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The Economic Outlook

The Economic Outlook. Michael Dolega, Economist TD Economics. May 3, 2013. This time is different. Jobless rates gradually improving…. …but not necessarily for right reason. Payroll growth remains subdued…. …causing job deficit to persist.

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The Economic Outlook

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  1. The Economic Outlook Michael Dolega, Economist TD Economics May 3, 2013

  2. This time is different

  3. Jobless rates gradually improving…

  4. …but not necessarily for right reason

  5. Payroll growth remains subdued…

  6. …causing job deficit to persist

  7. But shortfall is all in construction, manufacturing & government…

  8. What’s in store for the economy? • Lots of upside potential… • Housing • New construction: jobs • Existing homes: wealth effect, less NEM • Consumer spending • Auto: improved but pent-up demand present • Monetary policy • Fostering recovery: inexpensive credit, MBS

  9. What’s in store for the economy? • But weighed down by… • Fiscal issues • Revenue side: higher taxes • Expenditure side: sequester • Uncertainty over policy (long-term, funding) • Weak global backdrop • Eurozone: calmer but in recession; risks remain • Spilled over to global trade: soft-landing in China

  10. Global slowdown a near-term headwind…

  11. …with much of G7 still contracting

  12. U.S. exports less Europe-oriented

  13. … but New Hampshire more exposed

  14. NH exports beginning to turn around

  15. Still dragged down by machinery……but electronics faring better

  16. Government deleveraging will leave growth on shoulders of private sector

  17. Federal deficits are getting smaller…

  18. …at least for now

  19. Housing headwind has turned to a tailwind

  20. Construction to catch up to household growth

  21. Home prices recovering nationally…

  22. New England prices less volatile…

  23. …but rising throughout the region

  24. Foreclosure inventories gradually improving across New England

  25. Pent-up demand for autos remains…

  26. Investment has room to grow still…

  27. Fed will remain accommodative…

  28. …with interest rates remaining low for some time still

  29. Economic growth to gather pace…

  30. …with New England slightly slower

  31. But NH will do better than peers

  32. The bottom line • Tug-of-war within economy • Tax hikes & spending cuts are a drag • Global growth weighs, but gradually improving • Housing improvement will drive economic growth • Fed to remain stimulative • Real GDP growth of ~2.0% in 2013, ~3.0% in 2014

  33. TD Economics www.td.com/economics This reportis provided by TD Economicsfor customers of TD Bank Group. It is for information purposes only and may not be appropriate for other purposes. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.

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