NationalEconomicTrends February 9 How Accu Are Forecasts in a Recession? Individual households and firms, as well as local, state, and federal governments, make economic decisions based on their view of the future For a household, this may entail deciding whether to apply for a mortgage based on the expectation of having a job in the future For a firm, a decision to invest in the building of a new plant rests on expected future demand for its products Similarly, federal agencies make decisions about developing infrastructure based on expectations of future revenue Firms and government agencies (and, to a lesser extent, households) look to professional forecasters for advice on the future state of the economy This essay looks at how a recessionary environment affects the accuracy of economic forecasts, which in turn affects economic decisionmaking Although there are numerous professional economic forecasting agencies, the Survey of Professional Forecasters (SPF) is a publicly available forecasting source that is commonly used and discussed in various media outlets This discussion uses the mean of those forecasts as a proxy for professional forecasters in general 1 In total, we review years worth of quarterly, 1-year-ahead mean SPF forecasts from 191:Q3 through 7:Q3 The subsequent forecast errors ranging from 19:Q3 through :Q3 are constructed using the most recent and updated data We use the squares of these errors as a measure of their accuracy The chart shows the squared forecast errors associated with the mean SPF forecast of US Squared Forecast Errors gross domestic product (GDP) growth and the unemployment The shaded areas indicate 7 US recessions, as determined by the National Bureau of Economic Research Over the time frame shown in the chart, on average, professional forecasters have tended to be less 3 accu when the US economy was in recession During a recession, the 1 mean squared errors (MSEs) associated with forecasts of GDP growth and the unemployment are and 19, respectively In each case, the MSEs are four times larger than those made when the economy is not in a recession Even if the very large errors during and immediately after the 191 recession are omitted from the calculations, the MSEs are still roughly twice as large a smaller but still significant difference One main contributor to the deterioration in the forecasts is an inability to detect turning points that period when the economy shifts from being in a recession to not being in a recession and vice versa Another contributor is a clear bias in the forecasts during a recession Forecasts of GDP growth and the unemployment both generally tend to be overly optimistic: Forecasts of GDP growth tend to be too high, whereas those for the unemployment tend to be too low Perhaps not surprisingly, the degree of accuracy of the two series tends to move together; the correlation between the two series is roughly percent The unfortunate conclusion is that during a recession, economic decisions are not only more important, but also more difficult to make Michael W McCracken 1 The SPF is available at wwwphiladelphiafedorg/research-and-data/realtime-center/survey-of-professional-forecasters/data-files/ The SPF predicts gross national product (GNP) through 1991 and GDP thereafter Unemployment (left axis) GDP (right axis) 19:Q3 19:Q 199:Q1 199:Q 199:Q3 199:Q :Q1 :Q :Q3 3 1 Views expressed do not necessarily reflect official positions of the Federal Reserve System researchstlouisfedorg
Contents Page 3 Economy at a Glance Output and Growth 7 Interest Rates Inflation and Prices 1 Labor Markets 1 Consumer Spending 1 Investment Spending 1 Government Revenues, Spending, and Debt 1 International Trade Productivity and Profits Quick Reference Tables 7 Notes and Sources Conventions used in this publication: 1 Shaded areas indicate recessions, as determined by the National Bureau of Economic Research refers to simple percent changes from year refers to the percent change from the same month or quarter during the previous year Compounded annual of change shows what the growth would be over an entire year if the same simple percent change continued for four quarters or twelve months The compounded annual of change of x between the previous quarter t 1 and the current quarter t is: [(x t /x t 1 ) 1] 1 For monthly data replace with 1 3 All data with significant seasonal patterns are adjusted accordingly, unless labeled NSA We welcome your comments addressed to: Editor, National Economic Trends PO Box St Louis, MO 31- or to: stlsfred@stlsfrborg National Economic Trends is published by the of the Visit the s website at researchstlouisfedorg/publications/net to download the current version of this publication or register for e-mail notification updates For more information on data in this publication, please visit researchstlouisfedorg/fred or call (31) -73
updated through //9 National Economic Trends Real GDP Growth Compounded annual s of change - - 7 137 1 1717 173 179 Consumer Price 1 1 - - -1-1 - 7 137 1 1717 173 179 Industrial Production Interest Rates Percent 1-1 - -3-3 1 3-Month Treasury 1- Treasury - 7 137 1 1717 173 179 7 9 1 1717 173 179 13 Change in Nonfarm Payrolls Thousands Unemployment Rate Percent of labor force - - - - 7 9 1 1717 173 179 13 77 7 7 7 7 7 9 1 1717 173 179 13 3
National Economic Trends updated through //9 Real Gross Domestic Product from year 1-3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Industrial Production and Institute for Supply Management (ISM) es from year 1 1 Industrial Production 7 - -1-1 ISM 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 3 Aggregate Private Nonfarm Hours from year 1 - - 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Real Change in Private Inventories Percent of GDP 1-1 - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9
updated through //9 Real Final Sales and GDP Compounded annual s of change - - Final Sales GDP (bar) - 7 1 1717 173 179 Real GDP Revisions Compounded annual s of change 7 Advance Final 3 1-1 - -3 - National Economic Trends Preliminary Revision 7: :1 : :3 : Industrial Production and ISM Nominal Gross Domestic Product Compounded annual s of change 1 1-1 - -3 - Industrial Production (bar) ISM 3 3 - - - 7 9 1717 173 179 13-7 1 1717 173 179 Aggregate Private Nonfarm Hours 7 - - -7-1 7 9 1717 173 179 13 Average Weekly Private Nonfarm Hours Hours 3 337 33 33 33 1717 7 173 179 9 13 Real Change in Private Inventories Billions of dollars - - - 7 1 1717 173 179 Inventory-Sales Ratio Manufacturing and trade 1 1 13 13 13 1 1 7 1 1717 173 179
National Economic Trends updated through /3/9 Contribution of Components to Real GDP Growth Percentage points at compounded annual s - - - - -1 7Q1 7Q 7Q3 7Q Q1 Q Q3 Q Consumption Exports Government Imports Inventories Investment Contributions to Real GDP Growth Rate 7 1st nd 3rd th 1st nd 3rd th Final Sales 111 3 7 79 9 33-13 -1 Consumption 71 1 1 7 1 7-7 -7 Fixed Investment -7 7 - -97 - - -79-31 Nonresidential 33 17 91 3 7-19 - Residential -91 - -1-133 -11 - - - Government 17 77 7 1 3 7 11 3 Federal - 7 1-1 7 97 State and Local 3 3 19-3 31 17 - Net Exports -1 1 3 9 77 93 9 Exports 11 3 3 - Imports - -1 1 139 93 Change in Inventory -1 7 9-9 - - 13 Residual - - - -3-1 1 Real GDP Growth 79 7-17 7 3-1 -3
updated through /3/9 National Economic Trends Interest Rates Percent 1 1 9 3 1- Treasury 3-Month Treasury 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Treasury Yield Curve Percent 3 3 Jan Week Ending: 1/3/9 Jan 9 1 3m 1y y y 7y 1y Standard and Poor's with Reinvested Dividends from year 7 - - 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 7
National Economic Trends updated through //9 NIPA Chain Price es from year GDP Gross Domestic Purchases 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Consumer Price from year Excl Food and Energy All Items - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Producer Price, Finished Goods from year 1 Excl Food and Energy - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 PPI Employment Cost and Compensation per Hour from year 1 9 Comp per Hour 3 ECI 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9
updated through //9 NIPA Chain Price es Compounded annual s of change Gross Domestic Purchases National Economic Trends Oil & Natural Gas Prices: Spot & Futures Dollars per barrel Dollars per million btu 13 - GDP (bar) 1 Spot Oil Oil Futures 3 1 - - 7 1 1717 173 179 Consumer Price Compounded annual s of change 3 Spot Gas 1 Gas Futures 7 9 1 7 9 1 11 Note: Futures prices as of //9 Consumption Chain Price Compounded annual s of change 1 1 CPI (bar) PCE (bar) - Excl Food & Energy - Excl Food & Energy -1 - -1-7 1 1717 173 179-7 1 1717 173 179 Producer Price, Finished Goods Compounded annual s of change Unit Labor Cost Compounded annual s of change 1 3 PPI (bar) 1 1 Nonfarm -1 - Excl Food & Energy - Manufacturing (bar) -3 7 1 1717 173 179-1 7 1 1717 173 179 Employment Cost from year Benefits Compensation per Hour Compounded annual s of change 1 9 Compensation Wages and Salaries 3 3 7 7 171 137 1 1717 173 179-3 7 1 1717 173 179 9
National Economic Trends updated through //9 Employment from year Payroll Survey Household Survey - - 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Unemployment, Labor Force Participation, and Employment Rates Percent of labor force 1 9 Labor Force/Population Employment/Population Percent of population 7 7 1 3 Unemployment Rate 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Duration of Unemployment Percent of labor force Weeks 1 37 1 3 7 Unemployed > Weeks Unemployed < Weeks Median 1 1 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 1
updated through //9 National Economic Trends Change in Nonfarm Payrolls Thousands Change in Manufacturing Payrolls Thousands - - - - - -1-1 - - 7 9 1717 173 179 13-7 9 1717 173 179 13 Change in Household Employment Thousands 9 Labor Force and Population from year 3-3 1 Pop - -9-1 - -1 7 9 1717 173 179 13 9% Confidence Labor Force - 7 9 171 137 1 1717 173 179 13 Available Labor Supply and Components Percent of labor force 1 11 1 9 Available Labor Supply 7 Unemployed 3 Want to Work 7 9 171 137 1 1717 173 179 13 Unemployment Rate & Job Openings Rate Percent 7 7 Unemployment Rate Percent Job Openings Rate 7 9 1 171 137 1 1717 173 179 13 1 9% Confidence 3 3 11
National Economic Trends updated through 1/3/9 Real Disposable Personal Income from year, quarterly data 1-3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Real Consumption from year, quarterly data 1 Durables from year, quarterly data 1 Total - - -1 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 - Retail and Food Services Sales from year, quarterly average 1 1-3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 *Data from Jan 199 to the present are on a NAICS basis; data prior to Jan 199 are on an SIC basis and are not strictly comparable (see End Note) Debt Service Payments and Household Debt Outstanding from year, quarterly data 1 Percent of disposable personal income 1 9 3 Debt Service Payments Household Debt Outstanding 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 13 1 11 1 9 1
updated through //9 Real Disposable Personal Income Personal Saving Rate Percent National Economic Trends - - - 7 1 1717 173 179-3 7 7 171 137 1 1717 173 179 Real Consumption Compounded annual s of change 3 - -3-7 1 1717 173 179 Real Consumption 9 3-3 - -9 7 1 1717 173 179 Retail & Food Services 3 1 Ex Autos Real Durables Consumption & Vehicle Sales Millions of vehicles, annual Autos and Light Trucks 1 1 1-1 - -3 Total (bar) - - Durables (bar) 1 1-7 1 1717 173 179-7 9 1717 173 179 13 Consumer Sentiment (U of Michigan) 11 1 9 7 7 9 171 137 1 1717 173 179 13 Real Durables Consumption Compounded annual s of change 7-7 - - -3 7 9 1717 173 179 13 13
National Economic Trends updated through 1/3/9 Investment Percent of nominal GDP Total 1 1 1 1 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Private Private Fixed Investment from year 3 1 Nominal 1 Real - -1-1 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Real Nonresidential Fixed and Equipment & Software Investment from year 1 - -1 Equipment & Software Nonresidential - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Real Residential Fixed Investment from year - - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1
updated through //9 National Economic Trends Gross Saving Rates and Balance on Current Account (NIPA) Percent of GDP 1 - -1 Gross Private Saving Gross Govt Saving BOCA 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Real Private Fixed Investment Compounded annual s of change Nondefense Capital Goods Orders from year, excluding aircraft 3 1 - -1 - - 1-1 - Orders Equipment & Software Investment - 7 1 1717 173 179-3 3 7 7 171 137 1 1717 173 179 Real Equipment & Software Investment Compounded annual s of change 1 1 - -1-1 - -3 7 1 1717 173 179 Real Nonresidential Fixed Investment Compounded annual s of change 1 1 - -1-1 - 7 1 1717 173 179 Real Residential Fixed Investment Compounded annual s of change Housing Starts and New Home Sales Millions, annual Millions, annual 3 13 1 11 1-1 - 1 1 1 New Home Sales Housing Starts 3-3 7 1 1717 173 179 7 1 1717 173 179
National Economic Trends updated through 1/3/9 Govt Consumption and Investment Billions of dollars Govt Current Receipts and Expenditures Percent of GDP 3 Total Expenditures 1 1 1 Total State & Local 3 Total Receipts Fed Expenditures 9 Federal Fed Receipts 3 9 9 9 9 9 1 9 9 9 9 9 1 Government Budgets Billions of dollars National Income Accounts Calendar s Unified Budget Fiscal s Receipts State and Local Federal Federal Expenditures Surplus or Deficit (-) Receipts Expenditures Surplus or Deficit (-) Receipts Outlays Surplus or Deficit (-) 199 7 7 117 1-97 1913 131-93 1993 9 9 19-73 1 19-1 199 99 93 13 331-13 7 119-3 199 99 97 1 13-197 1319 9-1 199 133 117-11 3-17 1997 197 3 391 31 179-79 113-19 199 113 1111 1773 1739 39 17 7 93 1999 137 113 191 177 13 17 17 1319 19 3 1 19 179 3 1 1373 13 1 199 7 1991 13 1 111 13-3 3 111-79 3 11-7 3 19-3 1799 1-37 17 11-377 93 9 9 379-37 13 93-17 171 19 9 9-917 39 7-313 111 173 1 1 711-1 73-7 19 19 1 1-93 77 79-1 3 397 39 977-7Q1 177 3 3 1 379-1 7 7-17 7Q 199 17 3 1 9-11 9 137 7Q3 19 197 9 99-3 3 9-7Q 191 197-3 79 9-3 713-1 Q1 199 1973-7 33-337 39 77-9 Q 19 3-9 7 31-9 779 71 9 Q3 199-13 91 3139-77 97 77-19 Q 317 7 13-1
updated through 1/3/9 Federal Debt Percent of GDP 7 Total Percent of GDP National Economic Trends Federal Surplus (+) / Deficit (-) - NIPA 3 Held by Public - - Unified Budget - 9 9 9 9 9 1 Change in Federal Debt Percent of GDP 9 9 9 9 9 1 NIPA: Net government saving Federal Surplus (+) / Deficit (-), Unified Basis Billions of dollars, fiscal years 7 Total Excl interest payments - Held by Public - - Total - -7 9 9 9 9 9 1 9 9 9 9 9 1 Federal Government Debt Billions of dollars, end of month or fiscal year Excludes Agency-issued debt Total Public Debt Held by Agencies and Trusts Held by Public Federal Total Reserve Banks Held by Private Investors Foreign and Total International 7 33 3 79 7 73 7 977 39 9 779 97 37 17 1 7 3 March 7779 3 7 7173 3 193 June 73 339 7 77 33 179 September 7937 33311 1 73 39 193 December 17 3 71 7 397 3 March 371 39 7 7 11 June 3 797 7 3 1979 September 7 33 3 79 7 73 December 3779 91 779 11 7 March 97 379 3 79 731 197 June 77 397 93 79 1939 September 977 39 9 779 97 37 December 99 99 133 7 397 31 March 937 13 33 91 79 June 99 7 7 79 September 17 1 7 3 17
National Economic Trends updated through /3/9 Current Account, Trade and Investment Income Balances Billions of dollars, quarterly - - - - -1-1 -1-1 -1 - Current Account Investment Income Goods and Services Percent of GDP - - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 - - - - -1-1 -1-1 -1 Exchange Rates, March 1973 = 1 1 Yen/US$ 1 x (Ecu or Euro/US$) 37 1 3 1 1 Yen Major Currency Euro Ecu 7 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Goods Export Shares, 7 Goods Import Shares, 7 UK 37% Mexico 1% UK 9% Mexico 171% China 133% All Other 7% China % Japan % Japan 739% France 39% Germany 3% All Other 7% Germany 79% Other OECD 17% Canada 17% France 11% Other OECD 13% Canada 111% 1
updated through 1/13/9 Trade Balance Billions of dollars -1 - -3 - - Goods and Services -7 Goods - 7 1 1717 173 179 Goods Trade National Economic Trends from year 3 Exports 1 Imports - -1-7 1 1717 173 179 Current Account Balance Billions of dollars Services Trade from year - - -1-1 - 1 Exports Imports - 7 1 1717 173 179 7 1 1717 173 179 Real GDP Growth of Major Trading Partners Compounded annual s of change United Kingdom 9 Germany - 3-7 7 9-3 7 7 9 Canada France - 7 7 9-7 7 9 - - Japan 7 7 9 Mexico 1-7 7 9 19
National Economic Trends updated through //9 Output per Hour and Capacity Utilization, Manufacturing from year 1 Utilization Rate (level) Percent 9 7 Output/Hour - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 *Data from 197 to the present are on a NAICS basis; data prior to 197 are on an SIC basis and are not strictly comparable (see End Note) Nonfarm Compensation per Hour from year 1 Nominal Real - 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 Output per Hour, Nonfarm Business and Nonfinancial Corporations from year 9 Nonfinancial Corporations 3 Nonfarm Business Sector -3 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9
updated through //9 National Economic Trends Nonfarm Output per Hour Compounded annual s of change Manufacturing Output per Hour Compounded annual s of change - 7 1 1717 173 179-7 1 1717 173 179 Selected Component Shares of National Income Percent Percent 7 13 11 9 7 Corpo Profits Proprietors' Income 73 71 9 7 3 Compensation 3 1 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1 Corpo Profits Percent of GDP 1 1 1 Profits (Before Tax) Profits (After Tax) 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 3 7 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 1
National Economic Trends updated through 1/3/9 Billions of $ Nominal GDP Billions of $ Real GDP Billions of $ Final Sales Change in Private Inventories Billions of $ Last qtr / 119 3 199 9 197 31 39 1317 1 1191 11931 31 7 137 139 131-17 3 11719 13 1199 1-139 1 1 71 177 3 3 1799 3 79 179 197 9 19117 9 1979 3 17 139 3 3 1 1199 3 3 1139 1 3 111 397 19 1 3 1117 13 7 113-3 7 3 39 1 199 11171 31 1117 1 3 9 3177 13131 11917 7 3 113 3 9 1 3 139 3 7 1137 1733 9 37 39 13371 37 3 1133 1133973 9 13 31 7 1 1319 3 3 1137 1 13 11379 11 1-79 13737 9 119131 1 1193 3 3-1 113 3 139 3 17 113 31 11 131 3 9 11739-3 1179 - -1 1 1 3 7 19 9 1371 9-11 - 19 1 1 117731 1 11777 - -13197 3 11 3 33 11719-7 11739-13 1-9 -9 1-1 17 1993-3 - 13-1 -3-139 Billions of $ Consumption Durables Consumption Billions of $ Private Fixed Investment Billions of $ 779173 3 1133 19 11 7 9 3 11 93 19 1319 7 7 773 139 3-31 1399 9 79 3 119-17119 - 1 1 1 797 17 3 11117 3 1791 3 7 1397 37 9 7739 3 33 113717 11 13 7 73 119 3 1 3 7399 37 33 19 173 3 1379 1 79 1 11391-117 1 797 3 1 1 3 9 1 7971 3 3 11731 19 19 3 191 9 79 13 3 11731 1 3 137-33 133 79 3 3 7 113 3 993-7 1331 3 77 1199 37 3 17 9 1371-7 -1 1393-1 7 1 197173 39 31 173 9 171-3 - 133 3 3 377 9 17 119 3-33 137377 13 3 717 9 19 3 1 119-9 -3 17 7 3 919 1 171 - -19 1 3 1 3 9 137-3 17 - - 139 313 1 13 1 - -11 1799-17 -3 1311 3 9-3 - 1113-1 - 173-3 -7-17 1 1-3 -13 117 - -11 1331-1 - 131-191 - Nonresidential Fixed Investment Billions of $
updated through //9 National Economic Trends GDP Chain Price Employment Cost ECI: Wages ECI: Benefits 11339 33 99 31 99 99 117 3 11 9 11 9 11 9 7 11919 7 31 3 3 1 9 17 3 17 1 11177 33 9 3 3 93 9 1137 1 9 9 31 9 1 9 33 7 3 1137 1 3 99 9 9 99 3 997 37 13 37 3 1 3 11 13 39 1 13 3 3 1 1 1 9 11317 7 3 11 3 11 3 11 3 3 11719 3 3 3 3 31 3 1177 133 3 31 133 3 3 13 3 31 7 1 1193 1 9 1 7 3 13 39 3 131-1 3 11931 1 31 31 1 31 3 1 3 3 1199 31 3 9 31 33 31 1 3 31 17 31 33 31 3 1 1113 3 173 3 3 17 3 3 1 3 3 1191 11 179 3 3 1 3 31 19 19 3 1313 39 1 19 9 17 3 13113-1 19 191 19 19 7 179 Billions of $ Exports Billions of $ Imports 7 7 119 9 1337 1 1179 131 91 193 131 1 137 3 7 91 1971 1371 1 179 1 197-33 19 111 3 1 11779 1 9 1 3 91 13331 3 3 1 13137 7 17 13339 3 13 177 19 39 3 199 17939 131 37 19 13199 137 19 7 1731 3 133-11 177 37 3 1 11 17 9 199 13 1371 13 1793 1311 19 1 137 1 17 171 7 39 3 131 3 9 193 31 71 1397-1 3 177 19 9 1317 11 19317 3 131 1717 93 3 7 1 133 1 19173 77 3 1313 - - 1737 9 13919 7 1933-37 133 1 179 3 1 3 117 197 3 133 17 33 3 9 199-3 11 13 7 177 3 3 1 91 1 11 19 - -1 13911 33 179 3 33 79 13 11 19-73 -19 177 3 3 1799 9 33 3 9 3 1 1991-3 -3 1199 117 3 17-197 - 1919-7 -7 1 3 7 1399 3 Nonfarm Output per Hour Nonfarm Compensation per Hour 3
National Economic Trends updated through //9 Household Survey Employment Thousands Change Nonfarm Payroll Employment Thousands Change Nonfarm Aggregate Hours Monthly 139 11 11 13119 13 11 1 1 1171 7 1 13399 17 17 1 77 19 139 39 1 3 7 19 11 137 7 11 173 1 3-1 - 137 - - 1-1 1 13 79 1 133 1 19 1 39 33 171 9 1 1 1391 7 1 19 7 7 31 3 9 1 1 139 39 11 1 9 3 11 3 1 1377 77 1 1 1 7 1 11 9 13 19 137 9 1 1 1 73 - - 13 1377 9 9 1 173 1 3 99 9 3 1 1379 3 1 1 173 13 17 3 13 1 9 177 1 1 113-137 - 13793-7 - 17-1 - 7 99-19 - 1 1379-3 -13-19 - -3-3 3 99-9 -19-137 - - - 11-7 - -11 1-3 -3-137 -13-3 -1 11-19 -73-33 7 Jan 93 - - 1371 1 1 1 - - 17 Feb 99 9 1 1 1371 3 3 13 1 17 Mar 17 7 3 1 137 1 1 1 17 7 19 Apr 7 - - 13 1373 3 3 1 19-3 -33 11 May 9 13 13791 1 13 17 19 Jun 7 1 1 1 137 1 17 1 11 1 Jul 97 - -7 1 137 - - 11 173 - - 13 Aug 73 - - 137 - - 9 17-1 -11 1 Sep 13 71 39 1 137 1 9 9 173 1 11 1 Oct 7-33 -7 13717 1 1 17 3 1 Nov 79 7 133 19 9 177 3 11 Dec 19-371 -3 13 1 1 17 1 11 7 Jan 1317 3 13-7 - 7 17-3 -33 Feb 17 - - 1 13793-1 -1 17 1 11 9 Mar 13 - - - 1371-1 -11 3 17-1 -11 3 Apr 7 3 19 137-1 -1 17-1 -11 May 97-3 -3 13717-137 -1-1 19 - - - Jun 73-3 -19-1373 -11-1 - 1 - - -1 Jul 9-1 -1-3 137-1 -11-3 1 - - -1 Aug 73-33 - -3 1373-17 - - 1 3-7 Sep 9 - - - 1373-31 - -7 - - -1 Oct 7-37 -3-133 -3-33 -11 - -7-3 Nov 11-13 - -17 137-97 -1-1 11-9 -9-33 Dec 1333 - - - 1317-77 - - 133 - - - 9 Jan 199-139 -99-9 13-9 - - 1-7 -7 -
updated through //9 National Economic Trends Unempl Rate Retail and Food Services Sales Billions of dollars Monthly/ quarterly Industrial Production Monthly/ quarterly Treasury Yields (Percent) 3-mo 1-yr 33 1 137 137 7 1 79 1799 33 3 9 3139 19711 73 79 7 9 111393 17 3 3 713-1993 -17 137 37 1 7 1719 31 13 7 3 1 39 7 7 179 1973 7 7 3 119 3 119 19 91 9 7 3 1 19 - -9 17 9 3 7 1 13 1 7 33 1133 13 9 1119377 13 1119 3 1 7 3 7 1197 7 7 1 1177 9 3 1 3 73 1137 3 11193 1 3 1 339 1 9 113 - - 3 11 1 19 3 11 9 37 11131-9 -3 13 39 3 1 113377-13 -1 177-3 -9-3 19 3 9 - - -77 19-3 -1-3 3 7 Jan 31 1 9 1 197791 - - 9 9 7 Feb 371 7 91 3 111 7 1 3 7 Mar 3713 1 1 113-1 -1 13 9 Apr 37 - - 31 1193 1 1 7 9 May 37 199 119 73 7 Jun 373-1 -19 11131 3 3 1 1 1 Jul 7 377 37 11 7 17 Aug 7 373 - -1 3 111971 - -3 1 7 Sep 7 37 11 1 3 19 3 31 39 Oct 3793 3 39 111 - - 19 39 3 Nov 7 313 1 3 119 37 Dec 9 39-9 -1 113 1 1 3 1 Jan 9 319 - -1 39 17 7 37 Feb 371 - -9 7 11-3 -33 1 1 37 Mar 1 3 3 113 - - 1 31 Apr 37 1111 - -1 19 3 May 3379 9 111179 - - 173 3 Jun 39 1 9 31 11 1 7-1 1 1 Jul 37 - -7 11137 - - -7 13 1 Aug 379-7 -79 13 199-13 -1-19 17 39 Sep 37333-1 -173-1 - - -3 113 39 Oct 39-3 -31-1 17139 1 1-7 31 Nov 37-1 - - 713-13 -1-9 19 33 Dec 7 33-7 -77-9 139 - - -7 3 9 Jan 7 13
National Economic Trends Consumer Price Monthly/ quarterly to date Consumer Price less Food and Energy Monthly/ quarterly to date updated through 1/1/9 Producer Price Finished Goods Monthly/ quarterly 19 7 1933 1 3 193 3 7 7 9 3 3 933 13 3 7 73 9 1731 3 1 39 33 3 71 3 1771 3 1 19933 1 37 1 37 1 9 1 17 9 37 39 7 9 3 3 1 3 3 3 3 1 39 33 31 7 7 9 9 111 33 - - 19 19 7 1 7 7 9 - -33 3 7 1 9 9 37 37 97 3 3 17 19 7 11 1 3 1 1 3 3 799 7 37 1139 1 3 19 1 3 1 1 3 3 17 91 7 1 179 11 3 3 13931 173 9 71 1 3 7 1919 19 3 17 1 7 3 19 1 7 3 11 3 1 1 7 9 1373 - -9 1 1 17-3 -197 13 Dec 33 7 1 3 111 7 11 7 Jan 3 1 1 3 7 3 19-1 - Feb 3 3 9 7 9 19 1 1 Mar 9 7 3 933 1 9 1 9 11 3 Apr 71 3 39 37 9 3 7 3 3 May 7 7 7 1 997 19 7 37 Jun 7 3 3 39 1 7 3 1 1 7 3 Jul 77 7 37 19 3 17 7 Aug 779 19 33 1 19 1 3 11 - -9 3 Sep 9 3 11737 7 1 3 17 7 Oct 9 3 3 3 3 11 3 179 7 Nov 193 9 113 1 1 9 173 3 7 Dec 11 1 1 1313 7 171 - -1 Jan 1 137 3 3 3 173 1 19 7 Feb 71 3 1 131 3 1 17 3 Mar 1331 3 31 117 1 17 9 11 Apr 1373 39 3 139 1 13 3 1 171 3 3 May 13 1 1 13 3 17 1 1 73 Jun 173 11 13 9 3 39 3 117 17 9 91 Jul 1911 13 13 3 139 1 9 Aug 1-1 -1 1 13-9 -1 9 Sep 113 - - 9 19 1 17 1 - -1 7 Oct 171-1 -19 37 9 11-1 -9 1 17 - - 1 Nov 13-17 -1 1 7 19 3 19 17 - -3 Dec 119-7 - -1-1 11 - - 17 17 193-19 -7-1
National Economic Trends Notes Pages, : Final Sales is gross domestic product (GDP) minus change in private inventories Advance, Preliminary, and Final GDP Growth Rates are released during the first, second, and third months of the following quarter Changes result from incorporation of more complete information Real GDP is measured in dollars The ISM (formerly Purchasing Managers ) is a weighted average of diffusion indexes for new orders, production, supplier deliveries, inventories, and employment Aggregate and Average Weekly Hours are paid hours of production and nonsupervisory employees The Inventory-Sales Ratio uses nominal (current-dollar) inventory and sales data Page : For information on how to calculate the Contribution of a component to the overall GDP growth, see the October 1999 issue of the Survey of Current Business, p 1 The sign is changed for Imports Page 7: Ten-year Treasury Yields are adjusted to constant maturity; threemonth yields are secondary market averages All s used in the yield curves are adjusted to constant maturity The 3-year constant maturity series was discontinued by the Treasury Department as of Feb 1, Standard and Poor s with Reinvested Dividends shows the total return: capital gains plus dividends Pages, 9: Oil (West Texas intermediate) and Natural Gas (Henry Hub) spot and futures prices are listed in the Wall Street Journal Spot prices are monthly averages of daily prices; futures prices are usually taken from the last trading day of the month Consumer Price is for all urban consumers The Consumption Chain Price is the index associated with the personal consumption expenditures component of GDP The Employment Cost (ECI) covers private nonfarm employers ECI Compensation refers to a fixed sample of jobs, while Compensation per Hour covers all workers in the nonfarm business sector in a given quarter In both cases, compensation is wages and salaries plus benefits Pages 1, 11: Effective with the January Employment Situation, the establishment survey data for employment, hours, and earnings have been converted from the NAICS system to the 7 NAICS system For more information see http://wwwblsgov/ces/ Nonfarm Payroll Employment is counted in a survey of about, establishments (Current Employment Statistics) It excludes self-employed individuals and workers in private households, but double-counts individuals with more than one job The Household Survey (Current Population Survey) of about, households provides estimates of civilian employment, unemployment, labor force participation, and employment-population ratio Population is civilian, noninstitutional, 1 years and over The 9 percent confidence intervals for the unemployment (± percentage points) and change in household survey employment (± 3,) measure uncertainty due to sample size Because the household survey was changed in January 199, data prior to this date are not strictly comparable The Bureau of Labor Statistics announced several revisions to the Household Survey on Feb 7, 3, with the release of the January 3 data For more information, see <wwwblsgov/cps/> The Job Openings is the number of job openings on the last business day of the month as a percent of total employment plus job openings Page 13: The Michigan Consumer Sentiment shows changes in a summary measure of consumers answers to five questions about their current and expected financial situation, expectations about future economic conditions, and attitudes about making large purchases The survey is based on a representative sample of US households Page : Gross Private Saving is the sum of personal saving, undistributed corpo profits with IVA and CCAdj (see notes for pp 1-19), and private wage accruals less disbursements Gross Government Saving is net government saving (surplus/deficit) plus consumption of fixed capital Balance on Current Account (NIPA) is net capital transfer payments to the rest of the world plus net lending or net borrowing (international trade and income flows) Pages 1, 17: Government Consumption and Investment is current expenditures on goods and services, including capital consumption (depreciation) and gross investment, as reported in the NIPAs The Unified Federal Budget Surplus/Deficit differs from NIPA Basis in four main ways: (1) NIPA excludes transactions involving existing assets; () NIPA outlays exclude government investment and include consumption of government capital, while unified budget outlays do the reverse; (3) NIPA accounts exclude Puerto Rico and US territories; and () various timing issues are handled differently Outlays and Receipts are from the NIPAs, except as noted Since 1977, the federal Fiscal starts on October 1 Excluded agency debt was percent of federal debt at the end of fiscal 1997 Federal Debt Held by the Public includes holdings of the Federal Reserve System and excludes holdings of the social security and other federal trust funds Federal grants in aid to state and local governments appear in both state and local receipts and federal outlays Pages 1, 19: The Trade Balance (shown on a balance of payments basis) is the difference between exports and imports of goods (merchandise) and services It is nearly identical in concept to the Net Exports component of GDP, but differs slightly in accounting details The Investment Income Balance equals income received from US-owned assets in other countries minus income paid on foreign-owned assets in the US The investment income balance is nearly identical in concept to the difference between gross national product and gross domestic product, but differs in accounting details The Current Account Balance is the trade balance plus the balance on investment income plus net unilateral transfers to the US from other countries Pages, 1: Output per Hour (Y/H), Unit Labor Cost (C/Y), and Compensation per Hour (C/H) are indexes which approximately obey the following relationship: %(Y/H) + %(C/Y) = %(C/H) with %() meaning percent changes Unit labor cost is shown on page 9 Real Compensation per Hour uses the CPI to adjust for the effects of inflation Nonfarm business accounted for about 77 percent of the value of GDP in, while nonfinancial corporations accounted for about percent Inventory Valuation Adjustments (IVA) remove the effect of changes in the value of existing inventories from corpo profits and proprietors income (This change in value does not correspond to current production and therefore is not part of GDP) Capital Consumption Adjustments (CCAdj) increase profits and proprietors income by the difference between estimates of economic depreciation and depreciation allowed by the tax code Components of national income not shown are rental income of persons and net interest Sources Bureau of Economic Analysis (BEA), US Dept of Commerce National income and product accounts, international trade and investment data (except by country), auto and light truck sales Census Bureau, US Dept of Commerce Inventory-sales ratios, retail sales, capital goods orders, housing starts, exports and imports by country Bureau of Labor Statistics (BLS), US Dept of Labor All employment-related data, employment cost index, consumer and producer price indexes, unit labor cost, output per hour, compensation per hour, multifactor productivity United States Department of Treasury Unified budget receipts, outlays, deficit, debt Federal Reserve Board of industrial production, treasury yields, exchange s, capacity utilization, household debt The Survey Research Center, The University of Michigan Consumer sentiment index Organization for Economic Cooperation and Development (OECD) GDP for major trading partners (not available on FRED) 7