U.S. Forecast December 2011

U.S. Forecast December 2011

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

Meet Interim Dean fOARD f. jONES It is hard to believe, but yet another year has flown by. We are about to ring in 2012!

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

On New Year’s Eve, many of us will gather to watch the ball drop at Times Square and toast our friends and family at midnight. But what happens the next day, or the day after that?

After all the celebrations end on December 31, what will occur during the next 356 days?

A new year, brings new possibilities. In fact, there are only a few things we know for certain about 2012. For example, we know it is a leap year, and we know the Summer Olympics will be held in London.

We also know that the coming year will be an extremely important election year for our nation. Will we have a new president or will President Obama remain in office? At this point it is hard to say. One thing I can assure you, however, is that we will be hearing all about the election for the next 11 months!

Hopefully all the politicians who are either elected or reelected into office, whether it be at the national, state or local level, will be successful leaders and help us to get our country and our economy back on track. Only time will tell.

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

Until then, I wish you all a Happy New Year and I look forward to addressing you again in 2012!

Sincerely,

Foard F. Jones Interim Dean

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

Fo r eca s t fo r t h e Nati o n Forecast 2011 - 2014 December 2011 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2011 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 Elaine Vogt, Administrative Assistant Alexandra Betrone-Harpst, Researcher Jessica Fears, Researcher Sangitha Palaniappa, Researcher Nicholas Simons, 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.

Hi g h l i g h t s o f t h e 4 Q 2 0 1 1 U . S . F OR E C A ST In this Issue of the U.S. Forecast: • Game Euro-ver? Can the common currency survive this uncommon debt crisis?

• Consumer spending growth averaged 3.6% per year in the ten years leading up to the recession. For the first five years after the recession ended, that average growth will be just 2.0%.

• What do the Occupy Wall Street movement and Black Friday have in common? They are both overhyped and mean little in the big picture.

H I GHL I GHTS

• Inflation remains subdued and opens the door for further intervention by the Federal Reserve. Can anyone say, “Quantitative Easing III?” • Consumers’ balance sheets still bear the loss of home equity. Home equity remains essentially at the same levels seen at the nadir of the financial crisis. This burden of lost wealth will keep consumer-spending growth subdued through 2014.

• The next big economic jolt to come out of Washington, DC will be the elections. Until then, extension of payroll tax breaks and emergency unemployment insurance will be the limit of economic policy action.

• The U.S. economy lost impetus in the first half of 2011. The second half is a marked improvement over the first. Real GDP growth should accelerate to 2.7% in the fourth quarter after 2.0% growth in the third quarter. 2012 does not look as promising.

• GDP growth in 2012 should average 1.8% and accelerate to 2.2% in 2013 and then to 3.3% in 2014.

• Economists are less stressed over a potential double-dip recession after reassuring reports on 3rd quarter real GDP growth. Consequently, the fourth quarter’s Anxious Index has eased to 16.5%.

• Payroll employment growth remains sluggish. Policy uncertainty is a black cloud over the private sector and firms have been slow to hire new workers. Consequently, payrolls will only expand 1.3% in 2012. Postelection growth rises in 2013 to 1.4% and then again to 1.7% in 2014.

• A slow labor market recovery will ease foreclosures and expand the pool of potential buyers. Home prices should begin to reflect these labor market improvements in 2013 and 2014.

• Unemployment rates have recently dropped to 8.6%, in part due to a shrinking labor force. It is likely to linger in the range of 8.8% for 2012.

Unemployment rates will drift to 8.4% by the end of 2013 before falling ever so slowly to 7.7% by the end of 2014.

U . S . F o r eca s t

Game Euro-ver?

Can the Common Currency Survive this Uncommon Debt Crisis?

Early in 2010, there were the first rumblings of the debt earthquake that is now shaking the foundation of the European Union and its common currency, the Euro. It was revealed that Greece was running budget deficits far in excess of the government finance criteria of the Maastricht Treaty (also known as the Treaty of the European Union) limit of 3% of GDP and its national debt to GDP ratio had exceeded the 60% limit also set out in the Maastricht Treaty. The deficit to GDP ratio had hit 15% and the debt-to-GDP ratio stands in excess of 160%.

Financial markets around the world responded dramatically to this information, and as the crisis evolved, U.S. markets plunged as well. Why did world financial markets react so virulently to a sovereign debt crisis in a country whose GDP represents less than 0.5% of global GDP? (Florida’s economy is more than twice the size of the Greek economy).

Exposure to Greek Sovereign debt is limited in the U.S. but the fear at the time, which has turned out to be warranted, was that the crisis would spread to affect other countries in the Euro zone.

These countries have been collectively referred to as the PIIGS (Portugal, Ireland, Italy, Greece and Spain). All suffer from excessive debt problems to a varying degree and collectively they do represent a significant portion of the Euro area and the European Union as a whole (40% and 27% respectively).

Greece was merely the tip of this debt iceberg that is truly threatening to sink the common currency.

Markets quickly assessed the size of the iceberg and the fallout from a potential collapse of the Euro and in this context the reaction of financial markets seems far more rational than it appeared at first glance.

History has taught us that fixed exchange rate agreements between countries come under severe duress, and can ultimately collapse, when the countries that are party to the fixed exchange rate arrangement pursue divergent economic policies.

A common currency is the ultimate fixed exchange rate agreement. The architects of the Euro knew that fiscal and monetary policy must be consistent across

member states or risk the same fate as the Bretton Woods system of fixed exchange rates that came under speculative attack in the late 1960’s and finally collapsed in the early 1970’s.

The creation of the European Central Bank (ECB) ensured that monetary policy would be consistent across the Euro zone. But what about fiscal policy?

That is where the Maastricht treaty comes in—or where it was supposed to come in. All countries were supposed to adhere to the government finance criteria laid out in the treaty and discussed above, but these criteria were flouted by countries like Greece (Germany too violated these agreements, albeit not as egregiously as Greece) who misrepresented their fiscal situation and ran policies that grossly violated this agreement and ultimately have pushed the Euro to the precipice. Without a fiscal equivalent to the ECB, the future of the Euro is at best uncertain.

It’s a Bird, It’s a Plane, It’s Another Historic Agreement in Europe With the world watching and the future of the Euro and perhaps the EU on the line, European leaders came up with yet another historic agreement designed to stave off the debt crisis and rescue the Euro whose fate has become increasingly uncertain.

This “historic agreement” sounds like it must be some bold, decisive, and definitive solution that was arrived at after long-drawn-out negotiations, but any agreement designed to address the sovereign debt problem in Europe will be “historic” simply by virtue of the fact that the Euro and European Union are historic economic experiments in and of themselves.

Any new twist on these paradigms must then by definition be historic as well. The real question is, did the agreement solve Europe’s problems? The answer to this question is, “not all of them, and maybe not any of them in the long run.”

The central thrust of the latest agreement was meant to give some teeth to the provisions laid out in the Maastricht Treaty. Countries will be required to Institute for Economic Competitiveness

5

U . S . F o r eca s t

keep annual budget deficits less than 0.5% of GDP during “normal” times and 3% of GDP during times of recession or other unusual circumstances. Going beyond 3% will bring sanctions that are a function of how badly the country has exceeded the deficit limits.

Making these government finance provisions binding (if indeed they are made so) by something other than moral suasion or a sense of European duty is a sensible step for the long run stability of the Euro, but the steps taken to address the extent of the immediate debt crisis seem inadequate.

What does all this mean? As far as the debt crisis in Europe and the problems associated with it, we may all feel like the little girl in Poltergeist II who uttered the catch phrase, “They’re Baaaack!” On the upside, whatever happens will be historic.

Household Wealth Declines in Third Quarter According to the latest Flow of Funds report released by the Board of Governors of the Federal Reserve Bank, more than $2.4 trillion dollars of wealth was lost between the second and third quarter of this year. This is a troubling development as wealth remains nearly $8 trillion down from the prerecession/financial crisis peak.

Instability and uncertainty over the European debt crisis hit financial markets in the third quarter and the fall in the value of financial assets drove this loss in wealth. There was no corresponding offset in

home equity values as equity has essentially remained unchanged from the nadir of the housing crisis.

In the face of this lost wealth, households have been working to deleverage, to reduce their debt to income ratios and in the process try to rebuild those nest eggs devastated by the housing and financial crises.

There have been signs of consumer credit expanding, driven in part by the pent-up demand for automobiles and light trucks. The willingness of consumers to go back to using credit cards to finance purchases should be elucidated with the holiday shopping season now in progress. There may be a tentative return to using credit cards, but the wholesale and freewheeling use of this type of revolving credit seems unlikely in this “mini age of austerity.”

Table 1 displays data from the latest release of the Flow of Funds report. As you can see, the level of home equity is stuck at $6.2 trillion, more than two years after falling to this level at the low point of the financial crisis. Home ownership is a key source of wealth for families in the United States, and the recovery of this lost wealth has yet to begin in the housing market.

Lost wealth is proving to be a stubborn and long lasting legacy of the financial and housing crises.

Improvement in the fourth quarter seems likely given the recent performance of financial markets, but there is still a gaping crater where once trillions of dollars of wealth did lay. The impact of its absence will weigh on the shoulders of consumers, and thus the entire U.S. economy, for years to come.

Table 1. U.S. Flow of Funds Household Data (Trillions of dollars) 2005

2006

2007

2008

2009Q1*

2011Q3

Total Assets

71.3

78.6

79.5

66.6

62.8

71.1

Financial Assets

42.9

49.0

51.4

42.2

39.6

47.7

Home Equity

13.2

12.8

10.3

7.0

6.1

6.2

Net Worth

59.1

65.1

65.1

52.4

48.7

57.3

* = Bottom of Financial Crisis

6

U.S. Forecast | December 2011

Source: Federal Reserve Board of Governors

U . S . F o r eca s t

Figure 1.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1970:Q1 to 2011:Q 100

Probability (percent)

90 80 70 60 50 40 30 20

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

0

1970

10

Survey Date

Anxious Index Chilling Out? The most recent release (fourth quarter of 2011) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 44 forecasters surveyed for the publication are about 16.5% convinced that a decline in real GDP will occur in the first quarter of 2012.

The survey asks panelists to estimate the probability that real GDP will decline in the quarter in which the survey is taken, as well as the probabilities of a decline in each of the following four quarters.

The anxious index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in a real GDP in the quarter after a survey is taken. In the survey taken in the fourth quarter of 2011, the index stands at 16.57%, which means that forecasters believe there is a 16.57% chance that real GDP will decline in the first quarter of 2012, down from last quarter’s anxious index of 20.92%. This value of the anxious index is still much higher than the readings in the first half of 2011.

The forecasters also report just an 11.82% chance that we are currently (as of the fourth quarter of 2011) in a recession. According to the panel, the probability

that we will fall back in to recession is averaging around 17.1% through the end of the fourth quarter of 2012, which implies the possibility of a recession in the upcoming year has eased somewhat in the minds of these forecasters since last quarter. The easing in anxiety over the future of this economic recovery comes in the wake of a more solid report on real GDP growth in the third quarter of 2011 (2.0%) and indications that the fourth quarter may be even better.

The graph above plots the historical values of the anxious index and gray bars indicate periods of recession in the U.S. economy. The current levels of the anxious index reflect concerns over the strength of the U.S. recovery and the potential fallout from the European sovereign debt crisis.

GDP Outlook The pace of economic recovery slowed significantly in the first half of 2011. First quarter real GDP growth decelerated to just 0.4% from the 2.3% rate of expansion in the fourth quarter of 2010. The second quarter was an improvement over the first, albeit nothing to celebrate with growth still tepid at 1.3%.

By comparison, the first two quarters of 2010 growth averaged 3.9%.

Institute for Economic Competitiveness

7

U . S . F o r eca s t The third quarter was an improvement over the first two with growth coming in at 2.0% as of the second reading on GDP growth. Preliminary data suggest that inventory disinvestment will help boost growth in the fourth quarter. Consumption should see an uptick as oil prices have fallen over the quarter taking some of the pressure off household budgets, and consumers seem to be venting, for the time being, some of the pent-up demand built up during the recession. Fourth quarter GDP growth is expected to be a healthy, but not robust, 2.7% Should we expect this acceleration of GDP growth in the second half of 2011 to persist into 2012? Unfortunately, no, as we anticipate that the staccato pattern of this economic recovery will persist and growth will again decelerate in 2012 to just 1.8%. Fiscal restraint and continued deleveraging by consumers will weigh down on the economy as the looming of the 2012 presidential election will become the focal point of the year.

The second half rebound in 2011 reinforces the most likely scenario that the economic recovery will continue to limp along as opposed to slipping back into another recession. I believe the probability of a double dip is now around 25%; better growth in the second half of the year is the tonic the economy needed and the biggest risk to the U.S. recovery in the near term is the ongoing crisis in Europe. While the fat lady has not begun to sing on the sovereign debt problems in Europe as we discussed above, the recent accord may be enough to prevent an outright collapse in the near term and with it prevent a large negative shock to the global economy.

Real GDP growth will bounce back to 2.2% in 2013 and accelerate to 3.3% for the full year in 2014.

That growth rate in 2014 will represent the strongest annual growth in the U.S. economy since 2004.

There is still significant pent-up demand in the economy. However, its release will come in a series of short-lived bursts after which consumers will return to licking their wounded balance sheets in an attempt to repair the significant damage that has been done there.

Business investment in structures, which has languished for two years, has seen a transitory surge in 2011 owing mainly to surges in mining and petroleum 8

U.S. Forecast | December 2011

spending. Uncertainty still hangs over companies like a black cloud and despite record levels of corporate profits, firms are hesitant to hire and to invest in structures, though spending on IT should continue as this type of investment helps to raise productivity and lower costs.

The government sector will continue to be a drag on the economy. Federal budget deficits, the $15.1 trillion national debt, the debt ceiling showdown and subsequent failure of the misnamed super committee to agree to just $1.2 trillion in spending cuts over TEN YEARS (which, by the way, really amounts to squat as far as our deficit and debt problems are concerned) have dramatically changed the policy discussion from stimulus to austerity. Real government spending will decline an average of 3.1% per year during 2012-2014.

At the state and local government level, budget deficits have prompted spending cuts, tax hikes and layoffs—all of which are weighing down on the economic recovery in the affected states, particularly as federal budgetary band aids go by the wayside and the prospect for further help has, like Elvis, left the building.

Fiscal policy as a driver of economic growth looks to be at best limited to select elements of the American Jobs Act such as payroll tax cuts and extended unemployment benefits. Other components, like expanded infrastructure spending, are DOA. The next best chance for a real boost to the economy emanating from Washington, D.C. may very well be the 2012 election.

C o n s u m e r Spe n d i n g

It seems like a lifetime since the U.S. consumer was leading the economy during the heyday of the housing market when the economy flourished, stock markets soared, home prices soared and the rising equity helped further fuel the bacchanal binge of the U.S. consumer. Real consumption spending annual growth averaged 2.9% during the expansion post-2001 recession.

Those were the days, my friend; we thought they would never end. But end they did, and consumer spending is expected to remain a shadow of its former

U . S . F o r eca s t self through the end of our 2014 forecast horizon. We are forecasting average consumption spending growth to average just 2.1% over the four year span of 20112014. This will hamstring growth in the U.S. economy where consumer spending is 70% of overall GDP. Stated another way, 70% of the economy will grow at a pace during this expansion that is just 75% of the pace by which it grew in the previous one. There are a number of reasons why this is the case. As we noted above in the section on lost household wealth, there are actually several trillion reasons why this is the case and those are in addition to a still languishing labor market. Deleveraging is usually a slow and difficult process and despite the occasional venting of pent-up demand, the US consumer still has a difficult road to hoe.

The languishing labor market, financial market volatility, lost wealth, the government debt ceiling debacle, the U.S. debt downgrade, and surges in food and energy prices have all worked to severely erode consumer confidence. As the holidays approach, consumers are feeling a boost of good cheer. I wouldn’t go as far as labeling it irrational exuberance, but it is a welcome improvement from the dire outlook prevailing at the time of our last forecast in October.

In the near term, the seemingly good start to the holiday shopping season (the final tally has yet to be seen), financial market recovery, and falling unemployment rates may help support consumer spending. However, expecting the U.S. consumer will resume her place as the grand marshal of the economic recovery parade is a Christmas wish unlikely to be fulfilled.

Investment Nonresidential fixed investment spending has seen a surge in the second and third quarters of 2011. Businesses are sitting on record profits, but uncertainty has kept many from pulling the trigger on investment spending. We expect that nonresidential investment will grow at an average pace of 6.7% in 2011 through 2014. This average rate of investment growth is bookended by strong growth in 2011 and 2014; during those two years growth will average 8.4%.

Retained earnings represent a tremendous pool of resources that businesses could tap into to finance investment expenditures. The cost of borrowing is likely to remain subdued for an extended period; in fact, we are forecasting the 10-year Treasury yield to remain below 3.0% through the end of the third quarter of 2013. We are expecting that business spending on equipment and software will grow at an annual average rate of 6.8% during 2012 through 2014.

Investment in computers and peripherals will rise in the near term due to pent-up investment demand, cost reduction, and productivity-focused IT plans.

The expanded investment incentives included in the legislation that extended the Bush tax cuts will also push spending higher in the next eighteen months.

This type of investment will experience average growth of 14.5% in 2011 through the end of 2014.

The commercial real estate sector experienced a burst of activity in investment in non-residential structures with robust growth in 2011Q2 and 2011Q3.

We expect growth to continue to decelerate after this period and actually lose ground in 2013. As the commercial credit crisis continues to play itself out, financing will remain difficult to obtain for many commercial developers and demand for retail and office space will be held in check by cautious consumers and weak job growth.

Forward looking indicators of activity in the sector, namely the American Institute of Architects Billing Index, shows that the momentum in the commercial/ industrial sector has been building since August.

However, the inquiries index component continues to waver, suggesting that the momentum may be fleeting.

Growth in nonresidential structures will decelerate into 2013, but in 2014 we expect spending growth on structures to surge to double digits (10.7%) for the first time since 2007.

Investment in transportation equipment grew robustly in 2010 (57.4%) and will continue to do so throughout our forecast horizon. This type of investment will have an average growth rate of 15.2% during the four years from 2011 through 2014.

Continued pent-up demand and persistently low interest rates will bolster light vehicle sales which

Institute for Economic Competitiveness

9

U . S . F o r eca s t

will grow from 2010 levels of 12.7 million to a level slightly more than 16.5 million in 2014.

Residential fixed investment growth has been negative for six straight years including 2011. The staccato recovery, persistently high unemployment, and mortgage underwriting difficulties have prolonged the woes of a floundering housing market. In 2012, things finally start to turn around as residential fixed investment growth finally turns positive in this year and grows by 4.4% from a depressed level. It will average 20.9% growth through 2013-2014 with much faster growth in 2014 of nearly 25%.

Housing starts bottomed out in 2009 at 0.554 million and have bounced along that bottom since that time. Inventories of new homes have fallen significantly. We expect starts to accelerate significantly in 2012 before hitting nearly 1.6 million in 2014.

G o v e r n m e n t Spe n d i n g Despite running up deficits from 2009-2012 that we are projecting will exceed $5.1 trillion in total, the economy continues to grow at a sluggish pace. Bailout fatigue and a largely failed American Reinvestment and Recovery Act (the stimulus plan) have made bold stimulus action today an impossible political prospect.

This is too bad, because we have largely reached the limits of what monetary policy can deliver as far as a stimulus is concerned.

A coordinated fiscal and monetary policy would have a larger impact on the economy than either policy could do on its own. The opportunity to do this has unfortunately passed, and we are likely to see very modest fiscal policy passed in the near term likely comprised of extending unemployment benefits and payroll tax reductions. These are two stimulus policies already in place and extending them will not add any additional stimulus into the system but will prevent a negative shock to the economy if they were allowed to expire.

Any discussion of fixing our deficit and debt problem that excludes entitlements is an exercise in futility and only delays the difficult changes that must be undertaken. The solution to our problem lay in a plan along the lines of the Simpson-Bowles deficit reduction committee report and must include 10

U.S. Forecast | December 2011

significant reform to entitlements, Social Security and Medicare. It would also include a simplification of the tax code that would result in an increase in revenues without tacking additional taxes onto an already broken system. The Obama administration missed a chance to completely transform fiscal policy, to set the dials to the correct levels for the short, medium and long run, by the President’s decision to shelve the Simpson-Bowles report and not even consider its admittedly painful, yet ultimately necessary recommendations.

The national debt is over $15.1 trillion and rising, to see how quickly it is compounding, Google the U.S. debt clock and watch the debt grow at a rate almost too fast for the human eye to comprehend. Trilliondollar federal budget deficits are hanging around like a visit from an unwelcome relative. Despite the debtceiling drama and the ultimate failure of the deficit reduction super committee, we are forecasting deficits to stay above the trillion-dollar level through 2012. In 2013, we are forecasting the federal budget deficit to be $814 billion and $708 billion in 2014.

Ne t E x p o r t s Overall trade growth will continue through the end of our 2014 forecast period. Growth of both exports and imports is expected to be slower than projected in the October 2011 forecast. Average real export growth is expected to be 6.1% through 2011-2014, with a slowdown in 2012 as the Euro crisis weighs down on the value of the Euro. Real imports will expand over the same period with an average growth of 3.5 percent.

The global economy is growing ever more interdependent. The ongoing European debt crisis and its impact on U.S. financial markets is a near daily reminder of our interconnectedness. The stronger growth in emerging economies is helping grow US GDP by powering exports, while a still battered US consumer in a still languishing labor market has been weighing down on import growth.

In 2012, the U.S. dollar will appreciate vis-Ă vis major trading partners helped in part by the continuing uncertainty in the E.U. The weakening of the U.S. dollar was interrupted by the European sovereign debt crisis that continues to unfold, but we

U . S . F o r eca s t

expect the dollar will begin to depreciate again in 2013 and 2014.

The current account deficit will worsen in 20132014 due in part to a narrowing of the trade deficit as the dollar resumes its decline post 2012. The near term improvement is helped by the flow of income from abroad due to the strong overseas profits boosting factor income and thus the surplus on the income component of the current account.

We expect the trade balance to average -$346 billion in 2012 through the end of 2014. The forecast levels of the current account deficit show the deficit narrowing from $407 billion in 2011 to $280 billion in 2014. This 2014 deficit is slightly less than 40% of the peak deficit in 2006.

U n e m p loy m e n t The national unemployment rate ticked down in November by 0.4% to 8.6%. That is the good news.

The bad news is that a significant portion of the decline is due to the contraction of the labor force.

The decline in the size of the labor force exaggerates the fall in the unemployment rate. As workers become discouraged by the job search and throw up their hands in frustration and stop searching for a job, they become what is known as discouraged workers and are no longer counted in the headline unemployment rate known as U-3.

Underemployment (U-6) takes into account these discouraged workers as well as those who are underemployed, working part-time but not by choice, and it too has declined but remains painfully high at 15.6% in November, albeit down from the August 2011 level of 16.2%. This excess capacity in the labor market will be utilized before businesses feel the need to go out and hire new workers. High and persistent underemployment is responsible in part for the slow recovery of payroll employment.

It will be years before we see the unemployment rate fall back into a range consistent with full employment level. By the end of 2014, the unemployment rate will still stand at an uncomfortably high 7.7%.

Institute for Economic Competitiveness

11

utomobile and Light Truck Sales December 2011 (Millions Vehicles)

Charts

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

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

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

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

9.0

2.5

8.0

2.0

7.0

1.5

6.0

1.0

5.0

0.5

4.0 3.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 30-Year Fixed Mortgage Rate Housing Starts - Millions

0.0

Automobile and Light Truck Sales 11.0

(Millions Vehicles)

10.0 9.0 8.0 7.0 6.0 5.0 4.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Auto Sales Light Truck Sales

Change in Real Business Inventories 150.0

(Billions of 2000 Dollars)

100.0 50.0 0.0 -50.0 -100.0 -150.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Change in Real Business Inventories Institute for Economic Competitiveness

13

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

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Federal Budget Surplus

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

14

U.S. Forecast | December 2011

(%)

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Fed Funds Rate

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

Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0 -15.0

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

Industrial Production (2002=100)

105.0 100.0 95.0 90.0 85.0 80.0 75.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Industrial Production

Private Fixed Nonresidential Investment 2000.0

(Billions of Dollars)

1800.0 1600.0 1400.0 1200.0 1000.0 800.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Private Fixed Nonresidential Investment Institute for Economic Competitiveness

15

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

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Manufacturing Employment

Money Supply

40.0

(Annual Growth Rate %)

30.0 20.0 10.0 0.0 -10.0

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Annual Growth Rate of M2 Annual Growth Rate of M1

Total Nonfarm Payroll Employment 140.0

(Millions)

135.0 130.0 125.0 120.0

16

U.S. Forecast | December 2011

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Total Nonfarm Employment

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

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120

120.0

110

100.0

100

80.0

90

60.0

80

40.0

70

20.0

60

0.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Price of Oil WTI Consumer Sentiment

50

Real Disposable Income and Consumption 8.0

(% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.40 1.30 1.20 1.10 1.00 0.90

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

0.80

Institute for Economic Competitiveness

17

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

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 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

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

18

U.S. Forecast | December 2011

(%)

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 1-Year T-Bill Yield 5 Year Treasury Bond Yield 30 year Treasury Bond Yield

Table 15. Government Receipts and Expenditures History 2003

2004

2005

2006

1885.1

2014.0

2290.1

2524.5

2654.7

Personal Tax and Nontax Receipts

774.2

799.2

931.9

1049.9

1165.6

Corp. Profits Tax Accruals

197.8

250.3

341.0

395.0

362.8

89.3

94.3

98.8

99.4

94.5

762.8

807.6

852.6

904.6

945.3 2900.0

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

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Expenditures

December 2011

2007

Federal Govern

2261.5

2393.4

2573.1

2728.3

Purchases Goods & Services

756.5

824.7

876.3

931.7

976.4

National Defense

498.0

550.8

589.1

624.9

662.3

Other

258.6

273.9

287.3

306.9

314.1

1339.4

1405.1

1491.3

1587.1

1690.5

962.6

1014.3

1078.0

1180.7

1254.2

28.6

30.9

40.9

35.0

42.2

Grants in Aid to State & Local Gov't

338.0

349.2

361.2

359.0

380.8

Net Interest

196.5

204.6

239.0

261.0

291.0

45.3

45.7

64.1

53.9

50.2

Surplus (+) or Deficit (-)

-376.4

-379.5

-283.0

-203.8

-245.2

Receipts

1496.3

1601.0

1730.5

1829.7

1923.1

Personal Tax/Nontax Receipts

977.7

1059.4

1163.1

1249.1

1313.6

Corporate Profits

323.1

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Go

248.6

276.7

302.5

34.0

41.7

55.0

59.1

57.8

Contributions for Social Insurance

20.1

24.1

24.8

21.8

18.9

338.0

349.2

361.2

359.0

380.8

Federal Grants-In-Aid Expenditures

t ab l e s

226.2

Indirect Business Tax and Nontax Accruals

1535.13 1609.33 1704.50 1778.63 1910.83 2

Purchases Goods & Services

1356.1

1408.2

1493.6

1586.7

Government Social Benefits

353.4

384.3

404.8

402.9

433.7

353.4

384.3

404.8

402.9

433.7

Interest Received

20.6

19.0

10.9

2.1

0.5

Net Subsidies

-3.2

-0.6

0.3

1.7

16.2

Transfer Payments

Dividends Received

1.7

Net Wage Accruals

0.0

Surplus (+) or Deficit (-)

-38.8

1697.9

2.0

2.1

2.3

2.4

0.0

0.0

0.0

0.0

-8.4

26.0

51.0

12.2

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

2004

2005

2.5 2.5 2.8 6.6 3.4 1.9 1.4 3.1 8.0 8.9 8.7 -0.2 -5.8 -25.2 -3.3 -3.6 -6.1 -6.0 -7.7 14.2 -3.3 8.2 1.6 4.4 6.6 -0.1

3.5 3.1 3.3 7.3 2.8 2.7 6.2 7.9 9.9 11.5 10.9 -2.7 21.0 10.6 29.0 1.1 2.5 5.0 -16.7 16.6 1.4 9.9 9.6 11.1 4.1 -0.2

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

History 2006 2007

2009

2010

Billions of Dollars 11836.4 12246.9 12623.0 12958.5 13206.4 13161.9 12703.1 13088.0 11142.2 11853.3 12623.0 13377.2 14028.7 14291.6 13938.9 14526.6

2011

1.7 2.1 2.3 8.0 1.8 1.6 8.7 10.3 6.0 16.9 -2.7 12.3 28.0 -4.0 31.9 4.7 -2.8 -9.0 5.8 26.0 -7.9 -1.7 6.7 4.8 -1.8 -2.2

3.3 3.4 2.1 4.9 3.1

31.1 3.6 1.3 73.9 17.2 87.6 16.643 1.854 5.443 6.0 -0.3 -377 -519

41.5 2.8 2.3 76.1 58.3 95.2 16.867 1.949 5.914 5.5 1.1 -413 -629

56.5 1.6 3.2 78.2 49.8 88.6 16.948 2.073 6.181 5.1 1.7 -319 -746

66.1 0.9 2.2 78.6 63.2 87.3 16.504 1.812 5.712 4.6 1.8 -248 -801

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))

1.13 1.01 1.24 2.97 4.02 5.05 5.82 964 -1.3 1.111 -12.3

1.35 1.37 1.89 3.43 4.27 5.11 5.84 1131 18.0 1.020 -8.1

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 4.88 6.41 1311 8.6 0.985 -1.4

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)

9378 3.5 8378 4.6 8850 2.5 3.5 660 15.5

9937 6.0 8889 6.1 9153 3.4 3.6 923 40.2

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

72.3 1.6 2.7 79.2 28.7 85.6 16.089 1.342 4.959 4.6 1.1 -162 -710

Other Measures 99.6 61.7 79.4 1.0 3.7 3.9 -3.7 -11.0 5.3 74.9 66.2 71.7 -39.0 -116.9 57.3 63.8 66.3 71.8 13.195 10.402 11.545 0.900 0.554 0.585 4.337 4.559 4.311 5.8 9.3 9.6 -0.6 -4.4 -0.7 -455 -1416 -1294 -677 -377 -471

Financial Markets, NSA 5.02 1.93 0.16 0.18 4.35 1.37 0.15 0.14 4.52 1.82 0.47 0.32 4.43 2.80 2.19 1.93 4.63 3.67 3.26 3.21 4.27 4.07 4.25 4.84 6.34 6.04 5.04 4.69 1477 1221 947 1139 12.8 -17.2 -18.9 21.6 0.930 0.888 0.926 0.898 -5.6 -4.1 4.8 -2.8

11912 5.7 10424 5.1 9880 2.4 2.4 1293 -4.2

Incomes 12460 11930 4.6 -4.2 11025 10789 5.8 -2.1 10119 9883 2.4 -2.3 5.4 5.2 1051 1183 -18.6 24.5

12374 3.7 11180 3.6 10062 1.8 5.3 1408 21.2

Forecast 2012 2013

1.8 1.6 2.2 5.6 1.9 1.7 5.2 6.5 7.2 13.1 8.5 9.4 9.8 13.8 11.3 1.9 9.7 7.6 -5.7 1.7 -2.3 4.4 3.1 2.5 -2.8 -2.5

2.2 2.2 1.8 4.8 1.5 1.4 4.8 6.7 6.8 12.8 5.9 4.7 13.8 7.7 11.9 -0.4 3.3 7.6 -4.8 -5.1 4.7 17.0 6.7 3.0 -3.6 -0.9

2014

3.3 3.2 2.0 3.2 1.2 2.1 8.1 7.2 7.0 15.3 10.4 5.3 9.1 6.7 7.3 10.7 14.7 20.9 4.8 3.0 18.9 24.9 8.0 3.7 -2.9 0.2

13316.1 13551.8 13844.1 14295.8 15091.1 15564.3 16110.0 16929.0

Prices & Wages, Percent Change, Annual Rate 3.2 2.9 2.2 1.1 1.2 3.2 2.9 3.8 -0.3 1.6 2.5 2.3 2.3 1.7 1.0 3.0 3.9 6.4 -2.5 4.2 2.9 3.1 2.9 1.4 1.9

2.8 2.7 1.8 3.6 3.8

U.S. Forecast | December 2011

2008

Composition of Real GDP, Percent Change 2.7 1.9 -0.3 -3.5 3.0 2.6 2.2 0.2 -2.6 1.4 2.9 2.3 -0.5 -1.9 2.0 4.5 5.0 -4.9 -5.2 7.2 2.6 1.9 -1.2 -1.8 2.9 2.6 2.0 0.5 -1.4 1.0 8.0 6.5 -0.7 -17.8 4.6 7.6 3.3 -4.2 -15.7 14.6 8.7 8.1 2.2 -3.6 9.9 23.3 14.1 8.4 -2.2 30.9 12.8 11.5 -4.7 -7.6 12.6 8.4 4.0 -3.8 -20.7 7.1 9.2 -4.1 -23.0 -44.2 57.4 -5.1 30.6 -3.3 -23.6 -1.0 7.2 -18.2 -12.7 -22.7 -0.9 9.2 14.0 6.7 -21.3 -15.0 6.1 10.0 -3.6 -30.9 -23.7 10.3 18.1 25.8 5.0 -31.9 7.9 39.0 11.6 1.0 -14.9 14.7 6.2 8.4 -34.4 21.9 9.3 15.2 13.2 -18.8 -25.9 -7.2 -18.7 -23.9 -21.8 -4.2 9.0 9.3 6.3 -9.3 11.4 6.1 2.4 -2.7 -13.5 12.6 2.1 1.3 7.2 6.0 4.5 0.9 1.4 0.0 -0.9 -1.8

2.1 2.3 1.5 3.2 3.8

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

2003

2.1 3.2 1.6 6.0 2.2

1.4 1.6 1.7 0.7 2.1

1.3 1.7 1.8 1.2 2.4

1.8 2.2 2.2 1.9 2.7

97.2 99.2 1.4 0.5 5.3 3.6 76.3 78.3 64.2 66.5 73.8 77.3 12.726 14.4 0.632 1.0 4.587 4.9 9.0 8.8 1.0 1.3 -1296 -1055.4 -450 -478.1

104.4 0.9 2.6 78.7 42.1 79.8 15.8 1.4 5.2 8.7 1.4 -814.4 -458.0

108.2 1.7 3.8 80.0 53.0 83.4 16.5 1.6 5.5 8.1 1.7 -708.1 -478.1

0.3 0.2 0.4 1.8 3.0 3.9 4.5 1259.6 1.6 0.9 -2.5

1.3 1.3 1.7 2.7 3.6 4.5 5.1 1281.5 1.8 0.8 -1.8

0.10 0.06 0.20 1.54 2.80 3.92 4.46 1266 11.3 0.844 -6.0

0.1 0.0 0.2 1.3 2.3 3.3 4.0 1240.0 -1.9 0.9 3.8

12964 13413.4 13903.8 14597.4 4.8 3.5 3.7 5.0 11563 11914 12242 12840 3.4 3.0 2.7 4.9 10160 10328 10444 10740 1.0 1.7 1.1 2.8 4.3 3.8 3.1 3.9 1488 1517 1638 1694 5.8 2.0 8.0 3.4

U . S . F o r eca s t Tab l e s Table 2. Real Gross Domestic Product

Table 2. Real Gross Domestic Product History 2003

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

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

11836.4 12246.9 12623.0 12958.5 13206.4 13161.9 12703.1 13088.0

13316.1 13551.8 13844.1 14295.8

11820.5 12181.3 12573.0 12899.3 13177.6 13200.6 12852.7 13028.9

13299.0 13515.7 13809.8 14256.2

8244.5

8515.8

8803.5

9054.5

9262.9

9211.7

9037.5

9220.9

9431.1

9636.0

9805.9 10001.1

989.1

1060.9

1123.4

1174.2

1232.4

1171.8

1108.3

1188.3

1283.0

1355.3

1419.7

1464.5

Nondurables

1840.7

1892.8

1953.4

2005.0

2042.9

2019.1

1983.4

2041.3

2077.4

2115.9

2146.7

2172.8

Services

5418.2

5562.7

5726.8

5875.6

5990.1

6017.0

5935.5

5991.8

6086.0

6191.0

6276.5

6406.3

1189.6

1263.0

1347.3

1455.5

1549.9

1537.7

1263.2

1319.2

1434.2

1508.3

1580.7

1707.9

850.0

917.3

995.6

1071.1

1106.8

1059.4

889.7

1019.4

1123.4

1196.2

1276.0

1367.5

403.7

443.1

475.3

516.3

558.2

569.7

548.3

602.6

638.5

684.7

731.3

782.8

Computers & Peripherals

63.4

70.6

78.9

97.1

110.7

119.5

115.7

150.9

176.4

199.4

224.8

259.3

Communications Equipment

74.1

81.7

83.2

93.8

104.4

99.1

91.0

102.4

99.3

107.4

113.8

125.5

Industrial Equipment

151.6

147.4

159.6

172.9

179.9

172.9

137.1

146.6

164.5

179.7

188.2

198.1

Transportation Equipment

132.9

161.1

181.7

198.2

190.2

146.9

77.8

122.7

156.4

171.4

195.0

212.7

22.6

25.1

22.0

20.6

26.8

26.0

19.4

19.2

18.2

20.6

22.2

23.7

31.7

40.8

48.2

51.6

42.1

36.5

28.2

27.9

36.8

40.8

45.7

48.9

343.0

346.7

351.8

384.0

438.2

466.4

367.3

309.1

323.9

329.3

327.7

362.7

133.8

137.1

135.9

144.2

158.6

152.7

105.9

80.0

77.6

85.1

87.9

100.8

Manufacturing

24.3

25.5

29.9

33.0

39.0

48.6

50.8

34.6

30.9

33.1

35.6

43.0

Power & Communication

55.7

46.2

45.2

48.7

67.8

74.0

74.5

63.2

66.7

62.8

59.7

62.5

Mining & Petroleum

60.0

69.9

77.1

88.3

93.6

101.5

65.8

76.7

95.8

97.0

91.9

94.6

Other

66.5

67.4

63.7

69.6

80.3

90.4

73.5

54.2

49.8

48.7

50.8

60.4

664.3

729.5

775.0

718.2

584.2

444.4

345.6

330.8

324.7

338.9

397.0

495.2

Exports

1116.0

1222.6

1305.1

1422.1

1554.4

1649.3

1494.0

1663.2

1774.6

1830.2

1952.9

2108.7

Imports

1719.7

1910.4

2027.8

2151.5

2203.3

2144.0

1852.9

2085.0

2182.4

2237.2

2303.7

2389.6

831.1

865.0

876.3

894.9

906.1

971.1

1029.5

1075.9

1056.2

1026.2

989.7

961.1

1499.7

1497.1

1493.6

1507.2

1528.1

1528.1

1514.2

1487.0

1453.7

1417.2

1403.9

1406.7

Durables

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Federal Government State & Local Government

Institute for Economic Competitiveness

21

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

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

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

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

Real GDP Nominal GDP

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

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

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))

Composition of Real GDP, Percent Change, Annual Rate 1.7 1.3 1.3 1.7 2.1 2.8 2.8 0.9 1.0 1.4 1.9 2.2 2.8 2.7 2.0 2.3 2.2 2.1 1.7 1.4 1.5 2.5 5.4 7.3 5.6 6.1 2.5 3.5 2.1 1.9 1.5 1.5 1.2 1.1 3.2 1.6 1.8 1.6 1.7 1.0 1.2 1.3 3.7 3.0 0.6 3.8 2.5 9.0 8.2 4.2 5.6 5.2 7.7 3.3 10.0 8.6 7.3 8.9 8.8 9.9 1.5 7.2 9.4 1.1 12.5 19.4 23.3 0.3 8.9 22.4 33.1 19.0 9.3 6.6 -5.2 8.3 13.6 5.9 4.8 7.4 5.7 0.9 4.8 7.2 8.9 1.9 5.9 5.5 20.3 29.9 7.7 50.1 13.5 11.6 9.8 7.8 3.5 4.7 18.2 22.9 25.6 -3.1 -10.6 21.5 28.9 2.2 -3.8 -11.1 -6.9 0.2 6.2 6.8 14.4 13.5 -0.2 -1.9 3.0 1.8 6.0 4.5 4.2 -2.9 -2.7 -6.5 33.2 26.7 -13.2 -14.9 -13.7 -7.8 -2.9 -0.3 -2.4 -0.2 2.0 1.4 6.0 -9.6 -20.2 -10.4 -2.1 -4.5 -8.5 -9.5 5.7 16.0 19.6 3.3 4.9 9.5 9.0 15.5 25.6 28.5 2.2 1.5 3.5 6.4 8.4 7.9 7.0 3.9 3.4 2.5 3.6 2.1 3.2 3.7 -3.5 -3.5 -3.9 -3.9 -3.7 -3.2 -3.1 -3.1 -3.1 -1.8 -1.3 -0.9 -0.1 -0.3

0.4 0.0 2.1 11.7 1.6 0.8 2.1 8.7 0.3 -6.5 -4.0 11.7 42.1 -25.0 83.9 -14.3 -19.5 -20.5 -33.3 8.0 -11.1 -2.5 7.9 8.3 -9.4 -3.3

1.3 1.6 0.7 -5.3 0.2 1.9 10.3 6.2 8.9 50.3 -18.1 -0.8 19.7 42.1 48.5 22.6 22.7 55.4 13.0 33.6 -2.4 4.2 3.6 1.4 1.9 -2.8

2.0 3.6 2.3 5.5 -0.6 2.9 14.8 15.6 0.7 13.8 -20.8 31.3 30.8 -48.4 34.2 12.6 10.9 16.6 19.3 9.0 11.5 1.6 4.3 0.5 1.9 -1.4

2.7 2.1 2.7 13.2 2.2 1.2 5.3 5.2 7.5 12.0 0.9 11.3 7.0 25.1 -18.6 5.6 5.9 5.8 -0.7 13.1 -2.4 2.3 3.8 1.1 -4.9 -2.6

13228 14868

13272 15013

13338 15181

13427 15303

13483 15429

2.5 5.2 1.7 12.4 2.1

2.5 4.1 2.5 7.1 3.2

2.5 3.1 2.7 2.0 1.4

0.6 1.1 1.5 1.5 1.6

1.6 1.2 1.4 -1.0 2.7

3.1 2.9 1.3 0.7 0.9 1.6 8.0 7.6 7.5 15.9 10.0 6.3 9.5 5.8 9.2 9.5 16.9 19.3 7.3 -3.9 20.5 28.1 8.3 3.1 -3.1 0.1

3.3 3.3 2.2 3.1 1.1 2.4 7.4 5.7 6.4 14.7 11.1 2.8 4.8 8.0 3.8 12.6 14.2 27.7 5.3 6.0 21.2 24.7 8.0 3.9 -3.0 0.3

3.5 3.6 2.2 3.5 1.3 2.4 8.1 6.9 6.4 14.2 10.9 6.0 8.5 6.2 3.7 11.6 17.2 16.4 6.0 4.6 18.1 22.7 8.3 3.4 -2.7 0.4

3.7 3.7 2.6 5.2 1.5 2.6 8.7 7.7 6.4 14.3 7.9 5.3 13.1 9.2 0.8 11.8 18.5 10.7 5.8 7.2 16.5 21.2 8.3 4.7 -2.5 0.5

3.7 3.7 2.7 5.6 1.6 2.6 8.2 6.4 6.7 14.3 7.4 6.0 3.3 8.1 -2.0 13.4 26.5 11.4 9.3 3.9 13.7 22.0 7.3 4.5 -2.2 0.5

13889 16189

13995 16378

14107 16587

14229 16808

14359 17041

14489 17281

Prices & Wages, Percent Change, Annual Rate 0.8 1.2 1.1 1.4 1.4 1.5 0.6 1.9 1.4 1.8 1.9 2.0 1.6 1.8 1.9 2.1 1.3 1.5 -1.1 0.7 1.1 1.4 1.6 1.4 2.0 2.1 2.2 2.6 2.5 2.4

1.6 2.0 2.1 2.1 2.6

1.9 2.1 2.4 1.1 3.0

1.9 2.4 2.4 2.6 2.6

1.9 2.4 2.2 2.2 2.7

2.0 2.4 2.2 2.7 2.7

13525 15506

Billions of Dollars 13629 13698 13795 15717 15854 16020

Other Key Measures 94.0 102.6 89.7 92.0 90.3 87.6 86.0 90.4 94.6 99.8 111.4 111.5 112.0 112.8 113.5 114.2 -0.6 -0.1 2.3 1.2 0.8 0.5 0.4 0.6 1.0 1.5 1.3 1.5 1.4 1.5 1.6 1.5 5.2 2.6 2.5 2.2 2.3 1.6 2.7 3.2 3.9 3.5 3.8 3.9 4.0 3.9 4.8 0.6 74.5 74.4 74.9 75.3 75.7 75.9 76.1 76.3 76.4 76.9 77.3 77.8 78.2 78.7 79.1 79.5 59.7 51.0 4.9 20.4 41.0 46.5 42.4 38.7 32.4 35.1 38.7 45.0 44.4 42.4 42.3 42.9 73.1 71.9 59.6 63.5 67.6 70.7 71.8 74.7 76.5 76.7 77.3 77.5 78.1 78.6 78.9 79.4 12.967 12.108 12.449 13.327 13.101 13.116 13.384 13.674 14.191 14.529 14.759 14.750 14.907 15.153 15.565 15.782 0.582 0.572 0.610 0.634 0.641 0.660 0.685 0.720 0.799 0.902 0.995 1.086 1.178 1.279 1.385 1.462 4.473 4.303 4.307 4.389 4.346 4.430 4.560 4.679 4.816 4.818 4.875 4.909 4.910 5.034 5.134 5.250 8.9 9.1 9.1 8.8 8.8 8.8 8.8 8.8 8.8 8.7 8.6 8.5 8.4 8.2 8.0 7.7 1.5 1.5 1.6 1.9 1.9 2.0 1.3 1.4 0.9 1.6 1.3 1.0 1.3 1.5 1.4 1.5 -1201 -1275 -1173 -1142 -1072 -1064 -1028 -985 -832 -792 -774 -780 -749 -753 -748 -740 -478 -472 -414 -437 -457 -486 -491 -479 -452 -447 -466 -467 -467 -469 -483 -494

0.16 0.13 0.27 2.12 3.46 4.56 4.85 1303 37.1 0.857 -5.7

0.09 0.05 0.21 1.86 3.21 4.34 4.66 1319 5.1 0.830 -12.2

0.08 0.02 0.13 1.15 2.43 3.69 4.31 1228 -24.8 0.832 1.0

0.08 0.06 0.19 1.03 2.11 3.08 4.01 1215 -4.1 0.856 12.0

0.08 0.03 0.15 1.06 2.11 3.07 3.86 1206 -3.1 0.874 8.7

0.08 0.03 0.14 1.22 2.27 3.23 3.96 1237 10.9 0.883 4.1

Personal Income (Bil. of $) 12847 (% change) 8.8 Disposable Income (Bil. of $) 11481 (% change) 5.2 Real Disposable Income (Bil. of 2005 $) 10183 (% change) 1.2 Saving Rate (%) 5.0 After-Tax Profits (Billions of $) 1455 (% change) 39.8

12955 3.4 11559 2.8 10170 -0.5 4.8 1470 4.3

12975 0.6 11565 0.2 10117 -2.1 3.8 1507 10.3

13080 3.3 11648 2.9 10170 2.1 3.6 1521 3.8

13234 4.8 11780 4.6 10255 3.4 3.9 1533 3.4

13351 3.6 11877 3.3 10320 2.5 4.0 1501 -8.2

22

13570 15606

U.S. Forecast | December 2011

Financial Markets, NSA 0.08 0.08 0.08 0.25 0.05 0.04 0.04 0.19 0.16 0.16 0.16 0.31 1.41 1.49 1.54 1.69 2.44 2.52 2.64 2.87 3.37 3.46 3.57 3.77 4.10 4.18 4.25 4.39 1253 1264 1270 1267 5.2 3.5 2.0 -1.0 0.877 0.870 0.863 0.855 -2.8 -2.9 -3.4 -3.4

0.25 0.20 0.33 1.74 2.98 3.87 4.52 1257 -3.0 0.850 -2.5

0.50 0.50 0.75 2.10 3.31 4.20 4.78 1244 -4.2 0.846 -1.7

0.50 0.59 0.89 2.13 3.33 4.26 4.91 1248 1.4 0.843 -1.6

1.00 1.06 1.41 2.42 3.46 4.40 4.93 1270 7.1 0.839 -2.1

1.50 1.57 1.97 2.86 3.71 4.58 5.15 1296 8.4 0.836 -1.2

2.00 2.06 2.51 3.28 3.92 4.69 5.36 1313 5.4 0.834 -0.9

Incomes 13596 13692 3.7 2.9 12040 12077 2.7 1.2 10386 10374 1.4 -0.4 3.5 3.0 1523 1619 3.4 27.5

13973 4.1 12287 3.8 10459 1.9 3.1 1640 0.2

14117 4.2 12431 4.8 10534 2.9 3.4 1655 3.7

14316 5.8 12580 4.9 10608 2.9 3.6 1677 5.5

14493 5.0 12748 5.4 10691 3.2 3.8 1699 5.3

14691 5.6 12928 5.8 10785 3.6 4.0 1695 -1.1

14888 5.5 13105 5.6 10875 3.4 4.2 1703 2.0

13472 3.7 11959 2.8 10350 1.2 3.7 1511 2.7

13833 4.2 12172 3.2 10409 1.4 3.0 1639 5.2

U . S . F o r eca s t Tab l e s Table 4. Quarterly Gross Domestic Product

Table 4. Quarterly Gross Domestic Product

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

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

13227.9 13271.8 13337.8 13426.7 13483.1 13525.1 13570.1 13629.0 13698.4 13794.7 13888.7 13994.7 14107.2 14228.9 14358.5 14488.7 13182.8 13236.2 13353.9 13423.0 13451.9 13485.0 13531.7 13594.4 13669.5 13763.1 13853.4 13953.1 14066.2 14189.8 14319.6 14449.2

9376.7 9392.7 9446.5 9508.6 9556.8 9610.1 9663.4 9713.7 9754.6 9787.9 9824.3 9857.0 9910.5 9965.7 10030.6 10097.7 1277.4 1260.2 1277.1 1317.3 1325.5 1343.1 1366.9 1385.7 1406.3 1415.1 1427.3 1429.9 1440.7 1453.3 1471.9 1492.1

Nondurables

2075.4 2076.6 2073.2 2084.3 2100.9 2111.6 2121.4 2129.5 2137.5 2144.0 2150.1 2155.2 2161.1 2168.3 2176.6 2185.5

Services

6039.1 6067.0 6109.8 6128.1 6151.8 6179.4 6203.2 6229.8 6245.9 6265.2 6285.2 6309.9 6347.8 6384.8 6425.6 6466.9

Nonresidential Fixed Investment Equipment & Software

1378.9 1413.2 1462.8 1481.9 1495.4 1506.5 1508.8 1522.8 1532.2 1565.7 1596.8 1628.0 1657.2 1689.6 1725.3 1759.5 1086.9 1103.5 1144.3 1158.9 1171.0 1187.1 1202.1 1224.6 1234.6 1264.3 1290.8 1314.5 1332.8 1355.1 1380.3 1401.8 625.0

638.4

639.5

651.2

662.7

676.9

691.3

707.8

710.5

722.9

739.3

752.7

764.6

776.5

788.6

801.5

Computers & Peripherals

159.4

176.5

182.3

187.6

188.1

193.7

202.5

213.4

213.5

218.2

229.5

238.1

246.4

254.8

263.4

272.4

Communications Equipment

106.0

100.8

95.1

95.3

102.4

106.9

109.3

111.1

109.6

111.8

115.4

118.2

121.4

124.6

126.9

129.2

Information Processing Equipment

Industrial Equipment

158.1

157.7

168.9

173.4

176.0

178.0

181.3

183.8

184.2

186.3

189.6

192.5

193.9

196.7

199.3

202.2

Transportation Equipment

145.4

152.0

162.6

165.4

168.9

169.7

172.2

174.5

182.8

195.1

198.8

203.4

205.7

210.0

216.6

218.3

18.2

19.9

16.9

17.8

19.7

20.4

20.9

21.4

21.8

22.0

22.3

22.6

23.0

23.4

23.9

24.4

33.3

36.7

39.5

37.6

39.5

41.9

41.5

40.4

42.4

45.2

47.1

48.2

48.6

49.1

49.2

48.9

305.9

321.9

331.6

336.2

338.0

334.8

325.1

319.3

319.4

324.3

329.7

337.2

347.4

357.1

367.2

378.9

Commercial & Health

73.4

77.3

79.3

80.5

83.2

85.9

85.8

85.4

86.1

86.4

87.7

91.2

94.3

98.1

102.3

108.5

Manufacturing

27.8

31.0

32.2

32.7

33.0

33.4

33.1

32.9

32.4

34.8

36.9

38.5

41.0

42.6

43.6

44.8

Aircraft Other Equipment Structures

Power & Communication

63.8

65.7

68.7

68.6

66.2

63.6

61.3

60.1

59.6

59.6

59.2

60.2

61.0

61.9

62.8

64.2

Mining & Petroleum

88.9

95.6

97.7

100.8

102.2

99.7

94.2

91.7

91.6

92.1

92.4

91.5

92.8

93.9

95.5

96.4

Other

49.4

49.1

50.5

50.2

49.9

49.4

48.3

47.1

47.7

49.5

51.8

54.3

57.0

59.4

61.7

63.7

321.1

324.4

325.7

327.5

330.2

334.2

341.9

349.3

362.2

383.4

408.2

434.3

458.9

482.9

506.7

532.5

Residential Fixed Investment Exports

1749.6 1765.0 1783.6 1800.2 1810.0 1816.9 1832.8 1861.3 1899.2 1935.6 1968.6 2008.0 2047.1 2088.5 2130.7 2168.5

Imports

2173.9 2181.4 2184.3 2190.1 2211.2 2229.9 2243.7 2263.8 2275.4 2293.1 2314.3 2332.0 2354.4 2374.4 2401.6 2428.1

Federal Government

1053.3 1058.3 1063.2 1050.0 1040.7 1031.4 1021.3 1011.2 1001.7

State & Local Government

1466.4 1456.1 1450.9 1441.2 1429.9 1418.9 1412.4 1407.7 1404.5 1404.1 1403.3 1403.5 1404.3 1405.8 1407.5 1409.1

993.5

985.6

977.8

970.5

963.8

957.6

Institute for Economic Competitiveness

952.3

23

U . S . F o r eca s t Tab l e s Table 5. Annual Employment

Table 5. Annual Employment 2003

2004

2005

History 2006 2007

2008

2009

Forecast 2012 2013

2010

2011

2014

Total Nonfarm Employment

129.996 131.419 133.694 136.092 137.587 136.778 130.789 129.822

131.128

132.63 134.775 137.423

Private Nonfarm

108.416 109.801 111.890 114.117 115.367 114.278 108.231 107.335

109.062

110.83 113.002 115.530

Millions

Mining

0.503

0.523

0.562

0.620

0.664

0.709

0.644

0.656

0.737

0.75

0.720

0.707

Construction

6.736

6.973

7.333

7.690

7.627

7.161

6.014

5.527

5.517

5.40

5.456

6.019

Manufacturing

14.508

14.315

14.225

14.156

13.877

13.402

11.845

11.527

11.722

11.89

12.053

12.294

Trade, Transportation and Utilities

25.287

25.536

25.960

26.278

26.626

26.293

24.902

24.609

24.913

25.38

25.937

26.272

Transportation & Warehousing

4.184

4.250

4.363

4.469

4.540

4.507

4.235

4.182

4.267

4.40

4.570

4.733

Financial Activities

7.976

8.031

8.153

8.328

8.299

8.143

7.770

7.632

7.611

7.64

7.734

7.699

Education & Health

16.588

16.950

17.370

17.825

18.319

18.838

19.191

19.563

19.995

20.47

20.828

21.095

Professional & Business Services

15.985

16.388

16.952

17.572

17.945

17.740

16.571

16.680

17.201

17.66

18.216

19.230

3.189

3.117

3.061

3.038

3.032

2.984

2.803

2.711

2.672

2.67

2.747

2.769

Leisure & Hospitality

12.175

12.492

12.813

13.109

13.425

13.436

13.074

13.017

13.216

13.52

13.670

13.640

Government

21.580

21.618

21.804

21.975

22.220

22.500

22.558

22.487

22.064

21.79

21.754

21.825

2.760

2.731

2.732

2.733

2.735

2.761

2.832

2.967

2.829

2.76

2.682

2.612

18.820

18.887

19.073

19.242

19.485

19.739

19.726

19.520

19.235

19.03

19.072

19.213

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-0.26

1.09

1.73

1.79

1.10

-0.59

-4.38

-0.73

1.04

1.25

1.40

1.68

Private Nonfarm

-0.38

1.28

1.90

1.99

1.10

-0.94

-5.29

-0.81

1.65

1.76

1.71

1.94

Mining

-0.23

5.16

9.36

10.03

5.80

6.69

-14.65

11.98

11.69

-3.63

-2.50

-2.03

1.53

4.31

5.81

2.36

-1.93

-9.25

-16.60

-3.14

0.03

-2.57

4.17

12.41

Manufacturing

-4.46

-0.05

-0.84

-1.04

-2.05

-5.39

-11.47

0.56

2.14

1.40

0.98

1.90

Trade, Transportation and Utilities

-0.57

1.52

1.64

1.16

1.17

-3.32

-4.74

0.48

1.64

2.22

1.55

1.05

Transportation & Warehousing

-1.00

2.58

2.48

2.60

0.92

-2.77

-5.68

1.35

1.66

3.80

3.48

3.13

Financial Activities

1.25

0.95

2.13

1.35

-1.30

-2.46

-4.32

-0.91

-0.04

1.11

0.11

-0.61

Education & Health

2.12

2.36

2.51

2.62

2.88

2.57

1.72

2.13

2.31

2.27

1.26

1.17

Professional & Business Services

1.08

2.99

3.74

3.08

1.63

-3.64

-5.19

2.39

3.48

2.16

4.17

6.04

-5.02

-2.04

-1.07

-0.93

-0.03

-3.11

-6.04

-2.05

-1.21

-0.35

5.37

-0.19

1.59

2.59

2.15

2.85

2.12

-1.66

-2.46

0.76

1.89

2.42

0.31

-0.50

Government

-0.14

0.62

0.81

1.03

1.17

0.98

-0.19

-0.98

-1.49

-0.86

0.10

0.39

Federal

-1.55

-0.37

0.34

-0.21

0.55

1.16

2.45

4.09

-1.44

-2.74

-2.78

-2.44

0.08

0.77

0.88

1.20

1.25

0.95

-0.54

-1.24

-1.50

-0.59

0.51

0.78

Construction

Information Leisure & Hospitality

State & Local

24

U.S. Forecast | December 2011

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

Table 6. Quarterly Employment

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

Employment (Millions) Total Nonfarm Employment

130.5 131.0 131.3 131.7 132.0 132.4 132.8 133.4 133.9 134.5 135.1 135.7 136.3 137.1 137.8 138.5

Private Nonfarm

108.3 108.9 109.3 109.7 110.1 110.5 111.1 111.6 112.1 112.7 113.3 113.9 114.5 115.2 115.9 116.6

Mining

0.7

0.7

0.8

0.8

0.8

0.8

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Construction

5.5

5.5

5.5

5.5

5.5

5.4

5.4

5.4

5.4

5.4

5.5

5.6

5.7

5.9

6.1

6.3

Manufacturing

11.6

11.7

11.8

11.8

11.8

11.9

11.9

11.9

12.0

12.0

12.1

12.1

12.2

12.3

12.3

12.4

Trade, Transportation and Utilities

24.8

24.9

25.0

25.0

25.2

25.3

25.5

25.6

25.8

25.9

26.0

26.1

26.1

26.2

26.3

26.4

Transportation & Warehousing

4.2

4.3

4.3

4.3

4.3

4.4

4.4

4.5

4.5

4.5

4.6

4.6

4.7

4.7

4.8

4.8

Financial Activities

7.6

7.6

7.6

7.6

7.6

7.6

7.7

7.7

7.7

7.7

7.7

7.7

7.7

7.7

7.7

7.7

Education & Health

19.8

19.9

20.0

20.2

20.3

20.4

20.5

20.6

20.7

20.8

20.9

20.9

21.0

21.1

21.1

21.2

Professional & Business Services

17.0

17.1

17.2

17.4

17.5

17.6

17.6

17.8

17.9

18.2

18.4

18.7

19.0

19.3

19.6

19.9

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.7

2.7

2.8

2.8

2.8

2.8

2.8

2.8

Leisure & Hospitality

13.1

13.2

13.2

13.3

13.3

13.5

13.6

13.6

13.7

13.6

13.6

13.7

13.7

13.6

13.6

13.6

Government

22.2

22.1

22.0

21.9

21.9

21.8

21.8

21.8

21.8

21.8

21.8

21.8

21.8

21.9

21.9

21.9

2.9

2.8

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

2.6

2.6

19.3

19.3

19.2

19.1

19.1

19.0

19.0

19.0

19.0

19.1

19.1

19.2

19.2

19.3

19.3

19.4

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.30

1.43

0.85

1.58

1.28

0.99

1.28

1.45

1.36

1.49

1.50

1.50

1.57

1.91

1.88

1.96

Private Nonfarm

1.84

2.09

1.35

2.17

1.81

1.42

1.71

1.73

1.63

1.79

1.77

1.71

1.79

2.20

2.17

2.25

Mining

7.09 19.44 11.56

6.34

2.20

-7.89

-4.97

-4.25

-4.51

-2.89

-1.94

-0.77

-2.07

-2.12

-2.01

-1.98

Construction

0.07

1.45

0.43

-1.87

-3.62

-3.37

-1.74

-1.67

-0.37

2.78

5.64

8.20

9.44 11.38 12.96 13.65

Manufacturing

3.35

2.16

1.50

1.46

1.69

2.50

0.31

1.08

0.65

1.55

0.66

1.04

1.31

2.09

1.88

2.27

Trade, Transportation and Utilities

1.11

2.02

0.99

2.40

2.17

1.73

2.63

2.28

2.06

1.46

1.75

0.91

0.20

1.18

1.44

1.37

Transportation & Warehousing

0.72

2.70

0.91

2.33

4.18

3.41

4.14

3.48

3.42

3.20

3.86

3.44

2.94

3.23

3.12

3.23

Financial Activities

-0.45

0.39

-0.37

0.26

0.00

0.28

2.23

1.95

1.76

-0.22

-0.62

-0.46

-1.34

-0.58

-0.21

-0.34

Education & Health

2.04

1.96

2.38

2.85

2.69

1.79

2.39

2.21

1.53

1.99

0.80

0.71

2.37

1.35

0.33

0.64

Professional & Business Services

4.06

3.26

2.36

4.23

3.33

1.19

1.59

2.53

2.83

4.08

4.64

5.13

5.65

6.51

6.19

5.82

-1.77

-0.20

-4.16

1.27

2.24

2.74

-4.71

-1.68

2.46

9.43 10.10

-0.53

-4.17

-0.46

1.01

2.85

1.68

2.15

1.35

2.36

1.70

3.48

2.85

1.64

1.21

-0.16

-0.45

0.64

0.07

-0.90

-0.81

-0.35

-1.31

-1.76

-1.58

-1.33

-1.36

-1.22

-0.88

0.01

-0.02

-0.09

0.13

0.38

0.41

0.37

0.38

0.40

0.61

-1.72

-2.97

-1.68

-2.77

-2.72

-2.72

-2.72

-2.78

-2.78

-2.78

-2.77

-2.78

-2.53

-2.30

-2.14

-1.59

-1.77

-1.37

-1.28

-1.15

-1.00

-0.61

0.41

0.38

0.29

0.54

0.83

0.86

0.78

0.75

0.75

Information Leisure & Hospitality Government Federal State & Local

Institute for Economic Competitiveness

25

U . S . F o r eca s t Tab l e s Table 7. Quarterly Implicit Price Deflators (2005=100)

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

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

GDP

112.4 113.1 113.8 114.0 114.4 114.6 115.0 115.3 115.7 116.1 116.6 117.0 117.6 118.1 118.7 119.3

Consumption

112.7 113.7 114.3 114.5 114.9 115.1 115.5 115.9 116.4 116.9 117.5 118.0 118.6 119.2 119.9 120.5

Durables Motor Vehicles Furniture

90.4

90.7

90.6

90.1

89.7

89.5

89.4

89.3

89.2

89.2

89.3

89.3

89.3

89.3

89.3

89.2

104.0 106.3 107.4 106.9 106.8 106.8 107.1 107.4 107.7 108.1 108.5 109.0 109.4 109.9 110.3 110.7 92.2

92.5

92.6

92.1

92.0

92.0

92.0

91.9

92.0

92.0

92.2

92.3

92.5

92.7

92.9

93.0

Other Durables

113.2 114.0 114.5 115.6 115.8 116.2 116.8 117.4 118.2 118.9 119.7 120.4 121.1 121.8 122.5 123.1

Nondurables

117.5 119.4 120.7 120.8 121.1 121.0 121.7 122.1 122.7 123.2 123.8 124.3 124.7 125.4 126.2 127.1

Food

116.1 117.9 119.3 120.5 121.3 121.6 121.7 121.9 122.1 122.4 122.7 123.1 123.5 124.0 124.4 124.8

Clothing & Shoes

97.6

98.3 101.3 101.1 101.0 100.9 101.2 101.4 101.7 102.1 102.4 102.7 103.0 103.3 103.5 103.8

Gasoline & Oil

152.5 159.7 161.8 158.1 156.9 153.4 157.0 156.7 157.4 158.0 158.4 157.3 156.2 157.0 158.7 160.6

Fuel

165.3 178.0 171.4 168.0 165.8 166.9 167.9 168.4 169.3 170.2 171.1 170.9 170.8 171.9 173.4 175.1

Services

115.6 116.3 116.8 117.3 117.8 118.2 118.7 119.2 119.7 120.4 121.0 121.7 122.4 123.2 123.9 124.6

Housing

113.0 113.3 114.0 114.7 115.1 115.5 115.9 116.3 116.8 117.3 117.8 118.4 119.0 119.7 120.3 121.0

Electricity

129.4 130.4 130.7 132.0 132.3 132.6 132.9 133.4 134.0 135.0 136.4 137.9 138.9 139.6 140.6 141.5

Natural Gas

85.8

87.6

88.2

86.3

84.4

81.4

82.0

84.1

85.8

87.2

87.6

91.2

93.3

97.6 100.0 103.0

Water & Sewer

136.4 138.2 139.4 140.7 142.2 143.5 144.7 145.8 147.0 148.3 149.4 150.5 151.7 152.9 154.2 155.5

Telephone

103.5 103.3 103.0 103.3 102.8 102.2 102.0 101.5 101.1 100.8 100.5 100.2

Transportation

120.2 121.2 121.6 122.6 123.1 123.4 123.7 124.2 124.8 125.3 125.9 126.5 127.2 127.9 128.6 129.3

Other Services

121.2 121.9 122.8 123.7 124.2 124.7 125.4 126.1 126.7 127.3 128.1 128.8 129.5 130.3 131.2 132.0

26

U.S. Forecast | December 2011

99.9

99.7

99.5

99.3

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

Table 8. Percent Change in Implicit Price Deflators

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

GDP

2.5

2.5

2.5

0.6

1.6

0.8

1.2

1.1

1.4

1.4

1.5

1.6

1.9

1.9

1.9

2.0

Consumption

3.9

3.3

2.3

0.8

1.2

0.7

1.6

1.3

1.7

1.8

1.9

1.8

2.0

2.2

2.1

2.2

-0.6

1.7

-0.5

-2.4

-1.5

-1.1

-0.6

-0.4

-0.1

0.0

0.1

0.1

0.0

0.0

-0.1

-0.2

Motor Vehicles

2.2

8.8

4.3

-1.8

-0.2

0.1

1.0

1.1

1.2

1.5

1.6

1.6

1.7

1.6

1.5

1.5

Furniture

0.1

1.6

0.4

-2.3

-0.3

-0.1

-0.1

-0.2

0.1

0.4

0.6

0.7

0.8

0.8

0.7

0.6

Other Durables

4.7

2.8

1.9

3.7

1.0

1.4

1.9

2.2

2.5

2.7

2.5

2.4

2.3

2.3

2.2

2.1

12.4

6.7

4.5

0.1

1.0

-0.3

2.6

1.2

1.8

1.9

2.0

1.4

1.5

2.2

2.5

2.6

Food

6.5

6.4

4.7

4.1

2.7

0.9

0.4

0.7

0.8

0.9

1.0

1.2

1.5

1.3

1.3

1.4

Clothing & Shoes

0.6

2.7

13.0

-0.9

-0.4

-0.1

0.8

0.9

1.4

1.4

1.3

1.2

1.1

1.1

1.0

0.8

Gasoline & Oil

68.1

20.1

5.6

-8.9

-3.0

-8.6

9.5

-0.8

2.0

1.5

1.1

-2.8

-2.7

2.1

4.2

5.0

Fuel

87.8

34.4

-14.0

-7.8

-5.1

2.9

2.2

1.3

2.2

2.2

2.0

-0.3

-0.2

2.5

3.6

4.0

Services

1.9

2.4

2.0

1.5

1.7

1.4

1.6

1.6

1.9

2.1

2.1

2.3

2.5

2.5

2.4

2.4

Housing

1.4

1.2

2.4

2.6

1.5

1.4

1.4

1.5

1.6

1.7

1.9

2.0

2.1

2.1

2.2

2.2

Electricity

1.7

3.3

0.9

4.1

0.8

0.9

1.0

1.3

2.0

3.1

4.1

4.4

2.9

2.3

2.7

2.6

-0.8

8.7

2.8

-8.0

-8.6

-13.4

2.8

10.9

8.0

6.9

1.7

17.8

9.5

19.7

10.3

12.2

6.2

5.4

3.7

3.7

4.2

3.8

3.3

3.1

3.4

3.4

3.2

3.0

3.1

3.3

3.3

3.4

-4.3

-0.6

-1.1

1.2

-2.0

-2.2

-1.0

-1.7

-1.6

-1.4

-1.1

-1.2

-1.0

-0.9

-0.7

-0.9

5.4

3.5

1.1

3.5

1.7

0.9

1.2

1.4

1.9

1.9

1.9

2.0

2.2

2.1

2.1

2.1

TableServices 9. Annual Implicit Deflators Other 3.4Price2.4 3.1 (2000=100) 2.9 1.6

1.6

2.4

2.0

2.0

2.0

2.3

2.3

2.2

2.4

2.7

2.5

Durables

Nondurables

Natural Gas Water & Sewer Telephone Transportation

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

2003

2004

2005

History 2006 2007

GDP Consumption Durables Motor Vehicles Furniture

94.1 94.7 103.1 99.1 101.2

96.8 97.1 101.1 98.4 99.9

100.0 100.0 100.0 100.0 100.0

103.2 102.7 98.4 100.1 99.6

Other Durables

101.9

101.5

100.0

101.8

105.5

Nondurables Food Clothing & Shoes Gasoline & Oil

92.8 95.3 101.2 69.8

96.1 98.3 100.9 82.1

100.0 100.0 100.0 100.0

103.2 101.7 99.6 112.8

106.5 105.6 98.6 123.9

109.1 112.6 112.1 97.9 144.9

110.4 109.3 113.5 98.7 106.1

110.9 112.7 113.9 98.0 125.4

114.3 119.6 118.5 99.6 158.0

116.6 121.5 121.6 101.1 156.0

119.3 123.5 122.6 102.2 157.8

122.1 125.9 124.2 103.4 158.1

64.1 93.7 95.4 92.5 77.3

74.6 96.7 97.6 94.2 83.7

100.0 100.0 100.0 100.0 100.3

114.2 103.4 103.6 112.1 102.7

123.5 107.0 107.3 116.7 102.5

168.4 110.6 110.2 124.2 116.1

114.1 112.4 112.2 128.0 90.6

133.9 114.5 112.3 128.2 88.8

170.7 116.5 113.7 130.6 86.9

167.3 118.5 115.7 132.8 83.0

170.4 120.7 117.6 135.8 88.0

172.8 123.5 120.0 140.1 98.5

89.7 102.3 95.1 91.2

95.0 100.7 96.5 95.4

100.0 100.0 100.0 100.0

104.9 100.6

110.3 102.4

116.7 104.0

123.9 105.5

131.8 104.9

138.7 103.3

144.1 102.1

148.8 100.6

153.6 99.6

104.2 104.1

106.6 107.4

112.5 112.5

115.7 115.4

118.1 119.1

121.4 122.4

123.6 125.1

125.6 127.7

128.3 130.7

Fuel Services Housing Electricity Natural Gas Water & Sewer Telephone Transportation Other Services

2011

Forecast 2012 2013

2014

111.0 111.1 91.3 103.1 93.7

113.3 113.8 90.5 106.1 92.4

114.8 115.4 89.5 107.0 92.0

116.4 117.2 89.3 108.3 92.1

118.4 119.6 89.3 110.0 92.8

2008

2009

2010

106.2 105.5 96.4 99.6 98.9

108.6 108.9 94.6 97.8 98.1

109.7 109.2 92.9 98.2 97.8

Institute for Economic Competitiveness

27

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

Table 10. Percent Change in Implicit Price Deflators History 2006 2007

2003

2004

2005

GDP Consumption Durables Motor Vehicles Furniture

2.1 1.9 -4.1 -3.9 -3.1

3.2 3.0 -0.9 1.6 -0.1

3.5 3.3 -1.3 1.0 -0.3

2.9 1.9 -1.8 -0.7 -0.1

Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil

-1.6 2.1 3.2 -1.6 19.4

-0.3 4.9 2.7 -0.5 28.8

-0.2 4.5 1.5 -1.3 31.8

Fuel Services Housing Electricity Natural Gas

21.4 3.2 2.2 3.2 22.1

41.8 3.2 2.4 1.8 14.7

Water & Sewer

4.6 -1.7 2.6 4.9

5.9 -1.7 1.4 4.4

Telephone Transportation Other Services

Forecast 2012 2013

2008

2009

2010

2011

2014

2.6 3.5 -1.9 0.5 -1.5

2.1 1.8 -2.1 -4.0 0.3

0.7 1.5 -1.1 5.4 -2.0

1.6 1.3 -2.3 2.3 -4.3

2.0 2.6 -0.5 3.4 0.0

1.2 1.2 -0.9 0.5 -0.2

1.5 1.8 0.0 1.4 0.4

1.9 2.1 -0.1 1.6 0.7

3.2 0.5 1.7 0.2 -0.8

2.5 6.4 4.7 -1.2 30.4

3.4 1.0 7.0 -0.9 5.1

1.4 2.8 -1.7 1.4 24.8

0.5 2.2 1.3 -1.4 13.4

3.3 5.9 5.4 3.8 21.2

1.6 1.1 1.2 0.3 -0.7

2.5 1.8 1.0 1.3 0.4

2.2 2.2 1.4 1.0 2.1

33.1 3.8 2.5 10.2 44.9

-0.3 3.1 4.4 8.6 -18.3

28.5 3.5 3.0 5.3 3.5

23.2 3.0 2.6 8.4 19.1

-0.3 1.6 0.9 -0.2 -18.4

16.2 1.6 0.3 0.5 -1.0

25.1 2.0 1.9 2.5 0.7

0.3 1.6 1.4 1.0 -2.1

1.5 2.1 1.8 3.4 8.6

2.5 2.4 2.1 2.6 12.9

5.0 0.2 4.9 4.7

4.9 1.2 2.5 4.0

5.2 1.5 3.4 3.3

6.7 2.0 6.0 5.0

6.0 0.7 2.0 2.2

5.8 -1.0 1.4 3.0

4.8 -1.2 3.4 2.9

3.6 -1.7 1.3 1.9

3.2 -1.3 1.9 2.2

3.3 -0.9 2.1 2.5

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2003

2004

2005

2006

Forecast

2007

2008

2009

2010

2011

2012

2013

2014

Personal Income

Personal Income Billions Current Dollars 9378.2 9937.3 10485.9 11268.1 11912.3 12460.2 11930.2 12373.5 12964.4 13413.4 13903.8 14597.4

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

6382.6 6693.4 845.6 874.6 894.1 984.1 36.5 49.7 204.2 198.4

7065.1 931.6 1025.9 43.9 178.2

7477.0 960.2 1103.6 29.4 146.5

7855.9 980.5 1052.6 37.8 143.7

8068.3 1052.4 1046.1 51.8 231.6

7806.4 1073.1 902.1 39.2 305.9

7971.4 1090.0 984.2 52.2 350.2

8244.3 1110.5 1043.6 64.6 401.8

8527.8 1150.3 1088.1 68.3 417.9

8883.2 1208.9 1140.2 71.6 401.3

9312.3 1280.2 1220.5 64.5 388.2

Dividends 423.1 548.3 Interest Income 889.8 860.2 Transfer Payments 1341.8 1415.5 Personal Social Insurance Tax 396.5 419.2

555.0 987.0 1508.6 445.2

702.2 1127.5 1605.0 475.1

791.9 1265.1 1718.5 499.6

783.4 1382.0 1879.2 517.2

598.8 1108.9 2138.1 506.1

717.7 1003.4 2281.2 513.6

790.1 1001.3 2339.2 425.1

857.1 1010.5 2411.4 451.6

891.4 1052.4 2503.6 501.6

903.0 1159.2 2663.4 548.4

Percent Change, Annual Rate 5.7 4.6 -4.2 3.7 5.1 2.7 -3.2 2.1 2.1 7.3 2.0 1.6 -4.6 -0.6 -13.7 9.2

4.8 3.4 1.9 6.1

3.5 3.4 3.6 4.3

3.7 4.2 5.1 4.8

5.0 4.8 5.9 7.0

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

3.5 4.4 13.2 2.5

6.0 4.9 3.5 10.1

5.5 5.6 6.5 4.3

7.5 5.8 3.1 7.6

113.5 14.9

38.7 -9.4

-11.1 -10.9

-32.7 -23.8

28.3 32.7

39.9 66.4

-22.8 18.9

32.8 9.2

26.6 18.6

6.5 -1.8

5.3 -3.4

-10.0 -3.6

14.0 -2.2 4.5

43.3 0.2 6.0

-0.6 19.4 6.3

26.8 10.9 6.7

7.6 13.7 7.6

-9.1 2.6 10.1

-13.6 -21.7 15.2

27.2 -4.5 7.2

6.5 0.4 0.3

9.7 3.1 4.0

1.4 5.6 3.9

2.0 14.0 6.5

4.2

6.1

5.9

6.7

5.2

2.0

-2.1

2.5

-11.5

6.4

11.8

10.0

Dividends Interest Income Transfer Payments Personal Social Insurance Tax 28

U.S. Forecast | December 2011

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

Table 12. Personal Consumption Expenditures (Current Dollars)

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

10571.7 10676.0 10798.7 10890.6 10978.2 11060.0 11165.7 11260.4 11355.4 11445.2 11540.7 11632.1 11753.2 11882.7 12023.0 12168.4

durable goods

1154.5 1143.8 1157.7 1186.8 1189.5 1201.9 1221.5 1237.0 1254.9 1262.9 1273.9 1276.5 1286.3 1297.5 1313.7 1331.2

furniture and appliances

248.3

251.2

254.8

257.9

259.1

261.7

263.8

266.3

269.0

271.4

273.7

275.5

276.3

276.9

277.5

278.3

95.2

95.7

95.8

98.6

99.0

99.9

100.5

101.3

101.7

102.3

103.1

104.1

104.9

106.1

107.4

108.8

motor vehicles and parts

383.0

363.4

368.9

384.6

382.1

387.9

400.8

408.1

419.5

421.7

427.9

426.1

432.0

438.7

450.0

461.7

other durable goods

124.2

127.3

128.4

130.3

131.1

131.9

133.0

134.3

135.3

136.0

136.5

137.1

137.8

138.6

139.4

140.4

information processing equipment

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

2437.8 2478.9 2502.4 2516.8 2543.4 2554.4 2582.5 2600.0 2621.8 2642.1 2662.6 2678.2 2695.8 2719.8 2747.4 2776.6 344.5

348.6

352.0

354.7

360.2

362.5

364.2

365.0

366.0

367.3

368.6

369.6

369.9

372.2

374.9

26.6

25.6

25.1

25.3

25.6

25.7

25.6

25.4

25.5

25.7

25.7

25.7

25.6

25.7

25.9

377.1 26.1

393.5

405.9

409.6

396.2

400.3

393.9

404.7

405.4

409.1

410.8

412.2

409.0

404.8

404.7

407.5

411.7

891.3

899.2

906.9

914.5

food

792.0

806.7

815.2

828.0

836.8

843.8

850.8

857.0

863.8

870.6

877.2

883.9

other nondurable goods

881.1

892.1

900.6

912.5

920.5

928.6

937.2

947.2

957.3

967.8

978.8

990.1 1004.2 1017.9 1032.2 1047.2

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

9376.7 9392.7 9446.5 9508.6 9556.8 9610.1 9663.4 9713.7 9754.6 9787.9 9824.3 9857.0 9910.5 9965.7 10030.6 10097.7

durable goods

1277.4 1260.2 1277.1 1317.3 1325.5 1343.1 1366.9 1385.7 1406.3 1415.1 1427.3 1429.9 1440.7 1453.3 1471.9 1492.1

furniture and appliances

269.3

271.4

274.9

280.0

281.6

284.4

286.8

289.6

292.5

294.9

296.9

298.4

298.6

298.7

298.8

299.2

information processing equipment

157.1

161.3

165.4

174.0

179.2

184.6

189.9

195.4

200.4

205.7

211.8

218.3

224.8

232.5

240.9

249.5

motor vehicles and parts

368.2

342.1

343.7

359.9

357.7

363.0

374.2

380.0

389.4

390.1

394.3

391.1

394.8

399.4

408.1

417.2

other durable goods

106.7

108.2

108.5

109.0

109.4

109.8

110.3

110.8

111.0

110.8

110.7

110.5

110.5

110.6

110.8

111.1

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

2075.4 2076.6 2073.2 2084.3 2100.9 2111.6 2121.4 2129.5 2137.5 2144.0 2150.1 2155.2 2161.1 2168.3 2176.6 2185.5 352.8

354.7

347.3

350.9

356.7

359.1

360.0

360.0

359.8

359.8

359.8

359.7

359.0

360.3

362.1

16.1

14.4

14.6

15.1

15.5

15.4

15.2

15.1

15.1

15.1

15.0

15.0

15.0

15.0

14.9

363.5 14.9

258.0

254.2

253.0

250.6

255.1

256.7

257.8

258.8

259.9

260.0

260.2

260.0

259.1

257.7

256.8

256.3

food

682.1

684.1

683.4

687.2

689.9

694.0

699.2

703.1

707.2

711.2

714.8

718.0

721.4

725.4

729.3

732.8

other nondurable goods

774.4

779.6

784.5

791.9

794.6

797.3

800.0

803.3

806.1

808.5

810.9

813.2

817.6

821.5

825.8

830.8

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

2.1

0.7

2.3

2.6

2.0

2.2

2.2

2.1

1.7

1.4

1.5

1.3

2.2

2.2

2.6

2.7

11.2

-5.4

5.4

12.6

2.5

5.3

7.1

5.5

6.0

2.5

3.4

0.7

3.0

3.5

5.1

5.5

3.5

3.0

5.2

7.4

2.3

4.0

3.4

3.9

4.0

3.2

2.7

2.0

0.3

0.1

0.2

0.5

information processing equipment

17.7

10.7

10.2

20.7

11.9

12.1

11.4

11.6

10.2

10.6

11.8

12.4

11.8

13.8

14.4

14.4

motor vehicles and parts

15.0

-28.4

1.8

18.8

-2.4

5.9

12.4

6.2

10.0

0.6

4.3

-3.3

3.8

4.6

8.8

8.9

other durable goods

7.9

5.6

1.0

1.8

1.7

1.3

1.6

1.9

0.7

-0.5

-0.6

-0.4

-0.1

0.3

0.5

1.1

nondurables

1.5

0.2

-0.6

2.1

3.2

2.0

1.9

1.5

1.5

1.2

1.1

0.9

1.1

1.3

1.5

1.6

clothing & shoes

3.1

2.2

-8.3

4.1

6.6

2.7

1.0

0.0

-0.3

0.0

0.1

-0.1

-0.8

1.5

1.9

1.5

-23.1

-42.9

7.3

12.5

9.8

-2.0

-3.8

-3.2

-0.7

-0.4

-0.6

-0.8

-0.6

-1.1

-0.4

-0.4 -0.8

fuel oil & coal

-5.0

-5.8

-1.9

-3.9

7.2

2.5

1.8

1.5

1.7

0.1

0.3

-0.2

-1.4

-2.1

-1.3

food

gasoline & motor oil

0.8

1.2

-0.4

2.2

1.6

2.4

3.0

2.3

2.4

2.3

2.0

1.8

1.9

2.2

2.1

2.0

other nondurable goods

5.3

2.7

2.6

3.8

1.4

1.4

1.4

1.6

1.4

1.2

1.2

1.1

2.2

2.0

2.1

2.4

Institute for Economic Competitiveness

29

U . S . F o r eca s t Tab l e s Table 13. Personal Consumption Expenditures (2000 Dollars)

Table 13. Personal Consumption Expenditures (2005 Dollars) History 2003

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

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

7804.1

8270.6

8803.5

9301.0

9772.3 10035.5

9866.1 10245.5

durable goods

1019.9

1072.9

1123.4

1155.0

1188.4

1108.9

1029.6

1085.5

1160.7

1212.4

1267.1

1307.2

231.8

247.0

261.3

271.5

271.3

257.9

235.3

243.8

253.0

262.7

272.4

277.2

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

10734.3 11116.1 11493.3 11956.8

50.4

59.4

67.0

75.3

86.1

84.9

83.0

91.3

96.3

100.2

102.8

106.8

401.0

403.9

408.2

394.8

399.9

339.3

316.5

340.1

375.0

394.7

423.8

445.6

85.4

92.9

99.5

109.9

118.8

117.9

111.0

116.9

127.6

132.5

136.2

139.0

1708.1

1819.3

1953.4

2069.8

2175.5

2272.8

2167.8

2301.5

2484.0

2570.1

2651.2

2734.9

286.2

298.7

314.0

327.3

335.4

330.9

318.2

334.3

349.9

363.0

367.9

373.5

16.7

17.9

20.0

20.6

21.8

25.9

20.3

22.7

25.7

25.6

25.6

25.8

gasoline & motor oil

192.8

231.6

283.8

314.7

343.0

384.5

279.1

331.4

401.3

401.1

410.3

407.2

food

587.5

613.0

644.5

674.2

711.2

746.4

746.0

766.4

810.5

847.1

873.9

903.0

other nondurable goods

625.0

658.2

691.1

733.0

764.1

785.1

804.1

846.7

896.6

933.4

973.5

1025.4

Consumer Expenditures by Type Billions 2005 Dollars Consumer spending on…

8244.5

8515.8

8803.5

9054.5

9262.9

9211.7

9037.5

9220.9

9431.1

9636.0

9805.9 10001.1

durable goods

989.1

1060.9

1123.4

1174.2

1232.4

1171.8

1108.3

1188.3

1283.0

1355.3

1419.7

1464.5

furniture and appliances

229.1

247.2

261.3

272.5

274.4

262.8

240.6

260.1

273.9

285.6

295.7

298.8

all goods & services

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

39.7

52.5

67.0

85.0

105.9

113.6

120.4

142.4

164.5

187.3

209.0

236.9

404.8

410.4

408.2

394.4

401.4

346.8

322.5

330.1

353.5

368.7

391.2

404.9

82.1

90.3

99.5

108.2

111.9

106.4

98.9

103.2

108.1

110.1

110.8

110.7

1840.7

1892.8

1953.4

2005.0

2042.9

2019.1

1983.4

2041.3

2077.4

2115.9

2146.7

2172.8

282.6

296.0

314.0

328.7

340.1

338.1

322.4

341.0

351.4

359.0

359.8

361.2

26.0

24.0

20.0

18.0

17.6

15.4

17.8

17.0

15.0

15.3

15.1

15.0

gasoline & motor oil

276.3

282.1

283.8

278.9

276.8

265.3

263.1

264.2

254.0

257.1

260.0

257.5

food

616.5

623.9

644.5

663.0

673.2

666.0

657.3

673.1

684.2

696.6

712.8

727.2

other nondurable goods

642.0

668.2

691.1

717.3

737.5

739.7

725.8

750.7

782.6

798.8

809.7

823.9

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

3.4

3.3

2.8

3.2

1.7

-2.5

-0.2

3.0

1.9

2.2

1.5

2.4

10.1

5.9

3.1

7.1

4.6

-12.6

3.5

10.9

6.3

5.2

3.2

4.4

8.2

6.5

6.2

1.4

1.2

-9.2

-1.4

9.3

4.9

3.4

3.0

0.3

44.6

25.9

26.8

28.7

21.3

0.8

12.1

18.2

15.7

12.3

11.7

14.3

5.7

1.6

-6.8

5.8

0.6

-23.5

8.0

12.9

3.1

5.7

3.0

6.7

15.3

6.8

10.8

5.8

4.1

-12.5

0.3

6.4

4.2

1.6

-0.2

0.5

3.6

2.7

3.1

2.9

0.8

-3.1

0.6

3.5

0.8

2.2

1.2

1.4

clothing & shoes

5.1

5.2

7.2

3.4

2.3

-3.8

-0.5

7.8

0.4

2.6

-0.1

1.0

fuel oil & coal

1.3

-18.3

-18.2

3.5

-7.9

9.1

8.5

-3.0

-9.3

0.3

-0.6

-0.6

gasoline & motor oil

4.8

0.7

-0.6

-0.4

-1.8

-4.0

-0.7

0.1

-4.1

3.3

0.5

-1.4

food

0.3

2.5

3.6

2.9

0.8

-4.0

2.6

2.1

0.9

2.3

2.1

2.1

other nondurable goods

6.0

3.3

3.3

4.2

1.7

-1.2

-0.3

4.8

3.6

1.4

1.2

2.2

30

U.S. Forecast | December 2011

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

Table 14. Business Fixed Investment History

2003

2004

2005

2006

Forecast

2007

2008

2009

2010

2011

2012

2013

2014

Billions Current Dollars Business Fixed Investment

1135.7 1223.0 1347.3 1505.3 1637.5 1656.3 1353.0 1390.1

1530.3 1616.5 1708.0 1870.9

Producers Dur. Equipment

853.8

916.4

995.6 1071.7 1112.6 1070.0

903.0 1015.7

Nonresidential Structures

281.9

306.7

351.8

433.7

524.9

586.3

449.9

374.4

410.0

423.7

425.4

483.1

Non-Farm Buildings

182.1

196.7

212.9

247.6

297.3

322.0

253.9

174.8

164.7

181.6

200.6

248.4

94.6

104.3

112.9

128.4

150.8

149.1

95.5

64.5

64.4

73.9

79.3

97.9

Commercial

1120.3 1192.9 1282.6 1387.7

Industrial

21.4

23.7

29.9

35.1

43.7

57.4

61.2

40.8

37.1

41.2

46.3

58.5

Other Buildings

66.0

68.7

70.2

84.1

102.8

115.6

97.1

69.5

63.3

66.6

75.0

92.0

Utilities

53.5

48.6

51.4

61.1

85.6

99.5

98.6

89.4

98.8

94.0

89.8

96.4

Mines & Wells

38.4

51.9

77.1

114.2

130.9

151.7

87.9

100.9

136.6

138.2

125.5

127.5

Billions 2005 Dollars Business Fixed Investment

1189.6 1263.0 1347.3 1455.5 1549.9 1537.7 1263.2 1319.2

1434.2 1508.3 1580.7 1707.9

Producers Dur. Equipment

850.0

917.3

995.6 1071.1 1106.8 1059.4

889.7 1019.4

Nonresidential Structures

343.0

346.7

351.8

384.0

438.2

466.4

367.3

309.1

1123.4 1196.2 1276.0 1367.5 323.9

329.3

327.7

362.7

Non-Farm Buildings

210.0

213.9

212.9

229.2

260.5

272.0

214.1

151.8

140.5

149.7

158.4

187.3

Commercial

110.3

114.4

112.9

118.4

131.2

124.5

78.4

54.4

53.2

58.9

60.6

71.4

Industrial

24.3

25.5

29.9

33.0

39.0

48.6

50.8

34.6

30.9

33.1

35.6

43.0

Other Buildings

75.4

74.1

70.2

77.9

90.3

99.3

85.7

63.5

57.0

57.9

62.6

73.3

Utilities

61.3

52.1

51.4

56.2

75.6

82.5

82.4

71.9

75.6

71.3

67.4

70.4

Mines & Wells

60.0

69.9

77.1

88.3

93.6

101.5

65.8

76.7

95.8

97.0

91.9

94.6

-16.7

11.1

9.9

2.8

8.3

9.6

Annual Growth Rate Business Fixed Investment

6.2

9.5

8.4

11.7

9.0

-5.8

Producers Dur. Equipment

6.7

8.5

6.3

6.9

3.5

-11.2

-5.9

15.3

9.4

5.6

8.6

7.5

Nonresidential Structures

4.8

12.6

14.9

25.2

22.0

5.1

-34.4

2.1

11.9

-4.7

7.3

15.9

Non-Farm Buildings

3.8

10.8

7.3

18.7

22.6

-0.1

-33.7

-21.8

8.0

6.2

17.9

25.0

Commercial

4.3

9.3

10.0

15.3

17.3

-11.8

-44.7

-17.3

9.2

12.3

12.3

29.7

Industrial

9.1

30.4

13.8

16.1

46.6

23.0

-12.0

-32.4

17.9

4.6

23.5

22.3

Other Buildings

2.5

9.2

1.7

26.0

22.6

6.7

-29.7

-18.7

2.2

1.1

21.5

22.2

Utilities

-3.7

5.5

3.8

23.9

54.9

0.8

-4.1

15.4

3.4

-12.1

1.7

9.5

Mines & Wells

29.4

38.0

51.3

50.0

4.8

24.1

-45.1

62.1

26.1

-12.3

-3.5

5.2

Institute for Economic Competitiveness

31

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

Table 15. Government Receipts and Expenditures History

Forecast

2003

2004

2005

2006

2007

2008

1885.1

2014.0

2290.1

2524.5

2654.7

2502.3

2009

2010

2011

2012

2013

2014

2429.6

2564.6

2727.0

3016.2

3228.1

Federal Government Receipts and Expenditures Receipts

2232.5

Personal Tax and Nontax Receipts

774.2

799.2

931.9

1049.9

1165.6

1101.3

856.6

896.4

1074.5

1161.9

1314.4

1398.3

Corp. Profits Tax Accruals

197.8

250.3

341.0

395.0

362.8

233.6

201.7

329.6

339.8

370.9

432.1

466.4

89.3

94.3

98.8

99.4

94.5

94.0

97.3

101.5

111.0

112.8

119.4

136.7

762.8

807.6

852.6

904.6

945.3

973.1

948.9

970.9

903.3

950.4

1021.9

1094.7

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2261.5

2393.4

2573.1

2728.3

2900.0

3115.7

3450.4

3703.3

3762.4

3764.3

3810.6

3975.6

Purchases Goods & Services

Expenditures

756.5

824.7

876.3

931.7

976.4

1080.1

1142.7

1222.9

1235.7

1219.8

1194.8

1182.3

National Defense

498.0

550.8

589.1

624.9

662.3

737.8

774.9

819.2

828.3

814.5

794.0

784.2

Other

258.6

273.9

287.3

306.9

314.1

342.3

367.8

403.7

407.4

405.3

400.8

398.1

1339.4

1405.1

1491.3

1587.1

1690.5

1841.9

2153.6

2313.7

2308.1

2330.4

2398.1

2535.1

962.6

1014.3

1078.0

1180.7

1254.2

1385.7

1601.8

1708.3

1739.9

1797.4

1856.7

1932.4

28.6

30.9

40.9

35.0

42.2

45.3

53.3

57.3

59.0

58.9

60.6

61.6

Grants in Aid to State & Local Gov't

338.0

349.2

361.2

359.0

380.8

395.5

482.4

531.5

492.3

456.7

463.0

523.0

Net Interest

196.5

204.6

239.0

261.0

291.0

272.1

227.5

250.0

287.8

284.2

287.6

325.1

45.3

45.7

64.1

53.9

50.2

53.6

62.7

60.6

62.4

53.4

48.4

47.6

Surplus (+) or Deficit (-)

-376.4

-379.5

-283.0

-203.8

-245.2

-1197.9 -1037.3

-794.4

-747.6

Receipts

1496.3

1601.0

1730.5

1829.7

1923.1

1944.8

1953.6

2064.7

2088.1

2108.4

2181.5

2308.7

Personal Tax/Nontax Receipts

977.7

1059.4

1163.1

1249.1

1313.6

1326.4

1252.8

1307.9

1367.8

1411.4

1463.6

1516.4

Corporate Profits

358.9

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

-613.5 -1217.9 -1273.7

State and Local Government Receipts and Expenditures

226.2

248.6

276.7

302.5

323.1

334.4

284.8

297.5

326.5

337.5

347.8

Indirect Business Tax and Nontax Accruals

34.0

41.7

55.0

59.1

57.8

47.4

47.4

57.9

52.6

54.4

60.6

64.8

Contributions for Social Insurance

20.1

24.1

24.8

21.8

18.9

19.0

20.2

20.8

21.6

22.5

23.5

24.6

338.0

349.2

361.2

359.0

380.8

395.5

482.4

531.5

492.3

456.7

463.0

523.0

Federal Grants-In-Aid Expenditures

1535.13 1609.33 1704.50 1778.63 1910.83 2017.05 2031.70 2090.00

2151.18 2160.22 2210.49 2325.30

Purchases Goods & Services

1356.1

1408.2

1493.6

1586.7

1697.9

1798.0

1774.8

1780.0

1797.1

1782.9

1801.4

Government Social Benefits

353.4

384.3

404.8

402.9

433.7

456.7

498.1

534.6

559.7

575.3

608.1

689.5

353.4

384.3

404.8

402.9

433.7

456.7

498.1

534.6

559.7

575.3

608.1

689.5

Interest Received

20.6

19.0

10.9

2.1

0.5

16.2

28.0

35.4

42.9

43.2

43.1

38.4

Net Subsidies

-3.2

-0.6

0.3

1.7

16.2

15.3

11.9

12.4

13.7

11.9

9.9

8.8

1.7

2.0

2.1

2.3

2.4

2.9

2.5

2.6

3.1

3.3

3.4

3.4

Transfer Payments

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

32

U.S. Forecast | December 2011

1847.6

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-38.8

-8.4

26.0

51.0

12.2

-72.3

-78.1

-25.3

-63.1

-51.9

-29.0

-16.6

U . S . F o r eca s t Tab l e s Table 16. U.S. Exports and Imports of Goods and Services

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

Forecast

2003

2004

2005

2006

2007

-504.1

-618.7

-722.7

-769.3

-713.1

2008

2009

2010

2011

2012

2013

2014

-516.9

-572.8

-574.7

-560.0

-529.9

Billions of Dollars Net Exports Goods & Services

-709.8

-391.5

Current Account

-519.1

-628.5

-745.8

-800.6

-710.3

-677.1

-376.6

-470.9

-450.4

-478.1

-458.0

-478.1

Exports -Goods & Services

1041.0

1180.2

1305.1

1471.1

1661.7

1846.8

1583.1

1839.8

2087.9

2160.6

2332.8

2555.0

Merchandise Balance

-540.4

-663.5

-780.7

-835.7

-818.9

-830.1

-505.9

-645.9

-735.2

-727.8

-724.1

-714.2

Food, Feed & Beverage

55.03

56.55

58.95

65.98

84.28

108.33

93.93

107.73

124.41

118.92

122.70

127.23

Industrial Supplies Excl Petroleum

168.3

199.5

227.5

267.3

316.2

386.9

293.8

388.7

486.5

495.0

528.5

571.2

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

80.7

89.2

98.4

107.3

121.3

121.5

81.7

112.0

133.6

141.7

153.4

172.1

293.7

327.6

358.4

404.1

433.0

457.7

390.5

446.6

493.1

524.0

584.0

656.3

39.9

42.8

45.5

47.6

45.6

43.9

37.7

43.9

49.1

52.4

61.5

70.6

207.1

238.7

257.0

291.9

314.5

339.8

278.0

330.8

363.2

377.0

418.2

469.4

Consumer Goods, Excl. MVP

89.9

103.3

115.3

129.1

146.0

161.3

150.0

165.9

176.4

190.1

211.6

235.4

Other Consumer

39.4

41.0

47.5

50.8

61.3

61.8

54.8

56.9

61.4

59.4

63.8

69.2

314.2

363.2

399.0

446.6

499.7

549.3

518.4

562.0

612.3

631.5

668.7

723.6

Imports -Goods & Services

1545.2

1798.9

2027.8

2240.4

2374.8

2556.5

1974.6

2356.7

2660.7

2735.3

2892.8

3085.0

Merchandise

1289.3

1501.7

1708.0

1884.9

2000.7

2146.3

1587.3

1947.3

2235.0

2286.2

2417.3

2574.2

Services

Billions of Dollars

55.8

62.1

68.1

75.0

81.7

90.4

82.9

92.5

108.0

109.8

114.4

119.4

Petroleum & Products

Food, Feed & Beverage

133.1

180.5

251.9

302.5

346.7

476.1

267.7

353.7

459.0

427.5

423.3

440.3

Industrial Supplies Excl Petroleum

175.7

226.4

266.0

291.4

295.7

318.9

197.1

250.4

299.6

305.6

330.7

366.0

Motor Vehicles & Parts

210.1

228.2

239.5

256.6

256.6

233.2

159.2

225.6

256.1

273.7

295.8

317.1

Capital Goods, Excl. MVP

296.4

344.5

380.8

420.0

446.0

458.7

372.7

450.0

511.7

533.9

569.8

622.5

76.5

88.6

93.3

101.4

105.2

101.2

94.2

117.3

119.9

124.3

131.9

141.2

Computer Equipment Other

195.8

231.6

261.7

290.2

306.5

322.0

247.8

301.5

358.0

372.3

397.3

436.9

Consumer Goods, Excl. MVP

337.7

377.2

411.5

446.1

478.2

486.7

432.5

486.6

517.5

550.6

595.5

615.9

80.5

82.9

90.3

93.5

95.9

82.3

75.4

88.6

83.1

85.2

87.8

93.0

255.9

297.3

319.8

355.4

374.0

410.1

387.3

409.4

425.7

449.1

475.6

510.7

Net Exports Goods & Services

-603.7

-687.9

-722.7

-729.4

-648.8

-494.8

-358.8

-421.8

-407.8

-407.0

-350.8

-280.9

Exports G & S

1116.0

1222.6

1305.1

1422.1

1554.4

1649.3

1494.0

1663.2

1774.6

1830.2

1952.9

2108.7

Imports G & S

1719.7

1910.4

2027.8

2151.5

2203.3

2144.0

1852.9

2085.0

2182.4

2237.2

2303.7

2389.6

Exports G & S

9.0

11.7

10.3

14.0

14.6

0.5

3.0

13.9

10.0

3.8

9.4

9.6

Imports G & S

8.0

19.1

12.1

5.4

9.0

-1.7

0.4

14.2

11.0

3.7

6.3

6.8

Other Consumer Services

Billions 2005 Dollars

Exports & Imports % Change

Real Exports G & S

6.6

7.2

6.8

10.5

10.1

-1.7

2.0

8.8

4.9

3.4

7.9

8.0

Real Imports G & S

5.4

11.0

5.3

4.2

0.9

-5.7

-3.9

11.0

2.8

3.4

3.0

4.1

Institute for Economic Competitiveness

33

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

Sea n M . S n ai t h , P h . 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