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M AY 2 0 1 7

U.S. FORECAST


About University of Central Florida (UCF) The University of Central Florida is a public, multi-campus, metropolitan research university, dedicated to serving its surrounding communities with their diverse and expanding populations, technological corridors, and international partners. The mission of the university is to offer highquality undergraduate and graduate education, student development, and continuing education; to conduct research and creative activities; and to provide services that enhance the intellectual, cultural, environmental, and economic development of the metropolitan region, address national and international issues in key areas, establish UCF as a major presence, and contribute to the global community.

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U.S. FORECAST 2017 - 2020

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.


HIGHLIGHTS Q2 2017

IN THIS U.S. FORECAST • Looking for Mr. Good Data: The presidential election has pushed stock prices higher and boosted consumer and business confidence, but a good mood is not the same as a good economy. • Faster economic growth and higher inflation will be products of Trump’s proposed economic policy path, assuming that path can be followed. • Average monthly payroll job growth since 2014 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 has decelerated for three years. Uncertainty and regulatory burden has been hindering payroll job growth, which slowed to 1.8% in 2016. It will further slow to a growth rate of 1.6% in 2017, but will accelerate to 1.7% in both 2018 and 2019, then ease to 1.5% in 2020. • The foreign sector will continue to be a drag on U.S. growth. A stronger dollar in a world of relatively weaker 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. • The Federal Reserve raised interest rates in March of 2017; the next 25 basis point hike will likely come in June. Stronger economic growth and higher inflation from Trump administration policies will quicken the pace of 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, 3.5% in 2018, and then slip to 3.4% in 2019 before easing to 3.0% in 2020, as the Federal Reserve tightens interest rates. This growth path assumes the Trump administration’s economic policies are carried out. • The housing market continues its recovery. The housing market will slowly improve through 2020 even with rising interest rates. Housing starts will rise from 1.29 million in 2017 to 1.66 million in 2020. • The headline unemployment rate (U-3) is expected to decline to 3.6% in late 2020. Job growth will be enough to keep up with labor force growth through the end of the forecast horizon. Underemployment (U-6), a persistent problem in this recovery, stands at 8.6% as of April 2017 but will also 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 2.7% during 2017-2020.


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Institute for Economic Competitiveness

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In the wake of the November presidential election, various measures of confidence in the U.S. economy surged higher. The stock market reacted to the expected economic policies of the Trump administration by reaching and breaking record levels on multiple occasions post-election. The Dow Jones Industrial Average—which closed at 18,260 on November 7th, 2016— closed at 21,116 on March 1st, 2017 and currently is hovering around that 21,000 level. Consumer and business confidence also reacted favorably. The University of Michigan Consumer Sentiment survey, which stood at 87.2 in October of 2016, surged to 96.9 by March of 2017 and remains near this level today. The National Federation of Independent Business optimism index soared after the election from 94.9 in October of 2016 to 104.7 in March of 2017, surpassing levels not reached in fourteen years.

This sequence of events led some to declare that the election had unleashed “animal spirits”1 a term used by John Maynard Keynes in his seminal 1936 book, The General Theory of Employment, Interest and Money. Animal spirits refer to the psychological factors that influence spending and investment decisions. Optimism—or the lack thereof—can affect business investment decisions, consumer spending, and financial markets. The surging stock market and the jump in both consumer and business confidence indexes are evidence of increased optimism in the outlook for the U.S. economy post-election. Animal spirits, however, are not economic activity but rather are a precursor for potential spending. Confidence can be an ephemeral phenomenon and if the anticipated policies of the Trump administration do not occur as expected, this sentiment could quickly turn.

1 https://www.bloomberg.com/news/articles/2017-03-09/dimon-says-trump has-reawakened-animal-spirits-in-the-u-s 6

U.S. Forecast / May 2017

The soft data on the economy has been quite positive for the Trump administration, but unless this translates into improved hard data in the form of actual economic spending activity, the boost in confidence enjoyed thus far will prove to be a fleeting victory.

The transition from improved soft data to improved hard data will ultimately depend on the administration’s ability to follow through on economic policies that will provide the impetus for spending to grow. Thus far, most of the progress has been made on the regulatory front: rolling back regulations, reducing the burden on businesses, and encouraging investment spending and hiring after decades of a growing regulatory burden. The economy will benefit from easing the red tape that currently binds the private sector. The administration’s proposed tax reforms and infrastructure spending plans remain on the drawing board and are a critical part of the economic strategy to boost economic growth from its paltry average of 2.0% during this economic recovery.

ANXIOUS INDEX Fear of Recession Slips to Lowest Level in More Than Two Years

The most recent release (2nd quarter of 2017) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 31 forecasters surveyed for the publication put a 10.92% chance that a decline in real GDP will occur in the 3rd quarter of 2017. This quarter’s release reflects a further decrease in forecasters’ anxiety over the 1st quarter’s survey. It should be noted that this is the second survey taken since the presidential election and, despite Mr. Trump’s Wild Ride2, it appears the Trump administration’s expected economic policies continue to lower fears of a recession in the near term. 2

February 2017 U.S. Forecast


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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 May of 2017, the index stands at 10.92 which means that forecasters believe there is a 10.92%, chance that real GDP will decline in the 3rd quarter of 2017.

The forecasters also report an 8.43% chance that we are currently (as of the 2nd quarter of 2017) experiencing a contraction in real GDP—three quarters of a percentage point higher than the probability the forecasters assigned for the 1st quarter of 2017. According to the panel, the probability that real GDP growth will turn negative is averaging around 14.78%

through the end of the 3rd quarter of 2018, indicating that the forecasters’ assignment of probability for a contraction in real GDP in the upcoming year is the lowest since the 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 three points lower than the average level during the economic recovery (13.45).

GDP OUTLOOK 3.0% Annual Real GDP Growth is Possible, but Not Without Economic Stimulus GDP growth did not get off to a fast start in 2017. The first estimate of real GDP growth for the 1st quarter came in at a paltry 0.7% after expanding at 2.1% in the 4th quarter. If the economy is to accelerate,

Figure 1.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2017:Q2 100 90 80

Probability (percent)

70 60 50 40 30 20

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

10

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

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it will require a significant shot of policy adrenaline. The economic platform proposed by the Trump administration should provide just the boost that this lackluster recovery needs, but proposing it and implementing it are two different things. A proposed policy does nothing, but if the administration is able to follow through, continuing the regulatory rollback and moving forward with tax reform and infrastructure spending, economic growth will accelerate and the lifespan of this economic recovery should be extended. We have incorporated all of these policies into our forecast—for now. The second half of 2017 will be a critical period to see what legislative priorities make progress as well as the specific details of what this legislation includes.

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 20172020 is significantly higher at 3.1%, with a projected acceleration of growth to levels greater than 3.0% after 2017.

The likelihood of a recession taking place during our forecast horizon is a real risk—no recovery lasts forever. Proposed economic policies could prolong the life of this recovery but not indefinitely. All expansions give way to the next recession and no election or policy mix has ever prevented that from occurring. The global economic environment, while showing some signs of improvement, remains weak. China’s slowing economy, Europe’s ongoing sluggish growth, the unresolved Greek debt crisis, the immigration crisis, Brexit, and political uncertainty create an environment that is not conducive to expanding prosperity in the U.S. The historic recession that Brazil continues to struggle to shake off is one example of the threats that also persist in this hemisphere.

During this now-eight-year-old recovery, we have waited for an acceleration of economic growth that was promised and projected to be on the horizon, but faster growth has proved to be nothing more than a mirage and a product of wishful thinking. A sharp change in policy could be the event that finally provides this longawaited acceleration, but the change in policy must take place first. In 2017, we are expecting real GDP growth to accelerate to 2.7%. Growth will jump to 3.5% in 2018 8

U.S. Forecast / May 2017

before decelerating to 3.3% in 2019 and 3.0% in 2020. The projected growth rate for 2018 would be the first time the U.S. economy experienced annual growth at 3.4% or higher since 2004.

As details of the economic policies pursued by the Trump administration become available and legislation is enacted, the possibility that economic growth could accelerate at an even faster pace—which seemed unlikely prior to the presidential election—is now in the realm of possibility. The election has impacted Federal Reserve policy in a positive way. After raising the federal funds rate by 25 basis points in December of 2016—the second time the Fed has made such a move this recovery—the total increase in interest rates came out to 0.50% over the past two years. As a result of the anticipated policies of the Trump administration, the Fed is quickening the pace of interest rate hikes, but not necessarily the magnitude of these hikes. We expect the central bank to continue to take baby steps as it raises interest rates, but the frequency of these steps will increase. As always, economic data will drive both the timing and the size of these interest rate changes, but the once-ayear, 25 basis point rate hike pattern of the past two years will come to an end in 2017.

After raising rates in March of this year, we expect the Federal Reserve to increase interest rates again in June and perhaps one or two more times in 2017. They will continue in 2018 and 2019 until the anticipated target rate reaches 3.00% by the fourth quarter of 2019. The path of interest rate hikes will deviate from this projection if growth accelerates faster than projected or if the proposed policies of the Trump administration fail to materialize and, of course, if there is a recession triggered by this failure or any of the global risks to the economic expansion.

CONSUMER SPENDING Rising Employment, Buoyed Balance Sheets, and Rising Incomes Will Fuel Consumers The U.S. consumer has been playing the biggest role in supporting the economic expansion, tepid as it has been, over the past three years. In 2014, real consumer spending growth was 2.9%, 3.2% in 2015, and spending grew at 2.7% in 2016.


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In these three years, the contribution to GDP growth was outsized. In 2014, consumer spending contributed 81% of economic growth, 83% in 2015, and in 2016, it contributed 116% to real GDP growth of 1.6% that year. In other words, if not for consumer spending, the US economy would have contracted in 2016.

Continued gains in employment, more rapidly rising wages, and improving household balance sheets should continue to provide a solid foundation for continued consumer spending growth. Tax cuts and spending programs proposed by the Trump administration should also boost consumer spending growth. These improving fundamentals and growth-oriented policies should boost consumption spending going forward from the depressed level in the 1st quarter of 2017, where the advance reading on spending growth was just 0.3%, well down from the 4th quarter of 2016 when growth was a solid 3.5%. Consumer confidence surged post-election and then eased back slightly but remains at levels that are the highest since 2000. Trump’s tumultuous first few months in office have not had an overall detrimental effect on consumer’s optimism, although one wonders if confidence would be even higher if things were proceeding in a more orderly fashion.

The next three quarters should show a strengthening of consumer spending growth. In the 2nd quarter of 2017, consumption spending growth will accelerate to 3.9%, as the surge in confidence opens consumer’s wallets that were tight in the 1st quarter. In the 3rd quarter of 2017, consumer spending growth should decelerate to 3.4% before slipping to 3.0% in the 4th quarter.

Consumer spending is the largest component of GDP and a critical part of supporting real GDP if this recovery is going to have continued growth and accelerate from the depressed levels that have characterized this recovery. The other main sectors of the economy have faced headwinds that have suppressed growth. Business investment has been weak, government spending is currently doing little to boost GDP growth, and net exports will continue to pull down growth as the dollar continues to strengthen. Trump’s proposed economic policies could change the first two in a positive way, but consumers will still need to provide momentum for this expansion going forward.

While the foundation of consumer spending continues to solidify, the labor market continues its recovery amid signs that job growth could 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 April 2017, growth has slipped back to 2.5%.

Global economic, financial market, and U.S. election related uncertainty began to erode consumer confidence in the second half of 2015 and 2016, despite positive developments in other areas. As a result, consumerspending growth decelerated to around 2.7% in 2016 from 3.2% in 2015. Proposed tax policy and other economic policies aimed at stimulating economic growth 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 3.0% in 2017, to 3.8% in 2018, and accelerate further to 4.1% in 2019 before pulling back to 3.8% in 2020, as higher interest rates rein in both GDP growth and consumer spending.

INVESTMENT After decelerating from 6.0% growth in 2014 to 2.1% growth in 2015, spending turned negative in 2016, contracting by 0.5%. The long and unusual presidential election cycle carried with it a much higher level of uncertainty than previous elections. As a result, many businesses stayed on the sideline when it came to investment spending, unsure of what tax and economic policies might be in place in 2017.

Investment spending in this recovery has been weak, and we have discussed the role of uncertainty and the rapid growth in the regulatory burden as probable causes of this weakness in previous U.S. Forecast publications. This environment of uncertainty worsened during the presidential political cycle but with the election now over and the regulatory burden already being rolled back, 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. Institute for Economic Competitiveness

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corporations overseas, along with proposed changes to allow companies to expense equipment instead of depreciating it, will all boost investment spending if they can make it through the legislative process.

Spending on equipment and software contracted in each of the first three quarters of 2016, following a contraction in the fourth quarter of 2015. The fourth quarter of 2016 pulled us back from the brink, as spending on equipment and software increased by 1.9%. The outlook going forward should continue to strengthen substantially.

Purchases of aircraft again contracted 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% before contracting again in the 3rd quarter of 2016 by 39.5%. For the full year, 2016 aircraft spending contracted 21.3% after more volatility in the second half of 2016. Over the next four years, spending on aircraft is expected to grow an average of 13.6%, but volatility in this type of investment spending is to be expected.

The earlier contraction in investment spending also reflected 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 morethan-seventy-year low of 404 in response to plunging oil prices. Oil prices have recovered from these lows and the May 2017 count was 901, up 497 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 35.8% and average 8.7% per year during 2018-2020. While this isn’t a return to $80 a barrel level boom in spending, it is a good recovery for a sector that has taken some hits from both markets and regulators. Approval of new pipelines has also given a boost to shale oil production in North Dakota.

It wasn’t just aircraft and oil rigs that were driving the weakness in investment spending in 2015 and 2016. 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

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U.S. Forecast / May 2017

investment spending growth to -0.5%. Now that the presidential election is over and the likelihood of investment friendly policies on the way, business investment growth will accelerate to 5.0% in 2017 and 6.8% in 2018 before easing to 5.7% in 2019 and 4.3% in 2020. Interest rates are currently still very low, even as the Fed has begun to push up the federal funds rate at what will be a faster pace going forward. Eventually, higher interest rates will begin to drag on investment spending, as is the intention of tightening monetary policy. Higher rates will begin 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 6.3% from 2017 through 2020. Investment spending growth in computers and peripherals will accelerate in 2017 to 5.9%, and 9.2% in 2018, as upgrade cycles and investment friendly tax policy kick in after spending had contracted in 2016 by 1.1%. Spending on communications equipment should expand at an average annual rate of 6.8% during 2017-2020, while industrial equipment purchases average 7.9% growth over the same time frame.

Investment growth in nonresidential structures has oscillated 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 2.8%. Investment in nonresidential structures will grow faster in 2017, 2018, and then decelerate in 2019 and 2020 with growth of 5.9%, 6.0%, 4.4%, and 3.8%, respectively.

Residential fixed investment growth swelled to 11.7% in 2015 but eased again in 2016 to 5.0%. Growth will average 6.0% through 2017-2020, accelerating to a peak growth rate of 7.1% in 2018. 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 6.5% 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 $746 billion—$126 billion less than its 2005 housing bubble peak. We expect housing starts to continue to accelerate over the next several years, reaching a level slightly


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above 1.66 million in 2020. Average levels of annual housing starts from 2017-2020 will be 1.5 million.

GOVERNMENT SPENDING In 2016, federal government spending growth remained positive with growth coming in at 0.6%. The two-year streak with positive federal government spending growth will end, despite the projection that the next four years of the Trump administration will see an increase in some forms of spending. This will occur as proposed spending boosts on infrastructure and the military will be partially offset by cuts that will be made elsewhere in discretionary federal government spending. In 2017, spending should contract 0.2% and rise again by 0.9% in 2018. During the 2017-2020 period, federal government spending is expected to rise, shrinking at an annual average pace of 0.1%. Over the 2016 to 2020 time horizon, state and local governments will oversee spending growth at an average rate of 1.8%. The federal budget deficit jumped in 2016 to nearly $586 billion and, after a slight dip in 2017, will continue to increase over our forecast horizon through 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 $577.7 billion before rising again in 2018 when it hits $652.5 billion. The deficit grows much larger in 2019 as entitlement, infrastructure, and military spending coupled with tax cuts pushes it to $841.3 billion before rising again in 2020 to more than $855 billion. The U.S. continues to travel down an unsustainable fiscal path that will ultimately lead to a crisis. 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. There has been no indication that the Trump administration, like those of its predecessors, will make any of the necessary changes to avoid this future crisis. We are projecting deficits through 2020 that are smaller than the $1 trillion-plus deficits that were the norm in 2009-2012. The amount that the projected deficits will add to the national debt over the next

four years will be nearly $2.9 trillion, pushing the national debt total to nearly $23.0 trillion before interest. As interest rates in the economy rise, the burden of servicing this debt will rise as well. Tax cuts and spending programs implemented by the Trump administration could push this debt to even higher levels than we are currently projecting. Slower than projected economic growth would also push projected deficits higher. Currently, the national debt is over $19.9 trillion and rising. This represents a debt of nearly $165,803 per taxpayer and $61,276 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 $106.2 trillion in liabilities, boiling down to $884,083 per taxpayer.3

NET EXPORTS 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. Last year the drag on GDP eased, but it still cost 0.13 percentage points. This drag on GDP growth is expected to last through the end of our 2020 forecast horizon.

The U.S. dollar has appreciated for four straight years against our major trading partners, including an outsized 16.1% appreciation in 2015. In 2016, this trend moderated, and in the first half of 2017, it has reversed, 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 before depreciating in 2020.

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, which is the difference between the dollar value of exports and the dollar value of imports. The effects of 3

National debt data from: http://www.usdebtclock.org/

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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, real export growth continues through the end of our 2020 forecast horizon and is expected to accelerate through 2018 before backing off slightly in 2019 and 2020. Real import growth is expected to accelerate over the 2017-2019 time frame, remaining above export growth through 2020 when growth hits 7.1% easing from 8.5% in 2019. Real export growth from 2017-2020 will average 4.2%, while real import growth will average 7.6% over the same time frame.

Real net exports will average -$862.3 billion during 2017-2020, with the trade balance worsening in each successive year and coming in at more than -$1.1 trillion in 2020. The sizeable appreciation of the dollar during 2012-2015 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 U.S. consumers’ appetite for imported goods and services. U N E M P LOY M E N T The national headline unemployment rate (U-3) in April dropped from the March reading of 4.5% to 4.4%, the lowest level since March of 2007. The unemployment rate declined driven by a decline in the number of unemployed, despite a small increase in the labor force. A total of 12,000 people joined the labor force in April, as the labor force participation rate decreased from 63.0% to 62.9%. The number of unemployed people declined by 146,000 in April.

The April jobs report showed continued growth in payroll jobs, with businesses adding 211,000 jobs after March’s 79,000 job gain. The 211,000 increase in payroll employment in April was 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 April’s uptick in job growth will be sustained or was just a bounce back from weaker jobs growth in March remains to be seen. This late in the economic

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U.S. Forecast / May 2017

cycle (this recovery turns 8 years old in June), a rapid acceleration in growth seems unlikely, but an end to the multi-year deceleration is possible if there is followthrough on economic policy.

The April labor force participation rate of 62.9% remains depressed and is at its lowest point since March 1978. Since the end of the recession, the labor force participation rate is down 2.6 percentage points. 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 455,000 workers), as well as those classified as underemployed (currently 5.3 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 (1.5 million workers). None of these 7.2 million-plus workers are counted in the headline unemployment rate of 4.4%. U-6 stands at 8.6% as of April 2017, down 0.3 percentage points from the March 2017 level and down 0.5 percentage points from April 2016 level. The current level of U-6 is down 8.5 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 nineteen consecutive months beginning in October 2015.


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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 14.0

(Millions Vehicles)

12.0 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

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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

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U.S. Forecast / May 2017

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


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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

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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

4000.0

(Annual Growth Rate %)

3500.0 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

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


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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

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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 / May 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


C h arts

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


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 5.8 2.5 2.3 -0.5 -2.9 2.5 -1.1 3.2 2.7 -4.8 -21.3 -21.4 -2.8 16.3 -5.2 4.6 -43.7 7.4 5.0 0.4 1.1 0.6 0.9

2.7 2.6 3.0 6.2 2.9 2.5 5.0 5.2 7.8 5.9 10.9 7.6 4.8 17.5 -0.5 5.9 9.0 -7.2 -1.0 35.8 4.5 6.1 4.1 5.6 -0.2 0.4

Billions of Dollars Real GDP Nominal GDP

14783.8 15020.6 15354.6 15612.2 15982.3 16397.2 16662.1 14964.4 15517.9 16155.3 16691.5 17393.1 18036.7 18569.1

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 / May 2017

Forecast 2018 2019

3.5 3.4 3.8 7.3 3.4 3.3 6.8 8.2 7.1 9.2 4.5 8.4 11.5 23.5 13.2 6.0 8.9 9.1 -2.3 10.8 4.9 7.1 5.5 9.4 0.9 2.6

3.3 3.2 4.1 8.8 3.6 3.5 5.7 7.0 7.2 4.8 5.8 9.4 6.3 7.3 7.3 4.4 7.3 3.4 0.2 5.6 3.2 4.4 3.7 8.5 0.2 2.5

2020

3.0 3.1 4.0 9.3 3.4 3.3 4.3 4.7 5.8 4.9 6.1 6.2 1.9 6.2 1.8 3.8 7.9 -7.9 -0.5 9.8 3.8 6.2 3.7 7.1 -0.4 1.7

17114.9 17720.4 18307.3 18860.6 19520.1 20773.4 22009.4 23203.8

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

2.3 2.6 2.5 2.4 2.4

2.8 3.1 2.6 2.0 3.2

2.6 3.3 2.9 2.5 3.7

2.3 3.0 2.7 3.0 3.8

79.4 3.3 5.6 70.7 65.9 71.8 11.555 0.586 3.705 9.6 -0.7 -1294 -442

95.1 0.1 3.1 73.7 36.6 67.4 12.743 0.612 3.792 8.9 1.2 -1297 -460

94.2 0.9 3.0 74.8 72.7 76.5 14.435 0.784 4.125 8.1 1.7 -1089 -447

97.9 0.3 2.0 74.7 73.0 79.2 15.530 0.928 4.475 7.4 1.6 -680 -366

93.3 0.8 3.1 75.4 62.2 84.1 16.455 1.001 4.333 6.2 1.9 -484 -392

48.7 0.9 -0.7 75.5 88.1 92.9 17.4 1.1 4.6 5.3 2.1 -439.1 -463.0

43.2 0.2 -1.2 75.1 26.0 91.8 17.5 1.2 4.8 4.9 1.8 -585.6 -481.2

48.7 1.3 2.7 76.5 39.4 96.8 17.6 1.3 5.0 4.5 1.6 -577.7 -432.6

44.4 2.0 3.9 78.2 68.0 101.3 18.1 1.4 5.1 4.1 1.7 -652.5 -379.9

53.5 2.0 3.2 78.7 82.7 101.1 18.6 1.5 5.2 3.8 1.7 -841.3 -467.3

64.1 2.0 2.2 77.5 70.3 101.6 19.2 1.7 5.3 3.7 1.5 -855.5 -674.1

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 0.8 1.1 2.1 2.6 3.2 4.4 2432.4 16.3 1.2 -0.4

1.6 1.6 2.0 2.7 3.3 3.9 5.2 2601.1 7.0 1.2 2.7

2.6 2.5 3.0 3.6 4.2 4.7 6.2 2721.6 4.6 1.2 2.5

3.3 3.1 3.5 4.0 4.5 4.9 6.5 2849.2 4.7 1.2 -2.5

12477.1 13254.5 13915.1 14073.7 14809.8 15458.5 16011.6 3.2 6.2 5.0 1.2 5.2 4.4 3.6 11237.9 11801.4 12403.7 12395.8 13022.7 13519.8 14045.9 2.7 5.0 5.1 0.0 5.1 3.8 3.9 11055.2 11331.3 11687.9 11527.6 11931.0 12343.2 12685.6 1.0 2.5 3.1 -1.4 3.5 3.5 2.8 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 1652.0 23.4 -2.9 18.1 0.3 2.5 -8.3 4.9

16746.5 17756.8 19004.1 20207.0 4.6 6.0 7.0 6.3 14655.2 15575.0 16618.2 17634.8 4.3 6.3 6.7 6.1 12999.8 13604.3 14231.8 14772.7 2.5 4.6 4.6 3.8 5.4 6.1 6.6 6.5 1877.2 2501.2 2673.3 2702.8 13.7 33.3 6.9 1.1


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 16662.1

17114.9 17720.4 18307.3 18860.6

14722.2 14979.0 15292.3 15521.1 15912.9 16300.6 16626.1

17060.2 17635.5 18207.3 18772.3

10036.3 10263.5 10413.2 10565.4 10868.9 11214.7 11522.2

11865.7 12312.9 12819.4 13330.2

Durables

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1584.6

1682.6

1805.7

1963.9

2146.2

Nondurables

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2500.4

2573.9

2660.4

2757.4

2851.7

Services

6727.6

6851.4

6908.1

6951.3

7114.2

7310.3

7481.0

7666.6

7922.2

8201.1

8472.4

1673.8

1802.3

1964.2

2032.9

2155.6

2200.2

2188.6

2298.2

2454.3

2594.3

2706.2

746.7

847.9

939.2

982.3

1035.7

1072.5

1041.4

1095.2

1185.2

1267.6

1326.8

281.4

285.9

303.1

317.7

326.0

338.7

346.9

373.9

400.3

429.1

454.0

Computers & Peripherals

84.7

83.0

88.5

88.5

89.2

88.8

87.7

92.9

101.3

106.2

111.4

Communications Equipment

90.2

91.8

96.3

106.2

110.3

118.2

121.9

134.9

141.0

149.2

158.2

Industrial Equipment

151.3

183.3

199.8

196.7

203.5

207.3

212.9

229.2

248.4

271.6

288.3

Transportation Equipment

127.5

173.9

213.1

240.6

271.8

308.1

293.1

306.8

341.5

363.0

370.0

22.1

27.9

29.2

31.7

35.3

42.0

33.0

38.5

46.9

50.4

53.5

36.2

48.1

58.1

61.3

70.8

71.9

56.5

55.8

63.1

67.7

68.9

366.3

374.7

423.1

428.8

472.9

452.1

439.2

465.2

493.1

514.9

534.6

Commercial & Health

95.2

94.7

102.8

106.4

120.1

132.3

153.9

167.5

182.5

195.7

211.1

Manufacturing

40.8

39.1

44.9

46.7

52.8

69.1

65.5

60.7

66.2

68.3

62.9

Power & Communication

80.4

74.1

89.7

85.7

98.6

86.2

89.9

89.0

86.9

87.0

86.6

Mining & Petroleum

87.8

110.9

123.8

126.0

133.0

91.4

50.0

66.4

72.9

76.9

84.5

Other

62.0

56.2

61.5

64.1

68.7

75.9

81.5

85.2

89.4

92.2

95.7

382.4

384.5

436.5

488.3

505.4

564.5

592.0

628.2

672.7

702.5

745.9

Exports

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2128.2

2214.8

2335.9

2422.7

2511.4

Imports

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2691.2

2841.7

3109.1

3371.5

3611.8

Federal Government

1270.7

1236.4

1213.5

1142.8

1113.8

1113.9

1120.5

1118.4

1128.0

1129.8

1124.8

State & Local Government

1820.8

1761.0

1728.1

1714.1

1718.1

1768.2

1784.8

1792.4

1838.7

1884.9

1917.0

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures

Residential Fixed Investment

Institute for Economic Competitiveness

21


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 1.7 4.0 Final Sales of Domestic Product 1.8 4.3 Total Consumption 1.3 3.9 Durables 1.5 2.3 Nondurables 2.8 3.8 Services 0.9 4.2 Nonresidential Fixed Investment 5.7 9.6 Equipment & Software 5.9 13.0 Information Processing Equipment 12.8 9.2 Computers & Peripherals 9.0 21.9 Communications Equipment 17.7 1.9 Industrial Equipment 10.7 11.6 Transportation Equipment -3.8 29.6 Aircraft 18.5 66.0 Other Equipment 16.4 14.8 Structures 7.4 10.8 Commercial & Health Care 2.0 2.4 Manufacturing -25.1 21.7 Power & Communication 9.4 -11.4 Mining & Petroleum 118.7 80.8 Other 0.5 12.7 Residential Fixed Investment 11.2 4.9 Exports 5.9 5.2 Imports 5.3 3.3 Federal Government 0.6 -2.0 State & Local Government -1.7 2.1 Billions of Dollars Real GDP Nominal GDP

2017Q3

3.4 3.3 3.4 7.2 3.3 2.9 6.9 8.4 6.8 6.3 4.4 9.3 12.7 34.5 -8.5 5.6 7.2 0.3 -3.0 26.7 2.5 9.6 6.6 9.1 -0.7 2.2

2017Q4

3.5 3.3 3.0 6.2 3.1 2.5 8.8 11.4 7.2 11.2 4.2 8.3 22.8 70.4 34.1 7.7 13.1 9.3 -2.1 13.8 3.4 8.8 5.8 9.5 1.5 3.2

2018Q1

3.4 3.3 4.0 8.4 3.2 3.5 5.8 7.0 5.9 10.9 4.4 7.2 8.6 5.0 26.8 4.1 8.1 5.2 -5.8 2.3 7.9 7.2 5.5 10.4 1.3 2.3

2018Q2

3.6 3.3 4.1 7.9 3.7 3.7 5.9 6.1 6.9 4.4 5.3 7.9 3.4 6.8 3.8 6.8 11.7 9.5 2.2 4.3 2.6 7.5 5.0 11.4 1.5 2.8

2018Q3

3.6 3.4 4.0 7.9 3.2 3.6 5.7 6.7 8.2 8.6 4.4 8.9 4.4 6.8 -8.9 4.5 6.7 16.5 0.2 -5.2 4.0 4.8 5.3 8.9 1.8 2.6

2018Q4

3.6 3.5 4.1 8.5 3.7 3.5 6.7 8.4 8.1 5.1 6.2 9.1 11.0 6.9 29.9 5.8 6.8 15.4 3.6 -0.1 4.0 2.4 4.1 7.2 -0.2 2.7

2019Q1

3.4 3.3 4.3 9.4 3.7 3.7 6.0 7.6 7.5 2.2 6.1 10.8 7.5 7.6 6.1 4.3 7.2 0.8 -2.2 9.0 4.7 2.8 3.4 8.8 -0.2 2.5

2019Q2

3.0 3.0 4.0 8.7 3.8 3.3 5.6 7.1 6.3 5.1 5.6 10.2 7.3 7.7 4.9 3.7 6.2 -0.3 -1.4 14.0 -0.4 4.9 2.9 8.7 0.0 2.7

2019Q3

3.0 3.0 4.0 8.8 3.6 3.4 4.5 5.4 6.2 5.3 6.2 8.5 2.1 7.5 4.0 3.2 8.2 -11.7 0.9 8.1 3.4 7.0 3.0 7.9 -0.4 2.2

2019Q4

2.9 3.1 4.1 9.9 3.7 3.3 4.0 4.4 6.1 5.2 6.5 6.4 0.2 7.6 2.7 3.0 6.7 -8.6 1.8 3.9 4.5 6.4 3.2 7.2 -0.7 1.8

2.1 1.6 2.9 0.8 2.9

2.5 2.7 2.3 2.2 2.9

2.9 2.9 2.3 2.4 3.0

3.1 3.5 2.4 2.2 3.2

2.9 3.1 2.8 1.1 3.3

2.7 3.4 3.0 2.5 3.5

2.5 3.1 3.0 2.3 3.7

2.6 3.3 2.9 2.5 3.7

2.5 3.4 2.9 2.6 3.8

2.4 3.2 2.8 3.1 3.9

2.4 3.1 2.8 3.1 3.8

51.9 -0.6 2.2 75.8 47.1 97.2 17.158 1.250 4.986 4.7 1.7 -647 -477

46.9 2.5 6.6 76.4 31.2 93.1 17.557 1.251 4.984 4.6 1.6 -634 -428

48.3 1.9 3.3 76.7 35.0 98.0 17.727 1.315 5.003 4.5 1.6 -593 -427

47.8 2.1 4.3 77.2 44.3 98.9 17.924 1.367 5.065 4.4 1.6 -546 -399

45.9 1.8 3.5 77.6 51.2 100.8 17.946 1.403 5.096 4.3 1.7 -962 -381

42.6 2.0 3.2 77.9 66.5 101.5 18.022 1.445 5.138 4.1 1.8 -964 -381

44.1 2.0 4.1 78.4 75.5 101.8 18.115 1.436 5.115 4.0 1.8 -953 -375

45.0 2.3 4.2 78.9 78.7 101.0 18.194 1.457 5.129 3.9 1.6 -946 -382

48.6 2.1 3.5 79.0 86.8 101.0 18.4 1.5 5.1 3.9 1.8 -980.8 -400.5

52.2 1.7 2.5 78.9 85.0 101.1 18.6 1.5 5.1 3.8 1.6 -966.9 -444.7

55.3 1.8 2.1 78.7 81.8 101.2 18.6 1.6 5.2 3.8 1.6 -945.4 -486.1

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))

0.70 0.60 0.89 1.94 2.44 3.04 4.17 2324 28.0 1.215 3.0

0.87 0.74 0.99 2.01 2.52 3.10 4.35 2419 17.3 1.155 -18.2

1.08 0.96 1.20 2.11 2.63 3.28 4.50 2471 8.9 1.158 0.9

1.12 1.02 1.38 2.15 2.72 3.41 4.59 2516 7.6 1.172 4.9

1.25 1.17 1.51 2.26 2.91 3.59 4.77 2546 4.9 1.195 8.2

1.49 1.48 1.92 2.59 3.23 3.85 5.04 2589 6.9 1.210 5.2

1.75 1.73 2.18 2.82 3.50 4.08 5.39 2619 4.7 1.206 -1.3

2.00 1.97 2.42 3.05 3.70 4.22 5.58 2649 4.7 1.214 2.7

2.3 2.2 2.6 3.3 3.9 4.4 5.8 2680.4 4.8 1.2 2.6

2.5 2.4 2.9 3.5 4.1 4.6 6.1 2706.1 3.9 1.2 3.6

2.8 2.7 3.1 3.7 4.4 4.8 6.3 2733.8 4.2 1.2 3.3

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)

16423 3.9 14391 3.4 12829 0.9 5.3 1796 13.3

16637 5.3 14573 5.2 12955 4.0 5.4 1848 12.1

16853 5.3 14743 4.7 13059 3.3 5.4 1891 9.5

17072 5.3 14913 4.7 13157 3.0 5.3 1974 18.8

17327 6.1 15220 8.5 13378 6.9 5.9 2406 120.7

17608 6.7 15454 6.3 13536 4.8 6.1 2476 12.2

17895 6.7 15689 6.2 13676 4.2 6.1 2541 10.9

22

U.S. Forecast / May 2017

2.9 3.1 4.1 10.8 3.3 3.3 4.4 4.3 5.9 4.5 6.6 6.6 -0.1 4.7 0.4 5.0 8.6 -1.0 -0.4 8.1 4.9 4.9 3.5 7.1 -1.6 1.7

2020Q2

3.3 3.4 4.0 9.2 3.3 3.4 4.5 5.1 6.2 6.9 6.1 6.0 3.2 6.3 1.4 4.1 8.3 -12.3 -0.8 14.4 4.4 6.4 3.8 6.7 2.3 1.4

2020Q3

3.0 3.0 3.7 7.7 3.3 3.2 3.9 3.9 4.9 2.6 5.7 2.9 3.1 5.8 0.6 3.6 8.2 -11.9 -2.8 15.0 2.8 7.9 4.7 6.8 -1.8 1.2

2020Q4

3.0 2.9 3.5 6.5 2.8 3.2 3.6 3.7 4.3 3.6 3.9 2.3 3.7 3.7 0.5 2.8 7.7 -10.1 -3.9 10.2 2.0 6.2 5.1 6.2 -1.0 1.2

16883.3 17048.2 17189.5 17338.8 17485.9 17641.6 17798.5 17955.5 18107.1 18240.4 18374.0 18507.7 18641.2 18793.4 18934.6 19073.4 19088.5 19373.1 19653.3 19965.4 20289.0 20614.1 20937.4 21253.3 21571.6 21862.4 22155.4 22448.1 22747.8 23055.4 23353.8 23658.3

Prices & Wages, Percent Change, Annual Rate GDP Deflator 3.0 Consumer Prices 3.5 Excl. Food & Energy 2.9 Producer Prices, Finished Goods 3.2 Employment Cost Index - Total Comp. 2.3 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. $)

2020Q1

2.5 3.1 2.7 3.1 3.8

2.1 2.9 2.6 2.9 3.8

2.2 2.9 2.7 3.0 3.8

2.3 2.8 2.6 3.0 3.7

58.1 1.9 2.1 78.3 77.2 101.1 18.8 1.6 5.2 3.8 1.5 -937.9 -538.1

60.8 63.4 2.0 2.4 2.2 2.3 77.9 77.6 69.5 67.5 100.9 101.1 19.0 19.2 1.6 1.6 5.2 5.3 3.8 3.7 1.4 2.1 -985.5 -1001.9 -603.1 -652.3

65.4 1.9 2.5 77.4 70.5 101.7 19.2 1.7 5.4 3.7 1.0 -985.3 -698.8

67.0 1.9 2.4 77.2 73.8 102.7 19.2 1.7 5.4 3.6 1.2 -985.5 -742.1

3.0 2.9 3.3 3.9 4.4 4.9 6.4 2766.0 4.8 1.2 1.2

3.3 3.1 3.5 4.0 4.6 5.0 6.5 2796.0 4.4 1.2 -2.0

3.3 3.1 3.5 4.0 4.5 4.9 6.5 2867.5 4.5 1.2 -4.8

3.3 3.1 3.5 3.9 4.4 4.9 6.5 2897.1 4.2 1.2 -3.4

3.3 3.1 3.5 4.0 4.5 5.0 6.6 2836.1 5.9 1.2 -10.3

18198 18544.3 18852.3 19161.4 19458.6 19786.6 20072.9 20349.5 20619.1 7.0 7.8 6.8 6.7 6.4 6.9 5.9 5.6 5.4 15937 16239.6 16491.4 16746.8 16995.2 17278.4 17518.9 17751.6 17990.3 6.5 7.8 6.3 6.3 6.1 6.8 5.7 5.4 5.5 13828 14019.5 14163.0 14305.9 14438.9 14598.0 14718.3 14830.4 14944.0 4.5 5.7 4.2 4.1 3.8 4.5 3.3 3.1 3.1 6.2 6.6 6.6 6.7 6.6 6.7 6.5 6.4 6.3 2583 2661.3 2671.8 2676.9 2683.3 2666.0 2699.1 2713.0 2733.2 6.7 12.8 1.6 0.8 1.0 -2.6 5.1 2.1 3.0


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

16883.3 17048.2 17189.5 17338.8 17485.9 17641.6 17798.5 17955.5 18107.1 18240.4 18374.0 18507.7 18641.2 18793.4 18934.6 19073.4 16823.3 17000.8 17138.3 17278.2 17418.0 17558.3 17706.0 17859.7 18003.2 18138.2 18274.8 18412.9 18553.9 18707.9 18846.0 18981.5 11708.9 11821.2 11921.6 12011.3 12129.2 12252.2 12372.4 12497.9 12631.3 12755.2 12880.9 13010.3 13143.1 13272.8 13394.5 13510.3

Durables

1654.5 1663.9 1693.1 1718.9 1754.1 1787.6 1821.8 1859.2 1901.3 1941.5 1982.7 2030.1 2082.9 2129.3 2169.2 2203.4

Nondurables

2540.4 2564.4 2585.4 2605.4 2625.8 2649.7 2670.7 2695.4 2719.9 2745.3 2769.7 2794.7 2817.6 2840.8 2864.2 2884.2

Services

7569.1 7646.7 7701.3 7749.3 7816.8 7887.4 7957.4 8027.1 8101.2 8166.9 8234.7 8301.6 8370.0 8439.7 8506.1 8573.9

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

2228.0 2279.5 2318.0 2367.1 2401.0 2435.8 2469.8 2510.5 2547.5 2582.5 2610.9 2636.4 2664.9 2694.4 2720.5 2744.8 1052.1 1084.7 1106.8 1137.2 1156.6 1173.8 1193.0 1217.3 1239.8 1261.3 1277.8 1291.5 1305.3 1321.5 1334.3 1346.3 363.1

371.2

377.4

384.0

389.5

396.0

403.9

411.9

419.5

425.9

432.4

438.8

445.1

451.8

457.2

462.0

88.2

92.6

94.1

96.6

99.2

100.2

102.3

103.6

104.2

105.5

106.8

108.2

109.4

111.2

111.9

112.9

133.4

134.0

135.5

136.9

138.3

140.1

141.6

143.8

145.9

147.9

150.2

152.6

155.0

157.3

159.5

161.1

Industrial Equipment

220.8

227.0

232.1

236.8

240.9

245.5

250.8

256.3

262.9

269.4

275.0

279.3

283.8

287.9

290.0

291.7

Transportation Equipment

283.9

302.9

312.1

328.5

335.3

338.2

341.8

350.8

357.3

363.6

365.5

365.6

365.6

368.5

371.3

374.7

32.4

36.7

39.6

45.2

45.8

46.5

47.3

48.1

49.0

49.9

50.8

51.8

52.4

53.2

53.9

54.4

53.9

55.8

54.6

58.8

62.4

62.9

61.5

65.7

66.6

67.4

68.1

68.6

68.6

68.9

69.0

69.1

451.1

462.8

469.1

477.8

482.7

490.7

496.1

503.2

508.5

513.1

517.1

520.9

527.3

532.6

537.4

541.1

164.0

165.0

167.9

173.1

176.5

181.4

184.4

187.5

190.8

193.7

197.5

200.7

204.9

209.0

213.2

217.2

Manufacturing

58.1

61.0

61.1

62.4

63.2

64.7

67.2

69.6

69.8

69.7

67.6

66.1

65.9

63.8

61.8

60.2

Power & Communication

91.5

88.7

88.1

87.6

86.3

86.8

86.8

87.6

87.1

86.8

87.0

87.3

87.2

87.1

86.4

85.6

Mining & Petroleum

56.9

66.0

70.1

72.4

72.8

73.5

72.6

72.6

74.1

76.6

78.1

78.9

80.4

83.2

86.1

88.2

Other

82.9

85.4

85.9

86.6

88.3

88.9

89.7

90.6

91.7

91.6

92.3

93.4

94.5

95.5

96.2

96.6

612.1

619.5

633.9

647.4

658.7

670.7

678.6

682.7

687.5

695.8

707.7

718.8

727.5

738.8

753.0

764.3

Computers & Peripherals Communications Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment Exports

2168.2 2196.0 2231.6 2263.3 2293.7 2321.8 2352.2 2376.0 2396.1 2413.3 2431.3 2450.3 2471.6 2495.0 2523.9 2555.2

Imports

2777.8 2800.1 2861.7 2927.3 3000.4 3082.5 3149.2 3204.2 3272.8 3342.0 3405.8 3465.5 3525.0 3582.7 3642.0 3697.3

Federal Government

1122.6 1116.9 1114.9 1119.0 1122.5 1126.7 1131.7 1131.2 1130.7 1130.8 1129.8 1127.8 1123.3 1129.7 1124.5 1121.7

State & Local Government

1777.1 1786.4 1796.0 1810.1 1820.4 1832.9 1844.7 1856.8 1868.2 1880.7 1891.1 1899.6 1907.9 1914.3 1920.0 1925.7

Institute for Economic Competitiveness

23


T ables Table 5. Annual Employment

Table 5. Annual Employment History 2010

2011

2012

2013

Forecast 2014

2015

2016

2017

2018

2019

2020

Millions Total Nonfarm Employment

130.353 131.941 134.171 136.379 138.937

141.81 144.306

146.667

149.18

151.68

154.00

Private Nonfarm

107.864 109.848 112.251 114.531 117.062

119.79 122.077

124.361

126.82

128.97

130.83

Mining

0.655

0.739

0.797

0.811

0.838

0.76

0.626

0.656

0.67

0.68

0.69

Construction

5.518

5.530

5.646

5.857

6.150

6.46

6.711

6.973

7.35

7.76

8.09

Manufacturing

11.529

11.727

11.927

12.020

12.185

12.34

12.348

12.525

12.80

12.98

13.10

Trade, Transportation and Utilities

24.641

25.071

25.472

25.857

26.378

26.88

27.236

27.470

27.61

27.81

28.05

Transportation & Warehousing

4.192

4.305

4.415

4.496

4.658

4.87

4.987

5.065

5.17

5.24

5.31

Financial Activities

7.695

7.696

7.783

7.886

7.976

8.12

8.285

8.453

8.55

8.59

8.68

Education & Health

19.973

20.322

20.769

21.085

21.436

22.02

22.616

23.053

23.20

23.35

23.61

Professional & Business Services

16.723

17.329

17.932

18.517

19.061

19.63

20.131

20.781

22.02

23.01

23.52

2.707

2.673

2.674

2.705

2.727

2.75

2.772

2.760

2.77

2.77

2.81

Leisure & Hospitality

13.042

13.352

13.770

14.258

14.694

15.15

15.615

15.874

16.02

16.20

16.46

Government

22.490

22.093

21.920

21.849

21.875

22.02

22.228

22.306

22.36

22.71

23.17

2.976

2.860

2.822

2.770

2.733

2.76

2.796

2.784

2.70

2.66

2.76

19.513

19.233

19.098

19.079

19.143

19.27

19.432

19.522

19.66

20.06

20.41

Total Nonfarm Employment

-0.71

1.22

1.69

1.65

1.87

2.07

1.76

1.64

1.71

1.68

1.53

Private Nonfarm

-0.80

1.84

2.19

2.03

2.21

2.33

1.91

1.87

1.98

1.69

1.44

Mining

11.68

13.57

2.08

2.94

3.82

-16.66

-12.25

9.62

0.07

1.24

2.70

Construction

-3.35

1.93

1.74

4.31

5.58

5.00

2.78

4.70

6.14

5.01

4.05

Manufacturing

0.65

1.76

1.47

0.96

1.67

0.65

-0.17

2.47

1.62

1.70

0.32

Trade, Transportation and Utilities

0.76

1.97

1.46

1.86

2.06

1.52

1.24

0.63

0.48

0.88

0.90

Transportation & Warehousing

2.14

2.33

2.61

1.91

4.67

3.91

1.96

1.49

1.79

1.32

1.32

Financial Activities

-0.90

0.47

1.29

1.22

1.48

1.83

2.07

2.01

0.53

0.75

1.07

Education & Health

1.71

1.92

1.97

1.38

2.08

2.97

2.51

1.31

0.54

0.83

1.22

Professional & Business Services

2.96

3.56

3.27

3.21

3.09

2.87

2.76

3.85

6.36

3.22

2.26

-2.35

-0.41

-0.13

1.96

0.33

1.03

0.30

-0.12

-0.16

0.77

1.47

1.26

2.80

3.11

3.63

2.97

3.46

2.31

1.40

0.83

1.27

1.83

-0.94

-1.38

-0.38

-0.26

0.45

0.67

1.00

-0.10

0.79

1.82

1.27

4.80

-0.85

-1.04

-2.53

-0.05

0.96

1.79

-2.89

-2.16

-1.13

4.55

-1.31

-1.46

-0.28

0.07

0.53

0.63

0.89

0.31

1.20

2.22

1.43

Information

Federal State & Local

Growth Rates

Information Leisure & Hospitality Government Federal State & Local

24

U.S. Forecast / May 2017


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

145.8 146.4 147.0 147.6 148.2 148.9 149.5 150.1 150.8 151.4 152.0 152.6 153.1 153.9 154.3 154.7

Private Nonfarm

123.5 124.0 124.7 125.3 125.9 126.5 127.2 127.7 128.2 128.7 129.2 129.7 130.1 130.5 131.1 131.6

Mining

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Construction

6.9

6.9

7.0

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

8.0

8.0

8.1

8.2

Manufacturing

12.4

12.5

12.6

12.6

12.7

12.8

12.8

12.8

12.9

13.0

13.0

13.1

13.1

13.1

13.1

13.1

Trade, Transportation and Utilities

27.4

27.4

27.5

27.5

27.5

27.6

27.6

27.7

27.7

27.8

27.8

27.9

28.0

28.0

28.1

28.1

Transportation & Warehousing

5.0

5.0

5.1

5.1

5.1

5.2

5.2

5.2

5.2

5.2

5.2

5.3

5.3

5.3

5.3

5.3

Financial Activities

8.4

8.4

8.5

8.5

8.5

8.5

8.6

8.6

8.6

8.6

8.6

8.6

8.6

8.7

8.7

8.7

Education & Health

22.9

23.0

23.1

23.1

23.1

23.2

23.2

23.3

23.3

23.3

23.4

23.4

23.5

23.6

23.6

23.7

Professional & Business Services

20.5

20.6

20.8

21.2

21.5

21.9

22.2

22.5

22.8

22.9

23.1

23.2

23.3

23.4

23.6

23.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

Leisure & Hospitality

15.8

15.8

15.9

15.9

16.0

16.0

16.0

16.1

16.1

16.2

16.2

16.3

16.4

16.4

16.5

16.6

Government

22.3

22.3

22.3

22.3

22.3

22.3

22.4

22.5

22.6

22.7

22.8

22.9

23.0

23.4

23.2

23.1

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

3.0

2.8

2.6

19.5

19.5

19.5

19.5

19.6

19.6

19.7

19.8

19.9

20.0

20.1

20.2

20.3

20.4

20.5

20.5

Total Nonfarm Employment

1.72

1.57

1.62

1.62

1.72

1.83

1.79

1.58

1.7

1.6

1.6

1.5

1.4

2.1

1.0

1.2

Private Nonfarm

1.96

1.85

2.00

1.97

1.98

2.04

2.01

1.56

1.7

1.6

1.5

1.5

1.4

1.1

1.7

1.6

Mining

9.14 18.17

7.74

1.59

0.13

-0.88

0.51

0.52

0.5

0.6

1.6

2.2

2.4

2.2

2.8

3.3

Construction

6.51

3.72

3.09

5.15

5.54

6.00

6.61

5.87

5.5

5.0

4.8

4.3

3.9

3.8

4.1

4.1

Manufacturing

1.64

4.32

1.73

2.09

3.26

2.34

-0.63

1.45

2.1

1.8

1.4

1.5

0.9

0.2

0.2

-0.1

Trade, Transportation and Utilities

0.94

0.39

0.85

0.35

0.33

0.62

0.78

0.19

1.0

0.8

0.9

0.8

0.9

0.6

1.1

0.9

Transportation & Warehousing

1.14

-0.63

2.62

2.85

2.00

2.31

1.65

1.20

1.1

1.4

1.4

1.4

1.5

1.0

1.5

1.3

Financial Activities

2.76

1.25

1.89

2.16

1.04

0.44

0.80

-0.14

0.3

0.7

0.8

1.1

1.0

0.6

1.4

1.3

Education & Health

2.06

1.73

0.96

0.51

0.06

0.88

0.86

0.37

0.4

0.8

0.8

1.2

1.1

0.8

1.5

1.5

Professional & Business Services

2.37

2.45

4.46

6.12

6.61

6.77

6.82

5.23

4.7

3.2

2.7

2.3

1.6

1.8

2.7

2.9

-1.54

-0.95

1.28

0.73

2.11

0.51

-2.06

-1.22

-1.0

1.1

1.3

1.7

1.7

1.3

1.8

1.1

Leisure & Hospitality

1.76

1.02

2.12

0.70

0.61

0.34

1.55

0.84

0.8

1.3

1.6

1.3

1.8

1.4

2.0

2.0

Government

0.42

0.02

-0.52

-0.32

0.22

0.68

0.57

1.69

1.9

2.0

1.8

1.7

1.6

7.5

-2.6

-1.5

Federal

1.28

-2.44

-5.22

-5.19

-2.10

-2.11

-2.22

-2.23

-1.1

-1.1

-1.1

-1.1

-0.1

63.5

-26.1

-19.0

State & Local

0.30

0.38

0.17

0.38

0.54

1.07

0.96

2.23

2.3

2.4

2.2

2.0

1.9

1.5

1.3

1.1

Information

Federal State & Local

Growth Rates

Information

Institute for Economic Competitiveness

25


T ables Table 7. Quarterly Implicit Price Deflators (2009=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

113.1 113.6 114.3 115.1 116.0 116.8 117.6 118.4 119.1 119.9 120.6 121.3 122.0 122.7 123.3 124.0

Consumption

112.2 112.5 112.9 113.4 113.8 114.2 114.7 115.3 115.8 116.4 117.1 117.7 118.4 119.0 119.7 120.4

Durables Motor Vehicles Furniture

87.7

87.3

87.0

86.8

86.5

86.2

85.8

85.5

85.2

84.9

84.5

84.2

83.9

83.7

83.5

83.3

109.2 109.3 110.1 110.6 110.9 111.2 111.5 111.8 112.1 112.3 112.5 112.7 112.9 113.3 113.6 114.0 83.6

83.3

83.2

83.0

82.7

82.5

82.2

81.9

81.6

81.3

81.0

80.8

80.5

80.3

80.1

79.9

Other Durables

102.1 101.7 101.7 101.7 101.9 102.0 102.1 102.2 102.3 102.3 102.3 102.4 102.6 102.9 103.2 103.5

Nondurables

109.7 109.2 109.2 109.3 109.5 109.5 110.1 110.6 111.3 112.0 112.7 113.4 114.1 114.9 115.6 116.3

Food

109.2 109.8 110.2 110.6 111.1 111.7 112.2 112.8 113.4 114.0 114.6 115.1 115.6 116.2 116.7 117.2

Clothing & Shoes

105.1 104.9 104.5 104.3 104.2 104.1 103.9 103.8 103.5 103.3 103.1 103.1 103.0 103.0 103.0 103.0

Gasoline & Oil

108.3 101.0

98.9

98.2

96.6

93.5

95.1

Fuel

100.1

98.9

99.5

99.0

97.1

98.9 100.2 102.9 106.0 108.8 111.6 114.1 116.7 118.9 121.0

Services

117.5 118.3 119.0 119.7 120.4 121.0 121.8 122.5 123.3 124.0 124.8 125.7 126.6 127.4 128.3 129.2

Housing

118.5 119.5 120.5 121.4 122.2 122.9 123.7 124.4 125.2 125.9 126.7 127.5 128.4 129.2 130.0 130.9

Electricity

108.8 110.8 112.5 113.4 114.0 114.8 115.5 116.2 116.8 117.2 117.8 118.8 119.7 120.6 121.5 122.6

Natural Gas Water & Sewer Telephone

89.4

96.9

87.7

83.5

83.6

85.1

84.1

82.1

96.0

80.9

98.6 101.8 104.6 107.4 109.9 112.5 114.9 116.8

79.9

79.1

80.3

80.9

82.5

83.7

84.8

86.5

142.1 143.2 144.4 145.7 147.0 148.3 149.8 151.2 152.7 154.2 155.8 157.3 158.9 160.5 162.1 163.7 91.5

91.3

91.1

91.0

91.0

90.9

90.9

90.9

91.0

91.0

91.1

91.2

91.3

91.4

91.6

91.6

Transportation

113.7 114.2 114.5 115.2 115.8 116.5 117.3 118.1 118.8 119.6 120.4 121.1 121.9 122.6 123.4 124.2

Other Services

119.9 120.4 121.0 121.7 122.5 123.3 124.2 125.1 126.1 127.1 128.1 129.2 130.3 131.4 132.6 133.7

26

U.S. Forecast / May 2017


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

3.0

2.1

2.5

2.9

3.1

2.9

2.7

2.5

2.6

2.5

2.4

2.4

2.5

2.1

2.2

2.3

Consumption

2.5

1.2

1.4

1.6

1.5

1.4

1.9

1.9

2.0

2.1

2.2

2.2

2.3

2.3

2.3

2.3

Durables

1.1

-1.9

-0.9

-1.2

-1.4

-1.5

-1.4

-1.5

-1.5

-1.6

-1.6

-1.5

-1.3

-1.1

-1.0

-0.8

Motor Vehicles

0.2

0.5

3.0

1.9

1.1

1.0

1.0

1.0

1.0

0.9

0.6

0.7

1.0

1.2

1.3

1.4

Furniture

1.9

-1.4

-0.8

-1.0

-1.1

-1.2

-1.3

-1.5

-1.4

-1.4

-1.4

-1.3

-1.3

-1.2

-1.1

-0.9

Other Durables

5.0

-1.6

0.1

0.2

0.6

0.4

0.4

0.5

0.3

0.0

0.1

0.5

0.8

1.0

1.0

1.2

Nondurables

3.2

-1.8

0.0

0.4

0.5

0.0

2.1

1.9

2.5

2.7

2.5

2.5

2.5

2.6

2.5

2.4

-0.2

1.9

1.6

1.5

1.9

1.9

1.9

2.2

2.1

2.1

2.0

1.8

1.9

1.9

1.8

1.8

5.5

-0.7

-1.5

-0.8

-0.4

-0.5

-0.7

-0.6

-0.8

-0.9

-0.7

-0.3

0.0

0.0

0.0

0.0

Gasoline & Oil

23.8 -24.4

-8.1

-2.8

-6.2 -12.4

7.4

3.7

11.3

13.8

11.4

11.1

9.7

9.9

8.4

7.1

Fuel

20.1 -12.2

8.6

2.6

-2.2

-7.4

7.7

5.4

10.9

12.8

10.9

10.5

9.3

9.4

8.1

7.2

Food Clothing & Shoes

Services

2.5

2.6

2.3

2.4

2.3

2.3

2.4

2.4

2.5

2.5

2.7

2.7

2.8

2.7

2.8

2.8

Housing

3.4

3.4

3.2

2.9

2.7

2.5

2.4

2.4

2.4

2.5

2.5

2.6

2.6

2.6

2.6

2.6

Electricity

2.5

7.5

6.2

3.4

2.2

2.5

2.7

2.5

1.9

1.4

2.3

3.2

3.2

2.9

3.0

3.8

-7.5 -17.7

0.1

7.6

-4.7

-9.2

-5.4

-5.2

-4.0

6.7

3.0

8.0

5.9

5.3

8.2

Natural Gas Water & Sewer

12.0 4.7

3.1

3.4

3.6

3.6

3.8

3.9

3.9

4.0

4.1

4.1

4.0

4.1

4.1

4.1

4.1

-3.5

-0.8

-0.9

-0.2

-0.1

-0.3

0.1

0.0

0.1

0.3

0.5

0.3

0.4

0.4

0.7

0.2

Transportation

5.6

1.8

1.1

2.5

2.4

2.3

2.7

2.7

2.7

2.6

2.6

2.5

2.5

2.5

2.5

2.6

Other Services

1.9

1.7

2.0

2.5

2.6

2.7

2.8

2.9

3.1

3.3

3.3

3.4

3.5

3.5

3.5

3.5

Telephone

Institute for Economic Competitiveness

27


T ables

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

2010

2011

History 2012 2013 2014

2015

2016

2017

Forecast 2018 2019

2020

GDP

101.2 103.3 105.2 106.9 108.8 110.0 111.5

114.0 117.2 120.2 123.0

Consumption

101.7 104.1 106.1 107.5 109.2 109.5 110.7

112.7 114.5 116.8 119.4

Durables Motor Vehicles

98.6

97.7

96.4

94.6

92.4

90.5

88.6

105.7 108.9 110.2 110.8 110.8 110.8 109.8

Furniture

95.8

94.2

94.0

92.1

88.9

86.8

84.5

87.2

86.0

84.7

83.6

109.8 111.4 112.4 113.5 83.3

82.3

81.2

80.2

Other Durables

100.4 103.6 104.2 104.0 102.3

99.8 101.0

101.8 102.0 102.3 103.0

Nondurables

103.1 109.2 111.8 111.9 112.6 108.9 107.8

109.4 109.9 112.4 115.2

Food

100.3 104.3 106.7 107.8 109.8 111.0 110.0

109.9 111.9 114.3 116.4

99.3 101.1 104.6 105.4 105.8 104.4 104.2

104.7 104.0 103.3 103.0

Clothing & Shoes Gasoline & Oil

118.2 149.3 154.7 149.7 144.0 106.2

94.2

101.6

95.3 103.1 113.5

Fuel

117.0 148.8 150.7 148.9 148.3 105.5

88.8

98.9

98.8 107.3 117.7

Services

101.7 103.5 105.8 108.3 110.9 113.1 115.8

118.6 121.4 124.5 127.9

Housing

100.1 101.4 103.5 106.0 108.8 112.1 115.9

120.0 123.3 126.3 129.6

Electricity

100.2 101.8 101.8 104.0 107.8 108.4 107.2

111.4 115.1 117.6 121.1

Natural Gas Water & Sewer

98.1

95.1

85.7

90.1

96.4

85.0

83.1

106.3 111.8 118.0 123.3 127.9 133.6 138.7

Telephone

99.3

97.5

97.7

97.1

96.3

94.1

93.6

86.0

83.1

80.0

84.4

143.8 149.1 155.0 161.3 91.2

90.9

91.1

91.5

Transportation

102.0 104.8 106.8 108.3 109.6 110.1 111.6

114.4 116.9 120.0 123.0

Other Services

103.0 105.6 108.3 111.2 113.9 116.3 118.6

120.8 123.8 127.6 132.0

28

U.S. Forecast / May 2017


T ables Table 10. Percent Change in Implicit Price Deflators

Table 10. Percent Change in Implicit Price Deflators History 2013 2014

2010

2011

2012

GDP

1.8

1.9

1.9

1.6

Consumption

1.3

2.7

1.8

-2.1

-0.5

-1.6

Durables Motor Vehicles

Forecast 2018 2019

2015

2016

2017

2020

1.5

1.1

1.6

2.6

2.8

2.5

2.3

1.2

1.2

0.4

1.4

1.7

1.7

2.1

2.3

-2.1

-2.4

-1.8

-2.7

-0.7

-1.4

-1.6

-1.1

2.9

3.3

0.7

0.4

-0.3

-0.1

-1.3

1.4

1.0

0.8

1.2

-4.4

-0.2

-0.4

-3.0

-3.1

-2.3

-3.0

-0.3

-1.3

-1.4

-1.1

Other Durables

0.6

3.2

-0.5

-0.6

-1.9

-2.7

2.3

0.9

0.5

0.2

1.0

Nondurables

2.2

5.9

1.9

-0.5

-0.2

-2.9

0.4

0.4

1.1

2.6

2.5

Food

1.3

5.1

1.2

0.7

2.7

0.3

-1.7

1.2

2.0

2.0

1.9

Furniture

Clothing & Shoes

-1.4

4.4

2.3

0.1

-0.3

-1.4

0.0

0.6

-0.5

-0.7

0.0

Gasoline & Oil

13.4

20.4

4.9

-4.5

-10.5

-16.1

7.6

-2.9

-1.9

11.9

8.8

Fuel

15.7

26.2

3.1

-1.2

-7.8

-29.2

6.9

4.8

0.9

11.3

8.5

Services

1.5

2.1

2.3

2.3

2.3

2.0

2.5

2.5

2.4

2.6

2.8

Housing

0.3

1.9

2.2

2.4

2.8

3.3

3.6

3.3

2.5

2.5

2.6

Electricity

0.5

2.4

-0.6

3.2

3.1

-0.6

0.3

4.9

2.5

2.2

3.2

-1.2

-1.6

-4.1

2.4

6.4

-12.4

7.4

-3.3

-2.9

0.1

6.9

5.7

4.9

6.0

3.8

4.3

4.1

3.6

3.7

3.8

4.0

4.1

-1.1

-1.5

0.1

-0.5

-2.2

0.2

-2.8

-1.4

-0.1

0.3

0.5

Transportation

1.5

3.1

1.3

1.7

1.0

0.1

1.8

2.7

2.5

2.6

2.5

Other Services

2.7

2.8

2.2

2.9

2.3

2.0

1.8

2.0

2.8

3.3

3.5

Natural Gas Water & Sewer Telephone

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components 2010

2011

2012

History 2013

2014

2015

2016

2017

Forecast 2018 2019

2020

Personal Income Billions Current Dollars Personal Income

12477.1 13254.5 13915.1 14073.7 14809.8 15458.5 16011.6

16746.5 17756.8 19004.1 20207.0

Wages & Salaries

7961.5

8269.0

8609.9

8842.5

9253.5

9693.1 10101.4

Other Labor Income

1114.6

1142.0

1165.3

1199.0

1229.8

1270.5

1325.4

1367.1

1399.8

1451.2

1514.3

986.7

1068.1

1179.8

1197.0

1269.2

1336.8

1389.7

1480.2

1591.5

1690.4

1771.3

46.0

75.6

61.6

87.8

68.5

40.0

27.8

18.5

19.7

18.1

16.1

402.8

485.3

525.3

567.1

606.1

659.6

704.7

746.0

755.3

755.6

757.8

Nonfarm Income Farm Income Rental Income Dividends

10596.0 11188.9 11851.4 12540.9

544.6

682.3

835.0

794.5

926.1

951.1

948.4

970.8

1106.5

1329.0

1467.3

Interest Income

1195.1

1231.6

1288.8

1261.6

1300.9

1302.8

1314.5

1374.5

1469.1

1646.9

1849.4

Transfer Payments

2324.7

2360.5

2366.4

2428.0

2540.4

2678.7

2775.4

2876.5

3023.2

3196.1

3377.1

514.7

423.9

437.2

577.8

607.6

635.7

663.6

699.9

743.2

788.9

836.5

Personal Social Insurance Tax Percent Change, Annual Rate Personal Income

3.2

6.2

5.0

1.2

5.2

4.4

3.6

4.6

6.0

7.0

6.3

Wages & Salaries

2.2

3.9

4.1

2.7

4.6

4.7

4.2

4.9

5.6

5.9

5.8

Other Labor Income

3.4

2.5

2.0

2.9

2.6

3.3

4.3

3.1

2.4

3.7

4.3

Nonfarm Income

5.3

8.2

10.5

1.5

6.0

5.3

4.0

6.5

7.5

6.2

4.8

Farm Income

30.4

66.2

-18.5

43.2

-21.4

-41.0

-30.3

-31.1

7.0

-7.7

-10.8

Rental Income

20.1

20.8

4.4

8.9

7.2

8.7

6.3

4.6

0.4

0.1

0.3

Dividends

23.8

23.5

46.4

-8.2

17.4

-1.9

1.4

4.4

19.5

18.2

6.3

Interest Income

-1.8

3.3

5.1

-2.7

3.4

-0.2

3.2

5.3

8.9

12.6

11.5

Transfer Payments

7.5

0.4

1.2

2.5

5.8

4.5

3.7

3.9

5.4

5.6

5.7

Personal Social Insurance Tax

2.4

-13.5

5.2

43.9

5.6

4.7

4.1

6.0

6.3

6.1

6.1

Institute for Economic Competitiveness

29


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

13134.0 13298.4 13459.5 13615.2 13799.6 13988.5 14193.3 14404.4 14631.6 14852.2 15078.6 15313.7 15556.4 15798.3 16032.9 16264.3

durable goods

1450.4 1451.8 1473.8 1491.7 1516.9 1540.1 1564.0 1590.3 1620.1 1647.7 1675.7 1709.2 1747.9 1781.9 1810.8 1835.6

furniture and appliances

323.3

323.7

324.9

327.1

331.4

336.5

341.7

347.1

351.9

356.6

361.9

367.8

374.1

380.3

385.3

390.2

information processing equipment

121.0

121.0

122.6

123.5

125.4

127.0

128.9

130.8

132.5

134.4

136.2

138.0

139.5

140.9

142.4

144.3

motor vehicles and parts

497.0

497.3

511.3

523.9

534.3

545.7

554.8

565.2

578.8

590.6

602.3

618.4

638.8

654.8

666.2

672.8

other durable goods

148.9

149.9

151.7

152.9

154.8

155.9

157.1

158.4

159.8

161.4

163.0

164.7

166.3

167.8

169.7

171.3

nondurables

2787.9 2801.2 2823.9 2848.8 2875.0 2901.2 2939.5 2980.5 3026.5 3075.4 3122.2 3170.0 3215.9 3263.5 3310.5 3353.8

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

385.8

391.6

392.8

394.8

397.7

402.3

405.3

411.6

416.4

421.9

426.9

433.4

438.9

444.2

449.4

18.3

20.4

20.8

20.9

20.7

20.2

20.6

20.8

21.4

22.0

22.5

23.0

23.4

23.7

24.0

24.3

289.4

272.8

270.7

273.3

270.0

264.9

272.8

278.6

289.9

302.6

313.1

323.0

331.2

339.5

346.3

352.1

974.0

984.5

993.4 1002.8 1012.9 1023.3 1033.1 1042.5 1052.7 1062.9 1072.6 1082.7

940.0

946.8

956.1

963.9

1154.4

1169.5

1183.4

1195.9

454.3

1212.6 1229.3 1247.4 1266.6 1285.8 1305.7 1326.6 1348.1 1369.8 1393.2 1418.1 1440.4

Consumer Expenditures by Type Billions 2009 Dollars Consumer spending on… all goods & services

11708.9 11821.2 11921.6 12011.3 12129.2 12252.2 12372.4 12497.9 12631.3 12755.2 12880.9 13010.3 13143.1 13272.8 13394.5 13510.3

durable goods

1654.5 1663.9 1693.1 1718.9 1754.1 1787.6 1821.8 1859.2 1901.3 1941.5 1982.7 2030.1 2082.9 2129.3 2169.2 2203.4

furniture and appliances

386.5

388.4

390.6

394.3

400.6

407.9

415.6

423.7

431.2

438.5

446.5

455.3

464.6

473.7

481.3

488.5

information processing equipment

205.6

209.4

215.0

219.7

226.5

233.4

241.6

249.7

258.0

267.3

276.7

286.4

295.5

304.2

313.0

322.5

motor vehicles and parts

455.3

455.0

464.4

473.5

481.6

490.6

497.5

505.6

516.5

525.9

535.5

548.8

565.6

578.1

586.2

590.1

other durable goods

146.4

148.5

150.5

151.7

153.4

154.5

155.7

157.0

158.5

160.4

162.2

163.9

165.4

166.7

168.3

169.7

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

2540.4 2564.4 2585.4 2605.4 2625.8 2649.7 2670.7 2695.4 2719.9 2745.3 2769.7 2794.7 2817.6 2840.8 2864.2 2884.2 367.1

373.2

375.8

378.5

381.5

386.5

390.0

396.6

402.2

408.3

413.9

420.5

425.9

431.0

436.2

18.2

21.0

21.1

21.0

20.9

20.8

20.8

20.8

20.8

20.7

20.7

20.6

20.5

20.4

20.2

441.0 20.1

267.2

270.1

273.8

278.4

279.5

283.4

286.7

290.2

294.0

297.1

299.3

300.7

301.3

301.7

301.6

301.4

860.6

862.7

867.7

871.5

876.5

881.7

885.5

889.1

893.2

897.6

901.8

906.0

910.4

914.8

919.2

923.6

1036.5 1047.0 1057.1 1066.3 1077.5 1087.7 1098.4 1109.8

1121.2

1133.3

1146.2

1159.2

1171.9

1185.6

1199.9

1211.3

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

1.3

3.8

3.4

3.0

3.9

4.1

3.9

4.1

4.3

3.9

3.9

4.0

4.1

3.9

3.7

3.5

durable goods

1.5

2.3

7.0

6.1

8.2

7.6

7.7

8.2

9.1

8.5

8.5

9.6

10.4

8.9

7.5

6.3

furniture and appliances

4.3

1.9

2.3

3.8

6.4

7.3

7.6

7.8

7.1

6.8

7.3

7.9

8.1

7.9

6.4

6.0

information processing equipment

9.0

7.4

10.8

8.7

12.4

12.2

14.0

13.4

13.3

14.4

14.1

14.0

12.7

11.8

11.5

12.1

motor vehicles and parts

-1.7

-0.3

8.3

7.9

6.8

7.5

5.6

6.5

8.6

7.3

7.3

9.9

12.2

8.8

5.7

2.6

other durable goods

-5.6

5.8

5.3

3.2

4.6

2.9

3.1

3.2

3.9

4.9

4.4

4.3

3.5

3.3

4.0

3.2

2.8

3.8

3.3

3.1

3.1

3.6

3.2

3.7

3.6

3.7

3.6

3.6

3.3

3.3

3.3

2.8

-2.0

6.7

2.7

2.9

3.2

5.2

3.6

6.8

5.6

6.1

5.5

6.4

5.1

4.8

4.8

4.4

-35.0

61.3

0.5

-1.0

-2.7

-0.4

-0.8

-0.2

-0.1

-1.1

-1.1

-1.4

-2.0

-2.8

-2.7

-2.9

-2.1

4.3

5.4

6.7

1.6

5.6

4.7

4.8

5.2

4.2

2.9

2.0

0.8

0.5

-0.2

-0.3

food

4.8

1.0

2.3

1.8

2.3

2.4

1.7

1.6

1.9

2.0

1.9

1.9

2.0

1.9

1.9

1.9

other nondurable goods

4.8

4.1

3.9

3.5

4.3

3.8

4.0

4.2

4.2

4.4

4.6

4.6

4.5

4.7

4.9

3.8

nondurables clothing & shoes fuel oil & coal gasoline & motor oil

30

U.S. Forecast / May 2017


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 12757.9

13376.8 14096.4 14969.0 15913.0

1070.7

1125.3

1191.9

1241.7

1294.8

1355.2

1402.9

1466.9

1552.8

1663.2

1794.0

250.4

260.7

271.4

281.6

292.1

305.1

316.5

324.8

339.2

359.5

382.5

90.3

91.9

98.6

101.7

104.5

109.2

115.0

122.0

128.0

135.3

141.8

motor vehicles and parts

342.0

363.5

395.8

416.1

442.8

464.8

474.7

507.4

550.0

597.5

658.2

other durable goods

110.0

121.4

127.3

133.1

136.2

141.2

146.5

150.8

156.5

162.2

168.8

2292.1

2471.1

2547.2

2592.8

2675.7

2656.9

2695.5

2815.5

2924.0

3098.5

3285.9

320.6

338.9

354.3

363.6

370.8

379.5

383.6

391.3

404.2

424.7

446.7

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

20.1

20.6

22.2

23.9

gasoline & motor oil

307.3

380.4

390.5

385.6

371.2

283.0

254.0

276.6

271.6

307.1

342.3

food

788.9

829.1

848.8

857.5

891.4

900.7

917.0

951.7

988.7

1027.9

1067.7

other nondurable goods

849.2

893.5

927.3

959.5

1014.6

1073.0

1122.6

1175.8

1239.0

1316.6

1405.4

Consumer Expenditures by Type Billions 2009 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 11522.2

11865.7 12312.9 12819.4 13330.2

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1584.6

1682.6

1805.7

1963.9

2146.2

261.5

276.6

288.7

305.8

328.7

351.6

374.6

390.0

412.0

442.9

477.0

97.2

108.0

125.2

139.4

152.3

167.8

190.1

212.4

237.8

272.1

308.8

motor vehicles and parts

323.4

333.8

359.1

375.7

399.5

419.4

432.6

462.0

493.8

531.7

580.0

other durable goods

108.9

115.1

120.2

126.4

132.9

142.7

146.0

149.3

155.2

161.3

167.5

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2500.4

2573.9

2660.4

2757.4

2851.7

322.7

335.3

338.9

344.9

350.6

363.4

368.2

373.6

388.7

411.2

433.5

nondurables clothing & shoes fuel oil & coal

22.4

19.6

17.5

17.8

18.7

19.6

20.7

20.3

20.8

20.7

20.3

gasoline & motor oil

259.9

254.7

252.5

257.6

257.7

266.6

269.8

272.4

285.0

297.8

301.5

food

786.5

795.1

795.7

795.2

811.7

811.3

834.0

865.6

883.2

899.6

917.0

other nondurable goods

833.0

863.2

880.7

908.2

947.8

989.1

1018.2

1051.7

1093.3

1140.0

1192.1

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

3.1

1.5

1.3

2.0

3.5

2.6

3.1

2.9

4.1

4.1

3.8

durable goods

9.3

4.9

7.3

5.3

8.7

5.5

8.0

4.3

8.2

9.2

8.6

furniture and appliances

8.3

5.8

3.1

7.5

7.9

6.6

6.1

3.1

7.5

7.5

7.3

information processing equipment

16.8

13.9

16.7

7.3

11.7

7.6

17.4

9.3

13.7

14.7

12.6

motor vehicles and parts

11.0

1.5

7.4

2.5

9.6

2.0

9.2

3.7

6.8

8.6

7.6

other durable goods

5.5

3.2

8.1

3.6

6.1

7.5

1.4

2.3

3.5

4.4

3.5

nondurables

3.3

0.4

0.8

2.6

2.8

2.3

2.6

3.3

3.5

3.7

3.2

clothing & shoes

7.6

1.1

0.9

2.5

3.5

2.2

0.8

2.6

4.8

6.0

4.9

-7.6

-12.6

5.5

14.0

-1.0

7.7

7.4

11.4

-1.0

-0.9

-2.6

gasoline & motor oil

2.2

-3.1

-0.9

3.3

1.0

3.0

0.1

3.7

4.3

3.6

0.2

food

2.1

-0.4

0.6

0.6

1.4

-0.3

5.0

2.5

2.0

1.9

1.9

other nondurable goods

3.6

2.8

1.9

4.1

4.6

4.2

2.0

4.1

4.1

4.5

4.5

fuel oil & coal

Institute for Economic Competitiveness

31


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 2308.8

2455.7 2655.5 2848.7 3022.7

Producers Dur. Equipment

731.8

838.2

937.9

982.8 1040.7 1086.1 1057.0

1122.0 1218.2 1310.5 1386.9

Nonresidential Structures

362.0

381.6

448.0

463.6

530.7

507.3

493.8

536.4

590.4

641.1

688.8

Non-Farm Buildings

173.7

170.2

191.6

203.8

234.4

277.5

311.6

334.5

375.2

411.0

441.1

Commercial

64.7

66.8

75.6

84.2

102.9

115.6

139.9

158.8

179.7

201.6

227.4

Industrial

39.8

39.0

45.8

48.8

57.0

75.9

72.5

68.0

77.8

83.9

80.5

Other Buildings

69.2

64.5

70.2

70.7

74.6

86.0

99.3

107.6

117.6

125.6

133.2

Utilities

93.3

90.7

112.2

108.9

126.3

114.7

117.9

120.8

122.8

127.3

131.2

Mines & Wells

86.2

112.3

134.1

139.4

156.3

101.2

51.6

68.5

79.0

88.2

99.2

Billions 2009 Dollars Business Fixed Investment

1673.8 1802.3 1964.2 2032.9 2155.6 2200.2 2188.6

2298.2 2454.3 2594.3 2706.2

Producers Dur. Equipment

746.7

847.9

939.2

982.3 1035.7 1072.5 1041.4

1095.2 1185.2 1267.6 1326.8

Nonresidential Structures

366.3

374.7

423.1

428.8

472.9

452.1

439.2

465.2

493.1

514.9

534.6

Non-Farm Buildings

179.3

172.3

188.8

196.0

218.2

253.2

279.7

292.1

315.6

333.1

344.7

Commercial

66.6

67.3

73.9

80.5

95.8

105.5

125.8

138.9

151.9

164.3

178.9

Industrial

40.8

39.1

44.9

46.7

52.8

69.1

65.5

60.7

66.2

68.3

62.9

Other Buildings

71.9

65.9

70.0

68.6

69.3

78.4

88.1

92.1

97.3

100.2

102.6

Utilities

89.8

82.8

99.1

95.1

108.9

97.4

99.7

99.3

97.7

98.0

97.7

Mines & Wells

87.8

110.9

123.8

126.0

133.0

91.4

50.0

66.4

72.9

76.9

84.5

Business Fixed Investment

8.6

10.9

6.9

5.8

6.5

1.1

0.6

9.4

7.4

6.6

6.1

Producers Dur. Equipment

20.2

14.4

8.4

5.8

4.5

4.3

-3.5

11.0

7.2

6.8

5.8

Nonresidential Structures

-0.6

15.3

7.8

9.5

12.1

-9.6

2.9

11.3

9.7

7.4

7.4

Non-Farm Buildings

-21.1

14.7

7.3

9.8

20.9

11.7

13.6

8.1

12.3

7.4

7.5

Commercial

-16.8

14.7

9.9

18.7

20.3

10.9

24.7

10.1

13.1

11.9

13.2

Industrial

-28.8

37.4

8.1

9.1

37.9

13.0

-6.9

5.3

16.9

-0.8

-5.0

Other Buildings

-19.5

3.6

4.5

1.7

12.0

13.2

16.7

8.3

8.3

6.3

6.2

Utilities

19.0

2.4

18.4

17.5

-1.7

10.4

-0.1

3.1

3.4

3.3

1.6

Mines & Wells

53.6

36.6

1.9

8.0

18.1

-54.8

-27.3

63.1

7.6

13.2

14.2

Annual Growth Rate

32

U.S. Forecast / May 2017


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

3506.2

3701.8

3569.2

3835.0

4085.7

Personal Tax and Nontax Receipts

941.6

1129.1

1164.7

1302.0

1402.3

1532.7

1553.2

1657.9

1697.9

1855.7

2010.0

Corp. Profits Tax Accruals

298.7

299.4

363.1

378.1

436.6

455.2

444.1

452.1

173.7

173.4

172.9

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

137.9

132.6

142.7

151.3

160.2

970.9

904.0

938.2

1091.3

1140.9

1189.6

1236.1

1301.2

1381.5

1466.4

1554.9

Expenditures

3772.0

3818.2

3789.1

3782.3

3901.3

4023.0

4163.1

4306.6

4525.6

4792.8

5075.3

Purchases Goods & Services

1303.9

1303.5

1292.5

1229.5

1218.9

1225.0

1244.5

1267.3

1303.9

1334.3

1355.7

National Defense

832.8

837.0

817.8

767.0

746.0

732.0

732.2

744.6

766.1

779.2

787.3

Other

471.1

466.5

474.7

462.5

472.9

493.0

512.3

522.8

537.8

555.1

568.4

Transfer Payments

2333.2

2327.0

2300.8

2346.2

2448.6

2564.9

2652.3

2748.0

2886.8

3050.0

3216.2

To Persons

1757.9

1779.9

1783.6

1823.5

1882.0

1961.3

2027.0

2092.5

2217.2

2358.6

2503.1

53.5

57.6

55.3

53.9

52.4

52.0

53.3

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

579.7

591.8

611.6

631.3

Net Interest

351.0

398.0

401.6

393.4

417.1

411.3

445.6

474.6

532.3

611.9

700.9

57.4

66.7

66.5

69.9

64.5

63.5

69.6

70.5

71.8

72.1

72.4

-1328.7

-1244.2

-1090.1

-643.8

-612.9

-569.7

-657.0

-604.8

-956.3

-957.8

-989.6

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

2372.9

2469.7

2607.5

2758.9

2896.5

Personal Tax/Nontax Receipts

1305.7

1368.3

1416.1

1481.4

1518.9

1564.6

1590.8

1654.8

1770.1

1891.4

1998.9

297.6

324.1

346.7

375.9

384.6

406.1

412.5

433.3

484.0

530.2

562.2

47.7

50.2

52.5

55.5

58.6

60.3

60.1

64.7

77.0

82.8

84.8

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

20.2

21.4

22.8

24.2

505.3

472.5

444.0

450.0

494.8

531.2

551.1

579.7

591.8

611.6

631.3

2643.92 2726.24

2863.0

3007.3 2441.5

2235.85 2246.40 2277.93 2327.28 2397.55 2492.83 2565.10 1870.2

1865.3

1866.0

1886.6

1933.2

1993.3

2032.2

2089.7

2200.8

2325.9

Transfer Payments

612.0

582.2

558.0

571.3

624.5

679.6

691.9

719.6

735.2

758.6

781.9

Interest Received

123.0

125.9

141.4

141.9

123.0

124.5

130.2

125.2

121.5

124.3

130.6

21.4

17.9

10.8

10.3

12.4

11.9

12.0

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

-192.2

-174.2

-118.8

-104.1

-110.8

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

Institute for Economic Competitiveness

33


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

-501.3

-495.5

-428.4

-499.2

-635.4

Current Account

-442.0

-460.4

-446.5

-366.4

-392.1

-463.0

-481.2

-432.6

-379.9

-467.3

-674.1

Exports -Goods & Services

1852.3

2106.4

2198.2

2276.6

2375.3

2264.3

2232.4

2385.0

2582.4

2746.7

2915.6

Merchandise Balance

-648.7

-740.6

-741.2

-702.2

-752.2

-762.6

-749.9

-748.8

-716.0

-814.5

-976.5

Food, Feed & Beverage

107.72

126.25

133.05

136.16

143.72

127.73

135.00

138.47

148.22

153.9

160.7

Industrial Supplies Excl Petroleum

388.6

485.3

483.2

492.4

500.4

417.1

388.9

443.1

486.7

529.8

575.0

Motor Vehicles & Parts

112.0

133.0

146.2

152.7

159.8

151.9

149.9

166.9

185.9

205.0

220.1

Capital Goods, Excl. MVP

447.8

494.2

527.5

534.8

551.7

539.7

518.4

535.4

566.7

573.5

576.8

Billions of Dollars

Computer Equipment

43.8

48.5

49.2

48.1

48.8

46.9

45.1

44.2

42.1

41.3

42.5

Other

332.1

365.4

383.9

381.7

389.8

373.4

353.2

368.8

394.7

400.8

403.5

Consumer Goods, Excl. MVP

164.9

174.7

181.0

188.1

198.0

197.3

193.1

210.3

228.1

240.4

248.7

Other Consumer

58.6

53.4

55.1

58.6

64.5

64.7

69.5

65.2

71.1

77.6

84.3

572.7

639.5

672.2

713.9

757.2

765.9

777.6

825.6

895.7

966.6

1050.0

Imports -Goods & Services

2365.0

2686.4

2763.8

2768.6

2884.1

2786.3

2733.7

2880.6

3010.8

3245.9

3550.9

Merchandise

1949.8

2244.7

2305.8

2301.5

2396.5

2291.1

2225.6

2338.9

2432.6

2623.5

2869.4

92.5

108.3

111.1

116.0

126.8

128.8

131.4

134.8

126.1

133.2

142.8

Petroleum & Products

353.6

462.1

434.3

387.8

353.6

197.3

159.8

177.5

158.3

181.9

217.3

Industrial Supplies Excl Petroleum

249.4

292.7

288.8

291.3

316.3

290.4

277.9

298.7

342.5

364.4

388.5

Motor Vehicles & Parts

225.6

255.2

298.5

309.6

329.5

350.1

351.5

366.3

370.9

384.4

413.8

Capital Goods, Excl. MVP

450.4

513.4

551.8

559.0

598.7

606.7

593.4

627.0

659.7

698.0

747.5

Computer Equipment

117.3

119.7

122.3

121.2

122.0

120.3

114.6

116.0

119.3

121.7

124.5

Other

301.9

358.2

389.4

390.8

423.4

431.3

428.7

458.8

482.5

516.8

563.1

Consumer Goods, Excl. MVP

485.1

515.9

518.8

532.9

558.7

596.5

585.1

605.0

608.9

649.0

713.1

Services Billions of Dollars

Food, Feed & Beverage

Other Consumer

93.1

97.1

102.4

105.0

112.9

121.3

126.6

129.7

166.3

212.5

246.4

415.2

441.6

458.0

467.1

487.6

495.2

508.1

541.7

578.1

622.4

681.5

Net Exports Goods & Services

-458.8

-459.4

-447.1

-404.9

-425.7

-540.0

-563.0

-627.0

-773.1

-948.8 -1100.4

Exports G & S

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2128.2

2214.8

2335.9

2422.7

2511.4

Imports G & S

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2691.2

2841.7

3109.1

3371.5

3611.8

Services Billions 2009 Dollars

Exports & Imports % Change Exports G & S

15.3

8.7

3.4

5.6

1.9

-6.9

2.6

8.7

7.8

5.7

6.7

Imports G & S

15.0

10.9

0.3

1.2

4.7

-5.9

3.0

4.1

5.2

8.8

9.8

Real Exports G & S

10.1

4.2

2.2

6.0

3.1

-2.1

1.6

5.9

5.0

3.1

4.3

Real Imports G & S

12.2

3.5

0.3

2.5

6.2

2.6

2.7

6.8

9.5

8.2

6.7

34

U.S. Forecast / May 2017


Sean Snaith, Ph.D., is the director of the University of Central Florida’s Institute for Economic Competitiveness and a nationally recognized economist in the field of business and economic forecasting. Snaith is the recipient of multiple awards for the accuracy of his forecasts, his research and his teaching. He has served as a consultant for local governments and multinational corporations such as Compaq, Dell and IBM. Before joining UCF’s College of Business, he held teaching positions at Pennsylvania State University, American University in Cairo, the University of North Dakota and the University of the Pacific. Snaith is frequently interviewed in international, national and regional media. He has been quoted in The Wall Street Journal, USA Today, The New York Times, The Economist and The Guardian and has appeared on CNBC, Fox Business Network, The Nightly News with Brian Williams, Al Jazeera, the BBC and CBC, China Central TV, Sky News, Nippon TV and the Business News Network, based in Toronto. Snaith is a sought-after speaker known for his engaging and humorous presentations. He has built a national reputation for his unique ability to explain complex subject matter in a digestible manner. He earned praise from one business editor for having “an uncanny knack of making economics not only understandable but interesting.” Snaith is a member of several economic organizations and national economic forecasting panels, including The Wall Street Journal’s Economic Forecasting Survey, the Associated Press’ Economy Survey, CNNMoney.com’s Survey of Leading Economists, USA Today’s Survey of Top Economists, Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, Bloomberg and Reuters. Snaith holds a B.S. in Economics from Allegheny College and an M.A. and Ph.D. in Economics from Pennsylvania State University.

Sean M. Snaith, PhD Director, Institute for Economic Competitiveness P 407.823.1451 E ssnaith@ucf.edu

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UCF U.S. Economic Forecast May 2107  
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