National and Virginia Economic Outlook Association of Electric Cooperatives September 29, 215 Sonya Ravindranath Waddell Regional Economist Research Department The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.
Overview National Economic Trends Gross Domestic Product Household Spending and Income Labor Market Indicators Housing Regional Economic Trends Measures of Economic Activity Labor Market Indicators Industry Trends Housing Market 2
National Economic Trends 3
U.S. Gross Domestic Product Percent Change, Seasonally Adjusted Annual Rate % Change, SAAR 6 4 2-2 -4-6 -8-1 Q2: 215 US: 3.9% 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Economic Analysis/Haver Analytics 4
Real Gross Domestic Product Components 215Q2 versus 215Q1, Percent Change, Seasonally Adjusted Annual Rate % Change, SAAR 12 1 215:Q1 215:Q2 1.1 9.3 12 1 8 6 6.2 8 6 4 2.6 3.9 3.6 1.7 2.3.3 4 2-2 -2-4 -4-6 -6-8 -7.4-8 -1 Real GDP PCE Residential Investment Nonresidential Investment: Structures Nonresidential Investment: Equipment -1 Source: Bureau of Economic Analysis/Haver Analytics 5
Personal Income and Expenditures YoY % Chg 8 Real Personal Consumption Expenditures Real Personal Income 6 4 2-2 -4 July 215: RPCE: 3.2% RPI: 4.% -6 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Economic Analysis/Haver Analytics 6
Nonfarm Payroll Employment Average Monthly Change Average Monthly Change, Thous. 4 3 2 1-1 -2-3 -4-5 -6-7 -8 Monthly Change June: 245 July: 245 August: 173 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 7
Unemployment Rate Percent 11 1 9 8 7 6 5 4 3 August 215: US: 5.1% 2 1 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 8
Labor Force Participation Rate Percent 67 67 66 66 August 215: US: 62.6% 65 65 64 64 63 63 62 25 26 27 28 29 21 211 212 213 214 215 216 9
Average Hourly Earnings YoY % Chg 4.5 4. 3.5 3. 2.5 2. 1.5 1..5 August: 2.2%. 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 1
Balance of International Trade Billion $, SA -1-2 Trade Balance Petroleum Balance Non-Petroleum Balance -1-2 -3-3 -4-4 -5-5 -6-6 -7-7 -8-8 24 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Economic Analysis/Haver Analytics 11
Exchange Value of the Dollar 135 125 115 15 95 85 75 198 1983 1986 1989 1992 1995 1998 21 24 27 21 213 216 Source: Bureau of Economic Analysis/Haver Analytics 12
Residential Fixed Investment % Change, SAAR 4 3 2 1-1 -2-3 2Q:215 7.8% -4 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Economic Analysis/Haver Analytics 13
Home Sales: United States Millions, SAAR 1.4 1.2 1. New Home Sales (Left axis) Existing Home Sales (Right axis) Millions, SAAR 6.5 6. 5.5 5..8 4.5.6.4 4. 3.5 3..2 2.5 25 26 27 28 29 21 211 212 213 214 215 216 Source: National Association of Realtors/Haver Analytics 14
Private Single-family Housing Starts & Permits Millions, SAAR 1.9 1.7 1.5 1.3 August 215 Permits:.699 million Starts:.739million Single-family Housing Permits Single-family Housing Starts 1.1.9 9's Average Starts: 1.15 9's Average Permits: 1.1.7.5.3 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 15
Private Multi-family Housing Starts & Permits Millions, SAAR.7.6 August 215 Permit:.471 million Starts:.437 million.5.4.3 9's Average Permits:.313.2.1 9's Average Starts:.298 Multi-family Housing Permits Multi-family Housing Starts. 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 16
National House Prices YoY% Change 2 15 July 215: Total: 6.9% Non-Distressed: 6.7% 1 5-5 -1-15 Total Sales Non-Distressed Sales -2 24 25 26 27 28 29 21 211 212 213 214 215 Source: CoreLogic Information Solutions, Inc. 17
Regional Economic Trends 18
Economic Activity in the Fifth District Manufacturing Sector Richmond Manufacturing Survey and ISM Manufacturing Survey 3-month average 4 3 2 1-1 -2-3 -4-5 7 65 6 55 5 45 4 35 3 25-6 2 25 26 27 28 29 21 211 212 213 214 215 216 Richmond Manufacturing Survey (Left Axis) ISM Manufacturing (Right Axis) Source: The Federal Reserve Bank of Richmond/Institute of Supply Management 19
Economic Activity in the Fifth District Service Sector Richmond Service Sector Survey and ISM Nonmanufacturing Survey 3-month average 4 3 2 1-1 -2-3 65 6 55 5 45 4-4 35 25 26 27 28 29 21 211 212 213 214 215 216 Richmond Service Sector Survey (Left Axis) ISM Nonmanufacturing (Right Axis) Source: The Federal Reserve Bank of Richmond/Institute of Supply Management 2
Payroll Employment YoY % Chg (SA) 4 3 2 1-1 -2-3 -4-5 August 215 US: 2.1% VA: 1.1% MD: 2.% DE: 1.3% U.S. Virginia Maryland Delaware -6 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 21
Total Nonfarm Payroll Employment Through August 215, SA Index: Dec. 27 = 1 15 13 11 99 97 95 93 91 89 87 U.S. Virginia Maryland Delaware 85 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 22
Virginia Industry Growth August 215 Total 2.1 1.1 Natural Resources & Mining -11.7-8.9 Construction Manufacturing 1. 1.3 Trade, Transportation & Utilities.4 2.2 Information -1.1 1.2 Financial Activities 2.1 1.1 Professional & Business Services 1.1 Education & Health Services Leisure & Hospitality.8 Other Services 1.1 1.3 Government.6.6 U.S. Virginia 3.6 3.5 3.3 2.8 2.4 3. -15-1 -5 5 YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 23
Virginia Industry Structure Natural Resources & Mining Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government 214 U.S. Virginia.6.3 4.4 4.7 8.8 6.1 19. 17. 2. 1.9 5.7 5.1 13.7 18. 15.4 13.2 1.6 9.8 4. 5.2 15.7 18.7 2 4 6 8 1 12 14 16 18 2 Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 24
Maryland Industry Growth August 215 Total 2.1 2. Natural Resources & Construction 2. 3.8 Manufacturing 1. -1.7 Trade, Transportation & Utilities 2.2 1.3 Information 1.2-1.6 Financial Activities 2.1 2.1 Professional & Business Services 3.3 2.1 Education & Health Services 2.8 3.5 Leisure & Hospitality 3. 3.2 Other Services 1.1 -.4 Government.6 1.8 U.S. Maryland -3-2 -1 1 2 3 4 5 YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 25
Maryland Industry Structure 214 U.S. Maryland Natural Resources & Construction Manufacturing Trade, Transportation & Utilities 3.9 5.1 5.8 8.8 17.4 19. Information Financial Activities Professional & Business Services 2. 1.4 5.7 5.5 13.7 16.2 Education & Health Services 15.4 16.3 Leisure & Hospitality Other Services Government 4. 4.3 1.6 9.9 15.7 19.2 2 4 6 8 1 12 14 16 18 2 Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 26
Delaware Industry Growth August 215 U.S. Delaware Total 2.1 1.3 Natural Resources & Construction 2. 5.9 Manufacturing 1. -.8 Trade, Transportation & Utilities 2.2 -.1 Information (NSA) 1. -8.2 Financial Activities 2.1 3.1 Professional & Business Services 3.3 2. Education & Health Services 2.8.3 Leisure & Hospitality 3. 3.6 Other Services 1.1-1.6 Government.6 1.7-1 -8-6 -4-2 2 4 6 8 YoY % Chg (SA) Source: Bureau of Labor Statistics/Haver Analytics 27
Delaware Industry Structure Natural Resources & Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government 214 U.S. Delaware 5.1 4.7 8.8 5.9 19. 18.2 2. 1.1 5.7 1.3 13.7 13.6 15.4 16.6 1.6 1.7 4. 4.2 15.7 14.8 2 4 6 8 1 12 14 16 18 2 Employment Share (Percent) Source: Bureau of Labor Statistics/Haver Analytics 28
Professional & Business Services Employment Index: Dec. 27 = 1 115 11 15 1 95 9 85 United States Fifth District Virginia 8 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics August 215 29
Professional & Business Services Employment Index: Dec. 27 = 1 115 11 U.S. Virginia Maryland Delaware 15 1 95 9 85 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics August 215 3
Federal Contract Spending (214) Total Contract Spending in FY14 ($Billion) 6 VA $52. 5 4 3 2 MD $27.6 DC $18.7 Total U.S.: $43,995,24,544 Fifth District: $11,35,17,24 Fifth District Share of Total Spending: 27.2% 1 VA CA TX MD DC PA CT FL MA WA AL NY AZ CO MO GAIL NM NJ KY TN OH SC MN NCMI SC $5.6 NC $4.8 WV $1.3 MS IN LA OK HI ID NV UT WI KS AK IA ME NH WV OR AR NERI GU SD MT ND DE PR VT WY VI MP AS Source: Federal Procurement Data System 31
MSA Payroll Employment Growth 3-month % Chg, ann 8 Bubble Size = Total Employment Winchester, VA 6 Cumberland, MD Roanoke, VA 4 2 Hagerstown, MD Harrisonburg, VA Charlottesville, VA Northern Virginia, VA Baltimore, MD Richmond, VA -2 Dover, DE -4 Lynchburg, VA Wilmington, DE Virginia Beach, VA -6 Blacksburg, VA -8 1 2 3 4 YoY % Change Source: Bureau of Labor Statistics/Haver Analytics August 215 33
Unemployment Rate Percent (SA) 11 1 9 August 215 US: 5.1% VA: 4.5% MD: 5.1% DE: 4.9% 8 7 6 5 4 3 U.S. 2 Virginia Maryland 1 Delaware 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics 34
Unemployment in Fifth District Counties July 215 Source: Bureau of Labor Statistics/Haver Analytics 35
Construction Employment Through August 215, SA Index: Dec. 27 = 1 115 11 15 U.S. Virginia Maryland* Delaware* 1 95 9 85 8 75 7 65 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bureau of Labor Statistics/Haver Analytics *Natural Resources & Construction 36
Housing Starts SAAR, thousands 9 8 7 6 5 4 3 2 1 Virginia (Left Axis) United States (Right Axis) July 215 US: 1,161, Virginia: 39,84 SAAR, thousands 2,5 2, 1,5 1, 5 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics 37
Housing Starts SAAR, thousands 4 35 3 25 Maryland (Left Axis) Delaware (Right Axis) SAAR, thousands 12 1 8 2 6 15 4 1 5 July 215 Maryland: 15,92 Delaware: 5,8 2 25 26 27 28 29 21 211 212 213 214 215 216 Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics 38
Single-Family Building Permits YoY % Chg 3-month average 6 U.S. Virginia 4 2-2 -4 July 215 US: 9.3% VA: 4.1% -6 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 39
Single-Family Building Permits YoY % Chg, 3-mma 6 4 July 215 MD: 11.1% DE: 9.9% Maryland Delaware 2-2 -4-6 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 4
Multi-Family Building Permits YoY % Chg 3-month average 2 15 July 215 US: 5.3% VA: -1.7% U.S. Virginia 1 5-5 -1 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 41
Multi-Family Building Permits YoY % Chg, 3-month average 7 6 5 4 3 2 1-1 July 215 MD: -2.7% DE: 43.7% Maryland Delaware -2 25 26 27 28 29 21 211 212 213 214 215 216 Source: U.S. Census Bureau/Haver Analytics 42
Virginia House Prices CoreLogic HPI YoY % Chg (SA) 3 25 2 15 1 5-5 -1-15 July 215 US: 6.9% VA: 2.% MD:.5% DE: 3.5% U.S. Virginia Maryland Delaware -2 25 26 27 28 29 21 211 212 213 214 215 216 Source: CoreLogic Information Solutions, Inc. 43
CoreLogic HPI Source: CoreLogic Information Solutions, Inc. 44
Summary Economic growth has been steady, with improvement in Q2:215, a large portion of which was increased consumer spending Labor markets have tightened in the U.S. and the region, although wage growth has not kept up with other labor market indicators Residential real estate continues to improve slowly, but construction activity is still at a low level compared to the 199s The traditional reliance of Virginia and Maryland on federal government spending has been a drag on economic growth in those states for the past few years. 45
Questions? The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System. 46