U.S. Forecast March 2011

U.S. Forecast March 2011

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

Message From Dean Thomas L. Keon The sun is out, the weather is warmer, and it is so quiet on campus I can actually hear myself think. Ah, must be spring break!

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

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

ser ving 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 g l o b a l c o m m u n i t y.

About the College of B u s i n e s s A d m i n i s t r at i o n 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 ser vice. 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 F lorida 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.

In the academic world, it’s the time of year that faculty members and students alike flee campus to cities all around the world. Many people in the corporate world also take a vacation this time of year to coincide with school breaks. But what will they find when they get to their destination? More importantly, what will they find when they get back? The answer is pretty simple. Higher gas prices!

Gas prices are increasing so rapidly, they may go up two more cents before you are done reading this column! The worst part is, there is no end in sight. They are expected to rise even further.

This will definitely have an impact on future travel. It will be more expensive to take a trip this summer, whether by car, air, train or bus. The high gas prices are expected to have a detrimental impact on travel and entertainment. But it is not just the leisure trips that will be affected. It will cost more to drive around town, even to commute to work or shop at the grocery store. This will force many to tighten their budgets even further.

I sincerely hope everyone gets to enjoy a nice, relaxing spring break or some type of vacation soon. It may be the last trip you take for quite awhile!

You can learn more about the high energy prices, and get Dr. Sean Snaith’s input on the economic recovery by reading this forecast.

n o e K .

L s a m o h T Thomas L. Keon Sincerely,

Dean

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

Fo r eca s t fo r t h e N ati o n Forecast 2011 - 2014 March 2011 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2011 Institute for Economic Competitiveness. All rights reserved.

Publications of the Institute for Economic Competitiveness are made possible by the following staff: Dr. Sean Snaith, Director Elaine Vogt, Administrative Assistant Cecilia Chirinos, Researcher Jessica Fears, Researcher Alexandra Betrone-Harpst, Researcher This forecast was prepared based upon assumptions reflecting the Institute for Economic Competitiveness’ judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Institute for Economic Competitiveness nor the University of Central Florida shall be held responsible as a consequence of any such variance. Unless approved by the Institute for Economic Competitiveness, the publication or distribution of this forecast and the preparation, publication or distribution of any excerpts from this forecast are prohibited.

Hi g h l i g h t s o f t h e 1 Q 2 0 1 1 U . S . F OR E C A ST In this Issue of the U.S. Forecast: • $100 per barrel oil will take a little off the top of the U.S. recovery and boost inflation; $150 a barrel is an economic crew-cut and inflation well above the comfort zone; and $200 a barrel is a funeral pyre upon which the U.S. economy roasts in a 1970’s style stagflation.

• At present it appears more likely that the oil price spike will decay rather than worsen in the months ahead, but predictions about that region of the world have made a liar out of many people.

H I GHL I GHTS

• Despite the burst of consumer spending at the end of 2010, consumers still face a wealth of problems, not the least of which is lost wealth.

• Should Ben Bernanke and the Fed take Charlie Sheen’s advice and start taking action to ensure the U.S. Central Bank is WINning (Whipping Inflation Now)?

• The U.S. economy added momentum in the second half of 2010. Real GDP growth accelerated from just 1.7% in the 2nd quarter to 2.8% growth in the 4th quarter. 2011 should see this momentum conserved.

• The expansion of real GDP in the economy during 2011 will be 2.8% versus a year ago and will slow slightly to 2.7% in 2012 as consumers still struggle with ravaged balance sheets. In 2013-2014 growth will average 3.2% as the housing sector joins the recovery.

• The U.S. economy shed in excess of 8.3 million payroll jobs through the end of 2009. Payroll employment will not reach its pre-recessions levels, and those jobs will not be recovered until the 1st quarter of 2014 –3 years from now.

• Continuing foreclosures, fed by persistently high unemployment, persist in weighing down the housing market. Until the labor market recovers further, the housing market cannot begin to heal.

Fortunately that day is now in sight.

• Unemployment has dropped rapidly the past three months and stands at 8.9%. It will remain around this level throughout 2011. A growing labor force and higher rates of labor force participation keep unemployment rates aloft. Unemployment rates will continue to fall gradually in 2012 and decline to 7.0% by the end of 2014.

U . S . F o r eca s t

Anxious Index The most recent release (1st quarter 2011) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 40 forecasters (including myself) surveyed for this publication are just 7% convinced that a decline in real GDP will occur in the 2nd quarter of this year.

The survey asked panelists two questions: 1) The probability that real GDP will decline in the quarter the survey is administered and 2) The probability of such a decline in each of the following four quarters.

The anxious index (a term coined by The New York Times reporter David Leonhard) 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 2011, the index stands at 7.08%, which means that forecasters believe there is a 7.08% chance that real GDP will decline in the 2nd quarter of 2011, down from last quarter’s anxious index of 12.88%. This value for the anxious index is the highest since the 2nd quarter of 2006, when the economy was still expanding and a year and a half before the onset of the recession.

The forecasters also report just a 6.32% chance that we are currently (as of the 1st quarter of 2011) in a recession. According to the panel, the probability that we will fall back into recession is averaging around 10.5% through the end of the first quarter of 2012, which implies the possibility of a near term recession is not completely out of the question in the minds of the panelists. Though it should be noted, the survey was completed, as was this forecast, prior to the much of the unrest in the Middle East and prior to the price of oil breaching $100 per barrel.

The unfolding of events in this region has no doubt jangled nerves and raised significant risk to the economic outlook.

The graph below plots the historical values of the anxious index and gray bars indicate periods of recession. The current levels of the anxious index and its sharp decline from the start of 2009 indicate the recession is over. The level of the anxious index is consistent with previous recoveries in the U.S. economy.

Figure 1.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2011:Q1 100

80 70 60 50 40 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 2010 2011

Probability (percent)

90

Survey Date

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U . S . F o r eca s t

Despite a Robust Holiday Shopping Season Consumers Still Face a Wealth of Problems

spending grew by 4.1%. This pent-up demand is often a key driver of economic recoveries, and this time around it remains an upward force on consumer spending.

Many economists were surprised by the strength of consumer spending in the last quarter of 2010.

This burst of activity has led many economists including myself to raise the outlook for 2011.

However, one should not take this to mean that the U.S. consumer is spending as boldly as we did in the years that preceded the recession.

Consumers are being impacted by powerful almost tectonic forces that are pushing them in opposite directions as far as spending is concerned. On the upside are pent-up demand, consumer confidence and rising income. On the downside are lost wealth and a floundering labor market.

The recession that ended in June of 2009 was long and deep and the worst since the Great Depression.

During that time layoffs were rampant and unemployment ultimately reached 10%. Fear was the order of the day and as the stock market and housing markets were collapsing trillions of dollars of wealth were being destroyed. Spending by consumers plunged as anxiety among those who remained employed rose. The growing masses of unemployed workers resulted in purchases being postponed or cancelled (new car purchases, vacations or other durables as examples.) As the recession came to an end and layoffs and uncertainty started to diminish, some of that delayed consumption (also known as pent-up demand) was released. This was most noticeable in the 4th quarter of 2010 when consumer

Consumer confidence is also on the rise as abject fear is replaced with a more stable mood that is not quite jubilation but a marked improvement in sentiment. An optimistic consumer spends more than a fearful one. This returning confidence also helps to boost spending as does rising personal incomes which are also helping to enhance consumer expenditures.

All of these factors push consumers to spend more, but there are also countervailing forces in place that continue to put downward pressure on spending.

One of the most significant of these is the wealth effect. The wealth effect on consumption can be a powerful force. As consumers feel wealthier, as a result of the value of their stock holdings or homes increasing, they will spend more of their current incomes. We saw this during the expansion that preceded the recession and we are seeing a negative wealth effect in the wake of the housing and stock market collapses.

Table 1 displays data from the Federal Reserve Flow of Funds report, a data source that examines the financial flows in the U.S. The impact of the financial and housing crises is clearly evident. The low point for wealth was the 1st quarter of 2009. At that point in time the total value of assets in U.S. households had fallen by an astounding 15.5 trillion dollars. Financial assets had declined by 10.7 trillion dollars and home equity, which had been declining

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

2006

2007

2008

2009Q1*

2010Q3

2010Q4

Total Assets

71.6

77.6

78.6

65.8

63.1

68.6

70.7

Financial Assets

43.3

48.1

50.6

41.4

39.9

45.3

47.6

Home Equity

13.2

12.8

10.3

6.9

6.0

6.5

6.3

Net Worth

59.5

64.1

64.2

51.5

48.9

54.7

56.8

* = Bottom of Financial Crisis

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U.S. Forecast | March 2011

Source: Federal Reserve Board of Governors

U . S . F o r eca s t

as a result of homeowners withdrawing equity before the crisis had begun, fell by $7.2 trillion from 2005 levels.

These monumental declines in wealth left U.S. consumers feeling much poorer than they were just a little over a year prior to the crisis. The good news is that the value of financial assets has made a dramatic recovery since hitting their nadir. They are still not back to the pre-crisis levels but have made back $7.7 trillion of the losses. Unfortunately, the same cannot be said of home equity.

For most households home equity is the major component of wealth and is expected to finance retirement years. Many consumers have seen their nest eggs turned into Humpty Dumpty and recent data suggests that those nest eggs are not being put back together again, at least not in a rapid fashion.

Home equity has not experienced the same rapid recovery that financial assets have: in fact home equity has merely bounced around the bottom it reached in the 1st quarter of 2009. Home equity now stands at $6.3 trillion a full $6.9 trillion lower than 2005 levels. Indications are that this wealth may take years, if not decades, to be recouped.

The burden of this loss will weigh on consumers for years as they try to repair the damage the crisis has wrought. How does one put Humpty Dumpty back together again? They attempt to do so by saving more of current income.

The implication of this lost wealth is that consumers will not be in a position to lead the economy on a path of robust growth. The days of the consumer leading the economy with strong spending as they did during the late 1990’s or during 2003-06 are not coming back, at least not during our forecast horizon. We anticipate consumption spending growth through 2014 to average 2.3%, a far cry from the 5.3% it averaged during 1998-2000 and well below the 3.1% consumption growth in the four years spanning 2003-06 during previous expansion.

Your Boss is Helping the Fed Keep Inflation at Bay Thank her or him before you go home today.

There are many of the pieces of an inflationary machine (imagine some economic Rube Goldberg contraption) in place in the U.S. economy: 1. Above trend economic growth (2.8% in 4th quarter 2010)

2. Commodity prices: oil, grains, metals all surging higher

3. Firms are somewhat more willing to pass higher commodity prices on to the consumer 4. Extremely accommodative monetary policy (QEII, Federal Funds Target near 0%)

5. Extremely large and persistent federal budget deficits.

Aggregate demand has strengthened, and the fear of a double-dip recession that was peaking in the middle of 2010 has given way to a surge of spending at the end of 2010.

But there are a few key components of that inflation machine that are not (yet) in place namely: 1. Wage inflation.

2. Untethered inflationary expectations.

The spread between the 10-year Treasury yield and the 10-year inflation indexed Treasury yield is about 2.5%. This is higher than the spread at the mid-point of 2010 when it was around 1.8%, but the spread, which is a market based measure of expected inflation, still has not reached a level that should cause alarm.

As far as your boss is concerned, has she/he given you a raise in the past few years? Could you go into their office and demand a pay raise because prices and your cost-of-living have gone up significantly? I am guessing that the state of the labor market with 8.9% unemployment and anemic job creation would have you thinking twice about making this kind of demand.

A key component of a fully functioning inflationary machine is the wage price spiral. Rising prices lead to demands for higher nominal wages by workers, these higher costs get passed through to Institute for Economic Competitiveness

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U . S . F o r eca s t

prices, and that leads to demands for higher wages.

This unpleasant cycle leads to the expectations of higher inflation in the future which only further feeds the process.

Fortunately, your boss has helped to rescue us all from this unpleasant inflationary cycle that tormented us in the 1970’s. That’s right; by not giving you a raise your boss is helping us avoid the wage-price spiral. Makes you think a little differently about the annual review now, doesn’t it? Make sure you thank her/him as you leave work today for they helped us all Whip Inflation Now, before it ever got started, and that is the best time to do it.

As the painful lesson of the 70’s and early 80’s taught us: once that Rube Goldberg inflationary

machine is fully assembled and running, it is much more difficult and painful to dissemble it.

Will Rising Oil Prices Cause the U.S. Economy to Slip and Fall?

The historic events we have witnessed over the past several weeks in countries across the Middle East and North Africa as regimes that have been in power for decades topple one after another like some sort of dictatorial dominoes have had a significant impact on the price of oil. The relatively peaceful demise of Egypt’s Hosni Mubarak gave way to a crisis in Libya where a Khadafy is less willing to go so quietly.

Here are a few rules of thumb when looking at the rising price of oil:

Every $1 increase in the price of a barrel of oil causes: • The price of a gallon of gasoline to increase by 2.5 cents.

• The Consumer Price Index to rise 0.04%.

• Consumers’ gasoline expenditures to rise by $3 billion in the near term.

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U.S. Forecast | March 2011

The economic consequences

of a sustained $20 per barrel rise in oil prices as compared to a baseline forecast without the hike: • Real GDP growth declines by 0.4% in the first year after the price hike and 0.6% in the second year.

• Real consumer spending falls by 0.47% in the first and 1.0% in the second.

• Payroll job losses of 240,000 in year one and 610,000 in year two.

U . S . F o r eca s t

The possibility of a prolonged civil war in Libya and the fear that the khamasin of revolution could blow throughout the region and affect much larger producers of oil like Saudi Arabia who is currently the world’s 2nd largest producer of oil (Russia is #1 and the U.S. is #3.)

These fears that unrest in the region might ultimately lead to a severe interruption of oil production and supply, have caused oil prices to spike in recent weeks and have caused concern that if the pace of oil price increases continue, the U.S. economic recovery may ultimately be in jeopardy.

In just a few weeks we have seen the price of a barrel of oil jump by $20 and the price of a gallon of gasoline hit the $3.50 mark. What does this mean for the economy and the economic outlook?

We are assuming that the worst is over as far as the oil price hikes are concerned. But we do not anticipate that price levels will decline. There will likely be enough of a residual instability in the region to prevent the entire risk premium from dropping out of oil prices. As demand continues to grow with the economic recovery prices will be on a gradual upward trend going forward. These higher prices have trimmed our outlook for economic growth over the next couple years, but have not led us to dramatically alter the path of growth for the U.S. economy.

What if we are wrong? What might happen if instability spreads across the region and there are significant supply interruptions? If we see $150 barrel oil and break through the threshold of $4 per gallon gasoline, consumer confidence will take a significant hit and while the economy will continue to grow economic growth would be cut in half going forward.

Worst case scenario encompasses rebellion spreading across the region and engulfing Saudi Arabia causing severe interruptions in oil supplies.

In this scenario $200 per barrel oil cannot be ruled out and gasoline prices would breach the $5 mark in the U.S. The recovery turns into a recession and CPI inflation exceeds 5 percent. The U.S. economy bears a striking resemblance to the 1970’s but without the rationing. The unemployment rate would reverse trend and begin to climb once again.

This is a worrisome scenario to say the least, but it is not one that we current put a high probability of occurring, there is perhaps a 10% chance of this coming to pass. That being said, just six months ago what probability would have been assigned to the set of events that have come to pass in the Middle East in recent months? We keep a cautious eye on the region, but believe that we may have seen the worst.

GDP Outlook The Economy is Growing Faster Thanks to a Nudge from Fiscal and Monetary Policy

The slippage between the tectonic forces affecting U.S. consumers resulted in a temblor of spending in the 4th quarter of 2010. This jump in spending growth, while not likely to be sustained, did help push real GDP growth for the quarter to 2.8%.

The economy was nudged a little further down the path of this recovery by fiscal and monetary policies that are helping to shore up a recovery that was wavering in the middle part of 2010. Quantitative Easing II (QEII), a planned purchase of $600 billion in U.S. Treasuries by the Federal Reserve, is scheduled to be completed by mid-year and will almost certainly be the last of these extraordinary monetary policy actions to be undertaken. Fiscal policy also played a role as the Bush-era tax cuts were extended for all income levels for two years. This is not a new policy per say, but an action taken to prevent any negative shock to an economy deemed not ready to bear such a burden. This extension legislation was accompanied by payroll tax cuts and incentives for business investment. The combination of fiscal and monetary policy actions shored up a recovery that appeared, at times last year, to be atrisk.

The economy is likely to continue to expand in 2011. We are expecting a similar rate of growth in the 1st quarter of 2011 to what we experienced in the 4th quarter of last year. Thereafter in 2011 we expect growth to average just over three percent as business investment regains some momentum thanks to mountains of retained earnings and the investment incentives included in the fiscal policy just discussed.

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U . S . F o r eca s t

The momentum in the economy will also begin to become more apparent in labor markets and, as hiring begins to pick up this year, so will activity in the housing market. Residential investment will start to expand again as the year progresses. While there is still downside risk in the housing sector, the likelihood of further price declines this year remains high. There will be a turnaround in this sector and builders must prepare for this eventuality.

Commercial investment in structure will continue to contract over the next year and a half. In the second half of 2012 we expect to see growth return to this sector of investment. One positive side effect to the higher oil prices discussed above is that it could trigger investment spending in mining and petroleum structures as it did in 2008 when oil prices spiked and triggered a couple quarters of double digit growth in this area.

Government spending is going to become a drag on real GDP growth over the next couple years both at the federal and state and local levels. Budget crises are flaring up in many regions of the country as state and local governments are all facing budget deficits that were deferred by money received as part of the federal stimulus act. This money has run out and the current political environment ensures that no additional bailouts are forthcoming.

This leaves the unpleasant task of choosing between spending cuts and/or tax increases to close budget gaps. The political backlash triggered by record national budget deficits and a $14 trillion national debt will push many state and local governments to slash spending as the preferred method of achieving budget balance.

We expect year over year real GDP growth to come in around 2.8% in 2011, 2.7% in 2012, and then accelerate in 2013 and 2014 to 3.0% and 3.4% respectively. In those final two years the housing sector will finally be on solid ground and growing once again. Housing starts will be over 1.5 million in those years, nearly triple what they were at their low point.

C o n s ume r Spen d in g Higher oil prices are a bitter medicine that is difficult to swallow.

The aftermath of the recession, financial and housing crises have left consumers facing a crater where once lay trillions of dollars of wealth. This lost wealth will weigh on consumer spending for years, but doesn’t preclude occasional bursts of spending as we witnessed in the 4th quarter of 2010. That 4.1% rate of consumer spending growth led many economists to be more optimistic about the economic outlook; the reality is that consumers are still in a very challenging position.

Pent-up demand for durable goods will be periodically released over the forecast horizon as consumers play catch-up with purchases delayed during the recession. At these times we will see accelerations of spending growth on durables. They will be transient and sporadic as the long run damage to household’s balance sheets will be an over-arching force for years to come.

We expect the average rate of consumer spending growth during the 2011-2014 time frame to be 2.3%.

U.S. consumers are entering a mini age of austerity as they work to rebuild all that the recession and financial crises have torn asunder.

We also anticipate that there will be some headwinds as a result of rising oil prices. Consumer sentiment will sour somewhat as consumers see more and more of their dollars going into the gas tank. If we stay below the $4 per gallon of gasoline mark the mood swing will not be as pronounced, but if we go over and beyond that level the consumers’ mood could change as drastically as a teenager who has just been grounded.

I n v e s t men t Nonresidential investment spending will continue to strengthen as the recovery continues. We expect that nonresidential investment will grow at an average pace of nearly 7.8% in 2011 through 2014.

This rate of investment growth is significantly higher than the average pace of growth during 2003-2007, which was 5.7%.

Businesses are sitting on a tremendous amount of cash, hoarded since the recovery began and

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U.S. Forecast | March 2011

U . S . F o r eca s t

interest rates remain at low levels pushed down by QE2. Firms can choose to use their stockpiled profits to make investments and acquisitions, and give up the paltry interest that money sitting in risk free investments would have earned. The explicit cost of borrowing is likely to remain subdued for an extended period. We are expecting that business spending on equipment and software will grow at an annual average rate of 11.7% through 2012.

Investment in computers and peripherals will be boosted in the near term by replacement cycles. The fact is that these types of investments help firms in their continued battle to grow profits by containing costs and to deal with the ever growing amount of data they must handle. Cost management will still be in the forefront of business strategy given the recent boost in commodity prices. This type of investment will experience average growth of 15.0% in 2011 through the end of 2014.

The commercial real estate sector is weighing down on investment in non-residential structures.

We expect growth to continue to decline throughout 2012. As the commercial mortgage crisis continues to play itself out, financing will remain difficult to access. As the flow of credit begins to resolve itself, growth will return in this type of investment in 2013. By the time we get into 2014, growth in this component of investment will be a robust 15.3%.

Investment in transportation equipment has been growing robustly in 2010 and will continue to do so throughout our forecast horizon. This type of investment will have an average growth rate of 21.0% during the four years from 2011 through 2014.

Pent-up demand, low interest rates, and idle cash on businesses’ balance sheets will bolster light vehicle sales to grow from current levels of between 11.5 million to a level in excess of 16 million in 2014.

Residential fixed investment growth has been negative for five straight years including 2010. The somewhat inconsistent recovery, persistently high unemployment and mortgage underwriting difficulty have extended the woes of a floundering housing market. In 2011, things finally start to turn around as residential fixed investment growth finally turns positive this year and will average 21.1% growth through 2011-2014 with much faster growth in 2012 and beyond. Housing starts bottomed out in

2009 and have hugged that bottom since that time, increasing but only slightly in 2010. Inventories of new homes have fallen significantly. We expect starts to accelerate significantly in 2012 before hitting nearly 1.7 million in 2014.

G o v e r nmen t Spen d in g The ongoing crisis in the EU is a stark reminder of where a lack of fiscal restraint can ultimately lead.

Deficit spending is not without cost, and there is no free lunch where government spending is concerned.

The fiscal path that the federal government has us following leads directly to the type of crisis we have seen unfold in Greece, Ireland and others to come.

We are certainly not at the level of fiscal imbalance that Greece was at when the crisis broke, but we would eventually get there if something isn’t done to correct these imbalances.

The national debt is over $14.0 trillion and rising.

Trillion-dollar federal budget deficits are lingering.

We are forecasting deficits to stay above that level through 2012. In 2013, we are forecasting the federal budget deficit to be $796 billion and $674 billion in 2014. The national debt at that time will be approaching an eye popping $19 trillion!

While the Bush tax cuts were extended for two years, they will have to be reversed at some point, and not just for the “rich.” All of us will be called upon to make some sacrifice so that the country we bequeath to our children and grandchildren offers the same prospect of a more prosperous future – like the one we inherited.

The recovery was too weak to allow any of the tax cuts to expire. But we must let them expire for all income levels and get to work on addressing the real sources of deficit spending.

President Obama’s bi-partisan deficit reduction commission has undertaken some of this work. They made preliminary proposals aimed to cut nearly 4 trillion dollars in deficits through 2020. The President unfortunately failed to provide leadership on this issue by taking these recommendations and advancing them through the policy process.

Consequently, he missed a golden opportunity to actually implement the change he so often promised on the campaign trail.

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U . S . F o r eca s t

But as Sam Cooke so sweetly sang: “A change is gonna come.” Our fiscal path must, and indeed will, be changed let’s just hope that it will be by our own preemptive action and not by crippling austerity measures that trigger civil unrest of the kind we have witnessed in Greece.

Net Exports Overall trade growth will continue through the end of our 2014 forecast period. Globalization is not just a passing fancy. The world will continue to become more and more integrated both in the trade of goods and services as well as in financial flows. The weakening of the U.S. dollar, temporarily interrupted as the Greek sovereign debt crisis unfolded, began to depreciate again in anticipation of QEII. The wobbling of the U.S. dollar vis-à-vis major trading partners is likely to persist though the end of 2014. However, a true change of course in U.S. fiscal imbalances could swing trends in favor of a stronger dollar.

In part due to the weakness of the U.S. consumers’ recovery and the relative strength of some of our trading partners’ economic growth, export growth will outstrip import growth through the end of our forecast horizon. Average export growth in 2011-2014 will be 8.7%, and the average growth in imports will be 5.4% over the same period.

However, the rising price of oil will put upward pressure on the dollar value of U.S. imports and that will have negative consequences for net export and GDP growth.

The current account deficit which improved in 2007-2009, particularly so after the price of oil collapsed in 2008, will be relatively stable. We expect the balance to average -$544 billion through the end of 2014. The forecast levels of the current account deficit are less than 63% of the peak deficit of over $800 billion in 2006. Again the price of oil is a wild card in these projections.

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U.S. Forecast | March 2011

U nemp l o ymen t The national unemployment rate has declined faster than we had expected and now stands at 8.9% down from 9.8% just a few months ago. This is welcome news, but it would be premature to declare victory in the battle of the labor market. The labor market participation rate remains at 27 year lows.

This means that the problem of the discouraged worker, a person who has been unemployed for so long they have (temporarily) given up the search for a job, is still present. As a result they are no longer included in the headline unemployment measure (U-3 as the Bureau of Labor Statistics calls it). As these workers see businesses hiring once again, many will resume the job search that they had earlier abandoned. This re-entry to the labor force has a statistical implication namely keeping the headline unemployment rate (U-3) from falling as quickly as it apparently has the past three months Despite the reemergence of job creation, the unemployment rate will be slow to decline. We expect that unemployment will stay near 9.0% until the end of 2011. However by the end of 2014, the unemployment rate will close in on 7.0%.

Underemployment (U-6) is an even bigger problem and stands at 15.9% in February, down from the time of our last forecast, but still uncomfortably high. This excess capacity in the labor market will get used before many firms are forced to go out and hire new workers. This is responsible in part for the slow recovery of payroll hiring.

It will be many years before we see the unemployment rate fall back into a range that could be considered consistent with a full employment level of unemployment. We are still forecasting that it will not be until 2018 before we see the unemployment rate once again drop below 6.0%.

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

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

9.0

2.5

8.0

2.0

7.0

1.5

6.0

1.0

5.0

0.5

4.0

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

0.0

Automobile and Light Truck Sales (Millions Vehicles)

11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0

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

Change in Real Business Inventories 150.0

(Billions of 2000 Dollars)

100.0 50.0 0.0 -50.0 -100.0 -150.0

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

Institute for Economic Competitiveness

13

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

Twin Deficits (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 13 14 U.S. Federal Budget Surplus Current Account

Civilian Unemployment Rate (%)

10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0

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

Debt to GDP Ratio

120% 100% 80% 60% 40% 20%

14

U.S. Forecast | March 2011

80

83

86

89

92 95 98 01 04 07 National Debt to GDP Ratio

10

13

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

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

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

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 1-Year T-Bill Yield 5 Year Treasury Bond Yield 25 year Treasury Bond Yield Institute for Economic Competitiveness

15

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

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

(%)

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

Industrial Production (2002=100)

110.0 105.0 100.0 95.0 90.0 85.0 80.0 75.0

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

Private Fixed Nonresidential Investment 2200.0

(Billions of Dollars)

2000.0 1800.0 1600.0 1400.0 1200.0 1000.0 800.0

16

U.S. Forecast | March 2011

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

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

Manufacturing Employment (Millions)

18.0 17.0 16.0 15.0 14.0 13.0 12.0 11.0

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

Money Supply

30.0

(Annual Growth Rate %)

20.0 10.0 0.0 -10.0

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

Total Nonfarm Payroll Employment 145.0

(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 13 14 Total Nonfarm Employment Institute for Economic Competitiveness

17

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

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120

120.0

110

100.0

100

80.0

90

60.0

80

40.0

70

20.0

60

0.0

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

50

Real Disposable Income and Consumption 8.0

(% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

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

Trade Balance and Real Exchange Rate

1.30 1.20 1.10 1.00 0.90 0.80 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

18

U.S. Forecast | March 2011

1.40

0.70

Table 15. Government Receipts and Expenditures History 2002

2003

2004

2005

1859.3

1885.1

2014.0

2290.1

2524.5

2654.7

2503.1

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1165.6

1102.8

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

362.8

232.2

86.8

89.3

94.3

98.8

99.4

94.5

96.0

739.3

762.8

807.6

852.6

904.6

945.3

972.4

2112.1

2261.5

2393.4

2573.1

2728.3

2900.0

3119.3

680.7

756.5

824.7

876.3

931.7

976.4

1079.9

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

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Expenditures Purchases Goods & Services

2006

2007

March 2011

2008

Federal Government Receipts and

National Defense

437.7

498.0

550.8

589.1

624.9

662.3

737.3

Other

243.0

258.6

273.9

287.3

306.9

314.1

342.5

1252.1

1339.4

1405.1

1491.3

1587.1

1690.5

1843.7

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1387.4

Transfer Payments To Persons

23.3

28.6

30.9

40.9

35.0

42.2

44.8

Grants in Aid to State & local Gov't

To Foreigners

304.2

338.0

349.2

361.2

359.0

380.8

396.2

Net Interest

213.7

196.5

204.6

239.0

261.0

291.0

270.1

40.3

45.3

45.7

64.1

53.9

50.2

53.5

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-245.2

-616.3

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1923.1

1967.2

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.6

1332.6

Corporate Profits

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts

221.8

226.2

248.6

276.7

302.5

323.1

335.4

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

57.8

48.0

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

18.9

19.7

304.2

338.0

349.2

361.2

359.0

380.8

396.2

Federal Grants-In-Aid Expenditures

1535.13

1609.33

1704.50

1778.63

1910.83

2014.58

1302.7

1356.1

1408.2

1493.6

1586.7

1697.9

1798.5

Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.2

333.0

353.4

384.3

404.8

402.9

433.7

455.2

Interest Received

12.0

20.6

19.0

10.9

2.1

0.5

8.8

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

16.2

16.0

Transfer Payments

Dividends Received

1.6

1.7

2.0

Net Wage Accruals

0.0

0.0

0.0

-54.1

-38.8

-8.4

Surplus (+) or Deficit (-)

t ab l e s

1466.78

Purchases Goods & Services

2.1

2.3

2.4

2.5

0.0

0.0

0.0

0.0

26.0

51.0

12.2

-47.4

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

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

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

Real GDP Nominal GDP

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

2004

2005

History 2006 2007

2.5 2.4 2.8 6.0 3.7 1.9 1.0 2.6 6.8 8.9 2.6 -0.2 -5.8 -25.2 -3.3 -3.6 -6.1 -6.0 -7.7 14.2 -3.3 8.2 1.6 4.4 6.6 -0.1

3.6 3.2 3.5 6.6 3.2 2.9 6.0 7.7 9.5 11.5 8.9 -2.7 21.0 10.6 29.0 1.1 2.5 5.0 -16.7 16.6 1.4 9.9 9.5 11.0 4.1 -0.2

3.1 3.2 3.4 5.2 3.4 3.0 6.7 8.6 7.3 11.7 1.8 8.3 13.5 -10.0 18.7 1.5 -0.8 17.8 -2.0 10.5 -5.5 6.2 6.7 6.2 1.3 -0.2

Composition of Real GDP, Percent Change 2.7 1.9 0.0 -2.6 2.8 2.6 2.2 0.5 -2.1 1.4 2.9 2.4 -0.3 -1.2 1.8 4.1 4.2 -5.1 -3.5 7.6 2.8 2.0 -1.1 -1.2 2.8 2.7 2.2 0.9 -0.8 0.5 7.9 6.7 0.4 -17.0 5.6 7.5 3.7 -2.4 -15.0 15.1 8.3 8.9 6.2 0.3 13.3 23.3 14.1 13.7 -0.8 27.4 10.8 16.0 3.1 0.5 13.3 8.4 4.0 -4.2 -23.2 6.0 9.2 -4.1 -22.9 -45.1 47.3 -5.1 30.6 -4.2 -18.0 -3.1 7.2 -18.2 -12.2 -36.9 11.9 9.2 14.0 6.2 -20.4 -13.5 6.1 10.0 -3.6 -30.1 -25.0 10.3 18.1 25.6 8.0 -32.1 7.9 39.0 11.6 3.0 -9.2 14.7 6.2 6.5 -35.0 28.8 9.3 15.2 13.2 -18.7 -27.2 -7.2 -18.7 -24.0 -22.4 -2.9 9.0 9.3 6.2 -9.4 11.8 -2.6 -13.7 12.7 6.1 2.7 2.1 1.3 7.2 5.8 4.8 0.9 1.4 0.3 -0.9 -1.4

2009

2010

3.3 3.4 2.1 4.9 3.1

31.1 3.6 1.3 73.8 17.2 87.6 16.643 1.854 5.443 6.0 -0.3 -377 -521

41.5 2.8 2.3 76.2 58.3 95.2 16.867 1.949 5.914 5.5 1.1 -413 -630

56.6 1.6 3.2 78.5 49.8 88.6 16.948 2.073 6.181 5.1 1.7 -319 -748

66.1 0.9 2.2 79.1 63.2 87.3 16.504 1.812 5.712 4.6 1.8 -248 -803

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))

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

1.35 1.36 1.89 3.43 4.27 5.12 5.84 1131 18.0 1.020 -8.1

3.21 3.13 3.62 4.05 4.29 4.56 5.86 1207 6.8 1.000 -1.8

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

9378 3.5 8378 4.6 8854 2.5 3.5 660 15.5

9937 6.0 8889 6.1 9155 3.4 3.4 923 40.2

10486 5.5 9277 4.4 9277 1.3 1.4 1228 33.1

2011

Forecast 2012 2013

2014

2.8 2.8 2.6 8.5 2.7 1.6 8.7 13.2 9.8 17.7 11.4 19.7 26.0 2.2 27.6 -3.2 -10.6 -18.0 2.0 10.1 -8.6 2.6 9.4 6.1 0.3 -1.6

2.7 2.9 2.4 5.1 2.0 2.1 7.3 10.3 6.7 12.1 12.5 10.6 31.4 14.6 18.0 -2.0 4.5 0.5 -8.7 -7.3 7.3 24.7 8.9 5.4 -3.2 -1.1

3.4 3.3 2.3 3.5 1.5 2.5 9.1 7.2 6.8 16.0 7.4 2.7 11.8 6.2 18.7 15.3 31.4 18.8 7.7 1.1 12.1 12.6 8.3 5.7 -1.9 1.5

3.0 3.0 2.0 4.8 1.2 1.9 6.0 5.1 4.3 14.3 1.5 0.5 14.6 7.2 14.2 9.4 25.1 26.7 -4.4 -2.8 12.4 26.0 8.2 4.5 -3.0 0.7

13620.9 13992.2 14412.0 14898.6 15298.8 15933.8 16657.4 17524.4

Prices & Wages, Percent Change, Annual Rate 3.3 2.9 2.2 0.9 1.0 3.2 2.9 3.8 -0.3 1.6 2.5 2.3 2.3 1.7 1.0 3.0 3.9 6.4 -2.5 4.2 2.9 3.1 2.9 1.5 1.8

2.8 2.7 1.8 3.6 3.8

U.S. Forecast | March 2011

2008

Billions of Dollars 11840.7 12263.8 12638.4 12976.3 13228.9 13228.9 12880.6 13245.6 11142.2 11867.8 12638.4 13398.9 14061.8 14369.1 14119.1 14657.8

2.2 2.3 1.5 3.2 3.8

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

20

2003

1.5 2.5 1.4 5.0 2.1

1.4 1.7 1.7 0.9 2.1

1.5 1.8 1.7 1.3 2.2

1.8 2.0 2.0 1.6 2.5

79.4 3.9 5.7 71.8 55.0 71.8 11.545 0.585 4.311 9.6 -0.7 -1294 -475

95.5 1.5 4.9 75.5 70.0 76.4 13.121 0.677 4.485 9.0 1.0 -1429 -549

97.5 0.4 3.0 76.9 49.2 78.9 14.7 1.1 4.9 8.6 1.8 -1069 -522

101.0 0.9 3.7 78.1 45.4 81.7 15.9 1.5 5.2 8.0 2.0 -796 -542

103.9 1.5 3.9 79.6 57.1 85.0 16.6 1.7 5.5 7.2 2.2 -674 -563

4.96 4.72 4.93 4.75 4.79 4.87 6.42 1311 8.6 0.985 -1.4

Financial Markets, NSA 5.02 1.93 0.16 0.18 4.38 1.40 0.15 0.14 4.52 1.82 0.47 0.32 4.43 2.80 2.19 1.93 4.63 3.67 3.26 3.21 4.25 4.84 4.28 4.07 6.33 6.04 5.04 4.69 1477 1221 947 1139 12.8 -17.2 -18.9 21.6 0.930 0.888 0.926 0.898 -5.6 -4.1 4.8 -2.8

0.16 0.24 0.40 2.23 3.57 4.70 5.00 1316 15.7 0.868 -3.3

1.8 1.9 2.3 3.3 4.2 5.2 5.6 1316 0.0 0.886 2.1

3.2 3.2 3.4 4.1 4.5 5.0 6.0 1444 9.8 0.897 1.3

3.8 3.8 4.0 4.6 4.9 5.3 6.3 1519 5.4 0.887 -1.1

11268 7.5 9916 6.9 9651 4.0 2.4 1349 10.1

11912 5.7 10424 5.1 9874 2.3 2.1 1293 -4.2

72.2 1.6 2.7 79.6 28.7 85.6 16.089 1.342 4.959 4.6 1.1 -162 -718

Other Measures 99.8 61.8 1.0 3.7 -3.3 -9.2 75.0 67.2 -39.0 -116.9 63.8 66.3 13.195 10.402 0.900 0.554 4.337 4.559 5.8 9.3 -0.6 -4.4 -455 -1416 -669 -378

Incomes 12391 12175 4.0 -1.7 10953 11035 5.1 0.8 10043 10100 1.7 0.6 4.1 5.9 1025 1062 -20.6 13.5

12545 3.0 11378 3.1 10239 1.4 5.8 1381 31.8

13179 13633.7 14247.5 15051.3 5.1 3.5 4.5 5.6 11866 12190 12559 13205 4.3 2.7 3.0 5.1 10475 10602 10750 11099 2.3 1.2 1.4 3.2 5.7 4.6 3.9 4.6 1186 1208 1453 1536 -14.1 1.9 20.3 5.8

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

Table 2. Real Gross Domestic Product History 2003

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

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

11840.7 12263.8 12638.4 12976.3 13228.9 13228.9 12880.6 13245.6

13620.9 13992.2 14412.0 14898.6

11824.8 12198.2 12588.4 12917.1 13200.0 13268.1 12992.8 13176.4

13540.1 13934.1 14357.6 14831.9

8247.6

8532.7

8819.0

9073.5

9289.5

9265.0

9153.9

9314.4

9555.2

9784.0

9983.6 10217.8

986.1

1051.0

1105.5

1150.4

1198.5

1136.4

1094.6

1178.2

1278.2

1343.5

1407.6

1457.3

Nondurables

1845.6

1904.6

1968.4

2023.6

2064.3

2041.2

2017.4

2073.5

2128.7

2170.4

2196.8

2229.5

Services

5418.4

5577.6

5745.1

5899.7

6028.3

6082.3

6032.7

6064.6

6164.1

6294.4

6413.3

6570.8

1191.0

1263.0

1347.3

1453.9

1552.0

1556.6

1290.8

1363.0

1482.1

1589.2

1685.2

1837.6

851.4

917.3

995.6

1069.6

1109.0

1082.0

916.3

1054.7

1194.0

1315.4

1382.1

1480.9

405.0

443.1

475.3

514.8

560.5

594.7

595.8

675.0

741.2

790.5

824.5

880.4

Computers & Peripherals

63.4

70.6

78.9

97.1

110.7

125.5

123.6

156.7

184.5

206.7

236.2

273.7

Communications Equipment

75.4

81.7

83.2

92.2

106.7

109.5

109.8

124.4

138.6

155.8

158.1

169.8

Industrial Equipment

151.6

147.4

159.6

172.9

179.9

172.2

132.2

139.7

167.3

184.7

185.7

190.7

Transportation Equipment

132.9

161.1

181.7

198.2

190.2

147.2

76.4

112.6

141.5

185.5

212.3

237.2

22.6

25.1

22.0

20.6

26.8

25.7

20.7

20.1

20.3

23.3

25.0

26.5

31.7

40.8

48.2

51.6

42.1

36.8

23.1

25.9

32.9

38.9

44.4

52.6

343.0

346.7

351.8

384.0

438.2

464.2

369.6

318.4

308.3

302.2

330.8

381.4

133.8

137.1

135.9

144.2

158.6

152.8

107.0

79.8

71.2

74.4

93.2

122.3

Manufacturing

24.3

25.5

29.9

33.0

39.0

48.5

52.2

35.5

28.8

28.9

36.7

43.5

Power & Communication

55.7

46.2

45.2

48.7

67.8

74.0

75.8

68.6

69.7

63.7

60.8

65.5

Mining & Petroleum

60.0

69.9

77.1

88.3

93.6

99.7

64.3

81.3

88.6

82.1

79.7

80.6

Other

66.5

67.4

63.7

69.6

80.3

90.4

73.5

53.3

48.6

52.2

58.6

65.7

664.3

729.5

775.0

718.2

584.2

444.2

342.7

332.4

340.5

425.5

534.6

601.4

Exports

1116.8

1222.8

1305.1

1422.1

1554.4

1647.7

1490.7

1666.5

1824.1

1985.3

2147.6

2325.2

Imports

1720.7

1910.8

2027.8

2151.2

2209.3

2151.8

1853.8

2088.4

2214.6

2333.9

2438.5

2577.9

831.1

865.0

876.3

894.9

906.1

971.8

1027.6

1077.0

1079.7

1045.6

1014.0

995.2

1499.7

1497.1

1493.6

1507.2

1528.1

1532.6

1518.8

1497.6

1473.4

1456.7

1466.5

1488.8

Durables

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Federal Government State & Local Government

Institute for Economic Competitiveness

21

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

Table 3. Quarterly Summary of the Forecast of the U.S. 2010Q4

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

2.8 6.7 4.1 21.0 4.8 1.4 5.3 5.5 11.5 18.0 14.3 10.9 -24.1 -60.1 6.8 4.5 -14.4 -29.8 81.9 5.0 -19.4 2.7 9.6 -12.4 -0.2 -2.4

2011Q1

2.9 1.8 2.1 8.9 1.4 1.3 4.1 10.5 3.0 6.6 -6.6 26.0 44.0 5.6 63.9 -12.1 -20.1 -13.0 -22.0 1.3 -9.0 -1.4 10.2 4.2 -4.1 -2.7

2011Q2

3.3 2.1 2.0 2.2 2.5 1.9 12.0 16.4 15.3 37.9 19.1 21.4 14.4 13.9 7.6 -0.1 1.3 -3.3 11.8 -9.2 2.8 11.8 9.6 11.5 0.9 -1.2

2011Q3

2.5 2.2 2.2 2.3 2.8 2.0 12.7 17.1 10.9 17.8 21.5 21.6 50.8 18.2 13.9 0.1 -2.8 -9.9 -3.0 9.1 -1.7 13.2 10.6 11.4 -2.0 -1.7

2011Q4

3.5 3.7 3.0 7.4 2.7 2.4 10.4 15.6 11.4 17.6 23.1 18.5 34.5 18.4 14.6 -5.1 1.5 -9.4 -9.2 -8.7 2.2 19.7 9.2 3.7 -2.5 -2.7

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q3

Composition of Real GDP, Percent Change, Annual Rate 2.1 2.5 2.9 3.4 2.2 3.5 3.6 2.8 2.9 2.9 3.5 2.5 3.4 3.2 2.3 2.4 2.1 2.4 1.8 2.1 1.9 5.8 5.9 3.0 5.7 5.6 5.6 3.2 1.4 1.6 1.7 1.5 0.8 1.1 1.2 2.0 2.1 2.0 2.3 1.5 1.8 1.9 2.2 5.6 7.3 8.5 -1.1 8.6 10.0 4.3 7.7 8.9 10.2 -4.2 6.3 8.3 0.5 5.3 5.7 7.6 -2.8 5.9 8.2 -5.9 12.5 20.2 24.0 1.2 13.3 23.3 5.6 9.6 6.1 8.5 -13.5 5.7 6.7 2.3 7.3 6.5 8.7 -12.3 2.1 2.8 38.0 21.1 28.5 17.3 7.7 10.2 14.2 10.4 15.8 11.6 17.0 -3.2 6.0 7.8 18.2 21.7 22.0 27.9 -0.7 15.6 14.5 -4.6 -1.3 1.7 2.6 10.9 16.8 16.1 3.8 11.4 5.1 12.6 30.8 38.8 35.1 -5.4 10.9 17.1 19.6 34.5 39.7 26.6 -13.1 -13.3 -5.1 -12.5 -5.7 -1.7 5.7 -8.0 -13.0 -9.5 -6.3 -3.0 4.7 2.4 4.6 15.3 17.3 13.4 11.2 10.9 10.1 22.6 34.8 36.7 32.8 23.2 23.3 17.7 9.2 7.7 7.9 7.6 8.3 8.2 9.0 1.8 5.8 6.6 4.0 2.0 4.8 6.2 -4.1 -4.1 -3.6 -3.6 -3.0 -2.5 -2.2 -1.8 0.7 0.4 -1.1 0.5 1.9 1.6

2013Q4

3.3 3.1 1.9 1.8 1.3 2.1 10.5 8.6 7.5 17.6 7.0 4.8 16.3 7.9 12.0 16.8 38.7 18.1 10.1 -0.3 10.8 13.9 8.4 6.2 -2.1 1.6

2014Q1

3.6 3.5 2.7 4.5 1.4 2.9 10.2 8.9 6.7 14.0 7.7 4.1 22.4 7.2 64.8 14.6 29.0 20.6 7.4 -1.1 13.1 11.6 8.2 6.8 -2.0 1.7

2014Q2

3.3 3.4 2.5 3.9 1.7 2.6 8.0 5.8 6.5 14.9 8.1 1.9 4.4 4.3 3.3 15.0 26.7 14.1 10.6 2.9 13.6 12.8 8.2 5.3 -1.6 1.4

2014Q3

3.1 3.2 2.5 2.9 1.8 2.7 6.9 4.7 5.9 14.3 7.9 -0.9 2.9 4.1 -3.3 14.1 27.9 7.5 6.8 4.5 12.6 7.2 8.1 4.6 -1.3 1.1

2014Q4

2.9 3.2 2.6 3.5 2.0 2.7 6.3 3.8 5.3 14.0 6.7 1.0 -2.5 3.8 -5.7 14.0 26.9 16.5 9.0 -3.5 12.4 3.1 7.4 3.7 -0.9 1.0

Billions of Dollars 13370.1 13467.0 13576.2 13661.2 13779.0 13849.9 13934.4 14033.0 14151.4 14227.6 14349.7 14476.0 14594.7 14724.2 14844.2 14958.7 15067.4 14861.0 15024.4 15211.0 15401.4 15558.3 15697.2 15834.1 16005.5 16198.6 16352.3 16552.2 16758.6 16966.6 17205.7 17427.0 17633.8 17831.0

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

Prices & Wages, Percent Change, Annual Rate 1.5 1.0 1.5 1.4 1.6 1.5 1.6 1.3 2.2 1.8 1.8 1.9 1.7 1.6 1.6 1.6 1.7 1.7 0.5 0.9 0.6 2.0 1.3 1.3 2.4 1.9 2.0 2.1 2.2 2.3

0.4 2.6 0.6 7.2 1.8

1.4 5.4 1.7 11.3 2.6

1.7 1.0 1.6 4.1 2.0

2.5 1.9 1.7 -1.0 2.0

0.6 1.9 1.7 1.6 2.0

85.0 2.6 3.2 73.0 5.7 71.3 12.306 0.534 4.170 9.6 0.8 -1342 -461

95.0 2.2 6.4 74.3 38.7 76.0 12.920 0.592 4.524 9.0 0.9 -1280 -555

96.6 0.7 3.9 75.1 74.5 76.4 12.733 0.636 4.406 9.1 1.3 -1268 -545

94.2 0.5 4.2 75.9 85.2 75.9 13.146 0.696 4.472 9.0 1.4 -1207 -534

96.2 0.9 3.7 76.6 81.6 77.2 13.687 0.782 4.537 8.8 1.8 -1160 -563

96.1 -0.4 2.1 76.5 59.5 79.5 14.200 0.883 4.639 8.8 1.9 -999 -518

97.0 0.2 2.3 76.6 45.9 79.5 14.601 1.007 4.755 8.7 1.8 -986 -518

Other Key Measures 97.9 98.8 99.8 0.7 1.2 0.1 2.9 3.5 3.5 77.0 77.5 77.2 46.2 45.4 35.1 77.9 78.5 78.7 14.817 15.147 15.512 1.151 1.249 1.332 5.012 5.085 5.099 8.5 8.4 8.2 1.8 2.1 1.8 -969 -946 -751 -528 -523 -525

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))

0.19 0.14 0.26 1.49 2.86 4.16 4.42 1204 45.4 0.870 -14.4

0.16 0.13 0.25 2.13 3.48 4.58 4.89 1310 40.1 0.860 -4.7

0.15 0.16 0.29 2.21 3.55 4.67 5.00 1310 0.0 0.865 2.3

0.13 0.25 0.41 2.24 3.57 4.70 5.01 1318 2.5 0.872 3.5

0.22 0.41 0.66 2.34 3.67 4.83 5.10 1328 3.3 0.874 0.5

0.54 0.82 1.21 2.55 3.86 5.01 5.25 1317 -3.5 0.871 -1.1

1.30 1.40 1.79 2.90 4.11 5.18 5.47 1310 -1.9 0.884 5.8

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

12715 3.9 11509 3.3 10312 1.4 5.4 1357 -15.8

12952 7.6 11675 5.9 10360 1.9 5.5 1225 -33.6

13111 5.0 11815 4.9 10456 3.7 5.9 1182 -13.2

13265 4.8 11936 4.1 10519 2.4 5.9 1174 -2.6

13388 3.8 12037 3.4 10565 1.8 5.7 1165 -3.2

13406 0.5 12007 -1.0 10500 -2.5 4.5 1195 10.7

13552 4.4 12131 4.2 10576 2.9 4.7 1192 -0.8

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

22

2013Q2

U.S. Forecast | March 2011

1.5 1.9 1.8 1.3 2.2

1.7 2.0 1.8 2.0 2.4

2.1 2.2 2.2 1.8 2.8

1.9 2.2 2.2 2.0 2.4

1.7 1.9 2.0 0.8 2.4

1.6 1.7 1.9 0.8 2.4

100.7 1.5 4.2 77.8 37.0 80.3 15.906 1.427 5.095 8.1 2.1 -708 -540

101.4 1.5 4.4 78.5 50.5 83.2 16.101 1.502 5.206 7.9 2.5 -673 -548

102.1 1.3 4.3 78.9 59.0 84.8 16.219 1.554 5.295 7.7 2.3 -668 -554

102.8 1.7 3.7 79.3 64.1 85.3 16.503 1.600 5.349 7.5 2.2 -652 -570

103.4 1.6 3.9 79.6 59.7 85.3 16.643 1.646 5.429 7.3 2.1 -661 -564

104.3 1.5 3.5 79.7 56.4 85.0 16.635 1.689 5.635 7.1 1.9 -669 -559

105.2 1.5 3.3 79.8 48.2 84.4 16.615 1.705 5.639 7.0 1.7 -685 -560

Financial Markets, NSA 2.25 3.03 3.33 2.35 3.10 3.35 2.69 3.40 3.57 3.52 4.11 4.26 4.28 4.53 4.61 5.35 5.29 5.06 5.70 5.99 6.13 1312 1325 1365 0.5 4.2 12.7 0.893 0.897 0.899 4.3 2.0 0.9

3.24 3.23 3.40 4.09 4.47 4.92 5.98 1421 17.4 0.898 -0.7

3.14 3.15 3.33 4.05 4.44 4.90 5.88 1476 16.3 0.895 -1.0

3.17 3.18 3.39 4.11 4.50 4.95 5.90 1515 10.9 0.896 0.4

3.28 3.28 3.51 4.20 4.58 5.02 5.98 1533 4.8 0.891 -2.4

3.41 3.42 3.68 4.31 4.67 5.12 6.07 1536 0.8 0.889 -1.1

3.87 3.84 4.15 4.65 4.95 5.38 6.29 1520 -4.0 0.886 -1.1

4.63 4.47 4.79 5.12 5.36 5.69 6.73 1488 -8.1 0.884 -0.8

Incomes 13869 4.8 12372 4.1 10699 2.5 4.7 1238 11.0

14165 4.7 12487 3.1 10711 1.4 3.8 1436 6.2

14325 4.6 12602 3.7 10766 2.0 3.8 1467 8.7

14497 4.9 12757 5.0 10851 3.2 4.1 1493 7.4

14753 7.2 12927 5.5 10941 3.4 4.2 1532 10.9

14949 5.4 13111 5.8 11041 3.7 4.4 1552 5.3

15154 5.6 13300 5.9 11152 4.1 4.8 1538 -3.5

15348 5.2 13483 5.6 11261 4.0 5.0 1522 -4.1

13707 4.7 12249 4.0 10633 2.2 4.7 1206 4.8

14003 3.9 12391 0.6 10673 -0.9 4.0 1415 70.4

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

Table 4. Quarterly Gross Domestic Product 2010Q4

Table 4. Quarterly Gross Domestic Product 2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

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

13370.1 13467.0 13576.2 13661.2 13779.0 13849.9 13934.4 14033.0 14151.4 14227.6 14349.7 14476.0 14594.7 14724.2 14844.2 14958.7 15067.4 13360.0 13419.0 13489.5 13564.5 13687.3 13781.4 13879.8 13977.9 14097.2 14183.8 14303.9 14416.4 14526.3 14650.5 14775.0 14892.6 15009.7 9425.9

9475.3

9523.2

9575.9

9646.3

9701.3

9758.4

9808.5

9867.9

9910.8

9961.5 10007.7 10054.5 10121.6 10185.3 10248.6 10315.7

Durables

1236.9

1263.6

1270.4

1277.8

1300.9

1319.5

1338.5

1348.6

1367.3

1386.1

1405.1

1416.3

1422.8

1438.5

1452.3

1462.8

1475.6

Nondurables

2100.9

2108.2

2121.2

2135.6

2149.8

2157.4

2165.9

2175.2

2183.2

2187.3

2193.2

2199.9

2206.9

2214.7

2223.9

2234.1

2245.1

Services

6098.7

6118.4

6146.7

6177.6

6213.8

6245.3

6277.8

6309.4

6344.9

6368.3

6397.3

6427.1

6460.6

6506.2

6548.5

6591.9

6636.4

1405.9

1420.0

1460.8

1505.0

1542.6

1550.9

1572.3

1600.2

1633.2

1628.8

1662.8

1703.0

1746.1

1789.2

1823.7

1854.6

1883.0

1098.9

1126.6

1170.1

1217.2

1262.1

1275.3

1299.2

1327.3

1359.9

1345.5

1366.3

1393.7

1422.9

1453.6

1474.1

1491.0

1504.9

702.1

707.3

732.8

752.1

772.7

773.7

783.8

794.8

809.5

803.8

815.5

831.7

847.0

860.9

874.6

887.3

898.8

165.5

168.2

182.2

189.8

197.7

194.7

200.5

210.0

221.6

222.2

229.3

241.6

251.6

260.0

269.1

278.3

287.5

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals

131.3

129.1

134.8

141.6

149.1

151.1

154.7

157.0

160.2

154.5

156.7

159.3

162.0

165.0

168.3

171.5

174.3

Industrial Equipment

Communications Equipment

146.8

155.5

163.3

171.4

178.9

179.9

183.1

186.0

189.9

183.8

184.8

186.0

188.2

190.1

191.0

190.5

191.0

Transportation Equipment

117.0

128.2

132.6

146.9

158.2

171.5

179.8

191.5

199.3

203.0

208.0

215.0

223.3

234.8

237.4

239.1

237.6

Aircraft Other Equipment Structures

19.0

19.2

19.9

20.7

21.6

22.1

23.0

23.6

24.6

24.4

24.7

25.2

25.7

26.1

26.4

26.6

26.9

28.0

31.7

32.3

33.3

34.5

36.0

37.8

39.7

42.2

42.1

43.7

45.2

46.5

52.7

53.1

52.7

51.9

319.5

309.3

309.3

309.4

305.3

301.8

300.8

302.1

304.0

312.0

324.4

336.7

350.0

362.2

375.1

387.7

400.5

Commercial & Health

75.4

71.2

71.5

71.0

71.2

71.9

73.9

74.8

77.0

82.4

89.4

96.4

104.6

111.5

118.3

125.8

133.5

Manufacturing

30.6

29.6

29.3

28.6

27.9

27.5

28.2

29.3

30.7

33.1

35.9

38.1

39.7

41.6

43.0

43.8

45.5

Power & Communication

73.4

69.0

70.9

70.4

68.7

66.3

64.0

63.2

61.1

60.2

59.9

60.8

62.3

63.4

65.0

66.1

67.5

Mining & Petroleum

89.4

89.7

87.6

89.5

87.5

85.7

82.7

80.7

79.4

78.8

79.7

80.2

80.1

79.9

80.5

81.4

80.7

Other

49.6

48.4

48.7

48.5

48.8

49.3

51.1

53.2

54.9

56.4

57.9

59.3

60.8

62.7

64.8

66.7

68.7

325.5

324.4

333.5

344.1

359.9

378.7

408.1

441.3

473.7

499.0

525.9

547.7

565.8

581.6

599.4

610.0

614.7

Residential Fixed Investment Exports

1718.3

1760.3

1801.0

1846.9

1888.0

1930.2

1966.1

2004.0

2041.0

2082.3

2123.7

2169.9

2214.3

2258.5

2303.3

2348.5

2390.7

Imports

2113.3

2135.1

2194.3

2254.2

2275.0

2285.2

2317.6

2354.8

2378.0

2389.8

2418.1

2454.5

2491.5

2532.8

2565.6

2594.8

2618.3

Federal Government

1093.7

1082.3

1084.6

1079.3

1072.5

1061.2

1050.1

1040.4

1030.9

1023.0

1016.5

1011.0

1005.5

1000.4

996.3

993.2

990.9

State & Local Government

1492.6

1482.5

1478.0

1471.6

1461.6

1454.9

1457.6

1459.1

1455.0

1457.0

1463.8

1469.6

1475.6

1481.9

1487.2

1491.3

1495.0

Institute for Economic Competitiveness

23

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

Table 5. Annual Employment

2003

2004

2005

History 2006 2007

2008

2009

Forecast 2012 2013

2010

2011

2014

Total Nonfarm Employment

129.996 131.419 133.694 136.092 137.587 136.778 130.789 129.822

131.132

133.47 136.167 139.106

Private Nonfarm

108.416 109.801 111.890 114.117 115.367 114.278 108.231 107.335

109.022

111.55 114.112 116.778

Millions

Mining

0.503

0.523

0.562

0.620

0.664

0.709

0.644

0.656

0.696

0.67

0.655

0.634

Construction

6.736

6.973

7.333

7.690

7.627

7.161

6.014

5.527

5.493

5.51

6.004

6.697

Manufacturing

14.508

14.315

14.225

14.156

13.877

13.402

11.845

11.527

11.783

12.15

12.524

12.687

Trade, Transportation and Utilities

25.287

25.536

25.960

26.278

26.626

26.293

24.902

24.609

24.906

25.62

26.254

26.648

Transportation & Warehousing

4.184

4.250

4.363

4.469

4.540

4.507

4.235

4.182

4.326

4.59

4.777

4.943

Financial Activities

7.976

8.031

8.153

8.328

8.299

8.143

7.770

7.632

7.632

7.79

7.869

7.869

Education & Health

16.588

16.950

17.370

17.825

18.319

18.838

19.191

19.563

19.915

20.31

20.552

20.852

Professional & Business Services

15.985

16.388

16.952

17.572

17.945

17.740

16.571

16.680

17.223

17.69

18.339

19.478

3.189

3.117

3.061

3.038

3.032

2.984

2.803

2.711

2.733

2.85

2.871

2.879

Leisure & Hospitality

12.175

12.492

12.813

13.109

13.425

13.436

13.074

13.017

13.133

13.40

13.463

13.445

Government

21.580

21.618

21.804

21.975

22.220

22.500

22.558

22.487

22.110

21.92

22.055

22.328

2.760

2.731

2.732

2.733

2.735

2.761

2.832

2.967

2.835

2.77

2.698

2.638

18.820

18.887

19.073

19.242

19.485

19.739

19.726

19.520

19.274

19.16

19.357

19.690

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-0.26

1.09

1.73

1.79

1.10

-0.59

-4.38

-0.73

1.01

1.79

2.02

2.16

Private Nonfarm

-0.38

1.28

1.90

1.99

1.10

-0.94

-5.29

-0.81

1.57

2.32

2.30

2.34

Mining

-0.23

5.16

9.36

10.03

5.80

6.69

-14.65

11.98

0.82

-4.23

-2.06

-3.74

Construction

1.53

4.31

5.81

2.36

-1.93

-9.25

-16.60

-3.14

-0.92

3.38

11.17

10.91

Manufacturing

-4.46

-0.05

-0.84

-1.04

-2.05

-5.39

-11.47

0.56

3.02

3.34

2.49

1.03

Trade, Transportation and Utilities

-0.57

1.52

1.64

1.16

1.17

-3.32

-4.74

0.48

1.68

3.11

2.19

1.13

Transportation & Warehousing

-1.00

2.58

2.48

2.60

0.92

-2.77

-5.68

1.35

4.86

5.29

3.91

3.08

Financial Activities

1.25

0.95

2.13

1.35

-1.30

-2.46

-4.32

-0.91

0.84

2.25

0.48

-0.40

Education & Health

2.12

2.36

2.51

2.62

2.88

2.57

1.72

2.13

1.81

1.65

1.11

1.45

Professional & Business Services

1.08

2.99

3.74

3.08

1.63

-3.64

-5.19

2.39

3.89

2.06

5.09

5.85

-5.02

-2.04

-1.07

-0.93

-0.03

-3.11

-6.04

-2.05

4.14

3.25

-0.80

1.29

1.59

2.59

2.15

2.85

2.12

-1.66

-2.46

0.76

0.90

2.04

0.05

-0.05

Government

-0.14

0.62

0.81

1.03

1.17

0.98

-0.19

-0.98

-1.31

-0.29

1.15

1.02

Federal

-1.55

-0.37

0.34

-0.21

0.55

1.16

2.45

4.09

-1.17

-2.66

-2.41

-2.01

0.08

0.77

0.88

1.20

1.25

0.95

-0.54

-1.25

-1.33

0.06

1.66

1.43

Information Leisure & Hospitality

State & Local

24

U.S. Forecast | March 2011

U . S . F o r eca s t Tab l e s Table 6. Quarterly Employment Table 6. Quarterly Employment 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

Employment (Millions) Total Nonfarm Employment

130.1 130.4 130.9 131.3 131.9 132.6 133.1 133.8 134.4 135.0 135.7 136.6 137.4 138.1 138.8 139.5 140.1

Private Nonfarm

107.9 108.2 108.7 109.3 109.9 110.6 111.2 111.8 112.5 113.1 113.7 114.5 115.2 115.8 116.5 117.1 117.7

Mining

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.6

0.6

0.6

0.6

0.6

Construction

5.5

5.5

5.5

5.5

5.5

5.4

5.5

5.5

5.6

5.8

5.9

6.1

6.3

6.4

6.6

6.8

6.9

Manufacturing

11.6

11.7

11.7

11.8

11.9

12.0

12.1

12.2

12.3

12.4

12.5

12.6

12.6

12.6

12.7

12.7

12.7

Trade, Transportation and Utilities

24.7

24.8

24.8

24.9

25.1

25.3

25.5

25.7

25.9

26.0

26.2

26.3

26.5

26.5

26.6

26.7

26.8

Transportation & Warehousing

4.2

4.2

4.3

4.4

4.4

4.5

4.6

4.6

4.7

4.7

4.8

4.8

4.8

4.9

4.9

5.0

5.0

Financial Activities

7.6

7.6

7.6

7.6

7.7

7.7

7.8

7.8

7.9

7.9

7.9

7.9

7.9

7.9

7.9

7.9

7.9

Education & Health

19.7

19.8

19.8

19.9

20.1

20.2

20.3

20.3

20.4

20.4

20.5

20.6

20.6

20.7

20.8

20.9

20.9

Professional & Business Services

16.8

17.0

17.1

17.3

17.5

17.6

17.6

17.7

17.8

18.0

18.2

18.5

18.8

19.1

19.4

19.6

19.9

2.7

2.7

2.7

2.8

2.8

2.8

2.8

2.9

2.9

2.9

2.9

2.9

2.9

2.9

2.9

2.9

2.9

Leisure & Hospitality

Information

13.1

13.1

13.1

13.1

13.2

13.3

13.4

13.4

13.5

13.5

13.5

13.5

13.5

13.5

13.4

13.4

13.5

Government

22.3

22.2

22.2

22.1

22.0

21.9

21.9

21.9

21.9

21.9

22.0

22.1

22.2

22.3

22.3

22.4

22.4

2.8

2.9

2.8

2.8

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

2.6

19.4

19.4

19.3

19.2

19.2

19.1

19.1

19.2

19.2

19.2

19.3

19.4

19.5

19.6

19.7

19.7

19.8

Federal State & Local

Growth Rates Total Nonfarm Employment

0.75

0.94

1.29

1.43

1.82

1.93

1.79

1.81

2.05

1.75

2.09

2.46

2.31

2.16

2.07

1.90

1.69

Private Nonfarm

1.46

1.32

1.75

2.10

2.50

2.46

2.25

2.18

2.43

1.99

2.27

2.65

2.47

2.29

2.27

2.12

1.87

-1.06

-1.99

-2.79

-2.48

-3.06

-4.36

Mining

11.00

4.44

2.88

-0.25

-3.97

-5.34

-4.45

-4.22

-3.18

-3.80

-3.96

Construction

-0.48

-0.37

1.13

-0.77

-3.72

-2.11

1.98

5.87

7.40

9.02 10.40 11.56 11.92 11.31 11.00 10.27

9.38

Manufacturing

-0.21

3.39

3.27

3.01

2.25

3.24

4.05

2.86

3.04

4.13

2.91

1.17

1.63

1.08

1.27

0.73

1.03

Trade, Transportation and Utilities

1.42

0.96

1.36

1.02

3.31

3.40

3.41

2.80

2.67

2.09

2.37

2.47

1.76

0.99

1.29

1.28

0.92

Transportation & Warehousing

3.93

1.20

3.59

7.47

7.19

6.47

5.57

4.82

4.32

3.54

3.73

4.39

3.99

3.08

3.25

3.09

2.90

Financial Activities

0.00

-0.93

0.58

1.57

2.15

2.50

2.05

3.21

1.23

0.31

-0.18

0.80

0.99

-0.50

-0.76

0.25

-0.60

Education & Health

2.56

1.21

0.98

2.29

2.77

2.05

1.95

1.06

1.56

0.08

2.30

1.27

0.80

1.98

1.67

1.06

1.08

Professional & Business Services

3.18

2.93

3.80

5.07

3.74

2.23

0.88

1.97

3.17

2.91

4.14

6.84

6.47

6.75

6.53

5.44

4.69

-1.37

-1.47

0.35

9.53

8.15

3.23

0.29

3.01

6.45

-1.51

-3.71

1.66

0.37

-0.79

-0.32

1.69

4.58

0.37

0.73

1.11

0.04

1.71

3.69

3.01

1.00

0.46

0.82

-0.53

-0.34

0.25

-0.27

-0.42

0.13

0.36

Information Leisure & Hospitality Government Federal State & Local

-2.63

-0.91

-0.98

-1.82

-1.53

-0.69

-0.52

-0.04

0.10

0.53

1.17

1.46

1.45

1.47

1.04

0.80

0.76

-11.86

0.79

-1.66

-1.53

-2.27

-2.69

-2.65

-2.65

-2.65

-2.41

-2.41

-2.41

-2.41

-2.41

-2.16

-1.92

-1.54

-1.19

-1.15

-0.88

-1.87

-1.42

-0.39

-0.20

0.34

0.50

0.95

1.68

2.01

2.00

2.01

1.48

1.17

1.07

Institute for Economic Competitiveness

25

U . S . F o r eca s t Tab l e s Table 7. Quarterly Implicit Price Deflators (2005=100) Table 7. Quarterly Implicit Price Deflators (2000=100) 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

GDP

111.2 111.6 112.0 112.7 112.9 113.3 113.6 114.1 114.5 114.9 115.3 115.8 116.3 116.9 117.4 117.9 118.3

Consumption

111.6 112.7 113.0 113.5 113.9 114.4 114.7 115.2 115.6 116.1 116.6 117.1 117.6 118.2 118.7 119.3 119.7

Durables

91.7

Motor Vehicles Furniture

91.4

91.1

90.9

90.7

90.5

90.3

90.1

89.9

89.7

89.5

89.3

89.2

89.1

88.9

88.7

88.5

103.5 103.6 103.8 104.1 104.4 104.6 104.8 104.9 105.1 105.3 105.5 105.6 105.9 106.2 106.4 106.7 106.9 92.0

92.0

91.4

91.1

90.9

90.8

90.8

90.8

90.8

90.7

90.7

90.7

90.7

90.7

90.7

90.7

90.6

Other Durables

113.3 114.8 115.9 116.6 117.1 117.7 118.1 118.6 119.1 119.6 120.1 120.6 121.1 121.7 122.2 122.7 123.1

Nondurables

114.0 117.8 117.9 118.6 119.2 119.7 120.0 120.9 121.5 122.0 122.6 123.2 123.9 124.5 125.0 125.6 126.0

Food

114.4 116.3 118.0 119.1 119.6 120.2 120.6 120.9 121.3 121.7 122.2 122.6 123.1 123.7 124.2 124.7 125.1

Clothing & Shoes

97.4

98.5

99.1

99.3

99.4

99.5

99.6

99.6

99.7

99.8

99.9 100.0 100.1 100.2 100.3 100.4 100.4

Gasoline & Oil

133.1 153.9 147.3 147.4 149.0 149.0 147.0 151.8 153.1 153.4 154.7 155.9 156.9 157.3 157.7 158.0 157.7

Fuel

141.6 164.1 162.7 159.3 162.5 163.2 164.6 166.0 167.4 167.7 168.8 169.7 170.6 171.1 171.6 172.0 172.1

Services

114.6 115.0 115.5 116.1 116.6 117.1 117.6 118.1 118.7 119.2 119.8 120.4 121.0 121.8 122.5 123.2 123.8

Housing

112.6 113.0 113.3 113.7 114.1 114.5 115.0 115.4 115.8 116.3 116.8 117.4 117.9 118.5 119.1 119.7 120.3

Electricity

128.3 128.5 129.3 130.1 130.3 130.6 131.0 131.3 131.9 132.7 133.5 134.5 135.5 136.8 138.5 140.1 141.1

Natural Gas

85.9

84.4

83.3

81.5

83.5

83.9

84.3

84.1

87.2

89.5

90.5

90.8

92.5

93.9

95.7

94.7

94.2

Water & Sewer

134.3 136.0 137.4 138.9 140.3 141.7 142.9 144.0 145.1 146.2 147.3 148.4 149.5 150.6 151.7 152.8 153.9

Telephone

105.0 103.9 103.5 103.5 103.2 103.1 102.8 102.7 102.4 102.1 101.8 101.5 101.3 101.0 100.8 100.6 100.4

Transportation

118.3 119.9 120.8 121.2 121.7 122.2 122.6 123.0 123.4 123.9 124.3 124.8 125.3 125.9 126.4 126.9 127.4

Other Services

120.2 121.1 121.8 122.5 123.1 123.7 124.3 125.0 125.6 126.2 126.8 127.4 128.1 128.7 129.4 130.2 131.0

26

U.S. Forecast | March 2011

U . S . F o r eca s t Tab l e s Table 8. Percent Change in Implicit Price8.

Deflators Table Percent

Change in Implicit Price Deflators

2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4

GDP

0.4

1.4

1.7

2.5

0.6

1.5

1.0

1.5

1.4

1.6

1.5

1.5

1.7

2.1

1.9

1.7

1.6

Consumption

1.8

3.9

1.1

1.7

1.6

1.5

1.2

1.8

1.5

1.6

1.7

1.6

1.8

2.0

2.0

1.7

1.6

Durables

-2.2

-1.3

-1.2

-0.9

-0.8

-0.9

-1.0

-1.0

-0.9

-0.8

-0.8

-0.8

-0.7

-0.6

-0.7

-0.8

-0.9

Motor Vehicles

-0.4

0.2

0.6

1.2

1.4

0.9

0.5

0.6

0.6

0.6

0.7

0.8

0.9

1.1

1.0

0.9

0.8

Furniture

-4.2

-0.2

-2.5

-1.5

-0.8

-0.3

0.0

-0.1

-0.1

-0.1

-0.1

-0.1

-0.1

0.0

0.0

0.0

-0.1

Other Durables

5.5

5.6

3.8

2.5

1.9

1.8

1.7

1.5

1.6

1.7

1.7

1.7

1.8

1.9

1.8

1.6

1.4

Nondurables

6.2

14.1

0.4

2.2

2.2

1.8

0.8

3.3

1.9

1.6

2.1

2.0

2.0

1.9

1.9

1.7

1.3

Food

1.4

6.8

6.2

3.8

1.6

2.0

1.5

0.8

1.2

1.5

1.6

1.4

1.6

1.9

1.7

1.5

1.3

Clothing & Shoes

-3.6

4.6

2.1

0.9

0.6

0.5

0.2

0.2

0.2

0.3

0.4

0.4

0.5

0.6

0.4

0.3

0.1

Gasoline & Oil

45.7

78.6 -16.1

0.4

4.3

0.1

-5.2

13.7

3.5

0.8

3.4

3.0

2.7

1.0

1.0

0.8

-0.8

Fuel

45.8

80.2

-3.5

-8.1

8.5

1.7

3.6

3.5

3.4

0.6

2.6

2.2

2.0

1.2

1.1

1.0

0.3

Services

1.1

1.5

1.8

1.9

1.8

1.8

1.7

1.7

1.8

2.0

2.0

1.9

2.1

2.5

2.5

2.2

2.1

Housing

0.9

1.3

1.0

1.3

1.5

1.6

1.6

1.5

1.5

1.7

1.8

1.8

1.9

2.0

2.1

2.1

2.0

Electricity

2.5

0.5

2.5

2.8

0.5

0.8

1.4

1.0

1.7

2.5

2.6

2.8

3.1

3.9

5.1

4.6

3.0

-17.7

-6.8

-5.0

-8.5

10.4

1.7

1.8

-0.7

15.6

11.0

4.6

1.3

7.8

5.8

8.3

-4.5

-1.9

4.9

5.1

4.2

4.4

4.2

3.9

3.6

3.2

3.0

3.1

3.1

2.9

3.0

3.0

3.0

2.9

3.0

-1.7

-4.0

-1.6

0.2

-1.2

-0.7

-0.8

-0.6

-1.2

-1.2

-1.1

-1.0

-1.0

-1.0

-0.9

-0.6

-1.0

Transportation

1.5

5.5

2.9

1.3

1.6

1.7

1.3

1.4

1.4

1.4

1.4

1.4

1.6

1.9

1.7

1.6

1.5

Other Services

1.9

3.3

2.1

2.3

2.1

1.9

2.0

2.3

1.9

1.9

1.9

2.0

2.1

2.0

2.2

2.5

2.3

Natural Gas Water & Sewer Telephone

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

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

GDP Consumption Durables Motor Vehicles

2003

2004

2005

History 2006 2007

94.1

96.8

100.0

103.3

106.3

108.6

109.6

110.7

112.3

113.9

115.6

117.6 119.0

2008

2009

2010

2011

Forecast 2012 2013

2014

94.6

97.1

100.0

102.7

105.6

109.1

109.3

111.1

113.3

115.0

116.8

102.9

101.0

100.0

98.5

96.7

95.3

93.8

92.5

91.1

90.2

89.4

88.8

99.1

98.4

100.0

100.1

99.7

98.6

98.7

103.1

104.0

104.9

105.6

106.5

Furniture

101.2

99.9

100.0

99.5

98.7

98.0

97.7

93.7

91.3

90.8

90.7

90.7

Other Durables

101.6

101.4

100.0

101.9

105.9

109.7

111.2

111.9

116.1

118.4

120.3

122.4

Nondurables

92.8

96.1

100.0

103.2

106.5

112.5

109.3

112.7

118.4

120.5

122.9

125.3

Food

95.3

98.3

100.0

101.7

105.7

112.1

113.5

113.9

118.3

120.8

122.4

124.4

101.3

100.9

100.0

99.6

98.6

97.8

98.6

97.9

99.1

99.6

99.9

100.3

Gasoline & Oil

Clothing & Shoes

69.8

82.1

100.0

112.8

123.9

144.5

105.9

125.0

149.4

150.2

155.2

157.7

Fuel

64.2

74.7

100.0

114.1

123.3

167.2

114.7

134.4

162.1

165.3

169.2

171.7

Services

93.7

96.7

100.0

103.4

107.0

110.6

112.2

114.2

115.8

117.9

120.1

122.8

Housing

95.4

97.6

100.0

103.6

107.3

110.3

112.3

112.4

113.5

115.2

117.1

119.4

Electricity

92.5

94.2

100.0

112.0

116.7

124.1

127.9

128.0

129.5

131.2

134.0

139.1

Natural Gas

77.2

83.6

100.0

102.6

102.4

116.6

91.1

89.2

83.2

84.9

90.9

94.6

Water & Sewer

89.7

95.0

100.0

104.9

110.3

116.8

124.0

131.9

138.2

143.4

147.9

152.2

Telephone

102.3

100.7

100.0

100.6

102.4

104.1

105.7

105.2

103.5

102.7

101.7

100.7

Transportation

95.1

96.5

100.0

104.2

106.6

112.4

115.6

118.0

120.9

122.8

124.6

126.6

Other Services

91.2

95.4

100.0

104.1

107.4

112.4

115.2

119.2

122.1

124.6

127.1

129.9

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 History 2006 2007

2003

2004

2005

GDP

2.1

3.2

3.5

2.9

Consumption

1.9

3.0

3.3

Forecast 2012 2013

2008

2009

2010

2011

2014

2.6

2.1

0.5

1.4

1.6

1.4

1.6

1.8

1.9

3.5

1.8

1.5

1.2

2.1

1.5

1.7

1.8

Durables

-4.0

-0.8

-1.2

-1.7

-1.7

-1.7

-1.0

-2.0

-1.1

-0.9

-0.8

-0.8

Motor Vehicles

-3.8

1.6

1.0

-0.6

0.5

-3.1

4.6

2.2

0.8

0.7

0.7

0.9

Furniture

-3.1

-0.1

-0.4

-0.2

-1.6

0.3

-1.9

-4.3

-1.2

-0.1

-0.1

0.0

Other Durables

-1.5

-0.1

0.0

3.3

2.9

3.7

1.6

0.8

3.4

1.6

1.7

1.7

Nondurables

2.1

4.9

4.4

0.5

6.4

1.0

2.8

2.2

4.7

1.9

1.9

1.7

Food

3.2

2.7

1.5

1.7

4.8

6.9

-1.6

1.3

4.6

1.4

1.5

1.6

Clothing & Shoes

-1.6

-0.5

-1.3

0.2

-1.2

-0.9

1.4

-1.3

2.0

0.3

0.4

0.3

Gasoline & Oil

19.4

28.8

31.8

-0.8

30.4

4.5

24.1

13.4

16.8

3.0

2.5

0.5

Fuel

21.3

41.6

32.8

-0.4

28.1

22.4

-0.5

16.2

19.3

3.0

1.9

0.9

Services

3.2

3.2

3.8

3.1

3.5

2.9

1.5

1.3

1.7

1.7

2.0

2.3

Housing

2.2

2.4

2.5

4.4

3.0

2.7

0.9

0.2

1.3

1.5

1.8

2.0

Electricity

3.2

1.8

10.2

8.6

5.3

8.3

-0.2

0.2

1.6

1.2

2.7

4.2

22.2

14.7

44.7

-18.3

3.5

19.1

-18.4

-0.2

-2.5

4.6

6.2

1.9

4.6

5.9

5.0

4.9

5.2

6.7

6.0

5.8

4.5

3.4

3.0

3.0

-1.7

-1.7

0.2

1.3

1.5

2.1

0.8

-0.8

-1.6

-0.8

-1.1

-0.9

Transportation

2.6

1.4

4.9

2.5

3.4

5.9

1.9

1.4

2.8

1.5

1.5

1.7

Other Services

4.9

4.4

4.6

4.0

3.3

4.4

3.0

2.7

2.4

2.0

2.0

2.2

Natural Gas Water & Sewer Telephone

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components 2003

2004

2005

History 2006 2007

2008

2009

2010

2011

Forecast 2012 2013

2014

Personal Income Billions Current Dollars Personal Income

9378.2 9937.3 10485.9 11268.1 11912.3 12391.2 12174.9 12544.6

Wages & Salaries

6382.6 6693.4 7065.1

7477.0

7855.9

8060.8

7811.7

7991.4

13179.0 13633.7 14247.5 15051.3 8337.3

8739.4

9153.7

9590.9

Other Labor Income

845.6

874.6

931.6

960.2

980.5

1036.7

1072.0

1106.9

1142.7

1194.9

1256.3

1321.9

Nonfarm Income

894.1

984.1 1025.9

1247.0

1103.6

1052.6

1051.2

981.5

1010.4

1064.1

1121.7

1168.8

Farm Income

36.5

49.7

43.9

29.4

37.8

50.9

30.5

44.9

63.7

60.0

53.6

52.8

Rental Income

204.2

198.4

178.2

146.5

143.7

222.0

274.0

301.2

330.6

318.8

269.7

232.8

Dividends

423.1

548.3

555.0

702.2

791.9

794.6

697.5

712.6

760.5

790.5

815.1

843.3

Interest Income

889.8

860.2

987.0

1127.5

1265.1

1314.7

1222.3

1193.8

1210.7

1306.4

1481.5

1665.1

1341.8 1415.5 1508.6

Transfer Payments

1605.0

1718.5

1879.3

2132.9

2294.8

2357.6

2419.4

2514.2

2678.8

396.5

419.2

445.2

475.1

499.6

517.1

509.7

525.1

439.3

590.6

651.0

673.1

Personal Income

3.5

6.0

5.5

7.5

5.7

4.0

-1.7

3.0

5.1

3.5

4.5

5.6

Wages & Salaries

4.4

4.9

5.6

5.8

5.1

2.6

-3.1

2.3

4.3

4.8

4.7

4.8

13.2

3.5

6.5

3.1

2.1

5.7

3.4

3.2

3.2

4.6

5.1

5.2

2.5

10.1

4.3

7.6

-4.6

-0.1

-6.6

3.0

5.3

5.4

4.2

6.7

Farm Income

113.5

38.7

-11.1

-32.7

28.3

38.1

-37.8

47.4

45.7

-5.6

-10.7

-1.4

Rental Income

14.9

-9.4

-10.9

-23.8

32.7

58.7

7.8

9.5

8.9

-10.4

-16.8

-11.4

Dividends

14.0

43.3

-0.6

26.8

7.6

-3.8

-11.2

6.0

7.6

2.4

3.4

3.8

Interest Income

-2.2

0.2

19.4

10.9

13.7

-1.3

-6.8

-1.5

3.0

12.6

12.0

14.2

Transfer Payments

4.5

6.0

6.3

6.7

7.6

10.4

15.0

6.6

1.7

3.4

4.0

6.7

Personal Social Insurance Tax

4.2

6.1

5.9

6.7

5.2

1.9

-0.6

3.8

-10.5

50.1

10.7

3.3

Personal Social Insurance Tax

Percent Change, Annual Rate

Other Labor Income Nonfarm Income

28

U.S. Forecast | March 2011

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

Table 12. Personal Consumption Expenditures (Current Dollars) 2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

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

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

2012Q1

10519.8 10677.5 10761.6 10865.6 10990.1 11094.1 11192.8 11299.6 11411.1 11505.3 11613.0 11714.2 11820.4 11959.0 12094.1 12222.1 12351.8 1134.6

1155.0

1157.7

1161.8

1180.4

1194.7

1208.9

1215.1

1229.1

1243.3

1257.9

1265.4

1269.0

1281.1

1291.3

1297.9

1306.2

261.6

264.9

266.7

269.2

272.1

274.5

276.8

279.4

281.9

284.7

286.6

288.5

290.3

292.0

293.2

294.4

295.3

73.6

75.6

77.6

78.0

79.0

79.5

80.3

81.1

82.0

82.6

83.5

84.7

86.1

87.1

88.5

89.8

91.1

377.3

390.1

387.1

386.4

395.1

402.8

411.2

411.9

420.0

428.0

436.2

438.1

436.5

443.2

448.0

449.3

452.6

105.0

107.1

108.3

108.9

110.0

110.6

111.1

111.4

112.1

112.8

113.5

114.4

115.0

115.6

116.2

116.8

117.5

2395.1

2483.9

2501.5

2532.1

2563.1

2583.4

2598.4

2630.8

2653.2

2668.8

2689.9

2711.2

2733.5

2756.4

2780.6

2805.2

2828.4

344.6

351.2

357.8

360.8

363.3

364.9

366.6

368.2

370.0

370.1

371.9

373.8

376.2

377.6

380.0

382.4

384.5

27.3

31.2

29.8

29.0

29.3

29.3

29.3

29.3

29.4

29.4

29.5

29.5

29.6

29.7

29.7

29.7

29.7

352.2

401.0

386.7

390.5

397.4

396.9

391.6

405.2

409.3

409.8

412.6

415.5

417.7

417.3

416.5

416.4

415.6

food

813.8

833.0

847.7

857.9

866.7

874.8

882.9

890.9

898.3

904.6

911.2

917.5

924.3

932.3

940.6

948.3

955.7

other nondurable goods

857.1

867.6

879.5

893.9

906.3

917.6

928.0

937.2

946.2

954.9

964.8

974.8

985.6

999.6

1013.9

1028.3

1042.7

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

9425.9

9475.3

9523.2

9575.9

9646.3

9701.3

9758.4

9808.5

9867.9

9910.8

9961.5 10007.7 10054.5 10121.6 10185.3 10248.6 10315.7

durable goods

1236.9

1263.6

1270.4

1277.8

1300.9

1319.5

1338.5

1348.6

1367.3

1386.1

1405.1

1416.3

1422.8

1438.5

1452.3

1462.8

1475.6

furniture and appliances

284.2

288.1

291.8

295.7

299.4

302.3

304.8

307.7

310.6

313.8

315.9

318.1

320.2

322.0

323.4

324.7

325.8

information processing equipment

126.3

134.2

141.3

145.7

151.5

156.5

162.4

168.3

175.0

181.1

188.2

196.2

204.7

212.8

222.0

231.7

241.7

motor vehicles and parts

364.4

376.5

373.1

371.3

378.4

385.0

392.4

392.6

399.6

406.5

413.7

414.7

412.3

417.5

421.0

421.3

423.5

90.1

90.2

90.2

90.1

90.7

90.9

91.0

91.1

91.3

91.6

91.9

92.3

92.5

92.6

92.8

93.1

93.4

2100.9

2108.2

2121.2

2135.6

2149.8

2157.4

2165.9

2175.2

2183.2

2187.3

2193.2

2199.9

2206.9

2214.7

2223.9

2234.1

2245.1

353.7

356.4

361.2

363.5

365.4

366.6

368.2

369.7

371.2

371.0

372.4

374.0

376.0

376.8

378.8

381.0

383.0

19.3

19.0

18.3

18.2

18.1

17.9

17.8

17.7

17.5

17.5

17.5

17.4

17.4

17.3

17.3

17.3

17.3

264.5

260.5

262.6

264.9

266.7

266.3

266.4

266.8

267.3

267.1

266.6

266.6

266.2

265.2

264.0

263.5

263.5

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

711.5

716.3

718.1

720.1

724.6

727.7

731.8

736.9

740.9

743.3

745.8

748.4

751.0

753.8

757.3

760.7

764.2

other nondurable goods

757.8

763.4

769.0

777.1

783.3

787.5

790.8

793.4

795.9

798.0

801.0

804.1

807.5

813.2

818.9

824.8

830.7

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

4.1

2.1

2.0

2.2

2.9

2.3

2.4

2.1

2.4

1.7

2.0

1.9

1.9

2.7

2.5

2.5

2.6

19.6

8.6

2.2

2.3

7.2

5.7

5.8

3.0

5.6

5.5

5.5

3.2

1.8

4.4

3.8

2.9

3.5

9.7

5.4

5.2

5.3

5.1

3.8

3.3

3.8

3.7

4.1

2.7

2.8

2.6

2.3

1.8

1.6

1.3

information processing equipment

11.5

25.1

21.2

12.6

15.9

13.1

15.2

14.5

15.9

14.0

15.6

17.1

17.4

15.8

17.2

17.6

17.2

motor vehicles and parts

41.5

13.3

-3.7

-1.8

7.6

6.9

7.7

0.1

7.1

7.0

7.0

1.0

-2.3

5.1

3.3

0.3

2.1

0.8

0.1

0.2

-0.3

2.7

0.8

0.4

0.2

1.2

1.1

1.5

1.6

1.0

0.6

0.8

0.9

1.3 2.0

other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

4.8

1.4

2.5

2.7

2.7

1.4

1.6

1.7

1.5

0.7

1.1

1.2

1.3

1.4

1.7

1.8

12.0

3.1

5.4

2.5

2.1

1.3

1.7

1.6

1.6

-0.2

1.5

1.7

2.1

0.9

2.1

2.3

2.1

6.7

-6.0

-14.1

-2.6

-3.3

-2.7

-3.3

-3.0

-2.4

-0.3

-1.6

-1.4

-1.0

-0.7

-0.9

-0.3

-0.1 0.1

-3.9

-6.0

3.1

3.5

2.8

-0.6

0.0

0.7

0.6

-0.3

-0.6

-0.1

-0.6

-1.4

-1.8

-0.8

food

4.9

2.7

1.0

1.1

2.5

1.7

2.3

2.8

2.2

1.3

1.4

1.4

1.4

1.5

1.8

1.8

1.8

other nondurable goods

5.3

3.0

3.0

4.3

3.2

2.2

1.7

1.3

1.2

1.1

1.5

1.5

1.7

2.8

2.9

2.9

2.9

Institute for Economic Competitiveness

29

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

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

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

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

7804.0

8285.1

8819.0

9322.7

9806.3 10104.5 10001.3 10350.6

durable goods

1014.8

1061.6

1105.5

1133.0

1159.4

1083.5

1026.5

1089.3

1163.7

1211.9

1258.9

1294.1

233.3

249.2

263.9

276.5

277.7

266.0

248.1

258.3

268.3

278.1

287.5

293.7

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

10823.7 11249.4 11663.2 12156.7

46.6

51.5

55.9

60.4

65.6

65.8

64.7

71.3

77.6

80.7

84.2

89.1

401.5

404.7

409.6

397.1

402.5

343.2

319.7

345.9

389.7

411.5

434.7

448.3

82.4

87.0

90.4

95.7

99.6

98.3

97.2

103.3

108.6

111.3

113.9

116.5

1712.6

1830.7

1968.4

2088.7

2198.2

2296.0

2204.2

2337.4

2520.1

2616.5

2700.8

2792.6

287.0

300.0

315.5

330.1

338.9

334.1

322.2

337.9

358.3

367.4

373.0

381.2

16.8

18.4

21.0

22.3

23.6

28.1

22.9

25.7

29.8

29.3

29.5

29.7

gasoline & motor oil

192.8

231.6

283.8

314.7

343.0

383.3

280.8

332.2

393.9

400.7

413.9

416.4

food

593.1

628.2

665.0

698.0

737.4

775.2

777.9

801.8

851.3

886.7

914.4

944.2

other nondurable goods

622.9

652.6

683.0

723.7

755.3

775.4

800.4

839.8

886.8

932.3

970.0

1021.1

nondurables clothing & shoes fuel oil & coal

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

8247.6

8532.7

8819.0

9073.5

9289.5

9265.0

9153.9

9314.4

9555.2

9784.0

9983.6 10217.8

durable goods

986.1

1051.0

1105.5

1150.4

1198.5

1136.4

1094.6

1178.2

1278.2

1343.5

1407.6

1457.3

furniture and appliances

230.6

249.3

263.9

277.9

281.5

271.4

253.9

275.8

293.8

306.4

317.0

324.0

information processing equipment

36.0

44.8

55.9

69.2

83.0

92.3

101.2

119.9

143.2

165.6

192.6

227.0

405.3

411.3

409.6

396.6

403.9

348.2

324.0

335.3

374.8

392.4

411.8

420.8

79.4

84.7

90.4

94.1

93.3

87.9

85.6

89.9

90.3

91.1

92.1

93.0

1845.6

1904.6

1968.4

2023.6

2064.3

2041.2

2017.4

2073.5

2128.7

2170.4

2196.8

2229.5

283.4

297.3

315.5

331.5

343.8

341.7

326.8

345.1

361.6

368.9

373.3

379.9

26.2

24.6

21.0

19.5

19.1

16.8

20.0

19.2

18.4

17.7

17.4

17.3

gasoline & motor oil

276.3

282.1

283.8

278.9

276.8

265.3

265.3

265.8

263.7

266.7

266.6

264.1

food

622.4

639.2

665.0

686.2

697.5

691.6

685.1

703.7

719.8

734.3

747.1

759.0

other nondurable goods

640.1

662.6

683.0

708.4

729.5

731.3

723.1

744.4

773.2

791.9

802.7

821.9

2.6

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

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

3.4

3.5

2.7

3.3

1.8

-1.9

0.2

2.6

2.3

2.3

1.9

durable goods

9.2

5.5

2.4

6.5

3.9

-12.0

5.2

11.1

5.2

5.1

4.1

3.7

furniture and appliances

9.4

6.1

6.8

2.6

1.2

-7.8

0.4

9.7

5.3

3.7

3.1

1.8 18.0

information processing equipment

30.1

21.4

25.1

22.5

20.4

5.2

15.3

17.3

20.1

15.5

17.0

motor vehicles and parts

5.9

1.7

-6.6

5.8

0.6

-23.2

7.4

14.5

4.1

5.6

3.3

2.7

other durable goods

9.1

4.2

6.8

1.2

1.0

-12.3

5.1

5.0

0.7

0.6

1.3

0.9

nondurables

4.0

3.0

3.3

3.2

0.8

-2.9

1.1

3.4

2.3

1.6

1.1

1.7

clothing & shoes

5.6

5.1

7.4

3.9

2.2

-3.7

-0.3

7.5

3.3

1.6

1.3

1.9

fuel oil & coal

1.7

-15.6

-16.2

6.1

-8.8

12.6

11.6

-3.0

-6.3

-2.8

-1.1

-0.5

gasoline & motor oil

4.8

0.7

-0.6

-0.4

-1.8

-3.8

-0.1

0.5

0.9

0.2

-0.4

-1.0

food

1.6

3.9

4.2

3.4

0.8

-3.9

3.2

2.2

1.8

2.2

1.4

1.8

other nondurable goods

5.6

2.7

2.9

4.4

1.6

-0.9

0.0

4.4

3.4

1.6

1.5

2.9

30

U.S. Forecast | March 2011

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

Table 14. Business Fixed Investment History

2003

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

Billions Current Dollars Business Fixed Investment

1135.7

1223.0

1347.3

1505.3

1637.5

1665.3

1364.4

1413.2

1554.3

1666.2

1768.6

1947.4

Producers Dur. Equipment

853.8

916.4

995.6

1071.7

1112.6

1082.9

912.8

1030.4

1176.3

1299.4

1362.0

1463.1

Nonresidential Structures

281.9

306.7

351.8

433.7

524.9

582.4

451.6

382.8

378.0

366.8

406.6

484.2

Non-Farm Buildings

182.1

196.7

212.9

247.6

297.3

322.0

256.3

175.7

154.9

168.5

219.1

287.1

Commercial

94.6

104.3

112.9

128.4

150.8

149.1

96.5

64.0

56.9

60.9

83.6

123.4

Industrial

21.4

23.7

29.9

35.1

43.7

57.4

63.1

41.9

34.9

37.2

49.6

61.8

Other Buildings

66.0

68.7

70.2

84.1

102.8

115.6

96.8

69.8

63.1

70.3

85.8

101.9

Utilities

53.5

48.6

51.4

61.1

85.6

99.5

100.0

91.9

97.7

91.9

89.7

98.3

Mines & Wells

38.4

51.9

77.1

114.2

130.9

147.9

85.0

105.7

115.5

95.9

87.9

88.8

Billions 2005 Dollars Business Fixed Investment

1191.0

1263.0

1347.3

1453.9

1552.0

1556.6

1290.8

1363.0

1482.1

1589.2

1685.2

1837.6

Producers Dur. Equipment

851.4

917.3

995.6

1069.6

1109.0

1082.0

916.3

1054.7

1194.0

1315.4

1382.1

1480.9

Nonresidential Structures

343.0

346.7

351.8

384.0

438.2

464.2

369.6

318.4

308.3

302.2

330.8

381.4

Non-Farm Buildings

210.0

213.9

212.9

229.2

260.5

272.0

216.1

153.0

131.8

137.8

171.9

215.3

Commercial

110.3

114.4

112.9

118.4

131.2

124.5

79.2

54.2

47.1

48.8

64.4

90.9

24.3

25.5

29.9

33.0

39.0

48.5

52.2

35.5

28.8

28.9

36.7

43.5

Industrial Other Buildings

75.4

74.1

70.2

77.9

90.3

99.3

85.3

64.0

56.5

61.0

71.6

81.3

Utilities

61.3

52.1

51.4

56.2

75.6

82.5

83.7

76.0

78.0

72.0

68.9

73.4

Mines & Wells

60.0

69.9

77.1

88.3

93.6

99.7

64.3

81.3

88.6

82.1

79.7

80.6

-15.2

9.8

11.0

5.6

7.6

9.0

Annual Growth Rate Business Fixed Investment

6.2

9.5

8.4

11.7

9.0

-5.2

Producers Dur. Equipment

6.7

8.5

6.3

6.9

3.5

-10.0

-5.3

15.1

16.4

7.5

4.8

6.1

Nonresidential Structures

4.8

12.6

14.9

25.2

22.0

4.7

-31.7

-2.0

-4.0

-0.9

17.8

18.5

Non-Farm Buildings

3.8

10.8

7.3

18.7

22.6

-0.1

-32.0

-24.3

-3.2

15.5

36.4

27.9

Commercial

4.3

9.3

10.0

15.3

17.3

-11.8

-43.4

-22.9

-2.8

10.9

54.4

42.4

Industrial

9.1

30.4

13.8

16.1

46.6

23.0

-8.6

-32.5

-4.7

16.7

36.3

20.3

2.5

9.2

1.7

26.0

22.6

6.7

-29.1

-19.8

-2.6

19.0

21.5

17.0

Utilities

Other Buildings

-3.7

5.5

3.8

23.9

54.9

0.8

1.3

7.8

-1.8

-8.4

3.7

10.6

Mines & Wells

29.4

38.0

51.3

50.0

4.8

22.5

-44.9

64.0

-7.3

-18.0

-2.0

1.8

Institute for Economic Competitiveness

31

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

Government Receipts and Expenditures History

Forecast

2003

2004

2005

2006

2007

2008

1885.1

2014.0

2290.1

2524.5

2654.7

2503.1

2009

2010

2011

2012

2013

2014

2515.6

2788.3

3215.9

3439.1

Federal Government Receipts and Expenditures Receipts

2205.8

2384.8

Personal Tax and Nontax Receipts

774.2

799.2

931.9

1049.9

1165.6

1102.8

852.7

875.2

998.8

1112.6

1337.7

1470.0

Corp. Profits Tax Accruals

197.8

250.3

341.0

395.0

362.8

232.2

182.1

302.5

359.2

339.5

451.2

471.5

89.3

94.3

98.8

99.4

94.5

96.0

94.4

106.6

119.9

122.5

127.7

143.8

762.8

807.6

852.6

904.6

945.3

972.4

953.5

987.1

927.7

1103.9

1189.5

1238.8

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2261.5

2393.4

2573.1

2728.3

2900.0

3119.3

3457.5

3718.9

3744.2

3763.4

3916.2

4106.1

Purchases Goods & Services

Expenditures

756.5

824.7

876.3

931.7

976.4

1079.9

1139.6

1214.3

1241.0

1221.9

1204.4

1202.6

National Defense

498.0

550.8

589.1

624.9

662.3

737.3

771.6

817.7

833.4

813.5

794.0

789.8

258.6

273.9

287.3

306.9

314.1

342.5

368.0

396.6

407.6

408.3

410.4

412.9

1339.4

1405.1

1491.3

1587.1

1690.5

1843.7

2157.5

2328.4

2318.5

2319.1

2395.8

2538.6

962.6

1014.3

1078.0

1180.7

1254.2

1387.4

1604.7

1724.2

1752.6

1781.4

1837.0

1911.1

28.6

30.9

40.9

35.0

42.2

44.8

52.7

58.4

55.6

55.7

56.6

57.6

Grants in Aid to State & Local Gov't

338.0

349.2

361.2

359.0

380.8

396.2

484.6

529.6

493.3

464.1

483.6

550.3

Net Interest

196.5

204.6

239.0

261.0

291.0

270.1

231.3

264.0

279.3

313.1

404.6

454.9

45.3

45.7

64.1

53.9

50.2

53.5

63.1

61.7

58.8

53.4

50.6

49.7

-376.4

-379.5

-283.0

-203.8

-245.2

-616.3

-1251.8

-1334.1

-1228.6

-975.2

-700.3

-666.9

Other Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities Surplus (+) or Deficit (-)

State and Local Government Receipts and Expenditures 1496.3

1601.0

1730.5

1829.7

1923.1

1967.2

2005.8

2126.9

2142.8

2174.2

2281.5

2428.2

Personal Tax/Nontax Receipts

Receipts

977.7

1059.4

1163.1

1249.1

1313.6

1332.6

1267.0

1330.0

1369.4

1415.7

1488.6

1554.0

Corporate Profits

226.2

248.6

276.7

302.5

323.1

335.4

287.3

291.9

314.3

331.4

350.8

376.0

Indirect Business Tax and Nontax Accruals

34.0

41.7

55.0

59.1

57.8

48.0

49.4

86.6

74.2

67.7

85.6

89.2

Contributions for Social Insurance

20.1

24.1

24.8

21.8

18.9

19.7

21.6

22.4

23.2

24.4

25.6

26.9

338.0

349.2

361.2

359.0

380.8

396.2

484.6

529.6

493.3

464.1

483.6

550.3

1535.13

1609.33

1704.50

1778.63

1910.83

2014.58

2025.90

2093.58

2141.40

2184.55

2274.73

2418.82

Purchases Goods & Services

1356.1

1408.2

1493.6

1586.7

1697.9

1798.5

1775.4

1786.1

1801.8

1815.0

1866.6

1941.2

Government Social Benefits

353.4

384.3

404.8

402.9

433.7

455.2

492.1

533.1

566.1

597.9

635.4

722.2

353.4

384.3

404.8

402.9

433.7

455.2

492.1

533.1

566.1

597.9

635.4

722.2

Interest Received

20.6

19.0

10.9

2.1

0.5

8.8

9.2

12.8

14.5

15.7

25.2

25.4

Net Subsidies

-3.2

-0.6

0.3

1.7

16.2

16.0

10.4

10.6

8.8

6.7

4.7

3.6

Dividends Received

1.7

2.0

2.1

2.3

2.4

2.5

2.7

3.0

3.2

3.3

3.3

3.4

Net Wage Accruals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-38.8

-8.4

26.0

51.0

12.2

-47.4

-20.1

33.4

1.4

-10.3

6.7

9.4

Federal Grants-In-Aid Expenditures

Transfer Payments

Surplus (+) or Deficit (-)

32

U.S. Forecast | March 2011

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

Exports

and Imports of Goods and Services History

2003

2004

2005

2006

Forecast 2007

2008

2009

2010

2011

2012

2013

2014

Billions of Dollars Net Exports Goods & Services

-504.1

-618.7

-722.7

-769.3

-714.0

-710.5

-386.4

-515.7

-562.1

-530.5

-483.4

-466.5

Current Account

-520.7

-630.5

-747.6

-802.6

-718.1

-668.9

-378.4

-474.8

-549.2

-521.8

-541.7

-563.5

Exports -Goods & Services

1041.0

1180.2

1305.1

1471.1

1661.7

1843.4

1578.4

1838.5

2105.9

2304.4

2512.4

2747.4

Merchandise Balance

-541.5

-665.6

-783.8

-839.5

-823.2

-834.7

-506.9

-647.8

-696.9

-677.0

-642.1

-643.3 141.84

Food, Feed & Beverage

55.03

56.55

58.95

65.98

84.28

108.38

93.90

105.45

136.61

130.30

135.37

Industrial Supplies Excl Petroleum

168.3

199.5

227.5

267.3

316.2

386.9

293.7

387.3

464.2

495.0

528.9

566.4

80.7

89.2

98.4

107.3

121.3

121.4

81.7

112.0

131.1

159.8

175.6

194.0

293.7

327.6

358.4

404.1

433.0

457.7

390.5

446.2

512.6

584.0

665.5

753.9

39.9

42.8

45.5

47.6

45.6

43.9

37.7

43.9

51.7

59.2

65.8

73.0

207.1

238.7

257.0

291.9

314.5

339.8

278.0

330.1

381.7

435.2

499.4

569.6

89.9

103.3

115.3

129.1

146.0

161.3

150.0

165.7

189.4

212.8

237.3

262.6

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

39.4

41.0

47.5

50.8

61.3

59.4

53.2

61.2

66.5

71.7

76.6

82.0

314.2

363.3

399.0

446.7

499.7

548.3

515.3

560.8

605.5

650.9

693.0

746.6

Billions of Dollars Imports -Goods & Services

1545.2

1798.9

2027.8

2240.4

2375.7

2553.8

1964.8

2354.1

2668.1

2834.8

2995.8

3213.9

Merchandise

1289.3

1501.7

1708.0

1884.9

2001.6

2148.8

1587.8

1949.6

2231.3

2363.9

2494.0

2676.4

55.8

62.1

68.1

75.0

81.7

89.0

81.6

91.8

102.7

103.8

106.6

110.8

Food, Feed & Beverage Petroleum & Products

133.1

180.5

251.9

302.5

347.6

477.6

267.4

355.1

435.7

441.9

456.3

475.9

Industrial Supplies Excl Petroleum

175.7

226.4

266.0

291.4

295.7

316.5

195.2

249.3

280.0

280.5

306.1

343.9

Motor Vehicles & Parts

210.1

228.2

239.5

256.6

256.6

231.2

157.6

225.3

253.8

283.1

304.1

327.4

Capital Goods, Excl. MVP

296.4

344.5

380.8

420.0

446.0

455.2

369.7

449.2

519.7

560.4

587.6

639.7

76.5

88.6

93.3

101.4

105.2

100.9

93.9

117.4

122.8

130.5

138.3

148.1

Computer Equipment Other

195.8

231.6

261.7

290.2

306.5

318.9

245.3

300.5

362.6

391.5

407.4

446.1

Consumer Goods, Excl. MVP

337.7

377.2

411.5

446.1

478.2

484.7

430.7

485.3

532.6

580.0

608.0

641.2

Other Consumer Services

80.5

82.9

90.3

93.5

95.9

94.5

85.6

93.7

106.9

114.1

125.4

137.5

255.9

297.3

319.8

355.4

374.0

405.0

377.0

404.6

436.8

471.0

501.7

537.5

Billions 2005 Dollars Net Exports Goods & Services

-604.0

-688.0

-722.7

-729.2

-654.9

-504.1

-363.0

-421.9

-390.6

-348.6

-290.9

-252.6

Exports G & S

1116.8

1222.8

1305.1

1422.1

1554.4

1647.7

1490.7

1666.5

1824.1

1985.3

2147.6

2325.2

Imports G & S

1720.7

1910.8

2027.8

2151.2

2209.3

2151.8

1853.8

2088.4

2214.6

2333.9

2438.5

2577.9

Exports G & S

9.0

11.7

10.3

14.0

14.6

0.0

2.8

14.3

13.3

8.7

9.5

8.9

Imports G & S

8.0

19.1

12.1

5.4

9.1

-2.1

-0.3

14.8

13.9

5.4

6.3

6.5

Real Exports G & S

6.6

7.1

6.8

10.4

10.2

-2.0

1.9

9.2

9.9

8.1

8.5

8.0

Real Imports G & S

5.4

11.0

5.2

4.2

0.9

-5.4

-4.8

12.3

7.7

4.5

4.8

5.1

Exports & Imports % Change

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 ai t h , P h . D .

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

Sean Snaith, Ph.D., is the Director of the Institute for Economic Competitiveness within the College of Business Administration at the University of Central Florida and is a widely recognized economist in the field of business and economic forecasting.

As an award-winning forecaster, researcher, and professor, Snaith is always interested in the application of academic expertise to the solution of real world problems.

Snaith has served as a consultant for a client list ranging from local and regional municipalities to multi-national corporations, including Compaq, Dell and IBM. He has held teaching positions at Pennsylvania State University, American University in Cairo, University of North Dakota and University of the Pacific.

Snaith frequently appears in national and regional media and is sought after as a speaker. He has been quoted in the Wall Street Journal, USA Today, the New York Times, and the Chicago Tribune and has appeared on CNBC and Fox Business Channel. Known for his engaging presentations, one business editor wrote, “Snaith (has) an uncanny knack of making economics not only understandable but interesting.”

Snaith is a member of several economic organizations and national economic forecasting panels including USA Today’s Survey of Top Economists, Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, Bloomberg, Reuters and the Livingston Survey.

In 2007 he was named California’s most accurate forecaster by the Western Blue Chip Consensus Forecast, besting UCLA, Wells Fargo and other esteemed forecasting groups. Snaith holds a B.S. in Economics from Allegheny College and an M.A. and Ph.D. in Economics from Pennsylvania State University.

Snaith was recently named by Bloomberg News as one of the nation’s most accurate forecasters and was one of just two academic economists making the list which was released in the December 2008 issue of Bloomberg Markets.

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 E-MAIL: ssnaith@bus.ucf.edu www.iec.ucf.edu

University of Central Florida College of Business Administration Institute for Economic Competitiveness P. O . B o x 1 6 1 4 0 0 , O r l a n d o , F l o r i d a 3 2 8 1 6 P H 4 0 7. 8 2 3 . 1 4 5 3

FA X 4 0 7. 8 2 3 . 1 4 5 4

w w w. i e c . u c f. e d u