U.S. Forecast June 2013 by UCF College of Business

U.S. Forecast

June 2013

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 2013 - 2016 June 2013 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright ÂŠ 2013 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 Caleb Leedy, Researcher Ashley Miller, Researcher Casey Moore, Researcher Sangitha Palaniappa, Researcher This forecast was prepared based upon assumptions reflecting the Institute for Economic Competitivenessâ&#x20AC;&#x2122; 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 IGH LIGH T S OF T H E 2Q 2 013 U. S. F OR EC A S T In this Issue of the U.S. Forecast: • If Taylor Swift were an economist, what songs would be on her next album? • Is the fog of uncertainty starting to lift? The Economic Policy Uncertainty Index has fallen below the high average level of uncertainty that has prevailed in this recovery. If this trend continues, economic growth will get a boost.

HIGHLIGHTS

• The Fed will begin the process of “removing the punchbowl” by the beginning of 2014. The challenge here is that the punchbowl is the size of an above ground swimming pool that will take several years to drain and dissemble. • Real GDP growth in the 4th quarter of 2012 was revised up to 0.4%, a dramatic slowdown from the 3rd quarter of 2012. This lost momentum and sequestration will slow growth in 2013. The 1st quarter growth of 2.4% will be the fastest of the year, and it will slow again to 1.3% in the 2nd quarter. The second half of 2013 should see average growth of 1.7%. • The Affordable Care Act is already impacting the labor market; as the law begins to be implemented expect that impact to grow. The question is how specifically the law will manifest itself in labor market statistics. Raising the cost of labor will reduce the amount of labor being employed in some way. We will soon find out the extent of this reduction. • GDP growth in 2013 should average 1.7% before growth accelerates to 2.7% in 2014 and 3.1% in 2015, then eases back to 2.7% in 2016 as the unwinding of monetary stimulus slows economic growth. • Real consumer spending is expected to grow an average of 2.5% during 20132016 and it should steadily accelerate over this period. Consumer’s balance sheets are slowly healing thanks to a housing market rebound, and the persistent, albeit gradual, labor market recovery will help push up spending. • A housing market recovery is underway. The housing market will steadily improve through 2016. During 2013-2016, housing starts will rise from 961,333 in 2013 to 1,554,357 in 2016. Levels that year will be 75% of the 2005 peak for housing starts. • Payroll employment growth remains sluggish. Economic and policy uncertainty weigh on the private sector and firms are still hesitant to hire new workers. Consequently, payrolls will only expand 1.4% in 2013 and 2014. Growth rises in 2015 to 1.8% and settles to 1.6% in 2016. From 2013 to 2016 payrolls will rise by 1.6% on average. This translates into an average monthly gain in payrolls of 209,086 through the end of 2016. • Payroll employment will reach pre-recession levels by the end of the 3rd quarter of 2014, nearly seven years after the pre-recession peak. Policy uncertainty and the sputtering recovery continue to dampen the pace of the labor market’s recovery. • Unemployment rates (U-3) are expected to gradually fall to 6.4% in the 4th quarter of 2016. Underemployment (U-6) remains a serious problem and currently stands at 13.8%.

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DADDYPALOOZA or What if Taylor Swift’s Next Album Were Inspired by the Economy? As a father one makes a lot of sacrifices on behalf of your children. When it comes to my two daughters, I am no exception. I am not referring to the money saved away to pay for their college educations, nor am I referring to the birthday parties, dance recitals, sleepovers, “helping with” (or rather more like “doing”) a variety of school projects, the scores of soccer, lacrosse, swim team, tee-ball, tennis, or basketball games and practices I have attended over the years. I know there are plenty more where these came from with girls ages 7 and 11. I have come to terms with the fact that they could be living at home until the age of 26 (thanks Obamacare!). I don’t want to come across as a whiner; I chose to have children. The joys they have brought into my life far exceed any cost that I have or may incur. However, there is one burden that has persisted over the years: the number of concerts and other musical shows that I have taken my daughters to over their lives. It is like a musical festival, but spread over time and space (thankfully) rather than concentrated in a single geography over a day or two. I call this string of performances that I have taken in and those that, in the future, I will take in, “Daddypalooza”. I get that dubbing it Daddypalooza neither makes this inauspicious set of shows any cooler to attend nor does it absolve me of the stigma of having been in the audience for these performances. Daddypalooza is my journey, my sojourn, my hair shirt of fatherhood. But I refuse to take this trip silently and perhaps, just perhaps, my writing about it will grant other fathers out there a modicum of comfort as they travel through their own Papastock, Fatherella, Daddaroo or Padrefest. It is hard to look back at the full line-up for Daddypalooza, in part because my mind has made my access to these memories a difficult task. Self-preservation is one of our mind’s most powerful and in this case necessary, functions. I think the first act of this festival was Sesame Street Live. Not a bad way to begin, the excitement of your child’s first show and a tie-in my own childhood memories, it was deceptively pleasant and gave no indication of what lay ahead. My only disappointment was that my two year old daughter refused to hold the lit lighter in the air as Bert and Ernie took the stage (and that the usher rudely took the lighter away- “hey man, that’s a Zippo!”). What happened in between this show and the recent set of concerts I have survived is largely a blur of Dora the Explorer, Barney – the dinosaur that extinction forgot –

Disney Princesses (both on and off the ice), Veggie Tales (this might be why my kids still don’t eat vegetables), The Wiggles and several circuses, live musicals, story times and at least a dozen other merchandise delivery systems. They have cost me hundreds if not thousands of dollars for tickets and high quality Made in China souvenirs that now reside in landfills from North Dakota to California to Florida. As my children have grown, performers dressed in character outfits have given way to live performers. The concerts have not gotten any easier to endure and I have had to adapt my methods of survival to get through these events with some part of my sanity, nay my soul, intact. The latest two acts to appear on Daddypalooza have been: 1. Justin Bieber During this concert I made an exasperated plea on social media for some Justin Beibeers (I got them) to help wash away the pain of 20,000+ 6-16 year old girls shrieking at a pitch and a decibel level that made an engine on a 747 seem like one of those white noise machines designed to help you sleep.1 2. Taylor Swift I know more of her songs, the background and inspiration for said songs, than I did for any of the previous shows I attended. This is more knowledge than any man of my age should possess but the songs themselves and why she wrote them (from what I understand a lengthy string of romantic disappointments that seem more fitting for a wistful 70-year old than a young woman of 23) have been played and explained for me hundreds of times by my daughters in a manner that would have been instructive to those in our military and intelligence community responsible for conducting PSYOPS. For the Taylor Swift concert I employed a new coping mechanism. For the songs that she played I tried to imagine that her inspiration came from the economy and not from some lost paramour. I asked myself: “If Taylor Swift were 1

When Master Bieber made his entrance he was wearing a giant pair of metallic angel wings and was suspended by cables from the overhead scaffolding. He traveled the length of the catwalk like portion of the stage while simultaneously being lowered until he touched down at the end of the catwalk. As he stood, statue like, on the stage he shed his wings, and they retracted backstage. I watched this in disbelief that only intensified as I heard a sound coming out of my mouth that matched both the pitch and loudness of the rest of the audience. Overcome by the audacity of this entrance, that evoked memories of “This is Spinal Tap”, I had shouted several times over: Bieber! Bieber!! Bieber!!! Institute for Economic Competitiveness

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an economist what would this song be about?” Throughout the rest of the forecast I will share a couple of the fruits of my thought exercise/coping mechanism that night. Do not pity me, nor disdain my efforts. Simply know that there but for the grace of God go you. And also please say a prayer for me as I fear the next show on Daddypalooza might be the boy band One Direction (you must know of course Taylor Swift dated Harry Styles of One Direction and that it didn’t turn out well, except for the Taylor Swift hit song he inspired.)

In the wake of the Great Recession, policy uncertainty increased from the already elevated levels during the recession; the average level of the Economic Policy Uncertainty Index during the recovery to date is still nearly 23 points higher than the average level during the recession. The levels of uncertainty were already significantly higher during the Great Recession than during the prior two recessions. To see uncertainty continue to remain at higher levels during the recovery only lowers the prospect of economic growth and job creation gaining momentum. This fact, perhaps as much as anything else, can explain why the economic recovery we are experiencing is as weak as it has been. Figure 1, below, plots the updated monthly Economic Policy Uncertainty Index along with the average level of the index during the phases of recent business cycles. This index has been discussed and tracked in our previous forecasts, and the role of policy uncertainty in constraining the economic recovery has been addressed as well. This updated chart reflects the unfortunate fact that current levels of uncertainty still exceed the average level of policy uncertainty this recovery has struggled under since its beginning in June of 2009. As we get closer to implementation of the Affordable Care Act, we would expect that policy uncertainty should begin to at least partially abate. The past two month’s values of the index not only are below the average level of uncertainty during the recovery, but also have fallen below

Is Economic Policy Uncertainty Finally Receding? Economic policy uncertainty has hampered our economic recovery, and as a result the recovery is the weakest one since the Great Depression. From the fiscal cliff to the sequester to healthcare reform and financial regulatory reform, uncertainty still is prevalent. Current levels of the Economic Policy Uncertainty Index have fallen below the elevated average level of policy uncertainty of the economic recovery that began in June of 2009. The May 2013 level of the policy uncertainty index is just a fraction below 120, and this reading is the lowest level of the entire recovery to date. Even so, the average level of uncertainty during the recovery remains above the uncertainty level that prevailed during the Great Recession.

Figure 1: The Economic Policy Uncertainty Index 300

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Year Source: Scott R. Baker, Nicholas Bloom, and Steven J. Davis, Measuring Economic Policy Uncertainty

U.S. Forecast | June 2013

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the average level during the Great Recession. To put this in a historical perspective the May index value of 120 is still well above the historical average across all recessions and recoveries that preceded the Great Recession, which stands at 97. If this recent trend of lower levels of policy uncertainty continues, it should help reduce the drag on economic growth. However, realistically we should resign ourselves to the fact that elevated levels of policy uncertainty are likely to stick around for at least another year or two.

recovery comes in the wake of an improved 1st quarter GDP report (2.4%) after a very weak report on real GDP growth in the 4th quarter of 2012 (0.1%). The graph below plots the historical values of the anxious index where the gray bars indicate periods of recession in the U.S. economy. The current levels of the anxious index are slightly below their average level during the economic recovery, and they are more than 3.5 points lower than last quarter. The volatility of the index over the course of the recovery is a testament to uncertainty.

Anxious Index

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

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The most recent release (2nd quarter of 2013) of the As 2012 came to an end, real GDP growth was barely Survey of Professional Forecasters by the Federal Reserve perceptible at just 0.4%. Growth at the start of 2013 Bank of Philadelphia suggests that the 38 forecasters picked up but was still subpar despite consumers’ spending surveyed for the publication are 14.32% convinced that a growing 3.4%, shrugging off smaller take home pay due decline in real GDP will occur in the 3rd quarter of 2013. to the expiration of payroll tax cuts. This burden on the This quarter’s release reflects forecasters’ receding anxiety consumer is in addition to the ongoing struggles in the despite a recovery that has lost momentum and is the lowest labor market and the lost wealth that has plagued many reading since 2nd quarter of 2012. The mitigation of the full consumers when housing prices plunged in many areas of impact of the fiscal cliff has caused the index to drop from the country. Consumers will fall back in the rest of the year 23.04% in the 4th quarter of 2012. after briefly taking the lead in the recovery effort. The survey asks panelists to estimate the probability that In this recovery, the weakest in the post-war era, GDP real GDP will decline in the quarter in which the survey is growth is just a fraction of the growth we have experienced taken, as well as the probabilities of a decline in each of the in the wake of previous recessions. following four quarters. The anxious index (a term coined As we have already touched upon in this and previous by The New York Times reporter David Leonhardt) is the forecast publications, policy uncertainty has played a big probability of a decline in real GDP in the quarter after role in the underwhelming performance of the economic a survey is taken. In the survey taken in the 2nd quarter recovery this time around. Looking forward through the of 2013, the index stands at 14.32%, which means that forecasters believe there is a Figure 2: The Anxious Index 14.32% chance that real GDP rd will decline in the 3 quarter of The Anxious Index 2013, down from last quarter’s Probability of Decline in Real GDP in the Following Quarter anxious index of 17.99%. Quarterly, 1968:Q4 to 2013:Q1 The forecasters also report 100 a 14.59% chance that we 90 are currently (as of the 2nd quarter of 2013) in a recession. 80 According to the panel, the probability that we will fall 70 back into recession is averaging 60 around 13.0% through the nd end of the 2 quarter of 2014, 50 which implies the possibility 40 of a recession in the upcoming year has decreased since last 30 quarter’s survey. This is the 20 lowest one-year outlook since the survey taken in the 2nd 10 quarter of 2011. 0 The decline in anxiety over the future of this economic Survey Date

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rest of 2013, the pace of economic recovery is not likely to show an improvement. We are anticipating growth of just 1.7% for the full year –the weakness coming from a combination of the sequestration cuts, rising payroll taxes, uncertainty, and the absence of momentum from the fourth quarter of 2012. Sequester spending cuts and revenue hikes will dampen growth as will the ongoing rollout of healthcare reform and Dodd-Frank financial regulatory reform. All of these will be impediments hampering the economic recovery and will keep growth subdued this year. In 2014 as uncertainty continues to abate and a building housing recovery from the housing crisis continues to heal consumer’s balance sheets, real GDP growth will accelerate to 2.7%. Growth will continue to rise in 2015, reaching 3.1% before easing to 2.7% in 2016 as stimulus continues to be drained by the Federal Reserve. The continuing risk to our recovery would be the ongoing sovereign debt crisis in Europe. I have written about this crisis in previous forecast releases, and I described it there and elsewhere as a train wreck in slow motion. The heightened financial anxiety has been soothed by the European Central bank, but as the banking crisis in Greek Cyprus revealed, the potential for a flare-up continues to be a threat. I still believe that Greece is still a 50/50 bet to leave the common currency, quite possibly in the upcoming year. The country has been in recession for six years, and the austerity measures being implemented are salt in this gaping economic wound. The exit of Greece may not have as dire consequences for the Eurozone and wider global economy, but if the crisis accelerates and other countries begin to fall out of the Eurozone, the result would be a severe deepening of an already persistent EU recession. This would create turmoil in financial markets that would impact the U.S. economy. Given the weak pace of growth here at home, this could also send us back into recession. The bottom line remains, the Eurozone cannot solve a long run fiscal problem with monetary policy. The purchases of debt by the ECB may soothe financial markets temporarily, lowering yields in the most troubled of their economies and providing strapped nations with needed liquidity, but they do not get to the core of this fiscal abscess. Widely divergent patterns of fiscal policy in Northern and Southern Europe cannot persist. This ECB provided liquidity really only treats the symptoms of the problem and sometimes when the symptoms of a condition abate we forget that there is an underlying cause. Fiscal reform in the Eurozone will be as difficult politically as any of the agreements that led to the formation of the EU and Euro, but it will ultimately be needed if the Euro is to survive. 8

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Taylor Swift’s Ode to the Federal Reserve’s Zero Interest Rate Policy and Quantitative Easing Programs: STAY STAY STAY “Before you I borrowed reserves from self-indulgent lenders who charged non-zero rates to me. But you gave me excess reserves in the trillions and now I’m smiling And I love QE and zero rates because I have no choice but to Stay stay stay the Dow’s been loving you for quite some time time time You think it’s time to tighten, so I’m sad sad sad But I think that it’s best if they both stay stay stay stay” Former Chairman of the Board of Governors of the Federal Reserve, William McChesney Martin, Jr. famously quipped that the job of Federal Reserve is “to take away the punchbowl just as the party gets going.” This is opposed to the Don Meredith philosophy of central banking which is to “turn out the lights the party’s over”. Kidding aside, we are getting closer to the time when the Fed is going to have to make a move for that punchbowl. The problem is this time around the punchbowl is the size of a swimming pool and draining and dissembling it will take an extended period of time. The punchbowl/swimming pool is not just filled with a federal funds rate that has been set to zero, but it is spiked with the three trillion dollars’ worth of securities the Fed has been purchasing as part of its quantitative easing programs. This amount is currently increasing by $85 billion per month. The Fed will have to orchestrate an exit strategy in a way that does not flood the market with massive sales of assets or that sharply raises the federal funds rate to a more neutral level. The swimming pool cannot be drained by punching a hole in its side and allowing the assets to flood out onto the market. The Fed will need to communicate a clear strategy to markets so they will be prepared and understand the process that will play out as the Fed implements its exit strategy. The first step will likely be a tapering down of the current 3rd round of quantitative easing, a process I believe will commence early in 2014. Purchases of mortgage backed securities and treasuries will gradually taper down over a period of months in 2014. Once the punchbowl is no longer being replenished, the process of draining it and removing it will begin. Common wisdom is that the Fed will sell off the assets it has purchased before it begins to raise the federal funds rate, but this is not necessarily how it will play out. The Fed could move on both fronts as the exit strategy plays out, but

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what is true is that the entire exit process could span several years depending on how markets and the economy react to the exit strategy as it unfolds. The Fed also has other tools at its disposal to rein in the money supply including raising reserve requirements and/ or raising the rate it pays on bank reserves. The exit strategy is also not going to be carved in stone, so the Fed can remain pragmatic and eclectic in how it ultimately exits this historical stance of monetary policy.

CONSUMER SPENDING U.S. consumers are still in this mini age of austerity. Consumption has been suppressed in this recovery relative to those that have preceded it, and U.S. consumers are not themselves. We have historically been voracious consumers, borrowing money to finance this spending when our current incomes could not support it. This recession and recovery have been well outside the norm. U.S. consumers, who account for 70% of GDP, were and are simply not in a position to lead a robust recovery. Lost wealth in the housing market, though we are beginning to make progress recouping some of this, coupled with a labor market recovery that has shown little oomph have both forced consumers to continue to be cautious with spending. They continue to nurse the wounds on their balance sheets, saving to try and fill in the gap once occupied by trillions of dollars of housing wealth. Financial asset values have fully recovered and surpassed pre-recession and pre-financial crisis highs. These gains are likely concentrated in a smaller share of households than home equity wealth, so we have not seen a powerful wealth effect from the rebound in the stock and bond markets. In the 70’s and 80’s, average real consumption growth of 4%-plus characterized the recoveries. In the 90’s the growth was on average greater than 3.8%. Consumption growth starting in 2010 and forecast through the end of 2016 is expected to average just 2.3%, well below the consumer spending growth of previous recoveries. Quarterly patterns of consumer spending show a pattern about this recovery that has persisted over the past several years: consumers spend at a higher pace for a quarter (this was the case in the 1st quarter of 2013), only to pull back in subsequent quarters to continue repairs on their balance sheet, which is what we are forecasting for the remainder of 2013. As the recovery progresses, the labor market and housing market continue to make progress. We expect that the pace of spending will stabilize at levels of consumption higher than the first four years of the recovery but still much lower than in previous recoveries. Average consumption growth 2014-2016 is expected to average 2.6%.

INVESTMENT Non-residential fixed investment spending grew at 8.6% in 2011 and 8.1% in 2012. Businesses have been very profitable for several years and have amassed significant retained earnings that could be used to fund investment. Interest rates are historically low for those who would seek to borrow, but uncertainty has many firms moving forward on investment with great caution. Policy uncertainty, as we have discussed, weighs on these investment decisions. Consequently, investment growth will be just 4.2% in 2013. Spending will accelerate in 2014 with investment growing at 6.3%, and expand at 6.9% in 2015 before easing further to 5.2% in 2016. The cost of borrowing will remain low historically speaking, but will rise over the course of the forecast horizon. The Federal Reserve’s stated commitment to low interest rates may come to a conclusion sooner than most are expecting. We think the Fed will begin to creep up the federal funds rate at the end of 2014, though we expect the 10-year Treasury yield to remain below 5.0% through the end of 2016. Business spending on equipment and software will grow at an annual average rate of 5.8% in 2013 through 2016. Investment in computers and peripherals will continue to be strong after slowing a bit in 2012. Companies managing costs and implementing productivity-focused IT plans will continue to spend at a double digit average annual growth rate of 12.6% from 2013 to 2016. Lowering a company’s cost structure reaps profits now and in the future. Investment in commercial real estate experienced a burst of activity in 2012. Growth decelerated into the start of 2013 but will accelerate in the second half of 2013. Year-over-year investment in structures will grow 2.5% in 2013. Investment in non-residential structures will slowly accelerate in 2014 and 2015 with growths of 4.0% and 6.5% respectively before growth rises to 7.9% in 2016. Investment in transportation equipment grew robustly in 2012 (20.3%), but growth will decelerate sharply in 2013 (3.5%), before slightly accelerating to a 4.9% growth rate in 2014 and 2015. This type of investment will have an average growth rate of 2.8% during the four years from 2013 through 2016, and in that final year growth will be -2.1% as higher interest rates and fading stimulus turn growth negative. Ongoing demand driven by replacement need and lower interest rates will bolster light vehicle sales that will grow from 2012 levels of 14.4 million to a level slightly over 15.7 million in 2016. The automotive sector will remain one of the more solid sectors in the U.S. economy over the next 4 years. Residential fixed investment growth spent six years spiraling downward, but there are clearly signs of a recovery in a sector that contracted for years. In 2012, residential fixed investment growth not only turned positive, but grew Institute for Economic Competitiveness

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by 12.0%. It will average 13.4% growth through 2013-2016 with a peak growth rate in 2015 of 18.9%. In the final year of our forecast, 2016, real residential fixed investment will still be more than $175 billion lower than its 2005 peak of $775 billion. The housing market is again showing tangible signs of recovery, and while there may be echoes of the housing boom in the current markets, this is not a re-run of the housing bubble. Inventories of new homes have fallen significantly. Existing home inventories are being absorbed; private equity and hedge fund investors are buying properties, rehabbing, and renting them out as opposed to flipping them in a short amount of time. The holding periods for this new crop of investors are measured in years, rather than months. Housing prices are rising again and while the pace of these increases may be a function of temporary inventory constraints, most indicators are moving in the right direction; the recovery will be sustainable – provided housing finance becomes more available. This is sending a signal to builders to get back to housing production. We expect starts to continue to accelerate significantly in 2013, then reaching more than 1.55 million in 2016.

GOVERNMENT SPENDING The Bush tax cut expiration was avoided for all but the highest income earners. No one, however, escaped rising taxes as the 2% payroll tax cut was allowed to expire and all wage earners took a 2% hit on their take home pay in January of 2013. Economic growth is also resulting in rising revenue for the Federal government and those states that have an income tax. The sequester is underway, and while these trillion dollar plus cuts are spread over a decade, they will be a drag on the pace of recovery. The predictions of swarms of locusts that would be unleashed as a result of the sequester have turned out to be political hyperbole. The combination of higher revenues and somewhat smaller expenditures will combine to lower the federal budget deficit to “just” $770 billion, the first time in four years that the deficit did not exceed $1 trillion. In this day and age I suppose this is what passes for austerity in Washington, DC. A series of disturbing and Orwellian-like scandals have engulfed the nation’s capital, and now the prospect of a grand fiscal bargain being worked out are in the words of 1970’s band Styx “a Grand Illusion.” The long run solution will require significant changes to entitlement programs (Social Security and Medicare), increased revenue, and decreased spending. The President’s bipartisan deficit reduction commission authored a report laying out one potential way forward. The SimpsonBowles report lays out a set of policies that are going to be politically painful and difficult to implement, but are by and large just the type of changes that must take place. We need 10

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to resurrect that study and work to implement the proposed policies or some reasonable facsimile of them. The national debt is over $16.8 trillion and rising. This represents a debt of nearly $148,248 per taxpayer and over $53,300 per citizen. Trillion-dollar federal budget deficits are a hallmark of the first term of the Obama administration that has run average deficits of $1.274 trillion during 2009-2012. In 2013, we are forecasting the federal budget deficit to shrink to $770 billion, which should continue to shrink to $640 billion in 2014, $623 billion in 2015, and $703 billion in 2016. Though we are projecting deficits to get smaller, the additional debt added to the national debt over these four years will exceed $2.7 trillion, thus pushing the national debt total to over $19.4 trillion. This is assuming interest rates do not rise faster than anticipated, and thereby raising the burden of servicing all this debt. All tolled, President Obama’s administrations will have added over $7.8 trillion to our national debt.

NET EXPORTS Most of the United States’ major trading partners are experiencing economic deceleration just as the U.S. is itself. In Europe, countries with growing economies are expected to have subpar growth until 2015. This does not reflect European economies that are contracting. Japan as well, extraordinary policies notwithstanding, will see weak growth, as will Canada. This will dampen the volume of trade in both directions. Real exports are expected to grow only by 1.6% in 2013, while real imports will grow at just 0.7%. Other important trading partners for the U.S. will see a stronger pace of growth closer to 4% for 2013, but that is still a deceleration in these typically higher growth rate countries. Overall trade growth continues through the end of our 2016 forecast period. However, real export and import growth both decelerated in 2012 and further slowed in 2013 as the U.S. and global recovery lost momentum. Real export growth is expected to be 4.0% on average through 2013-2016, even with the slowdown in 2012 as the debt crisis that brought recession to Europe has depressed Europeans’ incomes and the value of the Euro from $1.60 in 2008 to $1.33 recently, thereby making U.S. exports more expensive. Real imports will expand over the same period with an average growth of 3.4%. The near term deceleration of import growth is a function of the continuing wealth effects of lost home equity faced by consumers, the still weak labor market, the expiration of the payroll tax cut, and the deceleration in the pace of the U.S. economic recovery that occurred as 2012 came to an end and that looks to recur after a 1st quarter with 2.4% growth in real GDP. The U.S. dollar will appreciate vis-à-vis our major trading partners through 2014. The strengthening is due to

U . S . F orecast

the deepening recession, the uncertainty stemming from the sovereign debt crisis in the E.U. that will continue to weigh on the value of the Euro, and the continued global slowing of the economic recovery. Once this wave of global uncertainty abates, we expect the dollar will depreciate again in 2015-2016 at an average annual rate of 2.3% in the wake of still large and persistent imbalances in the U.S. economy. The current account deficit will improve through the end of 2014 as the dollar appreciates through that year. Current account balances will average -$435 billion during 2012-2014, with a worsening of the deficit in 2014-2016 when the dollar appreciation comes to a halt. We expect net exports to average -$499 billion during 2015-2016. “We are Never Ever Getting Back to Full-Employment” Oooh we got the jobs report last month But Oooh, this time I’m telling you, I’m telling you We are never ever ever getting back to full-employment We are never ever ever getting back to full-employment You go talk to the BLS talk To the Fed talk to me But we are never ever ever ever getting back to full-employment, Like ever... I assumed that Taylor Swift the singing economist would be as melodramatic as Taylor Swift the pop star, so it is hyperbole to say we will never get back to full employment. However, it is no exaggeration stating that the time it will take for the economy to get back to this point is substantial. What level of unemployment is consistent with fullemployment? 6.5%, 5.5% or 4.5%? Something else? Some economists have argued that the new normal fullemployment may now be higher than it was prior to the last recession. How long will it be before the unemployment rate hits 6.5%? We are forecasting the third quarter of 2015. How long until unemployment falls to 5.5%? Don’t expect to see this level until the fourth quarter of 2017 – a full 10 years from the onset of the Great Recession and eight years from the peak level of unemployment. Job creation remains weak, and the pace of payroll job growth is insufficient given that we are still 2.4 million jobs short of payroll employment returning to prerecession levels. The labor market is still suffering through the worst pace of job recovery following a recession since 1945.

The national unemployment rate ticked up in May to 7.6%. The May jobs report again showed a slight improvement of the labor market with 175,000 new workers on business payrolls, after an increase of 149,000 in April and 142,000 in March. The mixed message in recent jobs and labor market reports reinforces the need to look at more than a single metric of how the labor market is performing. Because it is sufficiently complex and difficult to measure, the U.S. labor market cannot be adequately gauged by a single metric such as the headline unemployment rate during this recovery. This is particularly true because in 2012 the labor force participation rate, despite ticking up one tenth of a percentage point in May, is at its lowest point since 1979. The headline unemployment rate falls as workers leave the labor force giving a downward bias to the unemployment rate in this recovery. The Bureau of Labor Statistics (BLS) does have alternative measures of labor market weakness. The broadest measure of unemployment (U-6) takes into account discouraged workers as well as those who are underemployed—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. U-6 remains painfully high at 13.8% in May, down just a percentage point since May of 2012, but down from its peak of 17.1% in April 2010. U-6 has been in double digits since June of 2008. As health care reform is rolled out later this year and into 2014 and beyond, we must pay attention to U-6. As many companies have suggested they will do, a shift from full-time workers to part-time workers will take place in response to avoiding either having to provide healthcare insurance for full-time or the fines that a company will face if they do not provide full-time employees with health care coverage. Headline unemployment could go down if full time jobs are split into two part time jobs, and payroll employment will go up (full time and part-time jobs are treated equally in the payroll employment data). However U-6 would rise in this scenario by its inclusion of underemployed workers.

Institute for Economic Competitiveness

utomobile and Light Truck Sales June 2013 (Millions Vehicles)

CHARTS

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

F O R E C A S T F O R T H E N AT I O N

U . S . F orecast C harts

30-Year Mortgage Rates and Housing Starts 9.0

(Mortgage rates - Left axis, %)

2.5

8.0

2.0

7.0

1.5

6.0

1.0

5.0

0.5

4.0 3.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 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

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Auto Sales Light Truck Sales

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

(Billions of 2000 Dollars)

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Change in Real Business Inventories Institute for Economic Competitiveness

U . S . F orecast C harts

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Federal Budget Surplus

Federal Funds Rate 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0

U.S. Forecast | June 2013

(%)

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Fed Funds Rate

U . S . F orecast C harts

Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Quarterly Growth Rate Real GDP Fed Funds Rate

Industrial Production 110.0

(2002=100)

105.0 100.0 95.0 90.0 85.0 80.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Industrial Production

Private Fixed Nonresidential Investment 2200.0

(Billions of Dollars)

2000.0 1800.0 1600.0 1400.0 1200.0 1000.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Private Fixed Nonresidential Investment Institute for Economic Competitiveness

U . S . F orecast C harts

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Manufacturing Employment

Money Supply

2600.0 2400.0 2200.0 2000.0 1800.0 1600.0 1400.0 1200.0 1000.0

(Annual Growth Rate %)

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Annual Growth Rate of M1

Total Nonfarm Payroll Employment 145.0

(Millions)

140.0 135.0 130.0 125.0

U.S. Forecast | June 2013

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Total Nonfarm Employment

U . S . F orecast C harts

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120

120.0

110

100.0

100

80.0

60.0

40.0

20.0

0.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Price of Oil WTI Consumer Sentiment

Real Disposable Income and Consumption 6.0

(% Change Year Ago)

4.0 2.0 0.0 -2.0 -4.0 -6.0

-200 -300 -400 -500

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.40 1.30 1.20 1.10

-600 -700 -800

1.00 0.90 0.80 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

0.70

Institute for Economic Competitiveness

U . S . F orecast C harts

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 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

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

U.S. Forecast | June 2013

(%)

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 1-Year T-Bill Yield 5 Year Treasury Bond Yield 30 year Treasury Bond Yield

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

Table 1. Annual 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.

2005

2006

2007

History 2008 2009

3.1 3.2 3.4 5.9 3.2 3.0 6.7 8.6 7.3 11.7 1.9 8.3 13.5 -10.0 18.7 1.5 -0.8 17.8 -2.0 10.5 -5.5 6.3 6.8 6.2 1.3 -0.2

2.7 2.6 2.9 4.5 2.6 2.6 8.0 7.6 8.7 23.3 12.8 8.4 9.2 -5.1 7.2 9.2 6.1 10.3 7.9 14.7 9.3 -7.2 9.0 6.1 2.1 0.9

1.9 2.2 2.3 5.0 1.9 2.0 6.5 3.3 8.1 14.1 11.5 4.0 -4.1 30.6 -18.2 14.0 10.0 18.1 39.0 6.2 15.2 -18.7 9.3 2.4 1.3 1.4

Composition of Real GDP, Percent Change -0.3 -3.0 2.4 1.8 2.2 0.2 -2.3 0.9 2.0 2.1 -0.5 -1.9 1.8 2.5 1.9 -4.9 -5.1 6.2 7.2 7.8 -1.2 -1.8 2.3 2.3 0.9 0.5 -1.4 1.0 1.9 1.2 -0.7 -18.0 0.9 8.6 8.1 -4.2 -16.2 8.9 11.0 7.0 2.2 -3.9 4.6 5.0 3.8 8.4 -5.3 3.1 12.3 4.3 -4.7 -9.4 12.7 -5.7 5.0 -3.8 -21.2 -0.9 13.3 7.3 -23.0 -45.6 61.9 34.4 20.3 -3.3 -25.0 6.9 -0.8 28.6 -12.7 -23.3 -1.0 41.7 16.4 6.7 -21.1 -14.7 2.7 11.1 -3.6 -30.9 -24.2 -2.1 7.8 25.8 5.2 -27.8 3.3 19.1 11.6 1.0 -15.9 -8.9 22.1 8.4 -33.9 23.6 23.4 6.2 13.2 -18.3 -26.4 -6.3 7.5 -23.9 -22.0 -3.6 -1.2 12.0 6.3 -9.0 11.2 6.7 3.4 -2.7 -13.4 12.5 4.9 2.4 7.2 6.1 4.5 -2.8 -2.2 0.0 2.2 -1.8 -3.4 -1.4

2011

2012

Billions of Dollars 12623.0 12958.5 13206.4 13161.9 12758.0 13063.0 13299.1 13593.2 12623.0 13377.2 14028.7 14291.6 13973.7 14498.9 15075.7 15684.8

2013

1.7 1.7 2.0 6.6 1.3 1.5 4.2 4.8 5.8 2.5 6.0 3.3 3.5 5.8 3.8 2.5 1.7 0.1 1.5 7.1 -2.7 14.2 1.6 0.7 -5.9 -1.4

3.2 3.2 2.5 3.0 2.9

2.9 2.9 2.3 3.9 3.1

56.5 1.7 3.2 78.1 49.8 88.6 16.948 2.073 6.181 5.1 1.7 -319 -746

66.1 0.9 2.2 78.4 63.2 87.3 16.504 1.812 5.712 4.6 1.8 -248 -801

72.3 1.5 2.5 78.6 28.7 85.6 16.089 1.342 4.418 4.6 1.1 -162 -710

99.6 0.6 -3.4 74.5 -37.6 63.8 13.195 0.900 3.655 5.8 -0.6 -455 -677

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))

3.21 3.15 3.62 4.05 4.29 4.56 5.87 1207 6.8 1.000 -1.8

4.96 4.73 4.93 4.75 4.79 4.87 6.41 1311 8.6 0.985 -1.4

5.02 4.35 4.52 4.43 4.63 4.84 6.34 1477 12.8 0.930 -5.6

1.93 1.37 1.82 2.80 3.67 4.28 6.04 1221 -17.2 0.888 -4.1

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)

10486 5.5 9277 4.4 9277 1.4 1.6 1228 33.1

11268 7.5 9916 6.9 9653 4.0 2.6 1349 10.1

11912 5.7 10424 5.1 9880 2.4 2.4 1293 -4.2

12460 4.6 11025 5.8 10119 2.4 5.4 1051 -18.6

Forecast 2014 2015

2.7 2.7 2.4 3.8 2.4 2.1 6.3 7.2 8.4 17.6 11.0 10.5 4.9 4.5 4.6 4.0 12.6 2.3 -6.2 3.2 8.8 16.4 4.3 4.3 0.4 0.0

3.1 3.1 2.7 4.7 2.1 2.5 6.9 7.0 6.8 16.5 8.8 10.1 4.9 4.8 4.2 6.5 25.6 6.1 -4.5 -5.1 13.8 18.9 4.6 4.6 -0.9 0.6

2016

2.7 2.8 2.9 5.6 2.3 2.7 5.2 4.0 4.8 13.7 7.0 6.6 -2.1 5.5 -2.5 7.9 20.2 16.1 -4.5 -1.1 8.0 4.0 5.5 3.8 -1.4 0.5

13820.5 14187.4 14630.9 15032.8 16163.2 16859.0 17617.8 18338.0

Prices & Wages, Percent Change, Annual Rate 2.2 0.9 1.3 2.1 1.8 3.8 -0.3 1.6 3.1 2.1 2.3 1.7 1.0 1.7 2.1 6.4 -2.5 4.2 6.0 1.9 2.9 1.5 1.9 2.2 1.9

3.3 3.4 2.1 4.9 3.1

Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2005 $) Consumer Sentiment Index Light Vehicle Sales (Million units) Housing Starts (Million units) Existing House Sales (Million units) Unemployment Rate (%) Payroll Employment (% change) Federal Surplus (Unified, FY, bil. $) Current Account Balance (Bil. $)

2010

1.4 1.3 1.7 0.8 1.6

1.6 1.4 1.8 0.6 2.2

1.3 1.5 1.7 0.3 2.3

1.3 1.5 1.5 1.0 2.4

94.2 0.9 3.6 75.8 59.6 76.5 14.4 0.8 4.1 8.1 1.7 -1089 -475.0

93.7 0.6 2.5 76.2 41.1 77.8 15.1 1.0 4.5 7.7 1.4 -770 -428.6

89.0 1.0 3.1 77.0 40.9 79.7 15.2 1.2 4.9 7.5 1.4 -640 -401.6

89.3 1.2 3.4 77.6 47.6 82.0 15.4 1.5 5.1 6.9 1.8 -623 -483.1

92.2 1.3 2.3 77.1 35.1 84.0 15.7 1.6 4.8 6.6 1.6 -703 -514.6

Financial Markets, NSA 0.16 0.18 0.10 0.1 0.15 0.14 0.05 0.1 0.47 0.32 0.18 0.2 2.19 1.93 1.52 0.8 3.26 3.21 2.79 1.8 4.07 4.25 3.91 2.9 5.04 4.69 4.46 3.7 947 1139 1269 1380 -18.9 21.6 11.5 8.9 0.926 0.898 0.845 0.9 4.8 -2.8 -5.8 3.7

0.1 0.1 0.1 0.9 2.0 3.1 3.6 1586 15.0 0.9 4.4

0.4 0.3 0.3 1.4 2.6 3.7 4.2 1585 0.0 0.9 0.4

2.2 2.0 2.2 2.9 4.0 4.8 5.6 1377 -13.1 0.9 -0.4

3.8 3.7 4.0 4.1 4.6 4.9 6.5 1311 -4.4 0.9 0.4

Incomes 12322 12947 3.8 5.1 11127 11549 3.8 3.8 10017 10150 1.8 1.3 5.1 4.3 1443 1475 24.6 2.2

13782 2.6 12116 1.4 10368 0.5 2.6 1679 -1.9

14437 4.8 12685 4.7 10725 3.4 3.5 1837 9.5

15127 4.8 13354 5.3 11146 3.9 4.6 1727 -6.0

15817 4.6 14029 5.1 11554 3.7 5.2 1658 -3.9

61.7 2.9 -11.2 65.7 -137.9 66.3 10.402 0.554 3.868 9.3 -4.4 -1416 -382

11867 -4.8 10722 -2.7 9837 -2.8 4.7 1171 22.8

Other Measures 79.4 95.1 3.1 0.6 5.7 3.4 71.3 74.0 58.0 36.5 71.8 67.4 11.555 12.733 0.586 0.612 3.705 3.793 9.6 8.9 -0.7 1.2 -1294 -1297 -442 -466

13431 3.7 11951 3.5 10321 1.7 4.1 1713 16.2

Institute for Economic Competitiveness

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

Table 2. Real Gross Domestic Product History 2005

2006

2007

2008

Forecast 2009

2010

2011

2012

2013

2014

2015

2016

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

12623.0 12958.5 13206.4 13161.9 12758.0 13063.0 13299.1 13593.2

13820.5 14187.4 14630.9 15032.8

12573.0 12899.3 13177.6 13200.6 12899.7 13010.3 13265.3 13539.4

13766.1 14139.1 14576.3 14990.2

8803.5

9054.5

9262.9

9211.7

9032.6

9196.2

9428.8

9603.3

9796.3 10029.7 10295.7 10596.1

Durables

1123.4

1174.2

1232.4

1171.8

1109.1

1178.3

1262.6

1360.9

1449.7

1505.5

1576.6

1664.6

Nondurables

1953.4

2005.0

2042.9

2019.1

1982.8

2029.3

2075.2

2094.5

2120.7

2172.4

2216.9

2267.1

Services

5726.8

5875.6

5990.1

6017.0

5930.6

5987.6

6101.5

6176.6

6271.3

6404.4

6565.5

6743.0

1347.3

1455.5

1549.9

1537.7

1259.9

1268.5

1378.2

1487.9

1549.6

1646.9

1759.9

1850.8

995.6

1071.1

1106.8

1059.4

885.2

963.9

1070.0

1143.8

1198.8

1284.9

1374.7

1430.1

475.3

516.3

558.2

569.7

546.4

571.7

600.2

623.2

659.5

714.6

762.9

799.6

Computers & Peripherals

78.9

97.1

110.7

119.5

112.6

116.0

130.3

135.1

138.0

162.3

188.9

214.9

Communications Equipment

83.2

93.8

104.4

99.1

89.3

100.5

94.7

99.3

105.1

116.7

126.9

135.8

Industrial Equipment

159.6

172.9

179.9

172.9

136.2

134.6

152.6

163.3

168.6

186.4

205.1

218.7

Transportation Equipment

181.7

198.2

190.2

146.9

75.9

123.2

164.7

196.9

203.8

213.8

224.2

219.5

22.0

20.6

26.8

26.0

19.1

20.4

19.8

25.3

26.4

27.6

28.9

30.5

48.2

51.6

42.1

36.5

27.9

27.7

39.3

45.2

46.9

49.0

51.1

49.8

351.8

384.0

438.2

466.4

368.1

310.6

319.2

353.5

362.4

377.0

401.7

433.4

135.9

144.2

158.6

152.7

105.8

79.4

77.6

83.7

85.0

95.7

120.4

144.4

Manufacturing

29.9

33.0

39.0

48.6

50.9

36.8

36.9

43.4

44.3

47.1

54.6

Power & Communication

45.2

48.7

67.8

74.0

74.5

62.5

56.8

69.2

70.1

65.7

62.7

59.8

Mining & Petroleum

77.1

88.3

93.6

101.5

66.1

77.3

94.8

100.2

107.2

110.7

105.0

103.7

Other

63.7

69.6

80.3

90.4

73.9

54.2

50.6

54.3

52.8

57.5

65.3

70.5

775.0

718.2

584.2

444.4

344.8

332.2

327.6

367.1

419.2

488.1

580.1

602.4

Exports

1305.1

1422.1

1554.4

1649.3

1498.7

1665.6

1776.9

1837.3

1866.6

1947.1

2036.1

2147.2

Imports

2027.8

2151.5

2203.3

2144.0

1853.9

2085.2

2184.9

2238.1

2254.3

2352.1

2460.3

2555.0

876.3

894.9

906.1

971.1

1030.6

1076.8

1047.0

1024.1

963.6

967.5

958.7

945.0

1493.6

1507.2

1528.1

1561.8

1534.1

1482.0

1461.7

1440.6

1440.2

1448.8

1456.1

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Federal Government State & Local Government

U.S. Forecast | June 2013

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. 2013Q1

Real GDP Nominal GDP

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

2.4 1.8 3.4 8.2 2.2 3.1 2.2 4.6 3.1 -15.0 -13.0 -2.4 0.7 -35.0 10.8 -3.5 -2.4 -10.5 -25.8 23.7 -16.9 12.0 0.8 1.9 -8.7 -2.4

2013Q2

1.3 0.7 1.2 3.1 0.0 1.4 1.8 2.4 5.7 -2.9 11.5 0.1 9.9 23.0 36.2 0.3 -5.8 -10.1 11.7 0.0 4.1 18.3 2.6 1.1 -8.9 -2.4

2013Q3

1.4 1.6 1.4 1.8 2.7 1.0 4.4 5.0 8.1 14.2 12.3 6.0 -3.3 0.7 -1.9 2.9 2.8 1.9 -1.8 7.0 1.8 11.1 4.4 4.1 -0.5 -0.5

2013Q4

2.0 2.1 1.7 2.0 2.8 1.3 5.7 7.7 9.5 22.1 11.2 8.9 6.1 2.2 1.3 0.6 2.3 2.9 -7.2 2.3 4.0 14.4 5.4 4.0 -1.7 -0.2

2014Q1

3.2 3.3 2.9 3.6 2.8 2.8 6.7 7.7 8.5 16.3 13.0 15.1 3.4 4.6 0.1 4.3 21.9 0.1 -16.6 9.3 2.3 15.9 4.1 4.4 3.7 -0.1

2014Q2

2014Q4

2015Q1

2015Q2

2015Q3

Composition of Real GDP, Percent Change, Annual Rate 3.4 3.2 3.1 3.4 3.1 2.9 3.5 3.2 3.0 3.3 3.0 2.9 2.9 2.7 2.9 2.5 2.6 2.5 5.8 5.6 5.6 3.6 4.8 3.9 2.5 2.3 2.1 2.0 1.9 2.0 2.6 2.4 2.7 2.5 2.5 2.5 8.2 7.2 6.8 8.0 6.6 5.3 8.6 7.9 6.9 8.0 6.7 5.6 9.1 7.6 7.2 7.8 6.0 4.7 25.4 17.1 16.1 18.0 15.8 12.5 11.6 6.7 6.1 12.3 8.6 7.4 11.9 12.0 10.0 10.5 9.5 8.5 9.4 7.4 1.8 6.6 5.0 4.5 3.9 5.2 2.4 5.6 5.1 5.9 8.1 9.7 -1.6 2.3 7.6 7.8 7.3 5.5 6.7 8.2 6.3 4.6 15.1 18.8 28.8 27.7 29.1 25.1 14.5 -2.5 -1.8 8.7 7.7 11.9 -3.1 -1.4 -3.4 -3.5 -6.6 -6.8 1.7 -3.9 -3.1 -2.2 -7.4 -12.4 17.4 24.2 13.9 12.4 10.8 10.3 18.9 18.1 22.0 22.8 19.7 13.5 4.7 5.4 4.7 3.6 3.9 4.7 5.1 5.1 5.1 4.4 4.6 4.0 1.8 2.2 -2.3 -0.9 -1.8 -1.7 0.4 1.1 0.6 0.5 0.6 0.5

13746.2 13790.1 13838.5 13907 14016.8 14133.2 16004.5 16073.9 16217.9 16356.6 16561.7 16766.8

0.5 1.5 1.1 -2.7 1.4

2.2 1.6 1.9 1.9 1.7

1.4 1.2 1.8 0.5 2.0

1.9 1.7 2.0 0.6 2.8

94.3 0.5 4.4 76.3 28.3 76.7 15.251 0.963 4.343 7.7 1.9 -782 -476

94.2 1.5 0.1 75.8 48.8 79.0 15.038 0.917 4.409 7.7 1.2 -723 -443

94.3 -0.2 3.7 76.2 45.2 78.0 14.984 0.963 4.466 7.7 0.9 -698 -405

91.8 0.3 3.5 76.4 42.1 77.5 14.945 1.003 4.636 7.7 1.2 -680 -390

90.6 1.5 3.1 76.7 40.1 78.0 15.010 1.063 4.650 7.7 1.5 -631 -391

89.7 1.4 3.1 76.9 38.5 79.5 15.188 1.142 4.915 7.5 1.7 -637 -389

0.14 0.09 0.15 0.83 1.95 3.14 3.50 1515 30.1 0.891 9.2

0.12 0.02 0.06 0.77 1.87 3.04 3.55 1613 28.8 0.915 10.9

0.14 0.05 0.09 0.89 2.04 3.17 3.73 1610 -0.7 0.927 5.4

0.15 0.07 0.11 0.95 2.11 3.24 3.79 1607 -1.0 0.924 -1.2

0.16 0.08 0.12 1.04 2.24 3.37 3.93 1601 -1.3 0.915 -4.0

0.16 0.08 0.12 1.20 2.49 3.63 4.10 1597 -1.1 0.918 1.3

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)

13603 -4.6 11998 -7.5 10281 -8.4 2.3 1738 -7.9

13706 3.1 12047 1.6 10332 2.0 2.5 1648 -19.1

13836 3.8 12152 3.5 10394 2.5 2.7 1667 4.6

13984 4.4 12266 3.8 10465 2.7 2.9 1662 -1.2

14196 6.2 12454 6.3 10584 4.6 3.3 1808 40.0

14357 4.6 12611 5.2 10678 3.6 3.4 1845 8.4

2015Q4

2.5 2.7 2.6 5.4 1.9 2.4 4.4 3.9 4.1 12.6 7.6 8.5 -1.2 6.4 -1.7 5.7 23.9 14.6 -8.5 -10.1 11.0 5.7 5.9 3.9 -1.4 0.6

2016Q1

2.5 2.7 3.0 5.4 2.3 2.8 4.0 2.3 4.1 13.0 7.2 6.3 -9.2 3.7 -17.2 8.1 19.6 20.6 -6.5 -1.3 7.8 0.5 5.3 3.3 -1.8 0.4

2016Q2

2.8 2.9 3.1 6.7 2.5 2.8 5.9 3.7 4.8 14.4 6.6 5.4 -2.3 6.7 7.2 11.3 18.0 21.6 -0.1 8.3 6.1 -1.3 5.3 3.8 -1.1 0.5

2016Q3

3.0 3.0 3.2 5.9 2.6 2.9 6.3 4.8 5.8 15.1 6.2 4.6 1.0 5.4 3.0 10.1 14.4 13.8 -1.1 12.0 5.6 0.3 5.6 4.2 -1.0 0.4

2016Q4

3.4 3.3 3.5 6.9 2.9 3.2 5.7 5.1 6.9 15.5 5.2 3.8 -0.8 6.5 -8.2 7.2 11.8 8.6 2.3 5.2 4.0 2.5 5.8 4.3 -1.0 0.5

Billions of Dollars 14245 14354.7 14474 14584.3 14687.7 14777.7 14868.2 14970.6 15082.5 15209.8 16961 17146.3 17352.4 17533.3 17710.6 17875 18051.8 18235.1 18427.3 18637.9

Prices & Wages, Percent Change, Annual Rate 1.6 1.5 1.3 1.5 1.1 1.8 1.5 1.3 1.6 1.3 2.0 1.8 1.6 1.7 1.6 0.9 0.5 0.3 0.3 -0.3 2.3 2.3 2.1 2.5 2.2

1.1 1.4 2.1 0.5 1.4

2014Q3

1.2 1.4 1.6 0.5 2.3

1.3 1.5 1.5 1.1 2.4

1.5 1.6 1.6 1.3 2.7

1.3 1.6 1.5 1.6 2.4

1.2 1.6 1.5 0.7 2.4

1.2 1.5 1.5 0.8 2.3

Other Key Measures 88.2 87.4 88.8 89.0 1.1 1.2 1.4 1.1 3.2 3.8 4.1 3.3 77.2 77.3 77.6 77.7 40.7 44.2 47.8 49.9 80.5 80.9 81.3 81.8 15.325 15.393 15.439 15.430 1.212 1.298 1.397 1.473 4.966 5.091 5.152 5.197 7.4 7.3 7.1 7.0 1.8 1.8 1.8 1.7 -627 -629 -649 -669 -401 -425 -452 -479

89.4 1.0 2.4 77.7 49.7 82.2 15.384 1.533 5.171 6.9 1.7 -683 -496

90.0 0.9 2.1 77.5 43.2 82.7 15.415 1.532 5.040 6.8 1.7 -695 -505

91.1 1.1 2.1 77.2 36.5 83.1 15.559 1.533 4.966 6.7 1.6 -754 -512

91.8 1.5 2.3 77.1 32.6 83.5 15.667 1.540 4.784 6.6 1.6 -780 -515

92.5 1.8 2.6 77.1 33.3 84.0 15.824 1.561 4.691 6.5 1.6 -798 -519

93.3 2.1 2.7 77.2 38.1 85.3 15.943 1.583 4.773 6.4 1.7 -814 -513

Financial Markets, NSA 0.29 0.89 1.36 1.88 0.19 0.72 1.13 1.62 0.24 0.82 1.24 1.81 1.36 1.85 2.19 2.63 2.68 3.10 3.42 3.90 3.80 4.14 4.39 4.70 4.24 4.55 4.93 5.41 1588 1553 1487 1408 -2.1 -8.7 -15.9 -19.6 0.919 0.920 0.915 0.913 0.6 0.2 -2.0 -0.8

2.42 2.25 2.61 3.14 4.31 4.95 5.93 1335 -19.1 0.913 0.0

2.96 2.81 3.21 3.49 4.52 5.01 6.30 1280 -15.6 0.916 1.3

3.46 3.27 3.66 3.80 4.64 5.06 6.47 1262 -5.5 0.916 0.1

3.86 3.68 4.05 4.10 4.66 5.05 6.58 1277 4.9 0.917 0.5

4.00 3.83 4.17 4.22 4.54 4.92 6.54 1318 13.3 0.919 0.5

4.00 3.86 4.15 4.22 4.36 4.69 6.46 1386 22.4 0.920 0.4

Incomes 14677 14887 4.4 5.8 12918 13106 5.1 6.0 10871 10990 3.9 4.4 3.8 4.2 1844 1748 -1.1 -19.3

15210 4.2 13442 5.1 11203 3.8 4.8 1719 -3.0

15360 4.0 13593 4.6 11292 3.2 5.0 1707 -2.7

15568 5.5 13787 5.8 11412 4.3 5.2 1628 -17.2

15730 4.2 13943 4.6 11501 3.2 5.2 1649 5.2

15894 4.2 14110 4.9 11601 3.5 5.3 1658 2.1

16075 4.6 14277 4.8 11700 3.5 5.2 1698 10.0

14519 4.6 12758 4.7 10768 3.4 3.6 1850 1.0

15053 4.5 13275 5.3 11098 4.0 4.6 1732 -3.5

Institute for Economic Competitiveness

U . S . F orecast T ables Table 4. Quarterly Gross Domestic Product 2013Q1

Table 4. Quarterly Gross Domestic Product 2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

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

13746.2 13790.1 13838.5 13907.0 14016.8 14133.2 14245.0 14354.7 14474.0 14584.3 14687.7 14777.7 14868.2 14970.6 15082.5 15209.8 13701.5 13726.5 13781.7 13854.9 13968.0 14087.4 14197.5 14303.7 14419.3 14527.4 14631.0 14727.4 14824.4 14930.6 15041.6 15164.3

9745.5 9775.7 9811.0 9853.0 9924.2 9996.2 10063.6 10134.8 10197.8 10263.2 10327.8 10394.2 10470.9 10552.0 10634.4 10727.1 1436.4 1447.4 1453.9 1461.2 1474.3 1495.2 1515.8 1536.6 1550.1 1568.4 1583.4 1604.4 1625.7 1652.2 1676.3 1704.3

Nondurables

2110.2 2110.0 2124.0 2138.7 2153.5 2166.8 2179.0 2190.5 2201.3 2211.5 2222.4 2232.6 2245.5 2259.2 2273.7 2289.8

Services

6242.5 6263.9 6279.0 6299.7 6344.0 6385.0 6423.1 6465.3 6505.5 6545.4 6586.0 6625.0 6670.9 6716.9 6765.1 6818.8

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

1530.8 1537.5 1554.3 1575.9 1601.7 1633.5 1662.3 1690.0 1723.0 1750.6 1773.3 1792.7 1810.3 1836.6 1865.1 1891.2 1180.6 1187.6 1202.3 1224.9 1247.7 1273.6 1298.2 1320.0 1345.5 1367.4 1386.2 1399.6 1407.6 1420.5 1437.2 1455.1 642.5

651.5

664.3

679.5

693.5

708.7

721.7

734.5

748.4

759.3

768.1

775.8

783.6

792.9

804.2

817.7

Computers & Peripherals

134.7

133.7

138.2

145.3

150.9

159.7

166.1

172.4

179.7

186.4

191.9

197.7

203.9

210.8

218.4

226.4

Communications Equipment

100.8

103.6

106.6

109.5

112.9

116.1

118.0

119.7

123.3

125.8

128.1

130.5

132.7

134.9

136.9

138.7

Industrial Equipment

166.5

169.0

172.6

178.8

183.9

189.1

193.7

198.6

203.1

207.3

211.5

214.8

217.6

220.1

222.2

Transportation Equipment

200.3

205.1

203.4

206.4

208.1

212.8

216.7

217.6

221.1

223.9

226.3

225.6

220.2

219.0

219.5

219.1

25.4

26.7

26.9

27.2

27.5

27.8

28.0

28.4

28.7

29.1

29.6

29.8

30.3

30.7

31.2

44.3

47.8

47.6

47.8

48.7

49.8

49.6

49.9

50.9

51.8

51.6

49.2

50.1

50.5

49.4

360.8

361.0

363.7

364.2

368.1

374.6

379.6

385.8

393.5

399.5

404.1

409.7

417.7

429.1

439.6

447.2

Commercial & Health

85.6

84.3

84.9

85.4

89.7

92.9

97.0

103.3

109.8

117.1

123.8

130.6

136.6

142.4

147.3

151.4

Manufacturing

44.1

42.9

43.1

43.4

44.9

44.6

44.4

45.4

46.2

47.5

49.2

51.5

54.1

55.9

57.0

Aircraft Other Equipment Structures

Power & Communication Mining & Petroleum Other Residential Fixed Investment

69.1

71.0

70.7

69.4

66.3

65.8

65.6

65.0

64.4

63.3

62.2

60.9

59.9

59.8

59.7

60.0

106.2

108.0

108.6

111.1

111.5

110.4

109.6

109.0

106.9

103.4

100.7

100.4

102.4

105.3

106.7

52.2

52.7

52.9

53.5

53.8

56.0

59.1

61.0

62.9

64.5

66.1

67.8

69.1

70.1

71.1

71.8

397.3

414.3

425.4

439.9

456.5

476.7

496.9

522.3

549.8

575.1

593.6

601.9

602.7

600.7

601.2

604.9

Exports

1841.3 1853.3 1873.5 1898.2 1917.2 1939.2 1956.5 1975.4 1998.0 2021.0 2048.0 2077.5 2104.6 2131.7 2161.1 2191.6

Imports

2232.8 2239.1 2261.6 2283.7 2308.6 2337.2 2366.7 2396.1 2421.9 2449.2 2473.1 2497.1 2517.6 2541.0 2567.2 2594.1

Federal Government State & Local Government

U.S. Forecast | June 2013

982.2

959.6

958.3

954.2

962.9

967.3

972.6

967.0

964.8

960.5

956.3

953.0

948.8

946.1

943.7

941.4

1448.3 1439.4 1437.7 1437.0 1436.8 1438.1 1441.9 1444.0 1445.8 1447.8 1449.8 1451.8 1453.3 1455.3 1456.9 1458.7

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

Table 5. Annual Employment 2005

2006

2007

History 2008 2009

2010

2011

2012

2013

Forecast 2014 2015

2016

Millions Total Nonfarm Employment

133.74

136.13

137.64

136.85

130.86

129.91

131.50

133.74

135.66

137.62

140.05

142.35

Private Nonfarm

111.93

114.15

115.42

114.35

108.31

107.42

109.41

111.82

113.84

115.73

118.07

120.32

Mining

0.56

0.62

0.66

0.71

0.64

0.65

0.74

0.80

0.82

0.86

0.87

Construction

7.33

7.69

7.63

7.16

6.02

5.52

5.53

5.64

5.82

6.09

6.74

7.35

Manufacturing

14.23

14.16

13.88

13.40

11.85

11.53

11.73

11.92

11.98

12.06

12.24

12.41

Trade, Transportation and Utilities

25.96

26.28

26.63

26.29

24.90

24.64

25.07

25.51

25.83

26.02

26.29

26.68

Transportation & Warehousing

4.36

4.47

4.54

4.51

4.24

4.19

4.30

4.41

4.48

4.62

4.78

4.95

Financial Activities

8.20

8.37

8.35

8.20

7.84

7.70

7.79

7.88

7.94

7.90

7.80

Education & Health

17.37

17.82

18.32

18.84

19.19

19.53

19.89

20.32

20.67

21.05

21.36

21.90

Professional & Business Services

16.95

17.57

17.95

17.74

16.58

16.72

17.33

17.93

18.47

19.13

19.82

20.27

3.06

3.04

3.03

2.98

2.80

2.71

2.67

2.68

2.70

2.69

2.70

2.72

Leisure & Hospitality

12.81

13.11

13.43

13.44

13.07

13.04

13.35

13.75

14.12

14.30

14.54

14.68

Government

21.80

21.98

22.22

22.50

22.55

22.49

22.09

21.91

21.83

21.89

21.98

22.03

2.73

2.74

2.76

2.83

2.98

2.86

2.82

2.74

2.73

2.67

19.07

19.24

19.48

19.74

19.72

19.51

19.23

19.10

19.08

19.16

19.25

19.35

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.71

1.79

1.11

-0.57

-4.38

-0.71

1.22

1.70

1.44

1.76

1.64

Private Nonfarm

1.87

1.99

1.11

-0.93

-5.28

-0.80

1.85

2.21

1.80

1.66

2.02

1.91

Mining

9.36

10.03

5.74

6.77

-14.53

11.65

13.45

3.27

4.80

2.83

0.19

2.03

Construction

5.81

2.36

-1.95

-9.21

-16.57

-3.46

1.84

1.62

3.59

6.81

11.75

7.05

-0.83

-1.03

-2.05

-5.36

-11.40

0.60

1.77

1.38

0.26

1.24

1.77

0.82

Trade, Transportation and Utilities

1.65

1.14

1.17

-3.31

-4.74

0.70

1.98

1.83

0.71

0.99

1.06

1.71

Transportation & Warehousing

2.48

2.60

0.89

-2.70

-5.70

1.56

2.44

2.86

1.25

3.57

3.45

3.66

Financial Activities

1.89

1.37

-1.16

-2.31

-4.30

-0.89

0.50

1.34

1.07

0.57

-1.30

-0.76

Education & Health

2.51

2.62

2.88

2.57

1.72

1.77

2.00

2.06

1.56

1.76

1.66

2.88

Professional & Business Services

3.74

3.08

1.64

-3.60

-5.16

2.92

3.54

3.29

2.97

4.08

3.16

2.22

-1.07

-0.93

-0.04

-3.14

-6.04

-2.27

-0.38

-0.05

1.75

-1.71

0.94

0.99

Leisure & Hospitality

2.15

2.85

2.15

-1.66

-2.44

1.27

2.77

2.69

2.65

1.14

1.61

0.74

Government

0.81

1.03

1.16

0.98

-0.19

-0.93

-1.40

-0.41

-0.34

0.62

0.29

0.17

Federal

0.34

-0.21

0.54

1.11

2.41

4.82

-0.84

-1.45

-3.33

1.21

-1.15

-1.80

State & Local

0.88

1.20

1.25

0.97

-0.54

-1.31

-1.48

-0.25

0.10

0.54

0.50

0.45

Manufacturing

Information

Institute for Economic Competitiveness

U . S . F orecast T ables Table 6. Quarterly Employment Table 6. Quarterly Employment 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

Employment (Millions) Total Nonfarm Employment

135.1 135.5 135.8 136.2 136.7 137.3 137.9 138.5 139.2 139.7 140.3 140.9 141.5 142.1 142.6 143.2

Private Nonfarm

113.2 113.7 114.0 114.4 114.9 115.4 116.0 116.6 117.2 117.8 118.4 118.9 119.5 120.0 120.6 121.2

Mining

0.8

0.9

Construction

5.8

5.9

6.0

6.1

6.3

6.5

6.6

6.8

7.0

7.2

7.3

7.4

7.5

Manufacturing

12.0

12.1

12.2

12.3

12.4

Trade, Transportation and Utilities

25.8

25.9

26.0

26.1

26.2

26.3

26.4

26.5

26.6

26.7

26.9

Transportation & Warehousing

4.5

4.6

4.7

4.8

4.9

5.0

Financial Activities

7.8

7.9

8.0

7.9

7.8

Education & Health

20.5

20.6

20.7

20.8

20.9

21.0

21.1

21.2

21.3

21.4

21.5

21.7

21.8

22.0

22.1

Professional & Business Services

18.3

18.4

18.5

18.6

18.8

19.0

19.2

19.4

19.6

19.8

19.9

20.0

20.1

20.2

20.3

20.5

2.7

Leisure & Hospitality

14.0

14.1

14.2

14.3

14.4

14.5

14.6

14.7

Government

21.9

21.8

21.9

22.0

2.8

2.7

2.8

2.7

19.1

19.2

19.3

19.4

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.91

1.17

0.93

1.20

1.49

1.68

1.80

1.79

1.80

1.70

1.72

1.60

1.54

1.56

1.69

Private Nonfarm

2.35

1.51

1.20

1.42

1.70

1.87

1.89

2.10

2.07

1.99

1.96

1.97

1.88

1.79

1.82

1.96

Mining

7.79

-0.60

6.64

4.87

4.82

2.64

2.41

1.32

0.40

0.43

0.01

-0.09

0.98

1.77

2.54

2.75

Construction

6.60

1.83

2.35

3.34

3.82

5.54

7.67

9.48 11.08 12.02 11.80 10.14

8.54

7.47

6.28

5.18

Manufacturing

1.37

-0.22

0.28

-0.38

1.04

1.26

1.35

1.34

1.52

1.95

2.22

1.57

0.75

0.66

0.29

Trade, Transportation and Utilities

1.45

0.07

0.74

0.57

0.23

1.10

1.43

1.18

0.55

1.10

1.27

1.29

1.33

1.59

1.89

1.97

Transportation & Warehousing

0.18

0.06

1.18

3.58

3.61

3.62

3.58

3.45

3.50

3.28

3.45

3.55

3.77

3.51

3.73

3.63

Financial Activities

1.35

1.11

0.33

1.49

1.09

0.39

0.75

0.06

-0.34

-1.31

-1.54

-1.99

-1.32

-1.38

-0.78

0.44

Education & Health

1.57

1.91

1.50

1.25

3.04

1.68

0.86

1.48

1.65

1.38

1.52

2.07

3.37

3.10

2.29

2.74

Professional & Business Services

3.83

3.51

1.40

3.13

3.82

4.74

4.10

3.68

3.86

3.45

2.57

2.76

1.70

1.87

2.36

2.97

Information

2.31

-0.31

2.68

2.33

0.23

-4.83

-4.85

2.59

3.78

0.62

-0.63

0.01

1.16

1.30

1.50

-0.01

Leisure & Hospitality

3.49

3.44

1.86

1.81

-0.15

1.06

1.54

2.13

1.72

1.52

1.83

1.35

0.36

0.61

0.98

1.01

Government

-0.35

-0.56

-0.49

0.02

0.34

0.73

1.30

0.11

0.33

0.11

0.32

0.40

0.12

0.21

0.14

0.22

Federal

-1.89

-5.11

-3.56

-2.76

0.06

4.14

2.86

-2.24

0.48

-1.70

-1.75

-1.63

-2.97

-1.47

-1.37

-1.38

State & Local

-0.12

0.12

-0.04

0.42

0.38

0.26

1.08

0.45

0.31

0.38

0.62

0.69

0.55

0.44

0.35

0.44

U.S. Forecast | June 2013

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

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

2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

GDP

116.4 116.6 117.2 117.6 118.2 118.6 119.1 119.4 119.9 120.2 120.6 121.0 121.4 121.8 122.2 122.5

Consumption

116.7 116.6 116.9 117.2 117.7 118.1 118.5 118.8 119.3 119.6 120.0 120.4 120.8 121.2 121.6 122.0

Durables Motor Vehicles Furniture

88.7

88.2

87.9

87.6

87.3

87.1

86.8

86.5

86.3

86.0

85.7

85.5

85.2

84.9

84.6

84.3

109.4 109.8 109.9 109.9 110.0 110.0 110.1 110.1 110.3 110.4 110.5 110.6 110.7 110.8 110.8 110.9 91.6

91.2

90.9

90.6

90.4

90.2

90.0

89.9

89.8

89.7

89.6

89.4

89.3

89.1

89.0

88.8

Other Durables

114.9 114.7 114.8 115.1 115.5 115.9 116.2 116.5 116.8 117.1 117.4 117.7 117.9 118.2 118.5 118.7

Nondurables

123.2 121.6 121.6 121.2 121.3 121.5 121.6 121.8 122.3 122.7 123.0 123.5 124.0 124.4 124.8 125.2

Food

121.8 122.2 122.7 123.1 123.2 123.3 123.4 123.6 124.0 124.3 124.7 125.0 125.4 125.7 126.0 126.3

Clothing & Shoes

104.4 103.3 103.5 103.7 103.9 104.1 104.1 104.0 104.0 104.0 103.9 103.8 103.8 103.7 103.6 103.5

Gasoline & Oil

164.7 152.4 149.8 144.5 143.0 141.9 140.7 139.8 141.0 141.1 141.4 141.9 143.0 143.7 144.4 145.1

Fuel

178.5 170.3 168.8 165.4 164.6 164.1 163.4 162.8 163.8 164.1 164.5 165.0 166.2 167.1 168.0 168.8

Services

120.1 120.6 121.2 121.9 122.6 123.3 123.9 124.5 125.0 125.5 126.0 126.6 127.1 127.7 128.3 128.9

Housing

117.9 118.5 119.4 120.3 121.1 121.9 122.5 123.1 123.7 124.2 124.7 125.2 125.7 126.2 126.7 127.2

Electricity

132.0 132.4 134.0 136.1 137.7 138.9 139.4 139.7 139.9 140.0 140.1 140.0 140.1 140.8 141.7 142.4

Natural Gas

79.9

85.0

87.7

92.2

94.9

97.4

99.2 100.2

97.9

93.9

91.9

92.3

93.7

95.9

95.6

Water & Sewer

151.1 152.5 153.9 155.2 156.5 157.8 159.0 160.2 161.4 162.6 163.8 164.9 166.1 167.2 168.4 169.5

Telephone

103.7 102.9 102.7 102.3 102.0 101.6 101.4 101.1 100.8 100.4 100.1

Transportation

124.7 124.5 124.9 125.3 125.9 126.3 126.7 127.1 127.6 128.0 128.5 128.9 129.5 129.9 130.4 130.8

Other Services

127.8 128.7 129.1 129.5 130.0 130.6 131.4 132.1 132.7 133.4 134.1 134.8 135.5 136.2 137.0 137.8

99.8

99.5

99.2

99.0

98.8

Institute for Economic Competitiveness

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

Table 8. Percent Change in Implicit Price Deflators

2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

GDP

1.1

0.5

2.2

1.4

1.9

1.6

1.5

1.3

1.5

1.1

1.2

1.3

1.5

1.3

1.2

Consumption

1.0

-0.3

1.0

1.6

1.5

1.3

1.2

1.5

1.2

1.3

1.4

1.3

Durables

-1.1

-2.0

-1.5

-1.4

-1.1

-1.2

-1.3

-1.2

-1.1

-1.2

-1.3

-1.4

Motor Vehicles

0.9

1.5

0.4

0.0

0.2

0.4

0.3

Furniture

-0.1

-1.9

-1.4

-1.3

-0.9

-0.7

-0.5

-0.4

-0.6

-0.7

-0.8

Other Durables

0.2

-0.8

0.5

1.0

1.4

1.3

1.0

1.1

1.2

1.0

0.9

1.0

0.9

0.8

Nondurables

-0.8

-4.9

-0.3

-1.1

0.3

0.5

0.3

0.6

1.7

1.2

1.3

1.4

1.6

1.4

1.3

Food

1.3

1.6

1.5

0.3

0.4

0.3

0.6

1.2

1.1

1.2

1.0

0.9

Clothing & Shoes

1.3

-4.2

0.8

0.7

0.8

-0.1

0.0

-0.3

-0.2

-0.3

-0.2

-0.3

-0.4

Gasoline & Oil

-8.0 -26.8

-6.6 -13.4

-4.1

-2.9

-3.4

-2.7

3.5

0.4

0.9

1.4

3.1

1.9

2.0

Fuel

4.7 -17.1

-3.4

-7.9

-1.9

-1.3

-1.7

-1.5

2.6

0.7

0.9

1.2

3.0

2.2

2.1

Services

2.0

1.6

1.9

2.2

2.5

2.3

2.0

1.8

1.6

1.7

1.8

1.9

1.8

Housing

2.2

2.1

3.1

3.0

2.7

2.5

2.3

1.9

1.8

1.7

1.6

1.5

Electricity

5.4

1.4

4.8

6.3

5.0

3.3

1.7

0.7

0.6

0.4

0.2

-0.2

0.3

2.0

2.7

2.0

Natural Gas

2.0

27.9

13.7

22.2

12.1

11.0

7.4

4.1

-8.9 -15.2

-8.5

2.2

5.9

9.8

-0.1

-0.9

Water & Sewer

4.4

3.8

3.7

3.4

3.3

3.2

3.1

3.0

2.9

2.8

2.7

Telephone

0.9

-3.0

-0.8

-1.6

-1.3

-1.4

-0.8

-1.4

-1.2

-1.4

-1.0

-1.4

-1.2

-1.1

-0.8

-1.1

Transportation

2.0

-0.9

1.5

1.1

1.9

1.3

1.2

1.7

1.3

1.4

1.7

1.4

Other Services

4.8

2.9

1.3

1.5

1.8

2.4

2.1

1.9

2.2

2.1

2.2

2.4

2.3

U.S. Forecast | June 2013

U . S . F orecast T ables Table 9. Annual Implicit Price Deflators (2000=100) Table 9. Annual Implicit Price Deflators (2005=100) 2005

2006

2007

History 2008 2009

2010

2011

2012

2013

Forecast 2014 2015

2016

GDP

100.0 103.2 106.2 108.6 109.5 111.0 113.4 115.4

116.9 118.8 120.4 122.0

Consumption

100.0 102.7 105.5 108.9 109.0 111.1 113.8 115.8

116.9 118.3 119.8 121.4

Durables Motor Vehicles

100.0 98.4 100.0 100.1

96.4 99.6

94.6 97.8

92.8 91.6 90.8 89.6 97.9 104.0 107.5 109.0

88.1 86.9 85.9 84.8 109.7 110.1 110.4 110.8

Furniture

100.0

98.9

98.1

97.8

Other Durables

100.0 101.8 105.5 109.1 110.4 110.9 114.3 115.0

114.9 116.0 117.3 118.3

Nondurables

100.0 103.2 106.5 112.6 109.2 112.6 119.4 122.4

121.9 121.5 122.9 124.6

Food Clothing & Shoes

100.0 101.7 105.6 112.1 113.4 113.7 118.2 120.9 100.0 99.6 98.6 97.9 98.8 98.1 99.8 103.4

122.5 123.4 124.5 125.8 103.7 104.0 103.9 103.6

Gasoline & Oil Fuel

100.0 112.8 123.9 144.9 105.5 124.8 156.9 163.2 100.0 114.2 123.5 168.4 114.3 134.1 171.6 174.3

152.8 141.3 141.4 144.1 170.7 163.7 164.4 167.5

Services Housing Electricity Natural Gas Water & Sewer

100.0 100.0 100.0 100.3 100.0

121.0 119.0 133.6 86.2 153.2

Telephone Transportation Other Services

100.0 100.6 102.4 104.0 105.5 104.9 103.3 103.6 100.0 104.2 106.6 112.5 115.7 118.1 121.4 123.8 100.0 104.1 107.4 112.5 115.4 119.1 122.3 125.6

99.6

103.4 103.6 112.1 102.7 104.9

107.0 107.3 116.7 102.5 110.3

110.6 110.2 124.2 116.1 116.7

112.2 112.2 128.1 90.3 123.9

93.7

114.4 112.2 128.3 88.5 131.8

92.4

116.4 113.8 130.7 86.0 138.6

92.2

118.8 116.3 130.5 77.7 146.4

91.1

90.1

123.6 122.2 138.9 97.9 158.4

89.6

125.8 124.5 140.0 94.0 163.2

89.0

128.0 126.5 141.3 95.3 167.8

102.9 101.5 100.3 99.1 124.8 126.5 128.3 130.1 128.8 131.0 133.7 136.6

Institute for Economic Competitiveness

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

Table 10. Percent Change in Implicit Price Deflators History 2008 2009

2005

2006

2007

3.5

2.9

2.6

2.1

Consumption Durables Motor Vehicles Furniture Other Durables

3.3 -1.3 1.0 -0.3 -0.2

1.9 -1.8 -0.7 -0.1 3.2

3.5 -1.9 0.5 -1.5 2.5

Nondurables Food Clothing & Shoes Gasoline & Oil Fuel

4.5 1.5 -1.3 31.8 33.1

0.5 1.7 0.2 -0.8 -0.3

Services Housing Electricity Natural Gas Water & Sewer

3.8 2.5 10.2 44.9 5.0

Telephone Transportation Other Services

0.2 4.9 4.7

GDP

Forecast 2014 2015

2010

2011

2012

2013

2016

0.5

1.8

2.0

1.8

1.3

1.6

1.3

1.8 -2.1 -4.0 0.3 3.4

1.4 -1.1 5.5 -2.0 1.3

1.5 -2.0 3.6 -4.3 0.6

2.5 -0.5 3.4 -0.1 3.2

1.6 -1.6 0.7 -0.4 -0.4

0.7 -1.5 0.7 -1.2 0.2

1.4 -1.2 0.2 -0.7 1.2

1.3 -1.2 0.4 -0.5 1.0

1.4 -1.3 0.3 -0.7 0.9

6.4 4.7 -1.2 30.4 28.5

1.0 7.0 -0.9 5.1 23.2

2.8 -1.7 1.4 26.7 -0.3

2.3 1.3 -1.4 13.3 16.0

5.9 5.1 4.4 19.7 27.2

2.2 1.1 2.4 7.2 3.6

-1.8 1.4 -0.3 -13.7 -5.9

0.4 0.4 0.3 -3.3 -1.6

1.4 1.1 -0.2 1.6 1.4

1.4 1.0 -0.3 2.3 2.3

3.1 4.4 8.6 -18.3 4.9

3.5 3.0 5.3 3.5 5.2

3.0 2.6 8.4 19.1 6.7

1.4 0.9 -0.3 -17.9 6.0

1.8 0.3 0.5 -0.9 5.8

1.9 1.9 2.5 -2.0 4.9

1.9 2.2 -1.2 -4.2 6.1

1.9 2.6 4.5 16.4 3.8

2.1 2.3 2.7 8.7 3.2

1.7 1.7 0.3 -7.6 2.9

1.8 1.6 1.7 3.7 2.8

1.2 2.5 4.0

1.5 3.4 3.3

2.0 6.0 5.0

0.7 2.0 2.2

-1.0 1.5 2.9

-1.3 3.3 3.0

0.2 1.2 2.1

-1.1 0.9 2.6

-1.2 1.5 2.0

-1.3 1.4 2.1

-1.0 1.5 2.2

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2005

Personal Income Wages & Salaries

2006

2007

2008

Forecast 2009

2010

2011

2012

2013

2014

2015

2016

Personal Income Billions Current Dollars 10485.9 11268.1 11912.3 12460.2 11867.0 12321.9 12947.3 13431.2 13782.2 14437.2 15127.2 15816.7 7065.1 7477.0 7855.9 8068.3 7799.4 7970.0 8295.2 8592.9 8852.7 9223.5 9645.0 10065.3

Other Labor Income Nonfarm Income Farm Income Rental Income Dividends

931.6 1025.9 43.9 178.2 555.0

960.2 1103.6 29.4 146.5 702.2

980.5 1052.6 37.8 143.7 791.9

1052.4 1046.1 51.8 231.6 783.4

1067.2 939.5 39.9 289.7 533.3

1097.3 1059.1 44.3 349.2 581.7

1139.0 1102.8 54.6 409.7 676.3

1172.2 1146.1 56.2 462.7 757.1

1203.4 1213.5 69.8 523.3 790.5

1248.8 1293.6 64.1 549.0 857.5

1317.8 1364.2 64.6 542.5 882.2

1401.6 1418.4 62.2 524.1 880.1

Interest Income Transfer Payments Personal Social Insurance Tax

987.0 1508.6 445.2

1127.5 1605.0 475.1

1265.1 1718.5 499.6

1382.0 1879.2 517.2

1093.3 2140.1 506.3

1016.6 2284.3 515.2

1008.8 2319.3 424.4

992.6 2375.1 436.7

1005.1 2440.6 578.1

1048.9 2574.9 611.2

1185.4 2685.5 649.8

1364.8 2810.6 687.0

Personal Income Wages & Salaries Other Labor Income Nonfarm Income Farm Income

5.5 5.6 6.5 4.3 -11.1

7.5 5.8 3.1 7.6 -32.7

5.7 5.1 2.1 -4.6 28.3

4.6 2.7 7.3 -0.6 39.9

-4.8 -3.3 1.4 -10.1 -20.7

3.8 2.2 2.8 12.7 12.0

5.1 4.1 3.8 4.2 23.5

3.7 3.6 2.9 3.9 3.0

2.6 3.0 2.7 5.9 25.0

4.8 4.2 3.8 6.6 -8.0

4.8 4.6 5.5 5.5 0.8

4.6 4.4 6.4 4.0 -3.6

Rental Income Dividends Interest Income Transfer Payments

-10.9 -0.6 19.4 6.3

-23.8 26.8 10.9 6.7

32.7 7.6 13.7 7.6

66.4 -9.1 2.6 10.1

12.6 -29.2 -21.9 15.3

16.3 28.2 -2.1 6.0

22.4 11.7 -1.8 0.2

12.0 27.5 1.3 3.4

12.2 0.8 1.8 2.8

1.9 5.4 7.5 5.5

-2.5 1.6 13.9 4.2

-3.2 -0.7 16.8 4.8

5.9

6.7

5.2

2.0

-2.0

2.7

-12.9

4.4

45.5

6.0

6.2

5.7

Percent Change, Annual Rate

Personal Social Insurance Tax

U.S. Forecast | June 2013

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

Table 12. Personal Consumption Expenditures (Current Dollars)

2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

11372.7 11399.1 11470.0 11548.8 11677.4 11805.5 11923.1 12042.5 12161.6 12276.3 12392.2 12512.3 12649.4 12791.8 12934.8 13089.8

durable goods

1273.5 1276.8 1277.9 1279.7 1287.6 1301.8 1315.4 1329.2 1337.2 1348.9 1357.5 1371.2 1385.0 1402.9 1418.3 1436.9

furniture and appliances

271.5

273.5

276.0

278.0

280.4

282.8

284.6

286.3

288.4

291.8

293.5

294.8

296.6

297.9

299.1

information processing equipment

102.7

102.8

103.9

104.4

105.2

106.5

107.7

109.0

110.3

111.7

113.1

114.4

115.5

116.7

117.9

119.3

motor vehicles and parts

435.9

435.2

430.2

427.8

428.0

433.6

439.6

445.8

445.6

447.9

448.7

455.5

461.7

472.7

482.4

492.9

other durable goods

142.4

141.8

142.5

143.4

144.1

145.2

146.1

147.1

148.1

149.1

150.2

151.3

152.2

153.1

154.0

155.1

nondurables clothing & shoes

2599.4 2566.6 2581.9 2592.7 2612.3 2632.0 2649.0 2666.9 2691.6 2712.4 2734.4 2756.3 2783.4 2810.1 2837.5 2866.8 371.2

372.7

377.3

379.3

382.7

385.2

387.2

389.1

390.9

392.8

394.6

396.3

397.9

400.8

404.0

23.0

21.5

21.4

21.0

21.2

21.3

21.4

21.5

21.6

21.7

21.8

21.9

gasoline & motor oil

420.2

383.4

380.2

370.5

367.2

364.7

362.0

359.6

362.6

362.8

363.5

364.7

367.4

369.6

372.5

375.7

food

838.1

837.8

845.2

853.2

862.2

870.8

878.5

886.0

893.9

901.5

909.7

917.7

926.1

934.2

941.9

949.4

other nondurable goods

947.0

951.2

957.9

968.7

979.2

990.3 1000.4 1011.1

fuel oil & coal

407.5

1023.0 1034.0 1045.2 1056.1 1070.5 1083.8 1097.3 1112.3

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

9745.5 9775.7 9811.0

durable goods

1436.4 1447.4 1453.9 1461.2 1474.3 1495.2 1515.8 1536.6 1550.1 1568.4 1583.4 1604.4 1625.7 1652.2 1676.3 1704.3

9853.0 9924.2 9996.2 10063.6 10134.8 10197.8 10263.2 10327.8 10394.2 10470.9 10552.0 10634.4 10727.1

furniture and appliances

296.2

299.9

303.7

306.9

310.3

313.7

316.3

318.5

321.2

325.3

327.7

329.6

332.2

334.2

334.8

336.9

information processing equipment

198.6

203.8

209.8

214.6

220.3

227.4

234.9

242.7

250.4

258.6

267.0

275.3

283.4

291.9

300.8

310.3

motor vehicles and parts

398.4

396.4

391.4

389.2

394.0

399.3

404.8

404.1

405.8

406.1

411.8

417.1

426.8

435.2

444.3

other durable goods

120.5

120.7

121.2

121.7

122.1

122.7

123.2

123.8

124.4

125.0

125.8

126.5

127.1

127.7

128.3

129.1

2110.2

2110.0

355.5

360.8

364.5

365.8

368.4

370.1

372.2

374.0

375.7

377.8

379.8

381.7

383.4

386.5

389.9

12.9

12.6

12.7

12.8

12.9

13.0

gasoline & motor oil

254.9

251.6

253.8

256.4

256.9

257.0

257.3

257.2

257.1

257.0

256.9

257.2

257.9

258.9

food

687.9

685.5

688.8

692.8

699.6

705.9

711.6

716.7

720.9

725.1

729.7

734.0

738.6

743.2

747.6

752.0

other nondurable goods

812.0

814.5

819.4

826.0

831.1

836.5

840.9

845.6

850.8

855.2

859.9

864.3

871.2

877.4

883.7

891.3

nondurables clothing & shoes fuel oil & coal

2124.0 2138.7 2153.5 2166.8 2179.0 2190.5 2201.3 2211.5

2222.4 2232.6 2245.5 2259.2 2273.7 2289.8 393.8

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

3.4

1.2

1.4

1.7

2.9

2.7

2.8

2.5

2.6

2.5

2.6

2.9

3.1

3.5

durable goods

8.0

3.1

1.8

2.0

3.6

5.7

5.5

3.5

4.7

3.8

5.3

6.5

5.8

6.7

furniture and appliances

5.0

5.1

4.2

4.4

4.3

3.3

2.9

3.3

5.1

3.0

2.3

3.1

2.4

0.7

2.5

information processing equipment

8.7

10.4

11.7

9.1

10.7

12.9

13.1

13.3

12.8

13.0

12.4

11.8

12.0

12.2

12.5 8.4

motor vehicles and parts other durable goods nondurables clothing & shoes

8.8

-2.0

-5.0

-2.3

0.0

4.9

5.4

5.5

-0.7

1.7

0.3

5.6

5.1

9.2

7.9

11.4

0.6

1.7

1.0

2.0

1.8

1.9

2.0

2.3

1.9

2.0

2.5

2.2

0.0

2.7

2.8

2.5

2.3

2.1

2.0

1.9

2.0

1.8

2.3

2.4

2.6

2.8

1.7

5.9

4.2

1.4

2.8

1.8

2.3

2.0

1.8

2.2

2.1

2.0

1.8

3.2

3.5

4.0

16.7

-7.1

0.6

1.1

2.0

1.7

1.1

1.6

1.9

0.6

0.9

0.4

-0.1

-0.5

gasoline & motor oil

1.9

-5.2

3.6

4.1

0.7

0.2

0.4

0.1

-0.2

-0.1

0.5

1.2

1.4

food

1.3

-1.4

2.0

2.3

4.0

3.7

3.3

2.9

2.4

2.3

2.6

2.4

2.5

2.4

2.3

other nondurable goods

2.9

1.2

2.4

3.3

2.5

2.6

2.1

2.2

2.5

2.1

2.2

2.0

3.3

2.9

3.5

fuel oil & coal

Institute for Economic Competitiveness

U . S . F orecast T ables Table 13. Personal Consumption Expenditures (2000 Dollars)

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

2006

2007

2008

Forecast 2009

2010

2011

2012

2013

2014

2015

2016

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

8803.5

9301.0

9772.3 10035.5

9845.9 10215.7 10729.0 11119.6

durable goods

1123.4

1155.0

1188.4

1108.9

1029.6

1079.4

1146.4

1218.9

1277.0

1308.5

1353.7

1410.8

261.3

271.5

271.3

257.9

235.4

241.3

251.7

265.8

274.7

283.5

292.1

297.9

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

11447.6 11862.1 12335.6 12866.5

67.0

75.3

86.1

84.9

82.4

91.7

94.7

99.5

103.4

107.1

112.4

117.4

408.2

394.8

399.9

339.3

316.0

342.7

373.6

407.0

432.3

436.8

449.4

477.4

99.5

109.9

118.8

117.9

111.1

116.0

125.8

133.0

142.5

145.6

149.7

153.6

1953.4

2069.8

2175.5

2272.8

2164.8

2285.5

2478.4

2564.2

2585.2

2640.1

2723.7

2824.4

314.0

327.3

335.4

330.9

317.0

331.6

349.2

365.9

375.1

386.1

393.6

402.5

20.0

20.6

21.8

25.9

20.6

22.3

24.5

21.8

21.7

21.0

21.4

21.8

gasoline & motor oil

283.8

314.7

343.0

384.5

278.7

330.1

403.8

418.4

388.5

363.4

371.3

food

644.5

674.2

711.2

746.4

742.3

760.6

810.2

829.1

843.6

874.4

905.7

937.9

other nondurable goods

691.1

733.0

764.1

785.1

806.1

840.8

890.7

929.1

956.2

995.2

1039.6

1091.0

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

8803.5

9054.5

9262.9

9211.7

9032.6

9196.2

9428.8

9603.3

9796.3 10029.7 10295.7 10596.1

durable goods

1123.4

1174.2

1232.4

1171.8

1109.1

1178.3

1262.6

1360.9

1449.7

1505.5

1576.6

1664.6

261.3

272.5

274.4

262.8

240.7

257.5

272.5

288.4

301.7

314.7

326.0

334.5

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

67.0

85.0

105.9

113.6

119.6

143.3

161.6

183.3

206.7

231.3

262.8

296.6

408.2

394.4

401.4

346.8

322.6

329.5

347.4

373.3

393.9

396.8

407.0

430.9

99.5

108.2

111.9

106.4

99.0

102.5

106.7

112.3

121.0

122.9

125.4

128.0

1953.4

2005.0

2042.9

2019.1

1982.8

2029.3

2075.2

2094.5

2120.7

2172.4

2216.9

2267.1

314.0

328.7

340.1

338.1

321.0

338.1

350.0

353.9

361.7

371.2

378.7

388.4

20.0

18.0

17.6

15.4

18.0

16.6

14.3

12.5

12.7

12.8

13.0

gasoline & motor oil

283.8

278.9

276.8

265.3

264.1

264.6

257.3

256.3

254.2

257.1

257.7

food

644.5

663.0

673.2

666.0

654.8

668.8

685.3

685.8

688.8

708.5

727.4

745.3

other nondurable goods

691.1

717.3

737.5

739.7

727.7

745.6

777.4

797.7

818.0

838.6

857.6

880.9

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

2.8

3.2

1.7

-2.5

-0.3

2.9

1.9

1.8

2.0

2.9

2.6

3.2

durable goods

3.1

7.1

4.6

-12.6

3.5

9.6

6.1

8.5

3.8

5.2

4.4

6.2

furniture and appliances information processing equipment

6.2

1.4

1.2

-9.2

-1.6

8.2

6.1

4.5

4.9

3.8

3.5

2.2

26.8

28.7

21.3

0.8

11.9

18.1

13.9

14.5

10.4

13.1

13.4

12.7 7.9

motor vehicles and parts

-6.8

5.8

0.6

-23.5

8.2

11.3

4.2

8.9

0.0

4.0

1.8

other durable goods

10.8

5.8

4.1

-12.5

1.4

5.5

1.1

10.6

4.0

1.7

2.1

3.1

2.9

0.8

-3.1

0.4

3.0

1.4

0.9

1.9

2.4

1.9

2.6

nondurables clothing & shoes

7.2

3.4

2.3

-3.8

-0.9

7.6

0.7

1.2

3.3

2.2

2.0

3.2

-18.2

3.5

-7.9

9.1

9.6

-8.0

-14.2

-4.9

3.2

1.6

1.0

-0.4

-0.6

-0.4

-1.8

-4.0

-1.1

0.2

-1.5

-0.2

1.1

0.4

-0.2

0.8

food

3.6

2.9

0.8

-4.0

2.1

1.4

-0.1

1.1

3.4

2.4

other nondurable goods

3.3

4.2

1.7

-1.2

-0.1

3.7

2.6

2.5

2.4

2.2

3.1

fuel oil & coal gasoline & motor oil

U.S. Forecast | June 2013

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

Table 14. Business Fixed Investment History

2005

2006

2007

2008

Forecast

2009

2010

2011

2012

2013

2014

2015

2016

Billions Current Dollars Business Fixed Investment

1347.3 1505.3 1637.5 1656.3 1349.3 1338.4 1479.6 1621.3

1700.6 1819.6 1960.8 2078.2

Producers Dur. Equipment

995.6 1071.7 1112.6

1070.0

898.2

962.1 1074.7 1157.9

Nonresidential Structures

351.8

433.7

524.9

586.3

451.1

376.3

404.8

463.4

1217.7 1305.0 1395.8 1450.4 482.9

514.6

565.0

627.8

Non-Farm Buildings

212.9

247.6

297.3

322.0

253.9

177.0

173.8

197.9

205.0

236.1

294.4

360.6

Commercial

112.9

128.4

150.8

149.1

95.5

64.7

65.3

74.5

80.1

96.2

128.7

165.7

Industrial

29.9

35.1

43.7

57.4

61.2

43.3

44.2

53.1

54.9

59.7

66.5

80.5

Other Buildings

70.2

84.1

102.8

115.6

97.1

69.0

64.2

70.4

70.0

80.2

99.2

114.4

Utilities

51.4

61.1

85.6

99.5

98.6

88.4

85.8

105.6

107.4

102.5

99.8

97.6

Mines & Wells

77.1

114.2

130.9

151.7

88.6

101.9

135.6

150.0

160.8

164.6

157.9

157.4

Billions 2005 Dollars Business Fixed Investment

1347.3 1455.5 1549.9 1537.7 1259.9 1268.5 1378.2 1487.9

1549.6 1646.9 1759.9 1850.8

Producers Dur. Equipment

995.6 1071.1 1106.8 1059.4

885.2

963.9 1070.0 1143.8

Nonresidential Structures

351.8

384.0

438.2

466.4

368.1

310.6

319.2

353.5

1198.8 1284.9 1374.7 1430.1 362.4

377.0

401.7

433.4

Non-Farm Buildings

212.9

229.2

260.5

272.0

214.1

153.9

148.3

164.5

165.0

180.1

214.5

252.2

Commercial

112.9

118.4

131.2

124.5

78.3

54.6

53.9

59.7

62.4

71.2

91.1

112.6

Industrial

29.9

33.0

39.0

48.6

50.9

36.8

36.9

43.4

44.3

47.1

54.6

Other Buildings

70.2

77.9

90.3

99.3

85.6

63.1

57.8

61.8

59.3

64.5

76.4

84.5

Utilities

51.4

56.2

75.6

82.5

82.4

71.1

65.0

77.3

78.1

73.6

70.5

67.5

Mines & Wells

77.1

88.3

93.6

101.5

66.1

77.3

94.8

100.2

107.2

110.7

105.0

103.7

4.0

8.1

7.0

6.2

Annual Growth Rate Business Fixed Investment Producers Dur. Equipment

8.4

11.7

9.0

-5.8

-18.2

8.2

12.6

6.9

6.3

6.9

3.5

-11.2

-8.3

11.1

12.3

5.8

4.9

7.8

6.0

3.8

14.9

25.2

22.0

5.1

-34.5

2.1

15.8

9.8

1.8

8.9

9.5

12.3

7.3

18.7

22.6

-0.1

-33.7

-21.3

15.7

10.1

2.7

21.2

25.8

19.4

Commercial

10.0

15.3

17.3

-11.8

-44.7

-16.8

9.6

16.9

3.8

28.7

35.9

24.0

Industrial

Nonresidential Structures Non-Farm Buildings

13.8

16.1

46.6

23.0

-12.0

-28.8

49.0

9.7

1.6

8.6

15.8

21.0

Other Buildings

1.7

26.0

22.6

6.7

-29.7

-19.5

4.3

4.6

2.3

23.2

20.7

12.1

Utilities

3.8

23.9

54.9

0.8

-4.1

16.0

1.1

30.6

-4.7

-4.5

-4.1

0.9

51.3

50.0

4.8

24.1

-46.9

66.0

29.9

1.0

6.9

1.1

-6.6

6.4

Mines & Wells

Institute for Economic Competitiveness

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

Table 15. Government Receipts and Expenditures History

Forecast

2005

2006

2007

2008

2009

2010

2011

2012

2290.1

2524.5

2654.7

2502.3

2226.5

2395.4

2519.6

2683.4

Personal Tax and Nontax Receipts

931.9

1049.9

1165.6

1101.3

857.0

894.2

1075.2

Corp. Profits Tax Accruals

341.0

395.0

362.8

233.6

200.4

305.1

304.2

98.8

99.4

94.5

94.0

91.4

95.5

852.6

904.6

945.3

973.1

949.1

2013

2014

2015

2016

3002.7

3248.8

3365.5

3469.1

1144.6

1308.8

1389.8

1399.9

1412.3

372.3

354.7

449.0

477.6

492.8

107.4

116.0

118.1

131.2

139.0

146.1

969.8

905.5

938.6

1101.4

1162.1

1229.5

1295.7

Federal Government Receipts and Expenditures Receipts

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Expenditures

2573.1

2728.3

2900.0

3115.7

3455.9

3703.4

3757.0

3757.7

3723.5

3879.6

4039.8

4255.7

Purchases Goods & Services

876.3

931.7

976.4

1080.1

1143.6

1223.1

1222.1

1214.3

1159.0

1179.9

1184.5

1184.7

National Defense

589.1

624.9

662.3

737.8

776.0

817.7

820.8

809.2

764.4

780.7

781.6

782.7

Other

287.3

306.9

314.1

342.3

367.6

405.3

401.3

405.1

394.6

399.2

402.8

402.0

Transfer Payments

1491.3

1587.1

1690.5

1841.9

2157.5

2310.8

2309.4

2319.2

2361.2

2485.6

2590.8

2715.7

To Persons

1078.0

1180.7

1254.2

1385.7

1605.4

1708.6

1735.8

1775.0

1818.4

1901.5

1971.0

2054.3

40.9

35.0

42.2

45.3

53.5

54.7

58.7

58.4

58.3

62.3

64.3

65.0

Grants in Aid to State & Local Gov't

361.2

359.0

380.8

395.5

482.6

531.1

497.8

468.0

466.2

503.2

536.3

577.0

Net Interest

239.0

261.0

291.0

272.1

228.6

251.7

294.7

292.9

266.3

282.4

332.7

421.1

64.1

53.9

50.2

53.6

62.8

62.4

73.8

78.1

77.4

71.9

67.6

63.9

Surplus (+) or Deficit (-)

-283.0

-203.8

-245.2

-613.5 -1229.4

-1308.1

-1237.4

-1074.3

-720.9

-630.8

-674.4

-786.6

Receipts

1730.5

1829.7

1923.1

1944.8

1961.4

2042.5

2064.4

2069.6

2126.6

2223.6

2320.7

2421.0

Personal Tax/Nontax Receipts

1163.1

1249.1

1313.6

1326.4

1264.9

1304.6

1360.8

1398.0

1451.5

1498.2

1547.8

1592.8

To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts and Expenditures

276.7

302.5

323.1

334.4

287.6

300.6

322.8

335.8

357.6

362.4

373.3

375.4

Indirect Business Tax and Nontax Accruals

Corporate Profits

55.0

59.1

57.8

47.4

45.5

44.5

47.6

48.2

50.6

58.5

56.9

54.9

Contributions for Social Insurance

24.8

21.8

18.9

19.0

18.4

18.3

17.5

17.2

17.8

18.6

19.4

361.2

359.0

380.8

395.5

482.6

531.1

497.8

468.0

466.2

503.2

536.3

577.0

Federal Grants-In-Aid Expenditures

1704.50 1778.63 1910.83 2017.05 2074.63 2132.10 2166.35 2198.50

2234.39 2311.11 2385.52 2468.63

Purchases Goods & Services

1493.6

1586.7

1697.9

1798.0

1823.6

1834.4

1837.7

1848.5

1848.0

1881.3

1927.3

Government Social Benefits

404.8

402.9

433.7

456.7

495.1

528.3

538.5

554.2

574.6

623.5

661.2

700.2

404.8

402.9

433.7

456.7

495.1

528.3

538.5

554.2

574.6

623.5

661.2

700.2

10.9

2.1

0.4

16.2

23.0

30.3

36.2

40.9

43.1

40.9

41.0

46.3

Net Subsidies

0.3

1.7

16.2

15.3

12.5

14.1

14.4

16.7

17.4

16.6

15.8

15.0

Dividends Received

2.1

2.3

2.4

2.9

2.1

2.2

2.3

2.1

2.2

2.3

Net Wage Accruals

0.0

26.0

51.0

12.2

-72.3

-113.2

-89.7

-102.0

-129.0

-107.8

-87.5

-64.8

-47.6

Transfer Payments Interest Received

Surplus (+) or Deficit (-)

U.S. Forecast | June 2013

1975.4

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

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

Forecast

2005

2006

2007

2008

2009

-722.7

-769.3

-713.1

-709.8

-388.7

2010

2011

2012

2013

2014

2015

2016

-559.9

-504.0

-475.1

-505.4

-507.5

Billions of Dollars Net Exports Goods & Services

-511.6

-568.1

Current Account

-745.8

-800.6

-710.3

-677.1

-381.9

-442.0

-465.9

-475.0

-428.6

-401.6

-483.1

-514.6

Exports -Goods & Services

1305.1

1471.1

1661.7

1846.8

1587.5

1844.5

2094.2

2184.1

2229.5

2336.3

2460.4

2610.1

Merchandise Balance

-780.7

-835.7

-818.9

-830.1

-505.8

-645.1

-738.4

-735.3

-673.2

-642.5

-674.6

-689.4

Food, Feed & Beverage

58.95

65.98

84.28

108.33

93.93

107.70

126.23

135.65

128.85

130.51

136.96

143.27

Industrial Supplies Excl Petroleum

227.5

267.3

316.2

386.9

293.5

388.5

484.4

482.8

486.3

502.5

530.9

565.6

Motor Vehicles & Parts

98.4

107.3

121.3

121.5

81.7

112.0

133.1

146.3

150.0

156.5

167.5

179.0

358.4

404.1

433.0

457.7

391.5

447.8

493.2

526.7

534.1

565.5

589.8

624.6

45.5

47.6

45.6

43.9

37.7

43.8

48.4

49.3

47.6

48.7

53.1

59.9

Other

257.0

291.9

314.5

339.8

279.0

332.0

364.7

383.3

388.0

408.6

422.7

444.5

Consumer Goods, Excl. MVP

115.3

129.1

146.0

161.3

149.4

165.2

175.0

181.5

190.8

207.7

216.0

222.7

47.5

50.8

61.3

61.8

54.6

57.4

62.5

70.0

73.9

76.8

80.6

84.5

399.0

446.7

499.7

549.3

522.8

565.9

619.7

641.2

665.5

696.7

738.7

790.4

Imports -Goods & Services

2027.8

2240.4

2374.8

2556.5

1976.2

2356.1

2662.3

2744.0

2733.5

2811.3

2965.7

3117.7

Merchandise

1708.0

1884.9

2000.8

2146.4

1587.5

1947.0

2229.3

2291.9

2263.3

2307.6

2422.2

2535.1

Capital Goods, Excl. MVP Computer Equipment

Other Consumer Services

Billions of Dollars

Food, Feed & Beverage

68.1

75.0

81.7

90.4

82.9

92.5

108.3

111.2

115.5

116.1

121.0

125.6

Petroleum & Products

251.9

302.5

346.7

476.1

267.7

353.8

462.3

436.7

364.2

301.5

279.7

273.2

Industrial Supplies Excl Petroleum

266.0

291.4

295.7

318.9

196.8

249.6

293.1

289.4

292.9

308.0

324.9

338.5

Motor Vehicles & Parts

239.5

256.6

233.2

159.2

225.7

255.2

298.5

300.1

301.6

318.5

333.8

Capital Goods, Excl. MVP

380.8

420.0

446.0

458.7

374.1

450.3

513.4

550.6

553.0

596.5

651.7

700.3

93.3

101.4

105.2

101.2

94.2

117.3

119.7

122.1

120.7

126.9

135.3

143.9

Other

261.7

290.2

306.5

322.0

249.2

301.8

358.1

388.7

387.6

420.7

464.9

502.3

Consumer Goods, Excl. MVP

411.5

446.1

478.2

486.7

431.4

486.5

517.4

519.6

539.8

577.0

609.7

640.6

Computer Equipment

Other Consumer

90.3

93.5

95.9

82.3

75.5

88.7

79.6

86.1

97.9

106.9

116.6

123.2

319.8

355.4

374.0

410.2

388.7

409.1

433.0

452.1

470.1

503.8

543.6

582.6

Net Exports Goods & Services

-722.7

-729.4

-648.8

-494.8

-355.2

-419.7

-408.0

-400.7

-387.7

-405.1

-424.2

-407.8

Exports G & S

1305.1

1422.1

1554.4

1649.3

1498.7

1665.6

1776.9

1837.3

1866.6

1947.1

2036.1

2147.2

Imports G & S

2027.8

2151.5

2203.3

2144.0

1853.9

2085.2

2184.9

2238.1

2254.3

2352.1

2460.3

2555.0

Exports G & S

10.3

14.0

14.6

0.5

3.5

14.4

9.0

3.4

3.5

4.8

5.9

6.0

Imports G & S

12.1

5.4

9.0

-1.7

0.9

14.4

11.0

0.4

0.5

4.7

5.6

5.1

Real Exports G & S

6.8

10.5

10.1

-1.7

2.4

8.8

4.3

2.2

3.3

4.1

5.2

5.5

Real Imports G & S

5.3

4.2

0.9

-5.7

-3.3

11.1

3.5

0.3

2.8

4.9

4.2

3.9

Services

Billions 2005 Dollars

Exports & Imports % Change

Institute for Economic Competitiveness

In Appeciation

The UCF College of Business Administration would like to thank Alan C. Charron, ‘84, for his generous gift to the Institute for Economic Competitiveness. His support enables the Institute to publish this forecast and will help fund future activities and research. Charron graduated in 1984 with a degree in finance. He is president of Real Property Specialists, Inc., located in Orlando, Florida. Founded in 1992, Real Property Specialists, Inc., is a fullservice brokerage company that has built a reputation of providing highly personalized service while being responsive and flexible to its clients' individual needs. They offer a range of commercial real estate services in the Central Florida area including brokerage, appraisal, development, property management and tenant representation. Real Property Specialists, Inc., has set a new standard of excellence in client service by providing these key advantages over the competition:

Responsiveness. You work directly with a decision

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

Consistency. We are a unified firm employing team-

members who are committed to the success of our clients. We pride ourselves on our ability to maintain a dedicated, professional staff that is able to build long-term, comfortable and prosperous relationships with our clients.

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

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

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

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