U.S. Forecast March 2016

U.S. Forecast March 2016

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

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

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

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

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

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

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

H I G H L I G H T S O F T H E Q 1 2 0 16 U . S . F O R E C A S T In This Very Special Episode of the U.S. Forecast: • Need to explore a thorny or sensitive topic like death or recession? A very special episode of The U.S. Forecast should do the trick.

• Cheap oil and gasoline saves consumers money they can spend elsewhere, but they would prefer that money in the form of larger paychecks.

HIGHLIGHTS

• The rest of the world is still a drag: Slow economic growth and retreating global financial markets act as depressants to U.S. GDP growth, as net exports will weigh on the economy over the next several years.

• The Federal Reserve raised interest rates in December; they will likely take baby steps raising interest rates this year and beyond, assuming they don’t have to battle the next recession.

• Real GDP growth failed to break out in 2015 and came in at 2.4% again. Growth will slow to 2.1% in 2016, then hit 2.5% in 2017, before slowing to 2.4% in 2018 and 2.3% in 2019 as the Federal Reserve gradually tightens their interest rates.

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

Growth in real consumer spending from 2016 through 2019 will average a mere 2.7%. If consumer confidence continues to erode and consumers begin to pull back, there won’t be much to separate us from a recession.

• The housing market continues to gradually recover. The housing market will slowly improve through 2018 when rising rates take their toll and housing starts level off. Housing starts will rise from around 1.2 million in 2016 to 1.45 million in 2019.

• Average monthly payroll employment growth in 2015 was slower than in 2014. And 2016 is not off to a strong start. Uncertainty and regulatory burdens are hurting payroll job growth, which will slow to 1.6% in 2016 and essentially stall at a low rate of growth of 0.8% in 2017, and 0.8% in 2018, before ticking up to 0.9% in 2019.

• Unemployment rates (U-3) are expected to stabilize around 4.9%, give-or-take 0.1 percentage points through 2017. Slower job growth will be just enough to keep up with labor force growth until 2018 when unemployment begins to climb. Underemployment (U-6) remains a persistent problem and currently stands at 9.9%.

• Inflation remains tepid, weighed down by low energy prices, but even core CPI inflation will remain below 2.0% until 2018.

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The U.S. Forecast

Primarily in the 1980’s, and to some extent in the 70’s and 90’s, television series would run “very special episodes.” These shows usually aired during sweeps weeks when television ratings were being measured, ratings that in turn determined advertising rates that stations could charge for commercials aired during these series.

These very special episodes most often took place in a situational comedy series and placed the characters in difficult situations that addressed weighty social issues or difficult life crises. The canned laughter was put to rest during these episodes, as topics covered ranged from child abuse to drug use to kidnapping to drunk driving to death. Always melodramatic, sometimes these episodes hit the emotional bulls-eye while other times they were way wide of the mark.

A simple web search of “very special episodes” will generate thousands of results with video clips

of many of these episodes and lists ranking the best and worst of this genre.

Different Strokes was a comedy that ran quite a few of these very special episodes, always addressing extremely sensitive subject matter and placing the child actors in harrowing scenarios that were powerfully effective. One could argue the series itself put the child actor stars of the show (Gary Coleman, Todd Bridges, and Dana Plato) in a real life very special episode, given the personal tragedies that befell the three of them after the show was canceled.

Other series’ attempts at very special episodes were more laughable than impactful. Steve Urkel—the bespectacled, suspenders-wearing main character of Family Matters—drank alcohol at a rooftop party and while walking drunk along the edge of the roof, he fell off. Death or severe injury to Urkel would have been very special indeed, but Institute for Economic Competitiveness

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instead he was uninjured, hanging from a ledge below the roof, from where he shouted, “I’ve fallen and I can’t get up.” View that clip here: https:// www.youtube.com/watch?v=pDvFDXpoAdY

This quarter we add our own very special episode of The U.S. Forecast as we also tackle another thorny, difficult issue: RECESSION.

This year has gotten off to a difficult start, not just in the U.S. economy, but in the global economy as well. It is this souring of the global economic environment that may pose the greatest threat to triggering a recession in the United States.

Oil and commodity prices have taken a beating, as global demand appears to be waning.

Financial markets worldwide, too, are off to a rotten start in 2016.

Some examples of the selloffs thus far:

• The U.S. Dow Jones Industrial Average down 5.7% year to date.

• Germany’s DAX 30 Index down 12.35% year to date.

• France’s CAC 40 Index down 8.6% year to date.

• Japan’s Nikkei 225 Index down 16.86% year to date.

• China’s Shanghai Composite Index down 17.97% year to date.

China’s economy has slowed significantly and is widely believed to be expanding at a pace well below official figures. Concerns that the debt-fueled expansion in China could lead to a meltdown are growing. Official debt figures do not look bad at first glance, but that is the case with all the official data coming out of China.

The data does not reflect the fact that in many cases the Chinese government is both the borrower and creditor. State-run banks are making loans 6

U.S. Forecast | March 2016

to state-owned corporations. The debt in China continues to mount and the government is “encouraging” banks to lend to businesses and people to spend, or the case of margin lending, to speculate in the stock market that continues to flail.

Debt is rising at more than twice the rate of the economy and China revealed that bad loans jumped by 50% in 2015—that eye-popping statistic is the official figure.

This behavior in China of using excessive debt to fuel an economy that continues to see its manufacturing sector contract is frighteningly similar to the debt-fueled run up to the 2008 economic and financial crisis in the U.S., or the 2010 start to the crisis in Greece.

By comparison, the U.S. economy doesn’t look so bad. Staking the claim to be the healthiest patient in the global economic intensive care unit, however, is not a tremendous source of solace.

Which brings us back to this very special episode topic of recession in the U.S. economy.

The forecast outlined and discussed below does not include a recession through the end of the 2019 forecast horizon, though it is exceedingly likely (almost a certainty) that the U.S. economy will experience a recession at some point over the next four years. No one should be surprised if it begins in 2016 or 2017.

It has been 79 months since the Great Recession officially came to an end and this current expansion is now longer than the expansion that preceded that historical time, which lasted 73 months before the Great Recession set in. The two expansion periods in the U.S. that occurred before the 2001 and 1990-91 recessions lasted 120 months and 92 months, respectively. The average U.S. economic expansion period during the 11 business cycles since 1945 has been 58.4 months.

That 120-month long expansion before the 2001 recession was bookended by the dot-com bubble

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that fueled the economy for 36 months at the end of the expansion. The 92-month expansion leading into the 1990-1991 recession was a powerful expansion that averaged an annual real GDP growth of 4.4%, including four years of real GDP growth in excess of 4%, and one year (1984) where growth was an eye-popping 7.3%.

If expansions were candy bars, our current one is not even “fun sized” compared to these two expansions, as average growth post-Great Recession has been just 2.2%. It is impossible for me to envision our current expansion lasting 120 months. Could it limp along to 92 months or longer? Perhaps, but even if this were the case, we will still be facing a recession in the not too distant future.

Cue the melancholy music because in this very special episode of The U.S. Forecast, we have learned that a recession will be coming to the U.S. economy almost certainly in the next four years.

Given how events are unfolding so far in 2016, it is increasingly likely the recession will occur in the next two years.

ANXIOUS INDEX Economists’ Anxiety Still Rising

The most recent release (1st quarter of 2016) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 37 forecasters surveyed for the publication put a 14.69% chance that a decline in real GDP will occur in the 2nd quarter of 2016. This quarter’s release reflects an increase in forecasters’ anxiety, and their worries are the highest since the 2nd quarter of 2013. The quarter-over-quarter increase of the anxious index in this survey is the largest since the 4th quarter of 2012. This was a period when a situation known as the “fiscal cliff” was expected to hit the economy. The Bush income tax cuts of 2001 were slated to expire at the same time that planned spending cuts from the Budget

Control Act of 2011, accomplished by broadbased cuts in discretionary spending known as budget sequestration, were set to take place. Many economists and the Congressional Budget Office estimated that the fiscal cliff would have led to a recession in 2013, but actions taken to prevent the fiscal cliff ultimately avoided that outcome.

In one section of the Survey of Professional Forecasters, panelists are asked to estimate the probability that real GDP will decline in the quarter in which the survey is taken, as well as the probabilities of a decline in each of the following four quarters. The anxious index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in early February of the 1st quarter of 2016, the index stands at 14.69, which means that forecasters believe there is a 14.69% chance that real GDP will decline in the 2nd quarter of 2016.

The forecasters also report a 14.38% chance that we are currently (as of the 1st quarter of 2016) experiencing a contraction in real GDP—nearly double the probability the forecasters assigned for the 4th quarter of 2015. According to the panel, the probability that real GDP growth will turn negative is averaging around 16.57% through the end of the 2nd quarter of 2016, which indicates that the forecasters’ assignment of probability for a contraction in real GDP in the upcoming year has increased since last quarter’s survey by more than three percentage points.

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 level of the anxious index is now higher than the average level during the economic recovery (13.39), and it is nearly 1.7 points higher than the previous quarter’s reading.

Institute for Economic Competitiveness

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The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2016:Q1 100 90 80

Probability (percent)

70 60 50 40 30 20

0

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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Survey Date Source: Survey of Professional Forecasters, Philadelphia Federal Reserve Bank

GDP OUTLOOK As was noted in the very special episode section above, the forecast for GDP does not include any quarters where GDP growth turns negative through the end of 2019. It is possible that the dark global clouds could dissipate and this very special episode of the U.S. Forecast about recession could end with a touching Public Service Announcement (PSA) about recessions put out by the Federal Reserve.

Even if we manage to avoid recession, there is no forecast for the nature of this recovery to change.

Growth is expected to remain sub-par in our baseline forecast through 2019.

Strong economic growth has been this economic recovery’s version of the Great Pumpkin from the Peanuts comic strip. Every Halloween, Linus sat in a pumpkin patch and awaited the arrival of the Great Pumpkin and every Halloween, the 8

U.S. Forecast | March 2016

Great Pumpkin failed to appear. In this recovery, many have been awaiting and predicting stronger economic growth in the U.S. that was finally going to appear next year, but the next year came and went and growth remained sub-par.

Once again, it was 2015 that was supposed to be the breakout year for GDP growth. Many economists and analysts were calling for real GDP growth in excess of 3.0% for the first time in this recovery. But at 2.4%, GDP growth in 2015 was no stronger than it was in 2014.

In 2016, we are expecting real GDP growth of just 2.1%: this forecast was revised down by 0.6 of a percentage point from our December 2015 outlook.

There will be a modest improvement in growth to 2.5% in 2017 before dipping slightly to 2.4% in 2018. As the gradual tightening of monetary policy begins to restrain the economy, GDP growth further decelerates to 2.3% in 2019.

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The timing of the first interest-rate hike in December has certainly been second and third guessed in the weeks that have followed. Clearly this tightening cycle will see that the Fed moving very slowly with any future interest rate hikes.

Taking small steps when it raises rates with pauses between each rate hike will allow the Fed to gauge how the economy is faring, review additional data as it is released, and continue to monitor the state of the global economy and financial markets.

We expect the federal funds rate to slowly drift higher beginning in December or January, reaching 3.0% in the 1st quarter of 2019 and holding there. If the next recession set in between now and 2019— and as we have discussed, this is a real possibility— the Fed would have to reverse its course on interest rates and since there would be little room for downward movement in interest rates, the Fed would once again have to use non-traditional tools of monetary policy and the possibility of negative interest rates is already being contemplated.

CONSUMER SPENDING Consumers are Propping up What Remains of This Recovery

To date, the U.S. consumer has played the largest role in supporting the economic recovery. However, holiday shopping growth was expected to come in at 3.7% this year, down from 4.1% growth last year, but it came in at only 3.0%, as measured by the National Retail Federation. In the 4th quarter, overall consumption spending growth decelerated from 3.0% in the 3rd quarter to 2.2%.

Consumer spending growth is all the more important now when looking at the other main sectors of the economy that continue to face headwinds that suppress growth. Business investment and government spending are adding little boosts in GDP growth and net exports are pulling growth down rather than propping it up and are likely to remain a drag for years to come.

The underpinnings of consumer spending, while not going gangbusters, continue to make some progress. The labor market continues to recover, amid signs it may be losing steam, and strong wage and salary growth continue to remain out of the grasp of most U.S. workers, with annual growth recently ticking up just a bit to 2.5% after being stuck around 2.2% for several years. The housing market continues to recover and as housing prices rise, home equity grows. In the aggregate, most of the home equity destroyed by the collapse of the housing market has been recovered, but there are regions of the country where many homeowners are still underwater in their mortgages. Despite these gains, home equity loan balances continue to contract on commercial banks’ balance sheets, as they have since the onset of the housing crisis.

Oil and gasoline prices have plunged, leaving more disposable income in the wallets of U.S. consumers. While this gasoline windfall is nice, it is not a substitute for more robust growth in wages and salaries. Nonetheless, it helps support consumer spending on other goods and services.

In particular, consumer spending at restaurants has benefitted from this oil and gasoline windfall.

Any consumer would prefer to have the monthly gasoline savings in the form of a larger paycheck.

Global economic and financial market uncertainty thus far in 2016 has worked to erode consumer confidence despite these positive developments in other areas. As a result, consumerspending growth is expected to decelerate to around 2.8% for 2016 and then hit 2.9% in 2017, before slowing to 2.6% in 2018 and 2.5% in 2019.

INVESTMENT Despite record levels of profits during this recovery and historically low-interest rates, nonresidential fixed investment growth during most of the recovery has been weak. In the 4th quarter of 2015 investment spending growth Institute for Economic Competitiveness

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turned negative, contracting 1.8%. The contraction is due in large part to purchases of aircraft, which can swing wildly from one quarter to the next depending on the timing of massive purchases by airlines, and these decreased by 58.9% in the quarter. The decline also reflects the negative impact of falling oil prices. Consumers may be enjoying the prices at the pump but oil producers are cutting back on investment as the rig count in the U.S. continues to drop. When oil was $80 a barrel, investing in new wells to extract oil from shale patches in North Dakota, Texas, and Pennsylvania was profitable. At $30 a barrel, that is no longer the case. During 2015 investment in mining and petroleum equipment contracted by 35%.

It is not just aircraft and oil wells that are driving weak investment spending. In 2013, for example, both of these types of spending were growing, yet overall investment growth was just 3.0% that year. There is a more fundamental problem with investment in this recovery and we have discussed the role of policy uncertainty and the rapid growth in the regulatory burden as probable causes of this weakness. This environment is unlikely to improve anytime soon and may very well worsen with a political cycle underway that has been anything but predictable.

In 2014, the 6.2% pace of real private nonresidential fixed investment growth was more than double the 3.0% growth in 2013. In 2015, once again, investment-spending growth decelerated to 2.9%. The weak start to 2016 in an environment of increasing uncertainty will result in a further deceleration of investment spending growth to 2.6%. After the presidential election is over some uncertainty will fade and, with answers to questions in hand, business investment growth will accelerate to 3.9% in 2017 and 4.5% in 2018.

In 2019, the Fed’s tightening of interest rates will result in a slight deceleration of growth to 4.4%.

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U.S. Forecast | March 2016

Interest rates are still quite low; even as the Fed begins to push up the federal funds rate, overall interest rates will continue to rise in a drawn-out process that will stretch until 2019.

Business spending on equipment and software will grow at an annual average rate of 4.8% from 2016 through 2019. Investment spending growth in computers and peripherals will accelerate in 2016 as upgrade cycles kick in after contracting in 2014 and 2015. Spending on communications equipment should expand at an average annual rate of 4.2% during 2016-2019, while industrial equipment purchases average 6.6% growth over the same time frame.

Investment in nonresidential structures has been on a roller coaster with a double-digit burst of activity in 2012, followed by growth of just 1.6% in 2013. The wild ride continued during 2014 and 2015 after growth jumped to 8.2% in 2014, it turned negative again in 2015 with growth coming in at -1.5%. Investment in nonresidential structures will slowly grow in 2017, 2018, and 2019 with growth of 1.1%, 2.7%, and 5.8%, respectively.

Investment growth in transportation equipment decelerated in 2015 to 8.4%, following five years of very strong double-digit growth. This type of investment will have an average growth rate of just 1.6% during the four-year period spanning 2016 through 2019.

Residential fixed investment growth slipped to 1.8% in 2014 after two strong years of growth but bounced back again in 2015 to hit 8.7%. Growth will average 4.6% through 2016-2019, decelerating over the entire period with a peak growth rate in 2016 of 7.3%. In the final year of our forecast (2019), real residential fixed investment will be dampened by both higher mortgage rates—which are expected to average 5.7% on a 30-year fixed mortgage that year—and a slower pace of price appreciation. As a result, growth is expected to be

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3.8% in the final year of our forecast. In 2019, real residential fixed investment will be just over $631 billion.

We expect housing starts to gradually accelerate over the next several years, reaching a level just below 1.45 million in 2019. Average levels of annual housing starts from 2016-2019 will be 1.3 million. In 2019 housing starts are expected to show an increase of 895,790 starts from their 2009 nadir.

GOVERNMENT SPENDING In 2015, for the fifth straight year, federal government spending growth was negative. This year will put an end to this streak, as federal government spending will grow. Spending packages approved by Congress last year will boost spending in 2016, with growth coming in at 3.4%. Beyond 2016 and through 2019, federal government spending is expected to continue to shrink, contracting at an annual average pace of 0.8%. Over the 2016 to 2019 time horizon, state and local governments will oversee spending growth at an average rate of 1.1%.

The course of fiscal policy going forward could be altered significantly by the outcome of the presidential election. The rhetoric and proposed policies of the remaining candidates is a little difficult to wrap your head around – and that is an understatement.

The federal budget deficit will rise in 2016 after four years of shrinking from nearly $1.3 trillion in 2011 to under $439 billion in 2015. We are forecasting deficits to widen in 2016, as middling economic growth cannot compensate for greater spending for entitlements and reversals of the sequester spending cuts, thereby pushing the deficit to $560.7 billion. In 2017 the deficit will decline somewhat to $549.1 billion before climbing again in 2018 when it hits $593.6 billion. The deficit in

2019 grows even larger as swelling entitlement spending pushes it to $717.0 billion.

The U.S. continues to travel down a fiscal highway that will take us to a destination of a fiscal crisis not unlike that which befell Greece in 2010.

The existing structure of entitlements including the Affordable Care Act and the demographics of an aging population guarantee that if no changes are made to address these programs and how they are funded, we will eventually get to that point. Because the crisis is still well beyond any upcoming elections, it seems highly unlikely that the necessary changes will be implemented in the near future.

Although we are projecting deficits through 2019 that are smaller than the $1 trillion-plus deficits that were the norm in 2009-2012, the additional debt added to the national debt over the next four years will be more than $2.4 trillion, pushing the national debt total to over $21.4 trillion before interest. As interest rates in the economy rise, the burden of servicing this debt will rise as well, consuming a greater share of federal tax revenues.

Currently, the national debt is over $19.0 trillion and rising. This represents a debt of nearly $159,035 per taxpayer and over $58,900 per citizen. The unfunded liabilities of the U.S. are even more alarming. These include Social Security, Medicare parts A, B, and D, Federal debt held by the public, and federal employee and veteran benefits, representing more than $101.3 trillion in liabilities, boiling down to $846,364 per taxpayer.

NET EXPORTS Yes, the Rest of the World is Still a Drag

Net exports became a drag on real GDP growth in the U.S. in 2014, shaving off nearly 0.2 percentage points from growth that year, and even more in 2015. Net exports shaved 0.66 percentage points off of real GDP growth last year. This drag Institute for Economic Competitiveness

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is expected to last through most of the forecast horizon.

The U.S. dollar has appreciated for four straight years against our major trading partners, including an outsized 16.2% appreciation in 2015. We expect that it will be five straight years as further appreciation is forecasted for 2016.

Over time, the stronger (appreciating) dollar boosts imports and reduces exports by making our goods and services more expensive to foreigners and at the same time making imported goods and services cheaper to U.S. consumers. This results in a worsening of the trade deficit.

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

Overall, export growth continues through the end of our 2019 forecast horizon and is expected to accelerate during that time frame—a result of a predicted depreciation of the dollar that is anticipated to arrive before 2017. Growth will remain to accelerate slowly in 2016 before jumping in 2017. Real export growth from 2016-2019 will average 3.7% while real import growth will average 4.6% over the same time frame.

Real net exports will average -$681.0 billion during 2016-2019, with the trade balance worsening in each successive year. The sizeable appreciation of the dollar and weaker global growth will dampen demand for U.S. goods and services and whet the appetite for imported goods and services in the U.S.

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U.S. Forecast | March 2016

U N E M P LOY M E N T The national headline unemployment rate (U-3) in January declined by 0.1 percentage points from the December reading of 5.0% to stand at 4.9%, the lowest level since February of 2008.

The unemployment rate fell despite a significant increase of 502,000 people in the labor force from the previous month as the labor force participation rate ticked up from 62.6% to 62.7%. The number of unemployed people fell by 113,000 in January.

The January jobs report showed much weaker payroll job growth compared to December’s gain of 262,000 jobs, which followed an upwardly revised 280,000 jobs added to payrolls in November. These figures put the average growth in monthly payrolls for 2015 at 228,000, down from 2014’s average growth of 251,000. Job growth decelerated last year and although we have only one data point for 2016 (payroll job growth in January of 2016), stagnating job growth is another worrisome trend to keep a wary eye on as the year progresses.

In this historically weak economic recovery, often-contradictory data has been the norm, particularly when it comes to the labor market. The health of U.S. labor market cannot be satisfactorily assessed by a single metric, such as the headline unemployment rate (U-3). A 4.9% unemployment rate, like the current rate, has typically been observed in periods of very strong economic and wage and salary growth, but neither exists in this recovery.

The January labor force participation rate of 62.7% remains depressed and is at its lowest point since December 1977. Since the end of the recession, the labor force participation rate has declined 3.0 percentage points. This fall in the labor force participation rate has exaggerated the decline in U-3, putting the labor market in a much better light when looking at this headline unemployment rate in isolation.

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Some of the decline in the overall labor force participation rate is due to retiring Baby Boomers, as it is calculated based on the population of everyone 16 years or older, but these demographics cannot fully explain the decline. However, if we limit ourselves to prime-age workers from 24 to 54, we still see a significant decline in labor force participation rates. In January 2016 this prime-age participation rate stood at 81.0%, down from 83.3% at the start of the recession. We can thus conclude that there exists a much greater slack in the labor market than the headline unemployment rate would suggest, and it is not completely attributable to retiring Baby Boomers.

The Bureau of Labor Statistics (BLS) produces alternative measures of labor market weakness, including the broadest measure of unemployment (U-6). U-6 takes into account discouraged workers (currently 623,000 workers) as well as those classified as underemployed (currently 5.9 million workers)—working part-time but not by choice— and workers who are marginally attached to the labor force and have looked for work in the past 12 months but are not currently looking, yet indicate a willingness to work (2.1 million workers). None of these 8.6 million workers are counted in the headline unemployment rate of 4.9%.

U-6 remains high at 9.9% in January 2016, down 1.4 points from the January 2015 level of 11.3%, and down 6.8 points from its peak of 17.1% in April 2010. U-6 remained in double digits for 88 straight months, more than seven years. It has been in single digits (barely) for four months running.

The bottom line is the labor market is still improving at a rate that appears to be slowing, but there remains significant slack in the market. Until that slack is taken up, we can expect that weak wage and salary growth will continue.

Institute for Economic Competitiveness

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30-Year Mortgage Rates and Housing Starts 8.0

(Mortgage rates - Left axis, %)

2.5

7.0

2.0

6.0

1.5

5.0

1.0

4.0

0.5

3.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 30-Year Fixed Mortgage Rate Housing Starts - Millions

0.0

Automobile and Light Truck Sales 11.0

(Millions Vehicles)

10.0 9.0 8.0 7.0 6.0 5.0 4.0

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

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

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(Billions of 2000 Dollars)

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

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Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

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

Federal Funds Rate 6.0

(%)

5.0 4.0 3.0 2.0 1.0 0.0 -1.0

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

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Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0

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

Industrial Production 120.0

(2002=100)

115.0 110.0 105.0 100.0 95.0 90.0 85.0

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

Private Fixed Nonresidential Investment 3000.0

(Billions of Dollars)

2500.0 2000.0 1500.0 1000.0

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

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Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

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

Money Supply

40.0

(Annual Growth Rate %)

30.0 20.0 10.0 0.0 -10.0

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Annual Growth Rate of M2 Annual Growth Rate of M1

Total Nonfarm Payroll Employment 150.0

(Millions)

145.0 140.0 135.0 130.0 125.0

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

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Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120.0

100 90

100.0 80.0

80

60.0

70

40.0

60

20.0 0.0

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

50

Real Disposable Income and Consumption 6.0

(% Change Year Ago)

4.0 2.0 0.0 -2.0 -4.0

-400

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

Trade Balance and Real Exchange Rate

1.50 1.40

-500

1.30

-600

1.20

-700

1.10

-800

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

18

U.S. Forecast | March 2016

0.80

U . S . F orecast C harts

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

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

Civilian Unemployment Rate 10.0

(%)

9.0 8.0 7.0 6.0 5.0 4.0 3.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

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

19

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

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

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

Real GDP Nominal GDP

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

2010

2011

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

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

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

2012

2013

2014

2015

Billions of Dollars 14418.8 14783.8 15020.6 15354.6 15583.3 15961.7 16341.8 14418.7 14964.4 15517.9 16155.3 16663.2 17348.1 17937.9

2.1 3.1 1.7 6.0 2.2

61.7 3.2 -11.2 65.7 -146.0 66.3 10.402 0.554 3.868 9.3 -4.3 -1416 -384

79.4 3.3 5.6 70.9 65.9 71.8 11.555 0.586 3.705 9.6 -0.7 -1294 -442

95.1 0.2 3.0 73.7 36.6 67.4 12.735 0.612 3.792 8.9 1.2 -1297 -460

94.2 0.9 2.9 74.5 72.7 76.5 14.443 0.784 4.125 8.1 1.7 -1089 -450

Other Measures 98.0 93.0 48.8 0.0 0.7 0.6 1.9 3.7 1.3 74.1 75.3 76.1 54.3 65.0 90.5 79.2 84.1 92.9 15.532 16.435 17.3 0.928 1.001 1.1 4.473 4.334 4.6 7.4 6.2 5.3 1.6 1.9 2.1 -680 -484 -438.9 -377 -390 -466.4

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

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

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

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

0.14 0.09 0.18 0.76 1.80 2.92 3.66 1380 8.9 0.946 3.8

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

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

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

12477 3.2 11238 2.7 11055 1.0 5.6 1470 23.4

13255 6.2 11801 5.0 11331 2.5 6.1 1428 -2.9

13915 5.0 12404 5.1 11688 3.1 7.6 1683 18.1

14068 1.1 12396 0.0 11523 -1.4 4.8 1693 0.6

Incomes 14694 15357.4 4.4 4.5 12914 13411 4.2 3.8 11836 12256 2.7 3.5 4.8 5.2 1694 1769 0.1 4.5

Forecast 2017 2018

2.5 2.4 2.9 7.2 2.9 2.2 3.9 5.0 6.2 4.5 5.4 6.7 0.8 -2.2 -0.3 1.1 7.2 -17.8 -6.6 15.9 8.3 7.1 4.1 6.0 -0.4 1.0

2.4 2.3 2.6 5.7 2.3 2.3 4.5 5.8 6.2 3.9 6.5 8.5 3.1 1.8 3.3 2.7 4.2 -2.4 -3.0 11.4 3.9 3.7 4.5 5.8 -1.2 1.1

2019

2.3 2.3 2.5 4.6 2.3 2.2 4.4 4.4 5.4 3.5 4.9 6.4 0.7 4.1 1.8 5.8 8.4 7.7 0.4 9.6 2.2 0.2 4.6 3.8 -0.7 1.0

16687.6 17099.4 17504.6 17904.7 18578.7 19376.4 20210.0 21043.9

Prices & Wages, Percent Change, Annual Rate 1.8 1.6 1.6 1.0 1.4 2.1 1.5 1.6 0.1 0.6 2.1 1.8 1.7 1.8 1.7 1.9 1.2 1.9 -3.3 -2.4 1.9 1.9 2.1 2.1 2.2

1.2 1.6 1.0 4.2 1.9

U.S. Forecast | March 2016

2016

Composition of Real GDP, Percent Change 2.2 1.5 2.4 2.4 2.1 2.1 1.4 2.4 2.2 2.6 1.5 1.7 2.7 3.1 2.8 7.4 5.8 5.8 6.0 5.7 0.6 1.9 2.1 2.7 2.9 0.8 1.0 2.4 2.8 2.3 9.1 3.0 6.2 2.9 2.6 10.9 3.2 5.9 3.1 4.0 6.0 3.8 3.8 5.1 7.1 7.0 4.1 -3.2 -0.1 5.0 4.9 9.4 3.0 8.0 7.9 9.4 -2.5 7.3 4.5 4.9 23.5 12.8 13.3 8.4 1.6 7.5 13.0 15.6 17.9 5.5 21.8 4.0 16.0 1.1 -0.8 13.3 1.6 8.2 -1.5 -1.0 8.6 3.6 12.9 13.0 6.2 15.7 4.2 11.1 49.5 0.2 21.4 -4.4 8.8 -9.5 3.3 12.7 2.4 6.6 -34.7 -22.7 9.5 4.7 4.0 12.4 7.7 13.5 9.6 1.8 8.7 7.3 3.4 2.8 3.4 1.1 1.5 2.2 1.1 3.8 5.1 2.7 -1.9 -5.7 -2.4 -0.2 2.7 -1.9 -1.0 0.6 1.4 1.2

0.8 -0.3 1.7 -2.6 1.4

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

20

2009

1.8 2.2 1.7 2.4 2.7

1.9 2.5 2.0 2.7 2.8

1.8 2.4 2.0 2.5 2.8

31.9 0.9 -0.7 74.7 20.2 85.6 17.6 1.2 4.7 4.9 1.6 -560.7 -378.4

40.0 1.5 2.1 74.1 25.9 82.1 18.0 1.3 4.6 5.1 0.8 -549.1 -390.0

49.6 1.8 2.8 74.0 46.7 83.0 17.8 1.4 4.6 5.3 0.8 -593.6 -511.2

59.7 1.8 2.4 73.7 39.2 82.6 17.4 1.4 4.5 5.4 0.9 -717.0 -594.1

0.6 0.5 0.7 1.6 2.2 2.9 4.0 1967 -4.6 1.3 6.7

1.4 1.3 1.4 2.0 2.5 3.2 4.4 2008 2.1 1.2 -5.8

2.4 2.3 2.6 2.9 3.1 3.6 5.0 2049 2.1 1.1 -7.2

3.0 2.8 3.0 3.3 3.6 4.1 5.7 2105 2.7 1.0 -5.0

15938.7 16635.2 17402.7 18194.7 3.8 4.4 4.6 4.6 13920 14573 15314 16029 3.8 4.7 5.1 4.7 12639 13013 13412 13775 3.1 3.0 3.1 2.7 5.6 5.8 6.3 6.6 1746 1808 1782 1742 -1.2 3.8 -1.4 -2.3

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

Table 2. Real Gross Domestic Product History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

14418.8 14783.8 15020.6 15354.6 15583.3 15961.7 16341.8

16687.6 17099.4 17504.6 17904.7

14566.3 14722.2 14979.0 15292.3 15511.4 15881.7 16237.2

16657.6 17064.9 17449.8 17856.9

9847.0 10036.3 10263.5 10413.2 10590.4 10875.7 11211.3

11522.8 11856.8 12169.3 12470.7

Durables

1023.3

1085.7

1151.5

1236.2

1307.6

1384.1

1467.0

1550.7

1662.6

1756.8

1837.6

Nondurables

2175.1

2223.5

2263.2

2277.5

2319.8

2367.8

2431.4

2501.6

2573.0

2632.6

2693.7

Services

6648.5

6727.6

6851.4

6908.1

6977.0

7144.6

7341.6

7509.3

7677.4

7850.8

8022.9

1633.5

1673.8

1802.3

1964.2

2023.8

2148.3

2209.7

2268.1

2355.8

2461.8

2570.8

644.3

746.7

847.9

939.2

969.5

1026.2

1057.5

1099.6

1155.1

1221.7

1275.7

256.1

281.4

285.9

303.1

314.4

326.4

343.1

367.3

389.9

414.1

436.4

Computers & Peripherals

76.8

84.7

83.0

88.5

92.0

89.0

88.9

93.3

97.4

101.2

104.7

Communications Equipment

79.4

90.2

91.8

96.3

105.2

108.1

116.3

125.1

131.9

140.4

147.3

152.1

151.3

183.3

199.8

194.8

208.9

218.2

228.8

244.1

264.8

281.8

70.6

127.5

173.9

213.1

240.6

272.4

294.6

299.4

301.8

311.2

313.3

17.7

22.1

27.9

29.2

33.0

37.4

43.1

45.1

44.2

44.9

46.8

30.8

36.2

48.1

58.1

60.3

69.8

69.9

69.3

69.1

71.3

72.6

438.2

366.3

374.7

423.1

429.7

464.6

457.6

452.8

457.9

470.2

497.4

126.7

95.2

94.7

102.8

106.4

120.3

135.6

144.0

154.4

160.9

174.3

Manufacturing

56.3

40.8

39.1

44.9

46.8

52.0

77.5

77.3

63.5

61.7

66.5

Power & Communication

95.8

80.4

74.1

89.7

85.6

90.9

79.9

82.4

77.0

74.6

74.9

Mining & Petroleum

75.0

87.8

110.9

123.8

126.7

135.0

87.7

64.4

74.5

83.0

90.9

Other

84.5

62.0

56.2

61.5

64.3

66.9

75.2

80.7

87.5

90.9

92.9

392.3

382.4

384.5

436.5

478.0

486.4

529.0

567.6

607.8

630.1

631.5

Exports

1587.7

1776.6

1898.3

1963.2

2018.1

2086.4

2109.5

2141.0

2228.7

2328.2

2434.3

Imports

1983.2

2235.4

2357.7

2410.2

2435.6

2528.9

2656.5

2728.9

2892.3

3059.6

3175.4

Federal Government

1217.7

1270.7

1236.4

1213.5

1144.1

1116.3

1113.5

1143.3

1138.6

1125.1

1116.7

State & Local Government

1871.4

1820.8

1761.0

1728.1

1710.2

1720.8

1745.0

1766.5

1784.1

1803.8

1821.3

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Institute for Economic Competitiveness

21

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

Table 3. Quarterly Summary of the Forecast of the U.S. 2016Q1

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

1.9 2.5 2.7 4.9 2.5 2.4 2.5 4.7 1.4 11.7 -11.9 4.3 5.8 106.1 17.0 -3.9 4.0 -9.5 3.9 -30.8 2.9 4.9 0.5 4.3 8.2 1.8

2016Q2

2.7 3.3 2.9 5.5 2.7 2.5 5.7 6.8 7.6 8.3 5.4 4.1 5.0 -1.1 6.8 5.8 10.4 -6.6 2.5 17.4 7.8 8.4 3.0 0.8 0.2 0.6

2016Q3

2.7 3.0 3.1 6.8 3.9 2.3 4.1 4.6 7.1 9.7 4.5 2.8 -0.1 6.1 -3.1 2.0 7.0 -7.4 0.1 -0.4 7.0 8.2 4.6 3.9 0.6 0.8

2016Q4

2.6 2.6 2.8 7.5 3.4 2.0 3.8 3.8 6.1 4.5 5.9 5.8 -2.8 -2.7 -8.9 2.9 8.7 -12.1 -10.3 33.1 6.2 5.8 5.1 5.6 0.3 1.2

2017Q1

2.2 2.2 3.0 8.1 2.5 2.3 3.6 4.7 5.7 2.2 5.7 6.7 0.7 -4.4 -0.1 0.8 10.4 -25.3 -7.3 15.6 11.6 7.6 3.8 7.4 -1.3 0.9

2017Q2

2018Q1

2018Q2

2018Q3

Composition of Real GDP, Percent Change, Annual Rate 2.7 2.3 2.0 2.8 2.3 2.3 2.5 2.1 1.8 2.6 2.3 2.4 3.0 2.6 2.6 3.0 2.3 2.5 7.2 7.1 5.8 5.3 4.7 5.8 2.8 2.3 2.1 2.9 2.0 2.0 2.5 2.0 2.2 2.6 2.1 2.1 3.9 3.4 3.9 4.5 5.5 5.1 5.6 5.9 5.9 5.8 6.6 5.0 5.1 6.7 6.6 6.6 6.1 5.3 3.2 4.0 4.3 3.8 5.0 2.3 3.7 6.9 7.2 7.2 6.5 5.6 8.1 9.2 10.4 7.9 8.0 7.8 3.1 1.8 1.2 4.0 7.1 1.3 -5.3 -2.3 1.2 3.0 3.7 4.8 5.2 4.8 -1.6 4.6 6.5 1.0 0.8 -2.8 -0.1 2.9 5.1 7.4 8.3 0.3 -1.3 2.2 5.8 13.6 -23.6 -20.6 -10.3 3.3 6.3 11.1 -9.1 -7.3 -4.9 -3.8 1.3 -0.1 19.7 4.0 15.7 13.8 11.3 4.6 9.6 7.1 4.1 2.6 2.2 3.6 7.4 6.9 4.9 3.5 2.1 2.0 4.8 4.7 3.8 3.7 4.2 4.8 6.6 7.4 6.3 5.9 5.1 4.7 0.0 0.9 -5.4 -0.2 -0.1 -0.3 1.1 1.3 1.0 1.0 1.2 1.0

Prices & Wages, Percent Change, Annual Rate 1.9 2.0 1.7 2.1 1.7 2.4 3.1 1.8 2.8 2.5 1.7 1.9 2.0 2.1 2.1 2.9 4.5 0.8 3.1 2.4 2.9 3.0 3.0 2.7 2.9

1.3 -1.8 1.3 -9.1 2.3

1.8 0.8 1.6 1.7 2.5

1.5 2.3 1.6 1.5 2.4

2.1 3.6 1.7 4.6 2.4

1.5 1.0 1.7 0.5 2.7

28.6 0.9 -1.3 75.5 42.5 87.1 17.638 1.159 4.606 4.9 1.6 -634 -434

30.5 2.7 -0.7 74.8 20.7 88.1 17.579 1.172 4.667 4.9 1.7 -611 -381

34.0 1.5 0.5 74.4 9.0 85.1 17.667 1.197 4.730 4.9 1.0 -605 -350

34.4 1.4 1.7 74.2 8.7 82.2 17.708 1.240 4.713 5.0 0.9 -629 -348

35.6 1.2 2.8 74.1 12.2 82.1 17.851 1.264 4.649 5.0 0.8 -684 -365

38.4 1.7 2.9 74.2 21.3 81.4 17.948 1.304 4.623 5.1 0.6 -699 -368

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

0.40 0.34 0.52 1.46 2.07 2.84 3.90 1947 -19.1 1.236 13.0

0.53 0.47 0.63 1.50 2.16 2.90 3.99 1964 3.5 1.262 8.6

0.75 0.59 0.71 1.58 2.27 2.97 4.06 1980 3.3 1.264 0.6

0.79 0.72 0.76 1.66 2.34 3.01 4.18 1976 -0.9 1.244 -6.1

1.03 0.96 0.97 1.78 2.45 3.09 4.30 1987 2.4 1.214 -9.3

1.29 1.18 1.18 1.86 2.51 3.15 4.37 2005 3.6 1.188 -8.3

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)

15756 3.9 13750 3.9 12548 4.7 5.9 1603 -23.1

15850 2.4 13835 2.5 12599 1.6 5.6 1737 37.7

15992 3.7 13971 4.0 12674 2.4 5.5 1783 11.0

16157 4.2 14126 4.5 12736 2.0 5.3 1859 18.3

16358 5.1 14308 5.2 12870 4.3 5.7 1779 -16.1

16550 4.8 14490 5.2 12974 3.3 5.8 1817 8.6

22

2017Q4

2018Q4

2.0 2.1 2.4 5.3 2.1 2.1 4.6 4.3 5.4 3.0 5.0 6.4 0.5 2.3 2.8 7.3 10.7 9.7 1.9 9.9 2.8 -1.0 4.7 4.3 -2.6 1.2

2019Q1

2.4 2.5 2.8 4.3 2.8 2.5 4.3 4.0 5.6 4.1 4.7 6.4 -0.4 4.4 1.8 6.3 7.7 6.5 0.7 14.5 3.3 -2.6 4.2 3.1 -0.3 1.0

2019Q2

2.3 2.3 2.4 4.0 2.4 2.1 4.0 4.5 5.4 3.8 4.5 6.3 1.2 5.0 0.1 3.8 6.8 4.8 -3.3 8.4 1.0 0.0 4.6 3.7 -0.3 1.1

2019Q3

2.4 2.4 2.3 4.1 2.2 2.0 3.9 3.9 5.0 3.1 4.1 5.1 -1.0 4.2 1.4 4.6 6.3 8.5 1.3 6.0 0.5 3.8 4.7 3.2 -0.3 0.7

2019Q4

2.2 2.2 2.3 3.9 2.1 2.0 4.2 4.1 4.9 3.7 4.4 5.2 0.0 3.4 2.6 5.4 5.9 8.5 3.7 8.7 1.1 3.5 4.6 3.5 -0.8 -0.2

Billions of Dollars 16520.8 16632.7 16745.2 16851.9 16945.2 17058.3 17155.2 17238.8 17356.9 17457.3 17558.4 17645.9 17751.7 17853 17957 18057 18275.3 18479.1 18672.2 18888.3 19063.3 19282.8 19490.9 19668.9 19905.6 20107.5 20316.8 20510.0 20727.5 20933.9 21151.5 21362.9

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

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

2017Q3

U.S. Forecast | March 2016

1.8 2.6 2.0 3.2 2.8

1.8 2.5 2.0 2.3 2.8

1.8 2.4 2.0 2.3 2.9

1.7 2.3 2.0 2.2 2.7

1.8 2.5 2.0 3.1 2.8

1.8 2.4 2.0 2.1 2.7

Other Key Measures 44.0 41.8 45.8 48.3 1.7 1.5 2.3 1.8 3.2 2.5 3.2 2.7 74.2 74.0 74.2 74.1 30.7 39.6 49.4 49.5 81.8 83.0 83.1 82.8 17.996 18.006 17.932 17.872 1.317 1.345 1.381 1.393 4.607 4.607 4.620 4.604 5.1 5.2 5.2 5.3 0.6 0.8 0.8 0.9 -703 -727 -798 -822 -407 -420 -460 -498

50.9 1.8 2.3 74.0 46.6 82.9 17.813 1.406 4.552 5.3 0.9 -835 -529

53.4 1.6 2.1 73.8 41.5 83.1 17.698 1.416 4.543 5.3 0.7 -864 -558

55.9 2.0 2.2 73.7 37.7 82.0 17.6 1.4 4.5 5.4 0.9 -900 -582

58.4 1.9 2.4 73.7 39.7 83.0 17.5 1.4 4.5 5.4 0.8 -912 -592

60.9 1.8 2.8 73.8 38.7 82.5 17.4 1.5 4.5 5.4 0.8 -900 -596

63.4 1.5 2.9 73.8 40.6 82.7 17.3 1.5 4.5 5.4 1.0 -888 -606

Financial Markets, NSA 1.54 1.79 2.03 2.29 1.46 1.73 1.97 2.21 1.44 1.90 2.21 2.45 1.97 2.26 2.58 2.81 2.58 2.65 2.75 2.93 3.22 3.28 3.34 3.43 4.45 4.52 4.63 4.82 2011 2028 2037 2043 1.1 3.4 1.8 1.2 1.166 1.145 1.122 1.098 -7.2 -6.8 -8.0 -8.2

2.54 2.44 2.69 3.05 3.23 3.71 5.15 2052 1.8 1.082 -5.7

2.79 2.67 2.90 3.28 3.55 4.02 5.50 2064 2.4 1.072 -3.7

3 2.80 2.97 3.34 3.65 4.12 5.67 2078 2.7 1.05 -7.4

3 2.79 2.97 3.35 3.65 4.13 5.69 2092 2.7 1.04 -3.9

3 2.79 2.97 3.35 3.65 4.13 5.69 2112 4.0 1.03 -3.2

3 2.79 2.97 3.35 3.65 4.13 5.68 2137 4.7 1.03 -2.5

Incomes 16906 17128 4.4 5.4 14832 15060 4.7 6.3 13155 13289 3.2 4.1 6.0 6.3 1808 1788 -4.2 -4.3

17491 4.3 15395 4.5 13450 2.4 6.3 1788 0.8

16726 4.3 14662 4.8 13053 2.5 5.8 1828 2.6

17309 4.3 15227 4.5 13370 2.5 6.3 1784 -0.9

17683 17909.4 18103.0 18287.8 18478.7 4.5 5.2 4.4 4.1 4.2 15573 15783 15953 16110 16269 4.7 5.5 4.4 4.0 4.0 13540 13659 13744 13813 13884 2.7 3.6 2.5 2.0 2.1 6.4 6.6 6.6 6.5 6.5 1769 1723 1734 1754 1756 -4.2 -10.0 2.5 4.8 0.5

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

Table 4. Quarterly Gross Domestic Product 2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

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

16520.8 16632.7 16745.2 16851.9 16945.2 17058.3 17155.2 17238.8 17356.9 17457.3 17558.4 17645.9 17751.7 17853.0 17957.0 18057.0 16467.7 16601.7 16726.6 16834.2 16924.1 17028.3 17116.1 17190.9 17299.6 17399.8 17503.6 17596.0 17705.4 17804.7 17909.6 18007.7 11397.7 11478.6 11566.8 11648.1 11733.3 11821.6 11898.6 11973.9 12061.5 12130.9 12205.6 12279.2 12363.7 12436.6 12506.3 12576.2

Durables

1515.4 1536.0 1561.4 1589.8 1621.0 1649.5 1678.1 1701.8 1723.8 1743.7 1768.2 1791.3 1810.4 1828.3 1847.0 1864.7

Nondurables

2471.9 2488.5 2512.5 2533.3 2548.9 2566.9 2581.4 2594.9 2613.2 2626.0 2638.7 2652.5 2670.8 2686.7 2701.6 2715.8

Services

7444.3 7490.4 7532.9 7569.7 7613.0 7659.2 7697.8 7739.7 7790.0 7829.8 7871.3 7912.1 7961.8 8003.6 8042.8 8083.6

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

2228.3 2259.2 2281.8 2303.1 2323.4 2345.9 2365.5 2388.3 2415.0 2447.7 2478.1 2506.4 2532.8 2558.0 2582.9 2609.4 1077.3 1095.3 1107.7 1118.2

1131.0 1146.5 1163.0 1179.8 1196.5 1215.9 1230.8 1243.6 1256.0 1269.8 1282.0 1294.9

357.8

364.5

370.8

376.3

381.6

386.4

392.7

399.1

405.5

411.5

416.9

422.4

428.2

433.9

439.2

444.4

90.6

92.4

94.5

95.6

96.1

96.9

97.8

98.9

99.8

101.0

101.6

102.3

103.4

104.3

105.1

106.1

122.8

124.4

125.8

127.6

129.4

130.5

132.7

135.1

137.4

139.6

141.5

143.2

144.9

146.5

148.0

149.6

Industrial Equipment

225.4

227.7

229.3

232.6

236.4

241.1

246.4

252.6

257.5

262.5

267.5

271.7

275.9

280.2

283.7

287.3

Transportation Equipment

297.3

300.9

300.8

298.6

299.1

301.4

302.8

303.7

306.7

311.9

312.9

313.3

313.0

313.9

313.2

313.2

45.0

44.9

45.5

45.2

44.7

44.1

43.8

44.0

44.3

44.7

45.2

45.5

46.0

46.6

47.0

47.4

69.1

70.3

69.7

68.1

68.1

69.0

69.8

69.5

70.3

71.4

71.6

72.1

72.4

72.4

72.7

73.1

446.0

452.4

454.7

458.0

458.9

459.8

456.5

456.4

459.6

465.3

473.7

482.0

489.5

494.1

499.6

506.2

139.4

142.9

145.3

148.4

152.1

155.2

155.3

154.8

155.7

157.9

163.0

167.1

170.3

173.1

175.7

178.3

Manufacturing

79.6

78.3

76.8

74.4

69.1

64.6

61.0

59.4

59.8

60.8

62.4

63.8

64.9

65.6

67.0

68.4

Power & Communication

82.6

83.1

83.1

80.9

79.4

77.5

76.0

75.1

74.4

74.6

74.6

74.9

75.1

74.4

74.7

75.4

Mining & Petroleum

61.3

63.8

63.8

68.5

71.0

74.3

75.0

77.8

80.4

82.6

83.5

85.5

88.5

90.2

91.6

93.5

Other

78.6

80.1

81.5

82.7

85.0

87.0

88.5

89.4

89.9

90.4

91.2

91.9

92.6

92.8

93.0

93.2

551.6

562.8

574.0

582.2

592.9

603.6

613.7

621.1

626.5

629.8

632.9

631.4

627.2

627.1

633.0

638.5

Computers & Peripherals Communications Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment Exports

2110.5 2126.3 2150.3 2177.0 2197.2 2217.9 2238.3 2261.3 2287.8 2314.6 2341.6 2368.6 2393.2 2420.3 2448.0 2475.5

Imports

2702.4 2707.7 2733.9 2771.4 2821.5 2866.8 2918.1 2963.1 3005.9 3043.3 3078.3 3110.8 3134.4 3163.4 3188.2 3215.6

Federal Government

1141.8 1142.4 1144.1 1145.0 1141.3 1141.3 1143.8 1128.1 1127.5 1127.3 1126.4 1119.1

State & Local Government

1761.6 1764.1 1767.5 1772.8 1776.6 1781.3 1786.9 1791.4 1796.0 1801.5 1806.2 1811.6 1816.1 1821.0 1824.4 1823.6

1118.3

1117.5

1116.6

Institute for Economic Competitiveness

1114.4

23

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

Table 5. Annual Employment History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Millions Total Nonfarm Employment

131.300 130.353 131.941 134.173 136.381 138.939

141.83

144.157 145.361

146.50

147.75

Private Nonfarm

108.747 107.863 109.848 112.254 114.533 117.062

119.83

122.100 123.216

124.18

125.23

Mining

0.643

0.655

0.739

0.797

0.811

0.838

0.77

0.664

0.662

0.69

0.72

Construction

6.017

5.518

5.530

5.646

5.858

6.150

6.44

6.757

7.014

7.18

7.35

Manufacturing

11.848

11.529

11.727

11.927

12.019

12.184

12.32

12.343

12.405

12.45

12.56

Trade, Transportation and Utilities

24.905

24.641

25.071

25.472

25.856

26.376

26.91

27.273

27.360

27.36

27.40

Transportation & Warehousing

4.237

4.192

4.305

4.415

4.496

4.657

4.84

4.908

5.024

5.12

5.17

Financial Activities

7.838

7.695

7.696

7.783

7.886

7.976

8.12

8.225

8.064

7.90

7.81

Education & Health

19.628

19.972

20.322

20.768

21.084

21.436

22.05

22.617

22.877

23.10

23.40

Professional & Business Services

16.574

16.723

17.329

17.933

18.520

19.064

19.66

20.176

20.703

21.15

21.46

2.804

2.707

2.673

2.675

2.706

2.727

2.75

2.786

2.780

2.79

2.82

Leisure & Hospitality

13.074

13.042

13.352

13.772

14.258

14.694

15.12

15.568

15.734

15.96

16.12

Government

22.553

22.490

22.093

21.918

21.849

21.877

22.00

22.056

22.145

22.32

22.52

2.831

2.976

2.860

2.822

2.770

2.733

2.75

2.753

2.722

2.68

2.65

19.722

19.513

19.233

19.097

19.079

19.145

19.25

19.303

19.422

19.64

19.87

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-4.33

-0.71

1.22

1.69

1.65

1.87

2.08

1.64

0.84

0.79

0.85

Private Nonfarm

-5.22

-0.80

1.84

2.19

2.03

2.21

2.36

1.90

0.91

0.78

0.85

Mining

-14.61

11.68

13.57

2.22

3.02

3.84

-14.61

-9.94

3.60

4.87

3.77

Construction

-16.57

-3.35

1.93

1.74

4.30

5.47

4.49

5.11

2.99

2.34

2.42

Manufacturing

-11.38

0.65

1.76

1.46

0.96

1.65

0.39

0.45

0.29

0.73

0.86

Trade, Transportation and Utilities

-4.83

0.76

1.97

1.46

1.85

2.01

1.76

1.02

0.08

0.01

0.23

Transportation & Warehousing

-6.16

2.14

2.33

2.63

1.95

4.66

2.58

1.63

2.30

1.54

0.63

Financial Activities

-4.32

-0.90

0.47

1.28

1.22

1.49

1.87

0.17

-2.39

-1.93

-0.47

Education & Health

1.90

1.71

1.91

1.97

1.38

2.10

3.19

1.89

0.95

1.06

1.23

Professional & Business Services

-5.15

2.96

3.56

3.30

3.23

3.13

3.28

2.26

2.46

1.78

1.81

Information

-6.02

-2.35

-0.41

-0.15

1.95

0.26

1.11

1.61

-1.93

2.09

1.00

Leisure & Hospitality

-2.46

1.26

2.80

3.13

3.63

2.96

2.99

2.11

1.32

1.45

0.69

Government

-0.18

-0.94

-1.38

-0.41

-0.25

0.48

0.44

0.22

0.56

0.92

0.74

Federal

2.46

4.80

-0.85

-1.05

-2.52

-0.02

0.64

-0.44

-1.50

-1.42

-1.27

State & Local

-0.53

-1.31

-1.46

-0.31

0.09

0.56

0.41

0.32

0.85

1.25

1.01

24

U.S. Forecast | March 2016

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

Table 6. Quarterly Employment

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

Employment (Millions) Total Nonfarm Employment

143.4 144.1 144.4 144.7 145.0 145.2 145.5 145.7 146.0 146.4 146.7 147.0 147.3 147.6 147.9 148.2

Private Nonfarm

121.4 122.0 122.3 122.6 122.9 123.1 123.3 123.5 123.8 124.1 124.3 124.6 124.8 125.1 125.3 125.7

Mining

0.7

0.7

0.7

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Construction

6.6

6.7

6.8

6.9

6.9

7.0

7.0

7.1

7.1

7.2

7.2

7.2

7.3

7.3

7.4

7.4

Manufacturing

12.4

12.3

12.3

12.4

12.4

12.4

12.4

12.4

12.4

12.4

12.5

12.5

12.5

12.5

12.6

12.6

Trade, Transportation and Utilities

27.2

27.3

27.3

27.3

27.4

27.4

27.4

27.4

27.3

27.4

27.4

27.4

27.4

27.4

27.4

27.4

Transportation & Warehousing

4.9

4.9

4.9

5.0

5.0

5.0

5.0

5.1

5.1

5.1

5.1

5.1

5.2

5.2

5.2

5.2

Financial Activities

8.2

8.3

8.2

8.2

8.1

8.1

8.0

8.0

8.0

7.9

7.9

7.8

7.8

7.8

7.8

7.8

Education & Health

22.4

22.6

22.7

22.7

22.8

22.9

22.9

23.0

23.0

23.1

23.1

23.2

23.3

23.4

23.4

23.5

Professional & Business Services

20.0

20.1

20.2

20.4

20.5

20.6

20.8

20.9

21.0

21.1

21.2

21.2

21.3

21.4

21.5

21.6

2.8

2.8

2.8

2.8

2.9

2.8

2.7

2.7

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

Leisure & Hospitality

15.4

15.6

15.6

15.6

15.6

15.7

15.8

15.8

15.9

15.9

16.0

16.1

16.1

16.1

16.1

16.2

Government

22.0

22.0

22.1

22.1

22.1

22.1

22.2

22.2

22.2

22.3

22.4

22.4

22.5

22.5

22.5

22.6

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

2.6

19.3

19.3

19.3

19.3

19.4

19.4

19.4

19.5

19.5

19.6

19.7

19.7

19.8

19.9

19.9

19.9

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.62

1.69

0.97

0.87

0.83

0.59

0.61

0.76

0.76

0.93

0.93

0.75

0.9

0.8

0.8

1.0

Private Nonfarm

1.91

1.96

1.09

0.98

0.93

0.61

0.59

0.76

0.79

0.92

0.92

0.70

0.9

0.8

0.9

1.0

-15.33 -20.07

-5.79

-1.04

1.26

3.69

5.03

4.21

4.02

5.15

5.11

4.86

4.0

3.4

3.8

3.6

Mining Construction

5.57

4.46

5.93

4.09

3.34

3.42

2.87

2.18

2.03

2.23

2.79

2.24

2.0

2.1

2.8

2.7

Manufacturing

1.15

-0.69

-0.56

1.90

1.18

-0.14

-0.21

0.32

0.16

0.54

1.04

1.17

1.0

0.5

0.9

1.0

Trade, Transportation and Utilities

1.49

1.45

0.63

0.48

0.10

0.07

0.23

-0.10

-0.25

0.08

0.13

0.09

0.1

0.2

0.2

0.4

-0.46

1.48

3.01

2.50

2.34

2.15

2.52

2.18

1.80

2.46

1.03

0.86

0.7

0.7

0.5

0.6

Financial Activities

2.10

1.78

-1.41

-1.80

-2.51

-2.74

-2.31

-1.99

-1.77

-2.01

-1.92

-2.00

-1.0

-0.4

-0.3

-0.2

Education & Health

2.11

2.94

1.80

0.69

0.87

1.44

0.53

0.96

1.08

1.02

0.93

1.23

2.2

1.0

0.7

1.1

Professional & Business Services

1.52

2.26

2.12

3.14

3.03

2.31

2.39

2.11

2.67

2.39

1.57

0.48

1.3

1.6

2.1

2.2

Information

0.29

1.03

4.66

0.45

6.79

-7.73

-9.24

2.45

3.61

1.43

1.55

1.76

1.8

1.1

0.4

0.7

Leisure & Hospitality

3.59

4.06

0.73

0.08

0.38

1.39

2.20

1.30

0.59

1.68

1.96

1.58

0.1

0.9

0.8

0.9

Government

0.04

0.24

0.33

0.27

0.27

0.46

0.74

0.76

0.64

1.03

1.02

1.01

1.0

0.8

0.6

0.6

-0.23

-0.20

-0.49

-0.84

-1.19

-1.41

-1.62

-1.77

-1.55

-1.45

-1.29

-1.39

-1.2

-1.3

-1.3

-1.3

0.08

0.31

0.45

0.43

0.47

0.73

1.07

1.12

0.94

1.37

1.33

1.33

1.3

1.1

0.9

0.8

Transportation & Warehousing

Federal State & Local

Institute for Economic Competitiveness

25

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

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

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

GDP

110.6 111.1 111.5 112.1 112.5 113.0 113.6 114.1 114.7 115.2 115.7 116.2 116.8 117.3 117.8 118.3

Consumption

109.6 109.8 110.2 110.9 111.2 111.7 112.3 112.7 113.3 113.9 114.5 115.0 115.5 116.1 116.6 117.2

Durables Motor Vehicles

89.6

89.1

88.6

88.1

87.6

87.1

86.7

86.3

86.0

85.7

85.4

85.1

84.7

84.4

84.1

83.8

111.4 111.4 111.3 111.3 111.2 111.1 111.2 111.2 111.4 111.7 112.0 112.2 112.4 112.6 112.8 112.9

Furniture

85.3

85.1

84.9

84.5

84.1

83.7

83.3

83.0

82.7

82.4

82.1

81.8

81.5

81.3

81.0

80.7

Other Durables

98.3

98.2

98.1

98.2

98.3

98.4

98.5

98.6

98.7

98.9

99.0

99.1

99.2

99.3

99.4

99.5

Nondurables

106.1 106.0 106.7 108.5 108.3 109.1 110.1 110.2 111.2 111.8 112.5 113.2 113.8 114.5 115.2 115.9

Food

110.7 111.2 111.7 112.5 113.3 114.1 114.9 115.6 116.2 116.9 117.5 118.0 118.6 119.1 119.7 120.2

Clothing & Shoes

102.9 102.9 102.7 102.7 102.6 102.4 102.3 102.2 102.2 102.1 102.0 101.9 101.7 101.6 101.4 101.3

Gasoline & Oil

84.1

80.9

85.4

97.4

92.2

95.4 101.2

98.8 103.2 105.9 108.6 111.3 114.1 116.8 119.6 122.7

Fuel

81.7

86.4

89.6

99.0

96.0

99.1 104.3 103.3 107.2 109.7 112.3 114.8 117.4 119.9 122.5 125.2

Services

114.3 114.8 115.3 115.9 116.4 117.1 117.8 118.5 119.2 119.9 120.6 121.3 122.0 122.6 123.3 124.0

Housing

114.5 115.2 115.8 116.4 116.9 117.5 118.2 118.9 119.6 120.3 121.0 121.7 122.4 123.1 123.8 124.6

Electricity

107.4 106.4 106.2 106.4 106.7 107.3 108.5 109.8 110.6 111.2 112.2 113.3 114.1 114.6 115.4 116.3

Natural Gas Water & Sewer Telephone

79.6

77.1

78.3

77.7

78.0

78.4

81.1

81.8

82.7

83.3

85.6

85.8

86.3

86.3

89.3

89.3

137.1 138.1 139.1 140.1 141.1 142.0 143.1 144.2 145.3 146.5 147.8 149.1 150.4 151.7 153.0 154.4 95.5

95.3

94.8

94.6

94.4

94.2

93.9

93.9

93.9

93.8

93.6

93.5

93.3

93.2

93.1

92.9

Transportation

110.5 110.9 111.4 112.1 112.5 113.0 113.7 114.2 114.8 115.4 116.0 116.6 117.3 117.8 118.4 118.9

Other Services

116.6 117.3 117.8 118.5 119.1 119.7 120.4 121.2 122.0 122.8 123.5 124.3 125.1 125.8 126.6 127.4

26

U.S. Forecast | March 2016

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

Table 8. Percent Change in Implicit Price Deflators

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

GDP

1.3

1.8

1.5

2.1

1.5

1.9

2.0

1.7

2.1

1.7

1.8

1.8

1.8

1.7

1.8

1.8

Consumption

-0.7

0.8

1.6

2.5

0.9

1.9

2.3

1.5

2.1

2.0

2.0

2.0

1.9

1.8

1.9

1.9

Durables

-1.6

-2.3

-2.3

-2.2

-2.3

-2.1

-1.9

-1.8

-1.6

-1.4

-1.4

-1.5

-1.4

-1.4

-1.5

-1.6

1.5

0.0

-0.3

-0.2

-0.3

-0.2

0.2

0.3

0.7

1.0

0.9

0.8

0.8

0.8

0.7

0.3

Furniture

-2.6

-0.9

-1.2

-1.6

-1.9

-2.0

-1.8

-1.6

-1.5

-1.4

-1.4

-1.4

-1.4

-1.3

-1.3

-1.3

Other Durables

-2.0

-0.4

-0.3

0.3

0.3

0.3

0.4

0.5

0.6

0.6

0.4

0.5

0.5

0.4

0.4

0.5

Nondurables

-8.2

-0.3

2.8

6.7

-0.6

2.9

3.9

0.4

3.4

2.5

2.5

2.5

2.2

2.4

2.5

2.5

Food

-1.9

1.8

1.8

2.6

3.0

2.8

2.7

2.6

2.2

2.2

2.2

1.9

1.7

1.8

1.9

1.8

Clothing & Shoes

-2.8

0.1

-0.9

-0.1

-0.4

-0.4

-0.4

-0.5

-0.1

-0.2

-0.6

-0.4

-0.6

-0.6

-0.6

-0.5

Gasoline & Oil

-52.4

-14.2

23.7

69.6

-19.8

14.9

26.4

-9.3

19.3

10.7

10.7

10.5

10.1

10.0

10.0

10.7

Fuel

-44.3

24.7

16.1

48.5

-11.6

13.7

22.8

-4.0

15.9

9.9

9.6

9.4

9.2

8.9

8.9

9.3

Services

1.9

1.7

1.9

2.0

1.9

2.2

2.5

2.4

2.3

2.4

2.4

2.4

2.3

2.2

2.3

2.2

Housing

3.0

2.3

2.2

2.0

2.0

2.0

2.2

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

-1.4

-3.8

-0.6

0.8

0.8

2.3

4.7

4.8

2.9

2.3

3.6

4.0

2.7

1.9

2.7

3.3

-10.3

-11.8

6.3

-3.2

1.5

2.1

14.5

3.8

4.4

2.6

12.0

0.9

2.2

0.1

14.6

-0.3

Water & Sewer

4.2

3.0

3.0

2.9

2.8

2.8

2.9

3.2

3.1

3.3

3.5

3.6

3.6

3.6

3.6

3.5

Telephone

1.7

-0.8

-1.9

-0.9

-1.1

-0.7

-1.0

-0.2

-0.1

-0.5

-0.8

-0.5

-0.6

-0.5

-0.6

-0.7

Transportation

1.4

1.8

1.7

2.3

1.5

2.0

2.4

2.0

2.1

2.1

2.1

2.0

2.1

1.9

2.0

1.9

Other Services

0.9

2.4

1.8

2.2

2.2

2.1

2.3

2.5

2.6

2.7

2.5

2.5

2.5

2.5

2.6

2.5

Motor Vehicles

Electricity Natural Gas

Institute for Economic Competitiveness

27

U . S . F orecast T ables

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

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

2009

2010

History 2011 2012 2013

2014

2015

2016

Forecast 2017 2018

2019

GDP

100.0 101.2 103.3 105.2 106.9 108.7 109.8

111.3 113.3 115.5 117.5

Consumption

100.0 101.7 104.1 106.1 107.6 109.1 109.4

110.1 112.0 114.2 116.4

Durables

100.0

Motor Vehicles

100.0 105.7 108.9 110.2 110.9 111.0 111.1

Furniture

100.0

88.9

86.8

84.9

83.5

82.2

81.1

Other Durables

100.0 100.4 103.6 104.2 104.0 102.4

99.9

98.2

98.4

98.9

99.4

Nondurables

100.0 103.1 109.2 111.8 112.0 112.7 109.0

106.8 109.4 112.2 114.9

Food

100.0 100.3 104.3 106.7 107.8 109.8 111.0

111.5 114.5 117.2 119.4

Clothing & Shoes

100.0

102.8 102.4 102.1 101.5

Gasoline & Oil

100.0 118.2 149.3 154.7 150.4 144.7 106.7

87.0

Fuel

100.0 117.0 148.8 150.7 149.0 148.9 106.5

89.2 100.7 111.0 121.2

Services

100.0 101.7 103.5 105.8 108.3 110.8 112.9

115.1 117.4 120.2 123.0

Housing

100.0 100.1 101.4 103.5 106.1 109.0 112.3

115.4 117.9 120.6 123.5

Electricity

100.0 100.2 101.8 101.8 103.9 107.7 108.3

106.6 108.0 111.8 115.1

Natural Gas

100.1

Water & Sewer

100.0 106.3 111.8 118.0 123.3 127.8 133.6

Telephone

100.0

Transportation

100.0 102.0 104.8 106.8 108.1 109.5 109.9

111.2 113.4 115.7 118.1

Other Services

100.0 103.0 105.6 108.3 111.1 113.6 115.5

117.5 120.1 123.1 126.2

28

U.S. Forecast | March 2016

98.6 95.8

97.7 94.2

96.4 94.0

94.7 92.1

92.5

90.6

99.3 101.1 104.6 105.5 105.9 104.5

98.1 99.3

95.1 97.5

85.7 97.7

89.7 97.2

96.1 96.4

84.7 94.3

88.8

86.9

85.5

84.3

111.3 111.2 111.8 112.7

78.2

96.9 107.3 118.3

79.8

84.4

87.8

138.6 142.6 147.2 152.4 95.0

94.1

93.7

93.1

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

Table 10. Percent Change in Implicit Price Deflators

GDP Consumption

2009

2010

0.4

1.8

History 2011 2012 2013 1.9

1.9

2014

2015

2016

1.4

1.1

1.7

1.6

Forecast 2017 2018 1.8

1.9

2019 1.8

1.2

1.3

2.7

1.8

1.2

1.1

0.4

1.0

1.6

2.0

1.9

-0.9

-2.1

-0.5

-1.6

-2.0

-2.4

-1.7

-2.1

-2.0

-1.5

-1.5

5.6

2.9

3.3

0.7

0.5

-0.3

0.2

0.3

0.0

0.8

0.7

-2.0

-4.4

-0.2

-0.4

-3.0

-3.1

-2.3

-1.6

-1.8

-1.4

-1.3

Other Durables

1.3

0.6

3.2

-0.5

-0.6

-1.9

-2.6

-0.6

0.4

0.5

0.5

Nondurables

2.8

2.2

5.9

1.9

-0.4

-0.2

-2.9

0.2

1.7

2.7

2.4

-1.8

1.3

5.1

1.2

0.8

2.8

0.3

1.1

2.8

2.1

1.8

Durables Motor Vehicles Furniture

Food Clothing & Shoes

1.5

-1.4

4.4

2.3

0.2

-0.4

-1.4

-0.9

-0.4

-0.4

-0.6

Gasoline & Oil

26.8

13.4

20.4

4.9

-4.8

-10.1

-13.4

6.7

3.0

12.8

10.2

Fuel

-0.8

15.7

26.2

3.1

-1.1

-7.5

-28.5

11.2

5.2

11.2

9.1

1.1

1.5

2.1

2.3

2.4

2.2

1.9

1.9

2.2

2.4

2.3

Services Housing

0.9

0.3

1.9

2.2

2.6

2.8

3.2

2.4

2.2

2.4

2.4

-0.4

0.5

2.4

-0.6

3.1

3.1

-0.6

-1.3

3.2

3.2

2.7

-18.3

-1.2

-1.6

-4.1

2.6

5.8

-12.2

-4.7

5.5

5.0

4.2

Water & Sewer

6.0

5.7

4.9

6.0

3.7

4.4

4.1

3.3

2.9

3.4

3.6

Telephone

0.6

-1.1

-1.5

0.1

-0.5

-2.1

0.2

-0.5

-0.8

-0.4

-0.6

Transportation

2.2

1.5

3.1

1.3

1.6

1.0

0.2

1.8

2.0

2.1

2.0

Other Services

2.4

2.7

2.8

2.2

2.8

2.1

1.6

1.8

2.3

2.6

2.5

Electricity Natural Gas

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components 2009

2010

2011

History 2012

2013

2014

2015

2016

Forecast 2017 2018

2019

Personal Income Billions Current Dollars Personal Income

12094.8 12477.1 13254.5 13915.1 14068.4 14694.2 15357.4 7787.0

7961.5

Other Labor Income

1077.5

1114.6

1142.0

1165.3

1197.8

1224.0

1264.3

1318.3

1386.6

1440.9

1494.2

937.6

986.7

1068.1

1179.8

1196.3

1268.5

1327.4

1377.0

1439.2

1485.9

1533.0

Farm Income

35.5

46.0

75.6

61.6

88.8

78.1

62.5

57.4

50.0

48.6

46.8

Rental Income

333.7

402.8

485.3

525.3

563.4

610.8

656.3

686.0

706.5

722.7

731.5

Dividends

553.8

544.6

682.3

835.0

789.1

815.5

868.2

877.6

890.5

902.4

906.1

Nonfarm Income

8269.0

8609.9

8839.7

9249.0

9670.8

15938.7 16635.2 17402.7 18194.7

Wages & Salaries

10114.0 10574.8 11032.2 11505.5

Interest Income

1264.3

1195.1

1231.6

1288.8

1271.4

1302.0

1312.6

1301.5

1382.7

1541.3

1719.9

Transfer Payments

2147.5

2324.7

2360.5

2366.4

2426.7

2529.2

2664.3

2781.6

2906.5

3047.4

3201.7

506.3

514.7

423.9

437.2

579.4

611.8

636.8

664.3

695.1

728.3

766.5

Personal Social Insurance Tax

Percent Change, Annual Rate Personal Income

-3.2

3.2

6.2

5.0

1.1

4.4

4.5

3.8

4.4

4.6

4.6

Wages & Salaries

-3.6

2.2

3.9

4.1

2.7

4.6

4.6

4.6

4.6

4.3

4.3

0.2

3.4

2.5

2.0

2.8

2.2

3.3

4.3

5.2

3.9

3.7

-4.2

5.3

8.2

10.5

1.4

6.0

4.7

3.7

4.5

3.3

3.2

-21.8

30.4

66.2

-18.5

44.7

-11.5

-19.3

-7.2

-11.9

-2.7

-3.7 0.7

Other Labor Income Nonfarm Income Farm Income Rental Income

18.4

20.1

20.8

4.4

8.5

8.5

6.7

3.3

3.0

2.0

-33.4

23.8

23.5

46.4

-13.7

7.2

4.4

0.0

2.4

0.6

1.0

Interest Income

-9.2

-1.8

3.3

5.1

-1.4

0.9

2.5

-1.4

10.0

12.6

10.2

Transfer Payments

14.4

7.5

0.4

1.2

2.4

5.1

5.2

4.5

4.3

4.7

5.3

Personal Social Insurance Tax

-1.8

2.4

-13.5

5.2

44.4

5.7

4.0

4.5

4.4

4.7

5.3

Dividends

Institute for Economic Competitiveness

29

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

Table 12. Personal Consumption Expenditures (Current Dollars)

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

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

12488.8 12603.9 12750.8 12920.1 13044.4 13203.2 13364.6 13500.0 13669.6 13815.5 13970.3 14123.0 14285.8 14436.0 14586.6 14736.1

durable goods

1357.8 1368.4 1383.0 1400.5 1419.9 1437.1 1455.2 1469.1 1482.2 1494.0 1509.5 1523.6 1534.3 1543.9 1553.9 1562.7

furniture and appliances

304.2

306.8

309.0

312.8

315.0

317.8

320.3

322.4

325.2

327.6

330.0

332.1

333.5

335.0

336.7

338.4

information processing equipment

109.9

111.2

111.7

112.1

113.0

113.9

114.8

115.7

116.6

117.4

118.3

119.2

119.6

120.5

121.1

121.8

motor vehicles and parts

462.2

464.8

474.6

482.8

494.5

502.8

511.7

517.4

521.3

524.3

530.6

535.5

540.0

542.3

545.9

547.6

other durable goods

141.7

142.5

143.0

143.9

144.8

145.9

147.0

148.0

148.9

149.6

150.5

151.5

152.2

153.1

153.8

154.7

2622.6 2638.0 2681.6 2747.9 2760.3 2799.8 2843.1 2860.7 2904.8 2937.1 2969.8 3003.7 3040.5 3076.8 3112.7

3148.8

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

375.7

375.4

379.1

384.8

386.3

388.3

389.2

390.6

396.6

399.1

400.5

401.8

404.4

406.5

408.3

16.1

17.6

18.5

20.6

20.1

20.9

21.9

21.6

22.2

22.5

22.8

23.2

23.5

23.8

24.1

24.5

227.8

223.6

237.7

271.6

258.5

269.5

286.3

280.0

293.8

303.0

312.1

321.7

331.9

342.0

351.7

361.3

964.3

971.9

979.5

986.8

993.2 1000.5 1008.1 1015.5

895.4

903.8

911.6

920.8

930.5

940.9

949.5

957.0

1107.5

1117.6

1134.8

1150.1

1164.9

1180.3

1196.1

1211.5

410.1

1228.0 1240.6 1254.9 1270.2 1287.6 1303.9 1320.5 1337.4

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

11397.7 11478.6 11566.8 11648.1 11733.3 11821.6 11898.6 11973.9 12061.5 12130.9 12205.6 12279.2 12363.7 12436.6 12506.3 12576.2

durable goods

1515.4 1536.0 1561.4 1589.8 1621.0 1649.5 1678.1 1701.8 1723.8 1743.7 1768.2 1791.3 1810.4 1828.3 1847.0 1864.7

furniture and appliances

356.6

360.5

364.1

370.1

374.5

379.7

384.4

388.5

393.3

397.7

402.0

405.9

409.1

412.3

415.7

419.2

information processing equipment

173.5

178.7

182.8

187.0

192.1

197.3

202.7

208.2

213.8

219.3

225.0

231.0

236.0

242.2

247.9

254.1

motor vehicles and parts

415.0

417.3

426.4

433.9

444.8

452.6

460.3

465.1

467.8

469.4

474.0

477.4

480.4

481.5

483.8

485.0

other durable goods

146.2

147.1

147.7

148.5

149.4

150.6

151.7

152.7

153.5

154.1

155.1

156.1

156.8

157.9

158.7

159.6

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

2471.9 2488.5 2512.5 2533.3 2548.9 2566.9 2581.4 2594.9 2613.2 2626.0 2638.7 2652.5 2670.8 2686.7 2701.6 2715.8 365.1

364.8

369.1

374.8

376.7

379.1

380.3

382.1

388.0

390.7

392.7

394.5

397.5

400.2

402.6

19.7

20.4

20.6

20.8

21.0

21.1

21.0

20.9

20.7

20.5

20.3

20.2

20.0

19.8

19.7

404.8 19.5

270.9

276.2

278.4

278.8

280.4

282.3

282.9

283.5

284.6

286.2

287.4

288.9

291.0

292.8

294.0

294.5

808.7

812.6

815.8

818.8

821.3

824.6

826.5

827.8

829.7

831.8

833.7

835.9

837.7

840.2

842.5

845.0

1018.2 1026.1 1040.2 1051.8 1061.5 1071.8 1082.6 1092.6 1102.7

1109.5

1117.4

1126.0

1137.9

1147.2

1156.6

1166.0

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

2.7

2.8

3.1

2.8

2.9

3.0

2.6

2.5

2.9

2.3

2.5

2.4

2.8

2.4

2.2

2.2

durable goods

4.8

5.4

6.6

7.3

7.9

7.0

6.9

5.6

5.2

4.6

5.6

5.2

4.3

4.0

4.1

3.8

furniture and appliances

4.8

4.4

4.0

6.6

4.7

5.5

4.9

4.3

5.0

4.5

4.2

3.9

3.1

3.1

3.4

3.3

information processing equipment

8.4

11.9

9.2

9.1

11.0

10.9

10.8

11.0

10.7

10.2

10.5

10.6

8.8

10.4

9.4

10.1

motor vehicles and parts

3.4

2.2

8.7

7.1

10.1

7.0

6.9

4.1

2.3

1.3

3.9

2.9

2.5

0.9

2.0

1.0

other durable goods

9.3

2.4

1.5

2.3

2.4

3.0

2.9

2.7

2.2

1.7

2.5

2.6

1.8

2.6

2.0

2.3

nondurables

2.5

2.7

3.9

3.3

2.5

2.8

2.3

2.1

2.8

2.0

1.9

2.1

2.8

2.4

2.2

2.1

clothing & shoes

2.1

-0.4

4.8

6.2

1.9

2.6

1.3

1.9

6.2

2.8

2.1

1.8

3.1

2.8

2.4

2.2

13.2

15.1

4.2

4.3

2.4

1.7

-0.7

-2.0

-4.3

-3.6

-3.7

-2.5

-3.5

-3.5

-2.8

-3.5

gasoline & motor oil

3.2

7.8

3.2

0.5

2.3

2.8

0.8

0.8

1.6

2.3

1.7

2.1

2.9

2.5

1.6

0.7

food

1.0

2.0

1.6

1.5

1.2

1.6

0.9

0.6

0.9

1.0

0.9

1.1

0.9

1.2

1.1

1.2

other nondurable goods

3.5

3.2

5.6

4.5

3.7

3.9

4.1

3.7

3.7

2.5

2.9

3.1

4.3

3.3

3.3

3.3

fuel oil & coal

30

U.S. Forecast | March 2016

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

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

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

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

9847.0 10202.2 10689.3 11050.6 11392.3 11865.9 12267.9

durable goods

1023.3

1070.7

1125.3

1191.9

1237.8

1280.2

1328.8

1377.4

1445.3

1502.4

1548.7

244.3

250.4

260.7

271.4

280.2

287.9

298.9

308.2

318.9

328.7

335.9

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

12690.9 13278.0 13894.6 14511.1

81.2

90.3

91.9

98.6

101.2

102.6

106.5

111.2

114.4

117.9

120.7

317.1

342.0

363.5

395.8

416.7

440.2

457.0

471.1

506.6

527.9

544.0

105.5

110.0

121.4

127.3

131.5

132.9

136.1

142.8

146.4

150.2

153.5

2175.1

2292.1

2471.1

2547.2

2598.9

2668.2

2649.8

2672.5

2816.0

2953.9

3094.7

306.5

320.6

338.9

354.3

362.5

368.9

376.4

378.8

388.6

399.5

407.3

24.3

26.2

29.2

26.4

27.4

28.4

21.0

18.2

21.1

22.7

24.0

gasoline & motor oil

260.2

307.3

380.4

390.5

385.6

372.8

284.5

240.2

273.6

307.7

346.7

food

770.0

788.9

829.1

848.8

866.0

886.5

896.2

907.9

944.5

975.6

1004.3

other nondurable goods

814.2

849.2

893.5

927.3

957.5

1011.7

1071.8

1127.5

1188.2

1248.4

1312.3

nondurables clothing & shoes fuel oil & coal

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

9847.0 10036.3 10263.5 10413.2 10590.4 10875.7 11211.3

durable goods

1023.3

1085.7

1151.5

1236.2

1307.6

1384.1

1467.0

1550.7

1662.6

1756.8

1837.6

244.3

261.5

276.6

288.7

304.3

323.9

344.3

362.9

381.8

399.7

414.1

81.2

97.2

108.0

125.2

138.8

149.4

163.5

180.5

200.1

222.3

245.1

317.1

323.4

333.8

359.1

375.8

396.7

411.5

423.1

455.7

472.2

482.7

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

11522.8 11856.8 12169.3 12470.7

105.5

108.9

115.1

120.2

124.9

129.7

137.5

147.4

151.1

154.7

158.2

2175.1

2223.5

2263.2

2277.5

2319.8

2367.8

2431.4

2501.6

2573.0

2632.6

2693.7

306.5

322.7

335.3

338.9

343.5

348.4

360.1

368.5

379.5

391.5

401.3

24.3

22.4

19.6

17.5

18.4

19.1

19.8

20.4

21.0

20.4

19.8

gasoline & motor oil

260.2

259.9

254.7

252.5

256.3

257.7

266.5

276.1

282.3

286.8

293.1

food

770.0

786.5

795.1

795.7

803.4

807.5

807.6

814.0

825.1

832.8

841.4

other nondurable goods

814.2

833.0

863.2

880.7

906.3

945.0

987.6

1034.1

1077.1

1113.9

1151.9

nondurables clothing & shoes fuel oil & coal

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

-0.2

3.1

1.5

1.3

2.3

3.2

2.6

2.9

2.8

2.6

2.4

3.0

9.3

4.9

7.3

4.6

7.5

5.2

6.2

7.0

5.3

4.1

furniture and appliances

-2.0

8.3

5.8

3.1

6.7

6.9

6.0

5.0

5.0

4.5

3.3

information processing equipment

12.9

16.8

13.9

16.7

6.3

9.6

9.7

10.0

11.4

10.9

10.0

motor vehicles and parts

7.9

11.0

1.5

7.4

2.3

8.5

1.1

5.5

7.2

2.6

1.6

other durable goods

0.6

5.5

3.2

8.1

1.9

4.0

8.7

4.0

2.8

2.3

2.2

nondurables

0.2

3.3

0.4

0.8

2.6

2.4

2.7

3.1

2.4

2.2

2.4

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

-1.0

7.6

1.1

0.9

1.8

3.6

2.1

3.2

1.9

3.3

2.6

7.5

-7.6

-12.6

5.5

16.4

-3.3

6.3

9.7

0.4

-3.5

-3.3

-1.1

2.2

-3.1

-0.9

2.7

2.2

2.6

3.8

1.7

1.9

1.9

2.1

2.1

-0.4

0.6

1.4

-0.3

0.1

1.5

1.1

1.0

1.1

-0.6

3.6

2.8

1.9

3.8

4.7

5.0

4.2

3.9

3.1

3.6

Institute for Economic Competitiveness

31

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

Table 14. Business Fixed Investment History

2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Billions Current Dollars Business Fixed Investment

1633.4 1658.2 1812.1 2007.7 2084.3 2233.7 2302.4

2353.3 2458.3 2609.8 2769.7

Producers Dur. Equipment

644.3

731.8

838.2

937.9

972.3 1036.7 1075.7

Nonresidential Structures

438.2

362.0

381.6

448.0

462.1

507.0

497.0

492.6

511.3

544.4

597.1

Non-Farm Buildings

249.1

173.7

170.2

191.6

203.8

232.5

290.2

308.3

317.7

338.8

376.4

Commercial

95.4

64.7

66.8

75.6

84.2

103.1

118.1

126.4

138.1

147.2

166.6

Industrial

56.3

39.8

39.0

45.8

48.8

56.1

85.2

87.8

76.2

77.8

87.5

Other Buildings

97.4

69.2

64.5

70.2

70.7

73.3

87.0

94.2

103.4

113.8

122.3

104.3

93.3

90.7

112.2

108.9

117.1

106.3

111.1

109.4

111.0

115.3

75.0

86.2

112.3

134.1

137.7

144.4

87.5

59.5

68.1

78.1

88.9

Utilities Mines & Wells

1104.5 1159.0 1239.6 1309.2

Billions 2005 Dollars Business Fixed Investment

1633.5 1673.8 1802.3 1964.2 2023.8 2148.3 2209.7

2268.1 2355.8 2461.8 2570.8

Producers Dur. Equipment

644.3

746.7

847.9

939.2

969.5 1026.2 1057.5

Nonresidential Structures

438.2

366.3

374.7

423.1

429.7

464.6

457.6

452.8

457.9

470.2

497.4

Non-Farm Buildings

249.1

179.3

172.3

188.8

196.1

216.5

265.0

277.5

278.8

287.5

308.2

Commercial

95.4

66.6

67.3

73.9

80.6

96.1

107.9

114.8

123.6

128.1

140.2

Industrial

56.3

40.8

39.1

44.9

46.8

52.0

77.5

77.3

63.5

61.7

66.5

Other Buildings

97.4

71.9

65.9

70.0

68.6

68.2

79.4

85.3

92.2

98.6

102.5

104.3

89.8

82.8

99.1

95.1

101.0

91.0

94.2

88.5

85.7

85.9

75.0

87.8

110.9

123.8

126.7

135.0

87.7

64.4

74.5

83.0

90.9

Utilities Mines & Wells

1099.6 1155.1 1221.7 1275.7

Annual Growth Rate Business Fixed Investment

-14.2

8.6

10.9

6.9

5.1

6.6

1.7

3.3

5.0

6.7

5.7

Producers Dur. Equipment

-11.4

20.2

14.4

8.4

4.2

6.5

2.9

3.2

6.3

6.7

5.2

Nonresidential Structures

-32.2

-0.6

15.3

7.8

9.0

6.6

-4.4

2.7

2.9

9.6

8.8

Non-Farm Buildings

-34.0

-21.1

14.7

7.3

9.8

19.9

20.0

3.8

1.6

11.2

9.8

Commercial

-44.7

-16.8

14.7

9.9

18.7

24.4

7.0

8.8

6.1

11.8

11.5

Industrial

-11.9

-28.8

37.4

8.1

9.1

27.6

46.4

-4.5

-15.6

12.7

11.7

Other Buildings

-29.7

-19.5

3.6

4.5

1.7

9.3

20.9

5.3

11.1

9.6

6.4

-4.1

19.0

2.4

18.4

17.8

-12.2

12.6

2.9

-2.1

3.8

3.9

-42.8

53.6

36.6

1.9

5.9

9.4

-54.1

0.1

14.2

14.2

13.4

Utilities Mines & Wells

32

U.S. Forecast | March 2016

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

Table 15. Government Receipts and Expenditures History 2009

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Federal Government Receipts and Expenditures Receipts

2238.4

2443.3

2574.1

2699.1

3141.3

3265.2

3435.2

3551.7

3609.2

3684.9

3827.6

Personal Tax and Nontax Receipts

864.5

941.6

1129.1

1164.7

1300.6

1396.9

1537.6

1594.4

1628.6

1640.5

1699.2

Corp. Profits Tax Accruals

200.4

298.7

299.4

363.1

379.3

417.9

429.8

439.4

389.8

371.5

365.5

91.4

96.8

108.6

115.1

125.8

137.8

142.5

136.4

143.6

154.2

164.1

950.8

970.9

904.0

938.2

1093.4

1145.2

1191.0

1242.8

1300.7

1362.8

1434.3

Expenditures

3487.2

3772.0

3818.2

3789.1

3782.2

3896.7

4023.2

4171.5

4312.3

4514.7

4727.6

Purchases Goods & Services

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

1217.7

1303.9

1303.5

1292.5

1230.7

1219.9

1224.7

1267.6

1280.1

1286.9

1299.9

National Defense

788.3

832.8

837.0

817.8

767.7

748.2

740.9

756.3

770.0

779.4

790.1

Other

429.4

471.1

466.5

474.7

463.0

471.6

483.9

511.4

510.1

507.6

509.8

Transfer Payments

2142.9

2333.2

2327.0

2300.8

2346.0

2444.0

2564.4

2673.0

2791.4

2927.8

3067.1

To Persons

1616.2

1757.9

1779.9

1783.6

1823.2

1877.3

1960.1

2036.7

2127.1

2240.2

2358.1

52.7

53.5

57.6

55.3

53.9

52.3

52.6

52.2

53.9

54.9

55.9

Grants in Aid to State & Local Gov't

To Foreigners

458.1

505.3

472.5

444.0

450.1

494.8

531.5

562.7

588.1

609.5

628.9

Net Interest

330.8

351.0

398.0

401.6

393.3

416.6

414.0

426.6

426.1

475.4

530.2

Subsidies less Surplus of Gov't Entities

56.2

57.4

66.7

66.5

70.2

67.1

66.2

68.3

69.9

70.3

70.5

-1248.8

-1328.7

-1244.2

-1090.1

-641.0

-631.5

-588.0

-619.8

-703.2

-829.8

-900.0

Receipts

1919.2

1998.5

2030.5

2057.2

2136.5

2225.0

2324.4

2388.6

2490.3

2592.4

2696.6

Personal Tax/Nontax Receipts

1268.1

1305.7

1368.3

1416.1

1479.8

1517.5

1562.3

1604.4

1671.1

1741.9

1816.7

287.8

297.6

324.1

346.7

372.2

383.3

409.1

423.9

433.7

448.4

466.7 57.1

Surplus (+) or Deficit (-)

State and Local Government Receipts and Expenditures

Corporate Profits Indirect Business Tax and Nontax Accruals

45.6

47.7

50.2

52.5

55.5

58.3

59.1

59.9

59.9

58.8

Contributions for Social Insurance

18.6

18.2

18.2

18.1

18.6

18.9

18.8

19.2

20.1

21.0

21.9

458.1

505.3

472.5

444.0

450.1

494.8

531.5

562.7

588.1

609.5

628.9

2529.85 2609.92 2700.46

2810.3

Federal Grants-In-Aid Expenditures Purchases Goods & Services

2191.15 2235.85 2246.40 2277.93 2323.60 2392.73 2461.38 1871.4

1870.2

1865.3

1866.0

1883.6

1932.3

1959.3

2003.1

2066.9

2141.7

2217.0

Transfer Payments

566.1

612.0

582.2

558.0

571.2

621.5

673.4

690.9

719.9

744.9

768.0

Interest Received

114.3

123.0

125.9

141.4

142.1

122.6

128.5

125.5

116.1

113.3

120.5

22.8

21.4

17.9

10.8

7.9

9.1

8.6

6.7

4.7

2.7

0.7

2.2

2.3

2.7

3.3

3.7

3.8

4.3

4.2

4.2

4.3

4.3

-271.9

-237.3

-215.9

-220.8

-187.1

-167.7

-136.9

-141.3

-119.6

-108.0

-113.7

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

Institute for Economic Competitiveness

33

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

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

2010

2011

2012

Forecast 2013

2014

2015

2016

2017

2018

2019

Billions of Dollars Net Exports Goods & Services

-395.5

-512.7

-580.0

-565.7

-508.4

-530.0

-531.9

-424.8

-465.0

-559.1

-612.8

Current Account

-384.0

-442.0

-460.4

-449.7

-376.8

-389.5

-466.4

-378.4

-390.0

-511.2

-594.1

Exports -Goods & Services

1587.7

1852.3

2106.4

2198.2

2263.3

2341.9

2253.0

2240.5

2374.9

2525.8

2679.7

Merchandise Balance

-509.7

-648.7

-740.6

-741.2

-702.6

-741.5

-761.1

-673.8

-722.7

-827.7

-901.3

Food, Feed & Beverage

93.91

107.72

126.25

133.05

136.16

143.75

127.16

122.64

131.88

136.80

142.2

Industrial Supplies Excl Petroleum

293.5

388.6

485.3

483.2

492.3

500.0

420.4

408.8

468.5

515.4

558.7

81.7

112.0

133.0

146.2

152.7

159.7

151.9

156.2

174.1

196.4

211.7

391.5

447.8

494.2

527.5

534.5

551.3

539.0

517.8

516.8

530.9

547.5

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

37.7

43.8

48.5

49.2

48.1

48.8

47.2

44.4

44.6

47.7

50.5

Other

279.0

332.1

365.4

383.9

381.4

389.5

373.4

357.7

356.3

365.1

375.0

Consumer Goods, Excl. MVP

149.3

164.9

174.7

181.0

188.4

198.3

197.0

186.8

179.8

174.3

174.8

55.2

58.6

53.4

55.1

56.9

64.9

69.6

66.9

70.7

73.5

78.3

522.6

572.7

639.5

672.2

702.3

723.9

747.9

781.2

833.2

898.5

966.6

Other Consumer Services

Billions of Dollars Imports -Goods & Services

1983.2

2365.0

2686.4

2763.8

2771.7

2871.9

2784.9

2665.2

2839.8

3084.9

3292.6

Merchandise

1590.3

1949.8

2244.7

2305.8

2301.9

2388.5

2282.8

2151.3

2280.6

2468.3

2625.2

82.9

92.5

108.3

111.1

116.0

126.7

128.8

120.1

115.2

122.4

128.9

Petroleum & Products

267.7

353.6

462.1

434.3

387.8

350.9

193.1

121.0

166.7

197.0

226.1

Industrial Supplies Excl Petroleum

196.6

249.4

292.7

288.8

291.2

316.0

290.9

264.0

286.7

308.8

321.3

Motor Vehicles & Parts

159.2

225.6

255.2

298.5

309.6

328.5

348.9

344.0

350.8

376.2

388.0

Capital Goods, Excl. MVP

374.1

450.4

513.4

551.8

557.9

595.7

603.3

602.1

634.1

681.1

724.5

94.2

117.3

119.7

122.3

121.2

121.7

120.8

117.7

118.5

121.9

124.9

Other

249.2

301.9

358.2

389.4

389.7

420.9

427.8

429.4

460.8

503.9

543.0

Consumer Goods, Excl. MVP

429.9

485.1

515.9

518.8

534.0

559.4

597.2

585.6

602.1

644.2

685.8

Food, Feed & Beverage

Computer Equipment

Other Consumer

80.0

93.1

97.1

102.4

105.5

111.3

120.7

114.6

124.9

138.6

150.7

392.9

415.2

441.6

458.0

469.8

483.4

502.1

513.9

559.3

616.6

667.4

Net Exports Goods & Services

-395.4

-458.8

-459.4

-447.1

-417.5

-442.5

-547.1

-587.9

-663.6

-731.4

-741.1

Exports G & S

1587.7

1776.6

1898.3

1963.2

2018.1

2086.4

2109.5

2141.0

2228.7

2328.2

2434.3

Imports G & S

1983.2

2235.4

2357.7

2410.2

2435.6

2528.9

2656.5

2728.9

2892.3

3059.6

3175.4

Exports G & S

4.1

15.3

8.7

3.4

5.1

1.2

-5.5

3.7

5.7

6.5

6.0

Imports G & S

0.9

15.0

10.9

0.3

1.6

3.9

-5.2

-0.9

8.2

8.3

6.1

Real Exports G & S

3.0

10.1

4.2

2.2

5.3

2.6

-0.7

3.3

3.9

4.7

4.5

Real Imports G & S

-3.6

12.2

3.5

0.3

2.4

5.5

3.4

3.6

6.9

5.0

3.4

Services

Billions 2005 Dollars

Exports & Imports % Change

34

U.S. Forecast | March 2016

SEAN M. SNAITH, PH.D.

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

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