National and Virginia Economic Outlook

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1 National and Virginia Economic Outlook Association of Electric Cooperatives September 29, 215 Sonya Ravindranath Waddell Regional Economist Research Department The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.

2 Overview National Economic Trends Gross Domestic Product Household Spending and Income Labor Market Indicators Housing Regional Economic Trends Measures of Economic Activity Labor Market Indicators Industry Trends Housing Market 2

3 National Economic Trends 3

4 U.S. Gross Domestic Product Percent Change, Seasonally Adjusted Annual Rate % Change, SAAR Q2: 215 US: 3.9% Source: Bureau of Economic Analysis/Haver Analytics 4

5 Real Gross Domestic Product Components 215Q2 versus 215Q1, Percent Change, Seasonally Adjusted Annual Rate % Change, SAAR :Q1 215:Q Real GDP PCE Residential Investment Nonresidential Investment: Structures Nonresidential Investment: Equipment -1 Source: Bureau of Economic Analysis/Haver Analytics 5

6 Personal Income and Expenditures YoY % Chg 8 Real Personal Consumption Expenditures Real Personal Income July 215: RPCE: 3.2% RPI: 4.% Source: Bureau of Economic Analysis/Haver Analytics 6

7 Nonfarm Payroll Employment Average Monthly Change Average Monthly Change, Thous Monthly Change June: 245 July: 245 August: Source: Bureau of Labor Statistics/Haver Analytics 7

8 Unemployment Rate Percent August 215: US: 5.1% Source: Bureau of Labor Statistics/Haver Analytics 8

9 Labor Force Participation Rate Percent August 215: US: 62.6%

10 Average Hourly Earnings YoY % Chg August: 2.2% Source: Bureau of Labor Statistics/Haver Analytics 1

11 Balance of International Trade Billion $, SA -1-2 Trade Balance Petroleum Balance Non-Petroleum Balance Source: Bureau of Economic Analysis/Haver Analytics 11

12 Exchange Value of the Dollar Source: Bureau of Economic Analysis/Haver Analytics 12

13 Residential Fixed Investment % Change, SAAR Q: % Source: Bureau of Economic Analysis/Haver Analytics 13

14 Home Sales: United States Millions, SAAR New Home Sales (Left axis) Existing Home Sales (Right axis) Millions, SAAR Source: National Association of Realtors/Haver Analytics 14

15 Private Single-family Housing Starts & Permits Millions, SAAR August 215 Permits:.699 million Starts:.739million Single-family Housing Permits Single-family Housing Starts 's Average Starts: 's Average Permits: Source: U.S. Census Bureau/Haver Analytics 15

16 Private Multi-family Housing Starts & Permits Millions, SAAR.7.6 August 215 Permit:.471 million Starts:.437 million 's Average Permits: 's Average Starts:.298 Multi-family Housing Permits Multi-family Housing Starts Source: U.S. Census Bureau/Haver Analytics 16

17 National House Prices YoY% Change 2 15 July 215: Total: 6.9% Non-Distressed: 6.7% Total Sales Non-Distressed Sales Source: CoreLogic Information Solutions, Inc. 17

18 Regional Economic Trends 18

19 Economic Activity in the Fifth District Manufacturing Sector Richmond Manufacturing Survey and ISM Manufacturing Survey 3-month average Richmond Manufacturing Survey (Left Axis) ISM Manufacturing (Right Axis) Source: The Federal Reserve Bank of Richmond/Institute of Supply Management 19

20 Economic Activity in the Fifth District Service Sector Richmond Service Sector Survey and ISM Nonmanufacturing Survey 3-month average Richmond Service Sector Survey (Left Axis) ISM Nonmanufacturing (Right Axis) Source: The Federal Reserve Bank of Richmond/Institute of Supply Management 2

21 Payroll Employment YoY % Chg (SA) August 215 US: 2.1% VA: 1.1% MD: 2.% DE: 1.3% U.S. Virginia Maryland Delaware Source: Bureau of Labor Statistics/Haver Analytics 21

22 Total Nonfarm Payroll Employment Through August 215, SA Index: Dec. 27 = U.S. Virginia Maryland Delaware Source: Bureau of Labor Statistics/Haver Analytics 22

23 Virginia Industry Growth August 215 Total Natural Resources & Mining Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services 1.1 Education & Health Services Leisure & Hospitality.8 Other Services Government.6.6 U.S. Virginia YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 23

24 Virginia Industry Structure Natural Resources & Mining Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government 214 U.S. Virginia Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 24

25 Maryland Industry Growth August 215 Total Natural Resources & Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government U.S. Maryland YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 25

26 Maryland Industry Structure 214 U.S. Maryland Natural Resources & Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 26

27 Delaware Industry Growth August 215 U.S. Delaware Total Natural Resources & Construction Manufacturing Trade, Transportation & Utilities Information (NSA) Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 27

28 Delaware Industry Structure Natural Resources & Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government 214 U.S. Delaware Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 28

29 Professional & Business Services Employment Index: Dec. 27 = United States Fifth District Virginia Source: Bureau of Labor Statistics/Haver Analytics August

30 Professional & Business Services Employment Index: Dec. 27 = U.S. Virginia Maryland Delaware Source: Bureau of Labor Statistics/Haver Analytics August 215 3

31 Federal Contract Spending (214) Total Contract Spending in FY14 ($Billion) 6 VA $ MD $27.6 DC $18.7 Total U.S.: $43,995,24,544 Fifth District: $11,35,17,24 Fifth District Share of Total Spending: 27.2% 1 VA CA TX MD DC PA CT FL MA WA AL NY AZ CO MO GAIL NM NJ KY TN OH SC MN NCMI SC $5.6 NC $4.8 WV $1.3 MS IN LA OK HI ID NV UT WI KS AK IA ME NH WV OR AR NERI GU SD MT ND DE PR VT WY VI MP AS Source: Federal Procurement Data System 31

32

33 MSA Payroll Employment Growth 3-month % Chg, ann 8 Bubble Size = Total Employment Winchester, VA 6 Cumberland, MD Roanoke, VA 4 2 Hagerstown, MD Harrisonburg, VA Charlottesville, VA Northern Virginia, VA Baltimore, MD Richmond, VA -2 Dover, DE -4 Lynchburg, VA Wilmington, DE Virginia Beach, VA -6 Blacksburg, VA YoY % Change Source: Bureau of Labor Statistics/Haver Analytics August

34 Unemployment Rate Percent (SA) August 215 US: 5.1% VA: 4.5% MD: 5.1% DE: 4.9% U.S. 2 Virginia Maryland 1 Delaware Source: Bureau of Labor Statistics/Haver Analytics 34

35 Unemployment in Fifth District Counties July 215 Source: Bureau of Labor Statistics/Haver Analytics 35

36 Construction Employment Through August 215, SA Index: Dec. 27 = U.S. Virginia Maryland* Delaware* Source: Bureau of Labor Statistics/Haver Analytics *Natural Resources & Construction 36

37 Housing Starts SAAR, thousands Virginia (Left Axis) United States (Right Axis) July 215 US: 1,161, Virginia: 39,84 SAAR, thousands 2,5 2, 1,5 1, Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics 37

38 Housing Starts SAAR, thousands Maryland (Left Axis) Delaware (Right Axis) SAAR, thousands July 215 Maryland: 15,92 Delaware: 5, Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics 38

39 Single-Family Building Permits YoY % Chg 3-month average 6 U.S. Virginia July 215 US: 9.3% VA: 4.1% Source: U.S. Census Bureau/Haver Analytics 39

40 Single-Family Building Permits YoY % Chg, 3-mma 6 4 July 215 MD: 11.1% DE: 9.9% Maryland Delaware Source: U.S. Census Bureau/Haver Analytics 4

41 Multi-Family Building Permits YoY % Chg 3-month average 2 15 July 215 US: 5.3% VA: -1.7% U.S. Virginia Source: U.S. Census Bureau/Haver Analytics 41

42 Multi-Family Building Permits YoY % Chg, 3-month average July 215 MD: -2.7% DE: 43.7% Maryland Delaware Source: U.S. Census Bureau/Haver Analytics 42

43 Virginia House Prices CoreLogic HPI YoY % Chg (SA) July 215 US: 6.9% VA: 2.% MD:.5% DE: 3.5% U.S. Virginia Maryland Delaware Source: CoreLogic Information Solutions, Inc. 43

44 CoreLogic HPI Source: CoreLogic Information Solutions, Inc. 44

45 Summary Economic growth has been steady, with improvement in Q2:215, a large portion of which was increased consumer spending Labor markets have tightened in the U.S. and the region, although wage growth has not kept up with other labor market indicators Residential real estate continues to improve slowly, but construction activity is still at a low level compared to the 199s The traditional reliance of Virginia and Maryland on federal government spending has been a drag on economic growth in those states for the past few years. 45

46 Questions? The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System. 46

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