Brown Sugar: Deriving Satisfaction through Data Analysis

Transcription

1 Brown Sugar: Deriving Satisfaction through Data Analysis By: Anirban Basu Sage Policy Group, Inc. April 18 th, 2018 WWEMA On Behalf of Washington Forum 45 th Disclaimer: Any resemblance between the presentation s title and the speaker is purely coincidental.

2 Get off of My Cloud

3 Ipsos Consumer Confidence CONSUMER CONFIDENCE GLOBAL SNAPSHOT Index January 2018 Ipsos Consumer Confidence Index March Ipsos Largest gains South Africa Turkey Hungary Largest drops Argentina Russia Saudi Arabia Canada 54.7/ -0.2 Mexico 45.7 /-0.2 Largest gains US 62.8/ +2.3 Argentina 45.8/ -5.7 IPSOS Global Confidence Index, March 2018 Great Britain 50.5/+1.5 Brazil 43.9/ +3.1 Belgium 49.8/+1.5 France 45.7/+2.3 Spain 42.9/-1.8 Italy 38.6/+0.8 South Africa 46.9/ +7.4 Country Germany 56.6/ -0.4 Poland 51.7/+1.5 Hungary 44.0/ +3.2 Index/3-month change High Low Turkey 42.1/+3.3 Sweden 63.9/ +0.8 Israel 53.6/ +0.1 Cha ge +1.5 Change -1.5 India 65.0/ +0.7 Saudi Arabia 52.6/ -2.1 Africa Russia 40.8/ -2.2 China 70.3/-0.4 Based on data from Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI). Japan 45.0/-0.1 South Korea 45.7/ -0.9 Australia 54.2/+1.3 Arabia Global Average: 50.5 (3-month change: +0.4) Highest (over 60) In: China, India, Sweden, U.S. Lowest (below 40) in: Italy Up in 9 countries: South Africa, Turkey, Hungary, Brazil, Korea France, US, Belgium, Great Britain, Poland Down in 4 countries: Argentina, Russia, Saudi Arabia, Spain 2 Source: IPSOS Largest drops Country Index/3-month change

4 OECD Business Confidence Index Select Regions/Countries March March 2018 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar OECD - Total Euro area (19 countries) United States China The business confidence index (BCI) is based on enterprises assessment of production, orders and stocks, as well as its current position and expectations for the immediate future. Opinions compared to a normal state are collected and the difference between positive and negative answers provides a qualitative index on economic conditions. Source: OECD

5 Estimated Growth in Output by Select Global Areas 2018 Projected Advanced Economies Euro Area Spain Germany France United Kingdom Italy Japan Australia Canada United States Emerging Market & Developing Economies Sub-Saharan Africa Emerging & Developing Europe Russia Emerging & Developing Asia China India Middle East, North Africa, Afghanistan, & Pakistan Latin America & the Caribbean Mexico Brazil 2018 Proj. Global Output Growth: +3.9% 2017 Growth (Estimate) World: 3.8% Euro Area: 2.3% United States: 2.3% Japan: 1.7% Source: International Monetary Fund: World Economic Outlook Database, April % 2.4% 2.1% 1.5% 2.5% 1.2% 2.8% 1.6% 2.1% 3.0% 2.9% 4.9% 3.4% 4.3% 1.7% 6.5% 6.6% 2.0% 3.4% 7.4% 2.3% 2.3% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Annual % Change

6 Global Monetary Policy Tightening/Easing As of March 2018 The CFR Global Monetary Policy Tracker covers fifty-four large countries mainly those that target inflation in some manner. Tightening policy is indicated in red, loosening in blue. The more a country has raised (lowered) rates, in percentage points, from the most recent trough (peak) in its policy rate, the darker the shade of red (blue). Generally, the policy rate target is the overnight interbank rate, with exceptions indicated. Source: Council on Foreign Relations (CFR), Global Monetary Policy Tracker

7 Start Me Up

8 Conference Board Consumer Confidence Index 2005 March 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 Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar March 2018 = where 1985 = Source: Conference Board

9 Mar-86 Mar-87 Mar-88 Mar-89 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 NFIB Index of Small Business Optimism, Mar. 2018: Seasonally Adjusted 1986=100 Source: National Federation of Independent Business (NFIB)

10 Paint It Black Corporate Profits U.S. Corporate Profits After Tax* 1950Q2 1951Q4 1953Q2 1954Q4 1956Q2 1957Q4 1959Q2 1960Q4 1962Q2 1963Q4 1965Q2 1966Q4 1968Q2 1969Q4 1971Q2 1972Q4 1974Q2 1975Q4 1977Q2 1978Q4 1980Q2 1981Q4 1983Q2 1984Q4 1986Q2 1987Q4 1989Q2 1990Q4 1992Q2 1993Q4 1995Q2 1996Q4 1998Q2 1999Q4 2001Q2 2002Q4 2004Q2 2005Q4 2007Q2 2008Q4 2010Q2 2011Q4 2013Q2 2014Q4 2016Q2 2017Q4 $ Billions $2, Q4: $1.77 Trillion $1,600 $1,200 $800 $400 $0 Source: U.S. Bureau of Economic Analysis *With Inventory Valuation Adjustment (IVA) and Capital Consumption Adjustment (CCAdj); Seasonally Adjusted Annual Rate

11 Job Openings (Millions) U.S. Job Openings February 2001 through February 2018 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 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb Feb. 2018: 6.05M Openings Source: U.S. Bureau of Labor Statistics

12 Thousands Net Change in U.S. Jobs March 2002 through March 2018 Mar-02 Jul-02 Nov-02 Mar-03 Jul-03 Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Nov-17 Mar March 2018: +103K Source: U.S. Bureau of Labor Statistics

13 National Nonfarm Employment by Industry Sector, March 2017 v. March 2018 Professional and Business Services 502 Education and Health Services 443 Leisure and Hospitality Trade, Transportation, and Utilities Manufacturing Construction Financial Activities 136 Other Services 88 Mining and Logging Government All told 2,261K jobs gained Information Thousands, SA Source: U.S. Bureau of Labor Statistics

14 U.S. Labor Force Participation: Men Ages Q1 2000Q3 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 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 94% 93% 92% 91% 90% 89% 89.1% 88% Source: U.S. Bureau of Labor Statistics, Current Population Survey

15 Employment Growth, U.S. States (SA) February 2017 v. February 2018 Percent Change RANK STATE % RANK STATE % RANK STATE % 1 IDAHO HAWAII ILLINOIS NEVADA NEW HAMPSHIRE OHIO UTAH NEW MEXICO MINNESOTA WASHINGTON PENNSYLVANIA WISCONSIN COLORADO SOUTH DAKOTA IOWA ARIZONA RHODE ISLAND MAINE CALIFORNIA MICHIGAN CONNECTICUT OREGON MISSISSIPPI KANSAS TEXAS NEW YORK KENTUCKY FLORIDA MASSACHUSETTS ARKANSAS GEORGIA MONTANA NEBRASKA OKLAHOMA INDIANA MARYLAND WYOMING MISSOURI VERMONT NORTH CAROLINA WEST VIRGINIA LOUISIANA SOUTH CAROLINA DISTRICT OF COLUMBIA DELAWARE NEW JERSEY VIRGINIA ALASKA TENNESSEE ALABAMA NORTH DAKOTA -1.6 Source: U.S. Bureau of Labor Statistics U.S. Year-over-year Percent Change: +1.5%

16 Unemployment Rates, 25 Largest Metros (NSA) February 2018 Rank MSA UR Rank MSA UR 1 San Francisco-Oakland-Hayward, CA MSA Los Angeles-Long Beach-Anaheim, CA MSA Denver-Aurora-Lakewood, CO MSA Atlanta-Sandy Springs-Roswell, GA MSA Minneapolis-St. Paul-Bloomington, MN-WI MSA Charlotte-Concord-Gastonia, NC-SC MSA Orlando-Kissimmee-Sanford, FL MSA Seattle-Tacoma-Bellevue, WA MSA San Antonio-New Braunfels, TX MSA Phoenix-Mesa-Scottsdale, AZ MSA Boston-Cambridge-Nashua, MA-NH Metro NECTA Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) Survey U.S. Unemployment Rate: 4.1% 1. Area boundaries do not reflect official OMB definitions Riverside-San Bernardino-Ontario, CA MSA San Diego-Carlsbad, CA MSA Baltimore-Columbia-Towson, MD MSA Washington-Arlington-Alexandria, DC-VA-MD- WV MSA Detroit-Warren-Dearborn, MI MSA Tampa-St. Petersburg-Clearwater, FL MSA New York-Newark-Jersey City, NY-NJ-PA MSA Dallas-Fort Worth-Arlington, TX MSA Houston-The Woodlands-Sugar Land, TX MSA St. Louis, MO-IL MSA (1) 3.8 Philadelphia-Camden-Wilmington, PA-NJ-DE Portland-Vancouver-Hillsboro, OR-WA MSA 4.0 MD MSA Miami-Fort Lauderdale-West Palm Beach, FL Chicago-Naperville-Elgin, IL-IN-WI MSA 5.2 MSA

17 Gimme Shelter

18 Rate 15-Year & 30-Year Fixed Mortgage Rates April 1995 through April 2018* Apr-95 Oct-95 Apr-96 Oct-96 Apr-97 Oct-97 Apr-98 Oct-98 Apr-99 Oct-99 Apr-00 Oct-00 Apr-01 Oct-01 Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 10% 9% 8% 7% 15-yr 30-yr 6% 5% 4% 3% 2% 4.42% 3.87% 1% *Week ending 4/12/2018 Source: Freddie Mac

19 U.S. Households: Owner v. Renter Occupied, From the number of households headed by owners remained relatively flat. At the same time, the number of households renting their home increased significantly (+26%). The share of renter households also increased from 31.2% of households in 2006 to 36.1% in # of Household Heads (Millions) Homeowners Renters Source: U.S. Census Bureau; Pew Research Center

20 U.S. Homeownership (NSA) 1980Q4-2017Q4 1980Q4 1981Q4 1982Q4 1983Q4 1984Q4 1985Q4 1986Q4 1987Q4 1988Q4 1989Q4 1990Q4 1991Q4 1992Q4 1993Q4 1994Q4 1995Q4 1996Q4 1997Q4 1998Q4 1999Q4 2000Q4 2001Q4 2002Q4 2003Q4 2004Q4 2005Q4 2006Q4 2007Q4 2008Q4 2009Q4 2010Q4 2011Q4 2012Q4 2013Q4 2014Q4 2015Q4 2016Q4 2017Q4 70% 68% 2017Q4: 64.2% 66% 64% 62% 60% 58% Source: U.S. Census Bureau *NSA: not seasonally adjusted

21 $ Billions (SAAR) U.S. Private New Multifamily Construction February 1993 through February 2018 Feb-93 Feb-94 Feb-95 Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 $70 $60 $50 $40 $30 $20 $10 $0 Source: U.S. Census Bureau

22 12-Month % Change S&P/Case-Shiller Home Price Indices for Select Metros January 2018, 12-Month Percentage Change 12% 10% 10.2% 11.1% 8% 6% 4% 2.4% 2.4% 4.0% 5.2% 5.3% 6.4% 6.5% 6.9% 7.6% 7.6% 7.6% 2% 0% Source: Standard & Poor s

23 Thousands, SAAR U.S. Single-Family Housing Starts March 1999 through March 2018 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 2,000 1,800 1,600 1,400 1,200 1, March 2018: 867K Source: U.S. Census Bureau

24 SAAR ($ Billions) Water Supply Construction Put-in-Place February 2002 through February 2018 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 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 $19.0 $18.0 July 08 to February 18: -$6.5B (-36.1%) $17.0 $16.0 $15.0 $14.0 $13.0 $12.0 $11.0 Feb. 17 to Feb. 18: +$0.5B (+4.4%) $10.0 Source: U.S. Census Bureau

25 SAAR ($ Billions) Sewage & Waste Disposal Construction Put-in-Place February 2002 through February 2018 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 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 $30.0 August 10 to February 18: -$7.1B (-25.8%) $27.0 $24.0 $21.0 $18.0 $15.0 Feb. 17 to Feb. 18: +$0.3B (+1.5%) Source: U.S. Census Bureau

26 National Nonresidential Construction Spending by Subsector February 2015 v. February 2018 Lodging Commercial Office Amusement and Recreation Communication Educational Transportation Public Safety Health Care Highway and Street Power Water Supply Religious Manufacturing Conservation and Development Sewage and Waste Disposal -13.3% -14.3% -14.7% -15.7% -3.9% -3.9% 11.1% 6.7% 5.0% 4.3% 27.2% 23.9% 22.7% 45.7% 43.7% Total Nonresidential Construction: +80.9B; +12.4% 62.5% -25% -15% -5% 5% 15% 25% 35% 45% 55% 65% 3-year % Change Source: U.S. Census Bureau

27 Billions of $US Commercial/Multifamily Offshore Investment Sales Volumes Reach New Heights in 2015/16 $60 Foreign investment increases 85.1% in 2015 $50 $40 $30 $20 $10 $ Cross-border investment remained elevated in 2016: Although down relative to a record 2015, offshore investment levels still exceeded the pre-2015 high in Source: Jones Lang LaSalle; Real Capital Analytics Note: Among transactions larger than $5.0 million

28 Foreign Investment in U.S. Commercial Real Estate Top Destination Markets, 2017H1 Foreign Investment by Destination Market (as a % of Total) New York Washington, D.C. Boston Los Angeles San Francisco Chicago Dallas-Ft. Worth Seattle-Bellevue Houston Austin 4.2% 3.4% 3.0% 2.6% 2.3% 2.2% 6.9% 7.6% 9.7% 17.4% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Source: Jones Lang LaSalle; Real Capital Analytics Note: Among transactions larger than $5.0 million; includes portfolio, entity-level transactions

29 19 th Nervous Breakdown

30 % Change from Preceding Period (SAAR) Gross Domestic Product 1990Q4 through 2017Q4* 1990Q4 1991Q3 1992Q2 1993Q1 1993Q4 1994Q3 1995Q2 1996Q1 1996Q4 1997Q3 1998Q2 1999Q1 1999Q4 2000Q3 2001Q2 2002Q1 2002Q4 2003Q3 2004Q2 2005Q1 2005Q4 2006Q3 2007Q2 2008Q1 2008Q4 2009Q3 2010Q2 2011Q1 2011Q4 2012Q3 2013Q2 2014Q1 2014Q4 2015Q3 2016Q2 2017Q1 2017Q4 8% 6% 2017Q4: +2.9% 4% 2% 0% -2% -4% -6% -8% -10% Source: U.S. Bureau of Economic Analysis *3 rd (Final) Estimate

31 One-month Percent Change Conference Board Leading Economic Indicators Index August 2007 through February 2018 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 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb % 1.0% 0.5% 0.0% -0.5% -1.0% February 2018: where 2016: % Source: Conference Board

32 Savings Rate (%) U.S. Saving Rate, February 2005 February 2018 (Savings as Percentage of Personal Disposable Income) 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 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb February 2018: 3.4% Source: U.S. Bureau of Economic Analysis

33 Global Debt Reaches All Time Highs (IIF) According to the International Institute of Finance (IIF), global debt has reached an all-time high in 2016; At $215 trillion, global debt including household, government, and corporate now represents 325% of global GDP; Last year the IMF warned of risks to the global economy: sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery Sources: 1. Institute of International Finance (IFF), Global Debt Monitor. 2. Business Insider. 3. The Telegraph. 4. Reuters.

34 Shiller Price-Earnings Ratio, Mar-80 Mar-81 Mar-82 Mar-83 Mar-84 Mar-85 Mar-86 Mar-87 Mar-88 Mar-89 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar Mar. 2018: Source: Robert J. Shiller Data used in his book, "Irrational Exuberance" Princeton University Press.

35 Shattered! --- Bitcoin Price, /1/14 6/1/14 8/1/14 10/1/14 12/1/14 2/1/15 4/1/15 6/1/15 8/1/15 10/1/15 12/1/15 2/1/16 4/1/16 6/1/16 8/1/16 10/1/16 12/1/16 2/1/17 4/1/17 6/1/17 8/1/17 10/1/17 12/1/17 2/1/18 4/1/18 $20,000 $16,000 4/16/2018: $8.1K $12,000 $8,000 $4,000 $0 Source: CoinMarketCap.com

36 Time is on My Side, at least in the Near-Term U.S. setting up for best year since 05...; Global economy also picking up momentum, in large measure due to policymaking; Job opportunities are abundant; Corporate profitability elevated; Consumer and business confidence has been surging...; And now tax cuts, including major reductions in corporate taxes... What could go wrong?; A lot can go wrong that s always true first there are the Black Swan threats: I m forever blowing bubbles, pretty bubbles in the air, they fly so high, nearly reach the sky, and like my dreams, they fade and die ; Where are all the pretty bubbles? Equity markets? U.S. bond market? Commercial real estate? Bitcoin? 2018 will be fine better than fine 2019 might be, too, but beyond that, potential deleveraging cycle prompted by a repricing of assets Bad!!!!

37 Thank You Please follow me on Twitter Please look for updates of information at Please contact us when you require economic research & policy analysis.