U.S. Forecast February 2009

U.S. Forecast Februar y 2009

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

Message From Dean Thomas L. Keon

A b o ut U n i v e r s it y o f C e n t r al F l o r ida ( U C F ) T h e Un i ve r s i t y o f C e n t r a l Fl o r i d a i s a public, multi-campus, metropolitan r e s e a r c h u n i v e r s i t y, d e d i c a t e d t o serving its surrounding communities with their diverse and expanding populations, technological corridors, and international partners. The mission of the university is to offer high-quality undergraduate and graduate education, student development, and continuing education; to conduct research and creative activities; and to provide services that enhance the intellectual, cultural, environmental, and economic development of the metropolitan region, address national and international issues in key areas, establish UCF as a major presence, and contribute to the global c o m m u n i t y.

A b o ut t h e C o lle g e o f B u s i n e s s A dmi n i s t r ati o n The College of Business Administration a d v a n c e s t h e u n i v e r s i t y ’s m i s s i o n and goals in providing intellectual leadership through research, teaching, and service. The college is striving to enhance graduate programs, while maintaining the strong undergraduate base. The college delivers research and quality business education programs at the undergraduate, masters, doctoral, and executive levels to citizens of the state of Florida and to select clientele n a t i o n a l l y a n d i n t e r n a t i o n a l l y.

It is nearly impossible to watch any news program and not hear terms such as “bailout,” “stimulus package,” “recession” or “foreclosure” used repeatedly.

Unfortunately, these phrases have become part of our daily conversations in 2009.

There is no question that our nation is facing economic uncertainty. Bankers and auto makers are not the only industries that are struggling however. Many colleges and universities throughout our country are experiencing unprecedented budget cuts, shrinking endowments, and reduced research funding. Additionally, students are having a difficult time finding the funds to pay for their education.

Indeed these are challenging times for higher education, but I remain hopeful. Economists such as Dr. Sean Snaith predict our economy will slowly emerge from this recession near the end of 2009. Until then, our university, like many others in the nation, must deal with tight budgets, hiring freezes, and the possibility of program eliminations. Learning to do more with less is difficult, but I do believe that our business school will emerge even stronger than before. A college degree is a sound investment and is certain to pay off after the economy improves.

While the U.S. has entered into its deepest recession since the 1980s, it is important to remain optimistic.

It is my hope that it won’t be long until we turn on the nightly news and hear the words in the first paragraph replaced with phrases such as “thriving economy,” “low unemployment rates,” and “booming housing market.”

L . Keon omasL. Keon ThThomas Sincerely,

Dean

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

F o r eca s t f o r t h e N at i o n Forecast 2009 - 2012 Febr uar y 2009 Repor t

Publications of the Institute for Economic Competitiveness are made possible by the following staff: Dr. Sean Snaith, Director Barbie Barontini, Editor Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2009 Institute for Economic Competitiveness. All rights reserved.

This forecast was prepared based upon assumptions reflecting the Institute for Economic Competitiveness’ judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Institute for Economic Competitiveness nor the University of Central Florida shall be held responsible as a consequence of any such variance. Unless approved by the Institute for Economic Competitiveness, the publication or distribution of this forecast and the preparation, publication or distribution of any excerpts from this forecast are prohibited.

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Hi g h l i g h t s o f t h e 1 Q 2 0 0 9 F OR E C A ST In this quarter’s U.S. Forecast from the University of Central Florida’s Institute for Economic Competitiveness: • G, is it in you? G, as in government spending, is in each and every one of us as the size of the government bailout continues to explode.

• The U.S. has entered its deepest recession since the 1980s and the longest since the Great Depression. Expect five consecutive quarters of negative economic growth before the economy emerges from recession in the 4th quarter of 2009.

• Oil prices will continue to fall during the U.S. recession. The declines from this point forward will be modest in comparison to what we have seen thus far. Once the recession has ended, prices will climb back to the low $80s by the end of 2012.

• The retail sector will continue its slump, and more closings, layoffs and bankruptcies are as inevitable as the deep discounts retailers will be forced to offer.

• The U.S. government budget deficit will smash previous records and explode to $1.6 trillion in 2009 and $1.2 trillion in 2010.

• Housing starts reach their nadir in the 2nd quarter of 2009. Starts will slowly rise from this historic low but remain below one million through 2010. 2012 levels will be lower than the suppressed levels of 2007 housing starts.

• Unemployment, a lagging indicator of the business cycle, peaks at 9.5% in 2010 before slowly falling to 7.8% by the end of 2012.

• Bailout fatigue is growing. Is the federal government becoming another Cashtomato.com?

• The dollar continues to appreciate against the euro and the pound for the first half of 2009. The dollar and U.S. Treasury bonds remain a safe haven amidst the global fear that this recession has mongered.

• The Buy American provision in the stimulus act is reckless, anachronistic, and wrong. It threatens not only the flow of goods and services but also the critical flow of capital into the U.S.

H I GHL I GHTS

• The economy will shed six million payroll jobs before the bleeding stops – in 2010.

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G

Government stimulus, rescues, financial guarantees, and bailout plans continue to be announced, and the sizes of the proposed programs are staggering. These government C+I+ expenditures and tax cuts are targeted at ending the current economic recession and associated financial crisis. The passage of the $800-billion stimulus package, in and of itself a dramatic piece of legislation, is just a fraction of the total value of tax cuts, expenditures, and bailouts that the government is making or will make before the crisis is over.

Nobody knows exactly what the total bill the U.S. government (read: American taxpayers) will run up before this whole shameful debacle comes to an end. Estimates of the total sum of expenditures, tax cuts, and financial assurances fall in a range from $4 trillion to close to $10 trillion.

The high end number is reached if you count all of the Federal Reserve, FDIC and Treasury loans, pledges, and backing of assets made during the crisis in addition to spending and tax cuts.

Many of these assurances and backings provided by the government will not be used, and the loans will hopefully be repaid, but the magnitude of the government involvement in the crisis is

huge. Because we do not have many details on some of these programs, particularly the TARP 2.0 program that was only outlined by the new Secretary of the Treasury, this number could, +N X , and likely will, grow larger.

We are looking at the likelihood of a $2-trillion deficit this year. $2 trillion! This will increase the national debt (the total of debt owed by the U.S. government – read: American taxpayers) by nearly 20%. We will be paying for this for the rest of our lives, the rest of our children’s lives, and the rest of their children’s lives and beyond.

What is G? G stands for government expenditures in the identity for GDP (GDP ≡ C + I + G + NX) G: is it in you? You better believe it is.

Using unanimously as a descriptor of the opinions of economists is laughable as was Mr. Obama’s claim that without a stimulus package, the recession could become irreversible. Both, in fact, are patently untrue and mark a return to the politics of fear that had a very short-lived respite in Washington, DC. Economists are not unanimous in the opinion that the stimulus package was necessary. In fact, I received an e-mail petition from the CATO institute that was signed by several hundred economists that stated just the opposite and requested that no stimulus package be implemented at all.

The notion of a permanent recession is ridiculous, and in absence of any action by the government, this entire mess would have sorted itself out eventually. Prices would adjust, markets would clear, and resources would be reallocated.

Businesses would fail, and people would lose their jobs, but eventually the economy would right itself. This is an amazing aspect of market-based economies, the inherent self–healing nature of this particular resource allocation mechanism.

These things being said, I support a stimulus package, not necessarily in the form that was recently signed into law, but I believe, given the

Is It In You? or Cashtomato.com, Make it rain!

Most economists, “ almost unanimously,

recognize government is an important element of introducing some additional demand into the economy.”

– President Obama

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seriousness of this recession, we should use all available tools to hasten the end of this recession.

In the long run, the economy will heal itself, but as Keynes wrote, “The long run is a misleading guide to current affairs – in the long run we are all dead.” While Keynes’ comment was in regards to monetary policy, I think the same argument could be made to justify fiscal policy as well.

Waiting for the economy to fix itself would most definitely lengthen and deepen an already long and deep recession. Unemployment would hit double-digits, and more people would suffer the consequences, both financial and personal, of recession. It makes no sense to sit idly by when we can act to hasten the economy’s healing process to get the economy back to full employment sooner rather than later.

Now that I have stated that I agree with the fiscal intervention in the economy to help end the recession, I also want to say that I agree that monetary policy and other actions to help stabilize the financial side of the economy, such as the TARP program, are also necessary. I do not necessarily agree with how this has been implemented or not implemented to date.

TARP, in particular, has thus far looked more like the end of an episode of the Benny Hill show than a serious and well-thought-out approach to shore up the financial and banking system.

Originally conceived to purchase toxic, mortgagebacked securities from financial institutions, thus allowing them to improve their capital positions and, in turn, resume lending, the Treasury department quickly changed tack on TARP and, instead, provided direct capital injections to troubled, or not so troubled, financial institutions.

Tens of billions of dollars were handed out in exchange for preferred stock and warrants (the right to make common stock purchases in the future, not unlike call options). Unfortunately, these billions that went into these banks were used like sand bags to shore up these financial institutions against the next wave of this crisis, which will come from the commercial real estate sector. Lending was not stimulated, as was hoped, and so once again, the TARP program was refocused again on the toxic assets held by financial institutions.

The new TARP, TARP 2.0 as announced

by Treasury Secretary Geithner, woefully lacks detail, and the stock market responded to this by plunging yet again. How this will actually be executed, who buys the assets, and how much is paid for them remain yet to be seen. The devil, as they say, is truly in the details.

B ai l o u t F a t i g ue As the size of the bailout and the list of recipients both grow larger, there is a rising sentiment against and backlash toward taxpayer funding of what is perceived by many to be irresponsible behavior on the part of some individuals and corporations. As each new multi-billion dollar bailout package or program is announced and yet another sinner is suddenly forgiven, absolved by Uncle Sam of any responsibility for their bad decisions and washed clean of their sins by the sweat and blood of hardworking taxpayers, resentment grows. Taxpayers who have suffered from loss of home equity or the value of retirement savings but did not act irresponsibly in their business decisions or housing purchases are asked to sacrifice further to bail out those whose irresponsibility goes unpunished.

This comedy of errors that has become the government’s response to the economic crisis reminded me of a story I came across last spring in the New York Daily News, a portion of which is reprinted here.

The gist of the story is a publicity stunt, which took place in New York City, gone awry for a website, Cashtomato.com, a YouTube wannabe. The stunt involved employees, dressed as tomatoes, giving away $4,000 on February 29th, $29 at a time with the money attached to a tomato. The promotion was slated to begin at 2:29pm (coinciding with the leap year date of the promotion), but as the time for the giveaway got closer the crowd became more restless and closed in upon the costume clad employees.

Shouts went up from the increasingly restless mob, “Where my money at?” and “Make it rain!” as they pressed in closer to the employees. The besieged employees grew ever more concerned the crowd would turn them into salsa, and they threw Institute for Economic Competitiveness

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Cashtomato money giveaway turns rotten with Union Square riot

BY SETH FIEGERMAN and TRACY CONNOR DAILY NEWS WRITERS

M. Roberts for News

Two men and a woman dressed as tomatoes were victims of a mob Friday afternoon as they attempted to give away money to promote Cashtomato.com.

Tomatoes with money attached. Most people in the unruly mob who wanted to get their hands on the cash were left only with squashed hopes.

Only in New York can a tomato get mugged for $4,000.

A money giveaway in Union Square by a company called Cashtomato.com turned rotten Friday when the impatient crowd bum-rushed the costumed organizers and ran off with the loot. One person was injured in the free-for-all.

“Make it rain!” and “Give me my money!” passersby shouted as the clock ticked down to the scheduled 2:29 p.m. publicity stunt, timed to mark Leap Day. With five minutes to go, the antsy mob of 100 surged toward three workers dressed to resemble tomatoes and holding sacks and boxes of prizes up to $29.

“People grabbed and pulled on the bag,” said Jason Buzi, an executive at the fledgling videosharing Internet company.

“I didn’t feel safe, so I let it go.”

Snaith Comments: Hey Jason, I feel the same way about all these bailout programs. Unfortunately I can’t just run away from them.

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down the cash-enhanced fruits and ran for their lives. As you might imagine, there was a mob scene as people scrambled to get a piece of the vine-ripened windfall. This poorly planned and illthought-out promotional stunt turned into a melee and sent one person to the hospital.

As the stimulus packages and new bailouts are announced, the federal government continues to “make it rain” for GM and Chrysler, for Filipino veterans of WWII, for irresponsible homebuyers who got in over their heads and bought more house than they could afford, for banks and investment banks that made billions providing the irresponsible homebuyers financing to enable the purchases that should not have taken place to begin with. There is a growing public sentiment that you might call “bailout fatigue.” Millions of people who did the right things and still have watched the value of their homes plummet and the balances in their retirement accounts dwindle are growing more angry that their tax dollars and their children and grandchildren’s tax dollars will be used to bail out those most responsible for our current problems. There is no help, no bailout, no TARP for rest of the populace who thought they did the right things. The question resounding in their heads: “Where my money at?”

B u y A m e r ican ? ?

Are we really repeating the same mistakes that led to the Great Depression?

The composition of the stimulus package is a huge disappointment in and of itself. There is far too much money for transfer payments such tax rebates for those that pay no taxes and far too little money going toward badly needed infrastructure repair and construction. The latter spending provides an ongoing stimulus to the economy because it is an investment in the nation’s capital stock, but the former is just a redistribution of income. There are plenty of other problems in the package, including pork spending in a spending program that allegedly contained none of the other white meat. We could write pages and point out all of the warts on this brobdingnagian piece of legislation, but I would like to just focus on one aspect of the law that is particularly disturbing.

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One of the policy mistakes that was made in the period prior to the Great Depression was the enactment of the 1930 Smoot-Hawley tariffs. This law raised tariffs (taxes) on more than 20,000 imported goods to record levels, effectively driving imports drastically downward and triggering retaliation by other countries that caused international trade to plummet. This, ultimately, helped to send the United States into the Great Depression.

Many economists are worried that the “Buy American� provision of the stimulus act is a repeat of the same mistake that Smoot-Hawley proved to be. While it is not as sweeping as those tariffs, it is a step onto the slippery slope of protectionism at a time when our economy can least afford to fall. If other countries follow suit and in their own recovery acts decide to include similar provisions, we will have all the makings of a trade war that would have devastating consequences.

Buy American sounds patriotic and is a deceptive policy that, on its surface, seems logical: spend money at U.S. companies instead of sending the money to foreign corporations. Like many protectionist policies, this sentiment is rotten once you get just underneath that veneer of patriotism.

If it were not for international trade, the U.S. economy would have already faced five quarters in a row of negative real GDP growth. The 1st and 2nd quarters of 2008 had positive growth that was driven by growth in net exports. In other words, it was international trade that enabled the U.S. economy to expand in the first half of 2008.

Many jobs in the United States are dependent on international trade, and this policy is reckless,

anachronistic, and wrong. The danger of this type of protectionism lies not only in the fact that it can impede the flow of good and services but also in that it could hurt the flow of capital into the United States at a time when we are most dependent upon it.

We are likely to run a deficit in the range of $1.6 to $2.0 trillion this year. The United State borrows money to finance deficit spending, so this year we will need to borrow a whole big bunch. The U.S. government sells Treasury bonds in order to raise the money it needs to pay for deficit spending.

Who will buy all of these bonds?

If recent history is a guide, the majority of these bonds will be sold to foreign countries, and three quarters of that amount will be purchased by the central banks of these countries (foreign official holdings). Foreign official holdings are how countries engage in international monetary policy, aka foreign exchange market intervention.

Take China, for example. The U.S. has had a large trade deficit with China for many years.

This would naturally lead to an appreciation of the Chinese renminbi, but an appreciation of the Chinese currency against the dollar makes Chinese products more expensive to American consumers.

In order to prevent or slow this appreciation from happening, the Chinese central bank buys U.S. government bonds. Consequently, China has amassed close to half a trillion dollars worth of U.S. Treasury bonds.

As you can see in Table 1, the percentage of foreign ownership of U.S. Treasury Bonds has grown significantly over time, as has the share of these holdings that are official. The inflow

Table 1 Foreign Ownership of US Treasury Bonds Billions of Dollars

Total outstanding Foreign-owned Percent foreign-owned Percent foreign official

Dec. 1984 1515 333 22.0 56.0

Dec. 1989 2392 464 19.4 52.6

March 1994 2508 884 35.2 61.7

June 2005 3093 1599 51.7 67.5

June 2006 3321 1727 52.0 70.2

June 2007 3454 1965 56.9 73.9

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of capital from abroad has inoculated the U.S. economy from the effect of recent budget deficits.

In 1984, the interest rate on a 10-year Treasury bond was 13-14%; in 2007, the yield was 4-5%.

What accounts for the difference? Both years represent record deficit spending at the time, but the inflow of capital from abroad has helped to keep interest rates low in recent times. There has been no discussion of the “crowding out” of government spending in the first decade of the new millennia, as there was during the 1980s. This is due, in large part, to foreign purchases of bonds.

If trade is curtailed by the Buy American provision of this stimulus act and trade is reduced, there will be less of a need for foreign countries, like China, to buy our bonds. In the face of epic budget deficits, the impact on interest rates could be significant. The detrimental effect of higher interest rates on the economy would be even more dramatic than the impact from reducing trade alone. This is twice the reason to stay away from stupid policies like this; leave them where they belong in the history books filed under lessons learned.

100 90

70 60 50 40

The most recent release (1st quarter 2009) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 41 forecasters (including the author) surveyed for this publication are convinced that the decline in real GDP currently taking place will continue in the 2nd quarter of the year.

The survey asks panelists to estimate the probability that real GDP will decline in the quarter in which the survey is taken as well as the probabilities of a decline in each of the following four quarters. The anxious index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in the 1st quarter of 2009, the index stands at 73.98%, which means that forecasters believe there is a 73.98% chance that real GDP will decline in the second quarter of 2009. This is one the highest reading for the anxious index in the 40-year history of the Survey of Professional Forecasters.

The forecasters also report a 94.41% chance that we are currently (1st quarter of 2009) in a recession.

The graph below plots the historical values of the anxious index and gray bars indicate periods of recession. The current levels of the anxious Figure 1. index confirm that the The Anxious Index economy has plunged Probability of Decline in Real GDP in the Following Quarter into recession, though Quarterly, 1968:Q4 to 2009:Q1 it has not officially been designated as a recession by the NBER. As the forecast horizon is lengthened, economists’ estimates of the probability of a recession do not fall below 20% during 2009.

30 20 10 0

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

Probability (percent)

80

“ H o w L o n g Mu s t Ou r A g o n y E ndu r e ? ” I nde x

Survey Date 10

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G D P Ou t l o o k The Longest Recession since the Great Depression (but not even close to the length and depth of that Ăœber recession)

This recession will not be the deepest since the Great Depression, though it will be the longest.

We are forecasting the recession to end by the 4th quarter of 2009. That will make this recession that began in December of 2007 nearly two years (20-24 months) long. The Great Depression lasted 43 months, nearly four years. The recession will not be the deepest since the Great Depression, in terms of real GDP declines. The recessions of the early 1980s look poised at this point to keep this record.

2008 Q3 real GDP growth came in an -0.5%, and the advance reading on 2008 Q4 real GDP growth was -3.8%. This was not as dismal as many economists were expecting, but the mix of GDP growth was foreboding. A large component of the real GDP growth was due to inventory investment.

That means firms will have larger inventories to draw from and, thus, new production is expected to fall. In the 1st quarter of 2009, we are forecasting real GDP growth to tumble at a rate of -6.3%.

Things improve from this point forward, though the economy remains in recession through the 3rd quarter of the year. The impact of the massive stimulus bill and extremely stimulative monetary policies will begin the process of recovery, and the declines in real GDP moderate to -3.6% in the 2nd quarter and -0.2% in the 3rd. We expect real GDP growth to turn positive in the 4th quarter of 2009 with growth of 1.6%.

Pent-up demand in the economy will be unleashed in some sectors, and the stimulus package will kick into full gear in 2010. These factors should combine to cause growth to jump in 2010. Not all sectors of the economy will grow, however. Investment will generally lag during the economic recovery, and commercial real estate will still be recovering from a hellish 2009. Residential fixed investment will finally emerge from a fouryear nosedive and grow in double-digits in 2010, admittedly from a much lower base.

The government sector, as discussed above, will play a huge role in hastening the end of the

recession, but there may be a steep price to pay for the mind-boggling deficits that we are running.

The foreign sector, which had pushed the economy forward the first two quarters of 2008 despite the substantial drag of the housing bust and credit crunch, has fallen victim to a spreading global recession and a strengthening of the U.S. dollar, used as a safe haven against the financial crisis and spreading gloom.

Many of the world’s economies have slipped into recession or decelerated significantly, and the notion of decoupling has been put to rest with other silly notions such as house prices never go down. Many of our trading partners will linger in recession longer. The countries of the EU do not have the luxury of running budget deficits that are 13% of GDP. In fact, by the Maastricht Treaty, EU countries must keep deficits at 3% of GDP or lower, and they cannot use fiscal policy to muscle their way out of recession.

C o n s u m e r Spendin g Gone Daddy, Gone.

Over the past several years, the U.S. consumer has endured a number of economic body blows, including record-breaking energy prices (on several separate occasions), record declines in home equity, and record volatility in financial markets.

Consumers, who comprise 70% of the U.S. economy, finally, like Elvis, left the building in the 3rd quarter of 2008. They were gone for the 4th quarter as well, much to the detriment of retailers who suffered one of the worst holiday shopping seasons in decades.

The toll that these events have taken has become apparent. Consumer confidence has plunged to levels we have not seen since the economic malaise of the early 1980s. Retail spending plunged in October by 2.8%, an ominous start to the important 4th quarter in this sector.

Consumer spending has been decelerating since 2007, with the exception of the 2nd quarter 2008 when the tax rebate checks led to a temporary burst in spending that gave way to a large decline in spending in the 3rd quarter. This decline will be matched in the 4th quarter of 2008 and in the 1st Institute for Economic Competitiveness

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quarter of 2009 as well. Consumer sentiment will start to slowly improve in the second half of 2009 as a sense that the worst is behind us starts to sink in.

Retailers suffered a terrible holiday shopping season in 2008, and after the false hope that things would improve, the news will only get worse for this sector. Circuit City will not be the last recognizable name to shutter its operations.

More automobile dealers will likely shut down as domestic auto manufacturers continue many of the programs, incentives, and low/zero interest rate financing that are already being offered. Light vehicle sales will continue to decline through much of the first half of 2009. But an aging fleet of cars on highways and plenty of government stimulus should begin to reverse the nearly two-year decline in auto and light truck sales. The turnaround will be too little too late, and Detroit as we know it will no longer exist. Loans notwithstanding, the Big Three automakers are in for a dramatic makeover that I believe will end via merger or bankruptcy with the big two left standing.

Spending on consumer durables will continue to decline at a stunning double-digit pace through the 1st quarter of 2009, as economic pessimism and ongoing layoffs have consumers wondering about their economic well-being. This will continue to undercut the confidence needed by consumers to make big-ticket purchases. The second stimulus package, signs that the recession is diminishing, and pent-up demand will turn durable spending growth positive for the remainder of the year.

I n v e s t m en t The rapid onset and steep nature of the economy’s decline, precipitated, as it was, by the credit freeze, has furthered the fall in business confidence and will lead to continued deceleration of investment spending by firms. An economy where many firms are cutting jobs from their payroll is not an environment that has firms thinking about capital investments — at least in the near term.

The Fed’s ability to keep interest rates lower for a longer period due to falling energy prices will help keep cost of capital low, and provided that bank lending and other forms of credit flow again, 12

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investment spending will have some support going into 2010.

The commercial construction sector is feeling the pain that residential construction has been enduring. Spending on structures will decline in the 4th quarter of 2008, the start of a doubledigit decline that will last through 2009 and into the first half of 2010. Rising unemployment and consumer retrenching have curtailed the need for office space and retail space, and the commercial outlook will continue to decline as the economy recovers. When employment starts to respond to the expansion, only then will we see commercial structure investment begin to grow again at the tail end of 2010.

Falling energy prices will lead to a precipitous fall in investment in structures for the mining and petroleum industry. The large list of projects that would have been undertaken at $150-per-barrel oil shrinks dramatically when oil falls below $40 per barrel with a very real possibility that it could go lower still. Oil and energy prices will recover from current lows as the recession lifts in the U.S. and eventually the rest of the world. Even with this rise, we will not see the speculation-fueled highs we reached in July 2008.

Residential fixed investment growth has been in a near freefall with double-digit declines expected to get larger and persist through the first half of 2009, which will make for a total of 14 consecutive quarters with double-digit declines and 4 straight years of contraction in this sector. In 2009 the long lingering malaise should begin to lift. The 4th quarter of 2009 should put an end to this string of dismal housing numbers. 2010 will finally see some growth return to this sector as residential fixed investment accelerates through the end of the year.

G o v e r n m en t Spendin g Obama’s fiscal austerity plan aims at bringing the deficit down to just $500 billion by 2012 OK, I have to admit that I “LOLed” as I typed the above subheading. I mean, I remember a time when a deficit of $400 billion was fiscally reckless, and now $500 billion dollar deficits are

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the new level of responsible government spending?

Hopefully, this is all a grand scheme to subdue expectations so that we can all rejoice when deficits shrink to just a paltry $400 billion once again. I guess being a fiscal conservative isn’t cool anymore since both parties have apparently abandoned this as a policy goal.

Last forecast, I thought that the budget deficit for 2009 would hit $1.3 trillion, but I also assumed a $500-billion stimulus package. Both were off by $300 billion. So the new number is: 1.6 trillion dollars. $1,600,000,000,000 A baby born tomorrow that would live to be 100 years old would have to spend $43.8 million each and every day of their life to burn through the $1.6 trillion. That is enough to buy General Electric – 17 times over. This is a one-year excess of government spending over tax revenue – the deficit, not the government’s debt. It will push the national debt up by 15% in a single year! The national debt, by the way, stands at $10.8 trillion and counting.

To further put this huge deficit in perspective, the sum of all deficits and surpluses during George Bush’s two terms is expected to be $1.9 trillion.

Self-funded state and local government spending will continue to decelerate as a result of slumping revenues as local economies wallow in the midst of recession. However, the second stimulus package will generate a surge of spending or at least softening of spending cuts. Spending cuts, however, will still continue to plague state and local governments for programs other than federally funded infrastructure projects in 2011 and 2012, particularly in states, such as Florida, California, Nevada, and Arizona, where the housing market has made this recession more pronounced.

Net Exports 2009 will mark the end of seven straight years that the U.S. dollar has depreciated against the currencies of the United States’ major trading partners. 2009 will witness a greater than 10% appreciation overall as capital flows into the United

States during this period of financial and economic turbulence that has afflicted the global economy.

The fear has persisted since the end of 2008 when the credit markets melted down.

As bad as it is in the U.S. economy, things are worse in Europe, and the E.U. lacks the flexibility of the U.S. economy and by the Maastricht treaty, they cannot run giant deficits to spend their way out of this mess.

It appears that the U.S. dollar hit its low point this summer and has appreciated against several major currencies. This is likely to continue as the safe harbor motive points toward a stronger dollar in the first part of the year.

Export growth will be weakened both by the stronger dollar and weak economies of our trading partners. Imports, however, have also been declining recently, as the value of oil imports fall and the flailing U.S. consumers struggle to get back on their feet, which has cut spending of domestically and foreign produced goods and services. Import growth should pick up again as the economy exits recession and the trade balance worsens once again.

The current account deficit should once again move in concert with its twin the budget deficit.

We are forecasting the deficit in the current account to continue to grow throughout our forecast horizon.

U ne m p l o y m en t Unemployment rates will continue to drift upward as job losses spread across and layoff announcements accelerate for most sectors of the economy. Currently, the U.S. rate of unemployment stands at 7.6%.

The drift upward in unemployment should continue through 2009 and into 2010, peaking at 9.5%. Unemployment and payroll employment lag the business cycle, and we expect to continue to see unemployment drift higher and payrolls shrink even after the economy has emerged out of the recession. We are forecasting unemployment rates to continue to climb for several quarters through the end of the second quarter of 2010 before beginning a painfully slow decline. We expect the unemployment rate to decline starting in the second half of 2011 and fall to 7.9% by the end of 2012.

Institute for Economic Competitiveness

13

Automobile Fe b r u a r y 2 0 0 9 and Light Truck Sales F OR E C A ST (Millions Vehicles)

Charts

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

f o r t h e na 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 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5

(Mortgage rates - Left axis, %)

2.5 2.0 1.5 1.0 0.5

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

15

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

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0

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

Federal Budget Surplus (Billions of Dollars)

500.0 0.0 -500.0 -1000.0 -1500.0

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

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

16

(%)

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

U.S. Forecast | February 2009

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

Industrial Production 115.0

(2002=100)

110.0 105.0 100.0 95.0 90.0 85.0

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

Private Fixed Nonresidential Investment 1800.0

(Billions of Dollars)

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 Private Fixed Nonresidential Investment

Manufacturing Employment 18.0

(Millions)

16.0 14.0 12.0 10.0

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

17

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

Money Supply

(Annual Growth Rate %)

40.0 30.0 20.0 10.0 0.0 -10.0

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

Total Nonfarm Payroll Employment (Millions)

140.0 135.0 130.0 125.0 120.0

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

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

140.0 120.0

100

100.0 80.0

80

60.0 40.0

60

20.0 0.0

18

120

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

U.S. Forecast | February 2009

40

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

Real Disposable Income and Consumption 8.0

(% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0 -4.0

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 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.20 1.10 1.00 0.90 0.80 0.70

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

0.60

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 U.S. Federal Budget Surplus Current Account Institute for Economic Competitiveness

19

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

Civilian Unemployment Rate (%)

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 Unemployment Rate

Yield Curve 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0

20

(%)

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

U.S. Forecast | February 2009

Table 15. Government Receipts and Expenditures History 2004 2005

2001

2002

2003

Receipts Personal Tax and Nontax Receipts Corp. Profits Tax Accruals Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2016.2 994.5 164.7 85.8 717.5

1853.2 830.5 150.5 87.3 734.3

1879.9 774.5 197.8 89.7 758.9

Federal Government Receipts a 2008.9 2266.9 2510.4 2651.3 797.4 930.7 1049.9 1167.3 250.3 341.0 389.0 365.4 94.6 99.2 98.0 97.7 805.2 850.1 902.4 942.3

Expenditures Purchases Goods & Services National Defense Other Transfer Payments To Persons To Foreigners Grants in Aid to State & Local Gov't Net Interest Subsidies less Surplus of Gov't Entities Surplus (+) or Deficit (-)

1969.5 612.9 392.6 220.3 1131.4 838.7 14.0 276.1 240.2 53.1 46.7

2101.1 679.7 437.1 242.5 1243.0 916.9 18.8 304.6 213.7 39.1 -248.0

2252.1 756.4 497.2 259.2 1328.7 963.7 23.6 338.5 196.5 45.4 -372.2

2379.5 825.6 550.7 274.9 1390.6 1012.3 26.2 349.1 203.8 45.5 -370.6

915.8 242.7 30.2 642.8 13.7 276.1

929.0 221.3 32.2 675.5 15.8 304.6

1368.2 1212.8 305.2 5.2 3.6 2.0 0.0 4.8

1444.3 1281.5 332.0 16.5 -1.6 2.0 0.0 -34.2

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

Expenditures Purchases Goods & Services Transfer Payments Interest Received Net Subsidies Dividends Received Net Wage Accruals Surplus (+) or Deficit (-)

2558.6 875.5 588.1 287.5 1478.0 1078.5 35.6 360.9 238.5 63.9 -291.7

2711.6 932.1 624.2 308.0 1568.1 1177.1 29.7 358.0 264.2 52.9 -201.1

2007

2880.6 979.3 662.2 317.1 1666.7 1250.6 36.3 376.3 290.7 47.4 -229.3

State and Local Government Receip 979.5 1061.2 1162.4 1242.2 1304.1 226.6 249.0 277.1 303.3 325.4 35.3 43.0 56.3 60.8 60.9 717.5 769.2 829.0 878.2 917.8 19.8 23.6 24.2 23.1 22.8 338.5 349.1 360.9 358.0 376.3 1514.6 1336.0 353.0 24.8 0.7 2.2 0.0 -20.4

1592.8 1391.3 383.8 24.1 3.4 2.4 0.0 1.6

1684.9 1479.8 403.5 16.5 8.7 2.5 0.0 29.5

1765.3 1576.0 401.0 13.7 5.4 2.7 0.0 46.2

t ab l e s

Receipts Personal Tax/Nontax Receipts Corporate Profits Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Federal Grants-In-Aid

2006

Fe b r u a r y 2 0 0 9

1892.4 1695.6 430.8 13.9 12.8 2.8 0.0 10.4

U . S . F o r eca s t Tab l e s Table 1. Annual Summary of the Long-Term Forecast of the U.S.

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

Gross Domestic Product Final Sales of Domestic Product Total Consumption Durables Nondurables Services Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals Communications Equipment Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures Commercial & Health Care Manufacturing Power & Communication Mining & Petroleum Other Residential Fixed Investment Exports Imports Federal Government State & Local Government Real GDP Nominal GDP GDP Deflator Consumer Prices Excl. Food & Energy Producer Prices, Finished Goods Employment Cost Index - Total Comp.

2001

2002

2003

History 2004 2005

0.8 1.6 2.5 4.3 2.0 2.4 -4.1 -4.8 -1.6 2.6 -7.1 -8.4 -11.7 3.7 -25.3 -2.1 -5.0 -10.2 3.0 18.5 -4.8 0.4 -5.3 -2.6 3.9 3.2

1.6 1.2 2.7 7.2 2.5 1.9 -9.2 -6.1 -4.6 5.4 -21.0 -7.3 -10.9 -26.6 -0.4 -17.0 -15.6 -41.2 -1.5 -23.1 -15.4 4.8 -2.0 3.5 7.0 3.1

2.5 2.5 2.8 5.8 3.2 1.9 1.0 2.8 5.8 13.1 1.4 2.9 -6.2 -22.3 -8.7 -3.9 -6.4 -6.0 -12.6 18.2 -4.3 8.4 1.3 4.1 6.8 0.2

Composition of Real GDP, Percent Change 3.6 2.9 2.8 2.0 1.3 3.3 3.1 2.8 2.4 1.5 3.6 3.0 3.0 2.8 0.3 6.4 4.6 4.5 4.8 -4.3 3.6 3.4 3.7 2.5 -0.4 3.2 2.6 2.5 2.6 1.5 5.8 7.2 7.5 4.9 1.9 7.3 9.4 7.3 1.7 -2.9 9.4 8.1 9.1 9.6 5.2 11.4 16.2 24.8 17.9 7.7 9.9 2.6 11.8 7.0 3.9 -3.0 8.4 5.8 1.4 -4.2 20.5 15.9 7.7 -11.2 -29.7 -3.5 -4.4 -15.0 22.9 -16.6 30.4 22.1 6.7 -35.4 -21.2 1.3 1.3 8.3 12.6 11.9 2.5 -0.7 6.1 8.3 0.8 5.0 17.9 10.3 14.2 40.8 -17.6 -2.8 8.1 23.0 14.6 14.9 9.8 11.8 9.5 16.9 2.2 -4.8 7.8 19.2 14.5 10.1 6.3 -7.0 -17.9 -20.8 9.8 7.0 9.1 8.4 6.6 11.3 6.0 6.0 2.2 -3.3 4.2 1.2 2.3 1.6 5.9 -0.2 -0.1 1.3 2.3 1.2

2.2 2.0 1.2 3.5 3.9

26.0 2.6 -3.4 73.9 -31.8 89.2 17.115 1.601 4.727 4.7 0.0 127 -385

26.1 4.1 -0.1 72.8 15.2 89.6 16.816 1.710 4.997 5.8 -1.1 -160 -461

31.1 3.7 1.3 74.0 14.0 87.6 16.643 1.854 5.443 6.0 -0.3 -375 -523

41.5 2.8 2.5 76.3 48.2 95.2 16.866 1.949 5.914 5.5 1.1 -411 -625

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

3.89 3.43 3.48 4.55 5.02 5.50 6.97 1192 -16.4 1.060 6.0

1.67 1.61 2.00 3.82 4.61 5.42 6.54 996 -16.7 1.044 -1.5

1.13 1.01 1.24 2.97 4.02 5.05 5.82 964 -1.3 0.916 -12.3

1.35 1.36 1.89 3.43 4.27 5.12 5.84 1131 18.0 0.840 -8.1

Personal Income (Bil. of $) (% change) Disposable Income (Bil. of $) (% change) Real Disposable Income (Bil. Of 2000 $) (% change) Saving Rate (%) After-Tax Profits (Billions of $) (% change)

8724 3.5 7487 4.1 7333 1.9 1.8 504 -0.9

8882 1.8 7830 4.6 7562 3.1 2.4 576 15.2

9164 3.2 8163 4.2 7730 2.2 2.1 665 15.6

9727 6.1 8681 6.3 8009 3.6 2.1 897 35.3

U.S. Forecast | February 2009

2008

2009

Forecast 2010 2011

-2.8 -2.1 -1.2 -6.8 -3.0 0.7 -15.3 -14.5 -8.3 -18.4 -10.5 -20.2 -33.4 4.0 -14.8 -16.2 -15.6 1.1 -8.7 -29.9 -11.0 -23.7 -9.3 -12.2 5.0 -0.7

2.0 1.1 2.7 8.9 3.5 1.4 -1.2 6.3 5.3 5.5 6.1 -4.1 53.1 7.6 46.5 -15.0 -17.3 -29.2 -14.3 -1.7 -13.5 14.7 -0.9 7.5 1.5 0.5

3.1 3.0 2.4 4.1 2.8 1.9 12.0 14.0 8.3 26.6 7.4 20.6 42.1 9.8 29.4 7.4 11.4 -3.2 -1.8 15.5 5.7 24.3 8.0 7.1 -2.8 -0.6

2012 3.1 3.2 2.7 5.7 2.5 2.4 11.0 10.4 7.9 19.9 8.4 15.7 17.1 14.5 7.6 12.3 15.6 43.8 7.1 4.7 4.9 11.6 8.2 6.1 -2.3 -0.5

11349.2 11581.4 11943.6 12318.3 14019.3 14425.3 15063.6 15738.6

Prices & Wages, Percent Change, Annual Rate 3.2 3.4 2.8 2.6 1.9 0.4 3.3 3.7 1.9 4.0 1.6 -0.9 2.1 2.1 2.6 2.3 2.0 0.7 4.5 5.1 0.3 6.6 1.5 -5.1 3.7 2.9 3.1 3.1 2.4 1.8

1.7 2.2 2.0 1.0 3.1

22

2007

Billions of Dollars 9890.7 10048.9 10301.1 10675.7 10989.5 11294.9 11523.9 11671.3 10128.0 10469.6 10960.8 11685.9 12421.9 13178.4 13807.6 14280.7 2.4 1.9 2.7 -1.1 4.0

Oil - WTI ($ per barrel) Productivity (% change) Industrial Production (% change) Factory Operating Rate Nonfarm Inven. Chg. (Bil. of 2000 $) Consumer Sentiment Index Light Vehicle Sales (Million units) Housing Starts (Million units) Existing House Sales (Million units) Unemployment Rate (%) Payroll Employment (% change) Federal Surplus (Unified, FY, Bil. $) Current Account Balance (Bil. $)

2006

1.2 2.4 1.4 3.2 1.6

1.2 2.1 1.6 1.9 1.4

1.4 2.2 1.7 2.3 2.2

Other Measures 66.1 72.2 99.8 1.0 1.4 2.9 2.2 1.7 -1.7 79.4 79.4 75.9 46.3 -3.7 -25.6 87.3 85.6 63.8 16.504 16.089 13.127 1.812 1.341 0.902 5.703 4.958 4.345 4.6 4.6 5.8 1.8 1.1 -0.4 -248 -162 -455 -788 -731 -665

40.7 1.1 -8.9 67.3 -98.2 53.9 10.158 0.531 3.787 8.7 -3.1 -1602 -322

53.2 2.5 1.2 68.5 19.6 69.2 12.732 0.943 3.861 9.4 -0.1 -1207 -568

63.3 1.2 3.9 70.9 43.3 69.7 13.852 1.308 4.093 8.8 1.5 -924 -713

76.5 1.1 3.2 72.7 42.9 73.0 14.8 1.5 4.8 8.1 1.9 -550 -784

Financial Markets, NSA 3.21 4.96 5.02 1.93 3.13 4.72 4.38 1.40 3.62 4.93 4.52 1.82 4.05 4.75 4.43 2.80 4.29 4.79 4.63 3.67 4.56 4.87 4.84 4.28 5.86 6.42 6.33 6.04 1207 1311 1477 1221 6.8 8.6 12.8 -17.2 0.824 0.812 0.767 0.733 -1.8 -1.4 -5.6 -4.1

0.12 0.23 0.51 1.73 2.66 3.34 5.02 917 -21.9 0.805 10.2

1.77 2.04 2.44 3.28 3.92 4.47 5.98 1099 20.2 0.775 -3.7

5.24 5.40 5.79 5.79 5.92 6.20 7.85 1253 14.0 0.747 -3.7

6.9 6.5 6.9 6.4 6.3 6.4 7.9 1410 12.6 0.8 1.3

Incomes 10994 11663 7.1 6.1 9641 10170 6.4 5.5 8407 8644 3.5 2.8 0.7 0.6 1405 1436 16.6 2.2

12175 0.6 10843 1.9 9004 2.9 5.6 1096 -9.7

12474 2.5 11092 2.3 9089 0.9 4.1 1245 13.6

13019 4.4 11502 3.7 9265 1.9 3.7 1267 1.8

13660 4.9 11960 4.0 9476 2.3 3.1 1285 1.4

56.6 1.8 3.3 78.6 39.1 88.6 16.948 2.073 6.181 5.1 1.7 -321 -729

10270 5.6 9062 4.4 8122 1.4 0.4 1207 34.6

12099 3.7 10637 4.6 8752 1.3 1.7 1241 -13.4

U . S . F o r eca s t Tab l e s Table 2.Gross Real GrossProduct Domestic Table 2. Real Domestic 2001

Product

2002

2003

History 2004 2005

2006

2007

2008

2009

Forecast 2010 2011

2012

Real GDP Billions 2000 Dollars Gross Domestic Product Final Sales of Domestic Product Total Consumption Durables

9890.7 10048.9 10301.1 10675.7 10989.5 11294.9 11523.9 11671.3

11349.2 11581.4 11943.6 12318.3

9921.0 10036.5 10285.1 10619.8 10947.3 11249.3 11523.5 11689.9

11438.1 11566.7 11908.1 12283.3

6910.4

7099.3

7295.4

7561.3

7791.7

8029.0

8252.8

8276.2

8177.6

8396.3

8594.8

8829.8

900.7

964.8

1020.6

1084.8

1134.4

1185.1

1242.4

1188.3

1104.8

1203.3

1253.1

1324.0

Nondurables

1986.7

2037.1

2103.0

2177.6

2252.7

2335.3

2392.6

2381.9

2310.1

2391.8

2459.4

2520.0

Services

4023.2

4100.4

4178.8

4310.9

4420.9

4529.9

4646.2

4714.8

4746.4

4812.5

4903.5

5022.6

1180.5

1071.5

1081.8

1144.3

1226.2

1318.2

1383.0

1408.2

1193.3

1174.9

1315.9

1459.7

874.2

820.2

843.1

905.1

989.6

1061.0

1078.9

1047.2

894.7

949.4

1082.0

1194.5

459.0

437.4

462.7

505.7

546.7

596.6

653.9

687.0

629.7

662.8

717.6

774.3

Computers & Peripherals

103.7

108.9

123.2

137.2

159.3

198.6

234.1

251.1

204.3

215.4

272.8

326.6

Communications Equipment

114.7

90.5

91.4

100.1

102.7

114.7

122.7

127.3

113.9

120.7

129.6

140.6

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Industrial Equipment

145.7

134.5

138.4

134.0

145.3

153.5

155.7

149.0

119.0

112.9

136.2

157.3

Transportation Equipment

141.7

126.3

118.3

142.9

164.4

177.0

157.2

111.4

70.8

107.3

151.4

176.7

33.5

23.9

17.8

17.3

16.0

13.5

16.6

14.0

14.1

15.1

16.6

19.1

30.4

30.1

27.4

35.8

43.4

46.3

29.9

23.2

19.7

28.7

36.7

39.4

306.1

253.8

243.5

246.7

249.8

270.3

304.6

340.5

284.3

239.5

257.0

288.5

130.3

109.8

102.6

105.1

104.3

110.6

119.7

120.6

101.8

83.9

93.3

107.8

Aircraft Other Equipment Structures Commercial & Health Care Manufacturing

28.5

16.7

15.4

16.2

19.0

20.9

23.9

33.7

33.2

23.4

22.4

32.0

Power & Communication

48.2

47.1

41.0

33.7

32.7

35.3

43.5

49.5

45.2

38.8

38.0

40.6

Mining & Petroleum

32.0

24.5

29.0

33.3

36.5

40.7

44.5

52.1

35.8

33.2

38.2

40.0

Other

66.6

55.9

53.4

54.6

51.9

55.9

66.7

76.1

67.7

58.2

61.6

64.6

448.5

469.9

509.4

560.2

595.4

552.9

453.8

359.3

273.8

312.2

386.5

431.3

Exports

1036.7

1013.3

1026.1

1126.1

1205.3

1314.9

1425.9

1518.6

1376.2

1362.3

1471.0

1592.0

Imports

1435.8

1484.6

1545.0

1720.0

1821.9

1930.5

1972.4

1906.7

1673.7

1799.7

1926.9

2043.5

601.4

643.4

687.1

715.9

724.5

741.0

752.9

797.7

836.9

849.0

825.2

806.0

1179.0

1215.5

1217.8

1215.8

1214.3

1230.2

1259.0

1274.3

1265.9

1271.7

1263.8

1257.7

Residential Fixed Investment

Federal Government State & Local Government

Institute for Economic Competitiveness

23

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

of the Forecast of the U.S.

2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

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 2000 $) 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 (%) 25-Year Treasury Note Yield (%) 30-Year Fixed Mortgage Rate (%) S&P 500 Stock Index (% change) Exchange Rate, Major Trading Partners (% change (negative = depreciation))

0.9 0.9 0.9 -4.3 -0.4 2.4 2.4 -0.6 7.0 15.2 -0.5 0.8 -17.0 55.1 -24.3 8.3 -3.7 12.4 21.4 14.7 12.2 -27.8 5.0 -0.8 5.7 -0.3

2.8 4.3 1.2 -2.8 3.8 0.7 2.4 -5.1 7.8 12.4 11.1 -3.6 -58.1 5.6 6.1 17.3 0.2 95.8 0.5 28.4 16.3 -14.0 11.8 -7.5 6.4 2.4

-0.5 -1.3 -3.9 -15.7 -7.3 -0.1 -1.7 -7.7 -4.2 -24.5 4.7 -9.1 -52.5 -100.3 -22.5 9.3 -9.1 15.5 6.6 39.1 1.9 -17.2 3.0 -3.5 13.1 1.3

-3.9 -5.2 -3.6 -24.6 -7.3 1.7 -20.6 -31.3 -20.4 -34.9 -31.2 -17.7 -110.1 -45.9 -32.3 -1.8 -8.1 28.4 -11.9 1.1 -2.7 -26.0 -21.4 -16.7 5.7 -0.5

-6.3 -2.7 -3.2 -10.5 -7.0 -0.4 -18.9 -15.1 -15.8 -38.7 -16.1 -19.0 10.4 128.8 6.6 -25.1 -17.8 -4.0 -12.9 -55.7 -13.4 -39.7 -13.2 -30.9 -0.9 -3.0

-3.6 -2.8 0.7 2.1 0.2 0.7 -24.0 -17.0 -4.2 -3.2 -8.8 -43.2 -48.7 -15.6 -50.6 -35.8 -22.3 -29.1 -12.4 -78.6 -24.1 -38.6 -9.6 -6.8 5.8 -0.6

Composition of Real GDP, Percent Change, Annual Rate

-0.2 -1.0 3.1 11.2 3.7 1.7 -21.2 -9.9 -1.8 -3.2 -6.6 -27.3 -22.3 -9.4 -9.3 -41.3 -34.1 -34.9 -10.7 -92.0 -24.9 -12.4 -10.5 0.6 5.1 0.0

1.6 0.6 2.9 9.4 4.5 1.2 -6.6 1.6 5.3 -0.5 4.6 -16.3 35.8 28.3 36.1 -22.5 -18.5 -37.9 -12.4 -29.2 -22.8 10.0 -4.9 6.0 4.4 -0.4

3.1 1.7 2.9 11.7 3.6 1.2 4.4 9.9 5.3 -11.1 11.1 -3.1 89.3 4.5 76.9 -7.1 -15.2 -37.7 -21.5 53.9 -16.8 17.0 0.6 11.1 1.9 1.1

3.3 2.1 2.5 7.0 3.5 1.4 6.0 16.1 9.0 25.8 12.3 7.9 83.1 14.1 60.8 -16.1 -26.9 -36.3 -21.5 16.8 -15.5 28.7 3.7 10.5 -0.8 1.7

3.3 3.1 2.3 4.8 2.7 1.8 12.5 14.9 9.6 26.2 7.4 20.9 41.1 8.9 53.1 6.6 6.7 -21.9 -10.2 31.0 8.5 33.6 7.0 7.5 -3.5 0.2

2.8 2.8 1.7 2.1 2.2 1.4 12.5 13.0 7.5 23.6 7.6 20.2 34.5 9.0 12.5 11.3 24.5 -26.7 -4.4 23.7 6.1 22.4 8.8 6.7 -2.2 -0.4

3.0 3.2 2.2 1.9 2.6 2.1 12.2 12.7 7.2 26.4 6.7 18.9 34.1 15.4 17.8 10.9 20.0 9.4 5.1 6.0 5.6 13.0 9.3 3.8 -2.6 -1.8

3.4 3.4 3.0 4.7 3.2 2.6 12.0 12.3 7.3 26.7 4.5 19.4 29.1 8.8 15.6 11.2 13.5 50.3 11.3 -3.9 6.9 10.4 9.0 5.8 -2.7 -0.9

3.0 3.1 3.0 7.1 2.7 2.6 11.5 11.4 8.0 20.2 7.2 18.6 19.1 10.6 8.0 11.8 11.7 55.6 10.4 -2.1 7.3 15.1 8.4 6.5 -4.2 -3.1

2.7 2.7 2.3 5.2 1.9 2.0 11.1 9.8 7.5 15.0 8.4 17.0 12.3 14.8 0.7 14.1 14.4 43.0 14.6 9.5 4.2 11.7 7.6 7.5 -2.2 0.1

3.4 3.5 2.8 6.0 2.3 2.5 9.8 8.9 8.0 15.4 10.1 13.3 8.3 17.4 8.7 12.1 15.7 37.3 -2.1 11.8 3.7 9.4 7.4 4.6 -0.9 0.7

3.3 3.3 3.0 6.2 2.5 2.8 8.7 8.5 7.8 16.4 9.6 7.9 12.7 15.8 6.3 9.3 16.3 18.8 -0.1 4.0 3.0 7.7 7.7 5.5 -1.6 0.6

3.1 3.1 2.7 4.6 2.5 2.5 6.7 6.2 7.7 17.8 9.8 -0.4 8.6 13.2 4.4 8.0 16.3 11.1 0.1 1.1 2.5 9.2 7.7 5.1 -1.8 1.4

Billions of Dollars

11646.0 11727.4 11712.4 11599.4 11417.5 11314.8 11309.5 11354.9 11443.0 11538.1 11624.2 11720.2 11802.8 11892.2 11994.0 12085.4 12166.8 12269.1 12370.7 12466.5 14150.8 14294.5 14412.8 14264.6 14107.6 13967.9 13968.5 14033.3 14187.3 14346.5 14502.5 14665.0 14824.8 14978.0 15147.7 15304.0 15466.1 15644.5 15828.4 16015.3

2.6 4.3 2.5 8.9 3.0

1.1 4.9 1.8 10.2 2.2

3.9 6.6 3.2 8.4 2.6

-0.1 -9.5 0.4 -21.4 1.8

1.5 -3.3 1.2 -9.6 2.2

97.9 123.8 118.3 59.1 2.6 3.6 1.5 3.2 0.4 -3.5 -9.2 -12.0 78.7 77.5 75.5 71.9 -17.9 -55.1 -33.3 4.0 72.9 59.6 64.8 57.7 15.210 14.101 12.888 10.307 1.053 1.025 0.876 0.656 4.393 4.337 4.447 4.203 4.9 5.4 6.1 6.9 -0.2 -1.3 -1.5 -3.6 -331 -650 -548 -535 -703 -724 -696 -537

-0.4 -2.1 0.4 -8.7 1.8

0.2 0.5 0.4 -1.2 1.7

Prices & Wages, Percent Change, Annual Rate 0.3 1.1 0.6 -0.8 1.4

1.3 2.5 1.1 3.8 2.2

1.2 2.6 1.4 4.2 1.5

1.1 2.1 1.5 3.0 1.3

1.5 2.2 1.6 2.5 2.1

1.2 2.3 1.6 1.9 1.9

1.4 2.2 1.7 2.3 2.4

1.6 2.3 1.8 2.7 2.6

39.6 -1.2 -17.9 67.8 -101.6 55.3 9.428 0.511 3.968 7.9 -5.2 -801 -314

38.0 41.0 44.3 49.0 53.1 54.6 56.2 58.7 61.8 64.8 67.9 -0.5 2.5 3.2 3.2 2.5 1.7 1.5 0.8 1.0 1.3 0.8 -3.7 -2.6 -1.2 2.5 3.3 3.7 4.0 4.0 3.6 3.7 4.1 67.5 67.1 67.0 67.6 68.5 68.8 69.2 69.9 70.5 71.3 71.8 -124.6 -98.6 -68.1 -22.8 16.8 39.4 45.0 45.9 41.8 42.7 42.9 52.0 54.1 54.3 68.5 69.4 69.9 68.9 68.4 68.3 69.9 72.0 9.781 10.464 10.959 11.923 12.677 13.047 13.281 13.425 13.698 13.933 14.351 0.485 0.524 0.603 0.703 0.904 1.030 1.135 1.220 1.279 1.332 1.401 3.670 3.691 3.819 3.792 3.815 3.863 3.974 3.982 4.012 4.105 4.274 8.5 9.1 9.4 9.5 9.5 9.4 9.2 9.1 8.9 8.7 8.6 -3.1 -2.1 -1.0 0.5 1.0 1.1 1.2 1.6 1.6 1.9 1.8 -1074 -1138 -1148 -1026 -1041 -1050 -1043 -890 -895 -892 -882 -264 -322 -390 -463 -535 -617 -658 -689 -703 -724 -736

70.4 0.7 2.3 72.2 44.5 72.2 14.5 1.5 4.5 8.4 1.8 -836 -759

75.2 1.5 3.1 72.5 41.4 73.3 14.8 1.5 4.7 8.2 2.0 -841 -773

78.7 1.4 3.1 72.9 42.4 73.4 15.0 1.6 4.9 8.1 2.0 -818 -794

81.5 1.3 2.8 73.1 43.2 73.0 15.0 1.6 5.0 7.9 2.0 -808 -810

1.2 2.1 1.6 1.6 1.2

Financial Markets, NSA

2.09 1.61 2.07 3.16 3.89 4.58 6.09 1372 6.4 0.698 -6.1

1.94 1.51 2.12 3.11 3.86 4.45 6.31 1252 -34.9 0.724 14.8

0.51 0.33 0.99 2.18 3.25 3.68 5.87 910 -109.3 0.800 42.3

0.14 0.17 0.46 1.67 2.60 3.27 5.04 833 -33.9 0.804 1.8

0.12 0.21 0.48 1.70 2.63 3.32 4.98 875 20.4 0.808 2.2

0.12 0.22 0.50 1.72 2.66 3.34 4.99 950 34.3 0.806 -1.0

0.12 0.31 0.58 1.81 2.75 3.43 5.07 1010 25.3 0.803 -1.6

0.36 0.62 0.92 2.08 2.94 3.60 5.18 1055 17.8 0.796 -3.3

1.12 1.38 1.76 2.72 3.45 4.03 5.52 1075 7.4 0.782 -7.3

11961 Personal Income (Bil. of $) 3.0 (% change) 10426 Disposable Income (Bil. of $) 2.9 (% change) Real Disposable Income (Bil. Of 2000 $) 8668 -0.7 (% change) 0.2 Saving Rate (%) 1348 After-Tax Profits (Billions of $) -30.9 (% change)

12152 6.4 10806 14.6 8891 10.3 2.4 1343 -1.4

12159 0.2 10691 -4.3 8689 -9.1 1.2 1300 -12.8

12124 -1.2 10626 -2.4 8760 3.3 2.9 974 -100.4

12076 -1.6 10671 1.7 8850 4.1 4.7 1077 42.4

12234 5.2 10849 6.7 9027 8.0 6.4 1060 -6.1

12176 -1.9 10904 2.0 9062 1.5 6.0 1106 17.4

12212 1.2 10946 1.5 9078 0.7 5.5 1142 12.7

12284 2.4 10923 -0.8 9016 -2.7 4.2 1229 30.5

12401 3.8 11029 3.9 9058 1.9 4.1 1257 9.1

U.S. Forecast | February 2009

1.4 2.4 1.6 3.2 1.6

1.5 2.3 1.8 1.6 1.6

1.1 2.0 1.6 1.7 1.2

1.1 2.0 1.6 1.4 1.4

Other Key Measures

3.18 2.15 2.10 2.75 3.66 4.41 5.87 1350 -38.5 0.709 -7.0

24

3.0 2.3 2.8 6.5 3.7 1.9 9.0 13.0 8.3 19.0 7.1 20.7 32.2 0.4 31.0 -0.7 -7.6 -17.1 -4.6 11.3 9.0 31.6 4.9 10.7 -3.8 -0.2

2.22 2.55 3.01 3.72 4.28 4.79 6.25 1114 14.6 0.768 -7.1

Incomes

12540 4.5 11161 4.8 9120 2.8 4.1 1239 -5.5

3.36 3.61 4.07 4.58 5.01 5.47 6.97 1153 14.1 0.756 -6.3

4.28 4.49 4.94 5.23 5.54 5.96 7.49 1193 13.8 0.745 -5.4

5.11 5.28 5.72 5.78 5.99 6.32 7.89 1233 13.4 0.743 -1.4

5.67 5.83 6.23 6.14 6.19 6.36 8.11 1273 13.0 0.747 2.2

5.88 5.99 6.28 6.01 5.96 6.14 7.90 1313 12.6 0.751 2.3

6.3 6.1 6.4 6.0 6.0 6.2 7.7 1353 12.2 0.752 0.3

6.7 6.3 6.6 6.2 6.1 6.3 7.8 1393 11.8 0.755 1.5

7.2 6.7 7.1 6.5 6.4 6.5 8.0 1433 11.4 0.758 1.5

7.5 7.0 7.4 6.8 6.6 6.7 8.2 1463 8.3 0.761 1.7

12668 4.1 11257 3.4 9161 1.8 3.9 1254 4.6

12807 4.4 11321 2.3 9172 0.5 3.6 1258 1.2

12942 4.2 11437 4.1 9230 2.5 3.7 1261 1.2

13093 4.6 11565 4.5 9298 2.9 3.7 1263 0.4

13236 4.4 11685 4.2 9360 2.7 3.6 1286 7.5

13389 4.6 11747 2.1 9371 0.5 3.2 1274 -3.9

13564 5.2 11889 4.8 9442 3.0 3.2 1287 4.3

13747 5.4 12028 4.7 9509 2.9 3.1 1289 0.6

13938 5.5 12176 4.9 9581 3.0 3.1 1290 0.1

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

Table 4. Quarterly Gross Domestic Product 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

Billions 2000 Dollars 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

11646.0 11727.4 11712.4 11599.4 11417.5 11314.8 11309.5 11354.9 11443.0 11538.1 11624.2 11720.2 11802.8 11892.2 11994.0 12085.4 12166.8 12269.1 12370.7 12466.5 11653.7 11778.8 11739.2 11588.0 11508.5 11427.7 11399.0 11417.3 11465.5 11525.9 11592.1 11683.2 11764.9 11858.0 11959.1 12050.3 12130.3 12235.3 12336.1 12431.2 8316.1 8341.3 8260.6 8186.9 8120.7 8134.7 8198.0 8257.1 8316.0 8367.7 8426.4 8475.2 8511.5 8558.6 8621.9 8687.2 8736.2 8796.9 8863.2 8923.1 1237.0 1228.3 1180.1 1107.7 1078.7 1084.4 1114.9 1141.1 1174.6 1195.1 1214.6 1229.1 1235.7 1241.6 1256.3 1278.7 1295.3 1314.9 1335.3 1350.7 2397.9 2420.7 2376.3 2332.8 2291.9 2293.2 2314.7 2340.5 2361.5 2381.8 2403.7 2420.1 2433.7 2449.3 2468.9 2485.6 2497.4 2511.7 2527.6 2543.2 4704.3 4712.1 4711.3 4731.6 4726.9 4735.0 4754.5 4769.2 4783.7 4800.2 4822.5 4843.6 4860.6 4886.2 4917.7 4949.3 4973.8 5005.2 5039.7 5071.6 1423.1 1431.8 1425.7 1352.2 1288.2 1210.9 1146.6 1127.6 1140.0 1157.0 1182.9 1219.9 1258.1 1296.4 1335.4 1373.8 1411.7 1446.4 1477.9 1502.9 1088.6 1074.7 1054.0

971.5

934.7

895.0

872.9

876.3

898.1

934.2

964.7 1000.6 1033.1 1065.9 1098.8 1130.0 1157.9 1183.7 1208.7 1227.6

689.6

702.9

695.5

660.1

634.0

627.3

624.5

632.8

641.1

655.6

669.2

685.2

698.0

710.6

723.6

738.1

751.9

766.8

781.7

796.8

258.7

266.8

250.4

228.6

206.4

204.8

203.1

202.9

197.3

210.0

219.9

234.3

248.1

264.5

282.1

296.4

307.5

319.3

332.4

347.2

126.5

130.0

131.5

121.3

116.4

113.8

112.0

113.3

116.4

120.0

122.1

124.4

126.7

128.9

130.3

132.7

135.5

138.9

142.2

145.7

153.4

152.0

148.6

142.0

135.3

120.6

112.4

107.8

107.0

109.1

114.7

120.7

126.8

132.8

139.3

145.7

151.9

157.0

160.1

160.0

142.1

121.4

105.5

76.5

78.4

68.9

65.1

70.9

86.7

104.7

113.2

124.8

135.5

147.1

157.8

165.3

170.3

173.9

179.4

183.3

16.2

16.5

12.3

10.9

14.4

13.9

13.5

14.5

14.7

15.2

15.2

15.5

15.9

16.5

16.9

17.3

17.9

18.7

19.5

20.1

24.0

24.4

23.0

21.2

21.5

18.8

18.4

20.0

23.9

27.5

29.6

33.6

34.6

36.2

37.6

38.3

38.4

39.2

39.9

40.3

326.4

340.5

348.4

346.9

325.1

296.1

265.5

250.6

246.1

236.2

235.8

239.7

246.5

253.2

260.3

268.0

277.4

285.8

292.4

298.3

122.5

122.6

119.8

117.4

112.1

105.9

96.8

92.4

88.9

82.9

81.3

82.7

87.7

92.1

95.2

98.0

101.6

105.5

109.8

114.3

27.5

34.0

35.4

37.9

37.5

34.8

31.7

28.7

26.0

23.7

22.6

21.4

20.0

20.4

23.0

26.2

29.0

31.7

33.2

34.2

49.5

49.5

50.3

48.8

47.3

45.8

44.6

43.2

40.9

38.7

38.2

37.3

36.9

37.3

38.4

39.4

40.8

40.6

40.6

40.6

47.1

50.4

55.4

55.5

47.8

38.4

29.6

27.4

31.1

32.4

33.3

35.9

38.0

38.6

38.2

38.0

38.9

40.1

40.5

40.6

73.8

76.8

77.2

76.7

74.1

69.6

65.3

61.6

59.0

56.7

58.0

59.2

60.1

61.0

62.0

63.1

63.8

64.4

64.9

65.3

383.0

369.6

353.7

330.7

297.9

269.1

260.8

267.3

278.7

298.7

322.2

349.3

368.8

380.8

390.7

405.5

417.3

427.1

435.3

445.4

1500.6 1544.7 1556.1 1472.8 1424.2 1390.0 1353.6 1336.9 1338.8 1351.2 1367.7 1391.5 1422.1 1455.1 1487.9 1519.0 1547.8 1576.4 1606.6 1637.3 1962.6 1926.0 1909.1 1829.2 1687.7 1658.9 1661.6 1686.5 1733.2 1778.7 1826.3 1860.6 1891.8 1909.8 1937.4 1968.7 2005.8 2028.7 2056.5 2082.9 772.6

785.0

810.8

822.3

820.4

832.3

842.9

852.1

856.2

854.6

846.4

838.9

834.2

828.7

823.2

814.5

810.0

808.1

804.8

801.3

1266.7 1274.4 1278.7 1277.2 1267.7 1265.7 1265.7 1264.3 1267.9 1273.3 1272.5 1273.1 1272.0 1266.4 1263.4 1253.7 1254.0 1256.3 1258.1 1262.4

Table 5. Annual Employment

Table 5. Annual Employment 2001

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

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

2002

2003

History 2004 2005

2006

2007

2008

Millions 131.830 130.340 129.996 131.419 133.699 136.098 137.604 137.055 110.709 108.831 108.416 109.801 111.890 114.123 115.384 114.558 0.532 0.512 0.503 0.523 0.562 0.620 0.664 0.716 6.826 6.715 6.736 6.973 7.333 7.693 7.632 7.214 16.440 15.257 14.508 14.315 14.226 14.159 13.880 13.425 25.986 25.500 25.287 25.536 25.963 26.277 26.627 26.382 4.373 4.224 4.184 4.250 4.364 4.469 4.540 4.503 7.809 7.848 7.976 8.031 8.153 8.329 8.301 8.144 15.643 16.201 16.588 16.950 17.370 17.824 18.320 18.856 16.480 15.975 15.985 16.388 16.949 17.573 17.948 17.781 3.629 3.394 3.189 3.117 3.061 3.038 3.032 2.997 12.032 11.986 12.175 12.492 12.814 13.109 13.427 13.458 21.120 21.509 21.580 21.618 21.810 21.974 22.220 22.496 2.763 2.766 2.760 2.731 2.732 2.732 2.733 2.764 18.357 18.744 18.820 18.887 19.078 19.243 19.487 19.732

0.03 -0.26 2.38 0.57 -4.78 -0.91 -0.86 1.57 3.53 -1.13 0.02 1.46 1.59 -3.40 2.41

-1.13 -1.69 -3.81 -1.63 -7.16 -1.87 -3.40 0.50 3.57 -3.05 -6.46 -0.38 1.84 0.09 2.11

-0.26 -0.38 -1.85 0.31 -4.90 -0.84 -0.94 1.63 2.39 0.06 -6.04 1.58 0.33 -0.19 0.41

1.09 1.28 4.03 3.52 -1.32 0.99 1.59 0.69 2.18 2.52 -2.24 2.60 0.18 -1.06 0.36

1.73 1.90 7.48 5.15 -0.62 1.67 2.67 1.52 2.48 3.42 -1.80 2.58 0.89 0.03 1.01

Growth Rates 1.79 1.11 2.00 1.11 10.29 7.07 4.95 -0.80 -0.48 -1.97 1.21 1.33 2.41 1.59 2.16 -0.32 2.78 2.62 3.68 2.14 -0.77 -0.18 2.31 2.43 0.76 1.12 0.00 0.05 0.86 1.27

-0.40 -0.71 7.93 -5.49 -3.28 -0.92 -0.80 -1.89 2.92 -0.93 -1.15 0.24 1.24 1.13 1.26

2009

Forecast 2010 2011

2012

132.805 132.666 134.646 137.179 110.295 110.140 112.354 114.928 0.678 0.633 0.654 0.647 6.316 5.900 6.001 6.349 12.002 11.258 11.405 11.683 25.506 25.866 25.855 26.328 4.249 4.249 4.398 4.634 7.832 7.835 7.909 8.053 19.458 20.020 20.538 20.823 16.876 17.103 18.440 19.303 2.829 2.710 2.788 2.790 13.206 13.196 13.220 13.535 22.510 22.525 22.292 22.251 2.784 2.825 2.753 2.732 19.726 19.700 19.539 19.519

-3.10 -3.72 -5.09 -12.47 -10.61 -3.31 -5.64 -3.83 3.19 -5.09 -5.62 -1.87 0.06 0.72 -0.03

-0.10 -0.13 -6.37 -6.50 -6.12 1.41 0.02 0.04 2.89 1.38 -4.18 -0.08 0.07 1.48 -0.13

1.49 2.01 3.28 1.74 1.31 -0.04 3.50 0.95 2.59 7.82 2.88 0.19 -1.04 -2.56 -0.82

1.88 2.29 -1.04 5.79 2.44 1.83 5.36 1.82 1.39 4.70 0.08 2.38 -0.18 -0.75 -0.10

Institute for Economic Competitiveness

25

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

Table 6. Quarterly Employment 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

Employment (Millions) Total Nonfarm Employment 137.9 137.5 137.0 135.8 134.0 133.0 132.3 132.0 132.1 132.5 132.8 133.2 133.8 134.3 135.0 135.6 136.2 136.8 137.5 138.2 Private Nonfarm 115.5 115.0 114.5 113.2 111.5 110.4 109.8 109.5 109.5 109.9 110.3 110.8 111.4 112.0 112.7 113.4 114.0 114.6 115.3 115.8 0.7 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.6 0.6 0.6 Mining 0.7 0.7 Construction 7.4 7.3 7.2 7.0 6.6 6.4 6.2 6.1 6.0 5.9 5.9 5.9 5.9 6.0 6.0 6.1 6.2 6.3 6.4 6.5 Manufacturing 13.7 13.5 13.4 13.1 12.5 12.1 11.8 11.5 11.3 11.2 11.2 11.3 11.3 11.4 11.4 11.5 11.6 11.7 11.7 11.8 Trade, Transportation, and Utilities 26.7 26.5 26.3 26.0 25.6 25.4 25.4 25.6 25.7 25.9 25.9 25.9 25.9 25.8 25.8 25.9 26.1 26.2 26.4 26.6 4.3 4.4 4.4 4.5 4.6 4.6 4.7 4.7 Transportation & Warehousing 4.6 4.5 4.5 4.4 4.3 4.3 4.2 4.2 4.2 4.2 4.3 4.3 Financial Activities 8.2 8.2 8.1 8.0 7.9 7.8 7.8 7.8 7.8 7.8 7.8 7.9 7.9 7.9 7.9 8.0 8.0 8.0 8.1 8.1 Education & Health 18.7 18.8 18.9 19.0 19.2 19.4 19.5 19.6 19.8 20.0 20.1 20.2 20.3 20.5 20.6 20.7 20.7 20.8 20.9 20.9 Professional & Business Services 18.0 17.9 17.7 17.5 17.2 16.9 16.8 16.6 16.7 16.9 17.2 17.6 17.9 18.3 18.6 18.9 19.1 19.2 19.4 19.6 Information 3.0 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.7 2.7 2.7 2.7 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 13.5 13.5 13.5 13.4 13.3 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.1 13.2 13.2 13.3 13.4 13.5 13.6 13.7 Leisure & Hospitality Government 22.4 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.6 22.6 22.5 22.4 22.4 22.3 22.3 22.2 22.2 22.2 22.3 22.4 Federal 2.7 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.9 2.9 2.8 2.8 2.8 2.8 2.7 2.7 2.7 2.7 2.7 2.7 State & Local 19.7 19.7 19.8 19.8 19.7 19.7 19.7 19.7 19.7 19.7 19.7 19.6 19.6 19.6 19.5 19.4 19.4 19.5 19.5 19.7

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

-0.17 -0.50 9.19 -5.48 -2.44 -0.68 -0.21 -1.78 2.81 -0.83 -0.62 -0.11 1.57 0.78 1.68

-1.26 -1.74 7.43 -8.47 -4.21 -2.34 -1.47 -1.83 3.04 -2.81 -1.50 -0.93 1.24 2.53 1.06

-1.47 -1.95 13.70 -6.46 -4.76 -2.49 -3.34 -1.97 2.85 -3.51 -2.88 -1.40 0.99 1.40 0.93

-3.63 -5.20 -3.05 -2.06 -4.33 -6.18 -3.68 -2.42 3.67 -2.67 -19.79 -24.70 -12.11 -18.93 -13.37 -14.06 -9.54 -16.45 -12.22 -11.72 -5.14 -5.82 -3.47 0.54 -6.44 -9.96 -4.64 -4.66 -4.31 -6.65 -4.64 -2.28 2.25 3.43 5.06 2.14 -5.32 -7.57 -5.00 -4.03 -3.70 -9.12 -5.85 -6.15 -3.00 -2.83 -1.67 -0.90 -0.08 -0.27 0.03 -0.27 0.96 1.20 -0.49 -0.49 -0.22 -0.47 0.10 -0.23

-1.01 -1.11 -11.23 -7.62 -8.63 1.76 -1.56 1.67 1.81 -3.85 -7.14 0.80 -0.51 0.98 -0.72

0.52 0.17 -6.53 -5.72 -6.55 2.75 1.15 0.91 2.58 1.73 -5.68 0.22 2.22 12.99 0.70

Growth Rates 1.02 1.09 1.32 1.57 2.66 4.86 -4.63 -3.17 -5.12 0.56 2.51 0.71 2.92 2.09 0.14 -0.20 4.02 3.05 6.19 6.22 -4.04 1.06 0.07 -0.08 -0.43 -1.25 -2.88 -8.44 -0.08 -0.21

1.23 1.88 5.28 0.51 1.42 -0.34 1.29 1.19 2.54 8.32 4.24 -1.12 -1.95 -3.46 -1.74

1.57 1.90 3.54 1.89 1.70 -0.45 3.57 0.80 2.07 8.39 4.82 -0.76 -0.05 -1.52 0.16

1.64 2.23 3.63 4.13 2.22 -1.09 4.31 1.11 2.79 8.10 4.63 0.60 -1.31 -0.86 -1.38

1.94 2.45 -0.07 5.37 2.14 -0.08 5.52 1.58 2.50 7.17 1.17 2.45 -0.64 -0.86 -0.61

1.77 2.60 -1.26 6.23 2.88 1.63 6.05 2.09 1.63 5.75 -0.74 2.76 -2.41 -0.86 -2.63

1.80 1.96 2.00 1.96 2.16 2.15 2.19 1.95 -1.34 -2.20 -1.40 -1.64 6.11 6.41 4.75 4.04 2.88 2.33 1.81 1.41 2.26 2.75 2.86 2.39 5.40 4.58 5.18 4.82 1.76 2.52 1.68 0.34 0.83 1.04 1.15 0.65 3.38 3.07 3.75 3.97 -0.37 -0.39 -0.25 -0.34 2.62 2.04 2.29 2.82 -0.02 1.00 1.00 2.04 -0.86 -0.69 -0.51 -0.34 0.10 1.23 1.21 2.38

Table 7. Quarterly Implicit Price Deflators (2000=100) Table 7. Quarterly Implicit Price Deflators (2000=100) 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

GDP Consumption Durables Motor Vehicles Furniture Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil Fuel Services Housing Household Operations Electricity Natural Gas Water & Sewer Telephone Domestic Service Other Household Transportation Other Services

26

121.6 120.3 86.6 98.7 68.1 100.8 123.1 123.0 90.2 216.9 235.9 127.1 127.0 127.2 140.4 167.3 140.0 97.5 128.5 131.8 122.5 137.5

122.0 121.5 86.2 98.4 67.2 102.1 125.0 124.9 89.5 228.6 270.1 128.5 127.6 131.6 143.9 195.2 141.5 98.5 129.7 134.3 124.8 139.5

123.1 123.0 86.1 98.3 66.7 102.7 128.1 127.5 90.8 249.7 278.3 129.5 128.4 134.8 148.5 206.1 144.5 99.4 130.7 135.9 126.8 140.7

U.S. Forecast | February 2009

123.1 121.3 85.3 96.5 66.0 103.3 122.0 129.1 89.7 162.8 217.1 129.8 129.0 133.1 151.6 174.7 147.5 99.7 131.0 136.2 127.8 142.0

123.6 120.6 84.2 95.0 65.0 102.9 119.4 129.2 88.9 131.8 166.4 130.0 129.6 131.8 151.4 158.1 148.8 99.9 131.5 137.0 128.4 143.3

123.4 120.2 83.2 93.9 64.1 102.0 118.2 128.6 87.8 121.6 148.3 130.2 129.6 128.5 147.1 135.8 150.0 99.2 131.8 137.7 128.5 144.4

123.5 120.3 82.2 92.8 63.0 101.5 118.3 128.3 87.3 125.6 151.0 130.6 129.7 127.5 143.1 136.8 151.1 98.2 132.1 138.4 129.0 145.3

123.6 120.6 81.3 92.1 62.0 101.3 118.7 128.3 86.9 130.8 155.1 131.0 129.8 127.2 141.2 139.8 152.1 97.5 132.3 139.0 129.4 146.0

124.0 121.2 80.8 91.9 61.1 101.3 119.7 128.6 86.8 140.2 163.6 131.7 130.1 128.0 140.8 148.7 153.1 97.1 132.5 139.6 130.2 146.6

124.3 121.8 80.4 91.9 60.3 101.4 120.6 129.2 86.7 146.3 169.8 132.4 130.4 129.2 141.3 160.7 154.1 96.6 132.6 140.2 130.9 147.1

124.8 122.4 80.2 92.1 59.6 101.5 121.3 129.9 86.6 148.5 172.8 133.2 130.9 130.8 142.4 173.3 155.0 96.4 132.7 140.7 131.5 147.9

125.1 122.9 79.9 92.3 58.9 101.5 121.9 130.5 86.4 150.3 175.2 133.8 131.5 131.6 143.5 178.5 155.9 96.1 132.8 141.3 132.0 148.5

125.6 123.4 79.6 92.5 58.3 101.6 122.7 131.1 86.4 154.6 178.6 134.5 132.1 131.9 144.2 179.4 156.8 95.7 132.8 141.8 132.6 149.1

125.9 123.9 79.4 92.7 57.7 101.7 123.4 131.6 86.3 158.5 182.5 135.0 132.8 132.1 144.9 179.2 157.7 95.2 132.9 142.4 133.0 149.5

126.3 124.4 79.1 92.7 57.1 101.7 124.2 132.0 86.2 162.9 186.8 135.5 133.5 132.2 145.7 177.6 158.8 94.9 133.2 143.0 133.5 150.1

126.6 124.8 78.7 92.6 56.5 101.8 124.9 132.4 86.1 167.5 191.2 136.1 134.1 133.0 146.5 183.2 160.0 94.3 133.5 143.7 133.9 150.5

127.1 125.4 78.4 92.7 55.9 101.9 125.6 133.0 86.1 171.4 195.3 136.7 134.7 133.7 147.1 188.2 161.2 93.8 133.7 144.4 134.5 151.0

127.5 125.9 78.1 92.7 55.3 102.0 126.6 133.5 86.0 178.7 200.8 137.2 135.4 133.7 147.5 186.4 162.4 93.3 134.0 145.1 135.1 151.5

128.0 126.5 77.9 92.7 54.7 102.1 127.5 134.1 86.0 184.1 204.8 137.9 136.0 133.8 148.2 184.9 163.5 92.9 134.3 145.8 135.8 152.2

128.5 127.1 77.6 92.8 54.1 102.3 128.4 134.8 85.9 188.3 208.0 138.6 136.7 134.2 149.2 186.1 164.7 92.5 134.5 146.4 136.6 152.9

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

2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

GDP Consumption Durables Motor Vehicles Furniture Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil Fuel Services Housing Household Operations Electricity Natural Gas Water & Sewer Telephone Domestic Service Other Household Transportation Other Services

2.6 3.6 -0.1 -0.9 -1.9 4.8 6.5 4.8 -0.5 23.4 41.2 2.8 2.9 3.7 0.8 16.9 5.6 0.2 7.8 2.6 4.8 4.2

1.1 4.2 -1.6 -1.3 -5.6 5.2 6.4 6.3 -3.0 21.6 58.1 4.1 2.0 13.9 10.1 66.7 4.2 4.0 3.6 7.5 7.6 5.8

3.9 4.9 -0.6 -0.2 -2.7 2.4 9.9 8.2 5.8 36.9 12.2 3.4 2.5 9.7 12.9 22.4 8.4 3.8 3.0 4.8 6.5 3.7

-0.1 1.5 -0.4 0.2 -5.7 -2.4 -1.3 0.5 -4.0 -5.0 -4.9 -4.7 -7.5 -6.4 -4.6 -4.4 -4.4 -5.8 -5.9 -6.5 2.2 -1.5 -3.4 -2.0 -19.1 -8.6 -3.9 0.3 4.8 0.3 -1.8 -0.8 -4.8 -3.8 -4.6 -2.5 -139.1 -76.1 -31.2 13.2 -88.0 -93.5 -43.3 7.2 0.7 0.9 0.4 1.3 2.0 1.6 0.1 0.3 -4.9 -4.0 -9.8 -3.3 8.3 -0.6 -11.3 -10.9 -61.0 -38.1 -56.4 2.9 8.3 3.5 3.3 2.9 1.0 1.0 -2.8 -4.0 1.2 1.5 0.9 0.8 0.8 2.3 2.1 1.9 3.0 2.0 0.4 1.6 3.6 3.6 3.0 2.7

0.3 0.8 -4.1 -3.3 -6.6 -0.9 1.3 -0.2 -1.8 16.8 10.7 1.3 0.4 -0.8 -5.2 8.8 2.8 -2.9 0.7 1.8 1.1 1.8

1.3 1.9 -2.7 -0.9 -6.0 0.0 3.4 1.1 -0.5 28.8 22.0 2.0 0.7 2.4 -1.2 25.4 2.6 -1.6 0.5 1.7 2.5 1.7

1.2 2.0 -1.8 0.3 -5.1 0.4 3.0 1.7 -0.4 17.3 15.3 2.2 1.1 3.9 1.6 32.4 2.5 -2.0 0.5 1.7 2.0 1.4

1.4 2.0 -1.4 0.8 -4.6 0.4 2.2 2.2 -0.3 6.1 7.1 2.4 1.4 4.8 3.1 31.2 2.4 -0.8 0.3 1.6 1.9 2.0

1.2 1.6 -1.4 0.8 -4.5 0.1 1.9 1.8 -0.8 4.9 5.4 2.0 1.8 2.5 2.9 12.2 2.3 -1.4 0.2 1.6 1.4 1.6

1.5 1.8 -1.1 1.1 -4.2 0.3 2.6 1.8 -0.1 11.3 7.9 1.9 2.0 1.0 2.1 2.0 2.1 -1.4 0.0 1.4 1.8 1.6

1.1 1.6 -1.3 0.5 -4.2 0.4 2.4 1.6 -0.4 10.2 8.8 1.6 2.1 0.6 2.0 -0.6 2.5 -2.0 0.4 1.6 1.3 1.2

1.1 1.5 -1.6 0.1 -4.2 0.2 2.4 1.4 -0.5 11.0 9.2 1.6 2.0 0.4 2.1 -3.5 2.8 -1.6 0.7 1.8 1.4 1.5

1.1 1.5 -1.7 -0.1 -4.3 0.1 2.3 1.2 -0.7 11.4 9.6 1.6 1.9 2.4 2.4 12.7 3.0 -2.2 0.9 1.9 1.2 1.2

1.53 1.66 -1.54 0.07 -4.28 0.46 2.41 1.57 -0.06 9.25 8.56 1.79 1.90 2.00 1.59 10.93 2.92 -2.10 0.83 1.90 1.93 1.31

1.24 1.79 -1.52 0.10 -4.25 0.51 3.25 1.64 -0.31 17.17 11.31 1.62 1.93 -0.03 1.17 -3.92 2.98 -2.35 0.88 1.94 1.77 1.25

1.38 1.80 -1.44 0.28 -4.22 0.50 2.82 1.79 -0.18 12.04 7.97 1.82 1.93 0.38 1.72 -3.28 2.85 -1.60 0.76 1.86 2.07 1.86

1.61 1.89 -1.37 0.38 -4.17 0.60 2.64 1.95 -0.12 9.14 6.16 2.03 1.99 1.33 2.67 2.76 2.82 -1.92 0.72 1.85 2.18 1.86

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

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

GDP Consumption Durables Motor Vehicles Furniture Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil Fuel Services Housing Household Operations Electricity Natural Gas Water & Sewer Telephone Domestic Service Other Household Transportation Other Services

2001

2002

2003

102.4 102.1 98.1 100.5 94.1 100.3 101.5 102.9 98.0 96.3 101.7 103.3 103.9 104.6 108.1 118.8 102.9 98.0 103.8 104.9 101.7 104.0

104.2 103.5 95.8 100.1 88.7 99.5 102.1 105.0 95.4 90.4 91.7 106.0 107.8 103.7 106.8 101.1 106.2 98.1 107.6 109.5 102.9 108.3

106.4 105.6 92.4 97.7 83.3 97.9 104.1 107.0 93.0 105.2 109.7 109.4 110.4 107.7 109.3 123.8 110.2 97.2 110.3 114.8 106.0 113.1

History 2004 2005 109.5 108.4 90.7 96.9 79.9 98.0 107.6 110.3 92.7 124.0 125.4 112.9 113.2 109.9 111.2 134.1 116.9 95.2 112.8 117.8 108.3 118.2

113.0 111.6 90.0 98.5 76.8 97.7 111.6 112.7 91.7 151.3 159.5 116.7 116.1 115.5 117.8 161.2 122.8 94.4 116.6 122.0 112.6 123.7

2006

2007

2008

2009

116.7 114.7 88.8 99.1 73.3 98.5 115.0 115.3 91.3 170.3 180.3 120.8 120.3 121.5 132.1 165.1 128.9 95.1 120.8 126.7 116.2 129.1

119.8 117.7 87.2 98.6 69.9 99.4 118.4 119.7 90.6 184.6 192.3 124.7 124.7 124.8 137.3 163.1 135.4 97.0 125.4 129.7 119.3 134.4

122.5 121.5 86.0 98.0 67.0 102.2 124.6 126.1 90.1 214.5 250.4 128.7 128.0 131.7 146.1 185.8 143.4 98.8 130.0 134.6 125.4 139.9

123.5 120.4 82.7 93.4 63.5 101.9 118.7 128.6 87.7 127.5 155.2 130.5 129.7 128.7 145.7 142.6 150.5 98.7 131.9 138.0 128.8 144.7

Forecast 2010 2011 124.6 122.0 80.3 92.0 60.0 101.4 120.9 129.5 86.6 146.4 170.4 132.8 130.7 129.9 142.0 165.3 154.5 96.5 132.6 140.4 131.1 147.5

126.1 124.1 79.2 92.6 57.4 101.7 123.8 131.8 86.3 160.9 184.8 135.3 133.1 132.3 145.3 179.8 158.3 95.0 133.1 142.7 133.2 149.8

2012 127.8 126.2 78.0 92.7 55.0 102.1 127.0 133.8 86.0 180.6 202.2 137.6 135.7 133.8 148.0 186.4 163.0 93.1 134.1 145.4 135.5 151.9

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

GDP Consumption Durables Motor Vehicles Furniture Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil Fuel Services Housing Household Operations Electricity Natural Gas Water & Sewer Telephone Domestic Service Other Household Transportation Other Services

2001

2002

2003

History 2004 2005

2006

2007

2008

2009

Forecast 2010 2011

2012

2.4 2.1 -1.9 0.5 -5.9 0.3 1.5 2.9 -2.0 -3.5 2.2 3.3 3.9 4.6 8.1 22.3 2.9 -2.0 3.8 4.9 1.7 4.0

1.7 1.4 -2.4 -0.4 -5.7 -0.8 0.6 2.0 -2.7 -5.0 -9.4 2.7 3.8 -0.9 -1.1 -13.5 3.2 0.2 3.7 4.3 1.2 4.1

2.1 2.0 -3.6 -2.4 -6.0 -1.6 2.0 1.9 -2.5 17.0 20.0 3.2 2.5 3.9 2.4 22.5 3.7 -0.9 2.5 4.9 2.9 4.4

2.9 2.6 -1.8 -0.8 -4.1 0.1 3.3 3.1 -0.4 18.1 14.7 3.2 2.5 2.1 1.7 8.4 6.1 -2.0 2.2 2.6 2.2 4.6

3.2 2.8 -1.3 0.6 -4.6 0.8 3.0 2.3 -0.4 13.8 13.8 3.5 3.6 5.3 12.2 4.4 4.9 0.7 3.6 3.8 3.1 4.4

2.7 2.6 -1.8 -0.5 -4.6 1.0 3.0 3.8 -0.8 8.9 6.8 3.3 3.7 2.7 3.9 -0.9 5.1 2.0 3.8 2.4 2.7 4.1

2.2 3.3 -1.3 -0.6 -4.2 2.8 5.2 5.4 -0.6 17.6 31.2 3.2 2.7 5.5 6.4 13.9 5.9 1.8 3.7 3.7 5.1 4.1

0.9 -0.9 -3.9 -4.6 -5.2 -0.3 -4.7 2.0 -2.6 -38.9 -37.2 1.4 1.3 -2.1 -0.1 -22.4 5.0 -0.1 1.5 2.6 2.7 3.5

0.8 1.3 -2.9 -1.5 -5.6 -0.5 1.9 0.7 -1.2 15.0 10.1 1.8 0.8 0.9 -2.5 16.7 2.7 -2.2 0.6 1.8 1.8 1.9

1.3 1.7 -1.5 0.1 -4.2 0.4 2.6 1.6 -0.3 12.3 9.5 1.7 1.9 1.2 1.8 3.7 2.9 -2.0 0.8 1.9 1.7 1.4

3.3 2.9 -0.8 1.7 -3.8 -0.4 3.7 2.2 -1.0 21.9 27.2 3.3 2.6 5.1 5.9 19.9 5.0 -0.8 3.4 3.6 4.0 4.6

1.3 1.7 -1.4 0.6 -4.3 0.3 2.4 1.7 -0.4 9.9 8.5 1.9 1.8 1.9 2.3 9.3 2.5 -1.6 0.3 1.6 1.6 1.5

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components 2001

2002

2003

Personal Income 8724.1 Wages & Salaries 5942.1 Other Labor Income 642.7 Nonfarm Income 752.2 Farm Income 19.7 Rental income 167.4 Dividends 369.0 Interest Income 1011.0 Transfer Payments 1193.9 Personal Social Insurance Tax 374.5

8881.9 6091.2 745.1 757.8 10.6 153.0 397.2 936.1 1286.2 384.8

9163.6 6325.4 815.6 782.1 29.2 133.0 422.6 914.1 1351.0 396.5

Personal Income Wages & Salaries Other Labor Income Nonfarm Income Farm Income Rental income Dividends Interest Income Transfer Payments Personal Social Insurance Tax 28

3.5 2.8 5.4 6.6 -12.8 11.5 -1.8 0.0 10.1 4.3

U.S. Forecast | February 2009

1.8 2.5 15.9 0.7 -46.1 -7.8 7.7 -7.4 7.8 2.7

3.2 3.8 9.6 3.2 269.0 -11.7 6.4 -2.3 5.0 3.0

History 2004 2005

2006

2007

2008

2009

Forecast 2010 2011

2012

Personal Income Billions Current Dollars 9727.2 10269.8 10993.9 11663.3 12099.1 12174.6 12473.5 13019.4 13659.6 6656.4 7030.8 7433.8 7812.4 8047.6 8047.7 8248.7 8563.0 8928.8 868.5 926.0 956.8 991.9 1026.9 1061.6 1116.6 1159.1 1207.7 1011.3 1055.2 1094.6 1130.2 874.3 925.7 998.6 1012.2 1038.0 37.4 34.1 16.2 44.0 34.5 27.6 37.9 40.5 40.6 118.4 40.9 44.3 40.0 64.0 119.2 138.3 119.7 83.8 537.1 574.9 699.4 785.9 834.1 811.5 796.2 781.3 763.1 895.1 1022.0 1125.5 1214.3 1206.3 1090.7 1080.3 1253.1 1496.6 1422.5 1520.7 1603.0 1713.3 1869.9 2057.1 2128.8 2222.5 2322.0 420.5 446.2 477.0 500.4 517.7 515.5 527.7 552.0 580.4

6.1 5.2 6.5 11.8 32.5 -10.4 26.7 -2.1 5.3 6.0

Percent Change, Annual Rate 5.6 7.1 6.1 3.7 5.6 5.7 5.1 3.0 6.6 3.3 3.7 3.5 5.9 7.9 1.4 2.6 -8.1 -49.9 200.3 -20.2 -68.9 14.7 -7.8 59.7 8.2 21.6 12.5 6.2 14.1 10.2 7.9 -0.6 6.9 5.4 6.9 9.1 6.1 6.9 4.9 3.5

0.6 0.0 3.4 -2.6 -14.8 97.7 -2.7 -9.6 10.0 -0.4

2.5 2.5 5.2 4.3 41.3 16.8 -1.9 -0.8 3.5 2.4

4.4 3.8 3.8 3.7 6.9 -13.2 -1.9 15.9 4.4 4.6

4.9 4.3 4.2 3.3 0.1 -30.1 -2.3 19.4 4.5 5.1

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

(Current Dollars)

2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

Consumer Expenditures by Type Billions Current Dollars Consumer spending on‌ all goods & services 10002.3 10138.0 10163.5 9930.2 9791.7 9776.6 9864.8 9955.7 10075.1 10188.6 10311.4 10413.4 10505.2 10605.0 10724.0 10845.5 10951.8 11077.3 916.3 928.3 949.0 961.2 973.5 981.7 984.2 985.6 993.4 1006.7 1015.9 1027.4 durable goods 1071.0 1059.3 1016.2 944.4 908.1 901.8 373.1 369.7 370.6 371.0 372.9 375.9 378.9 381.7 386.9 392.0 397.4 402.0 furniture & appliances 415.1 423.0 411.2 397.0 386.7 376.9 60.6 61.5 64.1 68.3 computers & software 64.2 66.2 65.1 63.7 62.5 59.8 60.5 62.1 62.9 63.5 65.0 66.2 67.4 69.5 329.6 343.0 360.7 369.8 378.2 382.0 380.5 378.4 378.2 383.7 386.3 392.5 motor vehicles & parts 424.7 400.6 370.7 322.4 302.1 311.0 184.5 186.2 188.0 190.4 191.9 192.9 193.3 193.5 195.8 198.0 198.4 198.3 other durable goods 202.4 206.4 205.5 196.4 190.7 185.0 nondurables 2950.7 3026.2 3044.6 2846.0 2736.5 2711.6 2739.2 2778.6 2827.5 2873.1 2915.8 2949.7 2985.7 3023.0 3065.5 3103.9 3137.4 3181.0 354.1 357.5 359.2 362.3 366.4 367.8 368.2 370.1 374.0 376.6 377.3 379.6 clothing & shoes 375.5 382.4 374.4 360.6 351.1 350.1 17.9 19.4 20.8 22.3 fuel oil & coal 30.2 32.3 30.9 26.4 19.6 17.3 18.3 20.1 20.4 20.5 21.1 21.5 22.0 22.8 230.0 241.6 257.9 268.1 272.8 275.6 282.3 288.7 298.5 307.5 314.8 328.8 gasoline & motor oil 393.4 409.5 432.7 298.1 240.2 219.0 food 1380.5 1416.3 1418.4 1383.1 1351.4 1349.3 1357.5 1376.0 1396.0 1418.3 1442.6 1463.7 1482.8 1501.3 1518.9 1535.2 1549.6 1565.9 779.7 785.2 795.0 804.3 813.7 822.1 831.6 841.9 852.6 862.6 873.4 883.9 other nondurable goods 771.1 785.7 788.2 777.8 774.3 775.9

11211.1 11340.1 1039.5 1048.0 408.3

412.8

70.6

71.8

395.9

396.6

200.1

202.5

3223.7 3265.0 383.7

387.1

23.2

23.4

338.8

348.8

1581.7 1598.0 896.4

907.8

Consumer Expenditures by Type Billions 2000 Dollars all goods & services durable goods furniture & appliances computers & software motor vehicles & parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

8316.1 8341.3 8260.6 8186.9 8120.7 8134.7

8198.0 8257.1

8316.0 8367.7 8426.4 8475.2

8511.5 8558.6 8621.9 8687.2

8736.2 8796.9 8863.2 8923.1

1237.0 1228.3 1180.1 1107.7 1078.7 1084.4

1114.9 1141.1

1174.6 1195.1 1214.6 1229.1

1235.7 1241.6 1256.3 1278.7

1295.3 1314.9 1335.3 1350.7

609.3

629.6

616.2

601.5

594.8

588.4

592.0

596.5

607.0

615.5

625.9

638.1

650.1

661.9

678.0

694.3

711.5

727.6

746.8

763.0

230.4

244.1

249.3

251.0

251.0

247.8

257.8

264.7

276.5

286.6

298.1

309.1

320.8

334.0

348.8

365.0

380.0

397.4

415.1

433.8

430.2

407.2

376.9

334.1

318.1

331.3

355.1

372.5

392.6

402.3

410.7

413.9

411.1

408.3

408.0

414.1

416.9

423.5

426.8

427.2

204.9

206.2

203.5

193.2

188.6

184.6

185.1

187.3

189.3

191.6

193.1

194.1

194.6

194.7

197.0

199.3

199.6

199.4

201.0

203.3

2397.9 2420.7 2376.3 2332.8 2291.9 2293.2

2314.7 2340.5

2361.5 2381.8 2403.7 2420.1

2433.7 2449.3 2468.9 2485.6

2497.4 2511.7 2527.6 2543.2

416.3

427.2

412.2

401.8

395.0

398.5

405.7

411.4

413.9

418.0

423.0

425.5

426.1

428.7

433.7

437.6

438.4

441.5

446.4

12.8

11.9

11.1

12.1

11.8

11.7

11.8

11.8

11.8

11.9

11.8

11.7

11.7

11.5

11.5

11.5

11.4

11.3

11.3

11.2

181.4

179.1

173.3

183.0

182.2

180.2

183.2

184.6

183.9

183.2

183.6

183.3

182.6

182.1

183.2

183.6

183.7

183.9

184.0

185.2

1122.4 1133.6 1112.3 1071.7 1046.3 1049.4

1057.8 1072.7

1085.3 1098.0 1110.8 1121.9

1131.3 1141.0 1150.3 1159.1

695.1

695.5

681.8

674.4

671.9

675.6

0.9

1.2

-3.9

-3.6

-3.2

0.7

3.1

2.9

2.9

2.5

2.8

2.3

1.7

2.2

3.0

3.0

2.3

2.8

3.0

2.7

-4.3

-2.8

-15.7

-24.6

-10.5

2.1

11.2

9.4

11.7

7.0

6.5

4.8

2.1

1.9

4.7

7.1

5.2

6.0

6.2

4.6

1.8

13.3

-8.5

-9.6

-4.4

-4.3

2.4

3.0

7.0

5.7

6.7

7.8

7.5

7.2

9.7

9.6

9.9

9.0

10.6

8.7

1.0

23.8

8.4

2.8

0.1

-5.2

16.2

10.8

17.7

14.7

16.0

14.8

15.1

16.5

17.8

18.6

16.4

18.3

17.9

18.0

-11.2

-21.4

-29.8

-45.5

-19.1

16.6

28.7

19.7

21.6

9.8

8.4

3.1

-2.6

-2.7

-0.3

6.0

2.7

6.3

3.2

0.3

-2.0

2.6

-5.4

-20.2

-9.6

-8.4

1.0

4.8

4.1

4.9

3.2

2.2

0.9

0.2

4.7

4.7

0.6

-0.4

3.3

4.5 2.5

691.1

695.3

698.8

702.9

1165.5 1172.9 1179.5 1185.8

684.8

679.7

686.3

450.5

707.4

712.3

716.7

721.3

725.6

731.5

736.2

Real Consumer Expenditures Annual Growth Rate all goods & services durable goods furniture & appliances computers & software motor vehicles & parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

-0.4

3.8

-7.3

-7.3

-7.0

0.2

3.7

4.5

3.6

3.5

3.7

2.7

2.2

2.6

3.2

2.7

1.9

2.3

2.5

2.9

10.5

-14.0

-10.1

-6.8

3.6

7.2

5.7

2.4

3.9

4.8

2.4

0.5

2.5

4.7

3.5

0.8

2.8

4.5

3.7

-17.2

-26.2

-29.2

37.5

-11.6

-2.2

5.2

-2.6

2.7

0.2

-1.4

-3.4

-1.8

-4.3

-0.2

-0.5

-2.7

-3.0

-1.5

-2.8

-5.3

-5.0

-13.0

22.6

-1.9

-4.4

6.7

3.2

-1.5

-1.5

0.9

-0.7

-1.5

-1.2

2.5

0.8

0.2

0.6

0.1

2.6

1.3

4.0

-7.5

-14.6

-9.5

1.2

3.2

5.6

4.7

4.7

4.7

4.0

3.4

3.4

3.3

3.1

2.2

2.5

2.3

2.1

-1.8

6.0

0.2

-7.9

-4.4

-1.5

2.2

2.4

3.8

2.8

2.5

2.0

2.4

2.5

2.8

2.5

2.6

2.4

3.2

2.6

Institute for Economic Competitiveness

29

U . S . F o r eca s t Tab l e s Table Personal Consumption Expenditures Table 13.13.

Personal Consumption Expenditures (2000 Dollars) (2000 Dollars) History 2001

2002

2003

Consumer spending on‌ all goods & services durable goods furniture & appliances computers & software motor vehicles & parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

7055.0 883.7 312.1 42.0 407.9 143.0 2017.1 297.7 15.4 171.6 967.9 564.4

7350.7 923.9 323.1 44.6 429.3 149.7 2079.6 303.5 14.2 164.5 1001.9 595.5

7703.6 942.7 331.5 46.6 431.7 157.1 2190.2 310.9 16.9 192.7 1046.0 623.7

all goods & services durable goods furniture & appliances computers & software motor vehicles & parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

6910.4 900.7 331.8 55.4 405.8 143.1 1986.7 303.7 15.2 178.3 940.2 549.2

7099.3 964.8 364.3 74.1 429.0 151.3 2037.1 318.3 15.5 181.9 954.6 567.1

7295.4 1020.6 397.8 94.8 442.1 161.9 2103.0 334.2 15.4 183.2 977.7 593.2

2004

Forecast 2005

2006

2007

2008

2009

2010

2011

2012

Consumer Expenditures by Type Billions Current Dollars 8195.9 983.9 355.7 51.6 436.8 167.9 2343.7 325.0 18.3 231.4 1113.1 655.9

8694.1 1020.8 377.3 55.5 443.1 175.9 2514.1 341.5 21.0 283.6 1181.2 686.8

9207.2 1052.0 403.5 59.1 434.0 189.0 2685.2 360.2 22.4 313.8 1257.4 731.4

9710.2 10058.5 1082.8 1022.7 415.3 411.6 63.3 64.8 440.4 379.6 198.7 202.7 2833.0 2966.9 374.0 373.2 26.3 30.0 340.6 383.5 1329.1 1399.6 762.9 780.7

9847.2 10247.1 10669.9 11145.1 913.6 966.4 992.5 1032.7 405.1 376.6 372.6 384.9 70.1 60.8 62.5 65.7 392.8 321.4 372.7 380.2 199.8 186.6 190.8 195.1 2741.5 2891.5 3044.5 3201.8 381.9 353.2 363.9 372.2 22.9 18.3 20.1 21.4 332.8 232.7 268.6 294.2 1358.5 1430.1 1509.5 1573.8 890.4 778.8 808.7 847.2

Consumer Expenditures by Type Billions 2000 Dollars 7561.3 1084.8 445.1 118.5 450.8 173.3 2177.6 350.7 14.6 186.7 1009.4 618.0

7791.7 1134.4 490.9 147.7 449.9 183.0 2252.7 372.3 13.2 187.4 1047.7 637.3

8029.0 1185.1 550.2 181.3 437.9 195.6 2335.3 394.4 12.4 184.2 1090.1 666.1

8252.8 1242.4 594.0 214.0 446.7 204.0 2392.6 412.9 13.7 184.5 1110.6 687.3

8276.2 1188.3 614.1 243.7 387.1 202.0 2381.9 414.4 12.0 179.2 1110.0 689.3

8177.6 1104.8 592.9 255.3 344.3 186.4 2310.1 402.7 11.8 182.5 1056.6 675.4

8396.3 1203.3 621.6 292.6 404.9 192.0 2391.8 420.1 11.8 183.5 1104.0 692.9

8594.8 1253.1 671.1 342.2 410.4 196.4 2459.4 431.5 11.6 182.9 1145.4 709.8

8829.8 1324.0 737.2 406.6 423.6 200.8 2520.0 444.2 11.3 184.2 1175.9 728.7

2.7 8.9 4.8 14.5 17.9 3.0 3.5 4.3 0.4 0.5 4.5 2.6

2.4 4.1 7.9 16.9 1.4 2.3 2.8 2.7 -2.1 -0.4 3.8 2.4

2.7 5.7 9.9 18.8 3.2 2.3 2.5 2.9 -2.0 0.7 2.7 2.7

Real Consumer Expenditures Annual Growth Rate all goods & services durable goods furniture & appliances computers & software motor vehicles & parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil food other nondurable goods

30

2.5 4.3 6.0 26.2 5.1 0.9 2.0 2.0 -3.9 1.5 1.6 3.1

U.S. Forecast | February 2009

2.7 7.2 9.8 34.1 6.1 5.8 2.5 4.8 2.7 2.1 1.5 3.3

2.8 5.8 9.1 27.6 3.1 7.0 3.2 5.0 -0.6 0.7 2.4 4.6

3.6 6.4 12.0 25.4 2.0 7.2 3.6 5.0 -5.5 1.9 3.2 4.2

3.0 4.6 10.3 24.7 -0.2 5.6 3.4 6.2 -9.6 0.4 3.8 3.1

3.0 4.5 12.1 22.8 -2.4 6.9 3.7 6.0 -5.1 -1.7 4.1 4.5

2.8 4.8 8.0 18.0 2.0 4.3 2.5 4.7 10.4 0.1 1.9 3.2

0.3 -4.3 3.4 14.0 -13.4 -0.9 -0.4 0.4 -12.5 -2.9 0.0 0.3

-1.2 -6.8 -3.4 4.8 -9.7 -7.6 -3.0 -2.8 -1.5 1.9 -4.8 -2.0

U . S . F o r eca s t Tab l e s Table Business Fixed Investment Table 14.14.

Business Fixed Investment

2001

2002

2003

Business Fixed Investment Producers Dur. Equipment Nonresidential Structures Non-Farm Buildings Commercial Industrial Other Buildings Utilities Mines & Wells

1176.8 854.2 322.6 216.4 118.2 29.5 68.7 54.4 39.2

1066.3 787.1 279.2 180.6 97.0 17.8 65.8 54.6 35.6

1077.4 800.2 277.2 174.7 91.7 16.7 66.2 49.2 45.7

Business Fixed Investment Producers Dur. Equipment Nonresidential Structures Non-Farm Buildings Commercial Industrial Other Buildings Utilities Mines & Wells

1180.5 874.2 306.1 208.4 114.2 28.5 65.6 52.8 32.0

1071.5 820.2 253.8 170.0 91.2 16.7 62.1 51.8 24.5

Business Fixed Investment Producers Dur. Equipment Nonresidential Structures Non-Farm Buildings Commercial Industrial Other Buildings Utilities Mines & Wells

-4.4 -7.0 3.2 -2.7 -2.3 -7.0 -1.5 5.5 45.3

-9.3 -7.7 -13.4 -16.5 -17.8 -39.5 -4.2 1.3 -8.8

History 2004 2005

2006

2007

Forecast 2010 2011

2012

1271.9 895.4 376.5 222.8 92.0 35.3 95.4 66.1 76.7

1422.2 1021.3 400.8 245.0 107.1 34.7 103.2 66.0 78.6

1588.3 1125.2 463.0 296.1 132.6 51.5 112.0 71.8 82.6

1193.3 894.7 284.3 188.1 77.6 33.2 78.5 52.1 35.8

1174.9 949.4 239.5 152.1 61.3 23.4 68.7 45.0 33.2

1315.9 1082.0 257.0 163.6 69.8 22.4 72.8 44.3 38.2

1459.7 1194.5 288.5 190.7 83.3 32.0 76.2 47.1 40.0

-15.5 -14.7 -16.2 -12.0 -20.9 5.5 -7.2 -7.0 -30.4

-2.8 5.3 -17.8 -19.2 -21.1 -29.0 -12.8 -15.6 -15.2

11.8 14.1 6.6 10.2 16.7 -0.7 8.2 -0.1 2.4

11.7 10.2 15.5 20.9 23.8 49.4 8.5 8.9 5.3

2008

2009

1154.5 856.3 298.2 188.4 101.1 18.5 68.9 44.7 55.7

Billions Current Dollars 1273.1 1414.1 1503.8 1556.2 935.5 1003.7 1023.5 999.9 337.6 410.4 480.3 556.3 203.2 236.4 279.8 316.2 109.5 124.7 143.7 148.3 23.3 27.4 33.0 49.1 70.4 84.3 103.1 118.9 47.0 56.0 70.6 84.5 76.6 107.9 118.1 142.6

1315.2 851.9 463.3 277.5 117.5 50.0 110.0 78.4 96.2

1081.8 843.1 243.5 160.3 83.9 15.4 61.0 45.6 29.0

1144.3 905.1 246.7 163.1 86.9 16.2 60.0 38.8 33.3

1226.2 989.6 249.8 161.7 85.9 19.0 56.8 38.0 36.5

Billions 2000 Dollars 1318.2 1383.0 1408.2 1061.0 1078.9 1047.2 270.3 304.6 340.5 174.0 195.5 214.1 90.1 98.2 97.9 20.9 23.9 33.7 63.0 73.6 83.3 41.7 50.5 56.9 40.7 44.5 52.1

1.1 1.7 -0.6 -3.1 -5.1 -4.6 0.6 -9.6 28.8

7.1 7.0 7.6 7.8 10.2 10.4 4.0 -8.9 21.8

10.3 9.3 13.2 8.0 8.4 27.2 2.3 5.2 37.6

Annual Growth Rate 11.1 6.3 7.3 2.0 21.5 17.1 16.3 18.3 13.9 15.3 17.4 20.3 19.8 22.2 19.1 26.0 40.7 10.0

3.5 -2.3 15.9 13.2 3.4 48.2 15.6 20.1 20.6

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 2004 2005

2001

2002

2003

Receipts Personal Tax and Nontax Receipts Corp. Profits Tax Accruals Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2016.2 994.5 164.7 85.8 717.5

1853.2 830.5 150.5 87.3 734.3

1879.9 774.5 197.8 89.7 758.9

Federal Government Receipts and Expenditures 2008.9 2266.9 2510.4 2651.3 2578.8 2357.5 797.4 930.7 1049.9 1167.3 1129.3 1014.8 250.3 341.0 389.0 365.4 295.4 201.0 94.6 99.2 98.0 97.7 96.6 73.6 805.2 850.1 902.4 942.3 971.5 966.2

Expenditures Purchases Goods & Services National Defense Other Transfer Payments To Persons To Foreigners Grants in Aid to State & Local Gov't Net Interest Subsidies less Surplus of Gov't Entities Surplus (+) or Deficit (-)

1969.5 612.9 392.6 220.3 1131.4 838.7 14.0 276.1 240.2 53.1 46.7

2101.1 679.7 437.1 242.5 1243.0 916.9 18.8 304.6 213.7 39.1 -248.0

2252.1 756.4 497.2 259.2 1328.7 963.7 23.6 338.5 196.5 45.4 -372.2

2379.5 825.6 550.7 274.9 1390.6 1012.3 26.2 349.1 203.8 45.5 -370.6

915.8 242.7 30.2 642.8 13.7 276.1

929.0 221.3 32.2 675.5 15.8 304.6

1368.2 1212.8 305.2 5.2 3.6 2.0 0.0 4.8

1444.3 1281.5 332.0 16.5 -1.6 2.0 0.0 -34.2

Receipts Personal Tax/Nontax Receipts Corporate Profits Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Federal Grants-In-Aid Expenditures Purchases Goods & Services Transfer Payments Interest Received Net Subsidies Dividends Received Net Wage Accruals Surplus (+) or Deficit (-)

32

U.S. Forecast | February 2009

2006

2007

2008

2009

Forecast 2010 2011

2012

2502.3 1050.4 279.4 80.5 986.9

2752.6 1162.9 367.5 86.8 1030.0

2979.5 1332.7 368.8 92.9 1080.0

3397.8 3542.3 1126.7 1158.5 766.3 768.7 360.3 389.8 2054.5 2143.6 1540.1 1582.7 33.4 33.1 477.1 523.8 287.1 318.2 57.3 54.4 -1040.4 -1040.0

3642.1 1147.0 755.4 391.6 2157.2 1647.2 33.6 472.2 410.5 54.4 -889.5

3805.2 1142.7 749.7 393.0 2217.0 1709.2 34.6 468.7 516.6 53.5 -825.6

State and Local Government Receipts and Expenditures 979.5 1061.2 1162.4 1242.2 1304.1 1321.6 1261.5 1318.4 226.6 249.0 277.1 303.3 325.4 332.7 317.3 330.8 35.3 43.0 56.3 60.8 60.9 48.8 39.7 51.4 717.5 769.2 829.0 878.2 917.8 940.1 904.5 936.2 19.8 23.6 24.2 23.1 22.8 23.8 24.4 24.9 338.5 349.1 360.9 358.0 376.3 388.1 477.1 523.8

1378.7 354.5 57.7 966.5 25.2 472.2

1427.9 366.6 58.1 1003.2 25.6 468.7

2084.2 1819.9 518.3 20.4 8.8 2.8 0.0 7.9

2125.3 1834.7 545.9 29.4 4.6 2.8 0.0 -10.9

2192.8 1858.4 579.7 41.2 3.8 2.9 0.0 -19.6

1514.6 1336.0 353.0 24.8 0.7 2.2 0.0 -20.4

1592.8 1391.3 383.8 24.1 3.4 2.4 0.0 1.6

2558.6 875.5 588.1 287.5 1478.0 1078.5 35.6 360.9 238.5 63.9 -291.7

1684.9 1479.8 403.5 16.5 8.7 2.5 0.0 29.5

2711.6 932.1 624.2 308.0 1568.1 1177.1 29.7 358.0 264.2 52.9 -201.1

1765.3 1576.0 401.0 13.7 5.4 2.7 0.0 46.2

2880.6 979.3 662.2 317.1 1666.7 1250.6 36.3 376.3 290.7 47.4 -229.3

1892.4 1695.6 430.8 13.9 12.8 2.8 0.0 10.4

3094.7 1071.1 734.3 336.9 1807.6 1379.3 36.5 388.1 285.8 48.2 -515.8

2015.3 1812.1 455.8 14.5 10.6 3.1 0.0 -77.3

2025.7 1792.8 485.6 16.4 8.9 2.7 0.0 -50.4

U . S . F o r eca s t Tab l e s Table Exports and Imports of Goods and Services Table 16.16.

U.S. U.S. Exports and Imports of Goods and Services 2001

2002

2003

Net Exports Goods & Services -367.0 Current Account -384.7 Exports - Goods & Services 1032.8 Merchandise Balance -429.5 Food, Feed & Beverage 49.43 Industrial Supplies Excl Petroleum 155.3 Motor Vehicles & Parts 75.4 Capital Goods, Excl. MVP 321.7 Computer Equipment 47.6 Other 221.6 Consumer Goods, Excl. MVP 88.3 Other Consumer 41.0 Services 301.6

-424.4 -461.3 1005.9 -485.0 49.60 153.5 78.9 290.5 38.6 201.5 84.4 40.7 308.4

-499.4 -523.4 1040.8 -550.9 55.03 168.3 80.7 293.7 39.9 207.1 89.9 36.9 316.4

Imports - Goods & Services 1399.9 Merchandise 1168.0 Food, Feed & Beverage 46.6 Petroleum & Products 103.6 Industrial Supplies Excl Petroleum 164.8 Motor Vehicles & Parts 189.8 Capital Goods, Excl. MVP 298.0 Computer Equipment 74.0 Other 192.7 Consumer Goods, Excl. MVP 284.5 Other Consumer 80.7 Services 231.9

1430.3 1189.4 49.7 103.5 158.4 203.8 283.3 75.2 182.7 308.0 82.8 241.0

Net Exports Goods & Services Exports G & S Imports G & S

-399.1 1036.7 1435.8

-5.6 -4.9 -5.3 -2.6

Exports G & S Imports G & S Real Exports G & S Real Imports G & S

History 2004 2005

2006

Forecast 2010 2011

2007

2008

2009

2012

-615.4 -625.0 1182.4 -669.6 56.55 199.5 89.2 331.4 42.8 238.7 103.3 38.4 364.1

Billions of Dollars -713.6 -757.3 -707.8 -729.0 -788.1 -731.2 1311.5 1480.8 1662.4 -787.1 -838.3 -819.4 58.95 65.98 84.28 227.5 267.3 303.0 98.4 107.0 121.1 363.3 415.0 447.4 45.5 47.6 45.5 257.0 292.3 314.6 115.3 129.1 146.1 44.9 47.8 47.3 403.1 448.7 513.2

-665.1 -664.8 1867.8 -809.9 109.95 370.4 122.5 471.6 44.0 340.6 161.5 53.8 578.2

-309.1 -322.3 1570.0 -439.8 82.35 260.9 101.7 405.5 27.8 280.9 139.0 47.0 533.6

-500.5 -568.2 1564.9 -624.0 85.59 280.4 114.3 360.5 25.8 229.8 137.8 48.2 538.1

-575.3 -712.8 1717.7 -711.1 90.01 315.6 141.3 391.2 29.2 248.7 147.9 52.3 579.5

-635.5 -784.0 1884.7 -784.3 94.5 351.7 159.9 439.2 33.7 284.5 158.1 57.2 624.2

1540.2 1284.0 55.8 133.1 174.4 210.1 295.9 76.5 195.3 334.0 80.6 256.2

1797.8 1499.5 62.1 180.5 225.1 228.2 343.6 88.6 230.7 377.2 82.9 298.3

Billions of Dollars 2025.1 2238.1 2370.2 1705.3 1882.7 1985.2 68.1 75.0 81.7 251.9 302.5 331.0 264.8 290.1 294.4 239.5 256.6 258.9 379.4 418.3 444.5 93.3 101.4 105.2 260.3 288.5 304.9 411.5 446.2 478.6 90.3 94.2 96.2 319.8 355.4 385.1

2533.0 2117.0 89.0 447.9 313.4 234.8 453.6 101.2 317.3 483.1 95.3 416.0

1879.1 1491.6 81.9 171.3 217.5 168.0 373.7 72.3 268.1 403.9 75.2 387.5

2065.4 1668.8 85.5 219.0 235.1 208.0 392.2 78.4 276.6 457.5 71.6 396.6

2293.0 1868.4 91.6 260.4 260.7 240.5 441.6 89.5 311.7 494.3 79.3 424.6

2520.2 2064.7 95.0 325.6 285.0 253.4 482.4 97.9 339.8 533.6 89.6 455.6

-471.4 1013.3 1484.6

-518.9 1026.1 1545.0

-593.8 1126.1 1720.0

Billions 2000 Dollars -616.6 -615.7 -546.5 1205.3 1314.9 1425.9 1821.9 1930.5 1972.4

-388.2 1518.6 1906.7

-297.5 1376.2 1673.7

-437.4 1362.3 1799.7

-455.9 1471.0 1926.9

-451.5 1592.0 2043.5

-2.3 2.6 -2.0 3.5

3.5 7.8 1.3 4.1

13.6 16.7 9.8 11.3

Exports & Imports % Change 10.9 12.9 12.2 12.6 12.7 10.6 5.9 7.0 7.0 9.1 8.4 6.6 6.0 6.0 2.2 -3.3

-15.8 -25.5 -9.3 -12.2

-0.2 10.0 -0.9 7.5

9.7 11.1 8.0 7.1

9.7 9.9 8.2 6.1

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

Director, Institute for Economic Competitiveness.

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

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

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

Sean Snaith is Director of the Institute for Economic Competitiveness in the College of Business Administration at the University of Central Florida.

Dr. Snaith received his B.S. in Economics from Allegheny College and his M.A. and Ph.D. in Economics from Pennsylvania State University. He has taught at Penn State, the American University in Cairo, the University of North Dakota and the University of the Pacific. While at the University of North Dakota, he served as the Director of the Bureau of Business and Economic Research and as Director of the Business Forecasting Center at the University of the Pacific.

Snaith also served with International Planning and Research, a Boston area consulting firm, where his work included forecasting, market sizing, economic analyses, and econometric modeling for a variety of clients including IBM, Dell, Compaq, and HewlettPackard.

Snaith is a director of the Association of University Business of Economic Research, a member of the National Association of Business Economics, and the American Economics Association. He is also a member of the Western Blue Chip Economic Forecast Panel, the Federal Reserve Bank of Philadelphia Survey of Professional Forecasters, Livingston Survey, Bloomberg U.S. Economic Indicator Survey and USA Today’s Quarterly Survey of Top Economists. He is frequently quoted in the media and has published articles on a variety of topics including exchange rate modeling, predicting educational outcomes, the economics of information technology, and telemedicine.

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

U n i v e r s it y o f C e n t r al F l o r ida College of Business Administration Institute for Economic Competitiveness P. O . B o x 1 6 1 4 0 0 , O r l a n d o , F l o r i d a 3 2 8 1 6 PH 407.823.1453

FAX 407.823.1454

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