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By: Anirban Basu Sage Policy Group, Inc. January 8, 2013

Going Up for the Rebound. On Behalf of Maryland Association of Realtors. By: Anirban Basu Sage Policy Group, Inc. January 8, 2013. First Pitch. Historic and Projected World Output Growth 2004 through 2013*. Source: International Monetary Fund. * 2012-2013 data are projections.

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By: Anirban Basu Sage Policy Group, Inc. January 8, 2013

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  1. Going Up for the Rebound On Behalf of Maryland Association of Realtors By: AnirbanBasu Sage Policy Group, Inc. January 8, 2013

  2. First Pitch

  3. Historic and Projected World Output Growth 2004 through 2013* Source: International Monetary Fund *2012-2013 data are projections

  4. Estimated Growth in Output by Select Global Areas2012 Projected Source: International Monetary Fund

  5. Debt by Country2011 Source: IMF; BIS; Bloomberg L.P.

  6. Top 12 Stock Exchanges 2011 Growth Source: Yahoo! Finance

  7. Top 12 Stock Exchanges 2012 Growth Source: Yahoo! Finance

  8. S&P Select Sector Performance2012 Source: Dow Jones, Standard & Poor’s

  9. Third Quarter Earnings for Select CorporationsEarnings per Share Source: Dow Jones, Standard & Poor’s

  10. Red Card/Pink Slip

  11. Recession Watchas of December 2012 Source: Moody’s Economy

  12. Industrial ProductionFebruary 2001 through November 2012 Source: Federal Reserve The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

  13. Gross Domestic Product1990Q1 through 2012Q3 Source: Bureau of Economic Analysis

  14. Net Change in U.S. Jobs, BLSJanuary 2002 through December 2012 Dec. 2012: +155K Between Dec. 2011 and Dec. 2012, the nation gained 1,835,000 jobs. Source: Bureau of Labor Statistics

  15. National Nonfarm Employmentby Industry SectorDecember 2012 v. December 2011 All told 1,835K Jobs gained Source: Bureau of Labor Statistics

  16. Two-minute Drill • The automatic sequestration mandated by the Budget Control Act of 2011 is set to begin in January 2013. Both defense and non-defense programs will be cut by $54.7 billion each year from 2013 through 2021 – a total of approximately $109.3 billion per year or $984 billion through 2021. • In addition, if Congress does not act by the end of the year, nearly 50 items in the tax code will expire. Among the most significant items are the “Bush tax cuts” and the payroll tax cut. • Bush Tax Cuts: If tax cuts are not extended, approximately 60 percent of taxpayers will see an increase in their tax ratebetween 3 and 5 percentage points (e.g. a couple that makes $90,000/year will pay an extra $2,700 in federal income taxes). Expiring tax cuts also mean reductions to investment income. If the current rates expire, the tax rate for capital gains would increase from 15 percent to 20 percent and dividendswould be taxed as normal income, instead of at the current 15 percent rate. • Payroll Tax Cut: If allowed to expire, roughly 160 million workers will see a 2 percentage point tax increase in payroll taxes, or an average of $714 or more/year for each worker. The Joint Committee on Taxation reports that the payroll tax cut will save workers $114 billion in 2012.

  17. Comparison of 2013 Business Taxes, Select States Source: The Tax Foundation *The relative scoring scale is from 0 to 10, with zero meaning not “worst possible” but rather worst among the fifty states."

  18. 2013 State Business Tax Climate Index Source: The Tax Foundation *The relative scoring scale is from 0 to 10, with zero meaning not “worst possible” but rather worst among the fifty states."

  19. Maryland Nonfarm Employmentby Industry Sector Groups (SA)November 2012 v. November 2011Absolute Change MD Total: +16.0K; +0.6% US Total (SA): +1,889K; +1.4% Source: Bureau of Labor Statistics

  20. Baltimore-Towson MSA Nonfarm Employmentby Industry Sector Groups (NSA)October 2012 v. October 2011Absolute Change Baltimore Total: +11.3K; +0.9% MD Total (NSA): +33.4K; +1.3% US Total (SA): +1,900K; +1.4% Source: Bureau of Labor Statistics

  21. Washington, DC-Arlington-Alexandria MSA Nonfarm Employmentby Industry Sector Groups (NSA)October 2012 v. October 2011Absolute Change DC MSA Total: +21.7K; +0.9% US Total (SA): +1,900K; +1.4% Source: Bureau of Labor Statistics

  22. Employment Growth, U.S. States (SA) November 2012 v. November 2011 Percent Change Source: Bureau of Labor Statistics U.S. Year-over-year Percent Change: 1.4%

  23. Unemployment Rates, U.S. States (SA) November 2012 Source: Bureau of Labor Statistics U.S. Unemployment Rate: 7.9%

  24. Unemployment Rates, 20 Largest Metros (NSA)October 2012 Source: Bureau of Labor Statistics

  25. MD County Unemployment RatesOctober 2012 Source: Bureau of Labor Statistics

  26. Pad Save

  27. 15-Year & 30-Year Fixed Mortgage Rates January 1995 through December 2012 Source: Freddie Mac

  28. Home Sale Prices – Maryland & United States2001Q1 through 2012Q3 Source: FHFA House Price Index *The HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages.

  29. Housing Inventory by Suburban MD November 2012 v. November 2011 Source: Maryland Association of Realtors Maryland = Nov. 2011: 8.5 months; Nov. 2012: 5.3 months

  30. Housing Inventory by Baltimore MSA Jurisdiction November 2012 v. November 2011 Source: Maryland Association of Realtors Maryland = Nov. 2011: 8.5 months; Nov. 2012: 5.3 months

  31. Home Sales for Seven Largest Maryland CountiesNovember 2012 v. November 2011 Percent Change Source: MRIS/RBI

  32. Home Building Permitsfor Select Maryland CountiesYTD2012 Q3 v. YTD 2011 Q3 Percent Change Source: Maryland Data Center Ranked by total permits.

  33. Put me in, Coach

  34. Conference Board Consumer Confidence2005 – December 2012 Source: Conference Board

  35. U.S. Retail and Food Service SalesJanuary 2002 through November 2012 Source: Census Bureau

  36. U.S. Chain Store Sales Growth by Type of Store December 2012 v. December 2011 Source: International Council of Shopping Centers

  37. National Vehicle Sales June 2004 through December 2012 (SAAR) Source: Autodata Corp.

  38. Conference Board Leading Economic Indicators IndexAugust 2007 through November 2012 Source: Conference Board

  39. Fourth Quarter • Economy hit a soft patch; • Recession not imminent; • Black swan threats: (1) Iran (2) Israel/Iran (3) Europe; • 2013 could be very different depending on…; • Many headwinds remain and the nascent recovery could easily falter; and • Whither Maryland?

  40. Thank You • You can always reach me at abasu@sagepolicy.com • If you appreciate this type of information and would like regular updates, please see our newsletter service at www.spgtrend.com • Also, if you need us in a hurry, we are at 410.522.7243 (410.522.SAGE) • Please contact us when you require economic research & policy analysis.

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