Single-family home sales and construction are not expected to regain 25 peaks Millions of units 8. 7. 6. 5. Housing starts (right axis) 4. Home sales (left axis) 3. 2. 1. 198 1985 199 1995 2 25 21 215 Millions of units 1.85 1.65 1.45 1.25 1.5.85.65.45.25 Source: Moody s Analytics.
Core capital goods orders and shipments remain weak, but might be turning Nondefense capital goods excluding aircraft US$ billions 75 7 New orders 65 6 55 Shipments 5 45 2 22 24 26 28 21 212 214 216 Source: Federal Reserve Bank of St. Louis.
Repeated QE has led to unprecedented amount of Fed assets Total assets of Federal Reserve banks US$ trillions 5 Mar. 29: QE1 expanded Nov. 21: QE2 announced Sep. 211: Operation Twist Sep. 212 QE3 announced Dec. 213 Tapering begins Dec. 215 Fed rate raised 4 Nov. 28: QE1 announced 3 2 1 1/3/27 1/3/28 1/3/29 1/3/21 1/3/211 1/3/212 1/3/213 1/3/214 1/3/215 1/3/216 1/3/217 Source: Bloomberg.
Non-petroleum imports outpacing exports as dollar appreciates Real U.S. international trade Percent change year-over-year 15. 1. Imports 5.. -5. Exports -1. 213 214 215 216 217 Source: Moody s Analytics.
Labor productivity and total factor productivity growth have been exceptionally weak in recent years Percent change in productivity 5 4 Private nonfarm labor productivity (5-year moving average) 3 2 1 Total factor productivity -1 1965 197 1975 198 1985 199 1995 2 25 21 215 Source: Moody s Analytics.
Real consumer spending fluctuating around 3% growth Personal consumption expenditures Percent change (year-over-year) 5 4 3 2 1-1 -2-3 -4 27 28 29 21 211 212 213 214 215 216 217 Source: Federal Reserve Bank of St. Louis.
Contribution of personal consumption to U.S. real GDP growth Percentage points 4 3 Real GDP change resulting from personal consumption change 2 1-1 -2-3 26 27 28 29 21 211 212 213 214 215 216 Sources: Bureau of Economic Analysis, Federal Reserve Bank of St. Louis. Change in real GDP resulting from other factors
Durable goods lead growth in real consumer spending, but services gaining Percent change 8 Durable goods (left) Nondurable goods (middle) Services (right) 6 4 2-2 -4-6 2 22 24 26 28 21 212 214 216 Source: Federal Reserve Bank of St. Louis.
Real household net worth has reached new high Household assets and liabilities US$ trillions 1 Assets 8 6 4 Net worth 2 Liabilities 198 1985 199 1995 2 25 21 215 Source: Federal Reserve Bank of St. Louis.
Household debt is rising at a moderate pace Percent change in outstanding loans 16 Mortgages (left) Consumer credit (right) 14 12 1 8 6 4 2-2 -4 199 1992 1994 1996 1998 2 22 24 26 28 21 212 214 Source: Federal Reserve Bank of St. Louis.
Housing starts finally begin to recover United States Thousands of units 2, 1,8 1,6 1,4 Single-family units 1,2 1, 8 6 4 2 Multi-family units 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 Source: Federal Reserve Bank of St. Louis.
A recovery in household formation will support further gains in housing starts Millions 2.5 2. Housing starts Household formation Forecast 1.5 1..5. 198 1985 199 1995 2 25 21 215 22 225 Source: IHS.
Labor market gaining momentum Nonfarm employment, United States Difference from previous month, thousands 6 Absolute change (left) 4 2-2 -4-6 Percent change (right) Percent change, year-over-year -8-1 24 25 26 27 28 29 21 211 212 213 214 215 216 217 3 2 1-1 -2-3 -4-5 -6 Source: Moody s Analytics.
Services generating largest job gains Change in employment during the 12 months ended March 217 (in thousands) Health care and social assistance Professional and business services Leisure and hospitality Retail trade Construction Financial activities Local government Other services Educational services Wholesale trade Transportation and warehousing Information Federal government Utilities State government Manufacturing Mining and logging Total change = 2.2 million Source: Bureau of Labor Statistics. -15 15 3 45 6
Labor-force participation and employment rates will not return to pre-recession levels as baby boomers age Percent of population 16 and over 7 68 66 Labor-force participation rate 64 62 6 58 56 54 52 Employment-population ratio 5 196 197 198 199 2 21 Source: Federal Reserve Bank of St. Louis.
S&P 5 and NASDAQ surge since election 214 - present Percentage gain 6 5 4 3 NASDAQ Composite Index 2 1-1 S&P 5 Index November 216 election Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Source: Bloomberg.
Contribution of private fixed investment to U.S. real GDP growth Percentage points 4 Change in real GDP resulting from other factors 3 2 1-1 -2-3 26 27 28 29 21 211 212 213 214 215 216 Sources: Bureau of Economic Analysis, Federal Reserve Bank of St. Louis. Real GDP change resulting from private fixed investment change
ISM s indexes show manufacturing bouncing back Index (over 5 indicates expansion) 65 Nonmanufacturing index 6 55 5 45 4 35 Manufacturing index 3 2 22 24 26 28 21 212 214 216 Source: Moody s Analytics. Note: ISM stands for Institute for Supply Management.
Investment in mines and wells has plummeted Real private fixed investment in structures US$ billions 15 125 Mines and wells 1 75 5 Utilities 25 Manufacturing 1999 21 23 25 27 29 211 213 215 Source: Federal Reserve Bank of St. Louis.
Oil rig count falls but U.S. production fairly stable Millions of barrels a day 1 9 8 7 6 5 Rotary oil rig count (right axis) Crude oil production (left axis) 4 28 29 21 211 212 213 214 215 216 217 Count 1,8 1,6 1,4 1,2 1, 8 6 4 2 Sources: Moody s Analytics, U.S. Energy Information Administration (EIA).
U.S. crude oil and natural gas prices US$ per barrel 14 12 1 8 6 4 Crude oil, WTI (left axis) US$ per million BTU 14 12 1 8 6 4 2 Natural gas, Henry Hub (right axis) 2 22 24 26 28 21 212 214 216 2 Source: Federal Reserve Bank of St. Louis. Note: WTI stands for West Texas Intermediate crude oil.
High-yield corporate spreads narrowing Corporate bond spreads over U.S. Treasuries Percent 9 8 7 6 5 4 3 2 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Source: Bloomberg. Note: High-yield = Barclays US Corporate High Yield Average OAS.
Consumer price inflation will pick up as commodity prices recover Private nonfarm sector inflation Annual percent change in inflation rates 6 5 All-urban CPI 4 3 2 1 Core CPI (excluding food and energy) -1-2 -3 2 22 24 26 28 21 212 214 216 Source: Moody s Analytics.
Oil prices and drilling activity have collapsed Weekly oil rig count and West Texas Intermediate (WTI) crude oil price Count 2, 1,8 Crude oil price, WTI (right axis) 1,6 1,4 1,2 1, 8 6 Rotary oil rigs (left axis) 4 US$ per barrel 14 2 27 29 211 213 215 217 12 1 8 6 4 2 Sources: Federal Reserve Bank of St. Louis, Moody s Analytics.
The U.S. current account will remain in deficit Percent 1-1 -2-3 Forecast US$ millions 2-2 -4-6 -4-5 -6 Balance as percent of GDP (left axis) Current-account balance (right axis) 198 1985 199 1995 2 25 21 215 22 225-8 -1-12 Source: IHS.
Contribution of net foreign trade to U.S. real GDP growth Percentage points 4 Change in real GDP resulting from other factors 3 2 1-1 -2-3 26 27 28 29 21 211 212 213 214 215 216 Sources: Bureau of Economic Analysis, Federal Reserve Bank of St. Louis. Real GDP change resulting from net foreign trade change
Each 1% increase in exports boosts U.S. economy by Percent.35.3 Mexico China.31.25.2.15.1.9.5 GDP.8.3 Industrial production Source: Milken Institute.
Each 1% increase in income boosts U.S. economy by Percent.35 Mexico China.33.3.25.2.15.1.5.1 GDP.2.7 Industrial production Source: Milken Institute.
Destinations of U.S. exports of goods (February 217) Japan, 4.3% Germany, 3.4% China, 8.4% Mexico, 15.9% All other, 5.3% Canada, 17.7% Source: U.S. Census Bureau.
Soft and hard data on U.S. economic performance diverge Year-to-year (%) 3 2 1-1 -2-3 -4 Jan 25 Jan 21 Jan 215 Index 14 12 1 8 6 4 2 Retail sales (left axis) Consumer confidence (The Conference Board) (right axis) Capital goods orders (left axis) Business confidence (NFIB) (right axis) Source: Moody s Analytics.
Corporate profits after tax as share of gross domestic product Percent 12 11 1 9 8 7 6 5 4 3 2 Jan-47 Jan-57 Jan-67 Jan-77 Jan-87 Jan-97 Jan-7 Source: Federal Reserve Bank of St. Louis.