Economic Forecast OUTPUT AND EMPLOYMENT WHAT THE TABLE SHOWS:

Transcription

1

2 December 3, 13 Economic Forecast OUTPUT AND EMPLOYMENT United States Real GDP $ billions (fourth quarter) $1,99 $1,7 $1, $1,9 $1, $1, $1,97 $1, % change over the four quarters 1.9% -.8% -.%.8%.%.%.% 3.% Nonfarm employment Job count (fourth quarter) 137,93, 13,13,333 19,,7 13,83,7 13,8,7 13,,7 13,79, 138,88,19 % change over the four quarters.9% -.% -.%.% 1.% 1.% 1.7% 1.1% Average monthly change 99,7-3,7-8,889 3,83 1, , , ,333 Real GDP $ billions (fourth quarter) $3 $3 $3 $3 $33 $3 $3 $3 % change over the four quarters.% -1.% -.%.%.3%.%.3% 3.% Nonfarm employment Job count (fourth quarter),7 1,33,97 7,8 3,,7,81,89 % change over the four quarters.3% -1.1% -3.%.% 1.%.% 1.3% 1.1% Average monthly change , WHAT THE TABLE SHOWS: s GDP forecast is derived from the national forecast by allocating output to each of the states based on employment shares. So, forecast misses reflect surprises in the aggregate forecast as well as unexpected shifts in a state s GDP share. s economy paced the national economy in the last decade, but has struggled in the current recovery. The state s economy is forecast to pick up speed gradually in the coming year. Note: GDP figures are based on quarterly values that are interpolated from annual GDP estimates using quarterly employment changes. Unbolded figures are reported actual values and bold figures represent forecasts. Sources: US Department of Commerce; US Department of Labor. Regional Perspectives: Economic Outlook Commercial Banking

3 Agriculture Mining Utilities Construction Durable manufacturing Nondudrable manufacturing Wholesale trade Retail trade Transportation Information Finance and insurance Real estate Professional and technical services Management of companies Administrative and waste management services Educational services Health care and social assistance Arts, entertainment, and recreation Hotel and food service Other services Government December 3, 13 The Economy s Structure PERCENT OF TOTAL GDP DERIVED FROM SELECTED INDUSTRIES US industry mix industry mix The figure compares the relative importance of selected industries to the state s economy with the national footprint of each industry (state and national figures reflect the value added of each industry as a percent of aggregate state or US nominal GDP, respectively). Compared with the national economy, s economy is more heavily dependent on industries that are faring well, including agriculture, energy, construction, trade and transportation, and health care and other services. The state s outsized industries, relative to the national economy, including health care, other services, and government activity, give it some stability. Source: US Department of Commerce. Updated through 11. Regional Perspectives: Economic Outlook Commercial Banking 3

4 December 3, 13 Bankruptcies RATIO OF BANKRUPTCY FILINGS TO THE 7 Q NUMBER The figure illustrates trends in bankruptcy 9 8 Business bankruptcy filings Nonbusiness bankruptcy filings 9 8 filings by businesses and persons relative to the number of filings in 7 Q, prior to the recession. 7 All US bankruptcy filings (shaded area) 7 Bankruptcy filings are generally back to normal. Indicators of financial stress are a useful 3 3 coincident indicator of economic distress. The relatively low level of financial stress is a big help. Source: Administrative Office of the U.S. Courts; Updated through September Regional Perspectives: Economic Outlook Commercial Banking

5 December 3, 13 Oil & Gas Activity NUMBER OF DRILLING RIGS ON LAND, INLAND WATERS, AND OFFSHORE 3, 3 The figure illustrates recent trends in the rig count for petroleum drilling operations. Oil and gas drilling activity in is,, United States (left scale) (right scale) relatively robust. Robust demand for energy should help to get on the recovery track. 1, 1 Source: Baker Hughes Rig Count. Updated through 13 Q3. 1, Regional Perspectives: Economic Outlook Commercial Banking

6 December 3, 13 Initial Jobless Claims RATIO OF INITIAL CLAIMS FOR UNEMPLOYMENT INSURANCE TO THE 7 Q LEVEL The figure tracks layoffs in and the.. national level of claims. Weekly layoffs, both the state and national.. US (solid area).. tallies, are illustrated in the figure as a ratio to the level of layoffs in the fourth quarter of 7, prior to the recession. Reflecting the slow recovery, jobless claims remain above the national trend, although they are coming down slowly Layoffs, which will signal any change in the economy s momentum, offer little hint of revival just yet. s recovery is making progress Source: US Department of Labor. Updated through August 1, 13 (state) and August 17, 13 (US). Regional Perspectives: Economic Outlook Commercial Banking

7 December 3, 13 Economic Growth REAL GDP GROWTH (PERCENT CHANGE FROM FOUR QUARTERS EARLIER) US Forecast Real GDP growth in (the line in the figure) is superimposed on top of US real GDP growth (bars in the figure). s economic recovery now paces the nation s. likely was cushioned by the boom in the energy sector that surrounded the state during the national recession, but the recovery has been slow-going. Source: US Department of Commerce. Updated through 1 (state) and 13 Q3 (US). Quarterly estimates for states after 1 are interpolated from employment figures, based on the historical correlation of state and national employment changes. Regional Perspectives: Economic Outlook Commercial Banking 7

8 December 3, 13 Economic Output REAL GDP LEVEL (RATIO TO Q) The figure illustrates the evolution of real 1. Forecast 1. GDP of the state and the overall US economy since the fourth quarter of, the peak of the previous business cycle that is, at any point in time the lines trace the ratio of real GDP to its level in Q. expanded faster than the national economy in the last decade, and did not contract as much as the national economy during the recession. It now is expanding in line with the national recovery US s economy is expected to speed up gradually Source: US Department of Commerce. Updated through 1 (state) and 13 Q3 (US). Quarterly estimates for states after 1 are interpolated from employment figures, based on the historical correlation of state and national employment changes. Regional Perspectives: Economic Outlook Commercial Banking 8

9 December 3, 13 Employment Growth NONFARM PAYROLL EMPLOYMENT (PERCENT CHANGE FROM 1 MONTHS EARLIER) Job growth in the state, compared with the 7 7 national job market. 3 US Forecast 3 Employment is expanding at a solid pace. s fortunes are tied somewhat to the strength of the energy states. 1 1 Source: US Department of Labor. Updated through October Regional Perspectives: Economic Outlook Commercial Banking 9

10 December 3, 13 Employment NONFARM PAYROLL EMPLOYMENT (RATIO TO THE Q LEVEL) The figure illustrates the evolution of employment in the state compared with the nation since Q, the peak of the previous business cycle. The lines trace out 1.1 Forecast 1.1 the ratio of employment at the time to employment in Q. Employment in has fully recovered from the recession losses and now stands at an all-time record high. 1. US s economy is faring well, supported in part by robust activity in the energy sector of its neighbors. Source: US Department of Labor. Updated through October 13. Regional Perspectives: Economic Outlook Commercial Banking 1

11 December 3, 13 Intrastate Employment NONFARM PAYROLL EMPLOYMENT IN SELECTED COMMUNITIES (RATIO TO Q LEVEL) Job trends in local communities within the US forecast state. Business conditions are not uniform across 1. Forecast 1. US the state Billings Activity in Billings has outpaced the state s growth rate Great Falls Source: US Department of Labor. Updated through April Missoula.9.9 forecast Regional Perspectives: Economic Outlook Commercial Banking 11

12 December 3, 13 Unemployment UNEMPLOYMENT (PERCENT OF THE LABOR FORCE) Unemployment rate trends in, 1 1 compared with the national average. Unemployment is coming down slowly. 1 Forecast 1 Unemployment is not as high as the national count and is declining steadily. 8 US (shaded) 8 The unemployment rate is the single best indicator of the relative economic performance of a region. Unemployment is expected to recede but at a slower pace than recently. Source: US Department of Labor. Updated through October Regional Perspectives: Economic Outlook Commercial Banking 1

13 December 3, 13 Relative House Prices RATIO OF THE STATE S HOUSE PRICES TO THE NATIONAL AVERAGE (199 Q = 1.) The figure tracks the relative price of houses in the state versus the nation that is, it reflects the ratio of the state price index to the national house price index, with that ratio set to unity in the summer of 199. A drop in the line means that house prices in the state lag the national trend. States that did not suffer from speculative conditions saw a decline in the relative price of houses in this last decade. Speculation drove s house prices up belatedly and they remain pricey The state s real estate markets are benefiting from the energy boom and influx of money earlier from California. Source: FHFA. Updated through 13 Q3. Regional Perspectives: Economic Outlook Commercial Banking 13

14 December 3, 13 Real Estate Markets HOUSE PRICES IN SELECTED COMMUNITIES (RATIO TO THE 199 Q LEVEL) The figure tracks the cumulative percentage.. US Great Falls Missoula Billings.. deviation in house prices since 199 in selected local markets and compares those with the national average. Real estate values have been holding steady for a while KEY MESSAGE: Slower activity in the energy industry may moderate trends in some communities Source: FHFA. Updated through 13 Q Regional Perspectives: Economic Outlook Commercial Banking 1

15 December 3, 13 New Home Building HOUSING STARTS (RATIO TO THE JULY 199 LEVEL) US New home building in, compared with the national average. Home building activity has fully recovered. The favorable comparison with the national 3 3 pace of home building is a testimony to the strong performance of the economy in the last decade and elevated job base that Forecast resulted from that. Source: Census Department. Updated through August Regional Perspectives: Economic Outlook Commercial Banking 1

16