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Paul Traub

Economic Update Crain’s Executive Orientation. Federal Reserve Bank of Chicago May 17 , 2013. Paul Traub. The U.S. Economy Private Domestic Investment The U.S. Consumer Michigan Economy. Overview. U.S. Real GDP. Billions Chained $2005, % Change Q/Q at SAAR. $ Billions.

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Paul Traub

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  1. Economic Update Crain’s Executive Orientation Federal Reserve Bank of Chicago May 17, 2013 • Paul Traub

  2. The U.S. Economy • Private Domestic Investment • The U.S. Consumer • Michigan Economy Overview Federal Reserve Bank of Chicago

  3. U.S. Real GDP Billions Chained $2005, % Change Q/Q at SAAR $ Billions Percent Q1 ‘13 $13,750 Q4 ‘07 $13,326 Declined $625B (Peak to Trough, -4.7%) Q2 ‘09 $12,701 Q1 ‘13 2.5% Q4 ‘08 -8.9% Source: BEA Federal Reserve Bank of Chicago

  4. U.S. Real GDP and Components Percent Change from Preceding Period - Q4 ’12, SAAR Percent Nonresidential 2.1 Residential 12.6 Exports 2.9 Imports 5.4 Source: Author’s calculations using data from the BEA Federal Reserve Bank of Chicago

  5. Recession Comparisons Percent Change 21 Quarters After the Start of the Recession Percent Source: Author’s calculations using data from the BEA Federal Reserve Bank of Chicago

  6. U.S. Real GDP Percent Change Yr / Yr Percent Consensus of the Blue Chip by Month Federal Reserve Bank of Chicago

  7. Global Outlook IMF Forecast for Growth (April ‘13), Percent Change Yr/Yr Percent Difference from January 2013 Outlook 2013 -0.1-0.2 -0.2 2014 0.0-0.1 0.0 Federal Reserve Bank of Chicago

  8. Closing the Output Gap Actual / Projected Growth Rate Scenarios $ Billions Q1 ‘16 Q1 ‘15 Q3 ‘20 Congressional Budget Office Projection Output Gap -5.6% Federal Reserve Bank of Chicago

  9. Private Domestic Investment Federal Reserve Bank of Chicago

  10. Total Gross Private Domestic Investment Billions Chained $2005, % Change Q/Q at SAAR $ Billions Percent Q1 ‘06 $2,266 Q1 ‘13 $1,992 Q1 ‘13 12.2% Q3 ‘09 $1,395 Declined $871B (Peak to Trough, -38.5%) Source: BEA Federal Reserve Bank of Chicago

  11. Nonresidential Private Domestic Investment Billions Chained $2005, % Change Q/Q at SAAR Q4 ‘07 $1,592 $ Billions Percent Q1 ‘13 $1,530 Declined $376B (Peak to Trough, -23.6%) Q1 ‘13 2.1% Q4 ‘09 $1,216 Source: BEA Federal Reserve Bank of Chicago

  12. Nonresidential Private Domestic Investment Index, 2000 = 100 Index Q1 ‘13 132.3 Q1 ‘13 82.7 Source: BEA Federal Reserve Bank of Chicago

  13. Residential Private Domestic Investment Billions Chained $2005, % Change Q/Q at SAAR Q4 ‘05 $1,592 $ Billions Percent Declined $461B (Peak to Trough, -58.9%) Q1 ‘13 12.6% Q1 ‘13 $397.8 Q3 ‘10 $322.2 Source: BEA Federal Reserve Bank of Chicago

  14. Home Prices Case-Shiller 20-City Home Price Index, January 2000 = 100 Index % Change Y/Y Feb ’13 149.8 9.4% Federal Reserve Bank of Chicago

  15. Home Price and Homeowner Equity United States - Index, January 2000 = 100 Index 30 Year Mortgage Balance 15 Year Mortgages Balance Note: S&P Case-Shiller 20 City Home Price Index, 30 Year Mortgage at 8.1%, 15 year Mortgage at7.7 %. Federal Reserve Bank of Chicago

  16. Cash-Out Refinance Total Cash-out and 2nd Mortgages/HELOC Consolidation, Billions of Dollars $Billions 2000 – 2007, $1.7 Trillion / 71% of 20 Year Total Source: Freddie Mac Federal Reserve Bank of Chicago

  17. Home Price and Homeowner Equity United States - Index, January 2007 = 100 30 Year Mortgage Balance 15 Year Mortgages Balance Note: S&P Case-Shiller 20 City Home Price Index, 30 Year Mortgage at 6.3%, 15 year Mortgage at 6.0%. Federal Reserve Bank of Chicago

  18. Own versus Rent CPI – Primary Residence, Index 2007 = 100, Jan ‘07 – Mar ‘13 Index Source: Bureau of Labor Statistics Federal Reserve Bank of Chicago

  19. U.S. Housing Starts and Building Permits Thousands of Units, SAAR Thousands Mar ‘13 1,036 907 Source: U.S. Census Bureau Federal Reserve Bank of Chicago

  20. U.S. Consumer Federal Reserve Bank of Chicago

  21. Real Disposable Personal Income & Savings Rate Percent Change Year/Year, Percent of DPI Percent Mar ’13 2.7% 1.1% May ‘09 -4.9% Source: BEA Federal Reserve Bank of Chicago

  22. Total Consumer Credit Revolving and Non-revolving Credit as % of DPI Percent Feb ’13 23.2% Federal Reserve Bank of Chicago

  23. Debt Service & Financial Obligation Ratios Percent of Disposable Personal Income Percent Q4 ‘12 15.5% 10.4% Federal Reserve Bank of Chicago

  24. Inflation – CPI Price Index Percent Change Yr / Yr Percent CPI - Core Mar ‘13 1.9% CPI – All Items Mar ‘13 1.5% Federal Reserve Bank of Chicago

  25. U.S. Unemployment & Participation Rates Percent – Seasonally Adjusted Percent Apr ‘13 7.5% 63.3 Source: BLS Federal Reserve Bank of Chicago

  26. U.S. Nonfarm Payroll Employment by Sector Employment Change Jan ‘08 – April ‘13, Thousands of Jobs Total -2,582, -1.9% Source: U.S. Department of Labor Federal Reserve Bank of Chicago

  27. Households Net Worth Trillions of Dollars, Q1 ‘80 to Q4 ‘12 Q3 ‘07 $67.4 Q4 ‘12 $66.1 -$1.3 Total Decline Q3 ‘07 – Q1 ‘09 -$16.0 Source: Federal Reserve Z.1 Statistical Release ,Table B100, Households and Nonprofit Organizations Federal Reserve Bank of Chicago

  28. Consumer Sentiment University of Michigan Index January ‘00 112.0 Apr ’13 76.4 Source: Thomson Reuters / University of Michigan Federal Reserve Bank of Chicago

  29. Michigan Economy Federal Reserve Bank of Chicago

  30. Michigan Population 1910 to 2010 by Decade, Percent Change Thousands Percent Source: U.S. Census Bureau Federal Reserve Bank of Chicago

  31. Real Per Capita Income Thousands of $2005 $Thousands 2012 $36.9 $32.4 Source: U.S. Census Bureau / Haver Analytics Federal Reserve Bank of Chicago

  32. Midwest Economic Index Sectoral Contribution Index Mar ‘13 0.27 Source: FRB of Chicago Federal Reserve Bank of Chicago

  33. Midwest Economic Index Michigan’s Contribution Index Mar ‘13 0.10 Source: FRB of Chicago Federal Reserve Bank of Chicago

  34. Relative Midwest Economic Index Michigan’s Contribution Index Mar ‘13 0.13 Source: FRB of Chicago Federal Reserve Bank of Chicago

  35. Michigan Real Gross State Product Billions of 2005$, Percent Change Year / Year 2005$ Percent 2003 $379 2012 $341 1.2 Source: Haver Analytics / FRB of Chicago Federal Reserve Bank of Chicago

  36. Michigan Exports of Manufactures Goods Billions of 2000$, Percent Change Year / Year 2000$ Percent Mar ‘13 2.95 -8.7 Source: Haver Analytics Federal Reserve Bank of Chicago

  37. Michigan Unemployment Rate Unemployment rate & Household Employment – S.A. Percent Mar ’13 8.5 Source: BLS Federal Reserve Bank of Chicago

  38. Michigan Nonfarm Payroll – 2013 Establishment Survey - SA (000)’s 35.1 28.5 25.0 3.9 21.1 14.4 -4.3 -5.1 -1.5 Source: BLS / Haver Analytics Federal Reserve Bank of Chicago

  39. Michigan Nonfarm Payroll Employment by Sector Employment Change Jan ‘08 – Mar ‘13, Thousands of Jobs Total -178.8, -4.2% Source: U.S. Department of Labor and Haver Analytics Federal Reserve Bank of Chicago

  40. Unemployment Rate Unemployment Rate for Select Cities – N.S.A. Percent Mar ‘13 17.5 8.3 5.4 Source: BLS Federal Reserve Bank of Chicago

  41. FHFA Home Prices Index, 2000 = 100 Index Q4 ‘12 94.9 79.9 Source: Haver Analytics Federal Reserve Bank of Chicago

  42. Home Price and Homeowner Equity Michigan and Detroit - Index, Q1 2000 = 100 Index 30 Year Mortgage Balance 15 Year Mortgages Balance Note: FHFA Home Price Index, 30 Year Mortgage at 8.1%, 15 year Mortgage at 7.7%. Federal Reserve Bank of Chicago

  43. Home Price and Homeowner Equity Michigan and Detroit - Index, Q1 2007 = 100 Index 30 Year Mortgage Balance 15 Year Mortgages Balance Note: FHFA Home Price Index, 30 Year Mortgage at 6.3%, 15 year Mortgage at 6.0%. Federal Reserve Bank of Chicago

  44. Housing Starts Index, 2000 = 100 Index Mar ‘13 65.8 25.7 Source: U.S. Census / Haver Analytics Federal Reserve Bank of Chicago

  45. U.S. Light Vehicle Sales SAAR and Annual Sales Millions 16.5 Apr ‘13 14.9 Cash for Clunkers 16.1 15.9 Aug ’09 14.6 15.4 14.4 13.2 12.7 11.6 10.4 Apr ’09 9.2 May Blue Chip Consensus Source: Ward’s Automotive and BEA Federal Reserve Bank of Chicago

  46. “Detroit 3” N.A. Auto Capacity Calendar Year 2005 - 2012 Percent Millions 13.5M, 67.8% 8.9M, 53.9% Detroit 3 Chrysler, Ford and General Motors Source: Ward’s Automotive Federal Reserve Bank of Chicago

  47. “Detroit 3” L.V. Market Share Calendar Year 2005 – April, 2013 Percent Detroit 3: Chrysler, Ford and General Motors Source: Ward’s Automotive Federal Reserve Bank of Chicago

  48. Thank You! • http://michiganeconomy.chicagofedblogs.org/

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