U.S. Forecast December 2009

U.S. Forecast December 2009

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

Message From Dean Thomas L. Keon T’is the season!

About University of C e n t r a l F lo r i da ( U C F ) The University of Central F lorida is

a public, multi-campus, metropolitan r e s e a r c h u n i v e r s i t y, d e d i c a t e d t o

ser ving its surrounding communities with their diverse and expanding

populations, technological corridors,

and international partners. The mission

of the university is to offer high-quality 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 g l o b a l c o m m u n i t y.

A b o u t t h e C o ll e g e o f B u s i n e s s Adm i n i s t r at i o n The College of Business Administration a d v a n c e s t h e u n i v e r s i t y ’s m i s s i o n

and goals in providing intellectual

leadership through research, teaching, and ser vice. The college is striving

to enhance graduate programs, while

maintaining the strong undergraduate

base. The college delivers research and

quality business education programs at the undergraduate, masters, doctoral,

and executive levels to citizens of the

state of F lorida and to select clientele n a t i o n a l l y a n d i n t e r n a t i o n a l l y.

This is an exciting time of year for many colleges and universities as we await the football bowl schedules to be announced. Which teams will be invited to play in a bowl game? Where will they play?

Which team will be crowned national champs?

While this is an enjoyable period for many schools, it can also be heart-wrenching or depressing for those that are not invited to go “bowling.” Many universities pay coaches a tremendous amount of money and expect good results in return. Losing seasons can shatter the hopes and dreams of students, alumni and donors. As a result, each year several coaches are either fired or choose to retire at the end of the season.

Sometimes you just have to hit rock-bottom before you can turn things around and become competitive again!

The U.S. economy serves as a good example. We are starting to rebound, but our recovery will take time.

Quite some time, according to this forecast. For example, unemployment rates will reach double digits and peak at 10.9 percent in the first quarter of 2010, before gradually falling to 7.9 percent by the end of 2013. You will find other examples of our slow recovery as you read through this publication.

But the good news is that for the first time in a quite awhile, we have hope. It appears we have hit the bottom and are starting to move forward. Like a determined football team that has fallen from grace, we can rise to the top again and come out winners!

Happy holidays and may your favorite football team(s) win this bowl season. I look forward to addressing you again in 2010!

L . Keon omasL. Keon ThThomas Sincerely,

Dean

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

Fo r eca s t fo r t h e N ati o n Forecast 2009 - 2013 December 2009 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2009 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 Barbie Barontini, Editor Elaine Vogt, Administrative Assistant Amanda Silvestri, Researcher Erin Garlow, Researcher Laura Burkstrand, Researcher McGregor Love, Researcher Laura Stockbridge, Researcher Evgenia Volkonitskaya, Researcher Cecilia Chirinos, 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.

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Hi g h li g hts o f th e 4Q 20 09 U. S . FOR ECA ST In this quarter’s U.S. Forecast from the University of Central Florida’s Institute for Economic Competitiveness: • Third quarter real GDP growth was just a lump in the gravy boat recovery.

• The gravy boat recovery will continue through 2010. Real GDP growth will decelerate through the end of 2009 to a below trend rate of 2.0% in 2010.

• The administration’s plans for a jobs summit, after having passed a nearly $800-billion stimulus package, are a sign that the stimulus act was yet another example of a Sky Mall® policy.

• The U.S. economy will have shed 8.5 million payroll jobs before the bleeding stops in the 2nd quarter of 2010.

• Oil prices should remain relatively stable through 2010 as the economic recovery remains muted. Starting in 2011, prices will continue to climb, reaching the low 90s by the end of 2013.

• Housing starts have finally bottomed out. Starts will slowly rise from this historic low, but will remain below one million through 2010.

2013 levels of housing starts will be on par with 2002 levels and are expected to come in at 1.7 million.

• Housing prices will likely continue to fall through the first three quarters of 2010, as it will take time to absorb the excess inventory on the market, as well as the “shadow” inventory that has been sitting on the sidelines.

• U nemployment, a lagging indicator of the business cycle, will reach double digits and peak at 10.9% in the 1st quarter of 2010, before gradually falling to 7.9% by the end of 2013.

• E xpect the half-life of unemployment to be 10 years from its peak in 1st quarter 2010. The slow decay of the unemployment rate will be political plutonium with many incumbents succumbing to radiation sickness.

• Th e dollar, which had been appreciating during the financial crisis as safe haven, will begin to depreciate. Continuance of a reckless fiscal policy ensures that by the end of our forecast horizon, the dollar will fall to record lows against some currencies.

H I GHL I GHTS

• Black Friday retail data is nothing but economic Spanx – it make things look a lot better on the surface, but beneath the sleek-looking sales numbers are consumers with out-of-shape balance sheets and employment atrophy.

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N o m o r e s k y mall® p o licy, plea s e .

Sky Mall®—killing me softly with your wares.

If you have ever flown on a commercial airline, you have most likely perused the Sky Mall® magazine that resides next to the air-sickness bag, found in the pouch on the seat in front of you.

The proximity of these two items may not be a coincidence.

Is there a better way to handle the serious condition of scalp stress without one of these therapeutic beauties? I think not.

I never plan on flipping through this catalogue of the cloud, but I usually burn through the reading material I do bring with me. Once I finish those two magazines, The Economist (cliché, I know) and Rolling Stone (hate the politics, but love the music), I invariably reach for Sky Mall®.

I am not sure if it’s the pressurized cabin, the reduced level of oxygen in the cabin air, or my anxiety about being 30,000 feet above the ground, but something happens to me as I flip through the pages of Sky Mall®—I find myself transfixed by what I see there on those glossy pages. Items I could never have imagined I needed, items that I cannot exist without, and indeed items that I simply must have, are all depicted in abundance in this catalogue.

Sky Mall®, you had me at the set of water-fillable aqua-bells that allow me to maintain my weight training regimen in the privacy of my hotel room on my business trips so that I never miss a workout!

I simply cannot imagine how I would be able to cut a pizza into slices without this:

How in the name of all things holy, would I be able to quickly get wrinkles out of my clothes without one of these?

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U.S. Forecast | December 2009

On most flights by the time I leave the airport, after breathing some non-recycled air and free of the anxiety that flying brings, the Sky Mall® spell is broken.1 It is a sensation that reminds me of what it feels like when you recover from a concussion.

Once, during college basketball practice, I jumped up to get a ball and my legs were swept out from under me. I fell on my back, my head bouncing off of the hardwood floor. I sat out for the rest of the scrimmage, but about ten minutes later in the locker room, I stood puzzled in front of my locker unable to remember the combination for the lock. Teammates asked if I was OK and began to ask me simple questions about people and places in my life, to which I could only laugh. I knew that I should know the answers, but I couldn’t respond. The coaches

1

I should mention that Wi-Fi is becoming more available in-flight, enabling fliers to place orders on the plane. I wonder if my HOA will mind if this two foot tall Sasquatch sculpture ends up in my front yard?

U . S . F o r eca s t

were alerted, and in a rush, came and escorted me to the medical center. During the walk to the medical center, in the brisk night air, I emerged from the fog that the concussion had brought down around me.

I found I had complete recall of everything. That is what it feels like when you come out of the Sky Mall® spell.

Sometimes, however, the spell doesn’t break. In these cases, thankfully infrequent, I place an order.

In case you are wondering if I walk around my neighborhood, sporting one of the Buck Rogersesque head massagers as pictured above, the answer is no. Do I divvy up my pizza with a pair of shears more suitable for harvesting alpaca wool? Again, the answer is no.

Sitting, gathering dust in my garage is a commercial clothes steamer. It was used only twice, both times with disappointing results. At the time I spotted it in Sky Mall®, it seemed the perfect solution. I hate to iron, and taking clothes to the dry cleaner just means that for every bundle of laundry, I have two additional errands I have to fit into my schedule.

What originally seemed like a perfect solution for my wrinkled shirts and suits, the clothes steamer has now become a monument to the money I wasted on it, and to the problem it was allegedly going to solve.

If only this were the first Sky Mall® purchase that had such an ending. Sadly, it is not.

TARP (Troubled Asset Relief Program) at the time looked like the right solution for what was vexing the financial sector. $700 billion dollars would be used to purchase mortgage-backed securities from financial institutions, after the market for these financial instruments dried up in the wake of rising foreclosures. TARP, by creating a market for these leper-like assets, would help boost banks’ capital ratios, and thereby increase lending to help redress the credit crunch that has crippled the economy. However, its implementation wasn’t anything like the original program. Only recently has it returned some focus on these troubled assets with the PPIP (Public Private Investment Program

for Legacy Assets)—albeit in quantities that, so far, are too small to matter.

The toxic assets continue to languish on the balance sheets of financial institutions, weighing down on lending in the economy and generally preventing the flow of credit from gaining strength.

To date, TARP has failed to deliver on its original purpose.

It appears that TARP was pulled from the pages of the Sky Mall® economic policy catalogue. It was a seemingly good idea, that in practice did not deliver results, and stands out as an overpriced failure.

Speaking of overpriced failures…

Now we hear an announcement that the President is convening a “jobs summit” to discuss how to stimulate job growth, as payroll job losses continue to mount and the unemployment rate has reached double digits. Shouldn’t these brainstorming sessions have taken place already? Didn’t we hastily pass a $787 billion stimulus act, the primary goal of which was allegedly to create jobs?

Despite record levels of spending and budget deficits, the stimulus act is looking more and more like it also was taken out of the Sky Mall® catalogue of economic policy.

Unfortunately the list of Sky Mall® policies doesn’t end at these two.

The foreclosure prevention policy has failed to stop the rising tide of foreclosures. Preliminary data is showing that those who have had their mortgages modified end up falling in back into default within a year of modification, at a rate as high as 40%. Most homeowners in the hardest-hit parts of the country were not even eligible to participate, as home prices had fallen by too much for them to qualify.

Now is not the time to push forward with even larger and potentially more damaging policy on healthcare and cap and trade. These policy issues are now surrounded with substantial questions as to the validity of the math and science that are the underpinnings of both.

Institute for Economic Competitiveness

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U . S . F o r eca s t

Healthcare in the country truly needs a fullout overhaul, but one that relies on markets, not government to drive it. One of the greatest failings of our country over the past 30 years was not pursuing a comprehensive energy policy for the development of alternatives to fossil fuels–a policy that reduces our economy’s susceptibility to volatile oil prices, seeks to mitigate environmental impacts, and advances the use of renewable energy.

At the moment, our collective heads are still in the fog on these major issues, and now is not the time to hastily commit to a dramatic and expensive path for policy. Let’s give ourselves a chance to come out of the fog, to emerge fully from this recession.

We do not need another deficit-ballooning Sky Mall® policy; in case you haven’t noticed, our fiscal garage is getting full.

Anxious Index The most recent release (4th quarter 2009) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 40 forecasters (including yours truly) surveyed for this

publication believe that there is slightly less than a 16% chance that a decline in real GDP currently taking place, will take place in the 1st quarter of 2010.

The survey asks 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 the 4th quarter of 2009, the index stands at 15.88%, which means that forecasters believe there is a 15.88% chance that real GDP will decline in the 1st quarter of 2010, down from last quarter’s anxious index of 23.73%. The forecasters also report a 15.35% chance that we are currently (4th quarter of 2009) in a recession, down significantly from the 25.88% assigned to the 3rd quarter of 2009 reported in the last survey. According to the panel, the probability that we will experience a double-dip recession later in 2010 drops off slightly to 13.98% in the 2nd quarter of 2010, and to just 13.36% for the 4th quarter of 2010.

Figure 2.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2009:Q4 100 90 80

Probability (percent)

70 60 50 40 30 20 10

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

0

Survey Date 8

U.S. Forecast | December 2009

U . S . F o r eca s t

The graph plots the historical values of the anxious index, and gray bars indicate periods of recession. The current levels of the anxious index, and its sharp decline from the start of this year, may indicate an end to the recession is at hand.

GDP Outlook The Gravy Boat Recovery Continues 3rd Quarter Real GDP Growth — A Lump in the Gravy Boat

3rd Quarter spending burst decelerates into a sub-par 2010

The U.S. economy is now out of the recession that has plagued it since December 2007. The shape of the recovery is still being debated, V, U, or W-shaped still being proffered by some, but I will stick with my gravy boat description for all the same reasons I laid out when first suggesting the gravy boat descriptor in the 2nd quarter forecast.

The V and the U shapes imply symmetry between the recovery and recession that simply will not materialize in this recovery. A once-in-a lifetime financial crisis and credit freeze fueled the severity of the recession’s plunge. Make no mistake, the plunge in real GDP growth in the 4th quarter of 2008 to -5.4% and to -6.4% in the 1st quarter of 2009 was extreme, but it will not be mirrored in the recovery. Growth will be gradual in the early phases of the recover, and GDP will rise slowly, like the tapered spout of that gravy boat.

The jump in real GDP growth in the 3rd quarter to 3.5% (revised down to 2.8% in the second release—the preliminary release2) will taper off as we enter in the 4th quarter, and will slow further as we move into 2010. The consumer, who we discuss in more detail next, will not be up to the task of fueling a robust recovery. Consumption expenditures represent 70% of GDP, and households are facing double-digit unemployment which will continue to 2

increase, a housing market still in shambles, and rising bankruptcies—all of which weigh down upon the shoulders of the U.S. economy’s version of Atlas.

A large amount of economic stimulus is still in place—both monetary and fiscal. Seventy-five percent of the federal stimulus act has yet to be spent. The Fed is keeping its target for the federal funds interest rate at near-zero, and likely will keep it there until mid-2010. In light of this entire spectrum of stimulus, it is hard to envision a doubledip recession taking place. Nothing is impossible, of course, and nascent recoveries, like all newborns, are vulnerable, but barring some large external shock like a repeat of 2008’s energy price bubble, a W-shaped recovery seems highly unlikely.

How does the gravy boat play itself out from here, and what are the prospects for GDP growth beyond the tip of that spout? As I have alluded to, we expect GDP growth to decelerate in the 4th quarter of 2009, and further decelerate in the 1st quarter of 2010. I expect real GDP growth to be 2.1% in the 4th quarter of 2009 and 1.4% in the 1st quarter of 2010. Growth picks up from that point, and for the rest of 2010, average growth will come in at just under 2.0%.

Once we move beyond the tip of the spout and get into 2011, things begin to accelerate, and the consumer comes back with relative strength. Credit markets will be much further along in the healing process, firms will begin to show confidence, and nonresidential investment will surge in 2011-2012.

The lagged impact of all the stimulus and pent-up demand from the protracted recession will result in real GDP growth in 2011 and 2012, coming in at a robust 3.8% rate of growth in each of those two years. As the stimulus works its way out of the economy, growth will slow in 2013 to 2.8%, but will remain above trend.

The forecast data in the tables was generated prior to the preliminary release of GDP data from the BEA and, thus, do not reflect this revision.

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U . S . F o r eca s t

Consumer Spending The U.S. consumer is in a difficult position. The U.S. recession is over, but, like an F-5 tornado, it ripped through households’ balance sheets, and the recession has left a path of destruction in its wake.

That damage will take consumers several years to fully recover from and to ultimately rebuild the wealth so dramatically torn asunder by the economic and financial chaos of the past two years.

The housing market is still in a difficult situation around the country, and many regions are still seeing prices continue on their downward trajectory. Every tick downward is additional home equity into the ether for longtime residents of their homes. For those that purchased in the last five years or so, the price declines represent yet another increase in the amount by which they are under water in their mortgages. These homeowners are chained to an asset that does not grow in value, and they must pay interest for the privilege of holding these assets.

It is a small wonder that many have walked away from their homes and mortgages, seeing no sense in continuing to shovel money into a black hole.

The stock market has made a recovery from the lows touched earlier in the year, but remains well below the pre-crisis highs. Portfolios and retirement nest eggs have shriveled, leaving consumers much poorer than they were prior to the recession and crisis.

Not surprisingly, this turn of events in the housing and financial markets has had a dramatic impact on consumer spending, which collapsed in the second half of 2008 and stagnated in the first half of 2009. The 3rd quarter of 2009 saw some signs of life as a burst in durables spending, courtesy of the expiring “cash for clunkers” program, lifted consumer spending. But, this is a far cry from the triumphant return of the consumer.

Black Friday sales reports will give a relatively upbeat portrait of the consumer, as sales and traffic will both be up year over year. I view this data with some skepticism and think of it as economic Spanx (or Manx).

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U.S. Forecast | December 2009

Spanx are the form-fitting undergarments that help to smooth out a woman’s (another company makes a male version of the product—but not for tall guys, doggone it) curves, essentially a body girdle for the new millennium. These garments give the appearance, at least on the surface, that it is smooth sailing and everything is A-OK, while underneath that hard working spandex is a beer belly waiting to spill out.

The data from Black Friday will also give a misleading view of the true state of the consumer and consumer spending. Stories of long lines and full shopping carts will permeate the media. Underneath that smooth surface of early reports, there are still fundamental problems facing the consumer.

As the holiday shopping season wears on the smooth silhouette cast by Black Friday, data will fade as the door busters are not enough to overcome double-digit unemployment and the out-of-shape household balance sheets discussed previously.

Expect that as the holiday season wears on, the sales data will paint a much less rosy picture, as spending will drop off.

When things are all said and done, this year’s holiday shopping season may end up being slightly better than last year’s. Given the terrible season last year and the bankruptcies that followed in the wake of it (Circuit City), this is no reason to celebrate and indeed may be reason for further worry.

Investment Nonresidential fixed investment plunged in the deepest, darkest part of this recession, with declines near 20% in the 4th quarter of 2008 and near 40% in the 1st quarter of 2009. This precipitous fall was a function of collapsing confidence, demand for goods and services that was plummeting even further, and the complete disarray of credit markets. “Perfect storm” has become a cliché when describing a convergence of events that have the same causal effects. It applies in this case, as it is hard to imagine what else could have occurred short of an apocalyptic event that could have made the

U . S . F o r eca s t

environment worse for business investment.

As the recovery continues and credit markets climb their way back to normalcy, investment will gradually recover. Once the recovery gains full momentum, there will be a surge of investment spending. Between where business investment is today, and that surge in spending, lays the gravy boat recovery.

The sub-trend growth of the economy in 2010 that we discussed above will not provide the impetus to spark a high level of business investment. The momentum will build over the course of 2010, and with corporate profitability on the rise, firms will have a buildup of retained earnings from which they can fund expansions, acquisitions, and investment in new and replacement of old equipment. Credit markets will also be on the mend in 2010, and this increased availability of funds will also help fuel the buildup in investment spending.

While 2010 will, for the most part, be the runway on which investment spending will taxi and then begin to build up speed for a takeoff in 2011 and 2012, some sectors of investment spending will begin to soar this year. Information technology spending will see double-digit growth over all four quarters of 2010. Replacement cycles are shorter for this type of investment and, after two years of contracting, investment spending in this area will grow by double digits next year. This type of investment can help to expand capacity for businesses, but it is also just as likely to help raise productivity and lower costs. With demand still somewhat weak in 2010, businesses will continue to focus on the cost side of the profit equation, and this cost-cutting mentality will help to fuel IT investment spending.

The other segment of investment that will see growth earlier in the recovery will be transportation equipment. The volatile aircraft sector should see strong growth, as air travel picks up in concert with the economy. Capacity in terms of available passenger seating is tight (Have you seen many (any) empty seats on a recent flight?), and this will necessitate that airlines add to their fleets.

The recovery of the global economy will also add to the capacity crunch and will help fuel this transportation equipment spending.

Overall investment spending will surge and accelerate into 2011 and 2012. Credit markets should be normalized, and firms will be flush with cash in an economy that will grow at nearly 4.0% in both years. We expect that this will fuel overall investment spending growth of nearly 15% in 2011, and just under 14% in 2012, before settling back to 6.7% in 2013.

Investment in structures will continue to contract throughout 2010. Commercial building will see an ongoing and significant contraction over the next five quarters. The average rate of contraction is expected to be nearly -19.0%. Double-digit unemployment that continues to drift upward, weak job growth, and consumers exhibiting restraint in spending, have all curtailed the need for office space and retail space, and the commercial outlook will continue to decline even as the economy recovers.

We do not expect an improvement in commercial building to take place until 2011, when spending on structures will rise nearly 15%. Growth will accelerate in 2012 to 16.5%.

Residential fixed investment growth has been at a near freefall for four years, and the double-digit declines will finally come to an end in 2009. Real residential fixed investment spending will have fallen by 53%, from peak to trough of the housing cycle.

In 2009, the long-lingering misery will finally start to lift. 2010 will finally see some stronger growth return to this sector, as residential fixed investment growth accelerates through the end of the year, with year over year growth of 5.4%. Double-digit growth is expected to remain in place into 2013. After several years of recovery, 2013 levels of residential fixed investment spending will still only be at 78% of the peak levels of 2005.

Government Spending Budget deficits continue to be the policy du jour in Washington, and it looks like they are going to be Institute for Economic Competitiveness

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U . S . F o r eca s t

on the menu for some time. As a result, the national debt will be ballooning between now and 2013. We are forecasting the total increase in the national debt during 2009-2013 to be in excess of $5 trillion. This total includes three straight years of trillion-dollar deficits in 2009-2011.

That would put the total national debt in 2013 at approximately $16.0 trillion. This debt will be over 95% of what we are forecasting GDP to be in 2013, $16.8 trillion. The path of fiscal policy that we are currently following is unsustainable. The combined impact of the $787 billion stimulus package, the overall costs of the bailout of the financial sector, and the recession’s impact on tax receipts have resulted in this massive run-up of the national debt.

Running deficits of this magnitude, and the resultant impact on the outstanding debt of the United States, does not come without consequences.

A variety of issues swirl around the pursuit of this path for fiscal policy. The burden on future generations is not the least of these concerns. Future Americans will have to pay the interest and principal on the massive borrowing we are doing now. This means that more of the federal budget will have to be allocated to service this debt and, thus, a smaller portion of the pie will be available for future generations to fight the recessions and wars of the future, and to pursue domestic policy of funding research, building, and repairing of the nation’s infrastructure. In short, this policy limits the choices available to our heirs as they will be shackled by the decisions we are making today. This is a shameful bequest to say the least.

Another possible consequence, one that we have been spared of to date, is that long-term interest rates could rise in response to this spending, and we could see a return to the crowding out that we felt during the 1980s.

Massive deficits are the fiscal equivalent of an unhealthy lifestyle of no exercise, combined with a poor diet filled with sugar, high cholesterol, and sodium. The effects are not necessarily felt immediately, but build up slowly over time until eventually a calamitous event is triggered. It is too 12

U.S. Forecast | December 2009

late to go back and undo the damage once you get to that point with your body, and so too it will be too late to go back and undo the damage inflicted by reckless fiscal policy if we do not address our fiscally unhealthy behavior before the consequences are fully felt.

If the hundreds of billions of dollars that have flowed into the United States from the rest of the world, most notably China—who is now the largest holder of U.S. treasuries in the world, do not continue to flow into the U.S., we could face a significant increase in long-term interest rates, and the U.S. dollar could face a significant depreciation.

Taxes are definitely going to go up as the Bush administration tax cuts, some of which are set to expire in 2010, go away. There may also be additional explicit new tax increases. The notion that only the “rich” will be taxed to meet this growing need for revenue is a fantasy belied by the simple arithmetic of policies that are either proposed, or are currently in place.

Mounting national debt caused by discretionary policies is particularly disturbing given the massive wave of entitlements that will hit the U.S. government’s debt. Current levels of debt pale in comparison to the fiscal problems awaiting us as the Baby Boomers age. Social Security, Medicare, and Medicaid represent an unfunded liability of the U.S. government that is in the neighborhood of $60 trillion. Opting to run trillion-dollar deficits in the near-term seems imprudent, to say the least, before addressing these particular entitlement programs and the huge obligation they represent.

Net Exports A flight to quality during the worldwide financial crisis resulted in a temporary boost in the value of the dollar. Despite all the saber rattling about the U.S. dollar no longer being the international reserve currency, during the crisis, investors sought to protect their capital by plowing money into U.S. treasuries. This massive shift to safety resulted in a spike in treasury prices and a corresponding

U . S . F o r eca s t

drop in treasury yields. In order to purchase U.S. government treasury bonds, international investors, of course, required U.S. dollars. The surge in the demand for the dollar led to a sharp appreciation.

Both the U.S. dollar and U.S. Treasury bonds have experienced price declines as the height of the crisis has passed.

The improvement in the current account deficit in 2009 was a lagged effect from the strengthening of the dollar in 2008-2009, as well as falling oil prices. The improvement will begin to come undone going forward. The weakening of the dollar and U.S. economic recovery will conspire to drive net exports lower over the next several years. Current account deficit should rise from $602 billion in 2010, to over $687 billion in the year 2012, before improving slightly in 2013.

have the administration convening a jobs summit on December 3rd. This employment pow-wow should have been held in January when the Democratic agenda, wrapped in a stimulus act’s clothing, was formulated and passed in a matter of days.

I’ve been referring to labor markets as the ugly scar that will serve as a reminder of the economic trauma that we’ve endured. Unfortunately, the scar will be extremely slow to fade and will remain on the face of the economy in a manner that would make the fictional Tony Montana proud.

Unemployment The unemployment rate, which currently stands at 10.2%, will continue to drift higher through the 1st quarter of 2010. We anticipate that the unemployment rate will peak at 10.9% in the 1st quarter of next year. As we have discussed earlier in this forecast and in previous forecasts, the nature of this recovery will be far too weak in the early stages to put much of a dent in the unemployment rate.

Consequently, we believe that unemployment will remain in double digits throughout 2010, and into the 2nd quarter of 2011.

As the pace of real GDP growth picks up in 2011 and 2012, so will the rate of decline in the unemployment rate. Unfortunately, because of the severity of the state of labor markets in the wake of this recession, we anticipate that the unemployment rate, by the end of 2013, will only have fallen to 7.9%. This is an unemployment rate that is well above what most would consider the full employment level of unemployment.

The slow decay of unemployment will characterize the economy over the next decade. The half-life of peak unemployment will be 10 years. This slow decay will have political consequences—thus we Institute for Economic Competitiveness

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Automobile and Light Truck Sales December 2009 (Millions Vehicles)

F OR E C A ST f o r t h e na t i o n

Charts

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Auto Sales Light Truck Sales

U . S . F o r eca s t C h a r t s

30-Year Mortgage Rates and Housing Starts 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5

(Mortgage rates - Left axis, %)

2.5 2.0 1.5 1.0 0.5

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 30-Year Fixed Mortgage Rate Housing Starts - Millions

0.0

Automobile and Light Truck Sales 11.0

(Millions Vehicles)

10.0 9.0 8.0 7.0 6.0 5.0 4.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Auto Sales Light Truck Sales

Change in Real Business Inventories 150.0

(Billions of 2000 Dollars)

100.0 50.0 0.0 -50.0 -100.0 -150.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Change in Real Business Inventories Institute for Economic Competitiveness

15

U . S . F o r eca s t C h a r t s

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus (Billions of Dollars)

500.0 0.0 -500.0 -1000.0 -1500.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Federal Budget Surplus

Real GDP Growth and Federal Funds Rate 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0

16

(%)

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Quarterly Growth Rate Real GDP Fed Funds Rate

U.S. Forecast | December 2009

U . S . F o r eca s t C h a r t s

Industrial Production 120.0

(2002=100)

115.0 110.0 105.0 100.0 95.0 90.0 85.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Industrial Production

Private Fixed Nonresidential Investment 2000.0

(Billions of Dollars)

1800.0 1600.0 1400.0 1200.0 1000.0 800.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Private Fixed Nonresidential Investment

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Manufacturing Employment Institute for Economic Competitiveness

17

U . S . F o r eca s t C h a r t s

Money Supply

(Annual Growth Rate %)

40.0 30.0 20.0 10.0 0.0 -10.0

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Annual Growth Rate of M2 Annual Growth Rate of M1

Total Nonfarm Payroll Employment (Millions)

145.0 140.0 135.0 130.0 125.0 120.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Total Nonfarm Employment

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

140.0 120.0

110

100.0

100

80.0

90

60.0

80

40.0

70

20.0

60

0.0

18

120

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Price of Oil WTI Consumer Sentiment

U.S. Forecast | December 2009

50

U . S . F o r eca s t C h a r t s

Real Disposable Income and Consumption 8.0

(% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

0 -100 -200 -300 -400 -500 -600 -700 -800

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.40 1.30 1.20 1.10 1.00 0.90 0.80

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

0.70

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 U.S. Federal Budget Surplus Current Account Institute for Economic Competitiveness

19

U . S . F o r eca s t C h a r t s

Civilian Unemployment Rate 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0

(%)

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

20

(%)

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 1-Year T-Bill Yield 5 Year Treasury Bond Yield 25 year Treasury Bond Yield

U.S. Forecast | December 2009

Table 15. Government Receipts and Expenditures History 2002

2003

2004

1859.3

1885.1

2014.0

2290.1

2524.5

2660.8

2475.0

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1168.1

1102.5

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

370.2

212.3

86.8

89.3

94.3

98.8

99.4

94.7

92.0

739.3

762.8

807.6

852.6

904.6

944.4

974.5

F OR E C A ST f o r t h e na t i o n Receipts

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Expenditures

2005

2006

2007

December 2009

2008

Federal Government Receipts and

2112.1

2261.5

2393.4

2573.1

2728.3

2897.2

3117.6

Purchases Goods & Services

680.7

756.5

824.7

876.3

931.7

976.7

1082.6

National Defense

437.7

498.0

550.8

589.1

624.9

662.1

737.9

Other

243.0

258.6

273.9

287.3

306.9

314.6

344.7

1252.1

1339.4

1405.1

1491.3

1587.1

1688.6

1840.6

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1388.2

23.3

28.6

30.9

40.9

35.0

42.2

44.8

Grants in Aid to State & local Gov't

304.2

338.0

349.2

361.2

359.0

378.9

391.7

Net Interest

213.7

196.5

204.6

239.0

261.0

290.7

272.3

40.3

45.3

45.7

64.1

53.9

50.3

54.3

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-236.5

-642.6

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1927.4

1974.2

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.4

1336.2

Corporate Profits

330.0

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts

221.8

226.2

248.6

276.7

302.5

322.8

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

56.6

51.0

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

19.8

21.1

304.2

338.0

349.2

361.2

359.0

378.9

391.7

Federal Grants-In-Aid

1535.13

1609.33

1704.50

1778.63

1905.63

2014.40

1302.7

1356.1

1408.2

1493.6

1586.7

1699.8

1800.6

Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.0

333.0

353.4

384.3

404.8

402.9

433.7

455.0

Interest Received

12.0

20.6

19.0

10.9

2.1

-2.6

3.9

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

11.0

6.1

1.6

1.7

2.0

2.1

2.3

2.5

2.9

Transfer Payments

Dividends Received Net Wage Accruals Surplus (+) or Deficit (-)

t ab l e s

1466.78

Purchases Goods & Services

Expenditures

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

21.7

-40.2

U . S . F o r eca s t Tab l e s 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.

2002

2003

2004

1.9 0.8 1.9 1.7 2.1 1.9 -6.2 -2.6 0.0 7.4 -17.0 -0.9 -13.5 -28.7 11.4 -15.6 -12.1 -33.7 -14.2 -9.5 -11.4 7.5 4.2 9.7 8.2 2.0

3.8 3.8 3.4 9.2 4.0 2.2 6.0 7.6 14.4 17.4 17.8 -1.5 8.6 24.3 11.0 1.5 1.1 8.5 -6.3 18.5 1.2 11.7 6.6 5.4 6.0 -0.5

3.1 2.8 3.5 5.5 3.0 3.4 7.2 9.1 5.9 10.8 -1.6 3.9 27.6 64.0 29.9 1.7 -0.8 20.7 -3.6 14.6 1.5 6.7 7.1 11.0 2.5 -0.4

History 2005

2009 Change -0.4 -0.2 0.8 2.9 1.1 0.5 -12.4 -8.0 0.0 3.1 -1.0 -17.3 3.5 10.5 -15.9 -19.9 -21.5 13.2 5.4 -24.6 -19.5 -7.2 -3.2 -6.0 4.2 0.5

26.1 3.2 2.5 72.7 15.6 89.6 16.816 1.710 4.997 5.8 -0.5 -160 -459

31.1 5.1 1.7 73.7 17.2 87.6 16.643 1.854 5.443 6.0 -0.1 -375 -522

41.5 1.5 3.0 76.2 58.3 95.2 16.867 1.949 5.914 5.5 1.6 -411 -631

56.6 1.5 2.7 78.6 49.8 88.6 16.948 2.073 6.181 5.1 1.8 -321 -749

Federal Funds Rate (%) 3-Month Treasury Bill Rate (%) 1-Year Treasury Note Yield (%) 5-Year Treasury Note Yield (%) 10-Year Treasury Note Yield (%) 25-Year Treasury Note Yield (%) 30-Year Fixed Mortgage Rate (%) S&P 500 Stock Index (% change) Exchange Rate, Major Trading Partners (% change (negative = depreciation))

1.67 1.61 2.00 3.82 4.61 5.42 6.54 996 -17.3 1.266 -5.1

1.13 1.01 1.24 2.97 4.02 5.05 5.82 964 20.8 1.111 -14.1

1.35 1.36 1.89 3.43 4.27 5.12 5.84 1131 11.2 1.020 -6.1

3.21 3.13 3.62 4.05 4.29 4.56 5.86 1207 6.1 1.000 4.9

Personal Income (Bil. of $) (% change) Disposable Income (Bil. of $) (% change) Real Disposable Income (Bil. Of 2005 $) (% change) Saving Rate (%) After-Tax Profits (Billions of $) (% change)

9060 2.4 8010 5.3 8637 3.3 3.5 573 38.0

9378 5.0 8378 5.9 8854 3.9 3.5 660 14.5

9937 6.7 8889 6.7 9155 3.5 3.4 923 36.3

10486 5.1 9277 4.0 9277 0.6 1.4 1228 41.9

66.1 0.9 1.8 79.4 63.2 87.3 16.504 1.812 5.712 4.6 1.6 -248 -804

Other Measures 72.2 99.8 2.9 1.0 1.8 -6.6 79.0 75.1 20.4 -20.4 85.6 63.8 16.089 13.195 1.342 0.900 4.960 4.341 4.6 5.8 0.9 -1.6 -162 -455 -727 -706

Financial Markets, NSA 4.96 5.02 1.93 4.72 4.38 1.40 4.93 4.52 1.82 4.75 4.43 2.80 4.79 4.63 3.67 4.87 4.84 4.28 6.42 6.33 6.04 1311 1477 1221 13.8 7.9 -32.4 0.985 0.930 0.889 -4.7 -9.9 13.1

11268 7.1 9916 6.6 9651 4.6 2.4 1349 2.8

Incomes 11894 12239 5.2 1.1 10403 10806 4.6 2.3 9861 9911 1.0 0.6 1.7 2.6 1323 1171 2.7 -26.1

2010

Forecast 2011

2012

2013

1.9 1.3 1.6 3.2 1.3 1.5 2.0 12.1 8.1 13.1 12.5 12.3 48.8 18.9 12.6 -18.7 -17.7 -33.4 -28.9 4.3 -15.6 5.4 6.8 6.3 0.4 0.2

3.8 3.4 2.7 8.4 1.6 2.3 14.8 14.9 8.4 20.6 11.8 20.0 47.6 16.4 52.9 14.7 33.7 0.8 8.0 5.8 11.3 29.3 7.7 8.3 -4.3 -0.2

3.8 3.7 2.8 5.3 1.8 2.8 13.9 13.0 8.0 22.6 9.6 12.9 36.3 18.3 34.3 16.5 24.2 32.5 2.0 9.9 10.6 13.7 8.6 7.1 -2.6 1.2

2.8 3.0 2.1 4.2 1.3 2.1 6.7 6.3 7.7 19.7 9.8 -3.9 12.4 7.7 15.9 7.7 11.6 12.1 5.4 -2.0 6.4 7.7 8.5 4.1 -1.2 1.5

12980.4 13226.5 13629.7 14173.5 14610.8 14266.0 14699.6 15341.5 16150.9 16863.4

Prices & Wages, Percent Change, Annual Rate 3.5 2.9 2.7 2.0 1.1 3.8 2.0 4.0 1.7 1.7 2.1 2.7 2.3 2.0 1.8 5.3 0.3 6.8 2.2 1.8 3.0 3.1 3.1 2.4 1.1

3.2 3.4 2.2 4.7 3.7

U.S. Forecast | December 2009

2008

Billions of Dollars 11553.0 11840.7 12263.8 12638.4 12976.3 13254.1 13312.2 10642.3 11142.2 11867.8 12638.4 13398.9 14077.7 14441.4

2.1 2.0 1.2 3.6 4.0

22

2007

Composition of Real GDP, Percent 2.7 2.5 2.5 -1.8 2.7 2.9 2.7 -1.4 2.7 3.3 2.0 -1.8 2.4 6.5 4.6 -11.7 3.3 3.2 1.5 -2.8 2.6 2.8 1.7 0.3 4.4 8.0 8.0 -5.6 6.1 6.2 3.2 -10.2 6.8 7.9 10.3 -1.1 15.0 18.6 23.5 -7.8 5.6 13.1 15.0 -3.3 9.9 5.9 3.6 -6.2 2.8 11.2 -11.5 -43.1 -31.4 15.6 15.5 -18.1 8.2 12.2 -37.9 -17.3 0.0 13.3 19.0 3.5 1.1 7.9 10.3 -9.9 5.8 10.0 43.9 22.1 -4.3 13.8 48.5 -0.5 6.9 25.5 9.2 20.4 -4.6 13.1 23.5 -0.3 5.3 -15.5 -20.2 -20.8 6.8 10.4 10.4 -2.8 5.2 4.2 1.0 -6.6 1.3 2.3 3.6 8.9 0.4 1.2 1.9 -0.3

1.8 2.3 2.1 1.0 3.1

Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2005 $) 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. $)

2006

1.2 0.9 1.2 0.0 1.6

1.2 1.9 1.5 2.7 1.2

1.2 1.6 1.4 1.2 1.8

1.3 1.5 1.5 1.1 2.3

63.3 4.7 -4.4 66.7 -120.0 64.4 10.153 0.574 4.541 9.3 -4.1 -1417 -443

73.1 1.1 3.1 70.1 3.8 67.2 10.560 0.785 4.442 10.8 0.1 -1372 -532

81.6 0.5 5.3 73.6 46.0 73.1 13.448 1.207 4.550 10.0 2.7 -1121 -602

87.1 0.9 4.5 76.4 77.4 76.4 15.4 1.5 5.2 8.9 2.8 -929.5 -687.0

90.5 1.0 3.2 76.7 51.5 78.9 16.6 1.7 5.6 8.1 2.0 -716.2 -672.3

0.16 0.14 0.44 2.17 3.22 4.02 5.05 939 23.2 0.930 -8.3

0.39 0.57 0.87 2.58 3.61 4.35 5.33 1081 3.0 0.900 1.6

2.47 2.83 3.22 3.89 4.37 4.97 5.92 1130 7.3 0.886 -2.1

4.1 4.0 4.3 4.6 4.8 5.2 6.4 1245.2 11.2 0.9 0.1

3.8 3.8 4.1 4.5 4.8 5.2 6.3 1379.1 8.3 0.9 0.1

11966 -2.0 10864 1.0 9939 -0.4 3.7 1119 54.9

12221 3.4 11050 2.7 9965 1.7 3.1 1259 -1.5

12733 13413.9 14106.7 4.6 5.5 5.1 11379 11881 12311 3.6 4.3 3.7 10115 10422 10663 2.0 3.0 2.3 2.2 2.2 2.0 1361 1414 1449 11.6 2.6 -0.6

U . S . F o r eca s t Tab l e s

Table 2. Real Gross Domestic Product

Table 2. Real Gross Domestic Product History 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

Real GDP Billions 2005 $ Gross Domestic Product Final Sales of Domestic Product Total Consumption

11553.0 11840.7 12263.8 12638.4 12976.3 13254.1 13312.2

12980.4 13226.5 13629.7 14173.5 14610.8

11543.5 11824.8 12198.2 12588.4 12917.1 13234.4 13341.2

13113.7 13235.8 13597.6 14111.0 14574.2

8021.9

8247.6

8532.7

8819.0

9073.5

9313.9

9290.9

9233.2

9327.1

9556.0

9840.5 10072.9

930.0

986.1

1051.0

1105.5

1150.4

1199.9

1146.3

1096.8

1097.5

1185.8

1271.7

1331.8

Nondurables

1780.2

1845.6

1904.6

1968.4

2023.6

2074.8

2057.3

2036.4

2061.4

2092.9

2131.7

2162.3

Services

5318.1

5418.4

5577.6

5745.1

5899.7

6040.8

6083.1

6090.3

6156.7

6277.6

6448.6

6598.0

1180.2

1191.0

1263.0

1347.3

1453.9

1544.3

1569.7

1293.9

1291.9

1430.8

1641.1

1787.6

830.3

851.4

917.3

995.6

1069.6

1097.0

1068.6

884.8

960.6

1102.7

1249.6

1358.0

379.3

405.0

443.1

475.3

514.8

555.7

588.8

550.6

590.3

641.0

693.1

747.7

Computers & Peripherals

58.2

63.4

70.6

78.9

97.1

114.3

123.9

111.5

120.7

144.8

176.4

214.1

Communications Equipment

73.7

75.4

81.7

83.2

92.2

98.2

101.6

92.1

102.0

113.8

125.9

137.7

Industrial Equipment

151.9

151.6

147.4

159.6

172.9

180.9

174.7

135.1

139.3

168.3

194.7

197.0

Transportation equipment

141.6

132.9

161.1

181.7

198.2

181.7

132.3

71.7

105.6

152.9

206.7

249.4

31.6

22.6

25.1

22.0

20.6

22.3

18.0

14.2

16.2

19.0

22.4

24.7

32.7

31.7

40.8

48.2

51.6

37.1

29.3

17.5

18.8

26.0

36.4

43.6

356.6

343.0

346.7

351.8

384.0

441.4

486.8

397.8

330.8

332.6

394.5

432.2

142.8

133.8

137.1

135.9

144.2

158.5

155.6

119.8

97.6

111.1

142.3

164.3

Manufacturing

26.2

24.3

25.5

29.9

33.0

40.4

50.6

64.4

46.0

37.5

47.8

56.8

Power & Communication

60.5

55.7

46.2

45.2

48.7

65.3

77.3

76.2

61.1

55.8

59.0

60.7

Mining & Petroleum

52.6

60.0

69.9

77.1

88.3

97.1

112.7

65.0

66.8

69.5

78.0

76.5

Other

68.9

66.5

67.4

63.7

69.6

80.8

89.8

74.9

62.1

62.1

70.4

75.1

613.9

664.3

729.5

775.0

718.2

585.0

451.1

361.6

385.6

458.3

553.6

605.5

Exports

1099.2

1116.8

1222.8

1305.1

1422.1

1546.2

1629.3

1453.8

1558.0

1669.2

1806.0

1961.0

Imports

1648.0

1720.7

1910.8

2027.8

2151.2

2193.8

2123.5

1813.0

1944.7

2077.8

2244.4

2360.0

779.5

831.1

865.0

876.3

894.9

906.4

975.9

1027.6

1060.2

1021.4

989.1

971.5

1500.7

1499.7

1497.1

1493.6

1507.2

1536.7

1543.7

1542.8

1547.1

1545.2

1553.2

1578.8

Durables

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Federal Government State & Local Government

Institute for Economic Competitiveness

23

U . S . F o r eca s t Tab l e s TableTable 3. Quarterly of the Forecast of the U.S. 3.Summary Quarterly Summary

of the Forecast of the U.S.

2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

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.

Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2005 $) 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. $)

3.5 2.6 3.4 22.3 2.0 1.2 -2.5 1.1 8.9 1.8 -1.5 -11.8 4.8 68.1 33.1 -9.0 -16.3 -5.7 3.4 5.2 -23.2 23.3 14.7 16.3 7.9 -1.1

Composition of Real GDP, Percent Change, Annual Rate 2.4 2.9 3.9 4.3 4.0 4.1 4.1 2.1 2.7 3.2 3.7 3.9 3.9 4.0 2.6 2.0 2.2 3.1 3.6 2.8 3.1 10.0 9.8 2.7 8.4 12.5 8.6 4.8 1.5 0.8 1.6 2.0 2.0 1.6 2.1 2.0 1.3 2.3 2.7 2.8 2.4 3.1 6.7 13.1 18.2 15.1 12.9 16.2 15.6 13.5 15.8 19.1 14.2 10.5 13.8 13.8 9.1 8.7 8.8 7.9 8.0 8.5 8.0 19.5 18.8 21.2 21.7 20.7 20.8 22.9 11.4 12.4 12.3 10.5 11.9 12.6 8.7 25.8 23.9 20.5 19.6 16.0 15.9 15.1 22.6 51.9 88.4 36.9 13.2 38.4 39.4 17.6 16.1 22.5 12.1 14.8 19.3 23.5 -1.7 83.3 42.6 43.0 42.6 57.6 32.0 -10.0 5.5 15.7 17.7 19.9 23.0 20.6 -3.7 31.2 39.3 39.1 25.0 29.0 28.9 -19.9 -20.6 -17.1 6.1 34.9 33.2 46.2 -25.4 -1.5 13.7 8.2 11.5 8.6 -1.9 5.3 1.2 7.7 1.8 12.7 26.3 17.5 -9.4 0.5 13.9 15.0 15.9 16.0 13.2 3.7 24.9 30.5 31.2 30.4 23.0 13.0 6.1 7.0 8.8 7.6 7.2 8.2 8.6 5.6 5.9 9.2 9.1 9.1 7.7 7.7 -4.5 -5.0 -4.6 -4.3 -3.3 -3.1 -2.6 0.5 -0.5 -0.4 0.0 0.0 0.3 1.1

2.1 0.0 0.2 -8.9 2.5 0.9 1.7 8.0 5.1 8.4 8.5 7.4 51.0 -32.7 -15.9 -9.6 -12.8 -31.3 -15.6 48.1 -15.7 9.6 6.4 10.6 1.7 0.6

1.4 -0.4 -0.4 -8.2 0.0 0.6 -0.5 10.7 6.5 -6.6 18.0 -2.5 92.7 19.7 18.8 -20.4 -18.8 -37.4 -27.7 4.1 -18.6 5.2 8.1 10.3 3.7 0.2

2.1 1.5 1.1 -1.4 1.4 1.3 -0.2 11.6 8.4 21.5 9.6 7.5 46.3 20.1 -12.7 -23.0 -26.3 -36.8 -34.0 9.7 -19.2 13.4 7.1 4.9 4.6 0.1

1.8 2.1 3.0 12.4 2.2 1.9 1.8 12.7 8.3 18.0 11.0 18.5 33.5 18.5 46.1 -21.6 -21.9 -39.4 -28.6 -2.0 -15.1 -0.6 6.0 4.5 -1.9 -0.2

13014.0 13080.7 14301.5 14433.4

13126 14520

13195 14640

13254 14755

13331 14884

1.7 4.1 1.6 6.8 1.0

1.0 -0.3 0.9 -2.3 2.0

1.2 0.5 1.2 -0.1 1.5

1.4 1.7 1.4 2.3 1.7

1.2 1.5 1.4 0.0 1.4

68.1 82.2 7.0 4.8 5.2 6.5 66.8 68.1 -134.4 -67.5 68.4 62.9 11.493 10.073 0.590 0.640 4.657 5.150 9.6 10.4 -2.8 -3.0 -1334 -1299 -456 -502

73.6 3.2 2.3 68.9 -7.9 62.7 9.694 0.719 4.970 10.9 -2.1 -1263 -542

Other Key Measures 70.9 72.8 75.0 77.6 80.5 83.3 84.9 85.8 86.7 87.6 88.5 89.3 90.2 90.9 91.6 1.3 -0.3 0.4 -0.3 0.9 0.7 0.7 0.6 1.3 0.8 0.8 0.5 1.2 1.1 1.3 3.5 2.7 3.9 4.2 5.3 5.9 5.9 5.2 4.7 4.3 3.7 3.2 3.1 3.1 3.4 71.1 72.0 73.2 74.3 75.0 75.7 76.3 76.8 76.8 76.8 76.7 76.7 76.6 69.9 70.5 11.2 2.2 9.6 16.6 41.0 60.1 66.4 73.1 78.1 82.2 76.3 65.1 51.7 46.5 42.8 66.6 68.4 70.9 71.8 72.8 73.5 74.3 74.7 75.9 76.9 78.1 79.0 79.4 79.0 78.3 9.878 10.974 11.696 12.527 13.098 13.759 14.406 14.952 15.208 15.530 15.745 16.221 16.607 16.692 16.720 0.760 0.791 0.869 1.005 1.150 1.285 1.386 1.455 1.522 1.584 1.626 1.650 1.683 1.714 1.711 4.710 4.048 4.038 4.340 4.455 4.606 4.799 4.986 5.136 5.321 5.376 5.445 5.553 5.687 5.711 10.8 10.7 10.6 10.4 10.2 9.8 9.6 9.3 9.0 8.8 8.5 8.3 8.2 8.0 7.9 2.2 2.1 1.8 1.6 0.7 0.5 1.3 2.2 2.8 3.0 2.9 2.9 3.0 2.8 2.5 -1291 -1292 -1260 -1046 -1026 -1005 -989 -910 -904 -869 -836 -735 -683 -659 -672 -523 -526 -538 -551 -583 -623 -651 -675 -689 -692 -693 -687 -670 -662 -670

0.8 3.6 1.5 4.9 1.8

3.7 3.6 2.6 3.5 1.8 2.8 13.7 14.0 7.8 23.3 8.2 15.4 40.4 16.8 26.1 13.1 21.5 33.1 0.6 -0.8 7.7 8.5 9.2 6.8 -2.5 1.3

3.2 3.4 2.7 4.2 1.8 2.7 10.0 10.4 7.7 23.5 8.9 5.1 26.8 13.6 21.6 9.2 17.4 17.7 0.5 -3.4 5.6 10.2 8.5 6.4 -2.2 2.0

2.9 3.2 2.2 6.6 1.0 1.9 8.0 7.9 8.2 21.0 9.7 -2.1 18.9 5.9 17.2 8.1 14.5 20.9 1.7 -6.9 4.4 13.1 8.2 4.6 -1.9 1.8

2.8 3.2 2.2 6.1 1.2 2.0 7.1 6.5 8.2 21.2 9.7 -5.1 13.7 8.6 22.1 8.5 13.1 14.2 6.1 -4.6 8.1 7.6 8.7 4.1 -1.4 1.8

2.8 2.9 2.0 2.4 1.4 2.2 6.3 5.5 7.6 19.6 10.1 -5.1 9.5 9.0 13.8 8.1 10.3 8.7 5.8 5.4 7.1 5.3 8.7 4.0 -0.9 1.4

2.6 2.7 2.0 1.8 1.4 2.2 5.3 5.1 6.9 17.0 9.7 -3.5 7.4 7.1 10.6 6.0 8.7 4.4 8.1 -1.7 6.2 4.7 8.4 3.6 -0.8 1.1

14116 16058

14245 16253

14359 16431

14462 16613

14562 16780

14662 16949

14757 17111

Prices & Wages, Percent Change, Annual Rate 1.6 1.0 1.2 1.1 1.6 1.0 1.9 1.9 2.1 1.8 1.9 1.4 1.5 1.5 1.5 1.4 1.5 1.4 2.4 2.2 3.4 2.7 2.6 0.0 1.4 0.9 1.2 1.1 1.8 1.6

1.2 1.6 1.5 1.9 2.0

1.2 1.4 1.4 0.4 2.0

1.5 1.6 1.5 1.4 2.4

1.2 1.6 1.5 1.5 2.2

1.3 1.6 1.5 1.2 2.4

1.2 1.4 1.4 0.4 2.3

13427 15050

13557 15235

Billions of Dollars 13699 13836 13975 15441 15640 15861

Federal Funds Rate (%) 3-Month Treasury Bill Rate (%) 1-Year Treasury Note Yield (%) 5-Year Treasury Note Yield (%) 10-Year Treasury Note Yield (%) 25-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 0.16 0.45 2.47 3.52 4.32 5.16 997 55.7 0.901 -18.6

0.13 0.00 0.22 2.22 3.33 4.14 4.97 1057 26.7 0.885 -6.7

0.12 0.09 0.31 2.27 3.37 4.15 5.09 1064 2.4 0.894 4.1

0.12 0.25 0.52 2.40 3.47 4.22 5.26 1082 7.0 0.900 2.7

0.39 0.69 1.03 2.66 3.69 4.42 5.43 1089 2.6 0.905 2.2

0.92 1.26 1.61 2.99 3.91 4.62 5.54 1089 0.1 0.900 -2.3

1.51 1.90 2.29 3.35 4.13 4.80 5.69 1096 2.6 0.895 -2.1

Financial Markets, NSA 2.13 2.79 3.44 4.07 2.51 3.17 3.75 4.16 2.90 3.56 4.12 4.48 3.67 4.08 4.45 4.71 4.29 4.42 4.63 4.87 5.22 4.93 5.03 5.12 5.86 5.97 6.18 6.43 1115 1140 1168 1195 6.9 9.4 10.2 9.4 0.889 0.881 0.880 0.883 -2.6 -3.6 -0.2 1.1

4.32 4.20 4.46 4.72 4.91 5.26 6.54 1225 10.3 0.882 -0.2

4.12 4.01 4.23 4.54 4.76 5.13 6.41 1262 12.8 0.882 -0.1

3.89 3.79 4.01 4.37 4.61 5.01 6.25 1300 12.5 0.882 -0.2

3.69 3.61 3.83 4.24 4.50 4.92 6.13 1338 12.3 0.881 -0.3

3.54 3.50 3.72 4.16 4.43 4.87 6.05 1373 11.1 0.881 0.0

3.63 3.73 4.00 4.42 4.69 5.11 6.26 1400 7.9 0.882 0.2

4.20 4.50 4.88 5.19 5.41 5.80 6.93 1406 1.7 0.883 0.5

Personal Income (Bil. of $) (% change) Disposable Income (Bil. of $) (% change) Real Disposable Income (Bil. of 2005 $) (% change) Saving Rate (%) After-Tax Profits (Billions of $) (% change)

11956 -0.5 10883 -0.7 9933 -3.4 3.4 1192 78.5

11984 0.9 10904 0.8 9876 -2.3 2.8 1276 31.5

12042 1.9 10890 -0.5 9861 -0.6 2.8 1257 -6.0

12161 4.0 10998 4.0 9943 3.4 3.4 1263 2.1

12290 4.3 11118 4.4 10013 2.8 3.3 1258 -1.7

12394 3.4 11192 2.7 10043 1.2 3.0 1257 -0.2

12512 3.9 11183 -0.3 9996 -1.9 2.1 1316 20.1

12648 4.4 11301 4.3 10065 2.8 2.2 1348 10.0

Incomes 12807 12965 5.1 5.0 11444 11587 5.2 5.1 10152 10245 3.5 3.7 2.3 2.3 1378 1401 9.2 6.9

13332 5.9 11823 5.5 10388 4.3 2.2 1399 2.3

13508 5.4 11957 4.6 10473 3.3 2.3 1430 9.4

13673 5.0 12079 4.1 10549 2.9 2.3 1437 1.8

13848 5.2 12132 1.8 10560 0.4 1.9 1451 4.1

14018 5.0 12230 3.3 10611 1.9 1.8 1462 2.9

14194 5.1 12362 4.4 10689 3.0 2.0 1455 -1.8

14366 4.9 12521 5.2 10793 4.0 2.4 1426 -7.8

24

U.S. Forecast | December 2009

13142 5.6 11666 2.8 10278 1.3 1.9 1391 -2.9

U . S . F o r eca s t Tab l e s Table 4. Quarterly Gross Domestic Product Table 4. Quarterly Gross Domestic Product 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

Real GDP Billions 2005 $ Gross Domestic Product Final Sales of Domestic Product Total Consumption

13014.0 13080.7 13126.3 13195.0 13253.6 13331.3 13426.9 13557.1 13699.0 13835.7 13975.1 14115.6 14244.7 14358.6 14462.2 14562.4 14661.6 14757.1 13160.4 13160.8 13147.1 13196.8 13264.5 13334.9 13423.7 13529.9 13653.2 13783.6 13916.6 14052.4 14177.5 14297.4 14412.1 14525.6 14629.9 14729.2 9265.1 9269.4 9259.7 9284.0 9351.7 9413.1 9460.2 9510.8 9584.2 9668.8 9736.8 9810.5 9874.8 9940.0 9993.4 10048.9 10099.9 10149.5

Durables

1127.2 1101.1 1077.7 1073.9 1105.7 1132.5 1159.2 1167.0 1190.8 1226.4 1251.9 1266.5 1277.6 1290.7 1311.5 1331.2 1339.2 1345.3

Nondurables

2035.9 2048.6 2048.6 2055.7 2066.8 2074.4 2078.8 2087.1 2097.7 2108.0 2116.3 2127.6 2136.8 2146.2 2151.7 2158.2 2166.0 2173.4

Services Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals Communications Equipment Industrial Equipment Transportation equipment Aircraft Other Equipment Structures Commercial & Health

6096.6 6109.9 6119.6 6139.4 6168.6 6199.1 6219.4 6254.2 6296.4 6340.5 6378.5 6427.6 6472.2 6516.2 6546.8 6579.3 6614.9 6651.0 1280.2 1285.7 1284.2 1283.6 1289.3 1310.4 1351.2 1408.9 1459.2 1504.0 1561.3 1619.0 1671.9 1712.3 1745.5 1775.7 1802.8 1826.4 973.5 1004.8 1042.3 1088.9 1125.5 1153.9 1191.8 1231.0 1271.9 1303.6 1328.7 1349.9 1368.2 1385.3

879.0

896.1

919.2

944.8

556.5

563.5

572.4

584.0

595.9

608.9

621.8

635.1

647.2

659.8

673.4

686.6

699.5

712.7

726.8

741.2

755.0

767.7

112.2

114.5

112.5

118.2

123.2

128.8

134.4

141.1

148.2

155.3

162.8

171.5

180.7

190.4

199.7

209.6

219.1

227.9 142.6

92.3

94.2

98.2

100.5

103.2

106.0

109.1

112.3

115.2

118.5

122.0

124.6

127.1

129.8

132.9

136.0

139.3

131.0

133.3

132.5

134.9

140.8

149.1

157.3

164.8

172.3

178.9

185.6

192.2

199.2

201.7

200.7

198.1

195.5

193.8

71.5

79.2

93.3

102.6

110.3

116.1

128.9

151.0

163.3

168.5

182.7

198.6

216.1

229.4

239.5

247.4

253.0

257.6

16.0

14.5

15.1

15.8

16.5

17.2

17.8

18.8

19.3

20.0

20.9

22.0

22.9

23.6

24.0

24.5

25.0

25.5

18.4

17.6

18.4

17.8

19.5

19.4

22.6

24.7

27.0

29.5

33.1

35.5

37.6

39.5

41.1

43.2

44.6

45.7

390.7

381.0

359.9

337.1

317.2

309.0

313.2

324.8

338.3

354.0

372.8

390.6

402.8

411.8

419.9

428.5

437.0

443.4

116.3

112.3

106.6

98.8

92.9

92.0

98.5

107.0

116.2

122.8

130.9

139.5

146.4

152.4

157.7

162.6

166.6

170.2

Manufacturing

66.5

60.5

53.8

48.0

42.3

40.1

37.8

36.1

36.6

39.5

42.4

46.6

50.1

52.1

54.7

56.5

57.7

58.4

Power & Communication

79.0

75.7

69.8

62.9

57.8

53.8

53.5

55.3

56.4

58.0

59.2

58.9

59.0

59.0

59.3

60.2

61.0

62.2

Mining & Petroleum

58.9

65.0

65.6

67.2

66.8

67.7

67.9

69.2

69.5

71.6

75.9

79.0

78.8

78.1

76.8

75.9

76.9

76.5

Other

72.8

69.8

66.3

62.8

60.3

58.8

58.9

60.9

63.0

65.4

67.9

70.0

71.3

72.3

73.1

74.5

75.8

76.9

362.9

371.3

376.0

388.0

387.4

391.0

413.3

441.8

472.8

505.3

532.1

548.6

559.9

573.7

591.6

602.5

610.3

617.3

Residential Fixed Investment Exports

1469.1 1492.0 1521.3 1547.4 1570.0 1593.4 1620.7 1655.0 1685.7 1715.3 1749.4 1786.0 1825.6 1863.1 1900.4 1940.6 1981.3 2021.6

Imports

1817.3 1863.8 1909.9 1933.1 1954.4 1981.4 2010.1 2054.9 2099.9 2146.4 2186.5 2227.2 2264.3 2299.6 2325.4 2349.1 2372.1 2393.2

Federal Government

1043.1 1047.5 1057.0 1068.8 1063.6 1051.4 1038.1 1026.0 1014.9 1006.5

State & Local Government

1543.7 1546.0 1546.8 1547.0 1546.4 1548.4 1546.4 1544.8 1544.8 1544.7 1545.6 1549.8 1554.9 1562.6 1569.6 1576.7 1582.2 1586.6

998.5

991.9

985.7

980.3

975.6

972.2

970.1

968.2

Table 5. Annual Employment

Table 5. Annual Employment 2002

Total Nonfarm Employment Private Nonfarm Mining Construction Manufacturing Trade, Transportation and Utilities Transportation & Warehousing Financial Activities Education & Health Professional & Business Services Information Leisure & Hospitality Government Federal State & Local

Total Nonfarm Employment Private Nonfarm Mining Construction Manufacturing Trade, Transportation and Utilities Transportation & Warehousing Financial Activities Education & Health Professional & Business Services Information Leisure & Hospitality Government Federal State & Local

2003

2004

History 2005

2006

2007

2008

Millions 130.340 129.996 131.419 133.699 136.098 137.604 137.046 108.831 108.416 109.801 111.890 114.123 115.384 114.550 0.512 0.503 0.523 0.562 0.620 0.664 0.716 6.715 6.736 6.973 7.333 7.693 7.632 7.213 15.257 14.508 14.315 14.226 14.159 13.880 13.423 25.500 25.287 25.536 25.963 26.277 26.627 26.381 4.224 4.184 4.250 4.364 4.469 4.540 4.503 7.848 7.976 8.031 8.153 8.329 8.301 8.144 16.201 16.588 16.950 17.370 17.824 18.320 18.855 15.975 15.985 16.388 16.949 17.573 17.948 17.779 3.394 3.189 3.117 3.061 3.038 3.032 2.997 11.986 12.175 12.492 12.814 13.109 13.427 13.457 21.509 21.580 21.618 21.810 21.974 22.220 22.496 2.766 2.760 2.731 2.732 2.732 2.733 2.764 18.744 18.820 18.887 19.078 19.243 19.487 19.732

-1.13 -1.69 -4.01 -1.32 -5.35 -1.07 -0.89 0.71 3.17 -1.27 -6.12 0.93 1.21 0.83 1.27

-0.26 -0.38 -0.23 1.53 -4.46 -0.57 -1.00 1.25 2.12 1.08 -5.02 1.59 -0.14 -1.55 0.08

1.09 1.28 5.16 4.31 -0.05 1.52 2.58 0.95 2.36 2.99 -2.04 2.59 0.62 -0.37 0.77

1.73 1.90 9.47 5.89 -0.77 1.68 2.51 2.16 2.53 3.76 -1.07 2.19 0.78 0.32 0.85

1.79 2.00 10.06 2.47 -0.98 1.13 2.55 1.42 2.64 3.14 -0.89 2.86 1.02 -0.33 1.21

Growth Rates 1.11 -0.40 1.11 -0.72 5.89 8.73 -1.87 -7.91 -1.99 -5.15 1.19 -2.65 1.00 -2.86 -1.25 -2.47 2.90 2.75 1.71 -3.12 0.01 -2.16 2.15 -1.37 1.17 0.93 0.49 1.44 1.27 0.86

2009

2010

Forecast 2011

2012

2013

131.794 129.852 132.433 136.228 139.334 109.308 107.494 110.281 113.798 116.453 0.675 0.631 0.625 0.631 0.620 6.232 5.610 5.565 5.916 6.339 11.978 11.462 11.647 12.163 12.610 25.211 24.586 25.043 25.764 26.351 4.225 4.091 4.240 4.529 4.749 7.763 7.510 7.549 7.748 7.820 19.240 19.614 20.201 20.552 20.762 16.720 16.750 18.092 19.182 19.787 2.845 2.661 2.733 2.752 2.781 13.175 13.202 13.305 13.537 13.785 22.486 22.357 22.152 22.430 22.882 2.820 2.923 2.786 2.745 2.722 19.666 19.434 19.366 19.685 20.159

-3.83 -4.58 -12.19 -14.51 -10.57 -4.66 -6.10 -4.91 1.48 -5.63 -6.37 -1.70 -0.74 1.07 -0.98

-1.46 -1.64 -3.22 -7.20 -1.91 -0.42 -1.60 -3.45 2.75 4.19 -3.21 1.42 -0.79 3.41 -1.11

1.99 2.59 0.49 2.79 3.55 2.73 6.89 3.46 2.69 8.24 2.36 0.16 0.06 -2.44 0.43

2.87 3.19 0.38 7.68 4.16 2.43 5.83 2.14 1.23 4.92 0.61 2.62 1.82 -1.13 2.24

2.28 2.34 -2.76 6.13 3.21 2.25 4.33 0.16 1.01 2.51 1.29 1.17 1.88 -0.68 2.24

Institute for Economic Competitiveness

25

U . S . F o r eca s t Tab l e s Table 6. Quarterly Employment

Table 6. Quarterly Employment 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

Employment (Millions) Total Nonfarm Employment

131.2 130.2 129.5 129.7 129.9 130.3 131.0 131.9 132.9 133.9 134.8 135.8 136.7 137.6 138.3 139.1 139.7 140.3

Private Nonfarm

108.7 107.8 107.1 107.2 107.6 108.1 108.9 109.8 110.8 111.7 112.6 113.4 114.2 115.0 115.6 116.2 116.7 117.2

Mining

0.7

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

Construction

6.1

5.9

5.8

5.6

5.5

5.5

5.5

5.5

5.6

5.7

5.7

5.9

6.0

6.1

6.2

6.3

6.4

0.6 6.5

Manufacturing

11.8

11.7

11.6

11.4

11.4

11.4

11.5

11.6

11.7

11.8

12.0

12.1

12.2

12.3

12.5

12.6

12.7

12.7

Trade, Transportation and Utilities

26.6

25.1

24.8

24.5

24.5

24.6

24.7

24.8

24.9

25.1

25.4

25.5

25.7

25.8

26.0

26.1

26.3

26.4

Transportation & Warehousing

4.2

4.2

4.1

4.1

4.1

4.1

4.1

4.2

4.3

4.4

4.4

4.5

4.6

4.6

4.7

4.7

4.8

4.8

Financial Activities

7.7

7.7

7.6

7.6

7.5

7.4

7.4

7.5

7.6

7.6

7.7

7.7

7.8

7.8

7.8

7.8

7.8

7.8

Education & Health

19.3

19.3

19.3

19.5

19.7

19.8

20.0

20.2

20.3

20.4

20.5

20.5

20.6

20.6

20.7

20.7

20.8

20.8

Professional & Business Services

16.6

16.5

16.4

16.6

16.8

17.2

17.5

17.9

18.3

18.6

18.8

19.1

19.3

19.5

19.6

19.7

19.8

20.0

2.8

2.8

2.7

2.6

2.6

2.7

2.7

2.7

2.7

2.7

2.7

2.8

2.8

2.8

2.8

2.8

2.8

2.8

Leisure & Hospitality

13.2

13.1

13.1

13.2

13.3

13.3

13.3

13.3

13.3

13.3

13.4

13.5

13.6

13.7

13.7

13.8

13.8

13.8

Government

22.4

22.4

22.4

22.6

22.3

22.2

22.1

22.1

22.2

22.2

22.3

22.4

22.5

22.6

22.7

22.8

22.9

23.0

2.8

2.8

2.8

3.1

2.9

2.8

2.8

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.7

19.6

19.6

19.5

19.5

19.4

19.3

19.3

19.3

19.4

19.4

19.5

19.6

19.7

19.9

20.0

20.1

20.2

20.3

Total Nonfarm Employment

-2.83

-3.02

-2.14

0.66

0.50

1.30

2.19

2.81

2.96

2.88

2.82

2.92

2.73

2.46

2.21

2.11

1.82

1.63

Private Nonfarm

-2.90

-3.37

-2.59

0.08

1.57

2.03

2.83

3.39

3.46

3.30

3.16

3.08

2.90

2.53

2.24

2.10

1.81

1.67

Mining

-11.86

-8.23

-4.02

-4.09

-3.36

-1.59

-0.96

0.66

1.16

1.07

1.29

1.08

0.37

-1.24

-2.45

-2.51

-3.24

-2.96

Construction

-12.82 -10.82 -10.57

Information

Federal State & Local

Growth Rates

-9.69

-8.47

-1.11

-0.96

2.37

4.69

4.87

6.04

8.13

7.81

7.89

7.37

6.40

5.56

4.64

Manufacturing

-7.75

-3.83

-3.01

-4.63

-1.61

1.46

2.59

1.69

4.16

5.56

5.14

3.66

3.91

3.66

4.69

3.21

2.41

2.37 1.83

Trade, Transportation and Utilities

-2.73

-5.60

-4.09

-0.24

1.54

1.04

1.88

2.08

2.94

3.91

2.93

2.64

2.18

1.88

2.45

2.59

2.05

Transportation & Warehousing

-4.27

-3.40

-4.27

-2.05

-0.20

0.15

3.26

7.52

8.45

8.33

6.44

5.64

6.31

4.95

4.75

4.30

4.35

3.94

Financial Activities

-3.30

-3.41

-0.65

-3.76

-5.82

-3.55

3.35

4.15

3.39

2.93

2.32

2.13

2.67

1.44

0.42

0.37

0.57

-0.73

Education & Health

1.70

0.47

0.51

4.04

4.26

2.20

2.44

3.97

2.80

1.57

1.47

1.67

0.92

0.85

0.77

1.37

1.19

0.70

Professional & Business Services

-2.90

-2.75

-1.76

3.73

6.62

8.15

8.57

9.81

8.48

6.11

5.37

5.39

5.14

3.78

2.13

2.39

2.43

3.08

Information

-4.62

-7.57 -10.34

-9.26

-0.31

7.04

5.78

2.79

1.34

-0.48

1.23

0.42

-0.10

0.89

1.76

1.47

1.18

0.76

Leisure & Hospitality

-0.45

-1.35

-1.74

3.15

3.55

0.73

-0.27

0.17

-0.03

0.78

2.35

2.63

2.75

2.77

1.77

1.09

0.75

1.09

Government

-2.46

-1.32

0.05

3.47

-4.48

-2.22

-0.96

-0.04

0.48

0.79

1.12

2.18

1.86

2.12

2.03

2.20

1.91

1.40

Federal

-3.92

-2.39

6.05 39.19 -20.82 -10.79

-3.29

-2.89

-1.91

-1.67

-1.33

-1.18

-1.18

-0.80

-0.80

-0.68

-0.68

-0.55

State & Local

-2.24

-1.16

-0.62

0.37

0.83

1.14

1.47

2.66

2.29

2.54

2.43

2.60

2.26

1.66

-0.79

-1.09

-1.66

-0.87

Table 7. Quarterly Implicit Price Deflators (2000=100)

Table 7. Quarterly Implicit Price Deflators (2005=100) 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP

109.9 110.3 110.6 110.9 111.3 111.6 112.1 112.4 112.7 113.0 113.5 113.8 114.1 114.4 114.9 115.2 115.6 116.0

Consumption

109.6 110.4 110.4 110.6 111.0 111.4 111.9 112.3 112.7 113.1 113.5 113.8 114.2 114.5 114.9 115.3 115.7 116.0

Durables

93.7

93.5

93.0

92.6

92.2

91.8

91.5

91.2

91.0

90.7

90.4

90.1

89.8

89.5

89.2

88.8

88.5

88.2

Motor Vehicles

99.1 100.0 100.3 100.8 101.0 100.9 101.1 101.4 101.7 101.9 102.1 102.2 102.3 102.4 102.5 102.5 102.6 102.7

Furniture

97.4

97.1

96.5

96.0

95.7

95.4

95.2

95.0

94.8

94.6

94.4

94.3

94.1

93.9

93.7

93.6

93.4

93.1

Other Durables

113.0 113.4 113.6 113.8 114.1 114.3 114.6 114.9 115.3 115.6 115.9 116.2 116.4 116.7 117.0 117.3 117.5 117.8

Nondurables

110.2 113.0 112.4 112.2 112.9 113.6 114.4 115.2 115.9 116.4 117.0 117.4 117.9 118.3 118.8 119.2 119.6 120.0

Food

112.7 112.5 113.1 113.6 114.2 114.7 115.1 115.4 115.7 116.0 116.3 116.6 116.9 117.3 117.6 118.0 118.3 118.7

Clothing & Shoes

99.4

99.3

99.2

99.1

99.0

98.9

98.8

98.8

98.7

98.6

98.5

98.4

98.3

98.1

98.0

97.9

97.8

97.6

Gasoline & Oil

111.1 128.8 121.4 117.9 119.8 122.0 125.2 128.1 130.9 132.4 134.0 134.8 135.7 136.6 137.5 138.4 139.1 139.8

Fuel

108.5 123.4 119.4 118.3 120.1 122.3 124.5 126.9 129.3 130.7 132.0 133.2 134.3 135.5 136.7 138.0 139.2 140.3

Services

112.4 112.8 113.1 113.5 114.0 114.4 114.9 115.3 115.8 116.2 116.7 117.1 117.6 118.0 118.5 119.0 119.5 120.0

Housing

112.6 112.7 112.8 113.1 113.4 113.9 114.4 114.9 115.3 115.8 116.3 116.8 117.4 117.9 118.3 118.8 119.3 119.8

Electricity

125.4 124.8 122.9 121.4 120.5 119.9 119.1 118.8 119.3 120.1 121.1 121.9 122.7 123.4 124.0 124.6 125.1 125.5

Natural Gas Water & Sewer

86.2

83.8

82.4

79.8

81.5

78.5

79.8

82.1

87.6

92.9

98.2

96.5

97.5

95.2

95.2

95.9

96.5

94.9

125.1 127.2 128.3 129.0 129.7 130.4 131.0 131.7 132.6 133.6 134.5 135.4 136.3 137.2 138.0 138.9 139.8 140.7

Telephone

106.0 106.4 106.1 105.8 105.3 104.8 104.3 103.9 103.4 102.9 102.4 101.7 101.2 100.7 100.1

Transportation

115.4 116.4 116.9 117.3 117.7 118.0 118.4 118.7 119.2 119.5 119.9 120.3 120.7 121.0 121.5 121.9 122.3 122.8

Other Services

115.0 115.5 116.0 116.3 116.8 117.2 117.7 118.0 118.4 118.7 119.1 119.4 119.9 120.4 120.9 121.4 122.1 122.7

26

U.S. Forecast | December 2009

99.6

99.1

98.6

U . S . F o r eca s t Tab l e s Table 8. Percent Change in Implicit Price Deflators

Table 8. Percent Change in Implicit Price Deflators 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP Consumption Durables

0.8

1.7

1.0

1.2

1.4

1.2

1.6

1.0

1.2

1.1

1.6

1.0

1.2

1.2

1.5

1.2

1.3

1.2

2.8

3.1

0.1

0.6

1.6

1.4

1.6

1.4

1.6

1.3

1.4

1.1

1.3

1.2

1.3

1.3

1.4

1.2

-3.1

-0.8

-2.0

-1.7

-1.6

-1.8

-1.4

-1.1

-1.0

-1.3

-1.3

-1.4

-1.3

-1.4

-1.3

-1.4

-1.4

-1.5

4.9

3.8

1.3

1.7

0.8

0.0

0.6

1.1

1.3

0.9

0.6

0.4

0.4

0.4

0.4

0.2

0.2

0.2

Furniture

-6.0

-1.0

-2.4

-2.0

-1.5

-1.2

-1.0

-0.8

-0.8

-0.7

-0.7

-0.7

-0.7

-0.8

-0.8

-0.8

-0.9

-0.9

Other Durables

-1.2

1.4

0.6

0.7

0.9

0.8

1.0

1.2

1.2

1.0

1.1

1.0

0.9

0.9

1.0

1.0

0.9

0.8

9.6

10.5

-2.3

-0.5

2.5

2.5

3.0

2.6

2.6

1.9

2.0

1.5

1.5

1.5

1.5

1.5

1.4

1.3

-2.1

-0.8

2.2

1.9

2.0

1.7

1.5

1.0

1.1

1.0

1.2

1.0

1.1

1.1

1.2

1.2

1.2

1.1

4.4

-0.4

-0.4

-0.5

-0.3

-0.6

-0.2

-0.3

-0.1

-0.6

-0.2

-0.5

-0.5

-0.5

-0.4

-0.5

-0.5

-0.7

Gasoline & Oil

91.2

80.8

-21.2

-11.0

6.6

7.6

11.0

9.3

9.0

4.7

4.9

2.6

2.6

2.6

2.8

2.6

2.1

1.8

Fuel

17.9

67.0

-12.4

-3.8

6.5

7.2

7.7

7.8

7.6

4.7

4.0

3.6

3.5

3.5

3.6

3.8

3.5

3.2

1.6

1.4

1.2

1.3

1.8

1.5

1.6

1.5

1.7

1.5

1.7

1.4

1.6

1.5

1.6

1.7

1.8

1.6 1.6

Motor Vehicles

Nondurables Food Clothing & Shoes

Services Housing

0.2

0.2

0.4

0.9

1.3

1.6

1.8

1.7

1.7

1.7

1.8

1.8

1.8

1.7

1.7

1.7

1.7

Electricity

-7.6

-1.8

-5.9

-4.9

-2.8

-2.2

-2.6

-0.9

1.6

3.0

3.1

2.7

2.7

2.4

1.9

1.9

1.6

1.3

Natural Gas

-2.4

-10.7

-6.7

-12.1

9.0

-14.2

7.1

11.8

29.6

26.5

25.1

-7.0

4.5

-9.3

0.1

2.9

2.6

-6.5

Water & Sewer

7.8

6.9

3.4

2.3

2.2

2.1

1.9

2.3

2.8

2.9

2.8

2.7

2.6

2.6

2.6

2.6

2.6

2.6

Telephone

1.9

1.5

-1.1

-1.3

-1.9

-1.9

-1.7

-1.7

-1.8

-2.1

-1.9

-2.4

-1.9

-2.3

-2.1

-2.1

-1.9

-2.1

Transportation

2.8

3.5

1.5

1.4

1.3

1.0

1.3

1.2

1.5

1.1

1.5

1.1

1.3

1.3

1.5

1.3

1.5

1.4

Other Services

1.8

1.8

1.7

1.2

1.7

1.4

1.5

1.3

1.4

1.0

1.2

1.1

1.6

1.5

1.8

1.8

2.1

2.1

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

Table 9. Annual Implicit Price Deflators (2005=100) History 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

GDP

92.1

94.1

96.8

100.0

103.3

106.2

108.5

109.9

111.1

112.6

113.9

115.4

Consumption

92.7

94.6

97.1

100.0

102.7

105.5

109.0

109.3

110.9

112.5

114.0

115.5

Durables

106.7

102.9

101.0

100.0

98.5

96.7

95.5

94.0

92.4

91.1

89.9

88.7

Motor Vehicles

101.9

99.1

98.4

100.0

100.1

99.5

98.5

98.4

100.7

101.5

102.2

102.6

Furniture

104.1

101.2

99.9

100.0

99.5

98.7

98.0

98.0

95.9

94.9

94.2

93.4

Other Durables

103.3

101.6

101.4

100.0

101.9

106.1

111.5

113.1

113.9

115.1

116.3

117.4

Nondurables

90.9

92.8

96.1

100.0

103.2

106.3

112.2

109.4

112.8

115.5

117.7

119.4

Food

93.5

95.3

98.3

100.0

101.7

105.6

111.9

113.2

113.9

115.6

116.8

118.1

103.9

101.3

100.9

100.0

99.6

98.6

97.8

98.8

99.1

98.7

98.3

97.9

Gasoline & Oil

Clothing & Shoes

59.9

69.8

82.1

100.0

112.8

122.4

142.2

106.4

120.3

129.1

135.3

138.7

Fuel

53.1

64.2

74.7

100.0

114.1

121.9

166.2

112.3

120.0

127.9

133.8

138.5

Services

90.8

93.7

96.7

100.0

103.4

107.0

110.6

112.2

113.7

115.5

117.3

119.2

Housing

93.0

95.4

97.6

100.0

103.6

107.4

110.4

112.5

113.3

115.1

117.1

119.1

Electricity

90.3

92.5

94.2

99.9

112.0

116.5

123.9

127.0

121.2

119.3

122.3

124.8

Natural Gas

62.8

77.2

83.6

100.2

102.6

101.4

115.4

89.3

80.5

85.6

96.8

95.6

Water & Sewer

86.5

89.7

95.0

100.0

104.9

110.2

116.7

124.0

129.3

132.2

135.8

139.4

102.7

102.3

100.7

100.0

100.6

102.4

104.1

105.8

105.5

103.6

101.5

99.4

Transportation

93.1

95.1

96.5

100.0

104.2

106.6

112.4

115.4

117.5

118.9

120.5

122.1

Other Services

87.0

91.2

95.4

100.0

104.1

107.3

112.4

114.8

116.6

118.2

119.7

121.8

Telephone

Institute for Economic Competitiveness

27

U . S . F o r eca s t Tab l e s Table 10. Percent Change in Implicit Price Deflators

Table 10. Percent Change in Implicit Price Deflators History

GDP Consumption

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

1.8

2.1

3.2

3.5

2.9

2.7

2.0

1.1

1.2

1.2

1.2

1.3

2.0

1.9

3.0

3.3

1.9

3.6

1.8

1.4

0.9

1.5

1.2

1.3

Durables

-2.6

-4.0

-0.8

-1.2

-1.7

-1.8

-1.3

-1.3

-1.8

-1.2

-1.4

-1.4

Motor Vehicles

-0.7

-3.8

1.6

1.0

-0.6

0.3

-2.9

3.2

0.9

1.0

0.5

0.3

Furniture

-2.0

-3.1

-0.1

-0.4

-0.2

-1.6

0.3

-0.9

-1.8

-0.8

-0.7

-0.8

Other Durables

-2.3

-1.5

-0.1

0.0

3.3

2.9

5.9

0.5

0.8

1.1

1.0

0.9

Nondurables

1.9

2.1

4.9

4.4

0.5

6.5

0.8

4.0

0.5

2.5

1.6

1.4

Food

0.8

3.2

2.7

1.5

1.7

4.7

6.9

-1.9

2.0

1.1

1.1

1.2

Clothing & Shoes

-1.9

-1.6

-0.5

-1.3

0.2

-1.2

-0.9

2.1

-0.5

-0.3

-0.4

-0.5

Gasoline & Oil

19.8

19.4

28.8

31.8

-0.8

31.5

0.7

33.8

-4.5

8.5

3.2

2.3

Fuel

7.2

21.3

41.6

32.8

-0.4

33.0

16.5

-0.1

-0.6

6.9

3.6

3.5

Services

3.0

3.2

3.2

3.8

3.1

3.6

2.9

1.1

1.5

1.6

1.5

1.7

Housing Electricity

3.4

2.2

2.4

2.5

4.4

3.1

2.6

1.1

1.1

1.7

1.8

1.7

-2.2

3.2

1.8

10.2

8.6

5.1

8.3

-2.6

-4.0

0.3

2.7

1.7

Natural Gas

5.3

22.2

14.7

44.7

-18.3

3.2

18.0

-21.9

-6.0

18.7

3.3

-0.2

Water & Sewer

3.1

4.6

5.9

5.0

4.9

5.2

6.8

6.1

2.5

2.5

2.7

2.6

Telephone

1.0

-1.7

-1.7

0.2

1.3

1.5

2.1

1.4

-1.5

-1.8

-2.1

-2.1

Transportation

1.3

2.6

1.4

4.9

2.5

3.4

5.9

1.6

1.3

1.3

1.3

1.4

Other Services

4.5

4.9

4.4

4.6

4.0

3.3

4.6

1.5

1.5

1.3

1.4

2.0

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2004

2005

Forecast

2002

2003

2006

2007

2008

2009

2010

2011

2012

2013

Personal Income

9060.1

9378.2

9937.3 10485.9 11268.1 11894.1 12238.8

Wages & Salaries

6110.8

6382.6

6693.4

7065.1

7477.0

7856.5

8037.4

7752.8

7855.1

8182.7

8588.1

9005.3

Other Labor Income

747.4

845.6

874.6

931.6

960.2

993.0

1023.9

1044.0

1075.4

1127.6

1193.8

1255.4

Nonfarm Income

1224.6

Personal Income Billions Current Dollars 11966.2 12221.5 12733.1 13413.9 14106.7

871.9

894.1

984.1

1025.9

1103.6

1056.9

1057.5

1009.5

1040.3

1104.8

1163.6

Farm Income

18.5

36.5

49.7

43.9

29.4

39.5

48.7

26.8

30.7

38.8

39.0

39.5

Rental income

218.8

204.2

198.4

178.2

146.5

144.9

210.4

270.5

312.8

306.1

257.8

197.3

Dividends

397.7

423.1

548.3

555.0

702.2

765.1

686.5

532.5

523.7

585.7

632.8

685.3

Interest Income

911.9

889.8

860.2

987.0

1127.5

1266.4

1308.0

1236.0

1225.1

1289.4

1497.2

1673.2

1282.2

1341.8

1415.5

1508.6

1605.0

1718.0

1875.9

2105.2

2215.0

2251.2

2315.5

2420.0

385.3

396.5

419.2

445.2

475.1

498.5

517.9

506.1

517.3

541.4

571.9

604.7

2.0

3.5

6.0

5.5

2.9

-2.2

2.1

4.2

5.3

5.2

Transfer Payments Personal Social Insurance Tax

Percent Change, Annual Rate Personal Income Wages & Salaries Other Labor Income Nonfarm Income

7.5

5.6

2.2

4.4

4.9

5.6

5.8

5.1

2.3

-3.5

1.3

4.2

5.0

4.9

11.7

13.2

3.5

6.5

3.1

3.4

3.1

2.0

3.0

4.9

5.9

5.2

3.8

2.5

10.1

4.3

7.6

-4.2

0.1

-4.5

3.1

6.2

5.3

5.2

Farm Income

-38.8

113.5

38.7

-11.1

-32.7

33.9

26.8

-44.6

16.8

29.0

0.4

1.5

Rental income

-13.1

14.9

-9.4

-10.9

-23.8

35.2

41.5

24.6

10.6

-9.7

-20.7

-22.3

7.6

14.0

43.3

-0.6

26.8

-0.4

-10.9

-25.6

12.6

8.8

9.1

7.1

-6.5

-2.2

0.2

19.4

10.9

14.4

-2.1

-5.0

0.1

10.2

16.5

10.4

Dividends Interest Income Transfer Payments

5.7

4.5

6.0

6.3

6.7

7.6

9.6

14.7

3.0

1.8

3.4

4.9

Personal Social Insurance Tax

3.2

4.2

6.1

5.9

6.7

5.1

2.8

-2.7

3.3

5.1

6.1

5.4

28

U.S. Forecast | December 2009

U . S . F o r eca s t Tab l e s Table 12. Personal Consumption Expenditures (Current Dollars)

Table 12. Personal Consumption Expenditures (Current Dollars)

2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 Consumer spending on… all goods & services durable goods furniture and appliances information processing equipment motor vehicles and parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

Consumer Expenditures by Type Billions Current Dollars 10151.6 10234.8 10226.0 10268.7 10384.1 10489.3 10583.7 10678.6 10804.0 10935.2 11051.4 11165.9 11274.4 11382.0 11480.6 11582.6 11680.7 11774.2 1055.5 1029.4

1002.4

994.6

1019.8

1039.8

1083.4

1112.3

1147.0

1154.7

1185.5

1186.3

251.4

253.4

253.0

251.8

249.2

246.1

245.1

244.8

247.2

250.3

254.3

258.6

262.1

265.1

267.9

270.4

271.3

271.8

64.1

64.0

63.1

63.3

64.3

65.1

65.5

66.7

67.9

69.3

70.4

71.9

73.2

74.6

75.5

76.5

77.5

78.6

338.9

313.9

291.4

285.2

310.1

329.4

347.6

347.5

359.1

378.9

389.9

388.4

385.6

384.2

390.7

396.7

395.9

393.9

96.8

96.6

95.6

95.7

96.4

97.3

97.9

98.4

99.1

100.0

100.2

100.7

101.2

101.9

102.5

103.0

103.0

102.9

2301.7 2307.1

2333.6

2356.8

2379.0 2403.6

2431.3

2454.5

2476.3 2498.6

2518.8

2539.2

2555.4 2572.6

2590.9

2608.1 354.9

2244.1 2315.3

1060.4 1064.4

1131.8 1141.0

1169.3 1182.6

323.9

325.7

326.2

329.8

333.7

334.9

334.1

336.4

339.1

341.4

342.7

345.5

347.4

349.0

349.7

351.0

352.9

19.7

22.1

21.4

21.1

21.4

21.6

21.8

22.0

22.3

22.7

22.9

23.0

23.2

23.3

23.6

23.8

24.1

24.3

307.8

358.7

334.7

323.6

328.8

334.4

341.2

346.7

354.2

359.0

363.2

365.9

368.2

372.2

373.4

375.7

377.9

379.8

food

791.6

797.9

806.4

817.0

828.5

838.6

847.1

855.6

863.9

871.5

878.3

885.1

891.7

897.9

903.5

909.0

914.7

920.4

other nondurable goods

801.2

810.9

812.9

815.5

821.2

827.2

834.8

843.0

851.8

859.9

869.3

879.1

888.4

896.8

905.3

913.1

921.4

928.7

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

9265.1 9269.4

9259.7 9284.0

9351.7

9413.1

9460.2 9510.8

9584.2

9668.8

9736.8 9810.5

9874.8

9940.0

9993.4 10048.9 10099.9 10149.5

1127.2 1101.1

1077.7 1073.9

1105.7

1132.5

1159.2 1167.0

1190.8

1226.4

1251.9 1266.5

1277.6

1290.7

1311.5 1331.2

1339.2

1345.3

furniture and appliances

258.2

260.9

262.1

262.2

260.5

258.0

257.5

257.8

260.8

264.6

269.3

274.3

278.5

282.2

285.8

289.1

290.6

291.9

information processing equipment

102.6

105.2

106.5

109.7

114.3

118.8

122.7

128.0

133.8

140.2

146.1

153.0

160.1

167.4

174.1

181.1

188.3

196.0

motor vehicles and parts

342.4

313.9

290.4

283.1

307.2

326.3

343.9

342.8

353.1

371.7

382.0

380.2

377.0

375.3

381.3

386.8

385.8

383.6

83.2

82.8

81.9

82.0

82.5

83.2

83.5

83.9

84.3

84.9

84.9

85.3

85.5

86.1

86.4

86.7

86.6

86.5

2048.6 2055.7

2066.8

2074.4

2078.8 2087.1

2097.7

2108.0

2116.3 2127.6

2136.8

2146.2

2151.7 2158.2

2166.0

2173.4 363.4

other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

2035.9 2048.6 325.7

327.9

328.7

332.8

336.9

338.7

338.1

340.6

343.5

346.3

347.8

351.2

353.5

355.6

356.6

358.5

360.8

18.1

17.9

18.0

17.8

17.8

17.7

17.5

17.3

17.3

17.4

17.3

17.2

17.2

17.2

17.2

17.3

17.3

17.4

277.0

278.4

275.8

274.6

274.5

274.1

272.5

270.8

270.7

271.2

271.1

271.4

271.3

272.5

271.5

271.4

271.6

271.7

food

702.0

709.3

712.9

719.0

725.4

731.1

735.8

741.3

746.5

751.2

754.9

758.9

762.5

765.8

768.1

770.5

773.0

775.7

other nondurable goods

715.6

717.6

716.1

715.0

715.9

716.8

718.9

721.6

724.6

727.1

730.6

734.7

738.5

741.6

744.8

747.5

750.6

752.9

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

3.3

0.2

-0.4

1.1

2.9

2.6

2.0

2.1

3.1

3.5

2.8

3.0

2.6

2.6

2.2

2.2

2.0

2.0

20.7

-9.3

-8.5

-1.4

11.8

9.7

9.4

2.7

8.2

12.0

8.3

4.7

3.5

4.1

6.4

6.0

2.4

1.8

6.3

4.2

1.8

0.2

-2.6

-3.8

-0.7

0.5

4.6

5.8

7.1

7.5

6.1

5.4

5.1

4.6

2.1

1.7

information processing equipment

22.2

10.0

5.1

11.8

17.1

15.5

13.1

17.5

18.0

19.2

16.8

19.1

18.4

18.4

15.9

16.0

16.1

16.3

motor vehicles and parts

47.3

-33.4

-29.9

-10.1

34.0

24.8

21.6

-1.3

11.9

21.1

11.0

-1.9

-3.4

-1.8

6.4

5.8

-1.0

-2.3

other durable goods

6.6

-1.8

-4.3

0.1

2.5

3.4

1.8

1.6

2.1

3.0

-0.1

1.8

1.2

2.6

1.5

1.6

-0.5

-0.5

nondurables

2.0

2.5

0.0

1.4

2.2

1.5

0.8

1.6

2.0

2.0

1.6

2.1

1.7

1.8

1.0

1.2

1.4

1.4

-1.5

2.7

1.0

5.0

5.0

2.1

-0.8

3.0

3.4

3.2

1.7

3.9

2.6

2.3

1.2

2.1

2.6

2.9

-24.0

-4.1

1.7

-3.1

0.3

-2.9

-4.2

-4.5

-1.0

2.3

-1.0

-1.8

0.1

-1.4

1.3

0.4

1.2

1.0

3.8

2.1

-3.8

-1.8

0.0

-0.6

-2.5

-2.5

-0.2

0.8

-0.2

0.4

-0.2

1.8

-1.4

-0.1

0.3

0.2

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

5.0

4.2

2.1

3.4

3.6

3.2

2.6

3.0

2.8

2.6

2.0

2.1

1.9

1.7

1.2

1.2

1.3

1.4

other nondurable goods

0.6

1.1

-0.8

-0.6

0.5

0.5

1.2

1.5

1.7

1.4

2.0

2.3

2.1

1.7

1.8

1.4

1.7

1.3

Institute for Economic Competitiveness

29

U . S . F o r eca s t Tab l e s Table 13. 13.

Personal Consumption Expenditures (2000 Dollars) Table Personal Consumption Expenditures

(2005 Dollars)

History 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

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

10093.3 10342.0 10750.4 11218.4 11629.5

7439.2

7804.0

8285.1

8819.0

9322.7

9826.4 10129.9

durable goods

992.1

1014.8

1061.6

1105.5

1133.0

1160.5

1095.2

1030.4

1014.1

1080.2

1143.6

1180.9

furniture and appliances

225.9

233.3

249.2

263.9

276.5

279.8

270.1

252.9

250.0

246.8

260.0

270.4

44.5

46.6

51.5

55.9

60.4

65.3

66.3

64.3

64.0

67.4

72.5

77.0

401.3

401.5

404.7

409.6

397.1

400.3

342.3

313.2

304.0

358.3

387.0

394.3

79.3

82.4

87.0

90.4

95.7

99.5

98.3

96.0

96.2

98.9

101.0

102.8 2581.8 352.1

information processing equipment motor vehicles and parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

1617.9

1712.6

1830.7

1968.4

2088.7

2204.5

2308.0

2228.5

2324.8

2417.1

2508.2

278.8

287.0

300.0

315.5

330.1

341.2

337.5

324.8

331.1

337.8

346.1

14.3

16.8

18.4

21.0

22.3

24.1

26.6

20.8

21.4

22.2

23.1

24.0

160.3

192.8

231.6

283.8

314.7

343.9

386.4

293.8

330.4

350.3

367.4

376.7

food

569.6

593.1

628.2

665.0

698.0

740.1

784.3

790.6

822.6

859.5

888.2

911.9

other nondurable goods

594.9

622.9

652.6

683.0

723.7

755.2

773.1

798.5

819.2

847.3

883.4

917.1

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

8021.9

8247.6

8532.7

8819.0

9073.5

9313.9

9290.9

9233.2

9327.1

9556.0

9840.5 10072.9

durable goods

930.0

986.1

1051.0

1105.5

1150.4

1199.9

1146.3

1096.8

1097.5

1185.8

1271.7

1331.8

furniture and appliances

217.0

230.6

249.3

263.9

277.9

283.6

275.5

258.2

260.7

260.2

276.1

289.3

28.3

36.0

44.8

55.9

69.2

82.4

92.6

100.4

112.3

131.2

156.7

184.9

394.0

405.3

411.3

409.6

396.6

402.4

347.5

318.4

301.8

352.9

378.6

384.4

74.7

79.4

84.7

90.4

94.1

93.0

85.8

82.5

82.4

84.2

85.4

86.6

1780.2

1845.6

1904.6

1968.4

2023.6

2074.8

2057.3

2036.4

2061.4

2092.9

2131.7

2162.3

268.5

283.4

297.3

315.5

331.5

345.9

345.0

328.6

334.3

342.1

352.0

359.8

26.9

26.2

24.6

21.0

19.5

19.7

16.0

18.5

17.8

17.4

17.3

17.3

gasoline & motor oil

267.5

276.3

282.1

283.8

278.9

280.9

271.7

275.9

274.7

271.3

271.6

271.6

food

609.0

622.4

639.2

665.0

686.2

700.7

700.7

698.1

722.1

743.7

760.5

771.8

other nondurable goods

612.5

640.1

662.6

683.0

708.4

729.4

728.7

718.1

716.0

723.1

736.3

749.0

information processing equipment motor vehicles and parts other durable goods nondurables clothing & shoes fuel oil & coal

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

1.9

3.4

3.5

2.7

3.3

2.0

-1.8

0.8

1.6

2.7

2.8

2.1

1.7

9.2

5.5

2.4

6.5

4.6

-11.7

2.9

3.2

8.4

5.3

4.2

5.8

9.4

6.1

6.8

2.6

2.5

-7.3

-1.0

-1.1

2.6

6.7

3.4

information processing equipment

29.8

30.1

21.4

25.1

22.5

21.1

6.3

11.1

13.0

18.0

19.5

17.1

motor vehicles and parts

-4.3

5.9

1.7

-6.6

5.8

0.7

-23.7

6.9

7.4

14.4

1.1

2.3

other durable goods

8.1

9.1

4.2

6.8

1.2

0.6

-14.6

4.4

0.4

2.1

1.4

0.5

nondurables

2.1

4.0

3.0

3.3

3.2

1.5

-2.8

1.1

1.3

1.6

1.8

1.3

clothing & shoes

3.9

5.6

5.1

7.4

3.9

3.5

-3.7

-2.2

3.3

2.2

2.7

2.2

10.2

1.7

-15.6

-16.2

6.1

-7.9

-1.3

11.0

-1.0

-1.8

-1.0

1.0

0.6

4.8

0.7

-0.6

-0.4

0.3

-3.3

2.9

-1.5

-1.1

0.5

-0.3

fuel oil & coal gasoline & motor oil food

1.0

1.6

3.9

4.2

3.4

1.3

-2.8

3.4

3.1

2.7

1.9

1.3

other nondurable goods

2.7

5.6

2.7

2.9

4.4

1.8

-1.7

-0.4

-0.1

1.4

2.0

1.5

30

U.S. Forecast | December 2009

U . S . F o r eca s t Tab l e s Table 14. 14.

Business Fixed Investment Table Business Fixed Investment History

Forecast

2002

2003

2004

2005

2006

2007

Business Fixed Investment

1125.4

1135.7

1223.0

1347.3

1505.3

1640.2

Producers Dur. Equipment

842.7

853.8

916.4

995.6

1071.7

Nonresidential Structures

282.8

281.9

306.7

351.8

433.7

Non-Farm Buildings

188.1

182.1

196.7

212.9

99.8

94.6

104.3

112.9

2008

2009

2010

2011

2012

2013

1693.6

1391.5

1366.9

1515.7

1751.1

1927.1

1104.8

1084.1

903.5

979.0

1124.3

1273.8

1384.1

535.3

609.5

487.9

387.9

391.4

477.3

543.0

247.6

298.9

328.3

289.9

223.6

235.6

304.2

363.7

128.4

150.8

151.3

108.7

81.1

99.3

140.9

174.0

Billions Current Dollars

Commercial Industrial

22.7

21.4

23.7

29.9

35.1

45.3

60.8

79.4

56.5

48.1

63.9

79.1

Other Buildings

65.6

66.0

68.7

70.2

84.1

102.8

116.3

101.8

86.0

88.3

99.4

110.5

Utilities

56.3

53.5

48.6

51.4

61.1

82.8

103.4

103.3

82.8

77.0

82.8

87.2

Mines & Wells

30.2

38.4

51.9

77.1

114.2

142.5

165.9

85.4

72.8

69.6

78.6

80.3

Billions 2005 Dollars Business Fixed Investment

1180.2

1191.0

1263.0

1347.3

1453.9

1544.3

1569.7

1293.9

1291.9

1430.8

1641.1

1787.6

Producers Dur. Equipment

830.3

851.4

917.3

995.6

1069.6

1097.0

1068.6

884.8

960.6

1102.7

1249.6

1358.0

Nonresidential Structures

356.6

343.0

346.7

351.8

384.0

441.4

486.8

397.8

330.8

332.6

394.5

432.2

Non-Farm Buildings

222.3

210.0

213.9

212.9

229.2

262.1

277.4

243.9

191.5

196.2

244.6

280.9

Commercial

119.5

110.3

114.4

112.9

118.4

131.1

126.3

88.5

67.4

80.5

110.5

131.2

26.2

24.3

25.5

29.9

33.0

40.4

50.6

64.4

46.0

37.5

47.8

56.8

Industrial Other Buildings

76.6

75.4

74.1

70.2

77.9

90.7

100.8

91.3

79.0

79.2

86.3

92.2

Utilities

66.0

61.3

52.1

51.4

56.2

73.0

85.8

84.4

68.5

63.0

66.3

68.2

Mines & Wells

52.6

60.0

69.9

77.1

88.3

97.1

112.7

65.0

66.8

69.5

78.0

76.5

Annual Growth Rate Business Fixed Investment

-6.3

6.2

9.5

8.4

11.7

9.8

-3.2

-15.1

1.4

15.3

14.9

7.8

Producers Dur. Equipment

-4.1

6.7

8.5

6.3

6.9

3.5

-8.8

-8.7

12.3

14.9

12.9

6.2

Nonresidential Structures

-12.0

4.8

12.6

14.9

25.2

24.9

8.0

-25.8

-20.3

16.6

20.3

11.9

Non-Farm Buildings

-14.5

3.8

10.8

7.3

18.7

23.4

2.5

-19.4

-20.7

24.0

27.8

15.7

Commercial

-15.3

4.3

9.3

10.0

15.3

17.2

-10.0

-30.6

-21.6

52.6

35.9

18.5

Industrial

-31.9

9.1

30.4

13.8

16.1

52.1

34.9

9.3

-30.7

5.0

38.1

16.9

Other Buildings Utilities Mines & Wells

-4.4

2.5

9.2

1.7

26.0

22.6

6.7

-19.0

-11.9

10.8

12.1

10.8

-10.7

-3.7

5.5

3.8

23.9

46.9

8.7

0.7

-27.0

8.9

4.2

7.8

9.1

29.4

38.0

51.3

50.0

17.6

21.8

-36.2

-11.9

2.1

12.6

2.5

Institute for Economic Competitiveness

31

U . S . F o r eca s t Tab l e s Table Government Receipts Table 15. 15.

Government Receipts and Expenditures

and Expenditures History

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

1859.3

1885.1

2014.0

2290.1

2524.5

2660.8

2475.0

2224.0

2352.9

2615.0

2850.5

3172.9

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1168.1

1102.5

832.0

889.6

1042.9

1199.8

1449.1

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

370.2

212.3

234.0

302.3

366.4

387.4

396.2

86.8

89.3

94.3

98.8

99.4

94.7

92.0

91.8

91.7

95.6

100.8

103.2

739.3

762.8

807.6

852.6

904.6

944.4

974.5

945.2

964.3

1008.5

1062.6

1120.4

Federal Government Receipts and Expenditures Receipts

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2112.1

2261.5

2393.4

2573.1

2728.3

2897.2

3117.6

3448.2

3629.3

3631.3

3730.4

3860.2

Purchases Goods & Services

Expenditures

680.7

756.5

824.7

876.3

931.7

976.7

1082.6

1146.2

1209.1

1189.1

1173.7

1174.0

National Defense

437.7

498.0

550.8

589.1

624.9

662.1

737.9

779.9

814.9

798.6

778.3

771.8

Other

243.0

258.6

273.9

287.3

306.9

314.6

344.7

366.3

394.2

390.6

395.3

402.2

1252.1

1339.4

1405.1

1491.3

1587.1

1688.6

1840.6

2133.8

2247.5

2207.6

2235.5

2320.3

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1388.2

1591.5

1665.6

1674.3

1702.0

1766.3

23.3

28.6

30.9

40.9

35.0

42.2

44.8

46.3

44.6

43.6

44.6

45.6

Grants in Aid to State & local Gov't

304.2

338.0

349.2

361.2

359.0

378.9

391.7

480.2

520.5

472.0

470.4

489.1

Net Interest

213.7

196.5

204.6

239.0

261.0

290.7

272.3

246.5

261.4

319.1

404.4

448.1

40.3

45.3

45.7

64.1

53.9

50.3

54.3

62.5

57.0

53.9

50.9

49.9

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-236.5

-642.6

-1224.2

-1276.4

-1016.3

-879.9

-687.2

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1927.4

1974.2

2003.5

2107.8

2158.0

2237.1

2315.5

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.4

1336.2

1268.8

1323.5

1409.7

1474.8

1521.1

Corporate Profits

221.8

226.2

248.6

276.7

302.5

322.8

330.0

270.0

282.3

311.4

332.9

346.3

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

56.6

51.0

62.1

66.9

72.5

75.1

75.1

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

19.8

21.1

21.8

22.1

22.4

23.1

24.1

304.2

338.0

349.2

361.2

359.0

378.9

391.7

480.2

520.5

472.0

470.4

489.1

1466.78

1535.13

1609.33

1704.50

1778.63

1905.63

2014.40

2021.90

2081.04

2131.16

2210.59

2305.0

1302.7

1356.1

1408.2

1493.6

1586.7

1699.8

1800.6

1790.9

1823.2

1846.8

1884.6

1950.6

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts and Expenditures

Federal Grants-In-Aid Expenditures Purchases Goods & Services Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.0

481.0

519.8

546.6

579.0

614.6

333.0

353.4

384.3

404.8

402.9

433.7

455.0

481.0

519.8

546.6

579.0

614.6

Interest Received

12.0

20.6

19.0

10.9

2.1

-2.6

3.9

4.7

6.0

7.0

9.9

13.8

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

11.0

6.1

5.6

6.2

2.5

-1.3

-2.1

Dividends Received

1.6

1.7

2.0

2.1

2.3

2.5

2.9

2.5

1.9

2.1

2.2

2.3

Net Wage Accruals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

21.7

-40.2

-18.4

26.8

26.9

26.5

10.5

Transfer Payments

Surplus (+) or Deficit (-)

32

U.S. Forecast | December 2009

U . S . F o r eca s t Tab l e s Table 16. 16.

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

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Net Exports Goods & Services

-427.2

-504.1

-618.7

-722.7

-769.3

-713.8

-707.8

-388.0

-438.2

-487.6

-552.2

-534.6

Current Account

-459.1

-521.5

-631.1

-748.7

-803.5

-726.6

-706.1

-442.8

-532.2

-602.4

-687.0

-672.3

Exports -Goods & Services

1003.0

1041.0

1180.2

1305.1

1471.1

1656.0

1831.1

1544.0

1701.4

1857.8

2031.9

2222.7

Merchandise Balance

-482.8

-549.0

-671.8

-790.9

-847.3

-831.0

-840.3

-512.4

-572.4

-629.6

-700.6

-698.7

Food, Feed & beverage

49.60

55.03

56.55

58.95

65.98

84.28

108.35

92.06

102.05

109.58

113.96

119.84

Industrial Supplies Excl Petroleum

153.5

168.3

199.5

227.5

267.3

303.1

369.4

280.0

332.2

365.0

397.3

430.5

78.9

80.7

89.2

98.4

107.3

121.3

121.5

78.6

104.2

128.0

153.6

176.4

290.5

293.7

327.6

358.4

404.1

433.0

457.7

384.7

410.8

457.2

516.3

582.2

38.6

39.9

42.8

45.5

47.6

45.6

43.9

37.3

41.4

44.9

49.9

55.4

201.5

207.1

238.7

257.0

291.9

314.5

339.8

273.0

292.8

328.7

376.7

427.8 190.4

Billions of Dollars

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

84.4

89.9

103.3

115.3

129.1

146.0

161.3

147.7

157.4

166.5

176.2

Other Consumer

43.5

39.4

41.0

47.5

50.8

51.8

48.8

37.9

40.8

45.2

49.6

53.7

302.8

314.2

363.3

399.0

446.7

516.5

564.2

523.1

554.0

586.3

625.0

669.6

Imports -Goods & Services

1430.2

1545.2

1798.9

2027.8

2240.4

2369.7

2538.9

1932.0

2139.6

2345.5

2584.1

2757.4

Merchandise

1193.9

1289.3

1501.7

1708.0

1884.9

1987.7

2126.4

1553.5

1738.6

1920.5

2127.6

2271.7

Services

Billions of Dollars

49.7

55.8

62.1

68.1

75.0

81.7

89.0

81.7

86.0

91.7

96.0

99.4

Petroleum & Products

Food, Feed & Beverage

103.5

133.1

180.5

251.9

302.5

331.0

453.3

256.7

288.1

316.2

348.3

367.4 316.0

Industrial Supplies Excl Petroleum

159.6

175.7

226.4

266.0

291.4

295.7

316.5

192.1

239.3

266.8

299.4

Motor Vehicles & Parts

203.8

210.1

228.2

239.5

256.6

259.3

233.8

150.9

179.5

208.5

253.8

277.2

Capital Goods, Excl. MVP

284.0

296.4

344.5

380.8

420.0

446.0

455.2

364.1

409.7

471.3

526.5

570.1

75.2

76.5

88.6

93.3

101.4

105.2

100.9

89.4

99.9

109.0

118.5

128.1

Other

Computer Equipment

183.3

195.8

231.6

261.7

290.2

306.5

318.9

243.9

272.5

318.6

359.9

389.0

Consumer Goods, Excl. MVP

310.7

337.7

377.2

411.5

446.1

478.2

484.8

423.4

449.5

477.4

506.6

536.7

82.7

80.5

82.9

90.3

93.5

95.9

94.0

84.6

86.4

88.7

97.0

104.8

236.4

255.9

297.3

319.8

355.4

382.1

412.4

378.4

401.0

424.9

456.4

485.6

Net Exports Goods & Services

-548.8

-604.0

-688.0

-722.7

-729.2

-647.7

-494.3

-359.3

-386.7

-408.7

-438.4

-399.0

Exports G & S

1099.2

1116.8

1222.8

1305.1

1422.1

1546.2

1629.3

1453.8

1558.0

1669.2

1806.0

1961.0

Imports G & S

1648.0

1720.7

1910.8

2027.8

2151.2

2193.8

2123.5

1813.0

1944.7

2077.8

2244.4

2360.0

Exports G & S

5.6

9.0

11.7

10.3

14.0

15.4

-0.8

-2.6

8.9

9.5

9.5

9.3

Imports G & S

13.4

8.0

19.1

12.1

5.4

9.9

-3.2

-3.4

6.7

11.6

8.8

5.6

Real Exports G & S

4.2

6.6

7.1

6.8

10.4

10.4

-2.8

-3.2

6.8

7.7

8.6

8.5

Real Imports G & S

9.7

5.4

11.0

5.2

4.2

1.0

-6.6

-6.0

6.3

8.3

7.1

4.1

Other Consumer Services

Billions 2005 Dollars

Exports & Imports % Change

Institute for Economic Competitiveness

33

In Appreciation

The UCF College of Business Administration would like to thank Alan C. Charron, ‘84, for his generous gift to the Institute for Economic Competitiveness. His support enables the Institute to publish this forecast and will help fund future activities and research. Charron graduated in 1984 with a degree in finance.

He is president of Real Property Specialists, Inc., located in Orlando, Florida.

Founded in 1992, Real Property Specialists, Inc., is a fullservice brokerage company that has built a reputation of providing highly personalized service while being responsive and flexible to its clients' individual needs. They offer a range of commercial real estate services in the Central Florida area including brokerage, appraisal, development, property management and tenant representation.

Real Property Specialists, Inc., has set a new standard of excellence in client service by providing these key advantages over the competition:

Responsiveness. You work directly with a decision

maker who has the flexibility to immediately attend to your needs.

Consistency. We are a unified firm employing team-

members who are committed to the success of our clients.

We pride ourselves on our ability to maintain a dedicated, professional staff that is able to build long-term, comfortable and prosperous relationships with our clients.

Accountability. At Real Property Specialists, our client is the real "Boss." We are accountable to no one other than the client. No company policy interferes with our ability to serve the individual needs of each client.

Experience. The staff at Real Property Specialists is

highly qualified, with most associates having more than a decade of experience in the industry. Our personal portfolio of shopping centers gives us first-hand knowledge of what is important when leasing, managing or selling a property.

Appraisers t Brokers t Consultants 6700 Conroy-Windermere Road, Suite 230 | Orlando, FL 32835 407.291.9000 | www.realpropertyspecialists.com

Director, Institute for Economic Competitiveness.

Ph.D., Pennsylvania State University 1996; M.A., Pennsylvania State University 1994; B.S., Allegheny College 1989.

Sea n M . S n ait h , P h . D .

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

Sean Snaith, Ph.D., is the Director of the Institute for Economic Competitiveness within the College of Business Administration at the University of Central Florida and is a widely recognized economist in the field of business and economic forecasting.

As an award-winning forecaster, researcher, and professor, Snaith is always interested in the application of academic expertise to the solution of real world problems.

Snaith has served as a consultant for a client list ranging from local and regional municipalities to multi-national corporations, including Compaq, Dell and IBM. He has held teaching positions at Pennsylvania State University, American University in Cairo, University of North Dakota and University of the Pacific.

Snaith frequently appears in national and regional media and is sought after as a speaker. He has been quoted in the Wall Street Journal, USA Today, the New York Times, and the Chicago Tribune and has appeared on CNBC and Fox Business Channel. Known for his engaging presentations, one business editor wrote, “Snaith (has) 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 USA Today’s Survey of Top Economists, Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, Bloomberg, Reuters and the Livingston Survey.

In 2007 he was named California’s most accurate forecaster by the Western Blue Chip Consensus Forecast, besting UCLA, Wells Fargo and other esteemed forecasting groups. Snaith holds a B.S. in Economics from Allegheny College and an M.A. and Ph.D. in Economics from Pennsylvania State University.

Snaith was recently named by Bloomberg News as one of the nation’s most accurate forecasters and was one of just two academic economists making the list which was released in the December 2008 issue of Bloomberg Markets.

For more information Sean Snaith, Director Institute for Economic Competitiveness College of Business Administration University of Central Florida P.O. Box 161400 Orlando, FL 32816 PH: 407.823.1451 FAX: 407.823.1454 E-MAIL: ssnaith@bus.ucf.edu www.iec.ucf.edu

U n i v e r s it y o f C e n t r al F l o r ida 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