UCF U.S. Forecast February 2017

U.S. Forecast Febr uar y 2017

Institute for Economic Competitiveness College of Business Administration University of Central Florida

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ABOUT THE COLLEGE OF B U S I N E S S A D M I N I S T R AT I O N

Institute for Economic Competitiveness College of Business Administration University of Central Florida

FO R E C A S T FO R T H E N ATI O N Forecast 2017 - 2020 Febr uar y 2017 Repor t

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2017 Institute for Economic Competitiveness. All rights reserved.

Publications of the Institute for Economic Competitiveness are made possible by the following staff: Dr. Sean Snaith, Director Angela Ayala, Administrative Assistant Diana Merchant, Researcher Leigh Durden, Researcher Maegan Alexis Trinidad, Researcher Coulter Small, Researcher Colin Lancaster, Researcher Brandt Dietry, Researcher This forecast was prepared based upon assumptions reflecting the Institute for Economic Competitiveness’ judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Institute for Economic Competitiveness nor the University of Central Florida shall be held responsible as a consequence of any such variance. Unless approved by the Institute for Economic Competitiveness, the publication or distribution of this forecast and the preparation, publication or distribution of any excerpts from this forecast are prohibited.

H I G H L I G H T S O F T H E Q 1 2 0 17 U . S . F O R E C A S T In this U.S. Forecast: • Mr. Trump’s Wild Ride: The first few weeks of the new administration feel a lot like a trip on Disney’s Mr. Toad’s Wild Ride. Will both rides have similar endings? • Faster economic growth and higher inflation—both of which have eluded the Federal Reserve for years—will be products of Trump’s proposed economic policy path.

HIGHLIGHTS

• Since 2014, average monthly payroll job growth has been decelerating, but the new administration should stem this trend with a bump to job growth in 2018-2019. • Average monthly payroll employment growth in 2015 was slower than in 2014 and 2016 averaged less than 2015’s average growth. Uncertainty and regulatory burdens have been hindering payroll job growth, which will slow to 1.8% in 2016 and further slow to a growth rate of 1.5% in 2017. In 2018, it will accelerate to 1.6% before ticking up to 1.7% in 2019 and then easing to 1.5% in 2020. • The rest of the world will continue to be a drag on U.S. growth. A stronger dollar in a world of weak growth and rising interest rates in the U.S. will boost imports and depress exports; as a result, net exports will weigh on the economy through 2020. Trump’s trade policies could alter this outlook significantly. • The Federal Reserve raised interest rates in December of 2016; the next 25 basis point hike will come in the next two FOMC meetings and stronger growth and higher inflation from Trump administration policies should up the pace of future increases over the next three years with the federal funds rate hitting 3.00% by the end of 2019. • Real GDP growth, which slowed to 1.6% in 2016, will hit 2.7% in 2017, 3.3% in 2018, and then rise to 3.4% in 2019 before easing to 3.0% in 2020 as the Federal Reserve tightens interest rates. A recession, though less likely under new administration policies, could interrupt the Fed’s plans. • The housing market continues its recovery. The housing market will slowly improve through 2020, even with rising interest rates. Housing starts will rise from 1.28 million in 2017 to 1.67 million in 2020. • Unemployment rates (U-3) are expected to decline to 3.8% in mid-2020. Job growth will be enough to keep up with labor force growth until 2019 when unemployment stabilizes. Underemployment (U-6), a persistent problem in this recovery, stands at 9.4% as of January 2017 but will continue to decline through 2020. • Inflation will accelerate in 2017, pushing the Fed to move more quickly to raise interest rates. Core CPI inflation will average 2.5% during 2017-2020.

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MR. T RUMP’S WILD RIDE When I was a boy, friends of my mother generously took me on a trip to Orlando for my first visit to Disney World. It would be nearly two decades before I would return to Magic Kingdom, but as you can imagine, my first trip to the park made a lasting impression.

any ride I had ever been on before. Mr. Toad’s Wild Ride was strange, surreal, gritty, and weird. It had also been described as dark—and not only because of the lighting.

The first was Space Mountain, which had recently opened in Disney World. I recall waiting in the heat and humidity of the summer afternoon in Orlando for what seemed to be hours (and maybe was, this being long before the advent of the Fast Pass) to get into the building housing the indoor roller coaster. I remember being grateful for the miracle of air conditioning and subsequently rocketing through the dark in the rocketship-shaped coaster car and finding how quickly the whole thrilling experience passed.

The ride made sudden turns, taking guests through (depending on the track/park) Mr. Toad’s library, dining room, trophy room, and kitchen. The car heads out through scenes in a pub, a courtroom, a barnyard, a gypsy camp, a warehouse filled with explosives, and a prison cell. All versions of the ride put riders on a train track where an oncoming train collides with the car, sending riders into the final scene taking place in, well, hell.

As I get older, my mind has become more and more like a Salvador Dali painting, and the persistence of memories from that trip are most vivid for three attractions, although I went on many more.

The second was the Haunted Mansion. This experience was so vastly different from the kitschy haunted house rides I had experienced at other fairs and amusement parks—with their painted facades, cheap plastic skeletons, and poorly designed mummies. I remember how detailed the whole experience was from the giant gothic mansion to the meticulous landscaping and many intricate details and décor throughout the ride. I also remember the pseudo-elevator at the start of the ride and the ghost that appeared in the car with me near the ride’s end. It was also nice and cool inside. Both Space Mountain and the Haunted Mansion are still staples at Magic Kingdom here in Orlando; however, the third attraction I remember from that trip is no longer at the park: Mr. Toad’s Wild Ride. The original Mr. Toad’s is still in operation at Disneyland in California. Now, Mr. Toad’s Wild Ride was certainly neither a thrill ride like Space Mountain nor a slow-moving, deliberate ride like the Haunted Mansion. Nor was it like

Riders began by entering an old jalopy Model-T-ish car that drove erratically, veering madly through a variety of disjointed and disconcerting scenes while wreaking havoc along the way. There were two tracks at the Disney World version, each offering a different variation of scenes with some unique to the California ride.1

The ride ends with the cars breaking out of hell through doors that lead back out into the light of day and the end of the ride. Hey kids, how’d you like that? Mr. Toad’s Wild Ride closed in the Magic Kingdom in 1998, but not without controversy and protests, with several occurring in the park itself by supporters of the ride.

President Trump was sworn into office less than a month ago, and the subsequent days since the inauguration have triggered those memories of taking a trip on Mr. Toad’s Wild Ride. Given that Trump was a candidate unlike any in presidential history, I suppose that the start of the Trump administration should have been expected to be unlike any in presidential history, but it still feels in many ways every bit as surreal as Mr. Toad’s ride. This ride began in an economic jalopy, with the economy experiencing a historically weak recovery. The latest GDP report for the 4th quarter of 2016 displayed growth of 1 A YouTube video of the Disneyland ride can be viewed here: https://www.youtube.com/watch?v=nWu6OThkq14 Institute for Economic Competitiveness

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1.9%, putting full-year growth at just 1.6%. There has been solid job growth, but even that has been insufficient to keep up with working age population growth. The recovery has endurance but no strength mid-way through its 8th year.

Dark. That would be the most euphemistic way that opponents of the president’s administration would describe it. The first few weeks of the new administration have thus far been erratic, veering wildly from issue to issue. We have already had a court scene, with more likely to come. And tweets—lots of tweets. Even typically routine processes such as the approval of cabinet appointments have become full-on issues, with Democrats resisting nearly all of the president’s nominees. This is a stark contrast to the first week of the Obama administration; in 2009, ten nominees were confirmed in the first week, though not all of President Obama’s nominees sailed through or even made it to a vote. Democrats cannot alone stop any appointments due to the change they made to Senate procedural rules to get the Affordable Care Act passed. This will allow Republicans to approve with a simple majority, although the Democrats can continue to delay the process. With many wealthy candidates requiring a longer vetting process, the new presidency will continue with only a skeletal administration in place, ensuring that the wild ride will last even longer.

The final scene of Mr. Toad’s Wild Ride, as mentioned previously, takes place in hell. It doesn’t take much digging to find people who will quickly characterize the Trump administration as hellish. And even those who are neutral or support the administration must feel somewhat bedeviled by how the initial weeks of the Trump presidency have been playing out. Those of us tasked with predicting how the future will look must somehow peer through the smoke, ignore the smell of sulfur, and try to see the world beyond this harrowing scene. While I worked on this forecast, if I closed my eyes, I could still see the little demons from Mr. Toad’s Wild Ride hopping up and down and hear them cackling in delight—this time taunting me to try and figure out how this might all unfold for the U.S. economy. However, I also recall from that ride, on my first trip to Disney World, the car emerged from hell, bursting through the gates and into the bright Florida sunshine. I still see a similar ending for Mr. Trump’s Wild Ride, 6

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with the U.S. economy emerging, after this hellish start to his administration, into a brighter future of faster economic growth—demons be damned.

ANXIOUS INDEX Fear of Recession Slips to Lowest Level Since 2015 The most recent release (1st quarter of 2017) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 37 forecasters surveyed for the publication put an 11.21% chance that a decline in real GDP will occur in the 2nd quarter of 2017. This quarter’s release reflects a further decrease in forecasters’ anxiety over the 4th quarter’s survey. It should be noted that this is the first survey that has been taken since the presidential election and, despite the wild ride, it appears the Trump administration’s expected policies have lowered fears of a recession. One section of the Survey of Professional Forecasters asked panelists to estimate the probability that real GDP will decline in the quarter in which the survey is taken, as well as the probabilities of a decline in each of the following four quarters. The anxious index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in early February of the 1st quarter of 2017, the index stands at 11.21, which means that forecasters believe there is an 11.21% chance that real GDP will decline in the 2nd quarter of 2017.

The forecasters also report a 7.68% chance that we are currently (as of the 1st quarter of 2017) experiencing a contraction in real GDP—more than two points lower than the probability the forecasters assigned for the 4th quarter of 2016. According to the panel, the probability that real GDP growth will turn negative is averaging around 14.92% through the end of the 2nd quarter of 2018, indicating that the forecasters’ assignment of probability for a contraction in real GDP in the upcoming year is the lowest given since 4th quarter of 2015. Figure 1 plots the historical values of the anxious index, where the gray bars indicate periods of recession in the U.S. economy. The current level of the anxious index is more than two points lower than the average level during the economic recovery (13.45).

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GDP OUTLOOK 3.0% Annual Real GDP Growth is Coming, but Probably Not in 2017 2016 went out not with a bang but a whimper. Real GDP growth in the final quarter of the year came in at a tepid 1.9% as of the advance estimate of GDP (the first of three estimates of GDP). That puts the full-year real GDP growth at an anemic 1.6% for 2016, matching the weakest annual GDP growth of this historically weak recovery. The contentious and historical presidential campaign occupied most of the last year, and the uncertainty surrounding this election was higher than is usually the case. This certainly weighed on economic growth, with investment spending hit particularly hard. We have substituted the current wild ride for election uncertainty, but like the election, this too will come to an end.

The average rate of annual real GDP growth from 2010 through 2016 has been just 2.1%. Our forecast for average real GDP growth from 2017-2020 is significantly higher

at 3.1%, with a projected acceleration of growth greater than 3.0% after 2017. As discussed earlier, Mr. Trump’s Wild Ride will eventually end and beyond the doors of the final scene of this ride awaits GDP growth in excess of 3.0%, which we have not experienced since 2005. The likelihood of a recession taking place during our forecast horizon is still a real risk, despite policies that should lower many domestic barriers to growth. All expansions lead into the next recession and no election of policy mix has ever prevented that from occurring. The domestic changes to policy do little to alter the global economic environment that remains fraught with potential expansion-killing pitfalls. From China’s slowing economy (despite official economic statistics suggesting otherwise) to Europe’s ongoing sluggish growth, immigrant crisis, and Brexit-related and political uncertainty, there are plenty of divots on the global economic playing field that could turn the ankle of the U.S. economy. For more than seven years now, we have waited for an acceleration of economic growth that has always been

Figure 1. The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2017:Q1 100 90 80

60 50 40 30 20 10 0

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Probability (percent)

70

Survey Source: Survey of Professional Forecasters, Philadelphia Federal ReserveDate Bank Institute for Economic Competitiveness

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promised and projected to be just around the corner, but when we got to that corner, again and again, faster growth proved to be nothing more than a mirage and the product of wishful thinking. The change of administration and path of policy appears to be an event that could finally provide this long-awaited acceleration. Despite a soybean-export-fueled growth of real GDP in the 3rd quarter of 2016 hitting 3.5%, the rest of the year mustered only an average growth rate of 1.4%. However, things should begin to improve this year. In 2017, we are expecting real GDP growth to accelerate to 2.7%. Growth will jump to 3.3% in 2018 before accelerating to 3.4% in 2019. The projected growth rate for 2019 would be the first time the U.S. economy experienced annual growth at 3.4% or higher since 2004. This forecast was revised up by 0.3 of a percentage point from our November 2016 U.S. Forecast for 2017-2019.

As details of the economic policies pursued by the Trump administration become available and the wild ride of the initial weeks of the administration concludes, the possibility that economic growth could accelerate at an even faster pace, which seemed unlikely prior to the presidential election, could very well come to pass. But if the wild ride lasts longer than expected, economic motion sickness could change this positive outlook in a negative way. The election will have consequences for Federal Reserve policy as well. After raising the federal funds rate by 25 basis points in December of 2016, the second December in a row that the Fed has made such a move, there has been a total increase in interest rates of 0.50% in the past two years. As a result of the anticipated policies of the Trump administration, the Fed will quicken the pace of interest rate hikes going forward but not necessarily the magnitude of these hikes. As always, economic data will drive both the timing and the size of these interest rate changes, but the once-a-year, 25 basis point rate hike pattern of the past two years will come to an end in 2017. We expect the federal funds rate to increase interest rates three or four times in 2017, 2018, and 2019, with the anticipated target rate reaching 3.00% by the third quarter of 2019. The path will deviate from this if growth accelerates faster than projected or, of course, there is a recession triggered by any of the global risks to the economic expansion.

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CONSUMER SPENDING Consumers Are Finally Poised to Do Some Heavier Economic Lifting The U.S. consumer has been playing the biggest role in supporting the economic expansion, tepid as it has been, over the past several years. In the 2nd quarter of 2016, real consumer spending growth was 4.3% and yet, despite this strong growth, real GDP growth in the quarter was a tiny 1.4%. Consumption contributed 2.88 percentage points to 2nd quarter GDP growth. In absence of this outsized effort, real GDP would have contracted in that 2nd quarter. Continued gains in employment, more rapidly rising wages, and improving household balance sheets should continue to provide a solid underpinning for continued consumer spending growth. Tax cuts and spending programs proposed by the Trump administration should also boost consumer spending growth. These improving fundamental and growth-oriented policies, however, were not sufficient to keep spending growth at the levels we saw in the 2nd quarter of 2016 but sustained faster consumption spending is on the horizon. Consumer confidence surged post-election and then eased back slightly but remains at levels that are the highest since 2000. Trump’s Wild Ride has not had an overall detrimental effect on consumers’ optimism; however, one wonders if things were proceeding more smoothly, would confidence be even higher?

By the 4th quarter of 2016, consumer spending growth had fallen to 2.5%. The next three quarters, however, should show a strengthening of consumer spending growth. In the 1st quarter of 2017, consumption spending growth will accelerate to 3.4%, as the surge in confidence opens up consumer’s wallets. In the 2nd quarter of 2017, consumer spending growth should decelerate to 3.3% before slipping slightly to 3.0% in the 3rd quarter and 2.7% in the 4th quarter. Consumer spending is the largest component of GDP and a critical part of supporting real GDP growth if this recovery is going to continue and accelerate. The other main sectors of the economy have faced headwinds that have suppressed growth. Business investment has been a drag, government spending is currently adding little to boost GDP growth, and net exports will continue to pull

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down growth rather than propping it up as it mildly did in the first half of 2016. Trump’s economic policies could change the first two in a positive way, but consumers will still need to be the big impulse of this expansion going forward.

While the fundamentals of consumer spending continue to solidify, the labor market continues its recovery amid signs that job growth may be gaining steam. Stronger wage and salary growth are showing signs of reappearing, with annual wage growth in December hitting the highest annual pace of growth in this recovery. December’s wage growth hit 2.9% after the wages labor market had been hovering around 2.1% for several years, but in January, that growth slipped back to 2.5%. Global economic, financial market, and election related uncertainty began to erode consumer confidence in the second half of 2015 and through much of 2016, despite positive developments in other areas. As a result, consumer-spending growth decelerated to around 2.7% in 2016 from 3.2% in 2015. Going forward, tax policy and other policies aimed at stimulating economic growth ushered in by the Trump administration as well as faster wage and salary growth that should accompany them will help boost consumer spending growth. Consumption spending growth is expected to rise to 3.1% in 2017, to 3.5% in 2018, and accelerating further to 4.1% in 2019, before pulling back to 3.9% as higher interest rates rein in both GDP growth and consumer spending.

INVESTMENT 2016 was a rough year for nonresidential investment spending. After decelerating from 6.0% growth in 2014 to 2.1% growth in 2015, spending growth turned negative in 2016, contracting by 0.4%. The long and brutal presidential election cycle carried with it a much higher level of uncertainty than otherwise is the case and as a result, many businesses stayed on the sideline unsure of what policies 2017 might bring. There has been a fundamental problem with investment in this recovery, and we have discussed the role of uncertainty and the rapid growth in the regulatory burden as additional probable causes of this weakness in previous forecast publications. This environment worsened with the presidential political cycle that compounded the environment of uncertainty, but with the outcome now known and the likelihood that this regulatory burden

will be eased in the upcoming years, the environment for investment spending will improve decidedly. Other proposals to change the corporate tax rate and incentivize the repatriation of profits held by U.S. corporations overseas, along with proposed changes to allow companies to expense equipment instead of depreciating it, would boost investment spending if they can make it through this wild ride.

Spending on equipment and software contracted in each of the first three quarters of 2016, following a contraction in the fourth quarter of 2015. This string of quarters with equipment spending declines was precariously close to what we expect to see during a recession. The fourth quarter of 2016 pulled us back from the brink as spending on equipment and software increased by 3.1%. The outlook going forward should continue to strengthen. Purchases of aircraft contracted again by a significant amount in 2016, declining by -43.5% in the 1st quarter; however, in the 2nd quarter, those purchases soared to 64.5%. For the full year, aircraft spending contracted 19.5% after more volatility in the second half of 2016.

The earlier contraction in investment spending also reflects the negative impact of falling oil prices. Consumers are still enjoying the low prices at the gasoline pump, but oil producers cut back on investments, as oil prices dropped below $40 per barrel early in 2016. The rig count in the U.S. hit a more than the seventy-year low of 404 in response to plunging oil prices. The February 2017 count was 751, up 237 year over year. During 2015, investment in mining and petroleum equipment contracted by 30.9% and further contracted in 2016 by 43.7%. In 2017, growth is expected to be 36.5% and average 10.5% per year during 2018-2020. This isn’t a return to $80 a barrel type of boom in spending but a good recovery for a sector that has taken some hits from both markets and regulators. However, it wasn’t just aircraft and oil rigs that were driving the weakness in investment spending.

As noted in 2015, the pace of real private nonresidential fixed investment growth decelerated to 2.1%. The weak start to 2016 and an environment of uncertainty resulted in a further deceleration of investment spending growth to -0.4%. Now that the presidential election is over, uncertainty will fade, and, with answers to many questions in hand and the likelihood of investmentInstitute for Economic Competitiveness

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friendly policies on the way, business investment growth will accelerate to 4.9% in 2017, 6.4% in 2018, then ease to 6.1% in 2019, and 4.7% in 2020.

Interest rates are currently still very low, even as the Fed has begun to push up the federal funds rate at what looks to be a faster pace going forward. Eventually, higher interest rates will begin to drag on investment spending, as is the intention of tightening, thus working to slow those investment spending growth rates in 2019 and 2020. Business spending on equipment and software will grow at an annual average rate of 6.4% from 2017 through 2020. Investment spending growth in computers and peripherals will accelerate in 2017 to 8.5% as upgrade cycles kick in after spending had contracted in 2016 by 2.8%. Spending on communications equipment should expand at an average annual rate of 6.5% during 20172020, while industrial equipment purchases average 7.8% growth over the same time frame. Investment growth in nonresidential structures has fluctuated wildly over the past three years. After growth jumped to 10.4% in 2014, it turned negative in 2015 with growth coming in at -4.4%. This was followed by another year of negative growth in 2016 with spending declining by 3.0%. Investment in nonresidential structures will grow faster in 2017 and 2018, and then decelerate in 2019 and 2020 with a growth of 5.5%, 5.3%, 4.0%, and 3.8%, respectively.

Investment spending growth for transportation equipment contracted by 4.6% in 2016, shattering the momentum built in 2015, when growth was 13.5%. The contraction will be short-lived, as spending is expected to bounce back to 3.8% in 2017. This type of investment will have an average growth rate of 6.7% during the four-year period spanning 2017 through 2020. Growth during 2018 is expected to hit 10.8%. Residential fixed investment growth surged to 11.7% in 2015 after slumping to 3.5% in 2014 but eased again in 2016 to 5.0%. Growth will average 5.9% through 2017-2020, accelerating to a peak growth rate of 7.0% in 2020. In the final year of our forecast (2020), real residential fixed investment will be dampened by both higher mortgage rates—which are expected to average 6.4% on a 30-year fixed mortgage that year—and a slower rate of price appreciation. In 2020, real residential fixed investment will be just nearly $745 billion—$127 billion less than its 2005 housing bubble peak. 10

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We expect housing starts to continue to accelerate over the next several years, reaching a level slightly below 1.67 million in 2020. Average levels of annual housing starts from 2017-2020 will be 1.5 million. In 2019, housing starts are expected to show an increase of 1.11 million starts from their 2009 bottom.

GOVERNMENT SPENDING In 2015, federal government spending growth remained essentially flat after four years of contraction. In 2016, spending growth turned positive with growth coming in at just under 0.6%. The streak of years with positive federal government spending growth will end at one year as the next four years of the Trump administration will see a contraction, though not dramatic, in the levels of federal spending. This will occur despite proposed spending boosts on infrastructure and the military, as cuts will be made elsewhere in federal government. Spending cuts will accelerate in 2019 to 0.5% before easing in 2020 to -0.1%. In 2017, spending should contract 0.2% and in 2018 contract again by 0.3%. During the 2017 to 2020 period, federal government spending is expected to contract steadily, shrinking at an annual average pace of 0.3%. Over the 2016 to 2019 time horizon, state and local governments will oversee spending growth at an average rate of 1.7%.

When it comes to the level of federal government spending, I do not anticipate that the “swamp will be drained,” but the water levels should decrease somewhat over the next four years. Ultimately, though, there will be little solace for federal deficit and debt hawks as these modest cuts will be paired with significant tax cuts leading to higher levels of both deficits and the debt over the next four years. The federal budget deficit jumped in 2016 to over $587 billion, and after a slight dip in 2017, will continue to increase over our forecast horizon through 2019, with a modest decline in 2020. This reversal in course will transpire after four years, during which we saw deficits shrinking from nearly $1.3 trillion in 2011 to $439 billion in 2015. In 2017, the deficit will slip to $579.5 billion before rising again in 2018 when it hits $706.9 billion. The deficit grows much larger in 2019 as entitlement, infrastructure, and military spending coupled with significant tax cuts pushes it to $908.3 billion. Like federal spending growth, the evolving tax policies of the

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new administration will likely impact these projected deficits in a significant way.

The U.S. continues to travel down an unsustainable fiscal path that will ultimately lead to a crisis if we continue on this road. The Greek debt crisis is an example of how painful these entirely avoidable fiscal crises can be, but the U.S. is not yet Greece. However, the existing structure of entitlements, coupled with the demographics of an aging Baby Boomer generation, ensure that if no changes are made to these programs and how they are funded, we will eventually face a fiscal meltdown. Because the onset of such a crisis is still well beyond any nearby election horizon, it is highly unlikely that the needed and admittedly politically unpalatable changes will be implemented in the near future. However, fiscal hawks in Congress could extract some concessions to their concerns from the Trump administration in return for the nearterm fiscal stimulus he is seeking—maybe. Although we are projecting deficits through 2020 that are smaller than the $1 trillion-plus deficits that were the norm in 2009-2012, the additional debt added to the national debt over the next four years will be nearly $3.1 trillion, pushing the national debt total to over $23.0 trillion before interest. As interest rates in the economy rise, the burden of servicing this debt will rise as well, consuming an even greater share of federal tax revenues, further squeezing discretionary spending between this debt service and entitlement spending. Tax cuts and spending programs implemented by the Trump administration could push this debt to even higher levels that we are currently projecting.

Currently, the national debt is over $19.9 trillion and rising. This represents a debt of nearly $166,766 per taxpayer and over $61,549 per citizen. The unfunded liabilities of the U.S. are even more alarming: these include Social Security, Medicare parts A, B and D, federal debt held by the public, and federal employee and veteran benefits, representing more than $105.1 trillion in liabilities, boiling down to $877,602 per taxpayer.

NET EXPORTS This is the sector of the economy where Mr. Trump’s Wild Ride meets It’s a Small World. Pending the forthcoming policies, renegotiated trade deals, and the general anti-globalism political environment, it is also the sector under the greatest cloud of uncertainty.

Net exports became a drag on real GDP growth in the U.S. in 2014, shaving off 0.15 percentage points from growth that year, and even more in 2015, when net exports shaved 0.71 percentage points off of real GDP growth. Last year, the drag on GDP eased but still cost 0.12 percentage points. This drag on GDP growth is expected to last through the end of our 2020 forecast horizon. The same caveat that applies to much of the forecast with regards to policies enacted by the Trump administration could materially and significantly alter the forecast for international trade.

The U.S. dollar has appreciated for four straight years against our major trading partners, including an outsized 16.2% appreciation in 2015. In 2016, this trend moderated, and in the first half of 2017, it may reverse itself slightly, albeit temporarily. As the Fed raises interest rates and the U.S. economy experiences faster growth, the dollar will again appreciate in the second half of 2017, 2018, and again in 2019. The size of the depreciation is anticipated to be much smaller than the appreciation of the six to seven years preceding it; thus, net exports will continue to be a drag on GDP growth.

Over time, a stronger dollar boosts imports and reduces exports by making our goods and services more expensive to foreigners and at the same time making imported goods and services less expensive to U.S. consumers. This results in a worsening of the trade deficit: the difference between the dollar value of exports and the dollar value of imports. The effects of currency changes take time to work on actual quantity of trade flows, resulting in what is known as the J-curve effect on net exports, when an appreciation of the dollar actually decreases the trade deficit before eventually increasing it. Overall, export growth continues through the end of our 2020 forecast horizon and is expected to accelerate through 2018 before backing off slightly in 2019, ticking up again in 2020. Real import growth is expected to accelerate over the entire 2017-2020 time frame but remain below export growth until 2019 when growth hits 8.4% before rising further to 9.7% in 2020. Real export growth from 2017-2020 will average 7.0%, while real import growth will average 6.9% over the same time frame. Real net exports will average -$857.6 billion during 2017-2020, with the trade balance worsening in each successive year and coming in at nearly -$1.1 trillion in Institute for Economic Competitiveness

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2020. The sizeable appreciation of the dollar during 20122015 and 2018-2019, along with weaker global growth relative to the U.S., will dampen demand for U.S. goods and services abroad and simultaneously stimulate the consumer’s appetite for imported goods and services in the U.S. Allow me to end the section the way it began. Traderelated policies of the Trump administration could have a large impact on the forecast presented here for international trade. Whether the tough talk on trade and our trading partners leads to substantive and potentially disruptive trade policies including higher, even punitive tariffs or other non-tariff barriers to trade, remains to be seen. The degree to which this transpires could swing the projections for export and import growth proportionately. It is a small world after all. U N E M P LOY M E N T The national headline unemployment rate (U-3) in January ticked up from the December reading of 4.7% to 4.8%, which is the average unemployment rate over the past twelve months. The unemployment rate remained ticked up as both the number of unemployed and the labor force increased slightly. 76,000 people joined the labor force in January as the labor force participation rate increased from 62.7% to 62.9%. The number of unemployed people rose by 106,000 in January.

The January jobs report showed continued growth in payroll jobs, with businesses adding 227,000 jobs after December’s 157,000-job gain. The gain of 227,000 in payroll employment in January was well above the average growth in monthly payrolls for 2016 of 187,000. Average payroll job growth for 2015 came in at 226,000, which was down from 2014’s average growth of 250,000. Job growth decelerated last year and whether January’s uptick in job growth will be sustained throughout the year remains yet to be seen. This late in the economic cycle, a rapid acceleration in growth seems unlikely, but an end to the multi-year deceleration seems possible. The January labor force participation rate of 62.9% remains depressed and at its lowest point since March 1978. Since the end of the recession, the labor force participation rate is still down 2.6 percentage points. This fall in the labor force participation rate has exaggerated the decline in U-3, the headline unemployment rate, 12

U.S. Forecast | February 2017

making the labor market appear to be healthier than it is when looking solely at this headline measure of unemployment.

Some of this decline in the overall labor force participation rate is due to retiring Baby Boomers, given the overall participation rate is calculated based on the population of everyone 16 years or older, but the demographics of aging Baby Boomers does not fully explain the decline. If we look only at prime age workers from ages 24 to 54, we still see a significant decline in their labor force participation rates. In January 2017, this participation rate stood at 81.5%, down from 83.1% as the recession got underway. There exists much greater slack in the labor market than the headline unemployment rate would suggest, and it is not solely attributable to retiring Baby Boomers. The Bureau of Labor Statistics (BLS) produces alternative measures of labor market weakness, including the broadest measure of unemployment (U-6). U-6 takes into account discouraged workers (currently 532,000 workers), as well as those classified as underemployed (currently 5.8 million workers)—working part-time but not by choice—and workers who are marginally attached to the labor force that have looked for work in the past 12 months but are not currently looking, yet indicate a willingness to work (1.75 million workers). None of these 8.2 million-plus workers are counted in the headline unemployment rate of 4.8%. U-6 remains elevated at 9.4% as of January 2017, up 0.2 percentage points from the December 2016 level but down 0.5 percentage points from January 2016 levels. The current level of U-6 is down 7.7 points from its peak of 17.1% in April 2010. U-6 remained in double digits for more than seven years. It has been in single digits for sixteen months running as of January 2017.

While the labor market is still improving, it has been improving at a rate that appears to be slowing; January’s uptick in job growth is just a single month of data, but with significant slack still remaining, any improvement in job growth will hasten the healing. As that healing continues, we can expect wage and salary growth to strengthen further, as it has recently shown flashes of doing—a development that has been a missing ingredient in this expansion.

U . S . F orecast C harts

30-Year Mortgage Rates and Housing Starts 7.0

(Mortgage rates - Left axis, %)

2.5 2.0

6.0

1.5

5.0

1.0

4.0 3.0

0.5 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 30-Year Fixed Mortgage Rate Housing Starts - Millions

0.0

Automobile and Light Truck Sales 12.0

(Millions Vehicles)

10.0 8.0 6.0 4.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Auto Sales Light Truck Sales

Change in Real Business Inventories 150.0 100.0 50.0 0.0 -50.0 -100.0 -150.0 -200.0 -250.0

(Billions of 2000 Dollars)

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Change in Real Business Inventories

Institute for Economic Competitiveness

13

U . S . F orecast C harts

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus 0.0 -200.0 -400.0 -600.0 -800.0 -1000.0 -1200.0 -1400.0 -1600.0

(Billions of Dollars)

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Federal Budget Surplus

Federal Funds Rate 6.0

(%)

5.0 4.0 3.0 2.0 1.0 0.0 -1.0

14

U.S. Forecast | February 2017

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Fed Funds Rate

U . S . F orecast C harts

Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Quarterly Growth Rate Real GDP Fed Funds Rate

Industrial Production 120.0

(2002=100)

115.0 110.0 105.0 100.0 95.0 90.0 85.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Industrial Production

Private Fixed Nonresidential Investment 3500.0

(Billions of Dollars)

3000.0 2500.0 2000.0 1500.0 1000.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Private Fixed Nonresidential Investment

Institute for Economic Competitiveness

15

U . S . F orecast C harts

Manufacturing Employment 16.0

(Millions)

15.0 14.0 13.0 12.0 11.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Manufacturing Employment

Money Supply

3500.0

(Annual Growth Rate %)

3000.0 2500.0 2000.0 1500.0 1000.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Annual Growth Rate of M1

Civilian Unemployment Rate 10.0

(%)

9.0 8.0 7.0 6.0 5.0 4.0 3.0

16

U.S. Forecast | February 2017

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Unemployment Rate

U . S . F orecast C harts

Total Nonfarm Payroll Employment 155.0

(Millions)

150.0 145.0 140.0 135.0 130.0 125.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Total Nonfarm Employment

Oil and Consumer Confidence Oil ($ Per Barrel) - Left Axis

140.0

100

120.0

90

100.0 80.0

80

60.0

70

40.0

60

20.0 0.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Price of Oil WTI Consumer Sentiment

50

Corporate Retained Earnings 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 -200.0

(Billions of Dollars)

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Corporate Retained Earnings

Institute for Economic Competitiveness

17

U . S . F orecast C harts

Real Disposable Income and Consumption (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0 -4.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Real Disposable Income Consumption

Real After Tax Profits 2500.0

(Billions of Dollars)

2000.0 1500.0 1000.0 500.0 0.0

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Real After Tax Profits

Real Investment Equipment & Software 1400.0

(Billions of Dollars)

1200.0 1000.0 800.0 600.0 400.0

18

U.S. Forecast | February 2017

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Real nonresidential investment-equipment & software

U . S . F orecast C harts

Trade Balance and Real Exchange Rate

-400

1.50

-500

1.40

-600

1.30

-700

1.20

-800

1.10

-900

1.00

-1000

0.90

-1100

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

0.80

Twin Deficits 0.0 -200.0 -400.0 -600.0 -800.0 -1000.0 -1200.0 -1400.0 -1600.0

(Billions of Dollars)

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 U.S. Federal Budget Surplus Current Account

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 1-Year T-Bill Yield 5 Year Treasury Bond Yield 30 year Treasury Bond Yield Institute for Economic Competitiveness

19

U . S . F orecast T ables Table 1. Annual Summary of the Long-Term Forecast of the U.S.

Table 1. Summary of the Long-Term Forecast of the U.S. 2010

2011

2012

2013

2014

2015

2016

2017

Composition of Real GDP, Percent Change Gross Domestic Product 2.5 Final Sales of Domestic Product 1.1 Total Consumption 1.9 Durables 6.1 Nondurables 2.2 Services 1.2 Nonresidential Fixed Investment 2.6 Equipment & Software 15.9 Information Processing Equipment 10.0 Computers & Peripherals 11.2 Communications Equipment 13.6 Industrial Equipment -0.2 Transportation Equipment 80.2 Aircraft 26.9 Other Equipment 17.4 Structures -15.7 Commercial & Health Care -24.1 Manufacturing -27.7 Power & Communication -15.9 Mining & Petroleum 21.7 Other -26.3 Residential Fixed Investment -2.4 Exports 11.9 Imports 12.8 Federal Government 4.4 State & Local Government -2.7

1.6 1.7 2.3 6.1 1.8 1.8 7.6 13.6 1.6 -1.8 2.0 21.0 37.6 28.4 33.0 2.3 -0.3 -1.6 -7.6 26.4 -9.1 0.7 6.9 5.6 -2.7 -3.3

2.2 2.1 1.5 7.4 0.6 0.8 9.1 10.9 6.0 7.0 4.9 9.4 23.5 7.5 21.8 13.3 8.6 15.7 21.4 12.7 9.5 13.5 3.4 2.2 -1.9 -1.9

1.7 1.5 1.5 6.2 1.7 0.6 3.5 4.6 4.9 0.1 10.5 -1.5 12.8 8.5 5.8 1.4 3.5 4.1 -4.3 1.8 4.3 12.0 3.5 1.1 -5.8 -0.8

2.4 2.5 2.9 6.7 2.6 2.3 6.0 5.5 2.6 0.9 3.9 3.5 13.1 13.3 15.7 10.4 12.9 12.8 17.5 5.6 7.1 3.5 4.3 4.4 -2.5 0.2

2.6 2.4 3.2 6.9 2.7 2.8 2.1 3.6 4.0 -0.4 7.7 1.9 13.5 20.8 2.2 -4.4 10.2 32.3 -10.9 -30.9 10.7 11.7 0.1 4.6 0.0 2.9

1.6 2.0 2.7 5.7 2.4 2.3 -0.4 -2.8 2.3 -1.1 2.5 2.9 -4.6 -19.5 -21.5 -3.0 15.8 -4.8 3.7 -43.7 7.8 5.0 0.4 1.1 0.6 1.0

2.7 2.7 3.1 7.4 2.5 2.7 4.9 4.4 6.3 8.5 6.1 6.4 3.8 20.8 6.0 5.5 8.5 -6.4 -3.7 36.5 5.3 5.5 3.3 5.1 -0.2 1.1

Billions of Dollars Real GDP Nominal GDP

14783.8 15020.6 15354.6 15612.2 15982.3 16397.2 16660.0 14964.4 15517.9 16155.3 16691.5 17393.1 18036.7 18567.0

Prices & Wages, Percent Change, Annual Rate GDP Deflator 1.2 Consumer Prices 1.6 Excl. Food & Energy 1.0 Producer Prices, Finished Goods 4.2 Employment Cost Index - Total Comp. 1.9 Other Measures Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2009 $) Consumer Sentiment Index Light Vehicle Sales (Million units) Housing Starts (Million units) Existing House Sales (Million units) Unemployment Rate (%) Payroll Employment (% change) Federal Surplus (Unified, FY, bil. $) Current Account Balance (Bil. $) Financial Markets, NSA Federal Funds Rate (%) 3-Month Treasury Bill Rate (%) 1-Year Treasury Note Yield (%) 5-Year Treasury Note Yield (%) 10-Year Treasury Note Yield (%) 30-Year Treasury Note Yield (%) 30-Year Fixed Mortgage Rate (%) S&P 500 Stock Index (% change) Exchange Rate, Major Trading Partners (% change (negative = depreciation)) Incomes Personal Income (Bil. of $) (% change) Disposable Income (Bil. of $) (% change) Real Disposable Income (Bil. Of 2009 $) (% change) Saving Rate (%) After-Tax Profits (Billions of $) (% change)

20

U.S. Forecast | February 2017

Forecast 2018 2019

3.3 3.0 3.5 6.7 3.1 3.2 6.4 8.0 8.2 8.1 7.6 7.7 10.8 14.2 16.6 5.3 7.6 4.4 -0.8 13.3 3.3 5.8 5.6 9.3 -0.3 2.0

3.4 3.2 4.1 9.1 3.5 3.4 6.1 7.9 7.4 5.2 6.3 10.4 8.4 7.2 12.3 4.0 6.4 -1.1 -0.5 10.0 3.1 5.3 4.3 8.8 -0.5 2.2

2020

3.0 3.1 3.9 9.0 3.3 3.2 4.7 5.4 5.9 5.8 6.2 6.6 3.8 5.8 5.1 3.8 8.7 -9.9 -0.6 8.3 3.6 7.0 3.9 7.4 -0.1 1.6

17114.4 17675.8 18268.3 18821.0 19499.8 20665.7 21877.3 23027.0

2.1 3.1 1.7 6.0 2.2

1.8 2.1 2.1 1.9 1.9

1.6 1.5 1.8 1.2 1.9

1.8 1.6 1.7 1.9 2.1

1.1 0.1 1.8 -3.3 2.1

1.3 1.3 2.2 -1.0 2.1

2.2 3.0 2.2 3.1 2.5

2.6 3.2 2.5 1.8 3.1

2.4 3.1 2.8 2.1 3.5

2.2 2.9 2.6 2.7 3.5

79.4 3.3 5.5 70.8 65.9 71.8 11.555 0.586 3.705 9.6 -0.7 -1294 -442

95.1 0.1 2.9 73.7 36.6 67.4 12.743 0.612 3.792 8.9 1.2 -1297 -460

94.2 0.9 2.8 74.6 72.7 76.5 14.435 0.784 4.125 8.1 1.7 -1089 -447

97.9 0.3 1.9 74.5 73.0 79.2 15.530 0.928 4.475 7.4 1.6 -680 -366

93.3 0.8 2.9 75.4 62.2 84.1 16.455 1.001 4.338 6.2 1.9 -484 -392

48.7 0.9 0.3 75.5 88.1 92.9 17.4 1.1 4.6 5.3 2.1 -439.1 -463.0

43.2 0.2 -1.0 75.0 25.2 91.8 17.5 1.2 4.8 4.9 1.8 -587.3 -485.8

52.4 1.7 1.9 75.4 18.4 94.4 17.5 1.3 4.9 4.6 1.5 -579.5 -446.2

48.7 1.8 3.8 76.8 63.1 95.7 17.8 1.4 5.0 4.3 1.6 -706.9 -415.9

54.3 2.0 3.3 77.5 85.9 97.5 18.5 1.5 5.1 4.0 1.7 -908.3 -500.3

64.7 1.9 2.4 76.4 73.3 98.3 19.0 1.7 5.3 3.8 1.5 -901.3 -687.2

0.18 0.14 0.32 1.93 3.21 4.25 4.69 1139 21.6 0.970 -2.8

0.10 0.05 0.18 1.52 2.79 3.91 4.46 1269 11.5 0.913 -5.8

0.14 0.09 0.18 0.76 1.80 2.92 3.66 1380 8.9 0.947 3.8

0.11 0.06 0.13 1.17 2.35 3.45 3.98 1643 19.0 0.977 3.2

0.09 0.03 0.12 1.64 2.54 3.34 4.17 1931 17.7 1.009 3.3

0.1 0.1 0.3 1.5 2.1 2.8 3.9 2061.2 6.9 1.2 16.1

0.4 0.3 0.6 1.3 1.8 2.6 3.6 2092.4 1.6 1.2 0.8

0.9 0.9 1.2 2.2 2.7 3.3 4.4 2384.8 14.1 1.2 -0.6

1.7 1.7 2.1 2.8 3.4 4.0 5.3 2492.4 4.5 1.2 2.4

2.6 2.6 3.0 3.6 4.2 4.7 6.2 2592.3 4.0 1.2 2.5

3.0 2.9 3.3 3.8 4.4 4.9 6.4 2799.1 8.0 1.2 -2.9

12477.1 13254.5 13915.1 14073.7 14809.8 15458.5 16006.2 3.2 6.2 5.0 1.2 5.2 4.4 3.5 11237.9 11801.4 12403.7 12395.8 13022.7 13519.8 14038.1 2.7 5.0 5.1 0.0 5.1 3.8 3.8 11055.2 11331.3 11687.9 11527.6 11931.0 12343.2 12677.5 1.0 2.5 3.1 -1.4 3.5 3.5 2.7 5.6 6.1 7.6 5.0 5.6 5.8 5.9 1470.2 1427.7 1683.2 1688.4 1730.2 1583.8 1662.1 23.4 -2.9 18.1 0.3 2.5 -8.3 5.6

16743.8 17741.4 18949.6 20107.6 4.6 6.0 6.8 6.1 14660.1 15595.2 16614.1 17579.8 4.4 6.4 6.5 5.8 13021.1 13631.4 14258.1 14779.5 2.7 4.7 4.6 3.7 5.4 6.4 7.0 6.8 1925.9 2501.7 2645.3 2710.9 16.0 29.9 5.8 2.5

U . S . F orecast T ables Table 2. Real Gross Domestic Product

Table 2. Real Gross Domestic Product History 2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

Real GDP Billions 2009 $ Gross Domestic Product Final Sales of Domestic Product Total Consumption

14783.8 15020.6 15354.6 15612.2 15982.3 16397.2 16660.0

17114.4 17675.8 18268.3 18821.0

14722.2 14979.0 15292.3 15521.1 15912.9 16300.6 16624.0

17079.1 17595.0 18164.2 18728.9

10036.3 10263.5 10413.2 10565.4 10868.9 11214.7 11514.9

11876.6 12297.8 12797.6 13293.8

Durables

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1584.2

1700.6

1814.9

1979.3

2156.5

Nondurables

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2498.9

2561.1

2639.8

2732.3

2823.3

Services

6727.6

6851.4

6908.1

6951.3

7114.2

7310.3

7475.7

7675.4

7920.0

8192.5

8456.8

1673.8

1802.3

1964.2

2032.9

2155.6

2200.2

2190.7

2298.5

2445.4

2593.4

2715.1

746.7

847.9

939.2

982.3

1035.7

1072.5

1042.1

1087.9

1174.6

1267.0

1335.3

281.4

285.9

303.1

317.7

326.0

338.7

346.4

368.0

398.2

427.4

452.8

Computers & Peripherals

84.7

83.0

88.5

88.5

89.2

88.8

87.7

95.2

102.8

108.1

114.3

Communications Equipment

90.2

91.8

96.3

106.2

110.3

118.2

121.0

128.2

137.9

146.6

155.7

Industrial Equipment

151.3

183.3

199.8

196.7

203.5

207.3

213.4

227.1

244.6

270.1

287.8

Transportation Equipment

127.5

173.9

213.1

240.6

271.8

308.1

293.8

304.7

337.4

365.5

379.3

22.1

27.9

29.2

31.7

35.3

42.0

33.6

40.5

46.1

49.4

52.3

36.2

48.1

58.1

61.3

70.8

71.9

56.5

59.4

69.2

77.7

81.6

366.3

374.7

423.1

428.8

472.9

452.1

438.3

462.3

486.6

506.2

525.4

Commercial & Health

95.2

94.7

102.8

106.4

120.1

132.3

153.3

166.0

178.7

190.1

206.7

Manufacturing

40.8

39.1

44.9

46.7

52.8

69.1

65.7

61.5

64.1

63.3

57.1

Power & Communication

80.4

74.1

89.7

85.7

98.6

86.2

89.1

85.8

85.1

84.7

84.2

Mining & Petroleum

87.8

110.9

123.8

126.0

133.0

91.4

50.0

66.6

74.6

82.0

88.9

Other

62.0

56.2

61.5

64.1

68.7

75.9

81.8

86.0

88.9

91.6

94.9

382.4

384.5

436.5

488.3

505.4

564.5

592.2

624.9

661.1

696.3

744.9

Exports

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2128.4

2198.9

2322.9

2421.8

2515.2

Imports

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2690.1

2827.8

3089.8

3361.2

3610.3

Federal Government

1270.7

1236.4

1213.5

1142.8

1113.8

1113.9

1120.5

1118.6

1115.1

1109.1

1108.5

State & Local Government

1820.8

1761.0

1728.1

1714.1

1718.1

1768.2

1786.6

1805.4

1842.1

1883.2

1912.7

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures

Residential Fixed Investment

Institute for Economic Competitiveness

21

U . S . F orecast T ables Table 3. Quarterly Summary of the Forecast of the U.S.

Table 3. Quarterly Summary of the Forecast of the U.S. 2017Q1

2017Q2

Composition of Real GDP, Percent Change, Annual Rate Gross Domestic Product 2.7 2.9 Final Sales of Domestic Product 3.6 3.1 Total Consumption 3.4 3.3 Durables 5.3 4.7 Nondurables 3.0 2.8 Services 3.2 3.2 Nonresidential Fixed Investment 6.1 7.6 Equipment & Software 4.5 9.8 Information Processing Equipment 6.0 12.2 Computers & Peripherals 16.9 28.8 Communications Equipment 0.7 7.5 Industrial Equipment 6.9 10.0 Transportation Equipment -0.1 12.6 Aircraft 40.5 28.1 Other Equipment 41.2 12.5 Structures 11.3 7.0 Commercial & Health Care 8.9 -0.6 Manufacturing -4.7 -9.7 Power & Communication -0.7 -0.6 Mining & Petroleum 98.9 93.2 Other 6.7 2.9 Residential Fixed Investment 7.1 8.6 Exports 3.4 4.4 Imports 1.4 7.0 Federal Government 0.0 -0.6 State & Local Government 0.7 1.7 Billions of Dollars Real GDP Nominal GDP

3.5 3.0 3.2 6.3 2.8 2.8 6.9 9.0 7.7 4.8 7.5 4.8 17.8 33.4 15.1 5.9 5.2 -3.3 -1.7 37.1 3.0 7.0 6.5 8.7 -1.1 1.6

2017Q4

3.1 2.7 2.9 4.8 2.5 2.7 7.0 8.7 7.6 5.8 8.4 7.3 13.7 28.0 14.8 5.7 7.8 2.6 -0.4 19.1 1.4 7.7 5.9 9.0 0.5 0.9

2018Q1

3.4 3.2 3.8 8.2 3.3 3.3 5.7 7.0 7.9 10.2 7.8 7.0 7.9 4.6 20.8 4.4 9.5 3.0 -3.0 2.3 5.6 7.1 5.5 9.8 0.7 2.4

2018Q2

3.0 2.8 3.8 6.3 3.5 3.5 5.9 7.3 8.0 4.6 7.8 8.4 8.1 5.7 16.4 4.9 9.9 8.7 1.6 -2.0 1.9 1.1 5.5 10.9 0.0 2.4

2018Q3

3.5 3.3 3.9 7.8 3.1 3.5 6.4 8.0 8.6 7.6 6.3 8.9 9.5 6.5 15.7 5.7 8.4 18.6 -0.6 -0.6 3.7 5.7 5.9 8.8 -2.6 3.0

2018Q4

3.5 3.4 3.9 8.7 3.2 3.4 6.4 8.3 8.2 5.2 6.4 10.1 9.5 6.7 15.5 4.5 5.0 5.6 1.4 7.4 3.8 4.4 4.9 7.2 -1.5 2.3

2019Q1

3.6 3.4 4.4 10.4 3.8 3.7 6.5 9.0 7.5 2.8 6.1 12.2 10.9 7.6 13.6 3.4 4.6 -8.8 -2.5 18.7 5.1 4.8 4.1 9.3 -1.3 2.1

2019Q2

3.3 3.2 4.0 9.4 3.6 3.3 6.1 7.9 6.4 5.9 6.1 11.9 7.9 7.9 9.9 3.8 5.8 -6.6 -1.7 21.1 0.1 6.2 3.4 9.6 2.7 2.2

2019Q3

3.0 3.0 4.0 8.9 3.6 3.3 5.0 6.4 6.3 6.1 6.0 9.6 4.2 7.3 6.8 2.9 7.5 -6.1 0.8 3.1 2.5 7.4 3.3 8.4 -0.6 1.9

2019Q4

2.9 3.0 4.0 9.4 3.5 3.2 4.6 5.3 6.3 6.2 6.3 7.0 2.5 7.2 4.9 3.8 10.4 -8.1 1.5 1.0 3.8 7.2 3.2 7.8 -0.4 1.6

2020Q1

2.9 3.1 4.0 9.6 3.4 3.3 4.7 5.5 6.2 6.4 6.4 7.1 3.1 4.2 4.9 4.1 9.9 -7.1 -0.4 3.9 4.7 5.3 3.7 7.4 -0.8 1.6

2020Q2

3.3 3.4 3.9 9.1 3.2 3.2 4.7 5.3 6.1 6.8 6.4 6.2 3.8 6.3 4.8 4.0 8.5 -16.1 -1.0 15.5 4.1 7.9 4.1 6.9 2.6 1.4

2020Q3

3.0 3.0 3.6 7.7 3.0 3.1 4.3 4.2 4.9 2.9 6.4 2.6 4.2 4.8 3.5 4.3 7.8 -13.3 -2.8 19.0 3.4 8.8 5.0 6.4 -2.2 1.2

2020Q4

3.0 3.0 3.5 6.6 3.0 3.2 3.7 3.8 4.4 3.9 4.9 1.5 4.4 4.4 3.2 2.4 7.1 -10.6 -4.1 6.6 3.2 6.7 5.2 5.7 -1.4 1.2

16918.3 17037.7 17184.2 17317.4 17461.8 17593.4 17746.9 17901.1 18058.6 18204.4 18338.6 18471.5 18603.5 18753.4 18892.9 19034.3 19110.4 19339.2 19634.2 19915.5 20220.8 20507.1 20814.3 21120.6 21440.0 21738.3 22024.9 22306.0 22595.4 22886.7 23167.6 23458.3

Prices & Wages, Percent Change, Annual Rate GDP Deflator 2.6 Consumer Prices 4.1 Excl. Food & Energy 2.5 Producer Prices, Finished Goods 5.3 Employment Cost Index - Total Comp. 2.8 Other Key Measures Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2009 $) Consumer Sentiment Index Light Vehicle Sales (Million units) Housing Starts (Million units) Existing House Sales (Million units) Unemployment Rate (%) Payroll Employment (% change) Federal Surplus (NIPA Bil. $) Current Account Balance (Bil. $)

2017Q3

54.2 1.5 1.6 75.0 12.9 94.1 17.4 1.2 4.9 4.8 1.5 -638.6 -463.7

2.0 2.0 2.5 2.2 2.8

2.7 3.2 2.2 0.6 2.9

54.6 1.6 3.3 75.1 -0.3 94.3 17.4 1.3 4.9 4.7 1.3 -635.8 -449.1

51.3 1.9 4.3 75.5 21.5 94.7 17.6 1.3 4.9 4.6 1.8 -605.3 -445.8

2.6 2.6 2.2 1.3 2.9

2.8 3.6 2.4 2.3 3.0

2.7 3.5 2.8 1.9 3.2

2.5 3.2 2.9 2.1 3.4

2.4 2.9 3.0 1.7 3.5

2.5 3.1 2.9 2.2 3.5

2.3 3.1 2.8 1.8 3.6

2.3 3.0 2.7 2.7 3.6

2.2 3.0 2.7 2.4 3.6

2.3 3.1 2.5 3.6 3.5

1.9 2.8 2.5 2.6 3.5

1.9 2.6 2.5 2.3 3.5

2.0 2.6 2.4 2.6 3.4

49.6 48.9 48.6 48.6 48.6 50.8 53.1 55.4 57.8 61.5 63.9 65.9 67.5 1.7 1.7 1.6 2.0 2.2 2.1 1.8 1.7 1.8 1.9 2.3 1.8 1.8 4.1 3.7 3.2 4.3 3.8 3.6 2.9 2.3 2.2 2.2 2.4 2.7 2.6 76.0 76.3 76.5 77.0 77.4 77.7 77.6 77.5 77.2 76.8 76.5 76.2 76.0 39.4 48.1 59.6 69.5 75.0 84.8 87.8 87.0 84.3 77.1 72.5 71.3 72.2 94.5 95.6 95.5 96.5 95.3 96.6 97.6 97.9 97.7 97.4 98.1 98.6 99.0 17.7 17.8 17.7 17.8 18.0 18.3 18.5 18.6 18.7 18.9 19.0 19.1 19.1 1.3 1.4 1.4 1.4 1.4 1.5 1.5 1.5 1.6 1.6 1.6 1.7 1.7 5.0 5.1 5.0 5.0 5.1 5.1 5.1 5.1 5.2 5.2 5.3 5.4 5.4 4.5 4.4 4.3 4.3 4.2 4.1 4.0 4.0 3.9 3.9 3.9 3.8 3.8 1.5 1.8 1.4 1.6 1.6 1.8 1.7 1.6 1.5 1.4 2.1 1.0 1.2 -572.6 -1026.1 -1039.7 -1026.2 -1027.9 -1051.8 -1048.8 -1024.7 -1011.8 -1043.3 -1046.7 -1016.1 -1004.4 -426.2 -421.8 -417.5 -412.6 -411.8 -441.9 -478.9 -515.3 -565.0 -616.1 -670.5 -713.0 -749.2

Financial Markets, NSA Federal Funds Rate (%) 3-Month Treasury Bill Rate (%) 1-Year Treasury Note Yield (%) 5-Year Treasury Note Yield (%) 10-Year Treasury Note Yield (%) 30-Year Treasury Note Yield (%) 30-Year Fixed Mortgage Rate (%) S&P 500 Stock Index (% change) Exchange Rate, Major Trading Partners (%change (negative = depreciation))

0.68 0.78 1.03 1.29 1.50 1.53 1.78 2.04 2.28 2.53 2.78 3.00 3.00 3.00 3.00 3.00 0.54 0.71 0.99 1.20 1.39 1.51 1.76 2.01 2.21 2.47 2.69 2.91 2.92 2.92 2.92 2.92 0.86 1.03 1.32 1.59 1.75 1.93 2.18 2.45 2.65 2.92 3.13 3.29 3.29 3.30 3.30 3.30 1.97 2.12 2.27 2.35 2.48 2.64 2.86 3.10 3.32 3.53 3.74 3.86 3.87 3.84 3.81 3.78 2.50 2.64 2.80 2.92 3.12 3.28 3.55 3.77 3.95 4.16 4.41 4.46 4.43 4.40 4.35 4.31 3.09 3.21 3.35 3.55 3.76 3.90 4.12 4.28 4.46 4.67 4.89 4.93 4.91 4.87 4.83 4.80 4.18 4.28 4.42 4.69 4.98 5.17 5.46 5.65 5.85 6.15 6.38 6.46 6.46 6.42 6.39 6.35 2321.83 2376.71 2408.93 2431.62 2442.77 2477.90 2510.66 2538.21 2557.33 2574.41 2600.19 2637.17 2698.48 2776.95 2838.34 2882.55 27.53 9.79 5.54 3.82 1.85 5.88 5.40 4.46 3.05 2.70 4.07 5.81 9.63 12.15 9.14 6.38 1.20 1.16 1.16 1.17 1.19 1.20 1.20 1.21 1.22 1.23 1.24 1.24 1.23 1.20 1.18 1.17 -2.90 -12.67 2.08 3.47 4.97 4.58 0.63 3.15 2.10 3.25 3.32 0.70 -3.00 -10.27 -5.36 -4.16

Incomes Personal Income (Bil. of $) (% change) Disposable Income (Bil. of $) (% change) Real Disposable Income (Bil. of 2009 $) (% change) Saving Rate (%) After-Tax Profits (Billions of $) (% change)

16420.8 16631.1 16849.5 17073.9 17324.6 17600.4 17876.9 18163.8 18505.2 18803.9 19099.6 19389.9 19704.6 19979.0 20244.2 20502.7 4.2 5.2 5.4 5.4 6.0 6.5 6.4 6.6 7.7 6.6 6.4 6.2 6.7 5.7 5.4 5.2 14390.6 14569.3 14749.9 14930.5 15245.0 15480.9 15708.9 15946.2 16244.4 16491.8 16738.7 16981.6 17248.8 17472.8 17688.0 17909.8 4.0 5.1 5.1 5.0 8.7 6.3 6.0 6.2 7.7 6.2 6.1 5.9 6.4 5.3 5.0 5.1 12856.3 12971.0 13073.2 13184.2 13410.8 13562.8 13702.6 13849.2 14043.2 14190.2 14332.2 14466.7 14614.9 14727.7 14833.3 14942.1 2.5 3.6 3.2 3.4 7.1 4.6 4.2 4.3 5.7 4.3 4.1 3.8 4.2 3.1 2.9 3.0 5.3 5.5 5.4 5.5 6.2 6.4 6.5 6.6 6.9 7.0 7.0 7.0 7.0 6.9 6.7 6.6 1867.2 1893.3 1942.1 2001.1 2399.3 2475.2 2537.3 2595.1 2614.6 2641.9 2658.6 2666.3 2684.7 2707.5 2715.1 2736.1 20.6 5.7 10.7 12.7 106.7 13.3 10.4 9.4 3.0 4.3 2.5 1.2 2.8 3.4 1.1 3.1

22

U.S. Forecast | February 2017

U . S . F orecast T ables Table 4. Quarterly Gross Domestic Product 2017Q1

Table 4. Quarterly Gross Domestic Product 2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

Real GDP Billions 2009 $ Gross Domestic Product Final Sales of Domestic Product Total Consumption

16918.3 17037.7 17184.2 17317.4 17461.8 17593.4 17746.9 17901.1 18058.6 18204.4 18338.6 18471.5 18603.5 18753.4 18892.9 19034.3 16889.3 17020.7 17145.5 17260.9 17396.0 17516.1 17659.6 17808.2 17955.9 18098.7 18233.5 18368.9 18507.8 18662.2 18802.7 18943.0 11737.4 11831.9 11925.7 12011.4 12123.5 12237.9 12354.9 12475.0 12611.0 12735.3 12859.4 12984.7 13112.6 13237.9 13354.3 13470.3

Durables

1668.0 1687.4 1713.4 1733.4 1767.8 1795.1 1829.1 1867.5 1914.3 1957.8 1999.8 2045.4 2092.9 2139.1 2179.2 2214.6

Nondurables

2534.9 2552.7 2570.4 2586.6 2607.5 2630.1 2650.2 2671.3 2696.4 2720.2 2744.5 2768.1 2791.1 2813.1 2834.0 2855.2

Services

7591.2 7650.4 7704.1 7755.9 7818.2 7886.2 7954.2 8021.4 8094.2 8159.6 8225.5 8290.9 8358.3 8425.2 8488.8 8555.0

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

2238.4 2279.7 2318.2 2357.7 2390.7 2425.4 2463.3 2502.0 2541.6 2579.6 2611.3 2641.0 2671.6 2702.3 2730.9 2755.8 1051.7 1076.5 1100.0 1123.1 1142.2 1162.4 1185.0 1208.9 1235.3 1259.0 1278.7 1295.2 1312.5 1329.5 1343.3 1355.8 355.1

365.5

372.3

379.2

386.4

393.9

402.1

410.1

417.6

424.2

430.7

437.3

443.9

450.5

456.0

460.9

89.8

95.7

96.8

98.2

100.7

101.8

103.7

105.0

105.7

107.3

108.9

110.5

112.2

114.1

114.9

116.0

124.7

126.9

129.3

131.9

134.4

137.0

139.1

141.2

143.3

145.5

147.6

149.9

152.2

154.6

157.0

158.9

Industrial Equipment

220.8

226.1

228.8

232.9

236.8

241.7

246.9

252.9

260.3

267.7

273.9

278.6

283.4

287.7

289.5

290.6

Transportation Equipment

289.4

298.1

310.6

320.7

326.8

333.2

340.9

348.8

357.9

364.8

368.6

370.9

373.7

377.2

381.1

385.2

36.6

39.0

41.9

44.5

45.1

45.7

46.4

47.2

48.0

49.0

49.8

50.7

51.2

52.0

52.6

53.2

56.5

58.2

60.3

62.4

65.4

68.0

70.5

73.1

75.4

77.2

78.5

79.5

80.4

81.4

82.1

82.7

451.6

459.3

465.9

472.4

477.5

483.3

490.1

495.5

499.7

504.4

508.0

512.8

518.0

523.1

528.6

531.8

164.4

164.1

166.2

169.3

173.2

177.3

180.9

183.2

185.2

187.9

191.3

196.1

200.8

204.9

208.8

212.4

Manufacturing

62.8

61.2

60.7

61.1

61.6

62.9

65.6

66.5

65.0

63.9

62.9

61.6

60.5

57.9

55.8

54.3

Power & Communication

86.1

86.0

85.6

85.5

84.8

85.2

85.0

85.3

84.8

84.4

84.6

84.9

84.9

84.7

84.1

83.2

Mining & Petroleum

55.7

65.6

71.0

74.2

74.6

74.2

74.1

75.5

78.8

82.6

83.3

83.5

84.3

87.4

91.3

92.7

Other

85.2

85.8

86.4

86.7

87.9

88.3

89.1

90.0

91.1

91.1

91.7

92.6

93.6

94.6

95.4

96.1

607.2

619.8

630.4

642.2

653.4

655.2

664.3

671.5

679.4

689.6

702.0

714.3

723.5

737.5

753.2

765.4

Computers & Peripherals Communications Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment Exports

2156.4 2179.6 2214.0 2245.7 2276.1 2306.7 2340.2 2368.5 2392.2 2412.2 2431.8 2451.0 2473.1 2498.0 2528.8 2560.9

Imports

2747.7 2794.6 2853.6 2915.4 2984.6 3062.9 3128.2 3183.3 3254.8 3330.1 3397.7 3462.3 3524.9 3584.6 3640.2 3691.4

Federal Government

1121.2 1119.4 1116.3 1117.7 1119.8 1119.7 1112.5 1108.3 1104.6 1112.1 1110.4 1109.4 1107.2 1114.4 1108.2 1104.2

State & Local Government

1795.2 1802.6 1809.9 1813.9 1824.5 1835.3 1849.1 1859.5 1869.1 1879.4 1888.4 1895.8 1903.4 1910.0 1915.8 1921.7

Institute for Economic Competitiveness

23

U . S . F orecast T ables Table 5. Annual Employment

Table 5. Annual Employment History 2012 2013

2010

2011

Total Nonfarm Employment

130.35

131.94

134.17

Private Nonfarm

107.86

109.85

Mining

0.65

Construction

Forecast 2018 2019

2014

2015

2016

2017

2020

136.38

138.94

141.81

144.31

146.53

148.89

151.35

153.63

112.25

114.53

117.06

119.79

122.08

124.28

126.57

128.72

130.57

0.74

0.80

0.81

0.84

0.76

0.63

0.65

0.67

0.68

0.69

5.52

5.53

5.65

5.86

6.15

6.46

6.71

6.89

7.18

7.52

7.86

Manufacturing

11.53

11.73

11.93

12.02

12.19

12.34

12.35

12.46

12.60

12.77

12.89

Trade, Transportation and Utilities

24.64

25.07

25.47

25.86

26.38

26.88

27.24

27.50

27.67

27.90

28.11

Transportation & Warehousing

4.19

4.30

4.42

4.50

4.66

4.87

4.99

5.11

5.22

5.29

5.36

Financial Activities

7.70

7.70

7.78

7.89

7.98

8.12

8.28

8.45

8.51

8.56

8.66

Education & Health

19.97

20.32

20.77

21.09

21.44

22.02

22.62

23.03

23.20

23.36

23.60

Professional & Business Services

16.72

17.33

17.93

18.52

19.06

19.63

20.13

20.90

22.22

23.27

23.82

2.71

2.67

2.67

2.71

2.73

2.75

2.77

2.76

2.76

2.76

2.78

Leisure & Hospitality

13.04

13.35

13.77

14.26

14.69

15.15

15.62

15.85

15.98

16.17

16.43

Government

22.49

22.09

21.92

21.85

21.88

22.02

22.23

22.25

22.32

22.64

23.06

2.98

2.86

2.82

2.77

2.73

2.76

2.80

2.76

2.68

2.64

2.74

19.51

19.23

19.10

19.08

19.14

19.27

19.43

19.49

19.64

20.00

20.32

Total Nonfarm Employment

-0.71

1.22

1.69

1.65

1.87

2.07

1.76

1.54

1.61

1.65

1.51

Private Nonfarm

-0.80

1.84

2.19

2.03

2.21

2.33

1.91

1.80

1.84

1.70

1.44

Mining

11.68

13.57

2.08

2.94

3.82

-16.66

-12.25

9.38

0.45

1.14

2.64

Construction

-3.35

1.93

1.74

4.31

5.58

5.00

2.73

3.07

4.92

4.66

4.34

Manufacturing

0.65

1.76

1.47

0.96

1.67

0.65

-0.19

1.55

0.87

1.68

0.54

Trade, Transportation and Utilities

0.76

1.97

1.46

1.86

2.06

1.52

1.27

0.65

0.68

0.97

0.74

Transportation & Warehousing

2.14

2.33

2.61

1.91

4.67

3.91

2.00

2.34

1.86

1.36

1.28

Financial Activities

-0.90

0.47

1.29

1.22

1.48

1.83

2.08

1.55

0.66

0.70

1.30

Education & Health

1.71

1.92

1.97

1.38

2.08

2.97

2.50

1.35

0.46

0.91

1.10

Professional & Business Services

2.96

3.56

3.27

3.21

3.09

2.87

2.75

5.11

5.98

3.62

2.30

-2.35

-0.41

-0.13

1.96

0.33

1.03

0.32

-0.50

0.04

0.09

1.14

1.26

2.80

3.11

3.63

2.97

3.46

2.34

1.02

0.94

1.35

1.72

-0.94

-1.38

-0.38

-0.26

0.45

0.67

0.98

-0.25

0.80

1.55

1.22

4.80

-0.85

-1.04

-2.53

-0.05

0.96

1.75

-3.49

-2.17

-1.13

4.60

-1.31

-1.46

-0.28

0.07

0.53

0.63

0.87

0.22

1.21

1.91

1.37

Millions

Information

Federal State & Local

Growth Rates

Information Leisure & Hospitality Government Federal State & Local

24

U.S. Forecast | February 2017

U . S . F orecast T ables Table 6. Quarterly Employment

Table 6. Quarterly Employment

2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4

Employment (Millions) Total Nonfarm Employment

145.72 146.20 146.83 147.38 148.05 148.57 149.18 149.78 150.44 151.08 151.67 152.23 152.74 153.52 153.91 154.36

Private Nonfarm

123.46 123.94 124.58 125.14 125.79 126.29 126.83 127.36 127.93 128.48 128.99 129.46 129.90 130.26 130.80 131.34

Mining

0.63

0.66

0.66

0.67

0.67

0.67

0.67

0.67

0.67

0.67

0.68

0.68

0.68

0.69

0.69

0.70

Construction

6.82

6.86

6.91

6.97

7.05

7.14

7.23

7.31

7.40

7.48

7.57

7.65

7.73

7.81

7.90

7.99

Manufacturing

12.40 12.44 12.47 12.52 12.60 12.61 12.58 12.63 12.69 12.74 12.79 12.84 12.88 12.89 12.90 12.91

Trade, Transportation and Utilities

27.45 27.49 27.54 27.54 27.61 27.66 27.70 27.72 27.80 27.87 27.94 27.99 28.03 28.06 28.13 28.20

Transportation & Warehousing

5.07

5.09

5.12

5.15

5.18

5.22

5.23

5.25

5.26

5.28

5.30

5.32

5.34

5.35

5.37

5.39

Financial Activities

8.42

8.43

8.46

8.47

8.50

8.51

8.52

8.53

8.54

8.55

8.57

8.59

8.62

8.64

8.67

8.70

Education & Health

22.92 22.98 23.10 23.13 23.16 23.18 23.23 23.24 23.27 23.33 23.38 23.45 23.51 23.55 23.63 23.71

Professional & Business Services

20.49 20.67 21.02 21.41 21.76 22.05 22.37 22.69 22.99 23.21 23.37 23.51 23.62 23.73 23.88 24.05

Information

2.76

2.76

2.75

2.76

2.76

2.77

2.76

2.76

2.76

2.76

2.76

2.76

2.76

2.77

2.78

2.79

Leisure & Hospitality

15.79 15.85 15.88 15.89 15.92 15.96 16.00 16.04 16.08 16.14 16.20 16.26 16.33 16.38 16.46 16.54

Government

22.26 22.26 22.25 22.24 22.26 22.28 22.35 22.42 22.50 22.60 22.68 22.76 22.85 23.26 23.11 23.02

Federal State & Local

2.81

2.77

2.75

2.72

2.70

2.69

2.67

2.66

2.65

2.64

2.63

2.63

2.63

2.97

2.75

2.61

19.46 19.48 19.51 19.52 19.56 19.59 19.67 19.76 19.85 19.96 20.05 20.14 20.22 20.29 20.35 20.41

Growth Rates Total Nonfarm Employment

1.54

1.29

1.75

1.49

1.80

1.42

1.63

1.61

1.76

1.71

1.56

1.47

1.36

2.04

1.00

1.18

Private Nonfarm

1.92

1.54

2.08

1.79

2.07

1.61

1.70

1.66

1.80

1.72

1.57

1.48

1.35

1.11

1.65

1.65

Mining

7.72 19.39

5.40

3.18

1.01

-0.36

0.41

0.71

0.66

0.54

1.55

1.77

2.22

2.43

2.58

3.23

Construction

3.23

2.69

2.64

3.60

4.85

4.64

5.22

4.60

4.60

4.52

4.64

4.54

4.08

4.08

4.47

4.46

Manufacturing

2.28

1.37

1.04

1.45

2.45

0.54

-1.06

1.53

2.01

1.61

1.47

1.56

1.14

0.47

0.45

0.11

Trade, Transportation and Utilities

1.40

0.45

0.74

0.02

1.02

0.70

0.71

0.27

1.06

0.99

1.07

0.73

0.56

0.46

0.95

0.99

Transportation & Warehousing

2.52

1.97

2.51

2.37

2.38

2.66

1.43

0.98

1.06

1.57

1.51

1.28

1.31

0.95

1.53

1.31

Financial Activities

3.69

0.47

1.30

0.75

1.14

0.40

0.69

0.43

0.22

0.75

0.77

1.07

1.20

1.02

1.69

1.28

Education & Health

1.58

1.11

2.08

0.64

0.41

0.43

0.76

0.24

0.47

1.03

0.98

1.17

1.01

0.70

1.31

1.39

Professional & Business Services

2.30

3.54

6.96

7.62

6.65

5.38

6.04

5.86

5.35

3.85

2.78

2.48

1.91

1.78

2.58

2.93

-1.03

-0.11

-1.55

0.68

0.20

1.15

-1.29

0.07

-0.05

-0.08

0.22

0.26

0.47

0.80

1.94

1.35

1.57

1.51

0.74

0.26

0.69

0.95

1.22

0.91

0.90

1.51

1.61

1.37

1.74

1.30

1.97

1.85

Government

-0.59

-0.11

-0.12

-0.18

0.30

0.33

1.27

1.30

1.54

1.68

1.52

1.43

1.44

7.48

-2.61

-1.44

Federal

-1.04

-4.66

-4.03

-4.21

-2.10

-2.11

-2.22

-2.23

-1.13

-1.13

-1.13

-1.14

State & Local

-0.52

0.57

0.45

0.40

0.64

0.67

1.76

1.79

1.90

2.06

1.88

1.78

Information Leisure & Hospitality

-0.12 63.83 -26.23 -19.08 1.64

1.40

1.28

Institute for Economic Competitiveness

1.15

25

U . S . F orecast T ables Table 7. Quarterly Implicit Price Deflators (2000=100)

Table 7. Quarterly Implicit Price Deflators (2009=100)

2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4

GDP

113.0 113.5 114.3 115.0 115.8 116.6 117.3 118.0 118.7 119.4 120.1 120.8 121.5 122.0 122.6 123.2

Consumption

111.9 112.3 112.8 113.2 113.7 114.1 114.6 115.1 115.7 116.2 116.8 117.4 118.0 118.6 119.2 119.9

Durables Motor Vehicles Furniture

87.2

87.0

86.8

86.5

86.2

85.9

85.6

85.2

84.9

84.5

84.1

83.8

83.5

83.2

83.0

82.8

110.5 111.1 111.6 112.0 112.2 112.5 112.8 113.0 113.2 113.3 113.5 113.6 113.9 114.2 114.5 114.9 82.6

82.5

82.3

82.0

81.8

81.5

81.2

80.9

80.6

80.3

80.1

79.8

79.5

79.3

79.0

78.8

Other Durables

100.1 100.2 100.3 100.4 100.5 100.6 100.7 100.8 100.9 100.9 100.9 100.9 101.1 101.3 101.5 101.8

Nondurables

109.1 108.9 109.3 109.4 109.7 110.1 110.5 110.9 111.4 112.0 112.6 113.3 114.0 114.7 115.4 116.0

Food

109.1 109.7 110.2 110.7 111.1 111.6 112.2 112.7 113.3 113.9 114.4 115.0 115.5 116.0 116.4 116.9

Clothing & Shoes

102.7 102.5 102.3 102.1 102.1 102.0 101.8 101.6 101.4 101.2 101.0 100.9 100.9 100.8 100.8 100.7

Gasoline & Oil

105.5

Fuel

96.7

99.4 100.8

99.3

98.8

98.7

99.0

99.2 100.5 102.6 104.7 107.1 110.4 112.9 115.2 117.2

97.6

96.1

96.3

96.8

97.7

98.3

96.4

99.9 101.9 104.1 106.5 109.4 111.8 113.9 115.9

Services

117.5 118.2 118.9 119.6 120.2 120.9 121.6 122.3 123.0 123.8 124.6 125.4 126.2 127.0 127.8 128.6

Housing

118.7 119.6 120.4 121.2 122.0 122.8 123.5 124.2 125.0 125.7 126.5 127.3 128.1 128.9 129.7 130.4

Electricity

108.9 110.7 112.0 112.8 113.4 114.1 114.9 115.8 116.4 116.9 117.5 118.4 119.3 120.2 121.0 121.9

Natural Gas Water & Sewer Telephone

86.9

85.2

82.1

81.4

82.8

82.0

80.7

79.7

79.9

78.8

80.3

80.3

83.1

84.3

84.4

84.8

141.5 142.6 143.8 145.0 146.3 147.7 149.1 150.6 152.0 153.6 155.1 156.6 158.2 159.7 161.3 162.8 91.7

91.5

91.4

91.3

91.3

91.2

91.3

91.3

91.3

91.3

91.4

91.4

91.5

91.5

91.6

91.6

Transportation

111.9 112.4 113.0 113.6 114.3 115.0 115.7 116.4 117.1 117.8 118.5 119.1 119.8 120.5 121.2 121.9

Other Services

119.6 120.1 120.8 121.6 122.4 123.2 124.0 124.9 125.8 126.7 127.7 128.7 129.8 130.8 131.8 132.9

26

U.S. Forecast | February 2017

U . S . F orecast T ables Table 8. Percent Change in Implicit Price Deflators

Table 8. Percent Change in Implicit Price Deflators

2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4

GDP

2.6

2.0

2.7

2.6

2.8

2.7

2.5

2.4

2.5

2.3

2.3

2.2

2.3

1.9

1.9

2.0

Consumption

1.5

1.4

1.8

1.5

1.5

1.6

1.8

1.8

1.9

1.9

2.0

2.0

2.2

2.1

2.1

2.1

-1.5

-0.9

-1.1

-1.3

-1.4

-1.4

-1.4

-1.6

-1.7

-1.8

-1.8

-1.6

-1.4

-1.2

-1.1

-1.0

3.7

2.4

1.8

1.3

0.9

1.0

1.0

0.7

0.6

0.6

0.5

0.6

0.9

1.1

1.1

1.2

Furniture

-3.6

-0.7

-0.9

-1.1

-1.2

-1.3

-1.4

-1.5

-1.4

-1.4

-1.4

-1.4

-1.3

-1.3

-1.2

-1.0

Other Durables

-2.3

0.6

0.3

0.2

0.6

0.4

0.4

0.4

0.2

-0.1

0.0

0.3

0.7

0.8

0.8

0.9

0.2

-0.9

1.6

0.5

1.1

1.3

1.5

1.4

1.9

2.1

2.1

2.3

2.7

2.5

2.3

2.3

Food

-0.5

2.1

1.8

1.7

1.7

1.8

1.8

1.9

2.1

2.1

2.0

1.8

1.8

1.8

1.6

1.6

Clothing & Shoes

-3.3

-0.5

-0.8

-0.9

-0.1

-0.5

-0.6

-0.7

-0.9

-0.9

-0.8

-0.4

0.0

-0.1

-0.2

-0.2

Gasoline & Oil

1.8 -21.2

5.6

-5.7

-2.1

-0.3

1.3

0.6

5.4

8.5

8.5

9.8

12.7

9.5

8.2

7.2

Fuel

5.2

3.7

-4.9

-1.2

1.0

2.1

3.4

2.8

6.3

8.6

8.7

9.4

11.4

9.0

7.8

7.2

Services

2.4

2.5

2.3

2.3

2.2

2.3

2.4

2.4

2.4

2.4

2.6

2.6

2.6

2.6

2.5

2.5

Housing

3.9

3.1

2.9

2.7

2.5

2.5

2.4

2.4

2.4

2.4

2.5

2.5

2.5

2.5

2.5

2.4

Electricity

2.0

6.9

4.9

2.7

2.1

2.5

3.0

2.9

2.3

1.7

2.1

2.8

3.1

3.0

2.8

3.1

Natural Gas

2.4

-7.5 -13.7

-3.6

7.4

-3.9

-6.1

-4.8

0.7

-5.4

7.7

0.1

14.8

5.7

0.7

2.0

Water & Sewer

3.4

3.1

3.3

3.6

3.6

3.8

3.9

3.9

4.0

4.1

4.0

4.0

4.0

4.0

3.9

3.9

-2.7

-0.8

-0.1

-0.7

0.2

-0.3

0.0

0.0

0.1

0.2

0.3

0.2

0.2

0.2

0.5

0.0

Transportation

1.6

1.9

1.9

2.4

2.3

2.4

2.6

2.5

2.4

2.3

2.3

2.2

2.3

2.3

2.3

2.4

Other Services

1.1

1.7

2.3

2.5

2.6

2.6

2.7

2.9

3.0

3.1

3.1

3.2

3.3

3.2

3.2

3.2

Durables Motor Vehicles

Nondurables

Telephone

Institute for Economic Competitiveness

27

U . S . F orecast T ables

Table 9. Annual Implicit Price Deflators (2000=100) Table 9. Annual Implicit Price Deflators (2009=100) History 2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

GDP

101.2 103.3 105.2 106.9 108.8 110.0 111.5

113.9 116.9 119.7 122.3

Consumption

101.7 104.1 106.1 107.5 109.2 109.5 110.7

112.6 114.4 116.5 118.9

Durables Motor Vehicles Furniture

98.6

97.7

96.4

94.6

92.4

90.5

88.6

105.7 108.9 110.2 110.8 110.8 110.8 109.9 95.8

94.2

94.0

92.1

88.9

86.8

84.5

86.9

85.7

84.3

83.1

111.3 112.6 113.4 114.4 82.3

81.4

80.2

79.2

Other Durables

100.4 103.6 104.2 104.0 102.3

99.8 100.9

100.3 100.7 100.9 101.4

Nondurables

103.1 109.2 111.8 111.9 112.6 108.9 107.8

109.2 110.3 112.3 115.0

Food

100.3 104.3 106.7 107.8 109.8 111.0 110.0

109.9 111.9 114.1 116.2

99.3 101.1 104.6 105.4 105.8 104.4 104.1

102.4 101.9 101.1 100.8

Clothing & Shoes Gasoline & Oil

118.2 149.3 154.7 149.7 144.0 106.2

94.8

101.2

98.9 103.7 113.9

Fuel

117.0 148.8 150.7 148.9 148.3 105.5

88.8

96.7

97.3 103.1 112.7

Services

101.7 103.5 105.8 108.3 110.9 113.1 115.7

118.5 121.2 124.2 127.4

Housing

100.1 101.4 103.5 106.0 108.8 112.1 115.9

120.0 123.1 126.1 129.3

Electricity

100.2 101.8 101.8 104.0 107.8 108.4 107.2

111.1 114.6 117.3 120.6

Natural Gas Water & Sewer Telephone

98.1

95.1

85.7

90.1

96.4

85.0

82.9

106.3 111.8 118.0 123.3 127.9 133.6 138.6 99.3

97.5

97.7

97.1

96.3

94.1

93.6

83.9

81.3

79.8

84.2

143.2 148.4 154.3 160.5 91.5

91.3

91.3

91.5

Transportation

102.0 104.8 106.8 108.3 109.6 110.1 111.4

112.7 115.4 118.1 120.8

Other Services

103.0 105.6 108.3 111.2 113.9 116.3 118.6

120.5 123.6 127.2 131.3

28

U.S. Forecast | February 2017

U . S . F orecast T ables Table 10. Percent Change in Implicit Price Deflators

Table 10. Percent Change in Implicit Price Deflators History

Forecast

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

GDP

1.8

1.9

1.9

1.6

1.5

1.1

1.6

2.5

2.6

2.4

2.1

Consumption

1.3

2.7

1.8

1.2

1.2

0.4

1.5

1.6

1.7

1.9

2.1

-2.1

-0.5

-1.6

-2.1

-2.4

-1.8

-2.5

-1.2

-1.5

-1.7

-1.2

Durables Motor Vehicles

2.9

3.3

0.7

0.4

-0.3

-0.1

-1.0

2.3

0.9

0.6

1.1

-4.4

-0.2

-0.4

-3.0

-3.1

-2.3

-2.9

-1.6

-1.4

-1.4

-1.2

Other Durables

0.6

3.2

-0.5

-0.6

-1.9

-2.7

2.1

-0.3

0.5

0.1

0.8

Nondurables

2.2

5.9

1.9

-0.5

-0.2

-2.9

0.6

0.3

1.3

2.1

2.5

Food

1.3

5.1

1.2

0.7

2.7

0.3

-1.7

1.3

1.8

2.0

1.7

Furniture

Clothing & Shoes

-1.4

4.4

2.3

0.1

-0.3

-1.4

-0.1

-1.4

-0.5

-0.8

-0.1

Gasoline & Oil

13.4

20.4

4.9

-4.5

-10.5

-16.1

11.2

-4.9

-0.1

8.0

9.4

Fuel

15.7

26.2

3.1

-1.2

-7.8

-29.2

6.9

0.7

2.3

8.3

8.9

Services

1.5

2.1

2.3

2.3

2.3

2.0

2.4

2.4

2.3

2.5

2.6

Housing

0.3

1.9

2.2

2.4

2.8

3.3

3.6

3.2

2.5

2.5

2.5

Electricity

0.5

2.4

-0.6

3.2

3.1

-0.6

0.5

4.1

2.6

2.2

3.0

-1.2

-1.6

-4.1

2.4

6.4

-12.4

6.7

-5.6

-1.9

0.8

5.8

5.7

4.9

6.0

3.8

4.3

4.1

3.5

3.4

3.8

4.0

4.0

-1.1

-1.5

0.1

-0.5

-2.2

0.2

-2.8

-1.1

0.0

0.2

0.2

Transportation

1.5

3.1

1.3

1.7

1.0

0.1

1.2

2.0

2.5

2.3

2.3

Other Services

2.7

2.8

2.2

2.9

2.3

2.0

1.8

1.9

2.7

3.1

3.2

Natural Gas Water & Sewer Telephone

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

Personal Income Billions Current Dollars Personal Income

12477.1 13254.5 13915.1 14073.7 14809.8 15458.5 16006.2 7961.5

Other Labor Income

1114.6

1142.0

1165.3

1199.0

1229.8

1270.5

1325.5

1369.5

1406.8

1462.0

1521.9

986.7

1068.1

1179.8

1197.0

1269.2

1336.8

1388.3

1467.1

1562.8

1656.1

1737.8

Nonfarm Income

8269.0

8609.9

8842.5

9253.5

9693.1 10096.0

16743.8 17741.4 18949.6 20107.6

Wages & Salaries

10575.6 11150.1 11795.3 12454.7

Farm Income

46.0

75.6

61.6

87.8

68.5

40.0

28.5

23.1

23.5

22.2

19.8

Rental Income

402.8

485.3

525.3

567.1

606.1

659.6

705.2

739.7

748.2

748.5

750.7

Dividends

544.6

682.3

835.0

794.5

926.1

951.1

948.4

987.5

1120.4

1330.7

1475.2

Interest Income

1195.1

1231.6

1288.8

1261.6

1300.9

1302.8

1314.5

1383.3

1496.8

1670.6

1856.3

Transfer Payments

2324.7

2360.5

2366.4

2428.0

2540.4

2678.7

2775.0

2875.4

3030.1

3199.7

3372.4

514.7

423.9

437.2

577.8

607.6

635.7

663.3

694.4

738.2

782.2

827.8

Personal Social Insurance Tax Percent Change, Annual Rate Personal Income

3.2

6.2

5.0

1.2

5.2

4.4

3.5

4.6

6.0

6.8

6.1

Wages & Salaries

2.2

3.9

4.1

2.7

4.6

4.7

4.2

4.8

5.4

5.8

5.6

Other Labor Income

3.4

2.5

2.0

2.9

2.6

3.3

4.3

3.3

2.7

3.9

4.1

Nonfarm Income

5.3

8.2

10.5

1.5

6.0

5.3

3.9

5.7

6.5

6.0

4.9

Farm Income

30.4

66.2

-18.5

43.2

-21.4

-41.0

-28.4

-17.8

1.9

-5.3

-11.0

Rental Income

20.1

20.8

4.4

8.9

7.2

8.7

6.6

3.4

0.3

0.1

0.3

Dividends

23.8

23.5

46.4

-8.2

17.4

-1.9

1.4

6.3

18.2

17.1

7.3

Interest Income

-1.8

3.3

5.1

-2.7

3.4

-0.2

3.2

6.6

9.5

11.9

10.2

Transfer Payments

7.5

0.4

1.2

2.5

5.8

4.5

3.6

4.1

5.4

5.6

5.4

Personal Social Insurance Tax

2.4

-13.5

5.2

43.9

5.6

4.7

4.0

5.5

6.0

5.9

5.8

Institute for Economic Competitiveness

29

U . S . F orecast T ables Table 12. Personal Consumption Expenditures (Current Dollars)

Table 12. Personal Consumption Expenditures (Current Dollars) 2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

Consumer Expenditures by Type Billions Current Dollars Consumer spending on… all goods & services

13138.2 13289.9 13455.3 13602.3 13781.6 13968.6 14163.8 14364.0 14587.8 14800.9 15018.6 15242.0 15475.8 15705.4 15924.3 16145.7

durable goods

1454.7 1468.4 1486.8 1499.1 1523.3 1541.4 1564.9 1591.4 1624.3 1653.8 1681.7 1713.1 1746.7 1779.8 1808.1 1832.8

furniture and appliances

319.1

319.9

321.4

323.6

328.1

332.8

337.9

343.2

347.9

352.8

358.2

364.2

370.5

376.8

381.8

386.5

information processing equipment

120.5

120.9

121.7

122.5

124.2

125.6

127.4

129.0

130.9

133.0

134.9

136.7

138.1

139.4

140.9

142.5

motor vehicles and parts

499.7

509.3

522.1

529.5

539.6

546.9

555.7

567.1

583.3

596.5

608.2

622.1

638.0

653.2

664.9

672.8

other durable goods

153.7

155.7

156.6

157.3

158.8

159.5

160.8

161.9

163.5

165.0

166.5

168.1

169.2

170.8

172.3

173.6

nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

2765.8 2778.7 2809.3 2830.8 2861.3 2895.6 2928.6 2962.6 3004.4 3046.9 3090.5 3135.2 3182.6 3227.3 3269.9 3313.1 383.0

385.2

387.0

387.4

391.8

395.8

399.1

403.6

409.7

414.8

419.9

425.0

430.4

435.6

440.1

19.4

20.6

20.4

20.3

20.2

20.3

20.4

20.6

20.9

21.3

21.7

22.1

22.6

23.0

23.3

23.5

278.6

269.6

276.6

276.9

276.6

279.6

283.4

287.2

294.9

304.5

313.3

322.5

332.9

340.7

347.1

352.8

959.5

969.4

977.3

984.5

992.0 1000.5 1009.7 1018.9 1028.3 1037.6 1046.6 1055.5

931.3

938.5

944.8

950.2

1153.4

1164.7

1180.5

1196.0

444.1

1213.2 1230.5 1248.3 1266.7 1286.9 1305.8 1325.9 1346.6 1368.4 1390.5 1412.9 1437.2

Consumer Expenditures by Type Billions 2005 Dollars Consumer spending on… all goods & services

11737.4 11831.9 11925.7 12011.4 12123.5 12237.9 12354.9 12475.0 12611.0 12735.3 12859.4 12984.7 13112.6 13237.9 13354.3 13470.3

durable goods

1668.0 1687.4 1713.4 1733.4 1767.8 1795.1 1829.1 1867.5 1914.3 1957.8 1999.8 2045.4 2092.9 2139.1 2179.2 2214.6

furniture and appliances

386.3

388.0

390.7

394.4

401.1

408.2

416.0

424.1

431.4

439.1

447.4

456.5

466.0

475.4

483.1

490.3

information processing equipment

207.4

211.3

215.8

220.4

227.1

233.8

241.6

249.3

258.1

267.7

277.3

287.1

296.0

304.9

313.5

322.7

motor vehicles and parts

452.4

458.4

467.8

473.0

480.9

486.1

492.8

501.9

515.5

526.3

536.0

547.4

560.1

571.9

580.5

585.6

other durable goods

155.1

157.0

158.0

158.6

160.0

160.7

162.0

163.2

164.9

166.8

168.5

170.3

171.4

172.8

174.1

175.3

nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

2534.9 2552.7 2570.4 2586.6 2607.5 2630.1 2650.2 2671.3 2696.4 2720.2 2744.5 2768.1 2791.1 2813.1 2834.0 2855.2 373.0

375.7

378.2

379.4

383.8

388.2

392.0

397.1

404.1

410.0

415.9

421.4

426.7

431.9

436.6

20.1

21.1

21.1

21.1

21.0

21.0

20.9

20.9

20.9

20.9

20.8

20.8

20.7

20.6

20.4

440.9 20.3

264.1

271.2

274.5

278.9

279.9

283.2

286.2

289.6

293.5

296.9

299.4

301.1

301.6

301.7

301.4

301.0

853.3

855.4

857.4

858.6

863.4

868.3

871.4

873.7

875.7

878.8

882.4

886.4

890.7

894.7

898.9

902.8

1033.9 1039.3 1049.3 1058.9 1069.7 1080.0 1090.3 1101.1

1113.7

1125.5

1138.1

1150.9

1164.0

1176.8

1189.4

1203.0

Real Consumer Expenditures Annual Growth Rate Consumer spending on… all goods & services

3.3

3.2

3.2

2.9

3.7

3.8

3.8

3.9

4.4

3.9

3.9

3.9

3.9

3.8

3.5

3.5

durable goods

5.2

4.6

6.2

4.7

7.9

6.2

7.6

8.4

10.0

9.1

8.6

9.1

9.3

8.8

7.5

6.5

furniture and appliances

4.4

1.8

2.7

3.8

6.8

7.1

7.6

7.8

6.9

7.2

7.6

8.1

8.3

8.1

6.5

6.0

12.5

7.6

8.5

8.5

12.2

11.7

13.5

12.8

14.0

14.9

14.3

14.2

12.5

11.9

11.3

11.8

motor vehicles and parts

-0.4

5.3

8.2

4.5

6.7

4.3

5.5

7.4

10.8

8.4

7.3

8.5

9.3

8.4

6.0

3.5

other durable goods

10.9

4.9

2.3

1.8

3.4

1.8

3.2

2.8

4.2

4.7

4.1

4.2

2.5

3.4

3.0

2.7

nondurables

2.9

2.8

2.8

2.5

3.2

3.5

3.1

3.2

3.8

3.5

3.6

3.5

3.3

3.1

3.0

3.0

clothing & shoes

4.8

2.9

2.7

1.3

4.6

4.6

4.0

5.2

7.1

5.9

5.7

5.3

5.0

4.9

4.4

3.9

fuel oil & coal

7.8

20.1

0.5

-0.6

-2.2

-0.3

-0.8

0.0

-0.2

-0.3

-0.8

-1.3

-1.8

-2.3

-2.3

-2.6

gasoline & motor oil

1.4

10.8

4.8

6.4

1.5

4.7

4.2

4.7

5.4

4.7

3.3

2.2

0.7

0.2

-0.4

-0.5

food

2.1

1.0

0.9

0.6

2.2

2.3

1.5

1.0

0.9

1.4

1.7

1.8

1.9

1.8

1.9

1.8

other nondurable goods

3.3

2.1

3.9

3.7

4.2

3.9

3.9

4.0

4.7

4.3

4.6

4.6

4.6

4.5

4.3

4.7

information processing equipment

30

U.S. Forecast | February 2017

U . S . F orecast T ables Table 13. Personal Consumption Expenditures

Table 13. Personal Consumption Expenditures (2009 Dollars) History 2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

Consumer Expenditures by Type Billions Current Dollars Consumer spending on… all goods & services durable goods

10202.2 10689.3 11050.6 11361.2 11863.4 12283.7 12750.8

13371.4 14069.5 14912.3 15812.8

1070.7

1125.3

1191.9

1241.7

1294.8

1355.2

1403.0

1477.2

1555.2

1668.2

1791.8

250.4

260.7

271.4

281.6

292.1

305.1

316.5

321.0

335.5

355.8

378.9

90.3

91.9

98.6

101.7

104.5

109.2

115.1

121.4

126.6

133.9

140.2

motor vehicles and parts

342.0

363.5

395.8

416.1

442.8

464.8

473.9

515.2

552.3

602.5

657.2

other durable goods

110.0

121.4

127.3

133.1

136.2

141.2

147.1

155.8

160.2

165.8

171.5

2292.1

2471.1

2547.2

2592.8

2675.7

2656.9

2695.0

2796.1

2912.0

3069.2

3248.3

320.6

338.9

354.3

363.6

370.8

379.5

383.3

385.7

397.5

417.4

437.5

furniture and appliances information processing equipment

nondurables clothing & shoes fuel oil & coal

26.2

29.2

26.4

26.6

27.8

20.7

18.3

20.2

20.4

21.5

23.1

gasoline & motor oil

307.3

380.4

390.5

385.6

371.2

283.0

254.2

275.4

281.7

308.8

343.4

food

788.9

829.1

848.8

857.5

891.4

900.7

916.5

941.2

972.7

1005.3

1042.0

other nondurable goods

849.2

893.5

927.3

959.5

1014.6

1073.0

1122.7

1173.7

1239.7

1316.3

1402.3

Consumer Expenditures by Type Billions 2005 Dollars Consumer spending on… all goods & services durable goods furniture and appliances information processing equipment

10036.3 10263.5 10413.2 10565.4 10868.9 11214.7 11514.9

11876.6 12297.8 12797.6 13293.8

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1584.2

1700.6

1814.9

1979.3

2156.5

261.5

276.6

288.7

305.8

328.7

351.6

374.5

389.8

412.4

443.6

478.7

97.2

108.0

125.2

139.4

152.3

167.8

190.1

213.7

238.0

272.5

309.3

motor vehicles and parts

323.4

333.8

359.1

375.7

399.5

419.4

431.5

462.9

490.4

531.3

574.6

other durable goods

108.9

115.1

120.2

126.4

132.9

142.7

146.6

157.2

161.5

167.6

173.4

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2498.9

2561.1

2639.8

2732.3

2823.3

322.7

335.3

338.9

344.9

350.6

363.4

368.1

376.6

390.3

412.8

434.0

nondurables clothing & shoes fuel oil & coal

22.4

19.6

17.5

17.8

18.7

19.6

20.6

20.8

20.9

20.9

20.5

gasoline & motor oil

259.9

254.7

252.5

257.6

257.7

266.6

268.4

272.2

284.7

297.7

301.5

food

786.5

795.1

795.7

795.2

811.7

811.3

833.6

856.2

869.2

880.8

896.8

other nondurable goods

833.0

863.2

880.7

908.2

947.8

989.1

1018.5

1045.4

1085.3

1132.1

1183.3

Real Consumer Expenditures Annual Growth Rate Consumer spending on… all goods & services

3.1

1.5

1.3

2.0

3.5

2.6

2.8

3.2

3.9

4.1

3.7

durable goods

9.3

4.9

7.3

5.3

8.7

5.5

7.9

5.3

7.7

9.5

8.3

furniture and appliances

8.3

5.8

3.1

7.5

7.9

6.6

6.0

3.2

7.5

7.6

7.4

information processing equipment

16.8

13.9

16.7

7.3

11.7

7.6

17.5

9.6

13.1

15.1

12.4

motor vehicles and parts

11.0

1.5

7.4

2.5

9.6

2.0

8.0

4.5

6.1

9.1

7.0

other durable goods

5.5

3.2

8.1

3.6

6.1

7.5

3.2

5.1

2.8

4.4

2.9

nondurables

3.3

0.4

0.8

2.6

2.8

2.3

2.4

2.8

3.3

3.6

3.1

clothing & shoes

7.6

1.1

0.9

2.5

3.5

2.2

0.7

3.0

4.7

6.1

4.6

-7.6

-12.6

5.5

14.0

-1.0

7.7

6.0

7.4

-0.8

-0.6

-2.2

gasoline & motor oil

2.2

-3.1

-0.9

3.3

1.0

3.0

-1.8

6.0

3.9

4.0

0.0

food

2.1

-0.4

0.6

0.6

1.4

-0.3

4.8

1.1

1.8

1.5

1.9

other nondurable goods

3.6

2.8

1.9

4.1

4.6

4.2

2.1

3.3

4.0

4.5

4.5

fuel oil & coal

Institute for Economic Competitiveness

31

U . S . F orecast T ables Table 14. Business Fixed Investment

Table 14. Business Fixed Investment History

2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

Billions Current Dollars Business Fixed Investment

1658.2 1812.1 2007.7 2094.4 2251.0 2311.3 2311.0

2445.8 2632.9 2827.1 3004.6

Producers Dur. Equipment

731.8

838.2

937.9

982.8 1040.7 1086.1 1057.9

1107.1 1198.5 1296.2 1378.2

Nonresidential Structures

362.0

381.6

448.0

463.6

530.7

507.3

492.8

531.8

581.4

628.2

673.6

Non-Farm Buildings

173.7

170.2

191.6

203.8

234.4

277.5

311.3

333.2

366.9

395.8

424.6

Commercial

64.7

66.8

75.6

84.2

102.9

115.6

139.0

155.5

175.0

194.1

220.6

Industrial

39.8

39.0

45.8

48.8

57.0

75.9

72.8

68.8

75.3

77.5

72.6

Other Buildings

69.2

64.5

70.2

70.7

74.6

86.0

99.5

108.8

116.6

124.2

131.4

Utilities

93.3

90.7

112.2

108.9

126.3

114.7

117.2

117.0

120.3

123.9

127.2

Mines & Wells

86.2

112.3

134.1

139.4

156.3

101.2

51.6

68.7

80.9

94.3

105.1

Billions 2009 Dollars Business Fixed Investment

1673.8 1802.3 1964.2 2032.9 2155.6 2200.2 2190.7

2298.5 2445.4 2593.4 2715.1

Producers Dur. Equipment

746.7

847.9

939.2

982.3 1035.7 1072.5 1042.1

1087.9 1174.6 1267.0 1335.3

Nonresidential Structures

366.3

374.7

423.1

428.8

472.9

452.1

438.3

462.3

486.6

506.2

525.4

Non-Farm Buildings

179.3

172.3

188.8

196.0

218.2

253.2

279.4

291.8

309.6

322.5

334.4

Commercial

66.6

67.3

73.9

80.5

95.8

105.5

125.0

136.3

148.1

158.9

174.7

Industrial

40.8

39.1

44.9

46.7

52.8

69.1

65.7

61.5

64.1

63.3

57.1

Other Buildings

71.9

65.9

70.0

68.6

69.3

78.4

88.4

93.7

96.9

99.9

102.3

Utilities

89.8

82.8

99.1

95.1

108.9

97.4

99.1

96.4

96.0

95.6

95.2

Mines & Wells

87.8

110.9

123.8

126.0

133.0

91.4

50.0

66.6

74.6

82.0

88.9

Business Fixed Investment

8.6

10.9

6.9

5.8

6.5

1.1

1.0

8.0

7.4

6.8

6.2

Producers Dur. Equipment

20.2

14.4

8.4

5.8

4.5

4.3

-3.1

8.4

7.8

7.4

6.1

Nonresidential Structures

-0.6

15.3

7.8

9.5

12.1

-9.6

2.1

10.6

9.3

7.2

7.1

Non-Farm Buildings

-21.1

14.7

7.3

9.8

20.9

11.7

13.2

6.3

11.4

6.7

6.8

Commercial

-16.8

14.7

9.9

18.7

20.3

10.9

22.1

9.2

13.3

11.6

13.1

Industrial

-28.8

37.4

8.1

9.1

37.9

13.0

-5.5

-1.0

14.0

-3.7

-8.3

Other Buildings

-19.5

3.6

4.5

1.7

12.0

13.2

17.5

7.3

7.3

6.0

5.9

Utilities

19.0

2.4

18.4

17.5

-1.7

10.4

-2.5

3.2

3.3

2.9

1.3

Mines & Wells

53.6

36.6

1.9

8.0

18.1

-54.8

-27.2

64.9

9.4

15.8

14.0

Annual Growth Rate

32

U.S. Forecast | February 2017

U . S . F orecast T ables Table 15. Government Receipts and Expenditures

Table 15. Government Receipts and Expenditures History 2010

Forecast

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2443.3

2574.1

2699.1

3138.4

3288.4

3453.3

3508.2

3693.6

3501.6

3755.6

4030.6

Personal Tax and Nontax Receipts

941.6

1129.1

1164.7

1302.0

1402.3

1532.7

1555.0

1649.3

1668.7

1816.1

1977.1

Corp. Profits Tax Accruals

298.7

299.4

363.1

378.1

436.6

455.2

445.2

460.7

140.4

139.8

160.1

Federal Government Receipts and Expenditures Receipts

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

96.8

108.6

115.1

124.8

134.6

139.4

138.0

133.8

144.4

150.9

159.4

970.9

904.0

938.2

1091.3

1140.9

1189.6

1235.5

1293.1

1374.9

1456.8

1541.5

Expenditures

3772.0

3818.2

3789.1

3782.3

3901.3

4023.0

4163.7

4306.7

4531.6

4789.9

5058.2

Purchases Goods & Services

1303.9

1303.5

1292.5

1229.5

1218.9

1225.0

1244.5

1267.0

1286.5

1305.1

1329.0

National Defense

832.8

837.0

817.8

767.0

746.0

732.0

732.2

746.9

760.6

769.4

782.0

Other

471.1

466.5

474.7

462.5

472.9

493.0

512.3

520.0

525.9

535.7

547.0

Transfer Payments

2333.2

2327.0

2300.8

2346.2

2448.6

2564.9

2652.9

2746.6

2894.9

3053.6

3211.5

To Persons

1757.9

1779.9

1783.6

1823.5

1882.0

1961.3

2026.7

2091.3

2223.3

2360.7

2497.8

53.5

57.6

55.3

53.9

52.4

52.0

54.1

53.9

54.9

55.9

56.8

Grants in Aid to State & Local Gov't

To Foreigners

505.3

472.5

444.0

450.0

494.8

531.2

551.1

579.6

593.8

613.1

631.9

Net Interest

351.0

398.0

401.6

393.4

417.1

411.3

445.5

475.5

539.1

620.6

706.2

57.4

66.7

66.5

69.9

64.5

63.5

69.7

70.5

71.8

72.1

72.4

-1328.7

-1244.2

-1090.1

-643.8

-612.9

-569.7

-655.5

-613.1 -1030.0

-1034.3

-1027.6

Subsidies less Surplus of Gov't Entities Surplus (+) or Deficit (-)

State and Local Government Receipts and Expenditures Receipts

1998.5

2030.5

2057.2

2136.8

2227.8

2331.5

2374.3

2477.3

2609.1

2752.1

2885.5

Personal Tax/Nontax Receipts

1305.7

1368.3

1416.1

1481.4

1518.9

1564.6

1592.1

1662.5

1769.8

1883.1

1987.4

297.6

324.1

346.7

375.9

384.6

406.1

413.1

434.5

477.4

519.5

550.6

47.7

50.2

52.5

55.5

58.6

60.3

60.9

68.8

78.4

83.4

86.1

Corporate Profits Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Federal Grants-In-Aid Expenditures Purchases Goods & Services

18.2

18.2

18.1

18.5

19.1

19.0

19.3

20.1

21.3

22.7

24.0

505.3

472.5

444.0

450.0

494.8

531.2

551.1

579.6

593.8

613.1

631.9

2645.98 2730.84

2859.5

2994.6 2423.1

2235.85 2246.40 2277.93 2327.28 2397.55 2492.83 2564.93 1870.2

1865.3

1866.0

1886.6

1933.2

1993.3

2034.2

2104.1

2201.8

2315.8

Transfer Payments

612.0

582.2

558.0

571.3

624.5

679.6

691.9

719.5

737.2

760.1

782.5

Interest Received

123.0

125.9

141.4

141.9

123.0

124.5

130.0

124.8

121.7

124.1

129.1

21.4

17.9

10.8

10.3

12.4

11.9

11.9

10.7

8.4

6.4

4.4

2.3

2.7

3.3

3.6

3.8

4.2

4.7

4.9

4.9

5.0

5.0

-237.3

-215.9

-220.8

-190.5

-169.9

-161.3

-190.6

-168.6

-121.7

-107.5

-109.1

Net Subsidies Dividends Received Surplus (+) or Deficit (-)

Institute for Economic Competitiveness

33

U . S . F orecast T ables Table 16. U.S. Exports and Imports of Goods and Services

Table 16. U.S. Exports and Imports of Goods and Services History

Forecast

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Net Exports Goods & Services

-512.7

-580.0

-565.7

-492.0

-508.8

-522.0

-499.5

-482.1

-443.2

-501.4

-640.3

Current Account

-442.0

-460.4

-446.5

-366.4

-392.1

-463.0

-485.8

-446.2

-415.9

-500.3

-687.2

Exports -Goods & Services

1852.3

2106.4

2198.2

2276.6

2375.3

2264.3

2232.2

2366.2

2558.3

2724.8

2889.9

Merchandise Balance

-648.7

-740.6

-741.2

-702.2

-752.2

-762.6

-751.1

-757.7

-751.2

-839.8 -1005.5

Food, Feed & Beverage

107.72

126.25

133.05

136.16

143.72

127.73

135.05

135.21

146.64

153.1

158.8

Industrial Supplies Excl Petroleum

388.6

485.3

483.2

492.4

500.4

417.1

388.9

431.6

481.5

520.9

563.3

Motor Vehicles & Parts

112.0

133.0

146.2

152.7

159.8

151.9

149.8

159.7

183.9

203.9

219.1

Capital Goods, Excl. MVP

447.8

494.2

527.5

534.8

551.7

539.7

518.1

531.9

554.9

565.7

569.2

Billions of Dollars

Computer Equipment

43.8

48.5

49.2

48.1

48.8

46.8

45.3

42.8

42.4

41.1

41.6

Other

332.1

365.4

383.9

381.7

389.8

373.4

354.0

365.5

384.6

394.5

397.6

Consumer Goods, Excl. MVP

164.9

174.7

181.0

188.1

198.0

197.3

193.0

207.9

225.1

236.2

243.3

Other Consumer

58.6

53.4

55.1

58.6

64.5

64.7

69.3

73.0

71.0

76.5

83.1

572.7

639.5

672.2

713.9

757.2

765.9

777.9

826.9

895.4

968.6

1053.2

Imports -Goods & Services

2365.0

2686.4

2763.8

2768.6

2884.1

2786.3

2731.7

2848.3

3001.6

3226.3

3530.2

Merchandise

1949.8

2244.7

2305.8

2301.5

2396.5

2291.1

2224.8

2313.3

2429.6

2610.5

2855.3

92.5

108.3

111.1

116.0

126.8

128.8

131.4

130.2

125.1

132.5

141.5

Petroleum & Products

353.6

462.1

434.3

387.8

353.6

197.3

160.9

184.6

173.7

188.8

223.0

Industrial Supplies Excl Petroleum

249.4

292.7

288.8

291.3

316.3

290.4

276.7

297.7

340.4

361.4

386.9

Motor Vehicles & Parts

225.6

255.2

298.5

309.6

329.5

350.1

351.4

356.5

364.5

379.1

408.6

Capital Goods, Excl. MVP

450.4

513.4

551.8

559.0

598.7

606.7

593.5

622.6

661.0

704.9

755.8

Computer Equipment

117.3

119.7

122.3

121.2

122.0

120.2

114.5

116.1

119.6

121.8

124.5

Other

301.9

358.2

389.4

390.8

423.4

431.3

428.6

454.3

484.9

525.1

572.6

Consumer Goods, Excl. MVP

485.1

515.9

518.8

532.9

558.7

596.5

585.2

588.4

598.0

633.6

694.8

Services Billions of Dollars

Food, Feed & Beverage

Other Consumer

93.1

97.1

102.4

105.0

112.9

121.3

125.7

133.4

166.9

210.2

244.7

415.2

441.6

458.0

467.1

487.6

495.2

506.8

535.0

571.9

615.8

674.9

Net Exports Goods & Services

-458.8

-459.4

-447.1

-404.9

-425.7

-540.0

-561.7

-628.9

-766.9

-939.4 -1095.1

Exports G & S

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2128.4

2198.9

2322.9

2421.8

2515.2

Imports G & S

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2690.1

2827.8

3089.8

3361.2

3610.3

Services Billions 2009 Dollars

Exports & Imports % Change Exports G & S

15.3

8.7

3.4

5.6

1.9

-6.9

2.6

7.6

8.0

5.6

6.7

Imports G & S

15.0

10.9

0.3

1.2

4.7

-5.9

2.7

3.4

6.0

8.4

9.7

Real Exports G & S

10.1

4.2

2.2

6.0

3.1

-2.1

1.7

5.0

5.5

3.5

4.5

Real Imports G & S

12.2

3.5

0.3

2.5

6.2

2.6

2.5

6.5

9.2

8.8

6.6

34

U.S. Forecast | February 2017

SEAN M. SNAITH, PH.D.

We would like to recognize the following organizations for their support of the Institute for Economic Competitiveness:

UNIVERSITY OF CENTRAL FLORIDA College of Business Administration Institute for Economic Competitiveness P. O . B o x 1 6 1 4 0 0 , O r l a n d o , F l o r i d a 3 2 8 1 6 P H 4 0 7. 8 2 3 . 1 4 5 3 FA X 4 0 7. 8 2 3 . 1 4 5 4 w w w. i e c . u c f . e d u