Will British Consumers Continue to Spend?
|
|
- Collin Ray
- 5 years ago
- Views:
Transcription
1 Economics Group Special Commentary Executive Summary Following very weak growth in 2011 and most of 2012, real consumer spending in the United Kingdom has strengthened somewhat in recent quarters. Although growth in real disposable income has been sluggish recently, consumers have been willing to let their savings rates recede in recent quarters, which has financed growth in real spending. Rising consumer confidence and stronger balance sheets have likely made consumers less anxious about the future, which may be reducing their precautionary motive for saving. We forecast that growth in real consumer spending will strengthen further over the next two years, although not back to rates that prevailed during the long economic expansion of 1992 to Although the personal savings rate has room to trend lower, we believe that growth in real disposable income will remain slow for the foreseeable future. Hiring intentions among British businesses remain subdued, and inflation, which erodes purchasing power, likely will recede, albeit at a slow rate. Consumer Spending Has Driven U.K. GDP Growth Recently In a report we wrote in 2010, we surmised that growth in British consumer spending likely would be sluggish over the next few years. 1 In the event, real personal consumption expenditures (PCE) contracted 0.5 percent in 2011 before growing at a subpar rate of only 1.2 percent in Although growth in consumer spending over the past few years has been relatively sluggish, at least when measured against the standard of the long economic expansion when real Figure 1 Figure 2 3% Contributions to U.K. GDP Growth Percent of Growth, Year-over-Year Change 3% 8.5% 8. U.K. Unemployment Rate ILO, Seasonally Adjusted Unemployment Rate: 7.7% Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) Mackenzie Miller, Economic Analyst mackenzie.miller@wellsfargo.com (704) Will British Consumers Continue to Spend? 8.5% % 7.5% 1% 1% % 6.5% -1% -1% - -3% - -5% Net Exports Government Consumption Inventories BFI Personal Consumption Year-over-Year GDP Growth - -3% - -5% % % % % 1 See Outlook for U.K. Growth Amid Budget Cutting (Oct. 26, 2010), which is available upon request. This report is available on wellsfargo.com/economics and on Bloomberg WFRE.
2 British unemployment rate has seen only modest improvement. PCE grew at an average annual rate of 3.6 percent, it has strengthened somewhat in recent quarters. Moreover, real PCE has been the primary driver of overall GDP growth in the United Kingdom over the past year or so (Figure 1). What has propelled growth in British real PCE in recent quarters? What is the outlook for consumer spending and, by extension, the British economy in the quarters ahead? We attempt to answer some of these questions in this report. Decline in Savings Rate Has Helped to Support Consumer Spending Although employment is growing again the number of jobs is up 3.6 percent from its March 2010 low the elevated rate of unemployment manifests the general weakness in the labor market. Since the cycle peak of 8.4 percent in December 2011, the British unemployment rate has seen only modest improvement subsequently (Figure 2). Indeed, the 7.7 percent rate that was recorded in July remained well above rates that prevailed prior to the Global Financial Crisis (GFC). 2 Figure 3 Figure 4 U.K. Consumer Spending Indicators Year-over-Year Growth Rates Real Disposable Income: -0.3% Personal Consumption Expenditures: U.K. Personal Savings Rate Percent of Disposable Income, SA Personal Savings Rate: % 8% Consumers financed growth in GDP by allowing their personal savings rates to decline. Due to this weakness in the labor market, wage growth has been slow, resulting in anemic growth in income. On a year-ago basis, nominal disposable income was up only 1.9 percent in Q However, because inflation is running at a higher rate than nominal income at present, real disposable income fell 0.7 percent in the second quarter (Figure 3). So, if purchasing power (i.e., real disposable income) is contracting at present, how did British consumers finance the 1.6 percent year-over-year increase in real personal consumption expenditures that occurred in the second quarter? The answer: they allowed their personal savings rate to decline to 5.9 percent in Q from 7.4 percent in Q (Figure 4). Will growth in real disposable income bounce back, or will consumers need to finance growth in consumer spending by continuing to run down their personal savings rates? The good news on this front is that consumers should get some relief from easing inflationary pressures that, everything else equal, would boost growth in real disposable income. Most forecasters project CPI inflation will recede from the 2.7 percent rate that was registered in August to roughly 2 percent by On the other hand, however, growth in nominal disposable income likely will remain rather sluggish due to continued weak growth in employment. Survey evidence shows that hiring intentions over the next six months among British businesses, 2 Between Q and Q the unemployment rate in the United Kingdom averaged 5.3 percent. 3 Our forecast calls for CPI inflation to decline from 2.6 percent this year to 2.1 percent in 2014 before edging up to 2.3 percent in The consensus forecast, as measured by Focus Economics, looks for 2.7 percent (2013), 2.4 percent (2014) and 2.3 percent (2015). The Bank of England forecasts CPI inflation will recede to 2.0 percent by the end of
3 although positive, remain weak when compared to the previous expansion (Figure 5). Lackluster growth in employment, should it indeed come to pass, is consistent with the slow decline in the unemployment rate that forecasters project. 4 On balance, it seems that growth in real disposable income will likely remain weak for the foreseeable future. Even if growth in real disposable income remains sluggish, growth in real PCE can remain positive, and even strengthen somewhat, if consumers allow their personal savings rates to recede even further. As Figure 4 makes clear, the personal savings rate trended lower between the early 1990s and the advent of the GFC more than a decade later. One reason why consumers may be willing to save less in coming quarters is that consumer confidence has rebounded significantly in recent months (Figure 6). If consumers are feeling more optimistic, they may perceive less of a need to save for precautionary reasons. Figure 5 Figure U.K. Employment Intentions Index U.K. Consumer Confidence Diffusion Index, Seasonally Adjusted 10 Consumers may be willing to save less in coming quarters since consumer confidence has rebounded recently Total Services: Manufacturing: Consumer Confidence: Balance Sheet Repair Supports Consumer Spending Consumer confidence may be improving because balance sheets are getting stronger again. Not only has the value of financial assets risen by nearly 1 trillion since the GFC, but the value of nonfinancial assets (largely real estate) has trended higher as well (Figure 7). The widely followed index of house prices that is compiled by the Nationwide Building Society shows that house prices in the United Kingdom were up 5.0 percent on a year-ago basis in September. Although the increase in house prices has been led by London, where prices are 8 percent higher than their previous peak, all 13 regions experienced price appreciation on a year-over-year basis in September for the first time since In that regard, government measures, such as Funding for Lending and Help to Buy, could be helping to lift house prices via lower mortgage rates and more access to credit that helps to spur demand for housing. On the liability side of the balance sheet, households have been deleveraging over the past few years. The household debt-to-disposable income ratio, which peaked at more than 150 percent in 2008, is closing in on 130 percent (Figure 8). The rise in asset values and the decline in liabilities have led to a 1.5 trillion increase in net worth since 2008 (Figure 7). If net worth continues to rise, then it is likely that the personal savings rate will continue to trend lower, which would support growth in real PCE. 4 The consensus forecast expects the unemployment rate to average 7.6 percent next year and 7.4 percent in The Bank of England does not believe that the unemployment rate will fall below 7 percent until
4 Figure 7 Figure Balance Sheets of U.K. Households Trillions of Pound Sterling Total financial assets Total non-financial assets Total financial liabilities Total net worth U.K. Household & Nonprofit Debt As a Share of Gross Disposable Income Household Debt/Disposable Income: Source: U.K. Office for National Statistics, IHS Global Insight and Wells Fargo Securities, LLC Whither British Consumer Spending? Between Q and Q2 2009, real PCE tanked 6.5 percent, which was a major reason behind the 7.2 percent peak-to-trough nosedive in British real GDP during the downturn. Although real PCE has trended higher over the past four years, the level in Q remained 3.0 percent below its prerecession peak. Growth in consumer spending has been slowed by overall slow growth in the British economy, which has restrained employment growth and, correspondingly, income growth. In addition, deleveraging among households over the past five years has also exerted headwinds on real PCE growth. Consumer spending in the United Kingdom may be starting to thaw. The rise in asset prices that has occurred over the past few years has helped consumers repair their battered balance sheets. The rise in asset prices arguably has played an important role in the sharp increase in consumer confidence as well. With consumers feeling less anxious, they have allowed their savings rates to recede somewhat in recent quarters to help finance growth in spending. There is room for the personal savings rate to trend lower in coming quarters, which would help support continued growth in real PCE. However, robust growth in consumer spending likely would require marked acceleration in real disposable income, which we do not think is in the cards, at least not in the foreseeable future. For starters, CPI inflation remains elevated, which helps to erode growth in real disposable income. Although inflation should gradually recede, a sharp decline, which would significantly boost growth in real income, does not seem likely. In addition, recent surveys suggest that the pace of employment growth likely will remain muted in coming quarters, which will restrain growth in nominal income. We project that real PCE will grow 1.6 percent in 2013, which, if realized would be the fastest pace of growth since We look for real PCE growth to strengthen to 1.9 percent in 2014 and 2.3 percent in Although certainly an improvement when compared to the average annual growth rate of only 0.6 percent during , growth in real PCE would remain well short of the 3.6 percent rate that was the norm during the long expansion of With real PCE accounting for more than 60 percent of overall GDP in the United Kingdom, subpar growth in real PCE likely will translate into continued slow growth in real GDP. Indeed, the 2.4 percent growth rates in real GDP in both 2014 and 2015 that we forecast would be nearly a full percentage point below the annual average growth rate between 1992 and
5 Wells Fargo Securities, LLC Economics Group Diane Schumaker-Krieg Global Head of Research, Economics & Strategy (704) (212) John E. Silvia, Ph.D. Chief Economist (704) Mark Vitner Senior Economist (704) Jay H. Bryson, Ph.D. Global Economist (704) Sam Bullard Senior Economist (704) Nick Bennenbroek Currency Strategist (212) Eugenio J. Alemán, Ph.D. Senior Economist (704) Anika R. Khan Senior Economist (704) Azhar Iqbal Econometrician (704) Tim Quinlan Economist (704) Michael A. Brown Economist (704) Sarah Watt Economist (704) Michael T. Wolf Economist (704) Sara Silverman Economic Analyst (704) Zachary Griffiths Economic Analyst (704) Mackenzie Miller Economic Analyst (704) Blaire Zachary Economic Analyst (704) Peg Gavin Executive Assistant (704) Cyndi Burris Senior Admin. Assistant (704) Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through subsidiaries including, but not limited to, Wells Fargo & Company, Wells Fargo Bank N.A., Wells Fargo Advisors, LLC, Wells Fargo Securities International Limited, Wells Fargo Securities Asia Limited and Wells Fargo Securities (Japan) Co. Limited. Wells Fargo Securities, LLC. ("WFS") is registered with the Commodities Futures Trading Commission as a futures commission merchant and is a member in good standing of the National Futures Association. Wells Fargo Bank, N.A. ("WFBNA") is registered with the Commodities Futures Trading Commission as a swap dealer and is a member in good standing of the National Futures Association. WFS and WFBNA are generally engaged in the trading of futures and derivative products, any of which may be discussed within this publication. The information and opinions herein are for general information use only. Wells Fargo Securities, LLC does not guarantee their accuracy or completeness, nor does Wells Fargo Securities, LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or as personalized investment advice. Wells Fargo Securities, LLC is a separate legal entity and distinct from affiliated banks and is a wholly owned subsidiary of Wells Fargo & Company 2013 Wells Fargo Securities, LLC. Important Information for Non-U.S. Recipients For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited ("WFSIL"). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. The content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, not will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. This document and any other materials accompanying this document (collectively, the "Materials") are provided for general informational purposes only. SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
Russian Economy Struggles To Grow
Economics Group Special Commentary Russian Economy Struggles To Grow Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 The Russian economy has joined the ranks of other
More informationEconomics Group. Special Commentary. April 07, 2014
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 2014 Federal Fiscal
More informationWill Dollar Strength Scuttle U.S. Exports? Executive Summary
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Tim Quinlan, Economist tim.quinlan@wellsfargo.com (704) 410-3283 Sarah House, Economist sarah.house@wellsfargo.com
More informationStatistical Tools to Determine a Relationship Between Variables
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com (704) 410-3270 Blaire A. Zachary, Economic
More informationHow Important is China to Other Asian Economies?
Economics Group Special Commentary Executive Summary The financial volatility that has emanated from China in recent weeks has spilled over to other Asian economies. China has clearly become more economically
More informationEurozone Inflation Outlook: Implications for ECB Policy
Economics Group Special Commentary Executive Summary The European Central Bank (ECB) has not done a very good job of hitting its inflation target of below, but close to, 2 percent over the past few years.
More informationHow Much Does Slower Chinese Growth Matter?
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Zachary Griffiths, Economic Analyst zachary.griffiths@wellsfargo.com (704) 410-3284 How Much
More information2016 Holiday Sales Outlook Executive Summary
Economics Group Special Commentary Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 2016 Holiday
More informationU.S. Budget Gap CBO Baseline Scenario Projections, Percent of GDP 26% 24% 22% 20% 18% 16% 14%
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 Mackenzie Miller,
More informationThe Structure of U.S. Capital Flows and the Dollar
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Nick Bennenbroek, Currency Strategist nick.bennenbroek@wellsfargo.com (212) 214-5636 Zachary
More informationEconomics Group. Special Commentary. April 07, Credit Availability and Its Effect on Real Spending
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 Erik Nelson, Economic
More informationEconomics Group. Special Commentary. August 01, 2016
Economics Group Special Commentary Executive Summary The first half of this year has been marked by softer than expected GDP growth with Q1 GDP growth held back, in part, by weaker real consumer spending.
More informationEconomics Group. Special Commentary. November 30, 2017
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economic Analyst michael.d.pugliese@wellsfargo.com (704) 410-3156 Abigail Kinnaman,
More informationEconomics Group MONTHLY OUTLOOK. July 10, Real Global GDP Growth (Wells Fargo) Year-over-Year Percent Change, PPP Weights
July 10, 2013 Economics Group MONTHLY OUTLOOK U.S. Overview An Improving But Still Less Optimistic View With four years of economic recovery now in the books, we are seeing more pockets of improvement,
More informationWill U.K. Inflation Recede?: Implications for BoE Policy
Economics Group Special Commentary Executive Summary The Monetary Policy Committee (MPC) of the Bank of England (BoE) recently hiked its main policy rate for the first time in more than 10 years. The U.K.
More informationEvolution of San Francisco Over Time San Francisco. John E. Silvia, Chief Economist July 01, 2015
Evolution of San Francisco Over Time San Francisco John E. Silvia, Chief Economist July 01, 2015 Sustained Growth in 2015 10% 8% U.S. Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDP - CAGR: Q1 @ -0.2%
More informationU.K. Mid-Year Economic Outlook
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economic Analyst michael.d.pugliese@wellsfargo.com (704) 410-3156 U.K. Mid-Year
More informationEconomics Group MONTHLY OUTLOOK. January 14, Eurozone Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change
January 14, 2015 Economics Group MONTHLY OUTLOOK U.S. Overview Better First Half of 2015, Fed Call Key Our forecast remains for U.S. real GDP to grow roughly 2.5-3 percent in each of the next two years,
More informationEconomics Group. Special Commentary. May 13, The recovery in single-family construction appears to be well underway. Figure 1.
May 13, 213 Economics Group Special Commentary Mark Vitner, Senior Economist mark.vitner@wellsfargo.com (74) 41-3277 Anika R. Khan, Senior Economist anika.khan@wellsfargo.com (74) 41-3271 Sara Silverman,
More informationWells Fargo Small Business Survey: Q4 2017
November 6, 217 Economics Group Special Commentary Mark Vitner, Senior Economist mark.vitner@wellsfargo.com (74) 41-3277 : Q4 217 The Wells Fargo/Gallup Small Business Index fell 3 points to 13 in the
More informationCopper Price Dollars per Pound $5.00 $4.00 $3.00 $2.00 $1.00 $0.00
Economics Group Special Commentary Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 Chile: Better Economic Prospects Executive Summary For many decades, Chile was the
More informationGlobal Investment Outlook: Part I Could Over-Investment Derail This Global Expansion?
Economics Group Special Commentary Global Investment Outlook: Part I Could Over-Investment Derail This Global Expansion? Executive Summary Because investment spending has important implications for the
More informationEconomics Group. The U.K. Economic Outlook: What About Brexit Uncertainty? Special Commentary. January 26, 2018
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Abigail Kinnaman, Economic Analyst abigail.kinnaman@wellsfargo.com (704) 410-1570 The U.K. Economic
More information15% Year-over-Year Percent Change: 5.6% 3-Month Annualized Rate: 8.9% 12% -6% -9% -12% -15%
Economics Group Special Commentary Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 Shannon Seery, Economic Analyst shannon.seery@wellsfargo.com (704) 410-1681 What Sectors
More informationEconomic Outlook. May 17, 2011
Economic Outlook May 17, 2011 Economic Growth The economy ended 2010 on a strong note, but has run into a wall with higher gasoline prices and further weakness in housing more recently Source: U.S. Department
More informationThe U.S. Economy: Bracing for Higher Interest Rates
The U.S. Economy: Bracing for Higher Interest Rates Eugenio J. Alemán, Ph.D. Director and Senior Economist June 9, 2016 Real GDP Growth 1 8% 6% 4% U.S. Real GDP Bars = Compound Annual Rate Line = Yr/Yr
More informationCan Taiwan s Economy Maintain Its Momentum?
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economic Analyst michael.d.pugliese@wellsfargo.com (704) 410-3156 Can Taiwan
More informationEconomics Group. Special Commentary. April 09, The labor force participation rate began to decline well ahead of the Great Recession.
Economics Group Special Commentary Labor Force Participation: Where to Now? The Fed s Participation Rate Conundrum To judge the state of the labor market, the unemployment rate is likely the most ubiquitous
More informationWill Fed Tightening Derail Developing Economies?
April 2, 213 Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (74) 41-3274 Will Fed Tightening Derail Developing Economies? Executive Summary Although it is
More information-$10 -$20 -$30 -$40 -$50 -$60 -$70 -$80
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 U.S. Trade Deficit Widening: Trouble Brewing? Executive Summary The U.S. trade deficit widened
More informationSingaporean Growth Strengthens but Challenges Remain
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economic Analyst michael.d.pugliese@wellsfargo.com (704) 410-3156 Singaporean
More informationThe Eurozone: the Good, the Bad and the Ugly
Economics Group Special Commentary Executive Summary Recent developments have raised our optimism about the near-term economic prospects in the Eurozone. The collapse in oil prices since last summer is
More informationEconomics Group MONTHLY OUTLOOK. October 07, Eurozone Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change
October 07, 2015 Economics Group MONTHLY OUTLOOK U.S. Overview Global Woes Spill Over Into The U.S. Economy Despite a surprisingly large upward revision to second quarter real GDP growth, weaker global
More informationEconomics Group. Special Commentary. December 04, 2017
Economics Group Special Commentary Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 Erik Nelson, Currency Strategist erik.f.nelson@wellsfargo.com (212) 214-5652 Shannon
More informationEconomics Group. Special Commentary. December 11, 2018
Economics Group Special Commentary Abigail Kinnaman, Economic Analyst abigail.kinnaman@wellsfargo.com (704) 410-1570 Erik Nelson, Macro Strategist erik.f.nelson@wellsfargo.com (212) 214-5652 Will Europe
More informationSteel Your Nerves: Effects of Tariffs on U.S. Inflation
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Sarah House, Senior Economist sarah.house@wellsfargo.com (704) 410-3282 Ariana Vaisey, Economic
More informationWells Fargo Economics The Road Ahead. Scott A. Anderson, Ph.D. Director/Senior Economist January 4, 2012
Wells Fargo Economics The Road Ahead Scott A. Anderson, Ph.D. Director/Senior Economist January 4, 2012 1 Recession Risks Remain Uncomfortably High Financial Stress In Europe Remains High (Italian 5-Yr
More informationFed Funds Surprises and Financial Markets: Part 1
May 12, 215 Economics Group Special Commentary Motivation and Executive Summary With the uncertainty surrounding the first rate hike by the Federal Reserve, the timing and likely impact on financial markets
More informationTim Quinlan, Economist November 13, 2014
Global Economic Outlook Tim Quinlan, Economist November 13, 2014 Bitcoin Price $1200 Bitcoin: Nov-4 @ 329.0 Bitcoin Price USD $1200 $1000 $1000 $800 $800 Following last year s massive price surge, bitcoin
More informationFed Funds Surprises & Treasury Yields: Part 2
May 21, 15 Economics Group Special Commentary Executive Summary There is significant uncertainty in 15 about what will happen to the yield curve when the Fed begins its tightening cycle. In this study,
More informationIndian Growth Has Strengthened. Can It Do Better?
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economic Analyst michael.d.pugliese@wellsfargo.com (704) 410-3156 Indian Growth
More informationChinese Economic Outlook: Further Slowing in Store?
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Abigail Kinnaman, Economic Analyst abigail.kinnaman@wellsfargo.com (704) 410-1570 Chinese Economic
More informationEconomics Group. Special Commentary. November 30, 2015
Economics Group Special Commentary Anika R. Khan, Senior Economist anika.khan@wellsfargo.com (704) 410-3271 Nonresidential Construction Recap: November Discussion Recent economic activity and labor market
More informationEconomic Outlook Annual Economic Forecast Breakfast Winthrop University. September 14, 2010
Economic Outlook Winthrop University September 14, 2010 Economic Growth 10.0% 8.0% Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDPR - CAGR: Q2 @ 1. GDPR - Yr/Yr Percent Change: Q2 @ 3.0% 10.0% 8.0%
More informationSouth Korean Economic Outlook
Economics Group Special Commentary Tim Quinlan, Senior Economist tim.quinlan@wellsfargo.com (704) 410-3283 Nick Bennenbroek, Currency Strategist nicholas.bennenbroek@wellsfargo.com (212) 214-5636 Shannon
More informationEurozone Economic Outlook: Does Monetary Tightening Lie Ahead?
Economics Group Special Commentary Executive Summary The economic expansion in the Eurozone is firmly underway, with real GDP increasing 2.7 percent in Q4 year over year. Although a breakdown of the GDP
More informationTaylor-ing Monetary Policy Amidst Uncertainty
Economics Group Special Commentary Executive Summary After seven years with the fed funds rate near zero, the Federal Open Market Committee (FOMC) voted for a 25 basis point increase at its most recent
More informationTime to Press Pause? Financial Conditions & the FOMC
Economics Group Special Commentary Jay Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Sarah House, Senior Economist sarah.house@wellsfargo.com (704) 410-3282 Shannon Seery, Economic
More informationU.S. & Charlotte Economic Outlook. Sarah House, Economist January 5, 2017
U.S. & Charlotte Economic Outlook Sarah House, Economist January 5, 2017 Expectations U.S. Growth Outlook Labor Market & Inflation GDP around 2.2 percent in 2017 and 2018 historically disappointing, but
More informationThe Mexican Energy Reform
The Mexican Energy Reform Eugenio J. Aleman, Ph.D. Director and Senior Economist February 20 th, 2015 Private Industry vs. Government Owned 150 Production of Petroleum and Nat. Gas Index Jan 1993=100 150
More informationEconomic Update and Outlook
Real GDP Growth Real GDP Growth $13.6 Real Gross Domestic Product Trillions of Dollars, SAAR $13.6 Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change Economic Update and Outlook $13.4 Before Q2
More informationIs the Yield Curve Enough to Predict Recessions?
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com (704) 410-3270 E. Harry Pershing, Economic
More informationGlobal Inflation: Should Central Banks Be Worried?
Economics Group Special Commentary Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com (22) 24-229 Sarah House, Senior Economist sarah.house@wellsfargo.com (74) 4-3282 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com
More informationEconomics Group MONTHLY OUTLOOK. May 13, Eurozone Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change
May 13, 2015 Economics Group MONTHLY OUTLOOK Groundhog Day U.S. Overview This recovery has been reminiscent of the movie Groundhog Day. Economic growth seems destined to replay the story from prior years,
More informationEconomics Group MONTHLY OUTLOOK. November 08, U.S. Real Final Sales Bars = CAGR Line = Yr/Yr Percent Change 8%
November 08, 2017 Economics Group MONTHLY OUTLOOK U.S. Overview Growth Momentum Continues in Q4 For the second half of 2017, the growth momentum in the U.S. economy shifted up a gear relative to a year
More informationEconomics Group. Special Commentary. May 22, 2018
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Internationalization of the RMB: A Progress Report Executive Summary Three years ago we wrote
More informationWill the Fed s Balance Sheet Ever Return to Normal? Part II 1
September 05, 018 Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (70) 10-37 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com (1) 1-5058 Ariana
More informationEconomics Group MONTHLY OUTLOOK. February 07, U.S. Real Final Sales Bars = CAGR Line = Yr/Yr Percent Change
February 07, 2018 Economics Group MONTHLY OUTLOOK U.S. Overview Moving Point A to Point B: Economic Implications When fly fishing in the streams in Wyoming, one quickly learns that moving from point A
More informationEconomics Group. Special Commentary. July 16, 2018
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com (212) 214-5058 China Mid-Year Economic
More informationWhich Way Will the Global Economy Go in 2018?
Economics Group Special Commentary Which Way Will the Global Economy Go in 2018? Executive Summary The global economy has been growing for seven years, and we forecast that the expansion that is underway
More informationAre Yield Curve/Monetary Cycles Approaches Enough to Predict Recessions?
Are Yield Curve/Monetary Cycles Approaches Enough to Predict Recessions? Azhar Iqbal, Director and Econometrician Sam Bullard, Managing Director and Senior Economist September 30, 2018 Introduction Predicting
More informationGlobal Investment Outlook: Part III A Look at Tangible Spending on Intangible Assets
April 19, 018 Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (70) 10-37 Tim Quinlan, Senior Economist tim.quinlan@wellsfargo.com (70) 10-383 Sarah House, Senior
More information6.0% Forecast 4.5% 3.0% -2% 1.5% -4% -6% 0.0% -8% -1.5%
September 07, 2017 Economics Group MONTHLY OUTLOOK U.S. Overview Continued Growth in a Changing Policy Context Although the outlook for solid real economic growth and continued below-target inflation in
More informationU.S. Economic Outlook: What s Ahead for Mark Vitner, Managing Director & Senior Economist June 20, 2014
U.S. Economic Outlook: What s Ahead for 2014 Mark Vitner, Managing Director & Senior Economist June 20, 2014 Key Macroeconomic Trends Economic Growth Reduced Policy Uncertainty Policy Adjustments Global
More informationHealth Care Inflation: What s the Prognosis?
Economics Group Special Commentary Sarah House, Economist sarah.house@wellsfargo.com (704) 410-3282 Ariana Vaisey, Economic Analyst ariana.b.vaisey@wellsfargo.com (704) 410-1309 Health Care Inflation:
More informationEconomics Group. Special Commentary. February 16, The Palmetto State has generally enjoyed robust growth in recent years.
Economics Group Special Commentary Mark Vitner, Senior Economist mark.vitner@wellsfargo.com (704) 410-3277 South Carolina in the Spotlight: February 2016 Primary Focuses Attention on the Palmetto State
More informationEconomics Group. Special Commentary. January 17, The new tax is likely to be a net positive for 2018 economic growth.
Economics Group Special Commentary Mark Vitner, Senior Economist mark.vitner@wellsfargo.com (704) 410-3277 Tax Reform and Housing New limitations on housing-related deductions raise several questions Home
More informationPennsylvania Economic Insights August 2018
Pennsylvania Economic Insights August 2018 Mark Vitner Senior Economist (704) 410-3277 mark.vitner@wellsfargo.com Michael Pugliese Economist (212) 214-5058 michael.d.pugliese@wellsfargo.com August 21,
More informationFrictionless Models in a World Full of Frictions
Economics Group Special Commentary John Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com (704) 410-3270 Erik Nelson, Economic Analyst
More informationEconomics Group MONTHLY OUTLOOK. January 08, U.S. Real GDP Bars = CAGR Line = Yr/Yr Percent Change
January 08, 2019 Economics Group MONTHLY OUTLOOK U.S. Overview Where Have All the Good Times Gone? A few short months ago, the U.S. economy was cruising along with strong growth momentum. But the environment
More informationU.S. Economic Outlook: Some Thoughts on the Second Half. Mark Vitner, Managing Director & Senior Economist July 21, 2014
U.S. Economic Outlook: Some Thoughts on the Second Half Mark Vitner, Managing Director & Senior Economist July 21, 2014 Key Macroeconomic Trends Economic Growth Structural Issues Continue to Weigh on Growth
More informationEconomics Group MONTHLY OUTLOOK. June 07, Real Global GDP Growth Year-over-Year Percent Change, PPP Weights 7.5%
June 07, 2017 Economics Group MONTHLY OUTLOOK Stay the Course U.S. Overview May s disappointing employment report, which saw just 138,000 jobs added to nonfarm payrolls, coming on the heels of sluggish
More informationEconomics and Rate Strategy Treasury Refunding Highlights
Economics and Rate Strategy Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com 1-704-410-3274 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com 1-212-214-5058 Abigail Kinnaman, Economic
More informationIs China the Next Bubble?
Economics Group SECURITIES Special Commentary Jay H. Bryson, Global Economist jay.bryson@wachovia.com 1-704-383-3518 Is China the Next Bubble? Expansionary Policies Have Helped to Boost Growth Recently
More informationEconomic Outlook: Cyclical Recovery, Structural Challenges Federal Reserve Bank of Atlanta Annual Banking Outlook Conference
Economic Outlook: Cyclical Recovery, Structural Challenges Federal Reserve Bank of Atlanta Annual Banking Outlook Conference John E. Silvia, Chief Economist March 1, 2012 Where Are We Now? Inflation Interest
More informationDoes Economic Activity Slow in Election Years?
Economics Group Special Commentary Executive Summary Now that we are nearly halfway through the current presidential election year, commentators have drawn attention to the potential link between the heightened
More informationWill the Fed s Balance Sheet Ever Return to Normal? Part I
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com (212) 214-5058 Ariana Vaisey, Economic
More informationEconomics Group. Special Commentary. May 21, 2018
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 Michael Pugliese,
More informationDo Wages Still Matter for Inflation?
Economics Group Special Commentary Executive Summary Wage growth has garnered increasing attention in the heavily watched monthly employment reports. The scrutiny reflects the emphasis many Fed officials
More informationEconomics Group. The Global Economic Expansion: Mind the Risks. Special Commentary. January 02, 2018
January 2, 218 Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (74) 41-3274 The Global Economic Expansion: Mind the Risks Executive Summary A global economic
More information10% -5% -10% -15% -20% -25% -4% -8% -12%
November 15, 2013 Economics Group Weekly Economic & Financial Commentary U.S. Review A Little Less Shine on the Data 1 Total Industrial Production Growth Output Growth by Volume 1 The trade gap increased
More informationHeads Up: Italian Political Risk Looms Large
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Heads Up: Italian Political Risk Looms Large Executive Summary The Italian parliament is currently
More informationInflation Outlook: Green Shoots or a False Spring?
Economics Group Special Commentary Sarah House, Economist sarah.house@wellsfargo.com (704) 410-3282 Ariana Vaisey, Economic Analyst ariana.b.vaisey@wellsfargo.com (704) 410-1309 Inflation Outlook: Green
More informationEconomics Group. Special Commentary. February 22, 2017
Economics Group Special Commentary John E. Silvia, Chief Economist john.silvia@wellsfargo.com (704) 410-3275 Michael A. Brown, Economist michael.a.brown@wellsfargo.com (704) 410-3278 Michael Pugliese,
More information$4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $ Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
September 20, 2013 Economics Group Weekly Economic & Financial Commentary U.S. Review Fed Throws Surprise Party for Markets The FOMC surprised markets by continuing the current monthly pace of asset purchases
More informationSpecial Commentary Eugenio J. Alemán, Senior Economist (704)
Economics Group Special Commentary Eugenio J. Alemán, Senior Economist eugenio.j.aleman@wellsfargo.com (704) 410-3273 Mexico: One More Thing to Worry About in 2018 Executive Summary The Mexican economy
More informationEurozone Exchange Rate USD per EUR
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 Abigail Kinnaman, Economic Analyst abigail.kinnaman@wellsfargo.com (704) 410-1570 Executive Summary
More information2011 Economic Forecast Breakfast
2011 Economic Forecast Breakfast Sponsored by Wells Fargo Bank, N.A and the College of Business Administration Winthrop University Mark Vitner September 21, 2011 Economic Outlook September 21, 2011 Economic
More informationIf Not Raising Wages, Then What? How Employers Are Addressing Hiring Difficulties
Economics Group Special Commentary Sarah House, Economist sarah.house@wellsfargo.com (704) 410-3282 Ariana Vaisey, Economic Analyst ariana.b.vaisey@wellsfargo.com (704) 410-1309 If Not Raising Wages, Then
More informationEconomics and Rate Strategy Treasury Refunding Highlights
Economics and Rate Strategy Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com 1-704-410-3274 Michael Pugliese, Economist michael.d.pugliese@wellsfargo.com 1-212-214-5058 Economics and Rate Strategy
More informationEconomics Group MONTHLY OUTLOOK. U.S. Overview. International Overview. March 14, 2018
March 14, 2018 Economics Group MONTHLY OUTLOOK U.S. Overview Inflation Alters the Path to Point B This month an increase in inflation expectations is the central theme. Compared to February, the new outlook
More informationEconomics Group. Special Commentary. October 25, 2018
Economics Group Special Commentary Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com (70) 10-282 Finding Dory: A New Framework to Estimate the Natural Unemployment Rate There is nothing either good
More informationEconomic Outlook. August 30, 2011
Economic Outlook August 30, 2011 Economic Growth 10.0% 8.0% Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDPR - CAGR: Q2 @ 1.0% GDPR - Yr/Yr Percent Change: Q2 @ 1.5% 10.0% 8.0% 6.0% 6.0% We are two
More informationEconomic Outlook. Mark Vitner, Managing Director & Senior Economist February 23, 2012
Mark Vitner, Managing Director & Senior Economist February 23, 2012 Economic Growth 10.0% 8.0% Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDP - CAGR: Q4 @ 2.8% GDP - Yr/Yr Percent Change: Q4 @ 1.6%
More informationThe Dollar Can Really Nickel and Dime You on Inflation
Economics Group Special Commentary Tim Quinlan, Senior Economist tim.quinlan@wellsfargo.com (704) 410-3283 Sarah House, Senior Economist sarah.house@wellsfargo.com (704) 410-3282 Ariana Vaisey, Economic
More informationU.S. Trade with Canada and Mexico: A Short Primer
Economics Group Special Commentary Jay H. Bryson, Global Economist jay.bryson@wellsfargo.com (704) 410-3274 E. Harry Pershing, Economic Analyst edward.h.pershing@wellsfargo.com (704) 410-3034 Executive
More informationWhat Happens if Spain or Italy Leaves EMU?
Economics Group Special Commentary Jay Bryson, Global Economist jay.bryson@wellsfargo.com (704) 383-3518 Tim Quinlan, Economist tim.quinlan@wellsfargo.com (704) 374-4407 Kaylyn Swankoski, Economic Analyst
More informationEconomics and Finance in a Two-Percent Economy Appalachian State University. John E. Silvia, Chief Economist March 31, 2017
Economics and Finance in a Two-Percent Economy Appalachian State University John E. Silvia, Chief Economist March 31, 2017 Where Are We Now? Inflation Interest Rates Five benchmarks for good decision making
More informationEconomics Group. Weekly Economic & Financial Commentary. U.S. Review. Global Review. Inside. November 30, 2012
November 30, 2012 Economics Group Weekly Economic & Financial Commentary U.S. Review Strong Q3 Growth Sets Up a Weak Fourth Quarter Third quarter economic growth was revised higher this week to 2.7 percent
More informationEconomics Group. Weekly Economic & Financial Commentary. U.S. Review. Inside. May 17, 2013
May 17, 2013 Economics Group Weekly Economic & Financial Commentary U.S. Review A Mixed Bag for Q2 Economic data this week was rather mixed, with positive signs out of the consumer, but faltering signs
More information