UCF US Forecast september2016

U.S. Forecast

September 2016

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

ABOUT UNIVERSITY OF C E N T R A L F LO R I DA ( U C F )

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

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

FO R E C A S T FO R T H E N ATI O N Forecast 2016 - 2019 September 2016 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2016 Institute for Economic Competitiveness. All rights reserved.

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

H I G H L I G H T S O F T H E Q 3 2 0 16 U . S . F O R E C A S T In this U.S. Forecast: • The winner in the 2016 presidential election: uncertainty. Hail to the Chief.

• Titan-like consumers foisted GDP growth on their shoulders, keeping the economy from contracting in the 2nd quarter of 2016 with real consumption growth of 4.4%. Atlas, however, will shrug. Growth in real consumer spending from 2016 through 2019 will average just 2.5%.

HIGHLIGHTS

• Average monthly payroll job growth in 2014 was greater than in 2015, which is greater than the average thus far in 2016. Prepare the cabin, this looks like we have begun our initial descent into recession.

• The rest of the world will continue to be a drag on U.S. growth. A stronger dollar in a world of weak growth and negative interest rates will boost imports and depress exports; as a result, net exports will weigh on the economy through 2019.

• The making of a new holiday tradition? It’s a Wonderful Life, lighting the menorah, leg lamps, and increasing the federal funds rate by 25 basis points.

The Federal Reserve raised interest rates in December of 2015; the next 25 basis point hike will come this December, with future increases being both modest and infrequent.

• Real GDP growth will slow to 1.5% in 2016, hit 2.2% in 2017 and 2018, and then slow to 2.3% in 2019 as the Federal Reserve gradually tightens interest rates. A recession will most likely interrupt the Fed’s plans.

• The housing market continues its gradual recovery. The housing market will slowly improve through 2018 when rising interest rates take their toll and housing starts level off. Housing starts will rise from around 1.18 million in 2016 to 1.53 million in 2019. Homeownership is at the lowest level since 1965.

• Average monthly payroll employment growth in 2015 was slower than in 2014 and 2016; growth thus far has averaged less than in 2015. Uncertainty and regulatory burdens are hurting payroll job growth, which will slow to 1.7% in 2016 and further slow to a growth rate of 1.1% in 2017 and 0.6% in both 2018 and 2019.

• Unemployment rates (U-3) are expected to stabilize around 4.8%—give-ortake 0.1 percentage points through early 2018. Slower job growth will be just enough to keep up with labor force growth until 2018 when unemployment will begin to climb. Underemployment (U-6) remains a persistent problem and stands at 9.7% as of August 2016.

• Inflation remains tepid, weighed down by low energy prices and middling wage growth, but even core CPI inflation will average 2.1% through 2019.

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The Winner of the 2016 Presidential Election:

UNCERTAINTY BY A LANDSLIDE Since the two candidates for President of the United States emerged from the primary process of each of the two major parties, I have been asked on numerous occasions by students, attendees at my economic forecast presentations, media outlets, and economic forecast surveys who might win the election and how each of the candidate’s proposed policies would impact the U.S. economy.

In my mind, the outcome of the election, which is about two months away, is far from preordained. It is an unusual, historic, and, in the opinions of those with whom I have spoken, disappointing choice between two flawed candidates. Much head shaking seems to accompany any discussion of the upcoming vote, but one of these candidates will be the next President of the United States.

Every presidential election brings with it uncertainty regarding the future of the economy as the outcome of the election can determine the policy path that the country will follow after the inauguration of the newly elected president. Two policy roads diverge in a yellow wood, and the country will take the one with at least 270 electoral votes.

What stands out about this election is the high degree of uncertainty about what each of these paths would entail. The two roads themselves are uncertain as the candidates have been opaque in providing details or have changed their stances over the course of their political careers and/or in the course of the primary season as political winds shifted.

On several issues, the differences are clear: Trump advocates the repeal of Dodd-Frank, while Clinton would largely keep it in place with some tinkering.

Trump advocates the repeal of the Affordable Care Act (ACA) and replacing it with a market-centric approach, while Clinton favors the addition of

a public option to advance the goal of universal coverage the ACA is unable to achieve.

Both candidates have expressed anti-trade sentiments and/or policies. Trump is vehemently against the Trans-Pacific Partnership (TPP) and is calling for punitive tariffs and aggressive enforcement of trade. Clinton, after helping to negotiate the TPP, has backed away from the agreement and is also calling for more aggressive policing of trading partners.

Economists, myself included, have not been supportive of the economic plans or inclinations of the candidates in this election, viewing them as insufficient, damaging, or worse.1 This uneasiness has augmented already-high levels of policy uncertainty in the economy currently with a surge in the expected level of policy uncertainty that has already inflicted significant additional damage on the U.S. economy.

Gross private investment in the U.S. economy has contracted for three straight quarters, starting in the 4th quarter of 2015 when it contracted -2.3%. In the first two quarters of 2016, it has contracted by -3.3% in the first and by a whopping -9.7% in the second.

This is recession-like behavior that reflects in part the impact of the presidential election, particularly the near double-digit contraction in the 2nd quarter.2 Any investment forgone represents a reduction of the productive capabilities of the economy and lower output in the future, resulting in a loss of real GDP now and in the future.

Some of this decline in investment spending can be

1 http://www.cnbc.com/2016/06/02/economists-give-presidentialcandidates-a-big-f.html 2 http://www.wsj.com/articles/economists-see-election-induceduncertainty-harming-u-s-economy-1470924003 Institute for Economic Competitiveness

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four to five years of the recovery. Even today, seven years after the end of the recession, the average level of policy uncertainty is nearly as high as it was during the Great Recession itself.

pinned on falling oil prices and a strong dollar, but not all of it.

Levels of economic policy uncertainty have been elevated through the entire 7-plus years of this recovery, and Figure 1 updates a chart we have looked at in previous issues of the U.S. Forecast.

The chart plots out the monthly values of the policy uncertainty index from 1985 to present and has overlaid on that plot the average levels of the index for each phase of the business cycles that took place over that time span.

The policy uncertainty that we have created via Dodd-Frank, the Affordable Care Act, and thousands upon thousands of pages of new rules and regulations that have been written (with many more yet to come) has weighed down on economic growth in this recovery. The process of selecting the next President of the United States has thickened this fog of uncertainty and increased the likelihood that the recovery may soon become our next recession.

As we noted when first presenting this chart, the level of policy uncertainty spiked during the downturns of all three recessions. However, following the 1990-91 and 2001 recessions, when the recovery began, policy uncertainty fell back down to average levels at or below those that prevailed prior to these two recessions. This was not the case in the aftermath of the Great Recession, where the average level of policy uncertainty actually increased over the first

ANXIOUS INDEX

Fear of Recession at Highest Level in 3.5 Years The most recent release (3rd quarter of 2016) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 34

Figure 1. Economic Policy Uncertainty Over the Business Cycle 300

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forecasters surveyed for the publication put a 15.64% chance that a decline in real GDP will occur in the 4th quarter of 2016. This quarter’s release reflects a further increase in forecasters’ anxiety. Our worries remain at the highest level since the 1st quarter of 2013 (my own are at the highest in this recovery to date).

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 the 2nd quarter of 2016, the index stood at 15.64, which means that forecasters believe there is a 15.64% chance that real GDP will decline in the 4th quarter of 2016.

The forecasters also report a 10.58% chance that we are currently (as of the 3rd quarter of 2016) experiencing a contraction in real GDP—lower than the probability the forecasters assigned for the 2nd quarter of 2016. According to the panel, the probability that real GDP growth will turn negative is averaging around 18.54% through the end of the 4th quarter of 2017. This indicates that the forecasters’ assignment of probability for a contraction in real GDP in the upcoming year is the highest since the 4th quarter of 2012, the eve of the dreaded, but hardly dreadful, fiscal cliff.

Figure 2 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 now higher than the average level during the economic recovery (13.39).

Figure 2.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2016:Q3 100

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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

Probability (percent)

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

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GDP OUTLOOK

GDP Growth is Anemic. Can the Economy Pull Out of This Dive?

Thus far, 2016 got off to an unfavorable start, to say the least, with global economic uncertainty, volatile financial markets, and real GDP growth in the U.S. of just 0.8% in the 1st quarter (having followed growth of just 0.9% in the 4th quarter of 2015).

Growth in the 2nd quarter was just 1.2%, and that puts average GDP growth during the past year at a measly 1.2%. This is not the stuff of which healthy and lasting expansions are made.

The average rate of annual real GDP growth from 2010 through 2015 has been just 2.2%. The forecast for average real GDP growth from 2016-2019 is slightly lower at 2.0%, a projected continuation of the subpar performance of the U.S. economy during this recovery. The likelihood of a recession taking place during our forecast horizon is at an elevated risk.

For over seven years now, we have waited for an acceleration of economic growth that has always been promised and projected to be just around the corner, but when we got to that corner, again and again, faster growth proved to be nothing more than an illusion and the product of wishful thinking.

There is no illusion about the outlook for 2016; we are expecting real GDP growth to be just 1.5% for the full year. The weakness in the first half of the year will not be fully offset by the relatively stronger growth in the second half. Average quarterly growth of 1.0% in the first six months of 2016 will be followed by growth of 2.6% in the second half of the year.

In 2017, we are expecting real GDP growth of just 2.2%. This forecast was revised down by 0.5 of a percentage point from our May 2016 outlook, after a downward revision for 2016. There will be no improvement in growth in 2018, with real GDP expanding at 2.2% again before dipping to 2.1% in 2019, as the gradual tightening of monetary policy begins to rein in the economy.

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U.S. Forecast | September 2016

The timing of the first interest rate hike in December of 2015 has certainly been secondguessed in the months that have followed. As already demonstrated by the tightening cycle, the Fed will continue to move very slowly with future interest rate hikes. Taking small steps when it does raise rates and allowing for pauses between each rate hike will enable the Fed to gauge how the economy is faring, review additional data as it is released, and continue to monitor the state of the global economy, financial markets, and whatever fallout there may be from the presidential election.

We expect the federal funds rate to slowly drift higher with another quarter point hike in December 2016. The federal funds rate will reach 3.0% in the 4th quarter of 2019 and hold there. If the next recession sets in between now and 2019—I would be more surprised if it does not—the Fed would have to reverse its course on interest rates and, since there would be little room for downward movement in interest rates, the Fed would once again have to rely on non-traditional tools of monetary policy. Negative interest rates have entered the lexicon of central banking as several central banks around the world have dipped their toes into this rare tool of central banking.

Hopefully the Fed will not have to follow suit; relying on negative interest rates feels like the Hail Mary pass of monetary policy.

CONSUMER SPENDING

Consumers Have Taken the Recovery on Their Shoulders, But Will Atlas Shrug?

The U.S. consumer is now playing the largest role in supporting the recovery. In the 2nd quarter of 2016, real consumer spending growth was 4.4% and, despite this strong growth, real GDP growth in the quarter was a tiny 1.1%. Consumption contributed 2.94 percentage points to 2nd quarter GDP growth. In absence of this outsized effort, one that will not likely be sustained, real GDP growth could have very well been negative.

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Continued gains in employment, modestly rising wages, and improving household balance sheets should continue to provide a solid underpinning for continued consumer spending growth. These fundamentals, however, do not indicate sufficient support to keep spending growth at the levels we saw in the 2nd quarter.

However, the next three quarters should show a weakening of consumer spending growth. In the 3rd quarter of 2016, consumption spending growth of a still-solid 3.3% will continue to decelerate to 2.5% in the 4th quarter, as holiday spending will not show much improvement, if any, over last year. In the first quarter of 2017, consumer spending growth should decelerate further to just 1.9%.

Consumer spending growth is a critical part of supporting real GDP growth if this recovery is going to continue. The other main sectors of the economy continue to face headwinds that suppress growth. Business investment is a drag, government spending is adding little to boost GDP growth, and net exports will continue to pull down growth rather than propping it up, as it has mildly done in the first half of 2016.

While the foundations of consumer spending continue to solidify, the labor market continues its recovery amid signs that it may be losing some steam.

Strong wage and salary growth continue to remain elusive to most U.S. workers, with annual growth in July ticking up just a bit to 2.6% after hovering around 2.2% for several years. In the aggregate, almost all of the home equity destroyed by the collapse of the housing market has been recovered, but there are regions of the country, such as Florida and Nevada, where many homeowners are still significantly underwater in their mortgages.

Oil and gasoline prices plunged—hitting their lows early in 2016—but have increased from that point, though they remain at relatively low levels. This windfall of lower oil and gasoline prices left more disposable income in the wallets of U.S. consumers, but it is not a substitute for robust growth in wages

and salaries. Consumer spending at restaurants benefitted from this oil and gasoline windfall, but broad-based spending increases predicted by some never materialized. The reason is straightforward: a consumer would prefer to have the monthly gasoline savings in the form of a larger monthly paycheck that is not as susceptible to the geopolitical risks and volatility that oil prices face.

Global economic and financial market uncertainty began to erode consumer confidence, despite positive developments in other areas. As a result, consumer spending growth is expected to decelerate to around 2.7% for 2016, hit 2.4% in 2017, slow down to 2.2% in 2018, and then rebound to 2.5% in 2019.

INVESTMENT Despite record levels of profits earlier in this recovery and historically low interest rates, nonresidential fixed investment growth during the recovery has been quite weak. In the 4th quarter of 2015, investment spending growth turned negative, contracting -3.3%. The contraction was due in large part to purchases of aircraft, which can swing wildly from one quarter to the next, depending on the timing of massive purchases by the world’s airlines.

These decreased by -52.4% in the quarter. Thus far in 2016, real nonresidential investment has come in at -3.4% in the 1st quarter and -0.9% in the 2nd quarter.

Purchases of aircraft again contracted by a significant amount, declining by -43.5% in the 1st quarter, but in the 2nd quarter, those purchases soared to 59.0%.

The contraction in investment spending also reflects the negative impact of falling oil prices. Consumers may be enjoying the prices at the pump, but oil producers are cutting back on investment as the rig count in the U.S. continues to drop. The total rig count in the U.S. has decreased -44.0% year over year. During 2015, investment in mining and petroleum equipment contracted by -31.2% and is expected to further contract in 2016 by -40.8%.

It is not just aircraft and oil rigs that are driving the weakness in investment spending. There is a

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more fundamental problem with investment in this recovery, and we have discussed the role of policy uncertainty and the rapid growth in the regulatory burden as additional probable causes of this weakness. This environment is unlikely to improve anytime soon and is worsening with the presidential political cycle that, as we have discussed above, has only compounded the environment of uncertainty.

In 2014, the 6.0% pace of real private nonresidential fixed investment growth once again decelerated to 2.1% in 2015. The weak start to 2016 in an environment of increasing uncertainty will result in a further deceleration of investment spending growth to -0.4%. After the presidential election is over, some uncertainty will fade and, with answers to many questions in hand, business investment growth will accelerate to 3.9% in 2017 and 4.3% in 2018. In 2019, the Fed’s tightening of interest rates will result in a slight deceleration of growth to 3.9%.

Interest rates are still very low, even as the Fed has begun to push up the federal funds rate. Overall, interest rates will continue to rise in a drawn-out process that will stretch until 2019, unless, of course, a recession throws a wrench into those plans.

Business spending on equipment and software will grow at an annual average rate of 2.8% from 2016 through 2019. Investment spending growth in computers and peripherals will accelerate in 2017, as upgrade cycles kick in after this spending had contracted in 2015 and 2016. Spending on communications equipment should expand at an average annual rate of 5.0% during 2016-2019, while industrial equipment purchases average 5.3% growth over the same time frame.

Investment in nonresidential structures growth has oscillated wildly over the past several years. The wild ride continued during 2014 and 2015. After growth jumped to 10.3% in 2014, it turned negative in 2015, with growth coming in at -4.4%. This will be followed by another year of negative growth in 2016 at -4.4%. Investment in nonresidential structures will slowly grow in 2017, 2018, and 2019 with growth of 5.8%, 4.1%, and 2.3%, respectively. Plunging oil 10

U.S. Forecast | September 2016

prices are causing a sharp two-year contraction in Mining and Petroleum structures growth, which is expected to average -34.4% during 2015-16.

Investment growth in transportation equipment maintained the momentum of the previous year in 2015 with growth of 13.5%. Prior to 2014, this sector experienced four years of very strong double-digit growth averaging 38.5%. This type of investment will have an average growth rate of just 1.1% during the four-year period spanning 2016 through 2019.

Residential fixed investment growth surged to 11.7% in 2015 after slumping to 3.5% in 2014.

Growth will average 4.8% through 2016-2019, decelerating from a peak growth rate in 2017 of 7.4%.

In the final year of our forecast (2019), real residential fixed investment will be dampened by both higher mortgage rates—which are expected to average 5.5% on a 30-year fixed mortgage that year—and a slower pace of price appreciation. As a result, growth is expected to be 0.9% in the final year of our forecast.

In 2019, real residential fixed investment will be just over $680 billion, which is $192 billion less than its 2005 peak.

We expect housing starts to accelerate over the next several years, reaching a level below 1.53 million in 2019. Average levels of annual housing starts from 2016-2019 will be 1.4 million. In 2019, housing starts are expected to show an increase of 971,398 starts from their 2009 nadir.

GOVERNMENT SPENDING 2014 was the fourth year in a row that federal government spending contracted until growth turned positive, but only very slightly, in 2015. 2016 will continue this streak, as federal government spending will grow 0.8% and will then expand at 0.9% in 2017. Beyond 2017 and through 2019, federal government spending is expected to continue to shrink, contracting at an annual average pace of -1.3%. Over the 2016 to 2019 time horizon, state and local governments will oversee spending growth at an average rate of 1.1%.

The course of fiscal policy going forward could

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be altered significantly by the outcome of the presidential election. The rhetoric and proposed policies of the nominees for the presidential election are difficult to wrap one’s head around and it is also unclear as to which, if any, of the proposals would make it into law. As a result, there is a high degree of uncertainty surrounding these forecasts of U.S. fiscal policy.

The federal budget deficit will rise in 2016 and in each subsequent year in our forecast horizon, after four years of shrinking from nearly $1.3 trillion in 2011 to $439 billion in 2015. We are forecasting deficits to widen significantly in 2016, as anemic economic growth cannot compensate for greater spending on entitlements and reversals of the sequester, thereby pushing the deficit to $545.2 billion. In 2017, the deficit will decline ever so slightly to $544.7 billion before easing again in 2018 when it hits $542.8 billion. In 2019, the deficit will grow much larger as swelling entitlement spending pushes it to $663.3 billion. This projection would represent the largest budget deficit since 2013.

The U.S. continues to travel down a dangerous fiscal path that will ultimately lead to a crisis if we continue. What Greece experienced in 2010 was a sampling of how painful these entirely avoidable fiscal crises can be. The existing structure of entitlements including the Affordable Care Act, if it survives (a prognosis that is increasingly becoming unlikely), coupled with the demographics of an aging Baby Boom generation ensure that if no changes are made to these programs and how they are funded, we will eventually face a fiscal meltdown. Because the onset of such a crisis is still well beyond any political horizon, it is highly unlikely that the needed and admittedly politically unpalatable changes will be implemented in the near future.

Although, we are projecting deficits through 2019 that are smaller than the $1 trillion-plus deficits that were the norm in 2009-2012, the additional debt added to the national debt over the next four years will be more than nearly $2.3 trillion, pushing the national debt total to over $21.8 trillion before

interest. As interest rates in the economy rise, the burden of servicing this debt will rise as well, consuming an even greater share of federal tax revenues, further squeezing discretionary spending between this debt service and entitlement spending.

Currently, the national debt is over $19.5 trillion and rising. This represents a debt of nearly $162,500 per taxpayer and over $59,950 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 $103.3 trillion in liabilities, boiling down to $863,593 per taxpayer.

NET EXPORTS After five straight quarters of pulling down growth, net exports was a positive contributor to GDP growth in the 1st and 2nd quarters of 2016, adding 0.01 and 0.1 percentage points to GDP growth in those quarters, respectively. That won’t last. Look for net imports to return to being a drag on growth in the second half of 2016 and likely for several years after that.

Net exports became a drag on real GDP growth in the U.S. in 2014, shaving off 0.15 percentage points from growth that year, and even more in 2015, when net exports shaved 0.71 percentage points off of real GDP growth. This drag is expected to last through the end of our 2019 forecast horizon, the two quarter boost to start this year notwithstanding.

The U.S. dollar has appreciated for four straight years against our major trading partners, including an outsized 16.2% appreciation in 2015. In 2016, this trend begins to slow and subsequently reverse itself and cause the dollar to depreciate through 2019. The size of the depreciation is anticipated to be smaller than the appreciation of the four years preceding it; therefore, net exports will remain a drag on GDP growth.

Over time, the stronger dollar boosted imports and reduced exports by making our goods and services Institute for Economic Competitiveness

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more expensive to foreigners and at the same time making imported goods and services cheaper to U.S. consumers. This results in a worsening of the trade deficit, though the effects of currency changes take time to work on actual trade flows.

This trade deficit will be boosted by relatively stronger growth in U.S. GDP as many of our trading partners are experiencing slower, sometimes much slower, GDP growth. U.S. buyers will thus have faster income growth allowing them to purchase more foreign goods and services. While foreign buyers will have less income growth to spend on U.S. goods and services. This will augment the effects of exchange rate movements.

Overall, export growth continues through the end of our 2019 forecast horizon and is expected to accelerate during that time frame—a result of a depreciation of the dollar that is anticipated to begin in 2016. Growth will remain flat in 2016 before jumping in 2017. Real export growth from 2016-2019 will average 2.2%, while real import growth will average 3.6% over the same time frame.

Real net exports will average -$675.5 billion during 2016-2019, with the trade balance worsening in each successive year and coming in at -$751.2 billion in 2019. The sizeable appreciation of the dollar during 2012-2016 and weaker global growth will dampen demand for U.S. goods and services and simultaneously whet consumer’s appetite for imported goods and services in the U.S. U N E M P LOY M E N T The national headline unemployment rate (U-3) in July held steady at the June reading of 4.9%. The unemployment rate remained unchanged despite a significant increase of 407,000 people in the labor force from the previous month as the labor force participation rate increased from 62.7% to 62.8%.

The number of unemployed people fell by 13,000 in July.

The July jobs report showed continued strength in payroll job growth, adding 255,000 jobs after 12

U.S. Forecast | September 2016

June’s 292,000 job gain. This is a contrast to May’s paltry gain of 24,000 jobs, which followed 144,000 jobs added to payrolls in April. The 255,000 gain in payroll employment in July puts the average growth in monthly payrolls for 2016 at 186,000.

Average payroll job growth for 2015 came in at 229,000, which was down from 2014’s average growth of 251,000. Job growth decelerated last year and continues to do so thus far in 2016. Despite the summer spurt in job growth, this slowing is a troublesome trend that warrants a wary eye as 2016 progresses.

The July labor force participation rate of 62.8% remains depressed and is at its lowest point since March 1978. Since the end of the recession, the labor force participation rate has declined almost 3.0 percentage points. This fall in the labor force participation rate has exaggerated the decline in U-3, making the labor market appear to be healthier when looking at this headline unemployment rate.

Some of the decline in the overall labor force participation rate is due to retiring Baby Boomers, since the overall participation rate is calculated based on the population of everyone 16 years or older, but these demographics cannot fully explain the decline.

If we look only at prime workers from age 24 to 54, we still see a significant decline in their labor force participation rates. In July 2016, this participation rate stood at 81.2%, down from 83.3% as the recession got underway. We can conclude that there exists a much greater slack in the labor market than the headline unemployment rate would suggest, and it is not solely attributable to retiring Baby Boomers.

The Bureau of Labor Statistics (BLS) produces alternative measures of labor market weakness, including the broadest measure of unemployment (U-6). U-6 takes into account discouraged workers (currently 591,000 workers) as well as those classified as underemployed (currently 5.9 million workers)— working part-time but not by choice—and workers who are marginally attached to the labor force and have looked for work in the past 12 months but are not currently looking, yet indicate a willingness

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to work (1.95 million workers). None of these 8.4 million-plus workers are counted in the headline unemployment rate of 4.9%.

U-6 remains high at 9.7% as of July 2016, up 0.1 percentage point from the June 2016 level and down from the July 2015 level of 10.4%. The July level of U-6 is down 7.4 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 ten months running as of July.

The bottom line is that while the labor market is still improving, it is improving at a rate that appears to be slowing, and significant slack in the market still remains. Until that slack is taken up, we can expect weak wage and salary growth to persist, as it has for the past seven years of this recovery.

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30-Year Mortgage Rates and Housing Starts (Mortgage rates - Left axis, %)

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Automobile and Light Truck Sales (Millions Vehicles)

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

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(Billions of 2000 Dollars)

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Change in Real Business Inventories

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Consumer Prices (% Change Year Ago)

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01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus 500.0

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01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Federal Budget Surplus

Federal Funds Rate 6.0

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Real GDP Growth and Federal Funds Rate (%)

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01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Quarterly Growth Rate Real GDP Fed Funds Rate

Industrial Production 115.0

(2002=100)

110.0 105.0 100.0 95.0 90.0 85.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Industrial Production

Private Fixed Nonresidential Investment 2800.0 2600.0 2400.0 2200.0 2000.0 1800.0 1600.0 1400.0 1200.0

16

U.S. Forecast | September 2016

(Billions of Dollars)

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Private Fixed Nonresidential Investment

U . S . F orecast C harts

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Manufacturing Employment

Money Supply

3500.0

(Annual Growth Rate %)

3000.0 2500.0 2000.0 1500.0 1000.0 500.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Annual Growth Rate of M1

Total Nonfarm Payroll Employment 150.0

(Millions)

145.0 140.0 135.0 130.0 125.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Total Nonfarm Employment Institute for Economic Competitiveness

17

U . S . F orecast C harts

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120.0

100 90

100.0 80.0

80

60.0

70

40.0

60

20.0 0.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Price of Oil WTI Consumer Sentiment

50

Real Disposable Income and Consumption 6.0

(% Change Year Ago)

4.0 2.0 0.0 -2.0 -4.0

-400

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.50 1.40

-500

1.30

-600

1.20

-700

1.10

-800

1.00 0.90 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

18

U.S. Forecast | September 2016

0.80

U . S . F orecast C harts

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 U.S. Federal Budget Surplus Current Account

Civilian Unemployment Rate 10.0

(%)

9.0 8.0 7.0 6.0 5.0 4.0 3.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 1-Year T-Bill Yield 5 Year Treasury Bond Yield 30 year Treasury Bond Yield Institute for Economic Competitiveness

19

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

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

Gross Domestic Product Final Sales of Domestic Product Total Consumption Durables Nondurables Services Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals Communications Equipment Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health Care Manufacturing Power & Communication Mining & Petroleum Other Residential Fixed Investment Exports Imports Federal Government State & Local Government

Real GDP Nominal GDP

GDP Deflator Consumer Prices Excl. Food & Energy Producer Prices, Finished Goods Employment Cost Index - Total Comp.

2010

2011

-2.8 -2.0 -1.6 -5.3 -1.8 -0.9 -15.5 -22.5 -8.3 0.7 -12.7 -22.2 -49.0 -40.0 -27.4 -18.9 -30.9 5.2 1.6 -27.7 -18.3 -20.7 -8.7 -13.6 5.7 1.6

2.5 1.1 1.9 6.1 2.2 1.2 2.6 15.9 10.0 11.2 13.6 -0.2 80.2 26.9 17.4 -15.7 -24.1 -27.7 -15.9 21.7 -26.3 -2.4 11.9 12.8 4.4 -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

2012

2013

2014

2015

Billions of Dollars 14418.8 14783.8 15020.6 15354.6 15612.2 15982.3 16397.2 14418.7 14964.4 15517.9 16155.3 16691.5 17393.1 18036.7

2.1 3.1 1.7 6.0 2.2

61.7 3.1 -11.4 65.6 -146.0 66.3 10.402 0.554 3.868 9.3 -4.3 -1416 -384

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

95.1 0.1 2.9 73.7 36.6 67.4 12.735 0.612 3.792 8.9 1.2 -1297 -460

94.2 0.9 2.8 74.6 72.7 76.5 14.443 0.784 4.125 8.1 1.7 -1089 -447

Other Measures 98.0 93.0 48.8 0.3 0.8 0.9 1.9 2.9 0.3 74.5 75.4 75.5 73.0 62.2 88.1 79.2 84.1 92.9 15.532 16.438 17.4 0.928 1.001 1.1 4.475 4.338 4.6 7.4 6.2 5.3 1.6 1.9 2.1 -680 -484 -439 -366 -392 -463

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))

0.16 0.15 0.47 2.19 3.26 4.07 5.04 947 -18.9 1.000 4.8

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 0.912 -5.8

0.14 0.09 0.18 0.76 1.80 2.92 3.66 1380 8.9 0.946 3.8

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)

12095 -3.2 10943 -0.5 10943 -0.4 6.1 1203 22.4

12477 3.2 11238 2.7 11055 1.0 5.6 1470 23.4

13255 6.2 11801 5.0 11331 2.5 6.1 1428 -2.9

13915 5.0 12404 5.1 11688 3.1 7.6 1683 18.1

Forecast 2017 2018

2.2 2.2 2.4 6.1 2.5 1.8 3.9 2.9 5.1 4.0 7.0 2.1 1.5 17.3 3.7 5.8 6.4 -6.5 -0.8 35.7 4.4 7.4 2.2 4.6 0.9 0.8

2.2 2.0 2.2 4.7 1.8 2.0 4.3 4.8 7.7 4.5 8.9 5.5 3.5 1.8 10.6 4.1 5.0 -2.4 -4.1 21.1 3.6 5.1 3.5 4.9 -1.3 0.8

2019

2.1 2.1 2.5 5.0 2.3 2.3 3.9 4.9 5.8 3.1 4.5 9.9 1.7 5.0 4.9 2.3 3.6 0.0 -2.9 6.3 3.1 0.9 3.8 4.0 -1.3 0.8

16644.2 17017.0 17383.4 17745.7 18568.1 19388.7 20202.6 21020.2

Prices & Wages, Percent Change, Annual Rate 1.8 1.6 1.8 1.1 1.4 2.1 1.5 1.6 0.1 1.2 2.1 1.8 1.7 1.8 2.2 1.9 1.2 1.9 -3.3 -0.9 1.9 1.9 2.1 2.1 2.2

1.2 1.6 1.0 4.2 1.9

U.S. Forecast | September 2016

2016

Composition of Real GDP, Percent Change 2.2 1.7 2.4 2.6 1.5 2.1 1.5 2.5 2.4 2.0 1.5 1.5 2.9 3.2 2.7 7.4 6.2 6.7 6.9 4.8 0.6 1.7 2.6 2.7 3.1 0.8 0.6 2.3 2.8 2.2 9.1 3.5 6.0 2.1 -0.4 10.9 4.6 5.5 3.6 -1.5 6.0 4.9 2.6 4.0 2.0 7.0 0.1 0.9 -0.4 -0.3 4.9 10.5 3.9 7.7 -0.3 9.4 -1.5 3.5 1.9 3.9 23.5 12.8 13.1 13.5 -2.0 7.5 8.5 13.3 20.8 -10.5 21.8 5.8 15.7 2.2 -17.7 13.3 1.4 10.4 -4.4 -4.4 8.6 3.5 12.9 10.2 10.8 15.7 4.1 12.8 32.3 -7.2 21.4 -4.3 17.5 -10.9 3.9 12.7 1.8 5.6 -30.9 -37.9 9.5 4.3 7.1 10.7 5.3 13.5 12.0 3.5 11.7 6.0 3.4 3.5 4.3 0.1 -0.4 2.2 1.1 4.4 4.6 1.1 -1.9 -5.8 -2.5 0.0 0.8 -1.9 -0.8 0.2 2.9 1.5

0.8 -0.3 1.7 -2.6 1.4

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. $)

20

2009

2.1 2.5 2.1 3.4 2.7

2.0 2.3 2.1 1.9 3.0

1.9 2.3 2.1 2.0 3.0

42.7 -0.1 -1.3 74.9 10.0 90.1 17.4 1.2 4.9 4.9 1.7 -545 -456

56.2 1.1 0.9 74.2 12.8 88.1 17.7 1.4 4.9 4.8 1.1 -545 -457

61.0 1.7 2.9 74.6 45.8 87.9 17.6 1.5 4.9 5.0 0.6 -543 -491

68.4 1.8 2.3 74.1 36.1 86.9 17.3 1.5 4.8 5.2 0.6 -663 -529

Financial Markets, NSA 0.11 0.09 0.1 0.06 0.03 0.1 0.13 0.12 0.3 1.17 1.64 1.5 2.35 2.54 2.1 3.45 3.34 2.8 3.98 4.17 3.9 1643 1931 2061 19.0 17.7 6.9 0.977 1.010 1.2 3.3 3.4 16.2

0.4 0.3 0.5 1.2 1.7 2.5 3.6 2083 1.1 1.2 0.1

0.8 0.7 1.0 1.7 2.2 2.8 4.0 2232 7.3 1.2 -0.7

1.5 1.4 1.8 2.3 2.8 3.4 4.8 2284 2.3 1.1 -3.1

2.4 2.2 2.6 3.0 3.4 3.9 5.5 2345 2.7 1.1 -4.2

Incomes 14810 15459 5.2 4.4 13023 13520 5.1 3.8 11931 12343 3.5 3.5 5.6 5.8 1730 1584 2.5 -8.3

15964 3.3 14012 3.6 12660 2.6 5.7 1674 6.3

16684 4.5 14617 4.3 12970 2.4 5.7 1803 7.9

17483 4.8 15307 4.7 13338 2.8 6.4 1856 2.9

18308 4.7 16029 4.7 13711 2.8 6.7 1885 1.6

14074 1.2 12396 0.0 11528 -1.4 5.0 1688 0.3

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

Table 2. Real Gross Domestic Product History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

14418.8 14783.8 15020.6 15354.6 15612.2 15982.3 16397.2

16644.2 17017.0 17383.4 17745.7

14566.3 14722.2 14979.0 15292.3 15521.1 15912.9 16300.6

16628.4 16992.5 17325.9 17697.4

9847.0 10036.3 10263.5 10413.2 10565.4 10868.9 11214.7

11517.7 11799.5 12062.1 12368.9

Durables

1023.3

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1570.3

1665.7

1743.4

1830.4

Nondurables

2175.1

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2515.5

2579.2

2626.8

2686.2

Services

6648.5

6727.6

6851.4

6908.1

6951.3

7114.2

7310.3

7473.5

7611.5

7760.6

7935.4

1633.5

1673.8

1802.3

1964.2

2032.9

2155.6

2200.2

2190.8

2275.5

2372.4

2464.1

644.3

746.7

847.9

939.2

982.3

1035.7

1072.5

1056.5

1087.5

1139.9

1195.3

256.1

281.4

285.9

303.1

317.7

326.0

338.7

345.3

362.9

390.7

413.2

Computers & Peripherals

76.8

84.7

83.0

88.5

88.5

89.2

88.8

88.4

91.9

96.0

99.0

Communications Equipment

79.4

90.2

91.8

96.3

106.2

110.3

118.2

117.6

125.6

136.8

142.8

152.1

151.3

183.3

199.8

196.7

203.5

207.3

215.4

219.9

232.0

254.8

70.6

127.5

173.9

213.1

240.6

271.8

308.1

301.8

306.2

316.8

322.1

17.7

22.1

27.9

29.2

31.7

35.3

42.0

37.2

43.2

43.9

46.1

30.8

36.2

48.1

58.1

61.3

70.8

71.9

59.1

61.2

67.7

70.9

438.2

366.3

374.7

423.1

428.8

472.9

452.1

432.1

457.2

476.0

487.1

126.7

95.2

94.7

102.8

106.4

120.1

132.3

146.5

155.9

163.6

169.5

Manufacturing

56.3

40.8

39.1

44.9

46.7

52.8

69.1

64.0

59.9

58.4

58.4

Power & Communication

95.8

80.4

74.1

89.7

85.7

98.6

86.2

89.3

88.6

84.9

82.5

Mining & Petroleum

75.0

87.8

110.9

123.8

126.0

133.0

91.4

54.1

72.9

87.5

93.0

Other

84.5

62.0

56.2

61.5

64.1

68.7

75.9

79.9

83.4

86.4

89.1

392.3

382.4

384.5

436.5

488.3

505.4

564.5

597.9

642.2

674.3

680.0

Exports

1587.7

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2111.5

2157.1

2232.0

2316.7

Imports

1983.2

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2689.3

2811.9

2950.1

3067.8

Federal Government

1217.7

1270.7

1236.4

1213.5

1142.8

1113.8

1113.9

1123.3

1132.9

1118.4

1104.3

State & Local Government

1871.4

1820.8

1761.0

1728.1

1714.1

1718.1

1768.2

1794.2

1808.9

1823.3

1838.0

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Institute for Economic Competitiveness

21

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

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

Gross Domestic Product Final Sales of Domestic Product Total Consumption Durables Nondurables Services Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals Communications Equipment Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health Care Manufacturing Power & Communication Mining & Petroleum Other Residential Fixed Investment Exports Imports Federal Government State & Local Government

Real GDP Nominal GDP

GDP Deflator Consumer Prices Excl. Food & Energy Producer Prices, Finished Goods Employment Cost Index - Total Comp.

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

0.8 1.3 1.6 -0.6 2.1 1.9 -3.4 -9.5 -3.0 4.7 -7.2 -3.8 -11.5 -43.5 -24.6 0.1 22.6 -10.7 0.6 -32.7 4.2 7.8 -0.7 -0.6 -1.5 3.5

1.2 2.4 4.2 8.4 6.0 3.0 -2.3 -3.5 -5.9 11.5 -30.7 12.0 -8.3 59.0 -32.7 -7.9 2.7 -9.0 2.0 -57.8 10.6 -6.1 1.4 -0.4 -0.2 -1.3

2.8 2.9 3.3 8.9 4.2 2.1 5.6 7.9 6.5 -4.0 12.1 5.6 14.8 24.4 1.9 3.0 4.8 -10.7 -1.8 29.7 3.4 2.7 0.3 4.4 2.7 2.2

2.4 2.2 2.5 5.5 2.7 1.9 4.0 2.3 4.9 2.7 9.2 0.2 1.0 49.3 6.0 7.6 9.2 -5.3 1.1 41.2 4.9 6.3 2.5 5.3 1.9 0.9

2.5 2.2 2.1 4.2 2.1 1.7 4.3 3.0 4.1 4.6 7.5 0.8 1.9 15.5 7.7 7.8 6.3 -6.6 0.7 55.8 4.0 10.5 2.1 4.2 0.8 0.9

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

1.7 1.9 2.4 5.2 2.0 2.1 3.4 4.4 5.5 1.9 4.1 10.5 0.5 3.8 6.3 1.5 4.6 -0.6 -1.0 -1.6 2.8 -0.6 3.6 3.6 -2.4 0.9

2019Q1

2019Q2

2019Q3

2019Q4

2.3 2.4 2.9 5.3 2.6 2.6 3.7 4.4 6.0 4.4 4.0 10.4 -0.3 5.5 3.3 3.0 3.6 2.6 -4.6 10.9 2.8 -0.8 3.8 3.6 -0.8 0.8

2.2 2.2 2.5 5.2 2.3 2.2 4.0 5.0 5.5 2.7 4.3 10.4 1.9 6.0 2.1 2.6 3.1 -0.9 -3.7 11.1 2.3 1.3 3.8 4.0 -0.7 1.1

2.3 2.3 2.5 4.9 2.4 2.2 3.9 4.7 5.0 1.8 4.1 9.1 1.7 5.9 3.2 2.4 2.5 -0.3 -1.3 6.5 3.5 3.2 4.3 3.9 -0.6 0.7

2.0 2.0 2.5 4.8 2.3 2.2 3.8 4.7 5.0 1.8 4.2 8.4 2.2 5.0 3.0 1.7 3.3 -1.7 -0.5 3.1 1.8 1.1 3.9 4.2 -0.9 0.0

Billions of Dollars 16525.0 16575.1 16688.4 16788.5 16893.7 16978.9 17056.3 17139.2 17257.7 17347.1 17426.9 17501.8 17600.9 17695.8 17797.9 17888.3 18281.6 18437.6 18661.7 18891.7 19105.1 19298.2 19481.1 19670.6 19908.2 20111.3 20303.5 20487.5 20703.7 20910.1 21129.8 21337.2 Prices & Wages, Percent Change, Annual Rate 2.0 2.0 2.0 2.1 2.0 2.0 2.7 2.2 2.2 2.4 2.3 2.3 2.1 2.1 2.1 2.1 2.1 2.1 2.7 2.2 1.5 2.2 1.6 1.8 2.9 3.0 3.1 3.0 3.0 3.0

2.2 2.5 2.1 3.1 2.3

2.1 1.2 2.0 2.2 2.1

2.5 3.5 2.3 4.3 2.5

2.0 2.5 2.2 5.2 2.7

33.5 -0.6 -1.8 75.3 47.5 91.6 17.258 1.151 4.717 4.9 1.9 -667 -499

45.6 -0.5 -1.0 75.0 1.6 92.4 17.120 1.160 4.870 4.9 1.3 -672 -465

44.1 1.7 -0.4 74.7 -7.9 87.9 17.858 1.182 4.932 4.9 1.6 -668 -436

47.6 1.0 0.6 74.6 -1.3 88.6 17.563 1.224 4.950 4.8 1.3 -668 -426

52.5 1.2 0.2 74.4 12.3 88.8 17.472 1.274 4.898 4.8 1.3 -681 -449

56.4 0.9 1.9 74.2 13.5 88.8 17.656 1.358 4.894 4.8 0.8 -681 -466

Other Key Measures 57.8 57.9 59.2 60.1 1.1 1.6 2.3 1.6 2.4 2.8 3.9 3.0 74.0 74.2 74.6 74.7 9.7 15.6 42.9 50.5 87.1 87.8 87.8 88.4 17.786 17.802 17.697 17.630 1.390 1.434 1.460 1.470 4.907 4.894 4.893 4.872 4.8 4.9 4.9 4.9 0.5 0.6 0.6 0.7 -675 -693 -740 -760 -458 -454 -478 -499

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))

0.36 0.29 0.58 1.37 1.92 2.72 3.74 1948 -18.9 1.201 0.9

0.37 0.26 0.57 1.24 1.75 2.57 3.59 2075 28.7 1.153 -15.1

0.37 0.28 0.49 1.07 1.50 2.23 3.44 2141 13.4 1.161 2.9

0.41 0.30 0.54 1.18 1.64 2.39 3.53 2167 4.9 1.180 6.7

0.54 0.44 0.69 1.43 1.91 2.61 3.73 2203 6.8 1.175 -1.8

0.74 0.69 0.97 1.69 2.16 2.84 3.96 2223 3.8 1.175 0.0

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)

15743 1.4 13810 2.5 12558 2.2 6.1 1551 40.8

15854 2.9 13916 3.1 12594 1.2 5.5 1672 35.2

16039 4.7 14084 4.9 12711 3.8 5.6 1713 10.3

16218 4.5 14237 4.4 12778 2.1 5.5 1761 11.5

16407 4.7 14389 4.3 12858 2.5 5.6 1793 7.7

16595 4.7 14541 4.3 12929 2.2 5.6 1798 1.0

22

2018Q4

Composition of Real GDP, Percent Change, Annual Rate 2.0 1.8 2.0 2.8 2.1 1.9 2.0 1.9 1.8 2.2 1.9 1.9 2.3 2.0 1.9 2.5 2.2 2.3 6.9 6.4 4.5 4.2 3.5 4.7 1.7 1.5 1.5 2.2 2.0 1.9 1.7 1.4 1.7 2.3 2.1 2.1 4.5 3.1 4.2 4.6 5.0 4.0 3.0 1.8 3.7 5.8 7.0 5.4 6.4 7.6 9.0 8.2 7.9 6.3 4.6 6.7 6.8 2.6 4.1 4.3 11.8 10.9 10.5 9.4 9.1 4.4 0.8 1.7 1.7 6.2 8.1 9.4 -0.2 -3.9 2.4 6.0 8.6 3.6 -6.0 -2.7 2.0 2.9 3.8 3.7 8.2 6.6 7.6 16.2 12.6 8.8 8.4 5.4 6.3 3.8 2.5 2.0 7.0 5.3 6.5 4.1 4.7 3.5 -5.8 -4.6 -4.1 -0.1 -3.0 -0.5 -1.8 -4.1 -4.1 -6.5 -3.0 -3.6 59.0 32.7 35.6 21.6 8.0 3.2 3.3 4.5 3.4 2.9 3.3 5.5 10.9 10.1 6.3 4.8 2.6 2.4 2.4 3.1 3.3 3.7 4.0 3.4 6.2 4.2 4.6 5.3 5.5 4.6 0.5 -0.3 -1.2 -1.4 -1.6 -1.9 0.6 0.6 0.7 0.9 0.9 0.8

0.5 -0.3 2.7 -4.8 2.6

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. $)

2018Q3

U.S. Forecast | September 2016

1.9 2.3 2.1 1.9 3.0

2.0 2.3 2.1 1.9 2.9

1.8 2.3 2.1 1.9 2.9

1.9 2.4 2.0 2.4 2.9

1.9 2.3 2.1 2.1 2.9

61.5 1.5 2.4 74.6 48.6 87.9 17.564 1.489 4.824 5.0 0.6 -782 -495

63.3 1.6 1.8 74.3 41.0 87.3 17.484 1.491 4.831 5.1 0.5 -810 -493

65.4 2.1 2.2 74.2 37.1 87.3 17.4 1.5 4.9 5.1 0.7 -853 -501

67.4 1.8 2.4 74.1 34.7 86.8 17.4 1.5 4.9 5.1 0.6 -860 -515

69.4 1.9 2.7 74.1 35.0 86.8 17.3 1.5 4.8 5.2 0.7 -849 -537

71.3 1.6 2.3 73.9 37.4 86.6 17.3 1.6 4.8 5.2 0.7 -849 -565

Financial Markets, NSA 0.79 1.04 1.29 1.50 0.72 0.90 1.13 1.40 1.01 1.26 1.46 1.81 1.75 1.95 2.09 2.33 2.23 2.37 2.57 2.77 2.90 3.03 3.21 3.37 4.12 4.27 4.53 4.72 2240 2264 2284 2278 3.0 4.4 3.6 -1.0 1.164 1.148 1.140 1.138 -3.6 -5.2 -2.9 -0.8

1.54 1.46 1.85 2.34 2.82 3.39 4.88 2279 0.2 1.129 -2.9

1.79 1.70 2.10 2.53 2.96 3.48 4.94 2296 3.0 1.113 -5.7

2.0 1.9 2.3 2.7 3.1 3.6 5.1 2316 3.6 1.1 -6.3

2.3 2.1 2.6 2.9 3.3 3.8 5.4 2331 2.6 1.1 -3.7

2.5 2.4 2.8 3.2 3.6 4.1 5.6 2353 3.9 1.1 -2.4

2.8 2.6 3.0 3.3 3.7 4.1 5.7 2380 4.7 1.1 -1.8

Incomes 16962 17195 4.6 5.6 14851 15058 4.5 5.7 13091 13213 2.7 3.8 5.9 6.3 1818 1832 3.3 3.0

17576 4.4 15387 4.4 13378 2.4 6.4 1866 5.5

17771 4.5 15560 4.6 13464 2.6 6.5 1884 3.8

18000 5.3 15766 5.4 13580 3.5 6.6 1885 0.3

18204 4.6 15942 4.5 13669 2.6 6.7 1890 1.1

18409 4.6 16115 4.4 13753 2.5 6.7 1889 -0.2

18619 4.6 16293 4.5 13842 2.6 6.7 1877 -2.6

16773 4.4 14688 4.1 13003 2.3 5.7 1803 1.2

17390 4.6 15224 4.5 13298 2.6 6.3 1842 2.2

U . S . F orecast T ables Table 4. Quarterly Gross Domestic Product 2016Q1

Table 4. Quarterly Gross Domestic Product 2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

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

16525.0 16575.1 16688.4 16788.5 16893.7 16978.9 17056.3 17139.2 17257.7 17347.1 17426.9 17501.8 17600.9 17695.8 17797.9 17888.3 16473.5 16571.3 16688.7 16780.1 16869.7 16953.7 17034.7 17111.8 17203.2 17285.1 17366.7 17448.8 17551.7 17648.9 17750.5 17838.6 11365.2 11482.8 11575.5 11647.2 11707.5 11773.0 11830.4 11887.0 11959.7 12025.6 12095.3 12167.9 12254.4 12331.0 12407.3 12482.9

Durables

1524.9 1555.8 1589.5 1610.9 1627.6 1655.1 1680.9 1699.3 1716.7 1731.4 1751.4 1773.9 1796.8 1819.9 1841.7 1863.3

Nondurables

2471.1 2507.3 2533.3 2550.5 2563.8 2574.8 2584.3 2593.8 2608.0 2620.8 2632.9 2645.6 2662.9 2678.3 2694.1 2709.3

Services

7403.9 7458.8 7497.5 7533.8 7566.4 7598.2 7624.9 7656.5 7699.9 7740.0 7780.7 7821.8 7871.7 7913.9 7956.6 7999.2

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

2179.7 2167.3 2197.3 2219.0 2242.5 2267.1 2284.5 2308.0 2334.4 2363.0 2386.2 2406.1 2428.3 2452.5 2476.2 2499.2 1052.0 1042.6 1062.7 1068.8 1076.6 1084.5 1089.4 1099.4 1115.1 1134.0 1149.1 1161.5 1174.1 1188.5 1202.3 1216.3 345.5

340.3

345.7

349.9

353.4

358.9

365.6

373.5

380.9

388.2

394.2

399.4

405.3

410.8

415.8

420.9

86.9

89.3

88.4

89.0

90.0

91.0

92.5

94.1

94.7

95.6

96.6

97.1

98.1

98.8

99.2

99.7

123.4

112.6

115.9

118.4

120.6

124.0

127.3

130.5

133.5

136.4

137.9

139.3

140.6

142.1

143.6

145.0

Industrial Equipment

209.4

215.4

218.4

218.5

218.9

219.4

220.3

221.2

224.6

229.0

234.2

240.1

246.1

252.3

257.8

263.1

Transportation Equipment

301.3

294.9

305.2

305.9

307.4

307.2

304.2

306.0

310.4

316.9

319.7

320.1

319.8

321.3

322.7

324.5

32.2

36.2

38.2

42.2

43.8

43.1

42.8

43.0

43.3

43.7

44.1

44.5

45.1

45.8

46.5

47.0

63.3

57.3

57.6

58.4

59.5

60.7

61.7

62.8

65.2

67.2

68.6

69.7

70.2

70.6

71.2

71.7

435.2

426.3

429.5

437.4

445.7

454.7

460.7

467.8

472.2

475.2

477.5

479.3

482.9

485.9

488.8

490.9

144.1

145.0

146.7

150.0

152.3

154.9

156.9

159.4

161.1

162.9

164.3

166.2

167.7

169.0

170.0

171.4

Manufacturing

66.3

64.8

63.0

62.1

61.1

60.1

59.4

58.8

58.8

58.4

58.3

58.2

58.6

58.4

58.4

58.1

Power & Communication

89.1

89.5

89.1

89.4

89.5

89.1

88.2

87.3

85.9

85.2

84.4

84.2

83.3

82.5

82.2

82.1

Mining & Petroleum

60.1

48.4

51.7

56.4

63.0

70.7

75.9

81.9

86.0

87.7

88.4

88.0

90.3

92.7

94.2

94.9

Other

77.8

79.8

80.5

81.5

82.3

82.9

83.9

84.6

85.2

85.9

87.0

87.6

88.2

88.7

89.5

89.9

600.7

591.3

595.3

604.5

619.7

636.0

651.5

661.6

669.3

673.6

677.6

676.6

675.3

677.4

682.8

684.7

Computers & Peripherals Communications Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment Exports

2102.0 2109.2 2110.9 2123.8 2134.9 2147.7 2164.1 2181.7 2201.7 2223.1 2241.8 2261.5 2283.0 2304.1 2328.6 2351.0

Imports

2668.2 2665.5 2694.3 2729.3 2757.7 2799.8 2829.1 2860.8 2897.7 2936.5 2970.1 2996.2 3022.8 3052.3 3082.0 3114.1

Federal Government

1118.7 1118.1 1125.6 1130.8 1133.1 1134.5 1133.7 1130.3 1126.2 1121.6 1116.3 1109.5 1107.4 1105.3 1103.6 1101.1

State & Local Government

1792.6 1786.8 1796.6 1800.7 1804.9 1807.4 1810.0 1813.2 1817.4 1821.4 1825.1 1829.3 1832.9 1837.8 1840.8 1840.7

Institute for Economic Competitiveness

23

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

Table 5. Annual Employment 2009

2010

2011

History 2012

2013

2014

2015

2016

Forecast 2017 2018

2019

Millions Total Nonfarm Employment

131.300 130.353 131.941 134.173 136.381 138.939

141.83

144.46

146.39

147.68

148.80

Private Nonfarm

108.747 107.863 109.848 112.254 114.533 117.062

119.83

144.28 145.894

146.80

147.73

122.15 123.714

124.52

125.34

Mining

0.643

0.655

0.739

0.797

0.811

0.838

0.77

Construction

6.017

5.518

5.530

5.646

5.858

6.150

6.44

0.65

0.649

0.69

0.70

Manufacturing

11.848

11.529

11.727

11.927

12.019

12.184

12.32

6.67

6.898

7.14

7.29

Trade, Transportation and Utilities

24.905

24.641

25.071

25.472

25.856

26.376

26.91

12.30

12.324

12.31

12.41

Transportation & Warehousing

4.237

4.192

4.305

4.415

4.496

4.657

4.84

27.32

27.407

27.26

27.23

Financial Activities

7.838

7.695

7.696

7.783

7.886

7.976

8.12

4.89

4.948

5.01

5.03

Education & Health

19.628

19.972

20.322

20.768

21.084

21.436

22.05

8.28

8.309

8.27

8.24

Professional & Business Services

16.574

16.723

17.329

17.933

18.520

19.064

19.66

22.69

23.051

23.17

23.39

2.804

2.707

2.673

2.675

2.706

2.727

2.75

20.21

20.879

21.44

21.76

Leisure & Hospitality

13.074

13.042

13.352

13.772

14.258

14.694

15.12

2.78

2.721

2.79

2.78

Government

22.553

22.490

22.093

21.918

21.849

21.877

22.00

15.53

15.784

15.83

15.92

2.831

2.976

2.860

2.822

2.770

2.733

2.75

22.12

22.180

22.28

22.40

19.722

19.513

19.233

19.097

19.079

19.145

19.25

2.78

2.782

2.75

2.70

19.34

19.398

19.53

19.69

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-4.33

-0.71

1.22

1.69

1.65

1.87

2.08

1.72

1.12

0.62

0.64

Private Nonfarm

-5.22

-0.80

1.84

2.19

2.03

2.21

2.37

1.94

1.28

0.65

0.66

Mining

-14.61

11.68

13.57

2.22

3.02

3.84

-14.73

-12.80

7.36

3.14

2.42

Construction

-16.57

-3.35

1.93

1.74

4.30

5.47

4.49

3.01

3.80

3.08

1.74

Manufacturing

-11.38

0.65

1.76

1.46

0.96

1.65

0.37

-0.32

0.50

0.03

0.93

Trade, Transportation and Utilities

-4.83

0.76

1.97

1.46

1.85

2.01

1.77

1.24

-0.17

-0.43

-0.08

Transportation & Warehousing

-6.16

2.14

2.33

2.63

1.95

4.66

2.58

0.43

1.52

1.04

0.39

Financial Activities

-4.32

-0.90

0.47

1.28

1.22

1.49

1.86

1.85

-0.43

-0.46

-0.37

Education & Health

1.90

1.71

1.91

1.97

1.38

2.10

3.21

2.56

0.90

0.63

0.95

Professional & Business Services

-5.15

2.96

3.56

3.30

3.23

3.13

3.28

2.53

3.21

2.12

1.82

Information

-6.02

-2.35

-0.41

-0.15

1.95

0.26

1.14

0.60

-3.19

4.32

-0.95

Leisure & Hospitality

-2.46

1.26

2.80

3.13

3.63

2.96

3.00

2.26

1.30

0.06

0.80

Government

-0.18

-0.94

-1.38

-0.41

-0.25

0.48

0.44

0.58

0.21

0.52

0.52

2.46

4.80

-0.85

-1.05

-2.52

-0.02

0.67

1.09

-0.58

-1.58

-1.44

-0.53

-1.31

-1.46

-0.31

0.09

0.56

0.40

0.51

0.32

0.82

0.79

Federal State & Local

24

U.S. Forecast | September 2016

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

Table 6. Quarterly Employment

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4

Employment (Millions) Total Nonfarm Employment

143.5 144.0 144.5 145.0 145.5 145.8 146.0 146.2 146.4 146.7 146.9 147.1 147.4 147.6 147.9 148.1

Private Nonfarm

121.5 121.9 122.4 122.9 123.4 123.6 123.8 124.0 124.2 124.4 124.6 124.8 125.0 125.2 125.4 125.7

Mining

0.7

0.6

0.6

0.6

0.6

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.70

0.70

0.71

0.71

Construction

6.6

6.6

6.7

6.7

6.8

6.9

6.9

7.0

7.1

7.1

7.2

7.2

7.24

7.27

7.31

7.34

Manufacturing

12.3

12.3

12.3

12.3

12.3

12.3

12.4

12.3

12.3

12.3

12.3

12.3 12.37 12.40 12.42 12.45

Trade, Transportation and Utilities

27.2

27.3

27.3

27.4

27.4

27.4

27.4

27.4

27.3

27.3

27.2

27.2 27.24 27.23 27.23 27.22

Transportation & Warehousing

4.9

4.9

4.9

4.9

4.9

4.9

5.0

5.0

5.0

5.0

5.0

5.0

5.02

5.03

5.03

5.04

Financial Activities

8.2

8.3

8.3

8.3

8.3

8.3

8.3

8.3

8.3

8.3

8.3

8.3

8.26

8.25

8.24

8.23

Education & Health

22.5

22.6

22.8

22.9

23.0

23.0

23.1

23.1

23.1

23.1

23.2

23.2 23.33 23.36 23.40 23.46

Professional & Business Services

20.0

20.1

20.3

20.4

20.7

20.8

20.9

21.1

21.3

21.4

21.5

21.5 21.60 21.70 21.82 21.92

2.8

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.8

2.8

Leisure & Hospitality

15.4

15.5

15.6

15.6

15.7

15.8

15.8

15.9

15.8

15.8

15.8

15.9 15.86 15.89 15.94 15.99

Government

22.1

22.1

22.2

22.2

22.2

22.2

22.2

22.2

22.2

22.3

22.3

22.3 22.35 22.39 22.41 22.44

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.7

19.3

19.3

19.4

19.4

19.4

19.4

19.4

19.4

19.5

19.5

19.6

19.6 19.63 19.68 19.71 19.75

Information

Federal State & Local

2.8

2.7

2.79

2.72

2.78

2.71

2.78

2.70

2.77

2.69

Growth Rates Total Nonfarm Employment

1.85

1.28

1.55

1.34

1.33

0.84

0.50

0.65

0.57

0.71

0.57

0.55

0.67

0.62

0.73

0.72

Private Nonfarm

2.07

1.38

1.67

1.57

1.57

0.95

0.56

0.68

0.57

0.74

0.59

0.55

0.69

0.62

0.78

0.76

-22.29 -20.65 -12.25

0.09

1.73

6.44

9.49 10.83

3.37

3.37

3.08

2.61

1.91

1.76

2.80

3.10

Mining Construction

5.66

0.60

1.67

3.92

3.65

4.02

3.49

3.81

3.66

3.36

3.04

2.09

1.78

1.78

1.96

1.40

Manufacturing

0.09

-0.84

0.27

-0.80

-0.18

1.68

1.55

-1.10

-1.25

-0.37

0.66

1.09

1.09

0.77

0.84

1.02

Trade, Transportation and Utilities

2.31

1.08

0.63

0.93

0.34

0.03

-0.37

-0.70

-1.19

-0.30

-0.16

-0.06

0.00

-0.11

-0.08

-0.14

-0.31

1.37

0.31

0.36

2.24

1.67

1.13

1.04

0.91

2.07

0.69

0.51

0.29

0.37

0.45

0.44

Financial Activities

1.89

2.39

1.84

1.29

-0.09

-0.83

-0.46

-0.34

-0.82

-0.48

-0.21

-0.32

-0.05

-0.29

-0.61

-0.51

Education & Health

2.71

2.76

2.39

2.39

1.69

1.06

0.36

0.49

0.49

0.29

0.66

1.07

1.45

0.54

0.68

1.12

Professional & Business Services

1.77

2.59

2.67

3.08

4.97

2.93

1.91

3.02

3.90

2.93

1.33

0.35

1.41

1.88

2.19

1.82

Information

1.55

-0.62

2.34

-0.89

3.49

3.04 10.24

7.25

-0.25

0.02

-0.67

-1.06

-1.18

-0.90

Leisure & Hospitality

2.73

1.53

3.13

1.63

1.29

1.64

1.56

0.70

-0.98

0.00

0.40

0.84

-0.10

0.81

1.33

1.16

Government

0.64

0.75

0.90

0.04

0.02

0.21

0.16

0.46

0.56

0.53

0.49

0.50

0.55

0.62

0.44

0.47

Federal

1.02

1.94

1.00

0.41

-0.38

-0.21

-0.61

-1.14

-1.70

-1.61

-1.45

-1.55

-1.38

-1.48

-1.46

-1.42

State & Local

0.58

0.57

0.89

-0.01

0.07

0.27

0.27

0.69

0.88

0.84

0.76

0.79

0.82

0.92

0.71

0.73

Transportation & Warehousing

-9.17 -10.13

Institute for Economic Competitiveness

25

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

Table 7. Quarterly Implicit Price Deflators (2005=100)

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4

GDP

110.6 111.2 111.8 112.5 113.1 113.7 114.2 114.8 115.4 115.9 116.5 117.1 117.6 118.2 118.7 119.3

Consumption

110.0 110.5 110.8 111.4 111.9 112.5 113.0 113.4 114.0 114.5 115.0 115.6 116.1 116.6 117.2 117.7

Durables Motor Vehicles Furniture

89.6

89.1

88.5

88.2

87.8

87.3

86.9

86.5

86.1

85.8

85.4

85.1

84.7

84.4

84.0

83.7

110.6 110.1 110.1 110.6 110.9 110.7 110.8 110.9 111.1 111.3 111.5 111.8 112.0 112.1 112.2 112.3 85.7

85.2

84.5

84.3

84.1

83.8

83.5

83.2

82.8

82.5

82.1

81.8

81.4

81.1

80.8

80.5

Other Durables

100.6 101.7 102.6 102.6 102.5 102.5 102.5 102.5 102.6 102.7 102.7 102.8 102.9 102.9 103.0 103.0

Nondurables

106.9 107.6 107.3 108.4 108.8 109.6 110.0 110.4 111.0 111.5 112.0 112.6 113.1 113.7 114.3 114.9

Food

110.7 110.2 109.7 109.9 110.4 110.9 111.4 112.0 112.6 113.2 113.8 114.4 115.0 115.5 116.1 116.6

Clothing & Shoes

104.5 104.3 104.3 104.2 104.1 104.0 103.8 103.7 103.6 103.5 103.3 103.1 102.9 102.7 102.5 102.4

Gasoline & Oil

87.5

93.5

91.5 100.9 101.2 105.4 106.8 107.5 109.6 111.3 113.1 115.2 117.3 119.5 121.6 123.8

Fuel

82.4

87.7

86.3

89.6

92.8

96.1

97.8

98.9 100.8 102.4 104.1 106.0 107.9 109.8 111.7 113.6

Services

114.7 115.4 116.0 116.7 117.4 118.1 118.8 119.5 120.2 121.0 121.7 122.4 123.1 123.8 124.6 125.3

Housing

114.3 115.4 116.5 117.3 118.1 118.9 119.6 120.4 121.1 121.8 122.6 123.3 124.1 124.8 125.6 126.3

Electricity

106.9 106.5 106.3 106.8 107.6 109.1 110.4 111.2 111.8 112.3 112.9 113.5 114.0 114.3 114.8 115.5

Natural Gas Water & Sewer Telephone

79.6

80.8

81.1

81.4

89.6

89.3

87.5

86.8

87.6

86.4

84.8

83.5

83.0

82.6

83.9

83.8

136.7 138.5 139.8 140.9 141.9 143.0 144.2 145.5 146.8 148.1 149.5 150.9 152.3 153.8 155.2 156.7 94.6

94.2

93.6

93.6

93.3

93.3

93.2

93.1

93.2

93.2

93.1

93.1

93.1

93.1

93.1

93.1

Transportation

111.1 111.4 111.7 112.4 113.1 113.6 114.2 114.8 115.4 116.1 116.7 117.3 118.0 118.6 119.2 119.8

Other Services

117.8 118.3 118.8 119.4 120.0 120.6 121.3 122.1 122.9 123.8 124.6 125.4 126.3 127.1 127.9 128.7

26

U.S. Forecast | September 2016

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

Table 8. Percent Change in Implicit Price Deflators

2016Q1 2016Q2

2016Q3

2016Q4

2017Q1 2017Q2

2017Q3

2017Q4

2018Q1 2018Q2

2018Q3

2018Q4

2019Q1 2019Q2

2019Q3

2019Q4

GDP

0.5

2.2

2.1

2.5

2.0

2.0

2.0

2.0

2.1

2.0

2.0

1.9

2.0

1.8

1.9

1.9

Consumption

0.3

1.9

1.1

2.3

1.8

2.0

1.7

1.7

1.8

1.9

1.9

1.9

1.9

1.8

1.9

1.9

-0.9

-2.3

-2.8

-1.4

-1.7

-2.1

-1.9

-1.9

-1.7

-1.6

-1.6

-1.5

-1.6

-1.6

-1.7

-1.7

0.3

-1.8

-0.2

2.0

0.7

-0.4

0.3

0.3

0.7

0.8

0.8

0.9

0.6

0.5

0.3

0.3

-1.0

-2.4

-3.1

-0.7

-1.0

-1.2

-1.5

-1.6

-1.8

-1.7

-1.7

-1.7

-1.6

-1.5

-1.5

-1.4

7.8

4.6

3.4

0.1

-0.2

0.1

-0.2

0.0

0.4

0.3

0.1

0.3

0.3

0.1

0.2

0.3

Nondurables

-5.6

2.5

-0.9

4.2

1.3

2.9

1.6

1.4

2.1

1.9

1.9

2.1

2.0

2.0

2.0

2.1

Food

-1.7

-1.8

-1.8

0.8

1.6

1.9

1.8

2.1

2.3

2.2

2.3

2.1

1.9

1.9

1.9

1.8

3.1

-0.7

0.0

-0.5

0.0

-0.6

-0.7

-0.6

-0.2

-0.5

-0.8

-0.6

-0.8

-0.7

-0.7

-0.5

Durables Motor Vehicles Furniture Other Durables

Clothing & Shoes Gasoline & Oil

-46.1 30.2

-8.5 47.9

1.2 17.7

5.7

2.7

8.0

6.2

6.8

7.6

7.5

7.5

7.3

7.5

Fuel

-39.0 28.2

-6.6 16.2 15.5 15.0

7.1

4.5

8.0

6.4

6.8

7.4

7.3

7.3

7.1

7.2

Services

2.4

2.5

2.4

2.3

2.5

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.3

2.4

2.3

Housing

3.0

3.6

3.9

2.9

2.8

2.7

2.6

2.5

2.4

2.4

2.4

2.5

2.4

2.4

2.5

2.5

Electricity

-3.4

-1.7

-0.8

2.0

3.3

5.4

5.0

3.1

1.9

1.9

2.3

2.1

1.5

1.2

1.9

2.5

Natural Gas

-8.0

6.1

1.4

1.3 46.9

-1.3

-7.9

-2.8

3.3

-5.0

-7.5

-6.0

-2.2

-2.1

6.4

-0.5

3.2

5.5

4.0

3.1

3.0

3.1

3.3

3.6

3.6

3.8

3.8

3.8

3.9

3.9

3.8

3.8

-1.4

-2.0

-2.4

-0.1

-1.0

-0.4

-0.4

0.0

0.1

-0.1

-0.1

0.0

0.0

0.1

-0.1

-0.1

Transportation

3.4

1.3

1.0

2.4

2.4

2.0

2.0

2.2

2.2

2.2

2.2

2.2

2.1

2.1

2.1

2.0

Other Services

1.9

2.0

1.6

2.1

1.9

2.2

2.4

2.6

2.7

2.8

2.7

2.7

2.6

2.6

2.6

2.6

Water & Sewer Telephone

Institute for Economic Competitiveness

27

U . S . F orecast T ables

Table 9. Annual Implicit Price Deflators (2000=100) Table 9. Annual Implicit Price Deflators (2005=100) History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

GDP

100.0 101.2 103.3 105.2 106.9 108.8 110.0

111.6 113.9 116.2 118.4

Consumption

100.0 101.7 104.1 106.1 107.5 109.2 109.5

110.7 112.7 114.8 116.9

Durables

100.0

Motor Vehicles

100.0 105.7 108.9 110.2 110.8 110.8 110.8

Furniture

100.0

88.9

86.8

Other Durables

100.0 100.4 103.6 104.2 104.0 102.3

99.8

101.9 102.5 102.7 102.9

Nondurables

100.0 103.1 109.2 111.8 111.9 112.6 108.9

107.6 109.7 111.7 114.0

Food

100.0 100.3 104.3 106.7 107.8 109.8 111.0

110.1 111.1 113.5 115.8

Clothing & Shoes

100.0

99.3 101.1 104.6 105.4 105.8 104.4

104.3 103.9 103.4 102.6

Gasoline & Oil

100.0 118.2 149.3 154.7 149.7 144.0 106.2

93.3 105.2 112.3 120.5

Fuel

100.0 117.0 148.8 150.7 148.9 148.3 105.5

86.5

Services

100.0 101.7 103.5 105.8 108.3 110.9 113.1

115.7 118.5 121.3 124.2

Housing

100.0 100.1 101.4 103.5 106.0 108.8 112.1

115.9 119.3 122.2 125.2

Electricity

100.0 100.2 101.8 101.8 104.0 107.8 108.4

106.6 109.6 112.6 114.7

Natural Gas

100.1

Water & Sewer

100.0 106.3 111.8 118.0 123.3 127.9 133.6

Telephone

100.0

Transportation

100.0 102.0 104.8 106.8 108.3 109.6 110.1

111.7 113.9 116.4 118.9

Other Services

100.0 103.0 105.6 108.3 111.2 113.9 116.3

118.6 121.0 124.2 127.5

28

U.S. Forecast | September 2016

98.6 95.8

98.1 99.3

97.7 94.2

95.1 97.5

96.4 94.0

85.7 97.7

94.6 92.1

90.1 97.1

92.4

96.4 96.3

90.5

85.0 94.1

88.8

87.1

85.6

84.2

110.4 110.8 111.4 112.1 84.9

80.7

83.7

82.3

81.0

96.4 103.3 110.7

88.3

85.6

83.3

139.0 143.7 148.8 154.5 94.0

93.2

93.1

93.1

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

Table 10. Percent Change in Implicit Price Deflators History

Forecast

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

GDP

0.4

1.8

1.9

1.9

1.6

1.5

1.1

1.8

2.0

2.0

1.9

Consumption

1.2

1.3

2.7

1.8

1.2

1.2

0.4

1.4

1.8

1.9

1.9

-0.9

-2.1

-0.5

-1.6

-2.1

-2.4

-1.8

-1.8

-1.9

-1.6

-1.6

Durables Motor Vehicles

5.6

2.9

3.3

0.7

0.4

-0.3

-0.1

0.1

0.2

0.8

0.4

-2.0

-4.4

-0.2

-0.4

-3.0

-3.1

-2.3

-1.8

-1.3

-1.7

-1.5

Other Durables

1.3

0.6

3.2

-0.5

-0.6

-1.9

-2.7

4.0

-0.1

0.3

0.3

Nondurables

2.8

2.2

5.9

1.9

-0.5

-0.2

-2.9

0.1

1.8

2.0

2.1

-1.8

1.3

5.1

1.2

0.7

2.7

0.3

-1.1

1.8

2.2

1.9

Furniture

Food Clothing & Shoes

1.5

-1.4

4.4

2.3

0.1

-0.3

-1.4

0.5

-0.5

-0.5

-0.7

Gasoline & Oil

26.8

13.4

20.4

4.9

-4.5

-10.5

-16.1

5.9

6.8

7.1

7.4

Fuel

-0.8

15.7

26.2

3.1

-1.2

-7.8

-29.2

-0.3

10.5

7.2

7.2

Services

1.1

1.5

2.1

2.3

2.3

2.3

2.0

2.4

2.4

2.4

2.4

Housing

0.9

0.3

1.9

2.2

2.4

2.8

3.3

3.4

2.6

2.4

2.4

Electricity

-0.4

0.5

2.4

-0.6

3.2

3.1

-0.6

-1.0

4.2

2.1

1.8

-18.3

-1.2

-1.6

-4.1

2.4

6.4

-12.4

0.2

8.7

-3.8

0.4

Water & Sewer

6.0

5.7

4.9

6.0

3.8

4.3

4.1

3.9

3.2

3.7

3.8

Telephone

0.6

-1.1

-1.5

0.1

-0.5

-2.2

0.2

-1.5

-0.5

0.0

0.0

Transportation

2.2

1.5

3.1

1.3

1.7

1.0

0.1

2.0

2.2

2.2

2.1

Other Services

2.4

2.7

2.8

2.2

2.9

2.3

2.0

1.9

2.3

2.7

2.6

Natural Gas

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Personal Income Billions Current Dollars Personal Income

12094.8 12477.1 13254.5 13915.1 14073.7 14809.8 15458.5

15963.6 16684.4 17483.0 18308.1

Wages & Salaries

7787.0

7961.5

8269.0

8609.9

8842.5

9253.5

9693.1

Other Labor Income

1077.5

1114.6

1142.0

1165.3

1199.0

1229.8

1270.5

1325.4

1375.7

1417.6

1468.9 1569.2

Nonfarm Income

10032.9 10508.3 10976.1 11446.4

937.6

986.7

1068.1

1179.8

1197.0

1269.2

1336.8

1389.6

1461.6

1520.5

Farm Income

35.5

46.0

75.6

61.6

87.8

68.5

40.0

33.5

33.8

34.3

32.9

Rental Income

333.7

402.8

485.3

525.3

567.1

606.1

659.6

705.6

730.7

745.2

751.8

Dividends

553.8

544.6

682.3

835.0

794.5

926.1

951.1

953.5

985.6

1020.8

1045.7

Interest Income

1264.3

1195.1

1231.6

1288.8

1261.6

1300.9

1302.8

1305.0

1349.5

1469.5

1635.2

Transfer Payments

2147.5

2324.7

2360.5

2366.4

2428.0

2540.4

2678.7

2785.5

2918.0

3081.2

3250.2

506.3

514.7

423.9

437.2

577.8

607.6

635.7

659.5

691.7

724.4

755.5

Personal Social Insurance Tax

Percent Change, Annual Rate Personal Income

-3.2

3.2

6.2

5.0

1.2

5.2

4.4

3.3

4.5

4.8

4.7

Wages & Salaries

-3.6

2.2

3.9

4.1

2.7

4.6

4.7

3.5

4.7

4.5

4.3

Other Labor Income

0.2

3.4

2.5

2.0

2.9

2.6

3.3

4.3

3.8

3.0

3.6

-4.2

5.3

8.2

10.5

1.5

6.0

5.3

4.0

5.2

4.0

3.2

Farm Income

-21.8

30.4

66.2

-18.5

43.2

-21.4

-41.0

-15.9

0.9

1.9

-4.1

Rental Income

18.4

20.1

20.8

4.4

8.9

7.2

8.7

5.9

2.9

1.3

0.8

Nonfarm Income

Dividends

-33.4

23.8

23.5

46.4

-8.2

17.4

-1.9

2.5

3.7

2.9

3.1

Interest Income

-9.2

-1.8

3.3

5.1

-2.7

3.4

-0.2

2.0

4.5

10.8

11.6

Transfer Payments

14.4

7.5

0.4

1.2

2.5

5.8

4.5

4.5

4.7

5.7

5.3

Personal Social Insurance Tax

-1.8

2.4

-13.5

5.2

43.9

5.6

4.7

3.4

5.0

4.6

4.3

Institute for Economic Competitiveness

29

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

Table 12. Personal Consumption Expenditures (Current Dollars)

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

12498.0 12688.1 12825.1 12977.4 13101.8 13241.1 13363.3 13485.0 13629.4 13767.5 13912.1 14061.9 14227.1 14381.5 14537.9 14693.9

durable goods

1366.6 1386.4 1406.4 1420.4 1428.8 1445.2 1460.6 1469.5 1478.1 1484.7 1495.7 1509.0 1522.4 1535.6 1547.4 1559.0

furniture and appliances

312.5

316.8

321.1

323.9

325.8

327.4

328.7

329.9

331.3

333.7

335.9

338.0

339.9

341.9

344.1

346.3

information processing equipment

111.5

114.7

116.1

116.7

116.9

117.4

117.5

118.0

118.5

119.3

120.1

121.0

121.6

122.6

123.5

124.7

motor vehicles and parts

455.7

458.6

468.5

474.1

479.5

493.7

507.8

514.6

518.5

520.4

524.9

531.3

536.0

540.3

543.0

544.5

other durable goods

143.6

147.8

151.6

152.1

151.7

150.4

150.0

150.4

151.5

152.1

152.9

153.7

154.6

155.5

156.4

157.5

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

2642.0 2697.4 2718.8 2765.8 2789.0 2821.1 2842.8 2863.3 2893.7 2921.2 2948.8 2978.2 3012.7 3045.6 3079.1 3112.7 381.7

384.8

384.9

389.6

390.2

391.0

391.1

392.3

394.6

397.4

398.8

400.2

402.7

405.4

407.7

16.9

19.8

19.3

18.8

19.6

20.4

20.8

20.9

21.1

21.4

21.5

21.8

22.0

22.3

22.5

22.8

237.5

251.1

249.6

274.2

275.6

287.7

292.1

294.3

301.2

307.6

314.2

321.8

330.0

338.1

345.5

352.6

967.5

973.5

979.5

985.7

991.2

997.8 1004.8 1012.0

904.3

919.0

928.5

936.0

943.2

950.7

956.3

961.5

1101.7

1122.8

1136.5

1147.3

1160.4

1171.3

1182.6

1194.3

410.2

1209.3 1221.3 1234.7 1248.8 1266.8 1282.0 1298.5 1315.1

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

11365.2 11482.8 11575.5 11647.2 11707.5 11773.0 11830.4 11887.0 11959.7 12025.6 12095.3 12167.9 12254.4 12331.0 12407.3 12482.9

durable goods

1524.9 1555.8 1589.5 1610.9 1627.6 1655.1 1680.9 1699.3 1716.7 1731.4 1751.4 1773.9 1796.8 1819.9 1841.7 1863.3

furniture and appliances

364.7

372.0

380.1

384.1

387.4

390.5

393.4

396.6

400.1

404.7

409.0

413.4

417.3

421.4

425.7

430.0

information processing equipment

179.0

188.3

194.6

199.1

203.3

207.8

212.0

216.9

221.9

227.6

233.6

239.7

245.4

252.1

258.8

266.2

motor vehicles and parts

411.8

416.4

425.5

428.5

432.6

445.8

458.2

464.0

466.8

467.5

470.6

475.3

478.7

481.9

483.9

484.9

other durable goods

143.8

145.9

148.1

148.7

148.5

147.3

147.2

147.8

148.8

149.5

150.5

151.3

152.4

153.4

154.5

155.7

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

2471.1 2507.3 2533.3 2550.5 2563.8 2574.8 2584.3 2593.8 2608.0 2620.8 2632.9 2645.6 2662.9 2678.3 2694.1 2709.3 365.4

369.1

369.2

374.0

374.6

376.0

376.7

378.4

380.8

384.1

386.2

388.1

391.4

394.7

397.7

20.5

22.5

22.3

21.0

21.1

21.2

21.2

21.1

21.0

20.9

20.7

20.5

20.4

20.3

20.2

400.6 20.0

271.3

268.5

272.9

271.8

272.5

273.0

273.5

273.7

274.7

276.4

277.7

279.3

281.3

283.1

284.2

284.8

816.8

833.9

846.4

851.5

854.6

857.4

858.6

858.9

859.4

860.0

860.5

861.3

862.0

863.8

865.8

868.2

1008.3 1023.8 1033.0 1042.2 1050.9 1057.1 1064.3 1071.6 1082.1 1089.6 1098.0 1106.7

1118.3

1127.2

1137.1

1146.8

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

1.6

4.1

3.2

2.5

2.1

2.2

1.9

1.9

2.4

2.2

2.3

2.4

2.8

2.5

2.5

2.4

-0.6

8.1

8.7

5.4

4.2

6.8

6.2

4.4

4.1

3.4

4.6

5.1

5.2

5.1

4.8

4.7

4.8

8.0

8.7

4.2

3.4

3.2

3.0

3.2

3.5

4.6

4.3

4.2

3.8

3.9

4.1

4.0

information processing equipment

17.9

20.8

13.3

9.3

8.3

9.0

8.0

9.3

9.3

10.3

10.6

10.4

9.6

10.8

10.7

11.5

motor vehicles and parts

-8.8

4.4

8.8

2.8

3.9

12.2

11.1

5.1

2.4

0.6

2.6

4.0

2.9

2.7

1.6

0.9

other durable goods

-8.0

5.9

6.1

1.5

-0.6

-3.1

-0.2

1.4

2.8

1.9

2.5

2.3

2.7

2.7

2.8

3.2 2.3

durable goods furniture and appliances

nondurables

2.1

5.9

4.1

2.7

2.1

1.7

1.5

1.5

2.2

2.0

1.9

1.9

2.6

2.3

2.4

clothing & shoes

-0.7

4.0

0.1

5.3

0.7

1.4

0.8

1.8

2.6

3.4

2.2

2.0

3.4

3.4

3.0

3.0

fuel oil & coal

25.5

39.2

-3.5

-24.4

3.0

1.6

-0.1

-1.4

-3.2

-2.3

-3.0

-2.8

-2.7

-2.6

-2.3

-2.4

gasoline & motor oil

4.4

-4.1

6.6

-1.6

0.9

0.9

0.6

0.3

1.5

2.5

1.9

2.2

2.9

2.5

1.6

0.8

food

3.2

8.6

6.1

2.4

1.5

1.3

0.6

0.1

0.2

0.3

0.2

0.4

0.3

0.8

0.9

1.1

other nondurable goods

1.3

6.3

3.6

3.6

3.4

2.4

2.7

2.8

4.0

2.8

3.1

3.2

4.2

3.2

3.6

3.5

30

U.S. Forecast | September 2016

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

Table 13. Personal Consumption Expenditures (2005 Dollars) History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

9847.0 10202.2 10689.3 11050.6 11361.2 11863.4 12283.7

durable goods

1023.3

1070.7

1125.3

1191.9

244.3

250.4

260.7

271.4

281.6

292.1

305.1

318.6

327.9

334.7

343.0

81.2

90.3

91.9

98.6

101.7

104.5

109.2

114.7

117.4

119.7

123.1

motor vehicles and parts

317.1

342.0

363.5

395.8

416.1

442.8

464.8

464.2

498.9

523.8

541.0

other durable goods

105.5

110.0

121.4

127.3

133.1

136.2

141.2

148.8

150.6

152.5

156.0

2175.1

2292.1

2471.1

2547.2

2592.8

2675.7

2656.9

2706.0

2829.1

2935.5

3062.5

306.5

320.6

338.9

354.3

363.6

370.8

379.5

385.3

391.1

397.7

406.5

furniture and appliances information processing equipment

nondurables clothing & shoes fuel oil & coal

1241.7

1294.8

1355.2

12747.1 13297.8 13842.8 14460.1 1395.0

1451.0

1491.9

1541.1

24.3

26.2

29.2

26.4

26.6

27.8

20.7

18.7

20.4

21.5

22.4

gasoline & motor oil

260.2

307.3

380.4

390.5

385.6

371.2

283.0

253.1

287.4

311.2

341.6

food

770.0

788.9

829.1

848.8

857.5

891.4

900.7

921.9

952.9

976.6

1001.4

other nondurable goods

814.2

849.2

893.5

927.3

959.5

1014.6

1073.0

1127.0

1177.2

1228.5

1290.6

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

9847.0 10036.3 10263.5 10413.2 10565.4 10868.9 11214.7

durable goods

1023.3

1085.7

1151.5

1236.2

1312.7

1401.1

1498.1

1570.3

1665.7

1743.4

1830.4

244.3

261.5

276.6

288.7

305.8

328.7

351.6

375.2

392.0

406.8

423.6

81.2

97.2

108.0

125.2

139.4

152.3

167.8

190.2

210.0

230.7

255.6

motor vehicles and parts

317.1

323.4

333.8

359.1

375.7

399.5

419.4

420.5

450.1

470.0

482.4

other durable goods

105.5

108.9

115.1

120.2

126.4

132.9

142.7

146.6

147.7

150.0

154.0

2175.1

2223.5

2263.2

2277.5

2316.1

2376.4

2439.3

2515.5

2579.2

2626.8

2686.2

306.5

322.7

335.3

338.9

344.9

350.6

363.4

369.4

376.4

384.8

396.1

furniture and appliances information processing equipment

nondurables clothing & shoes fuel oil & coal

11517.7 11799.5 12062.1 12368.9

24.3

22.4

19.6

17.5

17.8

18.7

19.6

21.6

21.2

20.8

20.2

gasoline & motor oil

260.2

259.9

254.7

252.5

257.6

257.7

266.6

271.1

273.2

277.0

283.4

food

770.0

786.5

795.1

795.7

795.2

811.7

811.3

837.1

857.4

860.3

864.9

other nondurable goods

814.2

833.0

863.2

880.7

908.2

947.8

989.1

1026.8

1061.0

1094.1

1132.4

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

-0.2

3.1

1.5

1.3

2.0

3.5

2.6

2.9

2.1

2.4

2.6

3.0

9.3

4.9

7.3

5.3

8.7

5.5

5.5

5.5

4.4

5.0

furniture and appliances

-2.0

8.3

5.8

3.1

7.5

7.9

6.6

6.6

3.3

4.2

4.0

information processing equipment

12.9

16.8

13.9

16.7

7.3

11.7

7.6

16.3

8.9

10.5

11.1

motor vehicles and parts

7.9

11.0

1.5

7.4

2.5

9.6

2.0

2.0

8.4

2.4

2.0

other durable goods

0.6

5.5

3.2

8.1

3.6

6.1

7.5

1.5

-0.6

2.4

2.9

nondurables

0.2

3.3

0.4

0.8

2.6

2.8

2.3

3.8

1.7

2.0

2.4

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

-1.0

7.6

1.1

0.9

2.5

3.5

2.2

2.2

1.2

2.6

3.2

7.5

-7.6

-12.6

5.5

14.0

-1.0

7.7

11.9

0.8

-2.8

-2.5

-1.1

2.2

-3.1

-0.9

3.3

1.0

3.0

1.4

0.7

2.0

2.0

2.1

2.1

-0.4

0.6

0.6

1.4

-0.3

5.1

0.9

0.3

0.8

-0.6

3.6

2.8

1.9

4.1

4.6

4.2

3.7

2.8

3.3

3.6

Institute for Economic Competitiveness

31

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

Table 14. Business Fixed Investment History

2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Billions Current Dollars Business Fixed Investment

1633.4 1658.2 1812.1 2007.7 2094.4 2251.0 2311.3

2313.8 2419.2 2547.7 2678.9

Producers Dur. Equipment

644.3

731.8

838.2

937.9

982.8 1040.7 1086.1

Nonresidential Structures

438.2

362.0

381.6

448.0

463.6

530.7

507.3

487.9

529.3

566.2

597.9

Non-Farm Buildings

249.1

173.7

170.2

191.6

203.8

234.4

277.5

300.9

318.6

336.6

355.4

Commercial

95.4

64.7

66.8

75.6

84.2

102.9

115.6

133.1

146.4

157.8

168.1

Industrial

56.3

39.8

39.0

45.8

48.8

57.0

75.9

71.6

69.0

69.4

71.6

Other Buildings

97.4

69.2

64.5

70.2

70.7

74.6

86.0

96.3

103.3

109.4

115.7

104.3

93.3

90.7

112.2

108.9

126.3

114.7

117.8

120.3

119.1

119.3

75.0

86.2

112.3

134.1

139.4

156.3

101.2

56.6

77.5

96.9

108.9

Utilities Mines & Wells

1071.9 1103.1 1161.5 1225.8

Billions 2009 Dollars Business Fixed Investment

1633.5 1673.8 1802.3 1964.2 2032.9 2155.6 2200.2

2190.8 2275.5 2372.4 2464.1

Producers Dur. Equipment

644.3

746.7

847.9

939.2

982.3 1035.7 1072.5

Nonresidential Structures

438.2

366.3

374.7

423.1

428.8

472.9

452.1

432.1

457.2

476.0

487.1

Non-Farm Buildings

249.1

179.3

172.3

188.8

196.0

218.2

253.2

268.5

276.9

285.7

293.9

Commercial

95.4

66.6

67.3

73.9

80.5

95.8

105.5

118.9

127.5

134.6

139.9

Industrial

56.3

40.8

39.1

44.9

46.7

52.8

69.1

64.0

59.9

58.4

58.4

Other Buildings

97.4

71.9

65.9

70.0

68.6

69.3

78.4

85.3

89.2

92.5

95.4

104.3

89.8

82.8

99.1

95.1

108.9

97.4

99.8

99.5

95.9

93.5

75.0

87.8

110.9

123.8

126.0

133.0

91.4

54.1

72.9

87.5

93.0

Utilities Mines & Wells

1056.5 1087.5 1139.9 1195.3

Annual Growth Rate Business Fixed Investment

-14.2

8.6

10.9

6.9

5.8

6.5

1.1

1.8

4.7

5.4

5.2

Producers Dur. Equipment

-11.4

20.2

14.4

8.4

5.8

4.5

4.3

-0.4

2.9

6.2

5.4

Nonresidential Structures

-32.2

-0.6

15.3

7.8

9.5

12.1

-9.6

2.5

9.4

5.7

5.6

Non-Farm Buildings

-34.0

-21.1

14.7

7.3

9.8

20.9

11.7

7.9

5.6

5.7

5.2

Commercial

-44.7

-16.8

14.7

9.9

18.7

20.3

10.9

14.3

9.4

7.1

6.0

Industrial

-11.9

-28.8

37.4

8.1

9.1

37.9

13.0

-6.9

-2.3

2.1

3.1

Other Buildings

-29.7

-19.5

3.6

4.5

1.7

12.0

13.2

12.2

6.0

6.1

5.4

-4.1

19.0

2.4

18.4

17.5

-1.7

10.4

1.0

0.9

-0.5

0.5

-42.8

53.6

36.6

1.9

8.0

18.1

-54.8

-4.3

47.9

14.0

13.1

Utilities Mines & Wells

32

U.S. Forecast | September 2016

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

Table 15. Government Receipts and Expenditures History 2012

Forecast

2009

2010

2011

2013

2014

2015

2238.4

2443.3

2574.1

2699.1

3138.4

3288.4

3453.3

2016

2017

2018

2019

3485.4

3636.8

3775.0

3919.5

Federal Government Receipts and Expenditures Receipts Personal Tax and Nontax Receipts

864.5

941.6

1129.1

1164.7

1302.0

1402.3

1532.7

1540.0

1633.8

1711.9

1787.9

Corp. Profits Tax Accruals

200.4

298.7

299.4

363.1

378.1

436.6

455.2

439.9

407.7

390.9

390.3

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

91.4

96.8

108.6

115.1

124.8

134.6

139.4

136.7

143.6

147.1

151.0

950.8

970.9

904.0

938.2

1091.3

1140.9

1189.6

1227.7

1288.2

1349.0

1407.0

Expenditures

3487.2

3772.0

3818.2

3789.1

3782.3

3901.3

4023.0

4154.3

4319.3

4547.9

4772.2

Purchases Goods & Services

1217.7

1303.9

1303.5

1292.5

1229.5

1218.9

1225.0

1246.5

1279.9

1285.3

1291.1

National Defense

788.3

832.8

837.0

817.8

767.0

746.0

732.0

733.1

747.4

755.8

764.8

Other

429.4

471.1

466.5

474.7

462.5

472.9

493.0

513.4

532.5

529.5

526.3

Transfer Payments

2142.9

2333.2

2327.0

2300.8

2346.2

2448.6

2564.9

2655.3

2788.2

2952.1

3106.9

To Persons

1616.2

1757.9

1779.9

1783.6

1823.5

1882.0

1961.3

2034.9

2140.6

2280.4

2411.9

52.7

53.5

57.6

55.3

53.9

52.4

52.0

52.4

53.9

54.9

55.9

Grants in Aid to State & Local Gov't

To Foreigners

458.1

505.3

472.5

444.0

450.0

494.8

531.2

547.1

571.8

593.8

615.1

Net Interest

330.8

351.0

398.0

401.6

393.4

417.1

411.3

431.6

431.5

479.1

534.8

56.2

57.4

66.7

66.5

69.9

64.5

63.5

70.4

71.8

71.9

72.1

-1248.8

-1328.7

-1244.2

-1090.1

-643.8

-612.9

-569.7

-669.0

-682.4

-773.0

-852.7

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

State and Local Government Receipts and Expenditures Receipts

1919.2

1998.5

2030.5

2057.2

2136.8

2227.8

2331.5

2385.1

2489.9

2603.4

2713.7

Personal Tax/Nontax Receipts

1268.1

1305.7

1368.3

1416.1

1481.4

1518.9

1564.6

1610.0

1681.5

1763.1

1842.1

287.8

297.6

324.1

346.7

375.9

384.6

406.1

412.0

433.3

463.8

491.1

45.6

47.7

50.2

52.5

55.5

58.6

60.3

67.9

72.4

73.9

74.2

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

18.6

18.2

18.2

18.1

18.5

19.1

19.0

19.4

20.3

21.3

22.2

458.1

505.3

472.5

444.0

450.0

494.8

531.2

547.1

571.8

593.8

615.1

2562.95 2640.38 2722.26

2826.8

2191.15 2235.85 2246.40 2277.93 2327.28 2397.55 2492.83 1871.4

1870.2

1865.3

1866.0

1886.6

1933.2

1993.3

2040.4

2106.4

2175.3

Transfer Payments

566.1

612.0

582.2

558.0

571.3

624.5

679.6

684.0

711.8

737.5

762.4

Interest Received

114.3

123.0

125.9

141.4

141.9

123.0

124.5

129.2

125.8

124.1

127.6

22.8

21.4

17.9

10.8

10.3

12.4

11.9

11.3

9.5

7.5

5.5

2.2

2.3

2.7

3.3

3.6

3.8

4.2

4.8

4.9

4.9

5.0

-271.9

-237.3

-215.9

-220.8

-190.5

-169.9

-161.3

-177.9

-150.4

-118.8

-113.2

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

Institute for Economic Competitiveness

2247.3

33

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

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

Forecast

2009

2010

2011

2012

2013

2014

Net Exports Goods & Services

-395.5

-512.7

-580.0

-565.7

-492.0

-508.8

Current Account

-384.0

-442.0

-460.4

-446.5

-366.4

Exports -Goods & Services

1587.7

1852.3

2106.4

2198.2

Merchandise Balance

-509.7

-648.7

-740.6

-741.2

Food, Feed & Beverage

93.91

107.72

126.25

Industrial Supplies Excl Petroleum

293.5

388.6

81.7

112.0

391.5

447.8

2015

2016

2017

2018

2019

-522.0

-493.1

-515.6

-554.5

-590.0

-392.1

-463.0

-456.2

-456.5

-491.2

-529.3

2276.6

2375.3

2264.3

2220.7

2321.1

2434.6

2563.9

-702.2

-752.2

-762.6

-728.4

-758.0

-811.6

-864.5

133.05

136.16

143.72

127.73

132.64

143.70

145.59

150.6

485.3

483.2

492.4

500.4

417.1

390.2

439.4

482.7

525.4

133.0

146.2

152.7

159.8

151.9

149.8

156.4

168.8

181.2

494.2

527.5

534.8

551.7

539.7

512.2

502.4

499.4

498.7

Billions of Dollars

Motor Vehicles & Parts Capital Goods, Excl. MVP Computer Equipment

37.7

43.8

48.5

49.2

48.1

48.8

46.9

47.8

45.5

44.8

44.9

Other

279.0

332.1

365.4

383.9

381.7

389.8

373.4

345.7

335.9

333.0

331.4

Consumer Goods, Excl. MVP

149.3

164.9

174.7

181.0

188.1

198.0

197.3

193.5

197.0

197.4

200.0

Other Consumer Services

55.2

58.6

53.4

55.1

58.6

64.5

64.7

70.7

73.2

75.4

79.7

522.6

572.7

639.5

672.2

713.9

757.2

765.9

771.6

809.0

865.2

928.2

Billions of Dollars Imports -Goods & Services

1983.2

2365.0

2686.4

2763.8

2768.6

2884.1

2786.3

2713.8

2836.8

2989.1

3153.9

Merchandise

1590.3

1949.8

2244.7

2305.8

2301.5

2396.5

2291.1

2206.6

2300.0

2411.4

2531.0

82.9

92.5

108.3

111.1

116.0

126.8

128.8

128.5

122.9

127.4

134.8

Petroleum & Products

267.7

353.6

462.1

434.3

387.8

353.6

197.3

149.5

198.9

222.7

242.8

Industrial Supplies Excl Petroleum

196.6

249.4

292.7

288.8

291.3

316.3

290.4

272.5

272.8

286.0

299.8

Motor Vehicles & Parts

159.2

225.6

255.2

298.5

309.6

329.5

350.1

347.1

351.7

369.3

373.0

Capital Goods, Excl. MVP

374.1

450.4

513.4

551.8

559.0

598.7

606.7

594.3

623.0

647.4

678.2

Food, Feed & Beverage

Computer Equipment

94.2

117.3

119.7

122.3

121.2

122.0

120.3

114.0

114.9

116.4

117.8

Other

249.2

301.9

358.2

389.4

390.8

423.4

431.3

427.7

453.0

475.7

504.7

Consumer Goods, Excl. MVP

429.9

485.1

515.9

518.8

532.9

558.7

596.5

593.8

610.3

625.5

655.8

Other Consumer

80.0

93.1

97.1

102.4

105.0

112.9

121.3

121.0

120.4

133.1

146.6

392.9

415.2

441.6

458.0

467.1

487.6

495.2

507.2

536.8

577.6

622.8

Net Exports Goods & Services

-395.4

-458.8

-459.4

-447.1

-404.9

-425.7

-540.0

-577.9

-654.7

-718.1

-751.2

Exports G & S

1587.7

1776.6

1898.3

1963.2

2031.5

2118.3

2120.6

2111.5

2157.1

2232.0

2316.7

Imports G & S

1983.2

2235.4

2357.7

2410.2

2436.4

2544.0

2660.5

2689.3

2811.9

2950.1

3067.8

Services

Billions 2009 Dollars

Exports & Imports % Change Exports G & S

4.1

15.3

8.7

3.4

5.6

1.9

-6.9

2.3

4.4

5.1

5.5

Imports G & S

0.9

15.0

10.9

0.3

1.2

4.7

-5.9

0.6

5.1

5.6

5.6

Real Exports G & S

3.0

10.1

4.2

2.2

6.0

3.1

-2.1

0.9

2.7

3.7

4.0

Real Imports G & S

-3.6

12.2

3.5

0.3

2.5

6.2

2.6

2.2

4.8

4.7

3.9

34

U.S. Forecast | September 2016

SEAN M. SNAITH, PH.D.

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

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