Back to the Future Part II

Transcription

1 Back to the Future Part II On Behalf of St. Mary s County By: Anirban Basu Sage Policy Group, Inc. August 19 th, 2014

2 Raging Bull (1980)

3 Estimated Growth in Output by Select Global Areas 2013 Advanced economies Euro area France Germany Italy Spain Japan United Kingdom Canada United States Emerging/developing countries Sub-Saharan Africa Central/eastern Europe Russia Developing Asia China India* Middle East, North Africa, Afghanistan, & Pakistan Latin America and Caribbean Brazil Mexico Source: International Monetary Fund, April 2014 WEO -0.5% -1.9% -1.2% 0.3% 0.5% 1.3% 1.5% 1.8% 2.0% 1.9% 1.3% 2.8% 2.4% 2.7% 2.3% 1.1% 4.7% 4.9% 4.4% 6.5% 7.7% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Annual % Change *For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices. Corresponding growth forecasts for GDP at factor cost are 4.6 percent for 2013.

4 Estimated Growth in Output by Select Global Areas 2014 Projected* Advanced economies Euro area France Germany Italy Spain Japan United Kingdom Canada United States Emerging/developing countries Sub-Saharan Africa Central/eastern Europe Russia Developing Asia China India** Middle East, North Africa, Afghanistan, & Pakistan Latin America and Caribbean Brazil Mexico Source: International Monetary Fund, July 2014 WEO Update 1.1% 1.8% 0.7% 1.9% 0.3% 1.2% 1.6% 0.2% 2.2% 1.7% *The IMF s global and regional growth figures for 2014 are based on new purchasing power parity (PPP) weights derived from the recently released 2011 International Comparison Program survey (see box) and are not comparable to the 2013 figures reported in the April 2014 WEO **For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices. Corresponding growth forecasts for GDP at factor cost are 5.4 percent for % 3.2% 3.1% 2.0% 1.3% 2.4% 4.7% 5.4% 5.4% 6.4% 7.4% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Annual % Change

5 Debt by Selected Country 2013 Estimates* Japan Italy United States Spain France United Kingdom Canada Germany India Brazil Argentina Mexico South Africa Indonesia China Russia Saudi Arabia Source: International Monetary Fund, April 2014 WEO General Government Gross Debt in Percent of GDP *IMF Staff Estimates

6 Top 12 Stock Exchanges 2013 Growth* Rank Exchange Index % Change 4 Tokyo SE Nikkei % 2 Nasdaq NASDAQ Composite 38.3% 1 NYSE Group DJI A 26.5% 6 Frankfurt SE DAX 25.5% 8 Bolsa De Madrid Madrid General 21.4% 12 Swiss Exchange Swiss Market 20.2% 5 Euronext CAC % 10 BorsaItaliana FTSE MIB 16.6% 3 London SE FTSE % 9 TSX Group S&P TSX Composite 9.6% 11 Hong Kong Exchanges Hang Seng Index 2.9% 7 Shanghai SE Shanghai Composite -6.8% Source: Yahoo! Finance *Change from the 2012 close to the 2013 close.

7 S&P Select Sector Performance 12-Month Percent Change as of August 15, 2014 Information Technology Health Care 24.7% 26.6% Materials 21.2% Energy Industrials Consumer Discretionary Financials Utilities Consumer Staples 17.5% 17.3% 15.2% 12.6% 10.6% 9.7% Telecommunication Services 3.6% 0% 5% 10% 15% 20% 25% 30% 12-month percent change Source: Standard & Poor s

8 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Federal Reserve Balance Sheet v. S&P 500 Index May 2008 August 2014* FRB Credit Reserve $Trillions 4.8 S&P S&P 500 index depicted in orange Source: Federal Reserve Bank; Yahoo Finance *Through 8/13/2014

9 Percent change since end of 2007 Top Gun (1986) Profits out of the Danger Zone 60% Profits 49.2% 40% Stocks 25.9% 20% 0% Incomes 2.7% Jobs -0.7% -20% Housing -10.5% -40% -60% Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance

10 The Golden Child (1986) Highest Earning Hedge Fund Managers, 2013 Manager Hedge Fund Firm 2013 Earnings Net Return George Soros Soros Fund Management $4 billion 22% David Tepper Appaloosa Management $3.5 billion 42% Steve Cohen SAC Capital Advisors $2.3 billion 19% John Paulson Paulson Enhanced $1.9 billion 26% Carl Icahn Icahn Enterprises $1.7 billion 31% James Simons Renaissance Technologies $1.1 billion 18% Ray Dalio Bridgewater Associates $900 million 5.25% Ken Griffin Citadel $900 million 19.25% Larry Robbins Glenview Capital $750 million 43% Leon Cooperman Omega $730 million 25% Source: Forbes 2013 S&P 500: +29.6%

11 Airplane! (1980) David Tepper s Move against the Market Our big play versus the market is airlines. That s a big play. We re the biggest holder of all these different airlines. No hedge fund owned as many airlines as we did and not too many people did. Delta, UAL, LCC, US Air, AMR. We owned big percentages in all those stocks. And you know what, they did pretty good pretty freaking good. -David Tepper Source: Forbes, Bloomberg 2013 Appaloosa Management: +$3.5 billion (29.6%)

12 Median Weekly Earnings, Full-Time U.S. Workers* 2000Q2 through 2014Q2 2000Q2 2000Q4 2001Q2 2001Q4 2002Q2 2002Q4 2003Q2 2003Q4 2004Q2 2004Q4 2005Q2 2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4 2009Q2 2009Q4 2010Q2 2010Q4 2011Q2 2011Q4 2012Q2 2012Q4 2013Q2 2013Q4 2014Q2 $350 $345 $340 $335 $330 $325 $320 Source: U.S. Bureau of Labor Statistics *SA, Constant dollars (adjusted to CPI-U) Wage and salary workers ages 16+

13 Recession Watch as of May 2014 Source: Moody s Economy

14 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Index (2007 = 100) Industrial Production January 2001 through July (Base year: 2007) Source: Federal Reserve The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

15 Percent Change from Preceding Period (SAAR) Gross Domestic Product 1990Q1 through 2014Q2* 8% 6% 2014Q2: +4.0% 4% 2% 0% -2% -4% -6% -8% -10% Source: Bureau of Economic Analysis *Advanced (1 st ) estimate

16 SAAR (%) Contributions to GDP Growth by Component 2013Q2 2014Q2* Q2-13 Q3-13 Q4-13 Q1-14 Q Personal Consumption Government Spending Net Exports Gross Investment Source: Bureau of Economic Analysis *Advanced (1 st ) estimate

17 Ordinary People (1980)

18 Feb-02 Jun-02 Oct-02 Feb-03 Jun-03 Oct-03 Feb-04 Jun-04 Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Thousands Net Change in U.S. Jobs, BLS January 2002 through July July 2014: +209K Source: U.S. Bureau of Labor Statistics

19 National Nonfarm Employment by Industry Sector July 2013 v. July 2014 Professional and Business Services Trade, Transportation, and Utilities Leisure and Hospitality Education and Health Services Construction Manufacturing Government Financial Activities Mining and Logging Other Services Information All told 2,570K Jobs gained Thousands, SA Source: U.S. Bureau of Labor Statistics

20 Maryland Nonfarm Employment by Industry Sector Groups (SA) July 2013 v. July 2014 Absolute Change Mining, Logging, and Construction Leisure and Hospitality Financial Activities 6,800 6,200 6,100 Professional and Business Services Education and Health Services 3,900 3,200 Other Services Trade, Transportation, and Utilities Government Information Manufacturing ,100-2,400-3,100-3,200 MD Total: +16.3K; +0.6% US Total (SA): +2,570K; +1.9% -10,000-5, ,000 10,000 Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series MD lost 1,364 jobs between July 2013 and July 2014.

21 Washington, DC-Arlington-Alexandria MSA Nonfarm Employment by Industry Sector Groups (NSA) July 2013 v. July 2014 Absolute Change Trade, Transportation, and Utilities 8,900 Leisure and Hospitality 7,200 Education and Health Services Financial Activities Other Services 2,500 3,800 5,400 Mining, Logging, and Construction 700 Professional and Business Services Information -2, DC MSA Total: +19.8K; +0.6% Manufacturing Government -4,100-2,600 US Total (SA): +2,570K; +1.9% -10,000-5, ,000 10,000 Source: U.S. Bureau of Labor Statistics

22 St. Mary s County, MD Nonfarm Employment by Industry Sector Groups (NSA) 2012Q4 v. 2013Q4 Absolute Change Government Professional and Business Services Natural Resources, Mining, Construction 161 Education and Health Services 72 Leisure and Hospitality 25 Information 7 Trade, Transportation, and Utilities Other Services Financial Activities Manufacturing St. Mary s County Total: +552; 1.3% MD Total: +15,159; 0.6% Source: MD DLLR

23 Employment Growth, U.S. States (SA) July 2013 v. July 2014 Percent Change RANK STATE % RANK STATE % RANK STATE % 1 NORTH DAKOTA OKLAHOMA SOUTH DAKOTA NEVADA GEORGIA KANSAS UTAH SOUTH CAROLINA WEST VIRGINIA TEXAS LOUISIANA PENNSYLVANIA COLORADO MINNESOTA ALABAMA DELAWARE WISCONSIN HAWAII FLORIDA KENTUCKY WYOMING OREGON MICHIGAN VERMONT ARIZONA ARKANSAS CONNECTICUT WASHINGTON NEW YORK ILLINOIS INDIANA MAINE MARYLAND NORTH CAROLINA NEW HAMPSHIRE VIRGINIA CALIFORNIA RHODE ISLAND OHIO MASSACHUSETTS DISTRICT OF COLUMBIA NEBRASKA MISSOURI IDAHO NEW JERSEY MONTANA IOWA NEW MEXICO TENNESSEE MISSISSIPPI ALASKA -0.7 Source: U.S. Bureau of Labor Statistics U.S. Year-over-year Percent Change: 1.9%

24 Unemployment Rates, U.S. States (SA) July 2014 RANK STATE % RANK STATE % RANK STATE % 1 NORTH DAKOTA VIRGINIA NORTH CAROLINA NEBRASKA MAINE CONNECTICUT UTAH MASSACHUSETTS NEW MEXICO SOUTH DAKOTA WASHINGTON NEW YORK VERMONT OHIO ILLINOIS HAWAII PENNSYLVANIA OREGON NEW HAMPSHIRE SOUTH CAROLINA ALABAMA WYOMING WISCONSIN ARIZONA IOWA INDIANA TENNESSEE MINNESOTA MARYLAND CALIFORNIA MONTANA ARKANSAS DISTRICT OF COLUMBIA OKLAHOMA DELAWARE KENTUCKY IDAHO FLORIDA MICHIGAN KANSAS WEST VIRGINIA NEVADA TEXAS ALASKA RHODE ISLAND COLORADO MISSOURI GEORGIA LOUISIANA NEW JERSEY MISSISSIPPI 8.0 Source: U.S. Bureau of Labor Statistics U.S. Unemployment Rate: 6.2%

25 Unemployment Rates, 20 Largest Metros (NSA) June 2014 Rank MSA UR Rank MSA UR 1 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area Washington-Arlington-Alexandria, DC-VA-MD- WV Metropolitan Statistical Area Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area Baltimore-Towson, MD Metropolitan Statistical Area 6.5 Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area 6.5 New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area 6.6 St. Louis, MO-IL Metropolitan Statistical Area 7.0 Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area 7.1 Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area 7.4 Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area 7.6 Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area 8.4 Detroit-Warren-Livonia, MI Metropolitan Statistical Area 9.2 Source: U.S. Bureau of Labor Statistics

26 MD County Unemployment Rates June 2014 Rank Jurisdiction UR Rank Jurisdiction UR 1 Howard County 4.9% 13 Garrett County 6.2% 2 Montgomery County 5.0% 14 Kent County 6.5% 3 Queen Anne's County 5.2% 14 Baltimore County 6.5% 4 Carroll County 5.4% 14 Prince George's County 6.5% 5 Frederick County 5.5% 17 Washington County 6.9% 5 Calvert County 5.5% 18 Caroline County 7.0% 7 Anne Arundel County 5.6% 18 Allegany County 7.0% 8 St. Mary's County 5.8% 20 Worcester County 7.2% 9 Charles County 5.9% 21 Wicomico County 7.5% 10 Harford County 6.0% 22 Dorchester County 8.6% 11 Talbot County 6.1% 23 Baltimore City 9.4% 11 Cecil County 6.1% 23 Somerset County 9.4% Source: U.S. Bureau of Labor Statistics

27 Patuxent River Naval Air Station Employment Historic and Projected, FY2010-FY ,000 16,000 14,000 12,000 10,000 8,000 6,000 Contractor Military Civilian 4,000 2,000 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Source: NAVAIR Employment Projections

28 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 Average Weekly Wages, St. Mary s County v. Maryland Private Employers 2001Q1-2013Q4 1,300 1,200 1,100 1, St. Mary's Maryland Source: U.S. Bureau of Labor Statistics

29 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 Average Weekly Wages, St. Mary s County v. Maryland All Employers 2001Q1-2013Q4 1,300 1,200 1,100 1, St. Mary's Maryland Source: U.S. Bureau of Labor Statistics

30 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun Month Net Change St. Mary s County Employment June June ,000 2,500 2,000 1,500 1, ,000 Source: Bureau of Labor Statistics

31 Field of Dreams (1989)

32 Feb-95 Aug-95 Feb-96 Aug-96 Feb-97 Aug-97 Feb-98 Aug-98 Feb-99 Aug-99 Feb-00 Aug-00 Feb-01 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Rate 15-Year & 30-Year Fixed Mortgage Rates February 1995 through August 2014* 10% 9% 8% 7% 15-yr 30-yr 6% 5% 4% 3% 2% 4.12% 3.24% 1% Source: Freddie Mac *Week ending 8/14/2014

33 Thousands, SAAR U.S. New Home Sales January 1999 through June ,600 1,400 1,200 1, June K Source: U.S. Census Bureau

34 Unit Sales St. Mary s County Housing Unit Sales ,000 1,800 Trend Line 1,600 1,400 1,200 1, Source: Southern Maryland Association of Realtors

35 St. Mary s County Housing Building Permits 2000 through 2014* 1,400 SF Units 1,200 1,000 MF Units June 2014: SF Units: 32 MF Units: YTD Source: U.S. Census Bureau, Maryland Department of Planning *YTD Through June 2014

36 The Shining (1980)

37 Sales Growth by Type of Business July 2013 v. July 2014* Health & Personal Care Stores Food Services & Drinking Places Motor Vehicle & Parts Dealers Internet, etc. Retailers Building Material & Garden Supplies Dealers Food & Beverage Stores Furniture & Home Furn. Stores Clothing & Clothing Accessories Stores Electronics & Appliance Stores General Merchandise Stores Miscellaneous Store Retailers Gasoline Stations Sporting Goods, Hobby, Book & Music Stores -2.3% -1.2% 3.1% 2.5% 1.6% 1.3% 1.1% 0.9% 7.3% 6.2% 6.0% 5.9% 5.1% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 12-month % change Source: U.S. Census Bureau *July 2014 advanced estimate

38 Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Oct-12 Mar-13 Aug-13 Jan-14 Jun-14 Vehicle Sales (millions) National Vehicle Sales January 2004 through July 2014 (SAAR) July 2014: 16.5m Source: Autodata Corp. GM Ford Chrysler Honda Toyota Nissan Others

39 St. Mary s County Vehicle Registrations Select Years, FY1990-FY , , , , , ,802 80,000 76,601 60,000 58,987 40,000 20, Source: Maryland MVA Annual Reports

40 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 One-month Percent Change Conference Board Leading Economic Indicators Index August 2007 through June % 1.0% 0.5% 0.0% -0.5% -1.0% June 2014 = where 2004= % Source: Conference Board

41 Coming to America (1988) Economy gained momentum over the course of last year; Tailwinds included booming stock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like housing and autos; The current year is associated with greater certainty regarding federal budgeting and monetary policy that helps; The world is not perfect - black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP; Healthcare reform could slow fulltime hiring over the course of the year; Regions with rapid population growth and/or significant import/export activity, industrial output and energy production will lead the way; and For the first time in a long time, St. Mary s County should strongly consider its economic future.

42 Thank You Follow us on You can always reach me at Please look for updates of information at Also, if you need us in a hurry, we are at ( SAGE) Please contact us when you require economic research & policy analysis.