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The Economic Outlook

The Economic Outlook. Mark Zandi Chief Economist. An Improving Economy. Business Confidence % Positive - % Negative Source: Economy.com. Manufacturers. All Industries. Plunging Tax Payments. Tax payments $bil, (L). Source: BEA. Effective tax rate (R).

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The Economic Outlook

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  1. The Economic Outlook Mark ZandiChief Economist

  2. An Improving Economy Business Confidence % Positive - % Negative Source: Economy.com Manufacturers All Industries

  3. Plunging Tax Payments Tax payments $bil, (L) Source: BEA Effective tax rate (R)

  4. Federal Government Spending Soars Real federal government spending growth % change year ago, 4-quarter MA Sources: BEA, Economy.com

  5. Soaring Mortgage Borrowing Cash Raised from Mortgage Borrowing $ bil Source: Economy.com

  6. Developing Inventory Cycle Total, Real Inventory-to-sales ratio Sources: BEA, Census Wholesale

  7. Amazing Productivity Growth... Nonfinancial businesses % change year ago, 4-qtr MA Source: BLS

  8. ...Lifts Margins and Profitability... After-Tax corporate profit margin Source: BEA

  9. ...Which Prompts Business to Invest... Business spending on information technology $ bil Source: BEA

  10. ...And Finally Add Some Jobs Change in employment ths Source: BLS

  11. Even More Jobs Coming Sources: BEA, BLS Profits growth 1 year lead (L) Employment growth (R)

  12. Near-Term Outlook % change year ago Real GDP Employment

  13. Withering Global Competition Trade deficit $ bil, 12 mo moving sum Source: Census China (R) Total excluding OPEC (L)

  14. Potential Housing Market Problems Buffalo Detroit Portland Syracuse Boston Milwaukee Nassau Pittsburgh Bergen-Passaic Salt Lake/Provo Cleveland Newark San Francisco Indiannapolis Monmouth Columbus San Jose Las Vegas Jersey City St. Louis Los Angeles Louisville Orange County Baltimore Tulsa Washington DC San Diego El Paso Corpus Christi Tampa Ft. Lauderdale New Orleans Miami Potential bubbles Ft. Myers Potentially overbuilt Naples

  15. Darkening Fiscal Outlook 10-Year Cumulative Budget Deficit Source: Congressional Budget Office

  16. Outlook Summary • The economy is performing increasingly well. • Supporting growth are massive fiscal and monetary stimulus, a replacement cycle, and robust productivity growth. • Job growth is rebounding in earnest. • While the economy will come back, it will not come roaring back. Fierce global competition and high labor-to-capital costs will weigh on job market. • Interest rates will rise with the job market. Even modestly higher rates will be hard on vehicles and housing. • High household leverage and ballooning federal budget and current account deficits are longer-term threats.

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