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Economic Highlights:  Growth  &  Profits   Don  Rissmiller     October  10,  2013     Strategas  Research  Partners   212-­‐906-­‐0134   drissmiller@strategasrp.com        


Where Are  We  In  the  Business  Cycle?   U.S. Real Gross Domestic Product % Change - Year to Year

SAAR, Bil.Chn.2009$

10.0

10.0

7.5

7.5

5.0

5.0

2.5

2.5

0.0

0.0

-2.5

-2.5

-5.0

-5.0 60 65 70 75 80 85 Source: Bureau of Economic Analysis

90

95

00

05

10


Where Are  We  In  the  Business  Cycle?   U.S. Real Gross Domestic Product % Change - Year to Year

SAAR, Bil.Chn.2009$

10.0

10.0

7.5

7.5

5.0

5.0

2.5

2.5

0.0

0.0

-2.5

-2.5

-5.0

-5.0 60 65 70 75 80 85 Source: Bureau of Economic Analysis

90

95

00

05

10


Even in  Bad  Times,  It’s  Easy  To  Get  a   “Bounce”   Real Gross Domestic Product % Change - Year to Year

Bil.Chn.2009$

15

15

1930s 10

10

5

5

0

0

-5

-5

-10

-10

-15

-15 30 31 32 33 34 Source: Bureau of Economic Analysis

35

36

37

38

39


Pent-­‐Up Demand  Is  Powerful   3  U.S.  Areas  To  Watch:     1)  Capex   2)  Housing   3)  State  &  Local  Govt  


Pent-­‐Up Demand  Is  Powerful   Mfrs' Shipments: Nondefense Capital Goods ex Aircraft % Change - Year to Year

SA, Mil.$

15.0

15.0

7.5

7.5

0.0

0.0

-7.5

-7.5

-15.0

-15.0

-22.5

-22.5 04 05 06 Source: Census Bureau

07

08

09

10

11

12

13


Pent-­‐Up Demand  Is  Powerful   Mfrs' Shipments: Nondefense Capital Goods ex Aircraft % Change - Year to Year

SA, Mil.$

All Employees: Total Nonfarm

% Change - Year to Year

SA, Thous

15.0

4

7.5

2

0.0

0

-7.5

-2

-15.0

-4

-22.5

-6 04 05 06 07 08 09 10 Sources: Census Bureau, Bureau of Labor Statistics

11

12

13


Household FormaQon  Is  Key   Total Number of Households, Break-adjusted % Change - Year to Year

Thous

2.4

2.4

2.0

2.0

1.6

1.6

1.2

1.2

0.8

0.8

0.4

0.4

0.0

0.0 90 95 00 Source: Census Bureau/Haver Analytics

05

10


Economic Symmetry  

2007-2009 Deep Recession 2013-14 Recovery (We get housing & capex back)

2009-2010 Moderate Recovery (Missing housing)

2011 Muddle Through (Deleveraging)

2012 Muddle Through (Deleveraging)

Late-2012, early 2013 Slowdown (Fiscal Cliff / Sequester Uncertainty)


But U.S.  InflaQon  Is  Not  a  Problem,  With   Wage  Growth  Restrained   CPI-U: All Items

% Change - Year to Year

SA, 1982-84=100

Nonfarm Business Sector: Compensation Per Hour % Change - Year to Year

SA, 2009=100

16

16

12

12

CompensaMon

8

8

4

4

0

0

-4

-4 60 65 70 75 80 Source: Bureau of Labor Statistics

85

90

95

00

05

10


So –  Even  AXer  the  Sept  Punt  –  Why  Is  the   Fed  Talking  About  Tapering  (Ever)?   Civilian Unemployment Rate: 16 yr + SA, % 12

12

10

10

8

8

6

6

4

4

2

2 60 65 70 75 80 Source: Bureau of Labor Statistics

85

90

95

00

05

10


Labor Share  At  a  Low   U.S. Corporate Compensation % Corporate GDP

66

66

64

64

62

62

60

60

58

58

56

56 50 55 60 65 Source: Haver Analytics

70

75

80

85

90

95

00

05

10


Future ProducQvity  Gains  Will  Be  Important   Nonfarm Business Sector: Real Output Per Hour of All Persons % Change - Year to Year

SA, 2009=100

6

6

4

4

2

2

0

0

-2

-2 60 65 70 75 80 Source: Bureau of Labor Statistics

85

90

95

00

05

10

Rissmiller, don  
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