UCF US Metro Forecast May 2016

U.S. Forecast

May 2016

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

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

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

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

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

H I G H L I G H T S O F T H E Q 2 2 0 16 U . S . F O R E C A S T In this U.S. Forecast: • Secular stagnation is not chronic fatigue syndrome. We need to treat the cause and not just the symptoms.

• Recent economic data have improved, but not enough to remove the shadow of recession hanging over the U.S. economy.

HIGHLIGHTS

• The rest of the world is still a drag: slow global economic growth and wavering global financial markets act as depressants to U.S. GDP growth, and net exports will weigh on the economy through 2019.

• The Federal Reserve raised interest rates in December of 2015; they will continue to take baby steps when raising interest rates twice this year and gradually thereafter, assuming they don’t reverse course to counter the next recession.

• Real GDP growth will slow to 1.6% in 2016, hit 2.7% in 2017 and 2018, then slow to 2.3% in 2019 as the Federal Reserve gradually tightens interest rates. A recession will most likely interrupt the Fed’s plans.

• Consumers are the primary source of GDP growth in the forecast.

Growth in real consumer spending from 2016 through 2019 will average just 2.6%. However, if consumer confidence erodes and consumers begin to pull back, there won’t be much to keep us from slipping into a recession.

• The housing market continues its gradual recovery. The housing market will slowly improve through 2018 when rising interest rates take their toll and housing starts level off. Housing starts will rise from around 1.2 million in 2016 to 1.54 million in 2019.

• Average monthly payroll employment growth in 2015 was slower than in 2014, and 2016 is off to an even weaker start. Uncertainty and regulatory burdens are hurting payroll job growth, which will slow to 1.9% in 2016 and further slow to growth rates of 1.3% in 2017 and 0.9% in 2018, before easing to 0.8% in 2019.

• Unemployment rates (U-3) are expected to stabilize around 4.9%— give-or-take 0.1 percentage points through 2018. Slower job growth will be just enough to keep up with labor force growth until 2018 when unemployment begins to climb. Underemployment (U-6) remains a persistent problem and stands at 9.7% as of April 2016.

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

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Secular Stagnation is Not Chronic Fatigue Syndrome Real GDP growth in the current economic expansion, which turns seven years old this June, has averaged a paltry 2.1%. The average growth rate through the 4th quarter of 2015 and the 1st quarter of 2016 has been even more anemic at 1.0%.

On the seventh birthday of this recovery, you can choose your own adjective to characterize it. Some suggestions include weak, subpar, tepid, puny, frail, feeble, scrawny, stunted, or my two choices above: paltry and anemic.

In 2009, before the official end to the recession had been declared, I projected that the recovery would be a much more gradual and protracted one. I described the path that the economy would follow out of the Great Recession as resembling the shape of a gravy boat: http://www.npr.org/sections/money/2009/06/the_gravy_ boat_recession.html At the time I didn’t think that the “spout” would stretch over seven years and counting. We are still stuck in the gravy boat recovery with little to no indication that we will ever get to a meaty portion of the recovery any time soon.

On these pages over the past seven years I have proffered several explanations as to why the recovery has been such an abject disappointment, some of which we will revisit below.

There have of course been others who have weighed in on the state of this recovery, one prominent voice being that of Larry Summers, former Secretary of the Treasury. He has reconstituted an old notion first put forth by Alvin Hansen in 1938 as he described his concerns about the U.S. economy in the wake of the Great Depression. Secular stagnation was the term used by Hansen to describe his concerns about the future of the U.S. economy and now has been resurrected by Summers to explain away the weak growth in both the U.S. and European economies.

Secular stagnation is a situation where a country has too much in savings and too little in investment; the latter of which causes future economic growth to be lower, as firms’ investments in machinery,

equipment, and structures are important sources of higher economic output in the future. The basic premise laid out by Summers states that private investment is falling because firms see low rates of population growth and innovation as indicators that future returns on investment are not likely to be high enough to justify the investment. This expectation by firms creates a self-fulfilling prophecy of slow growth.

Larry Summers’ answer to the problem is to have more government investment to jump-start demand and thus the economy.

There will be more on this diagnosis in a bit, but for now, let me turn to another condition: chronic fatigue syndrome.

The Mayo Clinic details chronic fatigue syndrome in this manner: “Chronic fatigue syndrome is a complicated disorder characterized by extreme fatigue that can’t be explained by any underlying medical condition. The fatigue may worsen with physical or mental activity, but doesn’t improve with rest.

The cause of chronic fatigue syndrome is unknown; although there are many theories, ranging from viral infections to psychological stress. Some experts believe chronic fatigue syndrome might be triggered by a combination of factors.

Chronic fatigue syndrome has eight official signs and symptoms, plus the central symptom that gives the condition its name: • • • • • •

Fatigue Loss of memory or concentration Sore throat Enlarged lymph nodes in your neck or armpits Unexplained muscle pain Pain that moves from one joint to another without swelling or redness • Headache of a new type, pattern or severity • Unrefreshing sleep • Extreme exhaustion lasting more than 24 hours after physical or mental exercise.”

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Chronic fatigue syndrome (CFS) was dubbed by the U.S. Centers for Disease Control in the late 1980’s, though the condition existed previously and was known as myalgic encephalomyelitis (ME).

In 1990, Newsweek magazine ran an article on CFS that used the term “Yuppie flu” implying falsely that the condition was a result of “burnout” suffered by these young, upwardly mobile professionals who had somehow hit the wall and were victims of their own ambition.

The explanation regarding the lack of innovation, I think, is relevant to issues of measurement of GDP: how do you measure the value of a tweet, a blog entry, or other social media postings? However, suggesting that innovation is somehow absent in this economy doesn’t reconcile with my observation of the world around me.

The bottom line on CFS is that the cause of this condition is unknown. There is not a pharmacological treatment or cure for CFS currently available.

Management is focused on the symptoms and includes psychological counseling, diet, activity management, and exercise therapy.

Sitting an arm’s length from me as I type this sentence is a handheld device that I can use to do a variety of things: make a voice call, make a video call, manage my calendar, send and receive e-mails, use for GPS navigation, access the internet, make purchases online or by waving it at check-out kiosk, take photos and video and share them electronically immediately, check the weather, as well as thousands of other applications—it’s an iPhone 6.

I disagree with both the asserted causes of secular stagnation and the suggestion that the only treatment available is for the symptoms of the disease and not the root causes. Summers points to slow population growth as one of the factors driving stagnation, yet while growth in population (labor supply) does impact the long run growth of the economy, slow population growth did not just appear during this lackluster recovery.

While population and innovation are both factors in determining economic growth largely out of the control of policy, to scapegoat them for a lackluster economy, I think, is a convenient way to wash the hands of the policymakers who have presided over this tepid economic recovery. One of whom is, of course, Larry Summers, who, among other proponents of secular stagnation, have been reliable boosters of the current administration and thus also eager to find a boogeyman to blame for our economic woes.

Larry Summers suggests economic policy aimed at treating the symptoms of secular stagnation as if it were CFS. That is to say there is, in his mind, no cure for the underlying causes of this economic disease.

His assertion is that slow population growth and a lack of innovation are causing firms to hold back on investing and causing the economic malaise that is the primary symptom of this condition. The government can’t control these exogenous factors and must increase spending to overcome the symptoms.

There are countless other examples: advances in autonomous vehicles, the private space-related sector having numerous breakthroughs including reusable rockets, modeling and simulation, robotics, 3-D printing, numerous advances on the medical front, drone technology, energy innovations, and the list could go on. To suggest that innovation is lacking as a cause of secular stagnation flies in the face of the many breakthroughs we observe on a near daily basis.

In 2015, real GDP growth was just under 2.0% and population growth was 0.80%. From 1983 to 1987, real GDP growth respectively was 7.83%, 5.63%, 4.28%, 2.94%, and 4.45%. Population growth during these years respectively was 0.92%, 0.87%, 0.89%, 0.93%, and 0.90%. I cannot buy into the notion that a one-tenth of one percentage point decline in population growth can explain such a dramatic difference in economic growth.

Economic policy is not the solution to our stagnation; it is a primary cause.

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It has been a while since we have written about it, but revisiting the economic policy uncertainty index1 is important to understand the role this uncertainty plays in causing the symptoms of our secular stagnation.

The original paper in which the policy uncertainty 1

www.policyuncertainty.com/us_monthly.html

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Figure 1. Economic Policy Uncertainty Over the Business Cycle 300

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index was created also demonstrated statistically that higher levels of policy uncertainty lead to lower levels of investment and employment in the economy.

Subsequent research by these and other authors2 fleshes out the channels through which the effects of policy uncertainty are transmitted to the economy.

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

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

We have seen the enemy of a robust recovery, and it is us. It is the policy uncertainty that we have created via Dodd-Frank, the Affordable Care Act, and thousands upon thousands of pages of new rules and regulations that have been written, with many more yet to come. No, more policy is not the cure to our economic ailment, but less may be just what the doctor ordered.

Figure 1 updates a chart we have looked at in previous issues of the Institute for Economic Competiveness’ U.S. Forecast. The chart plots out the monthly values of the policy uncertainty index from 1985 to present and has overlaid on that plot the average levels of the index for each phase of the business cycles that took place over that time span.

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The stagnation of the U.S. economy during this recovery does not have a mysterious cause like chronic fatigue syndrome. Appealing to low population growth and a supposed lack of innovation in the U.S. as the causes of weak growth, Ă la secular stagnation, suggests the solution is more government policy to knock the economy out of its low orbit.

You can see this research here: www.policyuncertainty.com/research.html Institute for Economic Competitiveness

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ANXIOUS INDEX

Economists’ Anxiety Stable

The most recent release (2nd quarter of 2016) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 38 forecasters surveyed for the publication put a 14.63% chance that a decline in real GDP will occur in the 3rd quarter of 2016. This quarter’s release reflects a stasis in forecasters’ anxiety. Their worries remain at the highest level since the 2nd quarter of 2013. The quarter-over-quarter increase of the anxious index from the 4th quarter of 2015 to the 1st quarter of 2016 survey was the largest since the 4th quarter of 2012.

This was during a period when the “fiscal cliff” was expected to hit the economy. Many economists and the Congressional Budget Office estimated that going over the fiscal cliff would have led to a recession in 2013, but actions taken to prevent that from transpiring avoided that outcome.

One section of the Survey of Professional Forecasters asked panelists to estimate the probability that real GDP will decline in the quarter in which the survey is taken, as well as the probabilities of a decline in each of the following four quarters. The anxious index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in early May of the 2nd quarter of 2016, the index stands at 14.63, which means that forecasters believe there is a 14.63% chance that real GDP will decline in the 3rd quarter of 2016.

The forecasters also report a 12.52% chance that we are currently (as of the 2nd quarter of 2016) experiencing a contraction in real GDP—lower than the probability the forecasters assigned for the 1st quarter of 2016. According to the panel, the probability that real GDP growth will turn negative is averaging around 16.60% through the end of the 3rd

Figure 2.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2016:Q2 100 90 80

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quarter of 2016, indicating that the forecasters’ assignment of probability for a contraction in real GDP in the upcoming year has not changed since last quarter’s survey.

Figure 2 plots the historical values of the anxious index, where the gray bars indicate periods of recession in the U.S. economy. The current level of the anxious index is now higher than the average level during the economic recovery (13.39), although it is nearly unchanged from the previous quarter’s reading.

GDP OUTLOOK

Recession Still a Shadow Over the Forecast But Not as Dark as in the First Quarter

2016 got off to an inauspicious start, to say the least. Global economic uncertainty, volatile financial markets, and real GDP growth in the U.S. of just 0.5% in the 1st quarter (having followed growth of just 1.4% in the 4th quarter of 2015), is not the stuff of which robust expansions are made. While the data that has been released since our last U.S. Forecast has shown some improvement in the state of the economy since that time, it hardly paints a picture of an economy that is poised to take off.

In fact, this lackluster start to the year prompted our very special episode of the U.S. Forecast dealing with recession. Even though this forecast does not explicitly predict the start of the next recession in the U.S. economy, the likelihood of facing one before the end of our forecasting horizon, 2019, remains significantly elevated.

The average rate of annual real GDP growth from 2010 through 2015 has been just 2.1%. The forecast for average real GDP growth from 2016-2019 is slightly higher at 2.3%, but represents a continuation of the subpar performance of the U.S. recovery.

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

There is no mirage for 2016; we are expecting real GDP growth to be just 1.7% for the full year. The weakness in the first half of the year will not be fully offset by the relatively stronger growth in the second half. Average growth of 1.0% in the first six months of 2016 will be followed by growth of 2.5% in the second half of the year.

The consumer will continue to lead the economy in 2016 as far as contributions to real GDP growth.

Gross Private Domestic Investment will not only fail to provide help in boosting GDP growth, but it will also be a drag on growth. The persistent fog of policy uncertainty and a presidential election cycle, which brings with it a far greater degree of uncertainty as to how the next administration will function, results in businesses remaining on the sideline rather than rushing investment projects into this thickening and already dense fog. Net exports will continue to be a drag on real GDP growth in 2016 and through the end of our forecast horizon. Government spending will provide little support to economic growth with its contribution diminishing over time.

In 2017, we are expecting real GDP growth of just 2.7%. This forecast was revised up by 0.2 of a percentage point from our February 2016 outlook after a downward revision for 2016. There will be no improvement in growth in 2018 with real GDP expanding at 2.7% again before dipping to 2.3% in 2019, as the gradual tightening of monetary policy begins to restrain the economy.

The timing of the first interest rate hike in December of 2015 has certainly been second- and third-guessed in the months that have followed. Clearly in this tightening cycle the Fed will move very slowly with any future interest rate hikes. Taking small steps when it raises rates with pauses between each rate hike will allow the Fed to gauge how the economy is faring, review additional data as it is released, and continue to monitor the state of the global economy and financial markets.

We expect the federal funds rate to slowly drift higher with another hike in June or July and in December 2016. The federal funds rate will reach 3.0% Institute for Economic Competitiveness

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in the 2nd quarter of 2019 and hold there. If the next recession sets in between now and 2019—this is a real possibility—the Fed would have to reverse its course on interest rates and since there would be little room for downward movement in interest rates, the Fed would once again have to use non-traditional tools of monetary policy. As a result, the possibility of negative interest rates is already being contemplated.

CONSUMER SPENDING

Consumers are Propping up What Remains of This Recovery

The U.S. consumer continues to play the largest role in supporting the recovery. However, the past two quarters saw a substantial weakening of consumer spending growth. In the 3rd quarter of 2015, consumption spending growth was 3.0% but then decelerated to 2.4% in the 4th quarter, as holiday spending came in much weaker than forecasted. In the first quarter of 2016, spending decelerated further to just 1.9%.

Consumer spending growth is a critical part of supporting real GDP growth. The other main sectors of the economy continue to face headwinds that suppress growth. Business investment and government spending are adding little to boost GDP growth and net exports are pulling down growth rather than propping it up, as discussed earlier.

The foundation of consumer spending continues to solidify. The labor market continues to recover, amid signs it may be losing some steam, and strong wage and salary growth continue to remain out of the grasp of most U.S. workers, with annual growth in April ticking up just a bit to 2.5% after hovering around 2.2% for several years. The housing market resumes its recovery and as housing prices rise, home equity grows. In the aggregate, almost all of the home equity destroyed by the collapse of the housing market has been recovered, but there are regions of the country, such as Florida and Nevada, where many homeowners are still significantly underwater in their mortgages.

Oil and gasoline prices plunged—hitting their lows early in 2016—but have increased from that point, 10

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though they remain at relatively low levels. This windfall of lower oil and gasoline prices left more disposable income in the wallets of U.S. consumers, but it is not a substitute for robust growth in wages and salaries. Nonetheless, it helps support consumer spending on some goods and services. Consumer spending at restaurants benefitted from this oil and gasoline windfall, but broad-based spending increases across all goods and services never materialized. The reason is understandable, as a consumer would prefer to have the monthly gasoline savings in the form of a larger monthly paycheck that is not as susceptible to the geopolitical risks of oil prices.

Global economic and financial market uncertainty began to erode consumer confidence despite positive developments in other areas. As a result, consumerspending growth is expected to decelerate to around 2.6% for 2016, and then hit 2.8% in 2017, before slowing to 2.6% in 2018 and 2.5% in 2019.

INVESTMENT Despite record levels of profits during this recovery and historically low interest rates, nonresidential fixed investment growth during the recovery has been quite weak. In the 4th quarter of 2015, investment spending growth turned negative, contracting 2.1%.

The contraction was due in large part to purchases of aircraft, which can swing wildly from one quarter to the next depending on the timing of massive purchases by the world’s airlines. These decreased by 48.2% in the quarter. The contraction also reflects the negative impact of falling oil prices. Consumers may be enjoying the prices at the pump but oil producers are cutting back on investment as the rig count in the U.S. continues to drop. During 2015, investment in mining and petroleum equipment contracted by 34.7% and is expected to further contract in 2016 by 56.1%.

It is not just aircraft and oil rigs that are driving the weakness in investment spending. There is a more fundamental problem with investment in this recovery, and we have discussed the role of policy uncertainty and the rapid growth in the regulatory burden as probable causes of this weakness. This environment is unlikely to improve anytime soon and is worsening

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with a presidential political cycle underway that has been anything but predictable.

In 2014, the 6.2% pace of real private nonresidential fixed investment growth, once again, decelerated to 2.9%. The weak start to 2016 in an environment of increasing uncertainty will result in a further deceleration of investment spending growth to -0.1%. After the presidential election is over, some uncertainty will fade and, with answers to many questions in hand, business investment growth will accelerate to 4.4% in 2017 and 5.4% in 2018. In 2019, the Fed’s tightening of interest rates will result in a slight deceleration of growth to 4.6%.

Interest rates are still very low, even as the Fed has begun to push up the federal funds rate. Overall, interest rates will continue to rise in a drawn-out process that will stretch until 2019.

Business spending on equipment and software will grow at an annual average rate of 4.2% from 2016 through 2019. Investment spending growth in computers and peripherals will accelerate in 2016 as upgrade cycles kick in after this spending had contracted in 2014 and 2015. Spending on communications equipment should expand at an average annual rate of 5.8% during 2016-2019, while industrial equipment purchases average 5.7% growth over the same time frame.

Investment in nonresidential structures growth has oscillated wildly over the past several years. The wild ride continued during 2014 and 2015. After growth jumped to 8.2% in 2014, it turned negative in 2015 with growth coming in at -1.5%. This will be followed by another year of negative growth in 2016 at -3.9%.

Investment in nonresidential structures will slowly grow in 2017, 2018, and 2019 with growth of 3.7%, 5.2%, and 4.6%, respectively. Plunging oil prices are causing a sharp two-year contraction in Mining and Petroleum structures growth, which is expected to average -45.4% during 2015-16.

Investment growth in transportation equipment decelerated in 2015 to 8.7%, following five years of very strong double-digit growth averaging 33.5%. This type of investment will have an average growth rate of just 2.1% during the four-year period spanning 2016 through 2019.

Residential fixed investment growth surged to 8.9% in 2015 after slumping to 1.8% in 2014. Growth will average 5.8% through 2016-2019, decelerating over the entire period, with a peak growth rate in 2016 of 9.3%. In the final year of our forecast (2019), real residential fixed investment will be dampened by both higher mortgage rates—which are expected to average 5.7% on a 30-year fixed mortgage that year—and a slower pace of price appreciation. As a result, growth is expected to be 0.7% in the final year of our forecast. In 2019, real residential fixed investment will be just over $660 billion—$212 billion less than its 2005 peak.

We expect housing starts to accelerate over the next several years, reaching a level just below 1.55 million in 2019. Average levels of annual housing starts from 2016-2019 will be 1.4 million. In 2019, housing starts are expected to show an increase of 992,439 starts from their 2009 nadir.

GOVERNMENT SPENDING 2015 was the fifth year in a row that federal government spending growth was negative. 2016 will put an end to this streak, as federal government spending will grow 1.1% and will expand at that same rate in 2017. Beyond 2017 and through 2019, federal government spending is expected to continue to shrink, contracting at an annual average pace of -1.1%. Over the 2016 to 2019 time horizon, state and local governments will oversee spending growth at an average rate of 1.1%.

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

The federal budget deficit will rise in 2016 and in each subsequent year in our forecast horizon after four years of shrinking from nearly $1.3 trillion in 2011 to $439 billion in 2015. We are forecasting deficits to widen significantly in 2016, as sputtering economic Institute for Economic Competitiveness

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growth cannot compensate for greater spending for entitlements and reversals of the sequester, thereby pushing the deficit to $554.6 billion. In 2017, the deficit will decline somewhat to $576.5 billion before climbing again in 2018 when it hits $588.0 billion.

The deficit, in 2019, grows even larger as swelling entitlement spending pushes it to $706.1 billion. This is the largest budget deficit since 2012.

The U.S. continues to travel on a fiscal path that will take us to a destination featuring a fiscal crisis not unlike that which Greece experienced in 2010.

The existing structure of entitlements including the Affordable Care Act and the demographics of an aging population actuarially guarantee that if no changes are made to these programs and how they are funded, we will eventually face a fiscal meltdown. Because the onset of such a crisis is still well beyond any upcoming elections, it seems highly unlikely that the needed, and politically unpalatable, changes will be implemented in the near future.

Although we are projecting deficits through 2019 that are smaller than the $1 trillion-plus deficits that were the norm in 2009-2012, the additional debt added to the national debt over the next four years will be more than $2.4 trillion, pushing the national debt total to over $21.6 trillion before interest. As interest rates in the economy rise, the burden of servicing this debt will rise as well, consuming a greater share of federal tax revenues.

Currently, the national debt is over $19.2 trillion and rising. This represents a debt of nearly $161,054 per taxpayer and over $59,557 per citizen. The unfunded liabilities of the U.S. are even more alarming. These include Social Security, Medicare parts A, B and D, Federal debt held by the public, and federal employee and veteran benefits, representing more than $102.2 trillion in liabilities, boiling down to $854,626 per taxpayer.

NET EXPORTS Net exports became a drag on real GDP growth in the U.S. in 2014, shaving off 0.18 percentage points from growth that year, and even more in 2015, when net exports shaved 0.64 percentage points off of real 12

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GDP growth last year. This drag is expected to last through the end of our 2019 forecast horizon.

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

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

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

Overall, export growth continues through the end of our 2019 forecast horizon and is expected to accelerate during that time frame—a result of a predicted depreciation of the dollar that is anticipated to begin in 2016. Growth will remain flat in 2016 before jumping in 2017. Real export growth from 2016-2019 will average 3.3%, while real import growth will average 4.2% over the same time frame.

Real net exports will average -$662.7 billion during 2016-2019, with the trade balance worsening in each successive year and coming in at -$718.2 billion in 2019. The sizeable appreciation of the dollar during 2012-2015 and weaker global growth will dampen demand for U.S. goods and services and whet the appetite for imported goods and services in the U.S.

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U N E M P LOY M E N T The national headline unemployment rate (U-3) in April held steady at the March reading of 5.0%. The unemployment rate remained unchanged despite a significant decrease of 362,000 people in the labor force from the previous month, as the labor force participation rate declined from 63.0% to 62.8%. The number of unemployed people fell by 46,000 in April.

The April jobs report showed much weaker payroll job growth compared to March’s gain of 208,000 jobs, which followed a revised 233,000 jobs added to payrolls in November. The 160,000 gain in payroll employment in April puts the average growth in monthly payrolls for 2016 at 192,000. Average payroll job growth for 2015 came in at 229,000, down from 2014’s average growth of 251,000. Job growth decelerated last year and continues to do so thus far in 2016. Stagnating job growth is a troublesome trend to keep a wary eye on as 2016 progresses.

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

(U-6). U-6 takes into account discouraged workers (currently 568,000 workers) as well as those classified as underemployed (currently 5.9 million workers)— working part-time but not by choice—and workers who are marginally attached to the labor force and have looked for work in the past 12 months but are not currently looking, yet indicate a willingness to work (1.7 million workers). None of these 8.1 million workers are counted in the headline unemployment rate of 5.0%.

U-6 remains high at 9.7% in April 2016, down 0.7 percentage points from the April 2015 level of 11.3%, and down 7.4 points from its peak of 17.1% in April 2010. U-6 remained in double digits for 88 straight months, more than seven years. It has been in single digits for seven months running as of April.

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

Some of the decline in the overall labor force participation rate is due to retiring Baby Boomers, as it is calculated based on the population of everyone 16 years or older, but these demographics cannot fully explain the decline. However, if we look only at primeage workers from 24 to 54, we still see a significant decline in their labor force participation rates. In April 2016, this participation rate stood at 81.2%, down from 83.3% at the start of the recession. We can thus conclude that there exists a much greater slack in the labor market than the headline unemployment rate would suggest, and it is not solely attributable to retiring Baby Boomers.

The Bureau of Labor Statistics (BLS) produces alternative measures of labor market weakness, including the broadest measure of unemployment

Institute for Economic Competitiveness

13

U . S . F orecast C harts

30-Year Mortgage Rates and Housing Starts 8.0

(Mortgage rates - Left axis, %)

2.5

7.0

2.0

6.0

1.5

5.0

1.0

4.0

0.5

3.0

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

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Auto Sales Light Truck Sales

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

14

U.S. Forecast | May 2016

(Billions of 2000 Dollars)

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

U . S . F orecast C harts

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

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

Federal Funds Rate 6.0

(%)

5.0 4.0 3.0 2.0 1.0 0.0 -1.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Fed Funds Rate Institute for Economic Competitiveness

15

U . S . F orecast C harts

Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0

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

Industrial Production 115.0

(2002=100)

110.0 105.0 100.0 95.0 90.0 85.0

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

Private Fixed Nonresidential Investment 3000.0

(Billions of Dollars)

2500.0 2000.0 1500.0 1000.0

16

U.S. Forecast | May 2016

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

U . S . F orecast C harts

Manufacturing Employment (Millions)

18.0 17.0 16.0 15.0 14.0 13.0 12.0 11.0

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

Money Supply

3500.0

(Annual Growth Rate %)

3000.0 2500.0 2000.0 1500.0 1000.0 500.0

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

Total Nonfarm Payroll Employment 150.0

(Millions)

145.0 140.0 135.0 130.0 125.0

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

17

U . S . F orecast C harts

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120.0

100 90

100.0 80.0

80

60.0

70

40.0

60

20.0 0.0

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

50

Real Disposable Income and Consumption 6.0

(% Change Year Ago)

4.0 2.0 0.0 -2.0 -4.0

-400

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

Trade Balance and Real Exchange Rate

1.50 1.40

-500

1.30

-600

1.20

-700

1.10

-800

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

18

U.S. Forecast | May 2016

0.80

U . S . F orecast C harts

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

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

Civilian Unemployment Rate 10.0

(%)

9.0 8.0 7.0 6.0 5.0 4.0 3.0

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

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

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

19

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

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

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

Real GDP Nominal GDP

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

2010

2011

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

2.5 1.1 1.9 6.1 2.2 1.2 2.6 15.9 10.0 11.2 13.6 -0.2 80.2 26.9 17.4 -15.7 -24.1 -27.7 -15.9 21.7 -26.3 -2.4 11.9 12.8 4.4 -2.7

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

2012

2013

2014

2015

Billions of Dollars 14418.8 14783.8 15020.6 15354.6 15583.3 15961.7 16348.9 14418.7 14964.4 15517.9 16155.3 16663.2 17348.1 17947.0

2.1 3.1 1.7 6.0 2.2

61.7 3.2 -11.4 65.6 -146.0 66.3 10.402 0.554 3.868 9.3 -4.3 -1416 -384

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

95.1 0.2 2.9 73.7 36.6 67.4 12.735 0.612 3.792 8.9 1.2 -1297 -460

94.2 0.9 2.8 74.6 72.7 76.5 14.443 0.784 4.125 8.1 1.7 -1089 -450

Other Measures 98.0 93.0 48.8 0.0 0.8 0.7 1.9 2.9 0.3 74.5 75.4 75.5 54.3 65.0 93.2 79.2 84.1 92.9 15.532 16.435 17.3 0.928 1.001 1.1 4.475 4.338 4.6 7.4 6.2 5.3 1.6 1.9 2.1 -680 -484 -439 -377 -390 -484

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

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

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

0.10 0.05 0.18 1.52 2.79 3.91 4.46 1269 11.5 0.912 -5.8

0.14 0.09 0.18 0.76 1.80 2.92 3.66 1380 8.9 0.946 3.8

Financial Markets, NSA 0.11 0.09 0.1 0.06 0.03 0.1 0.13 0.12 0.3 1.17 1.64 1.5 2.35 2.54 2.1 3.45 3.34 2.8 3.98 4.17 3.9 1643 1931 2061.2 19.0 17.7 6.9 0.977 1.010 1.2 3.3 3.4 16.2

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)

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

12477 3.2 11238 2.7 11055 1.0 5.6 1470 23.4

13255 6.2 11801 5.0 11331 2.5 6.1 1428 -2.9

13915 5.0 12404 5.1 11688 3.1 7.6 1683 18.1

14068 1.1 12396 0.0 11523 -1.4 4.8 1693 0.6

Incomes 14694 4.4 12914 4.2 11836 2.7 4.8 1694 0.1

15340 4.4 13395 3.7 12240 3.4 5.1 1751 3.4

Forecast 2017 2018

2.7 2.6 2.8 6.7 2.7 2.2 4.4 4.8 6.0 5.5 6.3 4.1 4.0 9.2 6.0 3.7 6.0 -9.3 -5.7 53.4 6.3 7.5 3.7 5.1 1.1 0.9

2.7 2.5 2.6 5.2 2.3 2.3 5.4 6.5 6.9 5.2 6.8 8.7 3.6 2.0 5.5 5.2 3.1 -2.1 -3.4 49.0 3.8 5.6 4.6 5.4 -1.1 1.1

2019

2.3 2.4 2.5 4.7 2.4 2.3 4.6 5.3 6.1 4.4 5.8 7.0 1.2 4.4 3.2 4.6 6.1 -0.8 -0.5 16.5 3.0 0.7 5.0 4.5 -1.0 1.2

16612.5 17056.0 17508.1 17913.1 18474.5 19355.8 20290.9 21202.8

Prices & Wages, Percent Change, Annual Rate 1.8 1.6 1.6 1.0 1.3 2.1 1.5 1.6 0.1 1.0 2.1 1.8 1.7 1.8 2.2 1.9 1.2 1.9 -3.3 -1.6 1.9 1.9 2.1 2.1 2.2

1.2 1.6 1.0 4.2 1.9

U.S. Forecast | May 2016

2016

Composition of Real GDP, Percent Change 2.2 1.5 2.4 2.4 1.6 2.1 1.4 2.4 2.3 2.1 1.5 1.7 2.7 3.1 2.6 7.4 5.8 5.8 6.0 4.5 0.6 1.9 2.1 2.6 2.2 0.8 1.0 2.4 2.8 2.5 9.1 3.0 6.2 2.9 -0.1 10.9 3.2 5.9 3.1 0.2 6.0 3.8 3.8 4.9 3.6 7.0 4.1 -3.2 -0.8 1.7 4.9 9.4 3.0 7.5 4.3 9.4 -2.5 7.3 4.7 3.0 23.5 12.8 13.3 8.7 -0.3 7.5 13.0 15.6 19.3 -7.9 21.8 4.0 16.0 1.0 -8.7 13.3 1.6 8.2 -1.5 -3.9 8.6 3.6 12.9 13.0 11.7 15.7 4.2 11.1 49.6 4.7 21.4 -4.4 8.8 -9.3 1.3 12.7 2.4 6.6 -34.7 -56.1 9.5 4.7 4.0 12.2 9.3 13.5 9.6 1.8 8.9 9.2 3.4 2.8 3.4 1.2 0.0 2.2 1.1 3.8 4.9 1.6 -1.9 -5.7 -2.4 -0.3 1.1 -1.9 -1.0 0.6 1.4 1.3

0.8 -0.3 1.7 -2.6 1.4

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

20

2009

2.0 2.3 2.0 2.8 2.5

2.1 2.5 2.1 2.9 3.0

2.1 2.6 2.2 2.8 3.1

42.3 0.1 -1.3 74.8 21.8 87.8 17.7 1.2 4.8 4.9 1.9 -555 -453

47.5 1.3 2.7 75.5 30.7 85.4 18.2 1.4 4.8 4.8 1.3 -576 -428

53.0 2.0 3.6 76.3 56.8 85.6 18.1 1.5 4.9 4.9 0.9 -588 -502

62.6 2.0 2.6 75.7 46.9 85.5 17.7 1.5 4.8 5.1 0.8 -706 -574

0.6 0.4 0.6 1.4 2.0 2.8 3.8 2069 0.4 1.2 -0.2

1.4 1.1 1.2 1.8 2.4 3.1 4.3 2233 8.0 1.1 -2.3

2.4 2.1 2.4 2.8 3.0 3.5 5.0 2360 5.7 1.1 -3.9

3.0 2.8 3.0 3.3 3.6 4.1 5.7 2431 3.0 1.1 -3.5

15920 3.8 13878 3.6 12565 2.7 5.1 1701 -2.6

16667 4.7 14536 4.7 12937 3.0 5.3 1798 5.8

17508 5.0 15308 5.3 13354 3.2 5.9 1825 1.5

18376 5.0 16091 5.1 13744 2.9 6.3 1815 -0.5

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

Table 2. Real Gross Domestic Product History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

14418.8 14783.8 15020.6 15354.6 15583.3 15961.7 16348.9

16612.5 17056.0 17508.1 17913.1

14566.3 14722.2 14979.0 15292.3 15511.4 15881.7 16242.0

16579.6 17013.4 17439.6 17854.0

9847.0 10036.3 10263.5 10413.2 10590.4 10875.7 11213.3

11508.3 11829.9 12138.0 12445.9

Durables

1023.3

1085.7

1151.5

1236.2

1307.6

1384.1

1466.5

1532.3

1635.5

1720.9

1801.8

Nondurables

2175.1

2223.5

2263.2

2277.5

2319.8

2367.8

2430.0

2483.9

2549.7

2608.4

2669.9

Services

6648.5

6727.6

6851.4

6908.1

6977.0

7144.6

7345.3

7526.7

7694.3

7870.5

8048.2

1633.5

1673.8

1802.3

1964.2

2023.8

2148.3

2209.3

2206.7

2302.9

2428.1

2540.8

644.3

746.7

847.9

939.2

969.5

1026.2

1057.8

1059.6

1110.5

1182.2

1244.4

256.1

281.4

285.9

303.1

314.4

326.4

342.2

354.5

375.6

401.4

425.9

Computers & Peripherals

76.8

84.7

83.0

88.5

92.0

89.0

88.3

89.6

94.6

99.5

103.9

Communications Equipment

79.4

90.2

91.8

96.3

105.2

108.1

115.8

120.5

128.0

136.8

144.6

152.1

151.3

183.3

199.8

194.8

208.9

218.7

225.2

234.5

254.9

272.8

70.6

127.5

173.9

213.1

240.6

272.4

295.4

294.5

306.1

317.2

321.0

17.7

22.1

27.9

29.2

33.0

37.4

43.7

40.0

43.3

44.2

46.1

30.8

36.2

48.1

58.1

60.3

69.8

69.9

63.7

67.6

71.2

73.5

438.2

366.3

374.7

423.1

429.7

464.6

457.7

439.5

455.9

479.7

501.6

126.7

95.2

94.7

102.8

106.4

120.3

135.7

151.5

160.4

165.5

175.6

Manufacturing

56.3

40.8

39.1

44.9

46.8

52.0

77.5

80.8

73.2

71.6

71.0

Power & Communication

95.8

80.4

74.1

89.7

85.6

90.9

80.1

81.0

76.4

73.8

73.5

Mining & Petroleum

75.0

87.8

110.9

123.8

126.7

135.0

87.6

37.0

56.2

82.8

96.3

Other

84.5

62.0

56.2

61.5

64.3

66.9

75.1

81.8

87.0

90.3

93.0

392.3

382.4

384.5

436.5

478.0

486.4

529.6

578.3

622.0

656.3

660.9

Exports

1587.7

1776.6

1898.3

1963.2

2018.1

2086.4

2110.1

2110.4

2187.8

2289.4

2403.8

Imports

1983.2

2235.4

2357.7

2410.2

2435.6

2528.9

2653.5

2697.2

2834.9

2988.1

3122.1

Federal Government

1217.7

1270.7

1236.4

1213.5

1144.1

1116.3

1113.2

1125.3

1137.3

1124.5

1113.4

State & Local Government

1871.4

1820.8

1761.0

1728.1

1710.2

1720.8

1744.3

1766.9

1783.2

1803.6

1825.8

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Institute for Economic Competitiveness

21

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

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

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

Real GDP Nominal GDP

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

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

0.5 0.9 1.9 -1.6 1.0 2.7 -5.8 -8.6 -6.3 11.7 -22.0 -2.9 -13.1 -42.4 -18.1 -10.7 28.0 3.1 -6.1 -86.0 11.6 14.9 -2.6 0.2 -1.6 2.9

1.5 2.6 3.0 8.7 2.8 2.2 2.7 4.5 4.9 5.0 7.4 2.6 12.6 69.1 0.8 -1.2 10.0 -3.2 0.3 -50.6 7.0 4.9 -0.1 1.7 3.5 -0.1

2.0 2.6 2.9 6.7 3.0 2.3 3.8 4.4 6.8 5.3 8.0 2.5 3.9 34.6 4.6 2.4 8.0 -5.0 -0.7 -6.8 7.1 5.4 3.5 5.5 2.6 1.0

3.0 2.7 2.9 7.4 2.9 2.2 3.9 3.7 5.8 4.4 6.7 1.3 2.8 6.7 6.5 3.9 5.0 -11.2 -2.6 73.3 5.9 7.6 3.7 4.5 0.8 1.2

2.8 2.7 2.7 6.0 2.6 2.2 5.1 4.6 5.6 6.3 5.4 2.7 4.8 5.3 6.6 7.3 11.9 -12.2 -3.3 88.5 7.0 7.5 4.1 5.1 1.1 1.2

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

Prices & Wages, Percent Change, Annual Rate 2.1 2.1 2.1 2.1 2.2 2.0 2.8 2.7 2.5 1.9 2.9 2.6 2.0 2.0 2.1 2.1 2.2 2.2 3.9 4.0 2.8 1.5 3.7 3.0 2.7 2.9 3.0 3.1 3.1 3.1

1.0 1.0 2.1 2.6 2.2

2.8 3.6 2.0 2.0 2.3

1.9 1.7 2.0 2.8 2.5

33.5 -1.0 -2.2 75.4 62.7 91.6 17.111 1.133 4.710 4.9 1.9 -586 -514

43.9 0.5 -0.5 74.9 20.0 86.9 17.839 1.140 4.761 4.9 1.8 -641 -449

48.0 0.7 -1.4 74.4 -3.5 86.1 17.964 1.167 4.799 4.9 1.6 -646 -430

43.9 1.5 2.8 74.7 8.1 86.8 17.966 1.233 4.845 4.9 1.6 -672 -421

43.3 1.2 3.8 75.0 15.5 85.0 18.027 1.311 4.788 4.9 1.4 -714 -415

47.0 1.4 3.7 75.3 26.8 85.1 18.148 1.367 4.783 4.8 1.1 -724 -418

Other Key Measures 49.7 50.0 49.5 51.9 1.7 2.0 2.2 2.1 4.1 4.2 4.1 3.4 75.6 76.0 76.3 76.4 35.0 45.4 58.1 61.3 85.5 86.0 85.6 85.9 18.196 18.236 18.172 18.115 1.404 1.438 1.476 1.489 4.821 4.854 4.874 4.872 4.8 4.8 4.8 4.8 0.9 1.0 0.8 0.9 -720 -734 -801 -808 -435 -445 -465 -492

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

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

0.42 0.27 0.61 1.32 1.90 2.69 3.70 2068 27.0 1.151 -15.7

0.42 0.23 0.50 1.31 2.02 2.76 3.86 2115 9.2 1.164 4.6

0.72 0.64 0.83 1.65 2.33 3.01 4.09 2144 5.6 1.161 -1.0

0.79 0.76 0.78 1.64 2.32 2.99 4.21 2177 6.3 1.153 -2.7

1.03 0.97 0.97 1.72 2.39 3.05 4.24 2216 7.4 1.147 -2.3

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)

15692 3.4 13682 3.2 12449 2.9 5.2 1625 -3.5

15848 4.0 13814 3.9 12526 2.5 5.1 1685 15.7

15981 3.4 13928 3.3 12606 2.6 5.0 1711 6.2

16160 4.6 14090 4.7 12679 2.3 4.9 1782 17.7

16371 5.3 14272 5.3 12800 3.9 5.2 1754 -6.1

16574 5.1 14452 5.1 12894 3.0 5.2 1796 9.9

U.S. Forecast | May 2016

2.1 2.3 2.4 4.6 2.1 2.2 4.7 5.2 6.0 3.7 6.0 6.5 1.7 2.6 5.2 4.8 7.7 0.7 2.1 8.5 3.2 -0.6 5.1 4.4 -1.6 1.5

2019Q1

2019Q2

2019Q3

2019Q4

2.4 2.5 2.9 5.0 2.8 2.6 4.4 4.9 6.3 5.0 5.8 6.7 0.0 5.0 3.4 4.5 5.6 -1.0 -1.9 18.4 3.5 -1.9 4.9 4.3 -0.6 1.3

2.2 2.3 2.4 4.6 2.4 2.1 4.5 5.2 6.0 4.3 5.4 6.8 0.9 4.9 1.5 3.8 5.6 -1.6 -2.7 16.2 2.1 0.2 4.9 4.6 -0.6 1.3

2.3 2.3 2.4 4.7 2.2 2.1 3.9 4.6 5.8 4.6 4.7 6.1 -1.0 5.3 1.6 3.1 6.0 -2.3 -0.1 7.5 1.7 3.4 5.2 4.3 -0.5 0.9

2.2 2.2 2.3 4.2 2.1 2.1 3.9 4.6 5.4 4.5 4.5 6.4 -0.2 4.0 1.6 2.9 6.0 -1.0 1.1 4.3 1.3 2.9 4.9 4.1 -0.8 0.2

Billions of Dollars 16492.7 16555.7 16638.3 16763.2 16881.3 17001.9 17113.5 17227.3 17350.0 17463.1 17563.0 17656.1 17763.3 17862.3 17964.5 18062.4 18221.1 18377.2 18516.1 18783.6 19006.8 19243.8 19471.2 19701.4 19946.5 20187.5 20405.9 20623.7 20862.1 21085.7 21317.0 21546.4

1.9 1.7 1.7 -0.4 2.3

22

2018Q4

Composition of Real GDP, Percent Change, Annual Rate 2.9 2.7 2.7 2.9 2.6 2.3 2.6 2.5 2.4 2.6 2.6 2.4 3.0 2.6 2.6 2.8 2.5 2.4 7.0 6.6 5.6 4.9 4.1 5.0 2.7 2.2 2.1 2.6 2.3 2.0 2.4 2.1 2.2 2.6 2.2 2.2 4.1 4.8 5.5 5.5 6.3 5.6 5.4 5.6 6.4 6.7 7.7 6.1 5.3 6.7 7.6 7.3 7.1 6.1 4.9 6.7 6.4 4.4 6.2 3.3 5.1 6.6 6.5 7.7 6.9 6.9 6.7 7.7 9.0 9.1 9.7 8.8 3.9 1.1 1.9 4.2 7.4 3.1 -5.3 -2.1 2.1 2.9 3.9 4.7 8.9 6.0 1.8 6.6 8.7 2.2 0.6 3.7 6.1 4.8 6.4 7.0 -1.8 4.3 5.1 -1.8 5.2 6.3 -13.7 -3.6 -3.9 0.4 -1.0 0.1 -15.0 -9.7 -2.5 -4.3 1.4 0.0 90.4 52.6 59.6 59.6 35.7 33.1 7.7 3.6 2.9 3.7 3.3 5.0 9.3 8.6 7.1 5.7 4.3 3.1 5.0 5.0 3.8 4.3 4.3 4.7 6.0 5.8 5.5 5.8 5.1 4.8 0.8 0.1 -1.2 -1.5 -1.5 -1.7 0.8 0.8 1.0 1.1 1.5 1.4

0.7 -0.3 2.7 -4.8 2.6

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

2018Q3

2.2 2.7 2.2 3.0 3.1

2.2 2.5 2.2 2.6 3.1

2.1 2.5 2.2 2.5 3.1

2.1 2.6 2.2 2.9 3.1

2.1 2.6 2.2 2.8 3.1

54.0 1.9 2.4 76.3 56.2 85.7 18.076 1.511 4.831 4.9 0.8 -820 -519

56.4 1.9 2.4 76.1 51.5 85.3 17.970 1.514 4.828 4.9 0.7 -844 -531

58.6 2.2 2.4 76.0 47.9 84.9 17.897 1.524 4.822 5.0 0.8 -894 -553

61.2 2.0 2.8 75.8 46.7 85.4 17.801 1.537 4.811 5.1 0.7 -911 -574

63.9 1.9 2.8 75.7 45.6 85.5 17.691 1.551 4.787 5.1 0.8 -907 -580

66.5 1.7 2.5 75.5 47.3 86.1 17.554 1.573 4.773 5.2 0.8 -908 -590

Financial Markets, NSA 1.29 1.54 1.79 2.03 1.25 1.51 1.77 2.00 1.24 1.70 2.02 2.25 1.84 2.13 2.45 2.67 2.48 2.54 2.65 2.82 3.12 3.18 3.24 3.32 4.32 4.44 4.64 4.84 2251 2289 2321 2348 6.4 7.0 5.7 4.7 1.139 1.131 1.123 1.103 -2.8 -2.8 -2.8 -6.9

2.29 2.23 2.49 2.91 3.12 3.60 5.12 2373 4.5 1.086 -5.8

2.54 2.45 2.71 3.13 3.43 3.89 5.42 2399 4.4 1.079 -2.6

2.79 2.62 2.82 3.23 3.55 4.02 5.59 2420 3.6 1.068 -4.1

3.00 2.81 3.02 3.39 3.68 4.13 5.70 2425 0.7 1.061 -2.7

3.00 2.81 3.01 3.37 3.66 4.11 5.73 2430 0.9 1.057 -1.5

3.00 2.81 3.00 3.36 3.65 4.10 5.71 2447 2.7 1.052 -1.7

Incomes 16959 17203 4.8 5.9 14799 15036 5.0 6.6 13073 13228 2.9 4.9 5.4 5.8 1831 1798 4.9 -7.2

17605 4.7 15395 4.8 13394 2.5 5.9 1829 -0.3

17815 4.8 15583 5.0 13485 2.7 6.0 1841 2.5

18061 5.6 15813 6.1 13614 3.9 6.2 1804 -7.7

18273 4.8 16003 4.9 13706 2.7 6.3 1806 0.5

18481 4.6 16184 4.6 13788 2.4 6.3 1820 3.1

18689 4.6 16363 4.5 13866 2.3 6.3 1831 2.4

16763 4.6 14621 4.8 12979 2.7 5.3 1810 3.1

17406 4.8 15216 4.9 13310 2.5 5.8 1831 7.6

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

Table 4. Quarterly Gross Domestic Product 2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

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

16492.7 16555.7 16638.3 16763.2 16881.3 17001.9 17113.5 17227.3 17350.0 17463.1 17563.0 17656.1 17763.3 17862.3 17964.5 18062.4 16420.7 16524.9 16630.0 16742.8 16853.7 16963.2 17066.7 17170.2 17280.4 17390.2 17495.1 17592.8 17703.4 17803.5 17906.6 18002.7 11383.2 11467.9 11549.6 11632.6 11709.1 11794.9 11870.3 11945.3 12028.5 12101.7 12174.5 12247.4 12335.4 12410.1 12483.3 12554.7

Durables

1489.4 1520.9 1545.6 1573.3 1596.4 1623.7 1649.7 1672.4 1692.7 1709.8 1730.6 1750.4 1771.8 1791.8 1812.4 1831.3

Nondurables

2457.6 2474.4 2492.7 2510.7 2526.8 2543.7 2557.4 2570.9 2587.4 2602.2 2615.1 2628.9 2647.0 2662.9 2677.7 2691.9

Services

7464.5 7505.5 7547.7 7589.0 7629.6 7675.3 7715.0 7757.2 7806.3 7849.6 7891.9 7934.2 7985.7 8027.7 8069.1 8110.4

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

2179.9 2194.7 2215.3 2236.8 2264.6 2287.2 2314.2 2345.5 2377.1 2413.6 2446.7 2474.7 2501.7 2529.3 2553.8 2578.4 1042.7 1054.2 1065.7 1075.5 1087.7 1102.1 1117.3

1134.9 1153.4 1175.1 1192.6 1207.8 1222.2 1237.8 1251.8 1265.9

347.2

351.3

357.2

362.2

367.2

372.0

378.1

385.1

391.9

398.7

404.6

410.6

416.9

422.9

429.0

434.7

88.0

89.1

90.2

91.2

92.6

93.7

95.3

96.8

97.8

99.3

100.1

101.0

102.2

103.3

104.5

105.6

117.2

119.3

121.6

123.6

125.3

126.9

128.9

131.0

133.4

135.7

138.0

140.0

142.0

143.9

145.5

147.2

Industrial Equipment

223.3

224.7

226.0

226.8

228.3

232.0

236.4

241.5

246.9

252.6

258.0

262.1

266.4

270.8

274.8

279.1

Transportation Equipment

286.1

294.7

297.6

299.6

303.1

306.0

306.8

308.3

311.5

317.1

319.5

320.9

320.9

321.6

320.8

320.7

34.7

39.5

42.6

43.3

43.8

43.3

43.0

43.2

43.6

44.0

44.5

44.8

45.3

45.9

46.5

46.9

63.0

63.2

63.9

64.9

65.9

67.3

68.3

68.6

69.7

71.2

71.6

72.5

73.1

73.4

73.6

73.9

438.2

436.8

439.5

443.7

451.6

452.3

456.5

463.3

468.7

476.0

484.1

489.9

495.3

500.0

503.8

507.4

146.9

150.4

153.3

155.2

159.6

158.9

160.6

162.6

161.9

163.9

166.5

169.6

171.9

174.3

176.8

179.5

Manufacturing

82.4

81.7

80.7

78.3

75.8

73.0

72.4

71.6

71.7

71.5

71.6

71.7

71.5

71.2

70.8

70.6

Power & Communication

81.2

81.2

81.1

80.6

79.9

76.7

74.8

74.3

73.5

73.8

73.8

74.2

73.8

73.3

73.3

73.5

Mining & Petroleum

41.0

34.4

33.8

38.8

45.4

53.4

59.3

66.7

74.9

80.9

86.9

88.6

92.5

96.0

97.8

98.8

Other

79.8

81.2

82.6

83.8

85.2

86.8

87.6

88.2

89.0

89.7

90.8

91.5

92.3

92.8

93.2

93.5

566.7

573.5

581.2

591.9

602.7

616.3

629.1

640.0

648.9

655.8

660.8

659.8

656.7

657.1

662.5

667.2

Computers & Peripherals Communications Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment Exports

2096.7 2096.3 2114.5 2133.9 2155.2 2175.6 2198.6 2221.8 2247.6 2275.1 2302.8 2331.9 2359.9 2388.4 2418.9 2448.2

Imports

2663.3 2674.6 2710.7 2740.4 2774.9 2815.5 2855.2 2893.9 2934.8 2971.7 3006.6 3039.3 3071.2 3106.3 3139.5 3171.4

Federal Government

1113.8

State & Local Government

1763.5 1763.3 1767.9 1772.9 1778.0 1781.3 1784.7 1788.9 1793.7 1800.5 1806.7 1813.3 1819.0 1825.0 1829.2 1829.9

1123.6 1130.9 1133.1 1136.3 1138.7 1138.9 1135.4 1131.2 1127.0 1122.1 1117.7

1115.9

1114.2

1112.8

Institute for Economic Competitiveness

1110.7

23

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

Table 5. Annual Employment History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Millions Total Nonfarm Employment

131.30

130.35

131.94

134.17

136.38

138.94

141.83

144.46

146.39

147.68

148.80

Private Nonfarm

108.75

107.86

109.85

112.25

114.53

117.06

119.83

122.36

124.23

125.34

126.20

Mining

0.64

0.65

0.74

0.80

0.81

0.84

0.77

0.64

0.62

0.66

0.70

Construction

6.02

5.52

5.53

5.65

5.86

6.15

6.44

6.76

7.04

7.25

7.42

Manufacturing

11.85

11.53

11.73

11.93

12.02

12.18

12.32

12.29

12.34

12.38

12.48

Trade, Transportation and Utilities

24.90

24.64

25.07

25.47

25.86

26.38

26.91

27.39

27.61

27.56

27.52

Transportation & Warehousing

4.24

4.19

4.30

4.42

4.50

4.66

4.84

4.87

4.97

5.06

5.11

Financial Activities

7.84

7.70

7.70

7.78

7.89

7.98

8.12

8.28

8.26

8.22

8.18

Education & Health

19.63

19.97

20.32

20.77

21.08

21.44

22.05

22.70

23.08

23.27

23.55

Professional & Business Services

16.57

16.72

17.33

17.93

18.52

19.06

19.66

20.22

21.08

21.70

21.94

2.80

2.71

2.67

2.68

2.71

2.73

2.75

2.80

2.78

2.79

2.82

Leisure & Hospitality

13.07

13.04

13.35

13.77

14.26

14.69

15.12

15.55

15.74

15.85

15.96

Government

22.55

22.49

22.09

21.92

21.85

21.88

22.00

22.10

22.16

22.34

22.60

2.83

2.98

2.86

2.82

2.77

2.73

2.75

2.77

2.77

2.73

2.69

19.72

19.51

19.23

19.10

19.08

19.14

19.25

19.33

19.39

19.61

19.91

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-4.33

-0.71

1.22

1.69

1.65

1.87

2.08

1.85

1.34

0.88

0.76

Private Nonfarm

-5.22

-0.80

1.84

2.19

2.03

2.21

2.37

2.11

1.53

0.89

0.69

Mining

-14.61

11.68

13.57

2.22

3.02

3.84

-14.73

-15.64

5.53

6.04

4.17

Construction

-16.57

-3.35

1.93

1.74

4.30

5.47

4.49

5.03

3.74

2.72

2.11

Manufacturing

-11.38

0.65

1.76

1.46

0.96

1.65

0.37

0.01

0.42

0.38

0.91

Trade, Transportation and Utilities

-4.83

0.76

1.97

1.46

1.85

2.01

1.77

1.67

0.35

-0.30

-0.04

Transportation & Warehousing

-6.16

2.14

2.33

2.63

1.95

4.66

2.58

0.48

2.29

1.59

0.72

Financial Activities

-4.32

-0.90

0.47

1.28

1.22

1.49

1.86

1.61

-0.80

-0.52

-0.41

Education & Health

1.90

1.71

1.91

1.97

1.38

2.10

3.21

2.70

1.03

0.93

1.16

Professional & Business Services

-5.15

2.96

3.56

3.30

3.23

3.13

3.28

2.87

4.23

1.98

1.30

Information

-6.02

-2.35

-0.41

-0.15

1.95

0.26

1.14

2.29

-2.25

1.79

0.84

Leisure & Hospitality

-2.46

1.26

2.80

3.13

3.63

2.96

3.00

2.07

1.28

0.58

0.66

Government

-0.18

-0.94

-1.38

-0.41

-0.25

0.48

0.44

0.44

0.28

1.18

0.97

Federal

2.46

4.80

-0.85

-1.05

-2.52

-0.02

0.67

0.46

-0.49

-1.58

-1.44

State & Local

-0.53

-1.31

-1.46

-0.31

0.09

0.56

0.40

0.44

0.39

1.57

1.30

24

U.S. Forecast | May 2016

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

Table 6. Quarterly Employment

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

Employment (Millions) Total Nonfarm Employment

143.5 144.2 144.8 145.3 145.8 146.2 146.6 146.9 147.2 147.6 147.9 148.1 148.4 148.6 148.9 149.2

Private Nonfarm

121.5 122.1 122.6 123.2 123.7 124.1 124.4 124.7 125.0 125.2 125.5 125.7 125.9 126.1 126.3 126.6

Mining

0.7

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Construction

6.6

6.7

6.8

6.9

6.9

7.0

7.1

7.1

7.2

7.2

7.3

7.3

7.4

7.4

7.4

7.5

Manufacturing

12.3

12.3

12.3

12.3

12.3

12.3

12.4

12.4

12.4

12.4

12.4

12.4

12.4

12.5

12.5

12.5

Trade, Transportation and Utilities

27.2

27.4

27.4

27.5

27.6

27.6

27.6

27.6

27.6

27.6

27.6

27.5

27.5

27.5

27.5

27.5

Transportation & Warehousing

4.9

4.9

4.9

4.9

4.9

5.0

5.0

5.0

5.0

5.1

5.1

5.1

5.1

5.1

5.1

5.1

Financial Activities

8.2

8.3

8.3

8.3

8.3

8.3

8.3

8.2

8.2

8.2

8.2

8.2

8.2

8.2

8.2

8.2

Education & Health

22.5

22.6

22.8

22.9

23.0

23.1

23.1

23.2

23.2

23.2

23.3

23.4

23.5

23.5

23.6

23.6

Professional & Business Services

20.0

20.1

20.3

20.5

20.8

21.0

21.2

21.4

21.5

21.7

21.8

21.8

21.8

21.9

22.0

22.1

2.8

2.8

2.8

2.8

2.9

2.8

2.7

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

Leisure & Hospitality

15.4

15.5

15.6

15.6

15.7

15.7

15.8

15.8

15.8

15.8

15.9

15.9

15.9

15.9

16.0

16.0

Government

22.1

22.1

22.1

22.1

22.1

22.2

22.2

22.2

22.2

22.3

22.4

22.5

22.5

22.6

22.6

22.7

2.8

2.8

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

2.7

19.3

19.3

19.3

19.4

19.4

19.4

19.4

19.4

19.5

19.6

19.7

19.7

19.8

19.9

19.9

20.0

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.90

1.79

1.59

1.58

1.37

1.10

0.92

0.98

0.75

0.94

0.81

0.70

0.75

0.67

0.81

0.82

Private Nonfarm

2.13

2.00

1.82

1.82

1.59

1.26

1.05

1.06

0.77

0.86

0.72

0.60

0.66

0.60

0.80

0.83

-22.01 -21.35 -21.95

-2.43

2.38

5.22

6.79

7.23

5.61

6.33

5.99

5.71

4.80

3.70

4.05

3.87

Mining Construction

5.95

4.61

4.47

4.72

4.41

3.96

3.36

3.04

2.67

2.82

2.92

2.37

2.02

1.95

2.38

2.04

Manufacturing

0.04

-1.33

-0.08

1.38

0.08

0.51

0.71

0.39

-0.23

0.10

0.56

1.06

0.92

0.71

1.03

0.97

Trade, Transportation and Utilities

2.38

1.83

1.30

1.14

0.59

0.59

0.42

-0.21

-0.46

-0.14

-0.31

-0.29

-0.13

-0.17

0.15

-0.01

-0.91

0.06

0.30

2.48

2.63

2.38

2.37

1.77

1.86

2.43

1.08

1.01

0.83

0.80

0.71

0.56

Financial Activities

1.81

2.26

3.10

-0.75

-0.78

-1.23

-0.72

-0.49

-0.54

-0.52

-0.45

-0.59

-0.34

-0.34

-0.54

-0.42

Education & Health

2.83

2.92

2.08

2.96

0.92

1.83

0.59

0.77

0.51

0.87

1.06

1.30

1.70

0.95

0.76

1.22

Professional & Business Services

1.72

2.35

2.63

4.80

5.86

3.97

3.47

3.61

3.50

2.98

1.26

0.16

1.06

0.99

1.48

1.65

Information

1.11

4.08

3.49

0.46

3.66

-8.29

-8.28

3.89

4.59

0.08

0.95

1.52

1.06

0.97

0.73

0.62

Leisure & Hospitality

3.07

3.13

2.24

-0.17

0.91

1.43

2.09

0.70

-0.23

0.46

1.04

1.06

-0.25

0.85

1.16

0.87

Government

0.62

0.62

0.32

0.20

0.16

0.24

0.19

0.54

0.68

1.39

1.35

1.30

1.24

1.05

0.85

0.76

Federal

1.12

0.78

-0.03

-0.04

0.02

-0.21

-0.61

-1.15

-1.71

-1.62

-1.46

-1.55

-1.38

-1.49

-1.47

-1.43

State & Local

0.55

0.60

0.37

0.23

0.18

0.30

0.30

0.78

1.02

1.81

1.74

1.70

1.60

1.40

1.16

1.05

Transportation & Warehousing

Institute for Economic Competitiveness

25

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

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

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

GDP

110.5 111.0 111.3 112.1 112.6 113.2 113.8 114.4 115.0 115.6 116.2 116.8 117.4 118.0 118.7 119.3

Consumption

109.9 110.3 110.5 111.1 111.5 112.1 112.6 113.2 113.7 114.3 114.9 115.6 116.2 116.8 117.4 118.0

Durables Motor Vehicles Furniture

89.8

89.5

89.1

88.8

88.4

88.1

87.7

87.3

87.0

86.7

86.4

86.1

85.8

85.5

85.2

84.9

110.8 110.4 111.1 111.5 112.0 112.4 112.5 112.5 112.6 112.8 113.0 113.2 113.4 113.6 113.7 113.9 85.7

85.3

85.2

85.0

84.7

84.4

84.0

83.7

83.4

83.1

82.8

82.6

82.3

82.1

81.9

81.7

Other Durables

101.0 100.9 100.4 100.1 100.1 100.2 100.3 100.4 100.6 100.8 101.0 101.2 101.3 101.5 101.6 101.8

Nondurables

107.1 107.5 107.0 108.5 108.5 109.4 110.1 110.8 111.0 111.9 112.6 113.3 114.0 114.7 115.4 116.2

Food

110.7 110.0 110.3 110.9 111.7 112.4 113.2 113.8 114.5 115.0 115.6 116.2 116.7 117.3 117.8 118.4

Clothing & Shoes

104.9 104.6 104.2 104.1 104.0 103.9 103.8 103.7 103.7 103.7 103.6 103.5 103.4 103.3 103.2 103.1

Gasoline & Oil

88.8

92.7

86.9

97.9

95.2

99.3 102.1 104.4 102.6 107.2 109.5 112.2 114.3 117.2 120.1 123.3

Fuel

83.9

88.6

89.3

89.0

89.8

93.3

96.0

98.2

97.6 101.3 103.4 105.8 107.7 110.2 112.6 115.3

Services

114.4 114.9 115.5 116.1 116.7 117.3 118.1 118.8 119.5 120.3 121.1 121.8 122.6 123.4 124.1 124.9

Housing

114.6 115.4 116.1 116.9 117.6 118.2 118.9 119.7 120.4 121.1 121.9 122.7 123.5 124.3 125.1 125.9

Electricity

106.5 106.5 106.1 106.2 106.4 107.1 108.3 109.5 110.3 111.0 111.9 112.9 113.7 114.3 115.0 115.8

Natural Gas Water & Sewer Telephone

80.1

79.6

78.7

79.1

81.0

82.1

85.0

85.7

86.5

87.1

88.6

90.3

91.7

91.9

93.1

92.9

136.8 138.3 139.4 140.5 141.5 142.6 143.7 144.9 146.1 147.4 148.7 150.0 151.4 152.8 154.2 155.7 94.9

94.7

94.9

94.7

94.3

94.1

93.9

93.8

93.8

93.7

93.6

93.6

93.6

93.5

93.4

93.4

Transportation

110.8 111.0 111.3 111.8 112.4 113.0 113.7 114.3 114.9 115.6 116.2 116.9 117.5 118.2 118.9 119.5

Other Services

116.7 117.2 117.8 118.5 119.1 119.7 120.3 121.0 121.8 122.6 123.4 124.3 125.1 126.0 126.8 127.7

26

U.S. Forecast | May 2016

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

Table 8. Percent Change in Implicit Price Deflators

2016Q1 2016Q2

2016Q3

2016Q4

2017Q1 2017Q2

2017Q3

2017Q4

2018Q1 2018Q2

2018Q3

2018Q4

2019Q1 2019Q2

2019Q3

2019Q4

GDP

0.7

1.9

1.0

2.8

1.9

2.1

2.1

2.1

2.1

2.2

2.0

2.2

2.2

2.1

2.1

2.1

Consumption

0.3

1.4

0.7

2.4

1.3

2.1

2.0

2.0

1.6

2.3

2.2

2.2

2.1

2.1

2.1

2.2

Durables

-1.1

-1.3

-1.7

-1.7

-1.4

-1.4

-1.8

-1.8

-1.6

-1.4

-1.4

-1.4

-1.4

-1.4

-1.3

-1.3

Motor Vehicles

-0.2

-1.4

2.3

1.7

1.8

1.4

0.3

0.1

0.3

0.6

0.7

0.7

0.7

0.7

0.6

0.6

Furniture

-1.0

-1.9

-0.6

-1.1

-1.3

-1.5

-1.6

-1.6

-1.4

-1.3

-1.2

-1.2

-1.2

-1.2

-1.1

-1.1

7.9

-0.5

-2.0

-1.1

-0.1

0.4

0.4

0.5

0.9

0.8

0.7

0.7

0.7

0.5

0.6

0.7

Nondurables

-5.6

1.2

-1.7

5.5

0.2

3.3

2.6

2.4

0.7

3.4

2.5

2.6

2.3

2.6

2.6

2.8

Food

-1.8

-2.5

1.1

2.2

2.8

2.8

2.6

2.4

2.2

2.0

2.1

2.0

1.8

1.9

1.9

1.9

3.1

-1.1

-1.4

-0.5

-0.3

-0.4

-0.4

-0.3

0.0

-0.1

-0.5

-0.3

-0.4

-0.4

-0.4

-0.2

Gasoline & Oil

-46.0 19.1 -22.9 60.9 -10.5 18.6 11.8

8.9

-6.7 19.5

8.9 10.1

7.6 10.6 10.4 11.0

Fuel

-38.0 24.1

3.7 17.0 12.0

9.4

-2.4 15.9

8.8

9.4

7.5

9.5

9.3

9.7

Other Durables

Clothing & Shoes

3.3

-1.5

Services

2.4

1.9

1.9

2.0

2.1

2.3

2.5

2.5

2.5

2.6

2.7

2.6

2.6

2.5

2.5

2.5

Housing

3.0

2.9

2.7

2.5

2.4

2.3

2.4

2.5

2.5

2.5

2.6

2.6

2.6

2.5

2.6

2.6

Electricity

-3.4

0.0

-1.6

0.4

0.9

2.6

4.7

4.5

2.8

2.6

3.3

3.4

2.8

2.3

2.5

2.8

Natural Gas

-8.3

-2.5

-4.2

1.7

9.8

5.7 15.1

3.0

3.8

2.8

7.4

7.9

6.5

0.7

5.2

-0.7

3.2

4.6

3.3

3.1

2.9

3.0

3.1

3.4

3.4

3.6

3.6

3.6

3.7

3.8

3.8

3.8

-0.7

-0.9

1.0

-1.1

-1.6

-0.7

-1.0

-0.3

0.0

-0.3

-0.4

-0.2

-0.2

-0.2

-0.3

-0.3

Transportation

2.6

0.6

1.1

1.9

2.1

2.3

2.3

2.3

2.0

2.4

2.3

2.3

2.3

2.3

2.2

2.3

Other Services

1.7

1.9

2.0

2.2

2.0

2.0

2.2

2.4

2.6

2.7

2.8

2.8

2.7

2.8

2.8

2.8

Water & Sewer Telephone

Institute for Economic Competitiveness

27

U . S . F orecast T ables

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

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

2009

2010

History 2011 2012 2013

2014

2015

2016

Forecast 2017 2018

2019

GDP

100.0 101.2 103.3 105.2 106.9 108.7 109.8

111.2 113.5 115.9 118.4

Consumption

100.0 101.7 104.1 106.1 107.6 109.1 109.4

110.5 112.4 114.6 117.1

Durables

100.0

Motor Vehicles

100.0 105.7 108.9 110.2 110.9 111.0 111.0

Furniture

100.0

Other Durables

100.0 100.4 103.6 104.2 104.0 102.4 100.0

100.6 100.2 100.9 101.6

Nondurables

100.0 103.1 109.2 111.8 112.0 112.7 109.1

107.5 109.7 112.2 115.1

Food

100.0 100.3 104.3 106.7 107.8 109.8 110.9

110.5 112.8 115.3 117.5

Clothing & Shoes

100.0

99.3 101.1 104.6 105.5 105.9 104.6

104.5 103.9 103.6 103.2

Gasoline & Oil

100.0 118.2 149.3 154.7 150.4 144.7 107.3

91.6 100.3 107.9 118.7

Fuel

100.0 117.0 148.8 150.7 149.0 148.9 106.4

87.7

Services

100.0 101.7 103.5 105.8 108.3 110.8 112.9

115.2 117.7 120.7 123.8

Housing

100.0 100.1 101.4 103.5 106.1 109.0 112.3

115.7 118.6 121.5 124.7

Electricity

100.0 100.2 101.8 101.8 103.9 107.7 108.2

106.3 107.9 111.5 114.7

Natural Gas

100.1

Water & Sewer

100.0 106.3 111.8 118.0 123.3 127.8 133.7

Telephone

100.0

Transportation

100.0 102.0 104.8 106.8 108.1 109.5 109.9

111.2 113.4 115.9 118.5

Other Services

100.0 103.0 105.6 108.3 111.1 113.6 115.5

117.6 120.0 123.0 126.4

28

U.S. Forecast | May 2016

98.6 95.8

98.1 99.3

97.7 94.2

95.1 97.5

96.4 94.0

85.7 97.7

94.7 92.1

89.7 97.2

92.5 88.9

96.1 96.4

90.6 86.8

84.7 94.3

89.3

87.9

86.5

85.4

111.0 112.4 112.9 113.6 85.3

79.4

84.2

83.0

82.0

94.3 102.0 111.4

83.4

88.1

92.4

138.8 143.2 148.0 153.5 94.8

94.0

93.7

93.5

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

Table 10. Percent Change in Implicit Price Deflators

GDP Consumption

2009

2010

0.4

1.8

History 2011 2012 2013 1.9

1.9

2014

2015

2016

1.4

1.1

1.6

1.6

Forecast 2017 2018 2.1

2.1

2019 2.1

1.2

1.3

2.7

1.8

1.2

1.1

0.5

1.2

1.9

2.1

2.1

-0.9

-2.1

-0.5

-1.6

-2.0

-2.4

-1.6

-1.4

-1.6

-1.5

-1.3

5.6

2.9

3.3

0.7

0.5

-0.3

0.1

0.6

0.9

0.6

0.7

-2.0

-4.4

-0.2

-0.4

-3.0

-3.1

-2.2

-1.1

-1.5

-1.3

-1.1

Other Durables

1.3

0.6

3.2

-0.5

-0.6

-1.9

-2.3

1.1

0.3

0.8

0.6

Nondurables

2.8

2.2

5.9

1.9

-0.4

-0.2

-2.6

-0.1

2.1

2.3

2.6

-1.8

1.3

5.1

1.2

0.8

2.8

0.2

-0.2

2.7

2.1

1.9

Durables Motor Vehicles Furniture

Food Clothing & Shoes

1.5

-1.4

4.4

2.3

0.2

-0.4

-1.0

0.0

-0.4

-0.2

-0.4

Gasoline & Oil

26.8

13.4

20.4

4.9

-4.8

-10.1

-11.8

2.8

7.2

7.9

9.9

Fuel

-0.8

15.7

26.2

3.1

-1.1

-7.5

-28.6

-3.0

10.5

7.9

9.0

1.1

1.5

2.1

2.3

2.4

2.2

1.9

2.0

2.3

2.6

2.5

Services Housing

0.9

0.3

1.9

2.2

2.6

2.8

3.2

2.8

2.4

2.5

2.6

-0.4

0.5

2.4

-0.6

3.1

3.1

-0.9

-1.1

3.2

3.0

2.6

-18.3

-1.2

-1.6

-4.1

2.6

5.8

-12.1

-3.3

8.4

5.5

2.9

Water & Sewer

6.0

5.7

4.9

6.0

3.7

4.4

4.1

3.5

3.1

3.5

3.8

Telephone

0.6

-1.1

-1.5

0.1

-0.5

-2.1

0.1

-0.4

-0.9

-0.2

-0.2

Transportation

2.2

1.5

3.1

1.3

1.6

1.0

0.2

1.5

2.3

2.2

2.3

Other Services

2.4

2.7

2.8

2.2

2.8

2.1

1.5

2.0

2.1

2.7

2.8

Electricity Natural Gas

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components 2009

2010

2011

History 2012

2013

2014

2015

2016

Forecast 2017 2018

2019

Personal Income Billions Current Dollars Personal Income

12094.8 12477.1 13254.5 13915.1 14068.4 14694.2 15340.4

15920.1 16666.6 17507.5 18376.2

Wages & Salaries

7787.0

7961.5

8269.0

8609.9

8839.7

9249.0

9654.9

Other Labor Income

1077.5

1114.6

1142.0

1165.3

1197.8

1224.0

1264.3

1311.6

1366.2

1411.8

1464.5

937.6

986.7

1068.1

1179.8

1196.3

1268.5

1328.4

1383.2

1456.4

1520.4

1572.7

35.5

46.0

75.6

61.6

88.8

78.1

59.9

50.2

51.5

51.3

49.4

Rental Income

333.7

402.8

485.3

525.3

563.4

610.8

656.6

699.6

722.9

737.0

744.1

Dividends

553.8

544.6

682.3

835.0

789.1

815.5

868.2

872.3

877.7

910.3

933.5

Interest Income

1264.3

1195.1

1231.6

1288.8

1271.4

1302.0

1312.3

1319.5

1376.8

1531.3

1723.7

Transfer Payments

2147.5

2324.7

2360.5

2366.4

2426.7

2529.2

2662.7

2785.3

2937.7

3087.4

3251.7

506.3

514.7

423.9

437.2

579.4

611.8

635.9

661.8

694.5

728.5

761.1

Nonfarm Income Farm Income

Personal Social Insurance Tax

10056.6 10551.7 11042.0 11534.9

Percent Change, Annual Rate Personal Income

-3.2

3.2

6.2

5.0

1.1

4.4

4.4

3.8

4.7

5.0

5.0

Wages & Salaries

-3.6

2.2

3.9

4.1

2.7

4.6

4.4

4.2

4.9

4.6

4.5

0.2

3.4

2.5

2.0

2.8

2.2

3.3

3.7

4.2

3.3

3.7

-4.2

5.3

8.2

10.5

1.4

6.0

4.7

4.1

5.3

4.4

3.4

-21.8

30.4

66.2

-18.5

44.7

-11.5

-22.7

-16.0

2.8

-0.5

-3.7 0.8

Other Labor Income Nonfarm Income Farm Income Rental Income

18.4

20.1

20.8

4.4

8.5

8.5

6.9

5.8

2.8

1.4

-33.4

23.8

23.5

46.4

-13.7

7.2

4.4

-0.8

1.9

4.1

1.9

Interest Income

-9.2

-1.8

3.3

5.1

-1.4

0.9

2.4

-0.6

8.3

13.0

11.7

Transfer Payments

14.4

7.5

0.4

1.2

2.4

5.1

5.0

5.4

4.9

4.9

5.5

Personal Social Insurance Tax

-1.8

2.4

-13.5

5.2

44.4

5.7

3.7

4.2

5.1

4.8

4.5

Dividends

Institute for Economic Competitiveness

29

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

Table 12. Personal Consumption Expenditures (Current Dollars)

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

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

12511.0 12647.5 12760.5 12927.5 13054.9 13219.5 13371.4 13522.7 13672.5 13834.6 13992.9 14153.1 14328.0 14489.9 14652.6 14815.0

durable goods

1337.9 1361.3 1377.5 1396.4 1411.9

1431.1 1447.5 1460.8 1472.4 1482.1 1494.9 1506.7 1519.9 1531.8 1544.3 1555.2

furniture and appliances

305.3

306.3

307.9

311.7

314.5

317.7

320.6

323.4

326.4

329.9

332.8

335.6

337.6

339.6

341.8

344.0

information processing equipment

111.0

111.9

112.7

113.3

113.7

114.6

115.3

116.2

117.1

118.0

118.9

119.7

120.2

121.1

121.8

122.7

motor vehicles and parts

440.2

459.3

474.7

483.3

493.6

505.0

515.0

521.7

525.8

528.2

533.4

537.8

542.5

545.7

549.5

551.0

other durable goods

138.9

138.1

137.7

138.2

137.5

138.1

138.5

139.6

140.6

141.5

142.4

143.4

144.3

145.2

146.2

147.3

nondurables clothing & shoes

2632.9 2659.0 2667.6 2723.3 2742.2 2782.8 2816.1 2847.9 2871.3 2912.2 2944.4 2979.0 3016.5 3054.3 3091.3 3128.9 377.2

376.0

379.3

382.4

384.0

386.0

386.4

388.1

391.4

395.0

396.3

398.2

401.2

404.2

405.7

17.0

17.9

18.4

18.6

18.9

19.8

20.4

20.8

20.5

21.2

21.5

21.9

22.1

22.4

22.8

23.1

238.5

254.1

239.2

270.2

264.3

277.3

285.8

292.1

288.6

303.7

311.5

320.7

328.9

339.4

349.3

359.0

902.4

902.5

906.9

914.3

923.2

933.5

941.6

948.8

955.8

963.2

970.2

977.1

983.2

990.4

997.9 1005.4

1097.6 1108.5

1123.9

1137.8

1151.8

1166.2

1181.9

1198.2

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

407.6

1215.0 1229.0 1244.9 1261.2 1281.1 1297.8 1315.6 1333.8

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

11383.2 11467.9 11549.6 11632.6 11709.1 11794.9 11870.3 11945.3 12028.5 12101.7 12174.5 12247.4 12335.4 12410.1 12483.3 12554.7

durable goods

1489.4 1520.9 1545.6 1573.3 1596.4 1623.7 1649.7 1672.4 1692.7 1709.8 1730.6 1750.4 1771.8 1791.8 1812.4 1831.3

furniture and appliances

356.1

359.0

361.4

366.9

371.4

376.6

381.5

386.5

391.5

396.9

401.7

406.3

410.0

413.7

417.5

421.3

information processing equipment

177.8

180.4

184.9

189.3

193.5

198.6

203.6

209.0

214.5

220.2

225.9

231.6

237.0

243.0

248.9

255.6

motor vehicles and parts

397.2

415.9

427.4

433.3

440.6

449.2

457.8

463.7

467.0

468.4

472.2

475.3

478.6

480.6

483.1

483.8

other durable goods

138.3

137.8

138.5

139.5

139.0

139.5

140.0

141.0

141.9

142.6

143.5

144.4

145.3

146.3

147.2

148.3

nondurables clothing & shoes

2457.6 2474.4 2492.7 2510.7 2526.8 2543.7 2557.4 2570.9 2587.4 2602.2 2615.1 2628.9 2647.0 2662.9 2677.7 2691.9 359.7

359.5

363.9

367.3

369.1

371.4

372.2

374.1

377.3

380.9

382.6

384.6

388.0

391.4

393.2

20.3

20.2

20.6

20.9

21.0

21.2

21.2

21.2

21.0

20.9

20.8

20.7

20.5

20.3

20.2

20.1

268.5

274.0

275.2

276.0

277.6

279.1

279.8

279.9

281.4

283.3

284.4

285.8

287.8

289.6

290.8

291.2

815.4

820.6

822.2

824.5

826.8

830.2

832.1

833.4

835.1

837.3

839.0

840.9

842.3

844.6

847.0

849.4

1021.8 1032.9 1043.2 1052.8 1063.0 1073.3 1083.6 1091.1 1099.6 1108.4

1120.0

1128.9

1138.5

1148.1

2.3

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

1004.1 1011.0

395.2

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

1.9

3.0

2.9

2.9

2.6

2.9

2.6

2.5

2.8

2.4

2.4

2.4

2.9

2.4

2.4

-1.6

8.4

6.5

7.2

5.9

6.8

6.4

5.5

4.8

4.1

4.9

4.6

4.9

4.5

4.6

4.2

4.2

3.3

2.7

6.1

4.9

5.6

5.3

5.2

5.2

5.5

4.8

4.5

3.6

3.6

3.7

3.6

20.1

5.8

10.0

9.5

9.0

10.5

10.1

10.7

10.6

10.5

10.4

10.2

9.3

10.1

9.7

10.7

-13.1

18.8

11.1

5.5

6.8

7.8

7.6

5.2

2.9

1.2

3.2

2.6

2.8

1.7

2.1

0.5

-8.7

-1.3

1.8

3.1

-1.7

1.6

1.3

2.9

2.5

2.1

2.5

2.4

2.6

2.7

2.7

3.0

1.0

2.7

3.0

2.9

2.6

2.7

2.2

2.1

2.6

2.3

2.0

2.1

2.8

2.4

2.2

2.1

clothing & shoes

-2.3

-0.2

4.8

3.8

1.9

2.5

0.9

2.0

3.4

3.8

1.8

2.1

3.5

3.5

1.9

2.1

fuel oil & coal

20.1

-3.1

7.5

6.1

3.6

2.6

0.5

-1.0

-2.5

-1.7

-2.4

-2.9

-3.2

-3.0

-2.7

-2.8

gasoline & motor oil

2.4

8.1

1.8

1.3

2.2

2.2

1.0

0.1

2.2

2.6

1.6

2.0

2.8

2.5

1.6

0.6

food

3.0

2.6

0.8

1.1

1.1

1.6

0.9

0.7

0.8

1.1

0.8

0.9

0.7

1.1

1.1

1.2

-0.1

2.8

4.4

4.4

4.1

3.7

4.0

3.9

3.9

2.8

3.1

3.2

4.3

3.2

3.5

3.4

motor vehicles and parts other durable goods nondurables

other nondurable goods

30

U.S. Forecast | May 2016

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

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

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

9847.0 10202.2 10689.3 11050.6 11392.3 11865.9 12271.9

durable goods

1023.3

1070.7

1125.3

1191.9

1237.8

1280.2

1328.7

1368.3

1437.8

1489.0

1537.8

244.3

250.4

260.7

271.4

280.2

287.9

298.9

307.8

319.1

331.2

340.8

furniture and appliances information processing equipment motor vehicles and parts other durable goods

12711.6 13292.1 13913.3 14571.4

81.2

90.3

91.9

98.6

101.2

102.6

106.5

112.2

115.0

118.4

121.4

317.1

342.0

363.5

395.8

416.7

440.2

456.6

464.4

508.8

531.3

547.2

105.5

110.0

121.4

127.3

131.5

132.9

135.8

138.2

138.4

142.0

145.8

2175.1

2292.1

2471.1

2547.2

2598.9

2668.2

2650.1

2670.7

2797.3

2926.7

3072.7

306.5

320.6

338.9

354.3

362.5

368.9

376.4

378.7

386.1

395.2

404.7

24.3

26.2

29.2

26.4

27.4

28.4

21.1

17.9

20.0

21.3

22.6

gasoline & motor oil

260.2

307.3

380.4

390.5

385.6

372.8

285.6

250.5

279.9

306.1

344.1

food

770.0

788.9

829.1

848.8

866.0

886.5

896.8

906.5

936.8

966.6

994.3

other nondurable goods

814.2

849.2

893.5

927.3

957.5

1011.7

1070.3

1117.0

1174.5

1237.5

1307.0

nondurables clothing & shoes fuel oil & coal

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

9847.0 10036.3 10263.5 10413.2 10590.4 10875.7 11213.3

durable goods

1023.3

1085.7

1151.5

1236.2

1307.6

1384.1

1466.5

1532.3

1635.5

1720.9

1801.8

244.3

261.5

276.6

288.7

304.3

323.9

344.3

360.8

379.0

399.1

415.6

81.2

97.2

108.0

125.2

138.8

149.4

163.3

183.1

201.2

223.1

246.1

317.1

323.4

333.8

359.1

375.8

396.7

411.3

418.5

452.8

470.7

481.5

furniture and appliances information processing equipment motor vehicles and parts other durable goods

11508.3 11829.9 12138.0 12445.9

105.5

108.9

115.1

120.2

124.9

129.7

137.1

138.5

139.9

143.1

146.8

2175.1

2223.5

2263.2

2277.5

2319.8

2367.8

2430.0

2483.9

2549.7

2608.4

2669.9

306.5

322.7

335.3

338.9

343.5

348.4

359.7

362.6

371.7

381.4

391.9

24.3

22.4

19.6

17.5

18.4

19.1

19.8

20.5

21.2

20.9

20.3

gasoline & motor oil

260.2

259.9

254.7

252.5

256.3

257.7

266.0

273.4

279.1

283.7

289.9

food

770.0

786.5

795.1

795.7

803.4

807.5

808.3

820.7

830.6

838.1

845.8

other nondurable goods

814.2

833.0

863.2

880.7

906.3

945.0

986.3

1017.4

1058.1

1095.7

1133.9

nondurables clothing & shoes fuel oil & coal

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

-0.2

3.1

1.5

1.3

2.3

3.2

2.7

2.7

2.7

2.5

2.5

3.0

9.3

4.9

7.3

4.6

7.5

5.1

5.3

6.3

4.7

4.6

furniture and appliances

-2.0

8.3

5.8

3.1

6.7

6.9

6.0

4.1

5.3

5.1

3.7

information processing equipment

12.9

16.8

13.9

16.7

6.3

9.6

9.3

11.9

10.4

10.8

10.3

motor vehicles and parts

7.9

11.0

1.5

7.4

2.3

8.5

0.9

6.2

7.0

2.5

1.8

other durable goods

0.6

5.5

3.2

8.1

1.9

4.0

7.5

-1.2

1.0

2.4

2.8

nondurables

0.2

3.3

0.4

0.8

2.6

2.4

2.4

2.4

2.4

2.3

2.4

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

-1.0

7.6

1.1

0.9

1.8

3.6

1.7

1.6

1.8

2.8

2.8

7.5

-7.6

-12.6

5.5

16.4

-3.3

7.8

8.2

1.4

-2.3

-2.9

-1.1

2.2

-3.1

-0.9

2.7

2.2

1.9

3.5

1.4

2.1

1.9

2.1

2.1

-0.4

0.6

1.4

-0.3

0.5

1.9

1.1

0.9

1.0

-0.6

3.6

2.8

1.9

3.8

4.7

4.5

2.9

3.9

3.3

3.6

Institute for Economic Competitiveness

31

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

Table 14. Business Fixed Investment History

2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Billions Current Dollars Business Fixed Investment

1633.4 1658.2 1812.1 2007.7 2084.3 2233.7 2301.9

2317.8 2448.2 2620.8 2794.2

Producers Dur. Equipment

644.3

731.8

838.2

937.9

972.3 1036.7 1076.1

Nonresidential Structures

438.2

362.0

381.6

448.0

462.1

507.0

497.1

479.5

511.6

560.3

614.4

Non-Farm Buildings

249.1

173.7

170.2

191.6

203.8

232.5

290.3

324.6

339.9

360.7

390.1

Commercial

95.4

64.7

66.8

75.6

84.2

103.1

118.2

133.3

145.2

155.1

172.3

Industrial

56.3

39.8

39.0

45.8

48.8

56.1

85.2

91.0

88.0

91.2

94.9

Other Buildings

97.4

69.2

64.5

70.2

70.7

73.3

86.9

100.3

106.6

114.4

122.9

104.3

93.3

90.7

112.2

108.9

117.1

106.4

108.5

108.9

110.9

114.7

75.0

86.2

112.3

134.1

137.7

144.4

87.4

34.2

48.2

72.5

92.5

Utilities Mines & Wells

1085.7 1146.6 1231.0 1309.6

Billions 2005 Dollars Business Fixed Investment

1633.5 1673.8 1802.3 1964.2 2023.8 2148.3 2209.3

2206.7 2302.9 2428.1 2540.8

Producers Dur. Equipment

644.3

746.7

847.9

939.2

969.5 1026.2 1057.8

Nonresidential Structures

438.2

366.3

374.7

423.1

429.7

464.6

457.7

439.5

455.9

479.7

501.6

Non-Farm Buildings

249.1

179.3

172.3

188.8

196.1

216.5

265.1

291.8

296.1

302.2

314.0

Commercial

95.4

66.6

67.3

73.9

80.6

96.1

108.0

120.7

129.0

133.3

142.7

Industrial

56.3

40.8

39.1

44.9

46.8

52.0

77.5

80.8

73.2

71.6

71.0

Other Buildings

97.4

71.9

65.9

70.0

68.6

68.2

79.3

90.2

94.0

97.6

101.0

104.3

89.8

82.8

99.1

95.1

101.0

91.1

92.0

87.6

84.9

84.5

75.0

87.8

110.9

123.8

126.7

135.0

87.6

37.0

56.2

82.8

96.3

Utilities Mines & Wells

1059.6 1110.5

1182.2 1244.4

Annual Growth Rate Business Fixed Investment

-14.2

8.6

10.9

6.9

5.1

6.6

1.6

2.4

6.1

7.4

6.1

Producers Dur. Equipment

-11.4

20.2

14.4

8.4

4.2

6.5

3.0

2.1

6.1

7.5

5.9

Nonresidential Structures

-32.2

-0.6

15.3

7.8

9.0

6.6

-4.3

0.0

7.9

10.6

8.6

Non-Farm Buildings

-34.0

-21.1

14.7

7.3

9.8

19.9

20.1

9.3

4.9

7.5

7.6

Commercial

-44.7

-16.8

14.7

9.9

18.7

24.4

7.6

13.5

8.5

8.6

10.8

Industrial

-11.9

-28.8

37.4

8.1

9.1

27.6

46.5

0.0

-2.3

5.5

3.2

Other Buildings

-29.7

-19.5

3.6

4.5

1.7

9.3

20.5

13.0

6.4

7.7

6.9

-4.1

19.0

2.4

18.4

17.8

-12.2

13.0

1.5

-1.4

4.3

2.8

-42.8

53.6

36.6

1.9

5.9

9.4

-54.3

-22.6

61.8

42.8

22.7

Utilities Mines & Wells

32

U.S. Forecast | May 2016

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

Table 15. Government Receipts and Expenditures History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Federal Government Receipts and Expenditures Receipts

2238.4

2443.3

2574.1

2699.1

3141.3

3265.2

3431.5

3544.8

3647.2

3771.5

3914.7

Personal Tax and Nontax Receipts

864.5

941.6

1129.1

1164.7

1300.6

1396.9

1536.0

1616.6

1685.5

1732.9

1795.5

Corp. Profits Tax Accruals

200.4

298.7

299.4

363.1

379.3

417.9

431.3

416.4

369.7

362.6

366.5

91.4

96.8

108.6

115.1

125.8

137.8

142.6

141.2

141.7

146.8

153.1

950.8

970.9

904.0

938.2

1093.4

1145.2

1189.0

1232.9

1293.9

1357.3

1418.2

Expenditures

3487.2

3772.0

3818.2

3789.1

3782.2

3896.7

4023.2

4180.9

4370.2

4589.7

4819.5

Purchases Goods & Services

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

1217.7

1303.9

1303.5

1292.5

1230.7

1219.9

1224.6

1255.1

1289.8

1299.0

1310.9

National Defense

788.3

832.8

837.0

817.8

767.7

748.2

740.8

747.8

760.7

771.5

784.5

Other

429.4

471.1

466.5

474.7

463.0

471.6

483.9

507.3

529.1

527.5

526.5

Transfer Payments

2142.9

2333.2

2327.0

2300.8

2346.0

2444.0

2564.3

2681.3

2824.2

2968.2

3117.9

To Persons

1616.2

1757.9

1779.9

1783.6

1823.2

1877.3

1959.7

2049.7

2163.4

2283.0

2408.4

52.7

53.5

57.6

55.3

53.9

52.3

52.4

53.8

53.9

54.9

55.9

Grants in Aid to State & Local Gov't

To Foreigners

458.1

505.3

472.5

444.0

450.1

494.8

532.0

556.6

584.7

607.1

629.5

Net Interest

330.8

351.0

398.0

401.6

393.3

416.6

414.1

429.2

443.5

498.9

559.9

Subsidies less Surplus of Gov't Entities

56.2

57.4

66.7

66.5

70.2

67.1

66.6

71.7

72.7

73.1

73.3

-1248.8

-1328.7

-1244.2

-1090.1

-641.0

-631.5

-591.7

-636.1

-723.1

-818.2

-904.7

Receipts

1919.2

1998.5

2030.5

2057.2

2136.5

2225.0

2324.7

2382.0

2494.4

2607.9

2723.2

Personal Tax/Nontax Receipts

1268.1

1305.7

1368.3

1416.1

1479.8

1517.5

1562.2

1603.2

1678.8

1759.9

1842.7

287.8

297.6

324.1

346.7

372.2

383.3

409.5

425.1

445.4

467.0

490.0 59.3

Surplus (+) or Deficit (-)

State and Local Government Receipts and Expenditures

Corporate Profits Indirect Business Tax and Nontax Accruals

45.6

47.7

50.2

52.5

55.5

58.3

59.4

57.3

58.6

59.7

Contributions for Social Insurance

18.6

18.2

18.2

18.1

18.6

18.9

18.8

19.2

20.1

21.1

22.1

458.1

505.3

472.5

444.0

450.1

494.8

532.0

556.6

584.7

607.1

629.5

2514.77 2595.23 2686.78

2807.3

Federal Grants-In-Aid Expenditures Purchases Goods & Services

2191.15 2235.85 2246.40 2277.93 2323.60 2392.73 2460.15 1871.4

1870.2

1865.3

1866.0

1883.6

1932.3

1958.8

1996.0

2059.6

2136.8

2221.2

Transfer Payments

566.1

612.0

582.2

558.0

571.2

621.5

673.8

685.5

716.5

742.6

768.5

Interest Received

114.3

123.0

125.9

141.4

142.1

122.6

128.4

125.8

113.9

108.9

116.6

22.8

21.4

17.9

10.8

7.9

9.1

8.6

7.4

5.5

3.5

1.5

2.2

2.3

2.7

3.3

3.7

3.8

4.3

4.9

4.9

4.9

5.0

-271.9

-237.3

-215.9

-220.8

-187.1

-167.7

-135.4

-132.8

-100.8

-78.8

-84.1

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

Institute for Economic Competitiveness

33

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

Table 16. U.S. Exports and Imports of Goods and Services History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Billions of Dollars Net Exports Goods & Services

-395.5

-512.7

-580.0

-565.7

-508.4

-530.0

-528.9

-511.0

-520.8

-567.5

-611.0

Current Account

-384.0

-442.0

-460.4

-449.7

-376.8

-389.5

-484.1

-453.4

-428.4

-501.9

-574.2

Exports -Goods & Services

1587.7

1852.3

2106.4

2198.2

2263.3

2341.9

2253.4

2201.5

2321.1

2474.0

2641.8

Merchandise Balance

-509.7

-648.7

-740.6

-741.2

-702.6

-741.5

-759.3

-750.1

-774.7

-842.8

-910.0

Food, Feed & Beverage

93.91

107.72

126.25

133.05

136.16

143.75

127.15

113.64

120.31

124.67

129.9

Industrial Supplies Excl Petroleum

293.5

388.6

485.3

483.2

492.3

500.0

419.6

381.7

423.8

472.5

521.3

81.7

112.0

133.0

146.2

152.7

159.7

151.7

149.0

161.3

176.4

190.7

391.5

447.8

494.2

527.5

534.5

551.3

539.0

519.7

525.8

543.5

565.7

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

37.7

43.8

48.5

49.2

48.1

48.8

46.8

46.8

47.3

49.3

50.8

Other

279.0

332.1

365.4

383.9

381.4

389.5

373.1

354.7

357.2

369.4

386.0

Consumer Goods, Excl. MVP

149.3

164.9

174.7

181.0

188.4

198.3

197.3

191.6

190.5

187.6

190.9

55.2

58.6

53.4

55.1

56.9

64.9

70.1

68.7

70.5

73.7

78.7

522.6

572.7

639.5

672.2

702.3

723.9

748.5

777.1

828.9

895.7

964.6

Other Consumer Services

Billions of Dollars Imports -Goods & Services

1983.2

2365.0

2686.4

2763.8

2771.7

2871.9

2782.3

2712.5

2841.9

3041.5

3252.7

Merchandise

1590.3

1949.8

2244.7

2305.8

2301.9

2388.5

2280.6

2194.2

2285.7

2437.5

2600.6

82.9

92.5

108.3

111.1

116.0

126.7

128.8

130.0

127.1

133.3

140.4

Petroleum & Products

267.7

353.6

462.1

434.3

387.8

350.9

193.8

145.0

177.8

200.2

227.1

Industrial Supplies Excl Petroleum

196.6

249.4

292.7

288.8

291.2

316.0

289.9

267.0

279.9

303.1

322.0

Motor Vehicles & Parts

159.2

225.6

255.2

298.5

309.6

328.5

348.8

352.6

362.7

385.0

396.3

Capital Goods, Excl. MVP

374.1

450.4

513.4

551.8

557.9

595.7

603.2

598.0

630.9

667.2

709.6

94.2

117.3

119.7

122.3

121.2

121.7

119.9

114.9

117.8

121.3

124.2

Other

249.2

301.9

358.2

389.4

389.7

420.9

428.1

430.8

457.8

489.6

527.6

Consumer Goods, Excl. MVP

429.9

485.1

515.9

518.8

534.0

559.4

596.9

572.8

573.7

599.6

640.8

Food, Feed & Beverage

Computer Equipment

Other Consumer

80.0

93.1

97.1

102.4

105.5

111.3

119.2

128.7

133.6

149.1

164.4

392.9

415.2

441.6

458.0

469.8

483.4

501.8

518.3

556.2

604.0

652.1

Net Exports Goods & Services

-395.4

-458.8

-459.4

-447.1

-417.5

-442.5

-543.5

-586.9

-647.1

-698.7

-718.2

Exports G & S

1587.7

1776.6

1898.3

1963.2

2018.1

2086.4

2110.1

2110.4

2187.8

2289.4

2403.8

Imports G & S

1983.2

2235.4

2357.7

2410.2

2435.6

2528.9

2653.5

2697.2

2834.9

2988.1

3122.1

Services

Billions 2005 Dollars

Exports & Imports % Change Exports G & S

4.1

15.3

8.7

3.4

5.1

1.2

-5.4

1.1

6.1

6.9

6.7

Imports G & S

0.9

15.0

10.9

0.3

1.6

3.9

-5.6

0.6

6.3

7.1

6.6

Real Exports G & S

3.0

10.1

4.2

2.2

5.3

2.6

-0.6

1.2

4.1

5.0

5.0

Real Imports G & S

-3.6

12.2

3.5

0.3

2.4

5.5

2.9

3.0

5.6

5.0

4.3

34

U.S. Forecast | May 2016

SEAN M. SNAITH, PH.D.

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

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