Understanding the New Trump Economy Economic Overview. November 15, 2016

Transcription

1 Understanding the New Trump Economy Economic Overview November 15, 2016

2 Uncertainty at the and Level

3 Source: Bureau of Labor Statistics The Trump Bump

4 Why?

5 National Job Growth Million Jobs Lost Payroll Change 000 s Million Jobs Recovered Source: Bureau of Labor Statistics

6 161,000 Jobs Added in October Payroll Change 000 s Source: Bureau of Labor Statistics

7 National Employment Change Percent Change in National Employment by Industry: Oct 2015 to Oct 2016 Ntl. Res. & Mining -13.7% Total: 1.7% Construction 3.0% Manufacturing -0.4% Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government 1.5% 0.4% 2.1% 2.7% 2.7% 2.0% 1.5% 0.9% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% Source: Bureau of Labor Statistics; seasonally adjusted

8 National Employment Change Total Change in Number of Jobs by Industry in Thousands: Oct 2015 to Oct 2016 Ntl. Res. & Mining -108 Construction 195 Manufacturing -53 Trade, Trans., Utilities 412 Information 10 Financial Activity 172 Prof. & Bus. Serv. 542 Ed. & Health Serv. 591 Leisure & Hospitality 304 Other Services 84 Government Source: Bureau of Labor Statistics; seasonally adjusted

9 Unemployment Rate Remains Low % in October Sources: U.S. Bureau of Labor Statistics

10 Unemployed and Discouraged Workers 18.0 Showing LiLle Change U-6 (Underemployed) U-3 (Unemployment) Source: Bureau of Labor Statistics

11 Labor Force Participation Increase % Source: U.S. Bureau of Labor Statistics Note: Seasonally adjusted

12 Labor Force Participation Rate % 68 Among Lowest in Over 35 Years Mar % Apr % 60 Oct % Source: U.S. Bureau of Labor Statistics Note: Seasonally adjusted

13 Civilian Labor Force Participation Rate 90% 80% 70% 60% 50% 40% 30% Men Women Source: BLS

14 Employment in Non-Routine Occupations:

15 Employment in Routine Occupations:

16 Cumulative Job Loss by Months of Recession Thousands Source: Euler Hermes analysis of Bureau of Labor Statistics Data

17 Cumulative Job Loss by Months of Recession Thousands Source: Euler Hermes analysis of Bureau of Labor Statistics Data

18 Slower Recovery than Past Recessions Index Periods from Value Scaled to Recession 2001 Recession 1990 Recession 1981 Recession 1980 Recession 1973 Recession Source: fred.stlouisfed.org

19 Slower Recovery than Past Recessions Source: fred.stlouisfed.org

20 Yearly Wage Growth Up Slightly in September 4.0% 3.5% Average 2.4% Oct % 3.0% 2.5% 2.0% 1.5% 1.0% Source: U.S. Bureau of Labor Statistics Note: Growth rate calculated using real chained dollars

21 Consumption Drives Growth 5% Total GDP Growth 3% Growth Rate 1% -1% Fixed Investment -3% -5% Inventories Net Exports Government Personal Consumption Q GDP 2.9% Source: Bureau of Economic Analysis

22 Consumer Confidence Remains Moderate Above 110 indicates economic prosperity Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Source: U.S. CCI from The Conference Board

23 Producer Price Index Percent Year-to-Year Change Source: U.S. Bureau of Labor Statistics; seasonally adjusted

24 Growth in Consumer Spending Under Par 5.0 Personal Consumption Expenditure Yearly Percent Change Percent Source: Bureau of Economic Analysis

25 The U.S. Dollar is Strong 1973 = 100 Trade Weighted U.S. Dollar Index: Major Currencies Source: Federal Reserve

26 Euro compared to U.S. Dollar $1.60 $1.50 $1.40 $1.39 $1.30 USD $1.20 $1.10 PARITY $1.00 $0.90 $ $1.05 Source: Investing.com

27 US Dollar Compared to Chinese Yuan Inverted Scale $6.00 $6.50 $7.00 $7.50 $8.00 $ China stops the yuan s rise 2001 China joins WTO 2005 China allows the yuan to rise 2010 China allows the yuan to rise Aug 2015 China devalues the yuan by largest amount in 20 years Source: Federal Reserve Bank of St Louis

28 $1.80 British Pound Drops to New Low Following Brexit Vote $1.70 $1.60 USD $1.50 $1.40 $1.30 $ Source: Investing.com

29 Drop in Oil Prices Causing Drop in Oil Production $120 2,200 $110 2,000 $100 1,800 $90 $80 $70 $60 $50 1,600 1,400 1,200 1,000 $ $ $ Oil Prices Active Oil Rigs Sources: Baker Hughes and U.S. Energy Information Administration; WTI weekly averages Note: Total count includes oil and gas rigs

30 The Fed is Under Pressure Central Banks with Negative Interest Rates Japan European Central Bank Sweden Denmark Switzerland -0.10% -0.40% -0.50% -0.65% -0.75% Source: global-rates.com

31 Federal Funds Rate Forecast (September 2016) Long Run Source: Board of Governors of the Federal Reserve

32 Fed Funds Rate Longer Run Projections Average Source: Board of Governors of the Federal Reserve

33 Utah is One of the Fastest Growing CA 0.9% States in the Country Percent Change in Population for States: 2012 to 2013 NV 1.3% NM 0.1% U.S. Rate = 0.7% NH Utah Economic 0.1% WA ME 1.1% -0.01% OR 0.8% AK 0.7% VT ND 0.1% MT 3.1% MN 1.0% 0.8% NY ID SD WI 0.4% 1.0% 1.3% 0.3% MI WY 0.1% PA 1.0% IA Conditions 0.1% NE 0.5% OH 0.7% IL IN 0.2% UT 0.1% 0.5% WV 1.6% VA CO MO KY -0.1% KS 0.9% 1.5% 0.3% 0.3% 0.4% NC 1.0% AZ 1.2% HI 1.0% TX 1.5% OK 0.9% AR 0.3% LA 0.5% MS 0.2% TN 0.6% AL 0.3% 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss SC 1.1% GA 0.8% FL 1.2% DC 2.1% CT 0.1% DE 0.9% MD 0.7% MA 0.7% RI 0.1% NJ 0.4% Source: U.S Census Bureau

34 Utah is One of the Fastest Growing States in the Country CNBC: Percent Utah Change Named in 2016 Population Top State for for States: Business 2012 to 2013 U.S. Rate = 0.7% NH 0.1% WalletHub: WA Utah Named 2016 State with Best Economy 1.1% NV 1.3% UT 1.6% MT 1.0% WY 1.0% ND 3.1% NE 0.7% MN 0.8% IA 0.5% IL 0.1% NY 0.4% MI 0.1% PA 0.1% OH IN 0.2% 0.5% WV VA KY -0.1% 0.9% 0.4% TN 0.6% AZ OK AR NM 1.2% 0.9% 0.3% 0.1% MS AL GA 0.2% 0.3% 0.8% TX 1.5% LA Utah One of only 10 States with AAA 0.5% Bond Ra@ng AK 0.7% Utah Accolades HI 1.0% 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss VT 0.1% SC 1.1% FL 1.2% ME -0.01% OR CNBC: 0.8% Salt Lake City (18), Ogden (7), ID SD WI and Provo (2) Named Among 1.0% 1.3% 0.3% Top 20 Metro Areas to Start a Business in U.S. Forbes: Utah Named CO #1 Best KS State MO for Business (top stop 5 out DE of CA 1.5% 0.3% 0.3% 0.9% 0.9% past 6 years) NC 1.0% Standard & Poor s, Moody s Investors Service, and Fitch Ra@ngs: DC 2.1% CT 0.1% MD 0.7% MA 0.7% RI 0.1% NJ 0.4% Source: U.S Census Bureau

35 Utah Population Sixth Fastest Growing in U.S. CA 0.9% OR 1.5% WA 1.5% NV 1.9% ID 1.2% AK 0.2% UT 1.7% AZ 1.5% MT 0.9% WY 0.3% CO 1.9% NM 0.0% HI 0.8% Percent Change: 2014 to 2015 U.S. Rate = 0.8% ND 2.3% SD 0.6% NE 0.7% TX 1.8% KS 0.3% OK 0.8% MN 0.6% IA 0.5% MO 0.3% AR 0.4% WI 0.2% LA 0.5% IL -0.2% MS 0.0% MI 0.1% IN 0.3% TN 0.8% AL 0.3% 1.5% or more OH 0.1% KY 0.3% 0.8% to 1.4% (at or above U.S. rate) 0.3% to 0.7% 0.0% to 0.2% Population Loss WV -0.3% VT -0.1% PA 0.1% NC 1.0% SC 1.4% GA 1.2% VA 0.7% FL 1.8% NH 0.2% NY 0.2% ME -0.1% DC 1.9% CT -0.1% DE 1.1% MD 0.5% MA 0.6% RI 0.1% NJ 0.2% Source: U.S Census Bureau

36 Utah Population and Components of Change 3,600,000 3,300,000 2,995, Total Population 3,000,000 2,700,000 2,400,000 2,100,000 1,800,000 1,500,000 1,200, ,000 17, Components of Population Change 600, ,000 33, e 2017f 2018f Sources: U.S. Census Bureau; Data from 2014 on from State of Utah Revenue Assumptions Working Group Net Migration Natural Increase Total Population e = estimate, f = forecast

37 Utah Population Growth Rates By County 2014 to 2015 Box Elder 1.2% Tooele 2.2% Davis 1.9% Cache 2.1% Weber 1.3% Morgan 4.2% Salt Lake 1.3% Utah 2.4% Rich 0.8% Summit 1.3% Wasatch 5.0% Duchesne 2.7% Daggett -1.0% Uintah 2.6% State Average = 1.7% Juab 1.3% Carbon -0.7% Increase of 2.5% or Greater Millard 0.7% Sanpete 1.5% Sevier 0.7% Emery -2.5% Grand 0.7% Increase of 1.7% to 2.4% Beaver -1.5% Piute 2.1% Wayne -0.8% Increase of 1.0% to 1.6% Iron 2.3% Garfield -0.1% Increase of 0.0% to 0.9% San Juan 3.4% Population Loss Washington 2.5% Kane -1.4% Source: U.S. Census Bureau

38 Utah Employment Growth 5 th Highest in the Nation CA 2.3% OR 3.5% WA 3.2% NV 2.7% AK -0.6% Note: Seasonally Adjusted Source: Bureau of Labor Statistics Percent Change in Employment for States: September 2015 to September 2016 U.S. Rate = 1.7% NH 2.1% ID 3.2% UT 2.9% AZ 2.3% MT 0.2% WY -3.2% HI 2.5% CO 2.7% NM -0.4% ND -1.3% SD 2.5% NE 1.0% KS -0.4% TX 1.7% OK -0.7% MN 1.6% IA 1.9% MO 1.1% AR 1.5% WI 1.2% LA -1.0% IL 0.7% MS 0.7% 2.6% or more MI 2.0% IN 1.5% TN 2.5% AL 0.8% OH 1.4% KY 1.4% GA 2.8% WV 0.1% VT 2.0% PA 0.9% NC 1.9% SC 2.7% VA 2.1% FL 3.4% 1.7% to 2.5% (at or above the U.S. rate) 1.0% to 1.6% 0.0% to 0.9% Loss NY 1.1% ME 0.5% DC 1.9% CT 0.8% DE 2.9% MD 1.7% MA 2.2% RI 1.1% NJ 1.3%

39 Utah Total Employment at New Highs Gain of 255,000 jobs from low in 2009 Thousands of Employees Loss of 92,000 jobs from Total Nonfarm Employment Source: U.S. Bureau of Labor Statistics, Total nonfarm seasonally adjusted Note: Numbers rounded to nearest thousand

40 UT Industries - Employment Gains Percent Change in Utah Employment by Industry: September 2015 to September 2016 Ntl. Res. & Mining -7.9% Total: 2.9% Construction Manufacturing Trade, Trans., Utilities 2.3% 3.5% 3.5% Information 0.6% Financial Activity 7.9% Prof. & Bus. Serv. 2.4% Ed. & Health Serv. 4.4% Leisure & Hospitality Other Services Government 1.8% 1.3% 2.9% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Source: Utah Department of Workforce Services

41 UT Industries Seeing Growth Total Change in Utah Employment by Industry: September 2015 to September 2016 Ntl. Res. & Mining -800 Total: 39,800 Construction 3,100 Manufacturing 4,400 Trade, Trans., Utilities 6,000 Information 200 Financial Activity 6,300 Prof. & Bus. Serv. 4,800 Ed. & Health Serv. 8,200 Leisure & Hospitality 3,900 Other Services 700 Government 3,000-3,000-1,000 1,000 3,000 5,000 7,000 9,000 Source: Utah Department of Workforce Services

42 Utah Employment Change Rates By County Sep 2015 to Sep 2016 Box Elder 5.7% Tooele 5.2% Cache 2.0% Rich 9.7% Weber 3.2% Davis 1.4% Morgan 1.7% Salt Lake 3.3% Utah 5.3% Summit 5.0% Wasatch 4.8% Duchesne -5.8% Daggett 1.4% Uintah -12.6% State Rate = 2.9% Juab 1.5% Carbon -2.8% 5.0% or more Millard 1.6% Sanpete 1.9% Sevier 1.5% Emery -2.1% Grand 3.3% 2.9% to 4.9% Beaver -6.4% Piute -3.4% Wayne -0.1% 1.0% to 2.8% 0.0% to 0.9% Iron 5.5% Garfield -1.0% San Juan 0.0% Loss Washington 6.4% Kane 0.5% Source: Utah Department of Workforce Services, Not seasonally adjusted

43 OR 5.5% CA 5.5% WA 5.6% NV 5.8% ID 3.8% UT 3.4% AZ 5.5% UT Unemployment Rates Among Lowest in the Nation MT 4.3% WY 5.3% CO 3.6% NM 6.7% September 2016 U.S. Rate = 5.0% ND 3.0% SD 2.9% NE 3.2% KS 4.4% OK 5.2% MN 4.0% IA 4.2% MO 5.2% AR 4.0% WI 4.1% IL 5.5% MS 6.0% MI 4.6% IN 4.5% TN 4.6% AL 5.4% OH 4.8% KY 5.0% GA 5.1% WV 5.8% VT 3.3% PA 5.7% NC 4.7% SC 4.9% VA 4.0% NH 2.9% NY 5.0% ME 4.1% DC 6.1% CT 5.4% DE 4.3% MD 4.2% MA 3.6% RI 5.6% NJ 5.3% AK 6.9% TX 4.8% LA 6.4% 3.9% or less 4.0% to 5.0% FL 4.7% Note: Seasonally Adjusted Source: Bureau of Labor Statistics HI 3.3% 5.1% to 5.5% (above the U.S rate) 5.6% to 5.9% 6.0% or more

44 Utah Unemployment Rates By County September 2016 State Rate = 3.4% 3.0% or lower Box Elder 3.3% Tooele 3.7% Millard 3.3% Juab 3.5% Davis 3.0% Cache 2.8% Weber 3.5% Salt Lake 3.0% Morgan 2.9% Utah 3.0% Sanpete 3.9% Sevier 4.3% Rich 3.3% Summit 3.0% Wasatch 3.1% Duchesne 8.0% Carbon 5.5% Daggett 4.6% Uintah 8.9% Emery 5.7% Grand 5.3% 3.1% to 3.4% Beaver 5.4% Piute 5.7% Wayne 7.3% 3.5% to 5.9% 6.0% to 7.9% Iron 4.2% Washington 3.4% Kane 3.7% Garfield 7.9% San Juan 7.5% 8.0% or greater Source: Utah Department of Workforce Services

45 Utah Personal Income Growth Highest in the Nation OR 1.3% CA 1.0% WA 1.1% NV 1.2% AK 0.4% ID 1.3% Source: Bureau of Economic Analysis Percent Change in Personal Income : Q Q U.S. = 1.0%; UT = 1.4% UT 1.4% AZ 1.2% MT 0.9% WY 0.5% HI 0.9% CO 1.1% NM 0.9% ND 0.5% SD 0.5% NE 1.3% KS 1.2% TX 0.9% OK 0.5% MN 0.9% IA 1.2% MO 1.0% AR 1.1% WI 1.0% LA 1.2% IL 1.0% MS 0.8% MI 1.1% IN 1.1% TN 1.0% AL 0.8% 1.2% or more OH 1.0% KY 0.8% GA 0.9% WV 1.0% VT 0.8% PA 1.0% NC 1.1% SC 0.9% VA 1.0% FL 1.2% NH 1.1% NY 1.0% 1.0% to 1.1% (at or above the U.S. rate) 0.6% to 0.9% 0.0% to 0.5% Decrease ME 0.7% DC 4.3% CT 1.1% DE 1.1% MD 1.1% MA 1.1% RI 0.9% NJ 1.0%

46 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% Sept 2011 Consumer Price Index United States vs. Wasatch Front Year Over Year Change Dec 2011 Mar 2012 Jun 2012 Sept 2012 Dec 2012 Mar 2013 Jun 2013 Sept 2013 Dec 2013 Mar 2014 Jun 2014 United States CPI Zions Bank Wasatch Front CPI Sept 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 June 2016 Sep 2016 Source: U.S. CPI from National Bureau of Labor Statistics and Wasatch Front CPI from Cicero Group

47 US Consumer Confidence Index vs. UT Consumer Attitude Index Above 110 indicates economic prosperity Zions Bank Utah Consumer Attitude Index United States Consumer Confidence Index 50.0 Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Source: U.S. CCI from The Conference Board and Utah CAI from Cicero Group

48 Utah Median Home Sale Price Reaching Pre-Recession Highs $300,000 $280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $100, Utah U.S. Source: Graphiq.com reporting data from CoreLogic

49 Utah Maintains Lower Percentage of Foreclosures than Nation 1.8 Percentage of total homes in foreclosure process U.S. Utah Source: Graphiq.com

50 Utah Residential Construction Activity Continues to Rise 30,000 25,000 20,000 15,000 10,000 5, e 2017f 2018f Single-Family Units Multifamily Total Source: State of Utah Revenue Assumptions Group, Moody s Economy.com, and HIS Global Insight

51 Utah Value of $8,000 New Construction Increasing $7,000 $6,000 Millions $5,000 $4,000 $3,000 $2,000 $1,000 $ e 2017f 2018f Residential Nonresidential Renovations Total Source: State of Utah Revenue Assumptions Group, Moody s Economy.com, and HIS Global Insight e= estimate f = forecast

52 Utah is One of the Fastest Growing CA 0.9% States in the Country Percent Change in Population for States: 2012 to 2013 AK 0.7% HI 1.0% U.S. Rate = 0.7% NH Cache County 0.1% WA 1.1% VT ND 0.1% MT 3.1% MN 1.0% 0.8% OR NY 0.8% ID SD WI 0.4% 1.0% 1.3% 0.3% MI WY 0.1% PA 1.0% IA Economic 0.1% NE 0.5% OH NV 0.7% IL IN 0.2% UT 1.3% 0.1% 0.5% WV 1.6% CO MO KY -0.1% VA KS 0.9% 1.5% 0.3% 0.3% 0.4% NC 1.0% TN 0.6% AZ OK SC AR Conditions NM 1.2% 0.9% 1.1% DC 0.3% 0.1% MS AL GA 2.1% 0.2% 0.3% 0.8% TX LA 1.5% 0.5% FL 1.2% 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss ME -0.01% CT 0.1% DE 0.9% MD 0.7% MA 0.7% RI 0.1% NJ 0.4% Source: U.S Census Bureau

53 Source: Utah Department of Workforce Services Cache County Job Growth

54 Cache County Unemployment Source: Utah Department of Workforce Services

55 Cache County Construction Source: Utah Department of Workforce Services

56 Source: Utah Department of Workforce Services Cache County Taxes

57 Economic Headwinds and uncertainty low energy prices Depressed business investment Unstable outlook Consumer spending and consumer confidence remain subpar

58 Economic Tailwinds Strong growth in the Intermountain West Utah job growth near the best in the country Unemployment low and dropping on the rise Utah accolades recognize a strong and growing economy

59 Utah Economic Indicators Population Nonfarm Employment Unemployment Rate Personal Income Home Prices Retail Sales e 2017f 2018f Sources: State of Utah Revenue Assumptions Working Group, Moody s Economy.com, IHS Global Insights e = estimate f = forecast

60 Robert Spendlove Economic and Public Policy Officer Phone: Zions Bank, A Division of ZB, N.A. Member FDIC. Content is offered for informa<onal purposes only and should not be construed as tax, legal, financial or business advice. Please contact a professional about your specific needs and advice. Content may contain trademarks or trade names owned by par<es who are not affiliated with ZB, N.A. Use of such marks does not imply any sponsorship by or affilia<on with third par<es, and ZB, N.A. does not claim any ownership of or make representa<ons about products and services offered under or associated with such marks.