U.S. Forecast March 2012

U.S. Forecast March 2012

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

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

Fo r eca s t fo r t h e Nati o n Forecast 2012 - 2015 March 2012 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2012 Institute for Economic Competitiveness. All rights reserved.

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

H i g h l i g h t s o f t h e 1Q 2 0 1 2 U . S . FO R E C A ST In this Issue of the U.S. Forecast: • A squeaky deal gets the Greece? Will the latest agreement to address the Greek sovereign debt crisis be the final solution or yet another temporary patch?

• What do the Euro and the Tacoma Narrows Bridge have in common? Poor design by the architects of both.

H I GHL I GHTS

• The “Dorian Gray” recovery continues: GDP growth in 2012 and 2013 should average 2.1% before we finally shake the vestiges of the Great Recession and growth accelerates to 3.2% in 2014 and then 3.1% in 2015.

• Consumer spending growth averaged 2.9% per year during the previous recovery. During 2012-2015 that average growth will be just 2.1%.

• Inflation is expected to remain subdued despite the surge in energy prices.

This fact, and a 2012 second half slowdown, will leave the door open for further intervention by the Federal Reserve.

• The housing market will steadily improve through 2015. During 2012-2015, housing starts will more than double from 733,200 in 2012 to 1,657,783 in 2015.

• Only looking at the unemployment rate to gauge the health of the labor market is economic malpractice.

• Shhhhhh. It’s all going to be OK. Economists seem less stressed over a potential double-dip recession after reassuring reports on 3rd quarter and 4th quarter 2011 real GDP growth. Consequently, the 1st quarter 2012 Anxious Index has eased to 13.41%.

• Payroll employment growth remains sluggish. Economic, political, and policy uncertainty weigh on the private sector and firms are still hesitant to hire new workers. Consequently, payrolls will only expand 1.4% in 2012 and 2013.

Growth rises in 2014 and 2015 to 1.6%.

• Payroll employment will not reach prerecession levels until the 4th quarter of 2014. The labor market in the wake of the Great Recession puts a whole new meaning in the notion of a jobless recovery • Unemployment rates have recently dropped to 8.3%, in part due to a shrinking labor force participation rate. Eventually discouraged workers will return to the labor force, and this will put a floor beneath the unemployment rate. Thus, unemployment rates are expected to stay above 8% until 2014.

U . S . F o r eca s t

A Squeaky Deal Gets the Greece?

Another round of antibiotics is heading to the wound on the Euro-zone that just won’t heal.

The real concern is will Greece turn gangrenous and ultimately cause the Euro to go septic?

In last quarter’s forecast we discussed the roots of the current sovereign debt crisis in the Eurozone within the context of the historical development of the largest fixed exchange rate experiment since the collapse of the Bretton Woods agreement in the late 1960s/early 1970s. The architects of the Euro were well aware of the root causes of the collapse of Bretton Woods. In their plan, they created the European Central Bank and laid out specific government finance criteria in the Maastricht Treaty.

Well, the best laid schemes of mice and men go often askew, and like the architects of the Tacoma Narrows Bridge (http://www.youtube.com/watch?v=jzczJXSxnw) the creators of the Euro didn’t envision the winds that are currently whipping across the region.

To be fair to the builders of the bridge, the winds that caused it to collapse were an act of God, and poor engineering led to the bridge’s demise. The winds that are shaking the foundation of the Euro are manmade and were completely avoidable; failing to take into account the foibles of the men and women who are responsible for the fiscal policies of Eurozone countries was poor engineering as well.

The demise of the Tacoma Narrows Bridge was dramatic, quick, and complete. The bridge collapsed, unable to survive the poor structure of the passage -it was doomed from the start.

The Euro is ailing right now. Greece is a wound on an extremity of the Euro and to date we have witnessed several attempts to heal this wound.

Several rounds of antibiotics have been administered in an effort to stem the debt crisis. Unfortunately, previous policy treatments have done little to promote the healing process. The recently passed bailout package represents a heightening of the regimen given to close the wound and it is akin to using a cocktail

of antibiotics whose objective is to knock out a drug resistant infection. But will it work?

If the latest attempt is not sufficient to solve the problems in Greece, what is the next step in treatment? If the wound does not improve, the risk that the Greek debt infection could spread to the body of the Eurozone will increase and this raises the possibility the Euro itself could turn septic and lead to the death of the common currency.

The cost of such a failure would, of course, be devastating to Europe and to the global economy.

Expect that every effort will be made to prevent such an outcome and that includes the possibility of amputation. If the choice comes down to Greece exiting the Euro in order to preserve the currency (or at least delay its collapse) versus allowing Greece to stay and risking the Euro, the former will be the obvious choice, as difficult as that decision will be.

Sometimes amputation is the only course of treatment that is left.

The Health of the US Labor Market Depends on More than the Unemployment Rate The U.S. unemployment rate has declined for five straight months and stands today at 8.3%; the unemployment rate has not been that low since February 2009. This is unequivocal evidence that the U.S. labor market’s health is improving, right?

Well, certainly it has been touted as such by the Obama administration and in many media outlets, but is the labor market as healthy as the declining unemployment rate might suggest?

If your physician ordered you to go have blood work completed at a lab, and upon receiving the report looked only at your triglyceride levels, and based on Institute for Economic Competitiveness

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U . S . F o r eca s t

U.S. Labor Market - A Mixed Bag

68.00

12.00

67.00

10.00

8.30%

8.00

65.00 6.00

64.00

63.7%

Unemployment Rate (%)

Labor Force Participation Rate (%)

66.00

4.00

63.00

2.00

62.00 Civilian labor force participation rate (Left Axis %) Unemployment rate (Right Axis %) 61.00 2000 Jan

2001 Jan

2002 Jan

2003 Jan

2004 Jan

2005 Jan

2006 Jan

that number declared you 100% healthy, would you feel confident? The results from your liver panel of the blood test might indicate advanced liver disease and thus a much grimmer prognosis. By ignoring those results you would get a false sense of your overall wellness.

The labor market as well cannot be fully assessed by looking solely at the headline rate of unemployment (U-3 in Bureau of Labor Statistics jargon). That number has been dropping significantly and now stands at 8.3%, but part of the decline in that figure is attributable to a declining rate of labor force participation. This is a measure of the percentage of the working age (16 and older) population that is included in the labor force This number has continued to fall, and the labor force participation rate now stands at 63.7%.

At the onset of the recession in December of 2007, the labor force participation rate stood at 66.0%.

The length and depth of the recession, coupled with the tepid job market recovery that has followed, has pushed the participation rate down to levels last seen in 1983. This troubling and continuing decline in the participation rate must stop if the labor market is to be considered in good health. Further declines in 6

U.S. Forecast | March 2012

2007 Jan

2008 Jan

2009 Jan

2010 Jan

2011 Jan

0.00 2012 Jan

the labor participation rate will invariably lower the unemployment rate, but that is not to be celebrated, even if at a cursory glance it appears to be good news.

After all, if your skin is yellow with jaundice, having a party in honor of your reduced risk of heart disease as a result of lower triglyceride levels would be a hollow celebration to say the least.

Anxious Index Shhhhhhhhhh. It’s All Gonna be OK. The most recent release (1st quarter of 2012) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 41 forecasters surveyed for the publication are just 13.4% convinced that a decline in real GDP will occur in the 2nd quarter of 2012. This quarter’s result continues a trend that seems to reflect a soothing of these forecasters’ worries of a double dip recession taking place.

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

U . S . F o r eca s t index (a term coined by The New York Times reporter David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in the 1st quarter of 2012, the index stands at 13.41%, which means that forecasters believe there is a 13.41% chance that real GDP will decline in the first quarter of 2012, down from last quarter’s anxious index of 16.57%. This value of the anxious index is still higher than the single digit readings in the first half of 2011.

The forecasters also report just a 9.51% chance that we are currently (as of the 1st quarter of 2012) in a recession. According to the panel, the probability that we will fall back into recession is averaging around 15.1% through the end of the first quarter of 2013, which implies the possibility of a recession in the upcoming year has eased again in the minds of these forecasters since last quarter. The easing of anxiety over the future of this economic recovery comes in the wake of a more solid report on real GDP growth in the 4th quarter of 2011 (2.8%) after a third quarter growth rate of 1.8%.

The graph below plots the historical values of the anxious index and gray bars indicate periods of recession in the U.S. economy. The current levels of

the anxious index reflect concerns over the strength of the U.S. recovery and the potential fallout from the ongoing European sovereign debt crisis and the struggle to find a lasting solution to the Greek debt crisis.

GDP Outlook The pace of economic recovery in the first half of 2011 was worryingly slow as first quarter real GDP growth decelerated to just 0.4% from the 2.3% in the 4th quarter of 2010. The 2nd quarter was an improvement over the first, but with growth still lukewarm at 1.3%.

The 3rd quarter was an improvement over the first two, with growth coming in at 1.8% and as of the first reading on 4th quarter GDP growth, the economy expanded at a healthier 2.8% clip. Momentum into the 1st half of 2012 should keep GDP growth above 2.0%. But in the 2nd half of the year the lingering problems with consumers’ balance sheets and the housing market’s ongoing struggle to return to something resembling normalcy will once again weigh down on real GDP growth. The lasting impact of lost wealth will be responsible for pulling down economic

Figure 1.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2012: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 2012

Probability (percent)

90

Survey Date Institute for Economic Competitiveness

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U . S . F o r eca s t growth to just 1.6% on average in the 3rd and 4th quarters of 2012.

Consumption should continue to show some boosts from pent-up demand in 2012, although the rising price of oil and gasoline are a clear and present danger to consumer spending. How high prices go and how long they remain there will ultimately determine the magnitude of the drag that higher energy prices impart on consumer spending and the economic recovery.

Echoes of the last spike in energy prices in 2008 are flashbacks an economy already enduring a sub-par recovery does not need right now, but such is the price for not having a comprehensive strategic energy policy for decades. Shame on us after enduring the 1970’s and all the pain and suffering that energy markets inflicted on our economy during that tumultuous decade. It is inexcusable that we still today find ourselves at the mercy of regions of the world that are subject to frequent bouts of instability and led by regimes that are hostile to America.

The Obama administration has done little to alleviate our energy woes, and in fact may be exacerbating the problem. The political decision to postpone until after the election a final ruling on the construction of the Keystone XL pipeline and the ongoing delays in granting permits for Gulf of Mexico oil exploration lengthens our dependency on foreign oil from unfriendly regimes.

Grants for research into clean and renewable energy were sorely needed and one can only wonder where we would be if this money for primary research had been provided throughout the intervening decades since the 1970’s. How much more advanced would photovoltaic panels and battery technology be today if we had done this? Instead, today we have the Federal Government playing a venture capitalist that is more apt to bet on the clean energy version of Flooz.com than on a solar Google.

Looking beyond 2012, the economy should maintain a growth rate of 2.1% in 2013 and then accelerate to 3.0% plus growth in 2014 and 2015 when the remnants of the Great Recession should finally begin to fade away.

With the November election quickly becoming the focal point of Washington, DC it is unlikely that we will see any additional fiscal policy action this year 8

U.S. Forecast | March 2012

beyond the extension of emergency unemployment benefits and the payroll tax cut

Business capital investment growth remains one of the strongest components of GDP as businesses are still sitting on mounds of retained earnings. Spending by businesses in areas which boost productivity and thereby dampen costs remain attractive areas for firms to invest as uncertainty about the revenue side of the profit equation is still elevated. Consequently, spending on computers and software is expected to perform better than business investment on structures.

The government sector is expected to remain a drag on GDP growth on the federal level throughout the entire forecast horizon. Record budget deficits and an increasingly worrisome national debt have pushed the rarely seen notion of fiscal austerity into the harsh spotlight of political awareness. As a result, real federal government spending is expected to contract at an average rate of -2.5% during 2012-2015.

State and local governments have been hit hard by the recession and housing crisis and despite significant federal support via the stimulus act, steep cuts, layoffs, and in some cases tax hikes, have all been employed to bridge budget gaps. As the economy continues its slow but steady forward plod, the burden of these governments will become less onerous. State and local government spending growth will still be declining in 2012 and 2013 but is expected to turn slightly positive in 2014 and 2015.

There are a number of looming fiscal deadlines that are on the horizon at the end of 2012. These include the scheduled expiration of the Bush tax cuts as well as the end of the recently extended payroll tax cut and emergency unemployment benefits. The Super Committee’s failure to reach an agreement last year means automatic spending cuts also will materialize if some other agreement cannot be reached to get our federal budget reigned in and get a handle on the burgeoning national debt.

C o n s u m e r Spe n d i n g During the recovery that followed the 2001 recession, consumers led the economic charge.

Shaking off the failed investments of the dot com era (such as the previously mentioned Flooz.com), as well as the jobless recovery, (seems kind of whiny

U . S . F o r eca s t now that we had been calling it a jobless recovery back then, given what we have been experiencing in the labor market this go round) consumer spending growth helped power the expansion. Boosted by the sugar high of soaring home values in 2004 and 2005 consumption grew at 3.3% and 3.4% those two years and that helped boost average consumption spending to 2.9% during the six year expansion leading up to the Great Recession.

This time around consumers have not been as nimble at shaking off the lost wealth, which in the case of the housing market is still declining, stemming from the housing and financial crises and the labor market’s excruciatingly slow recovery. These burdens will weigh down on consumers for years to come. As a result, this large sector of the U.S. economy will be a lackluster driver of economic growth.

Consumer spending is expected to remain a shadow of its former self through the end of our 2015 forecast horizon. We are forecasting consumption spending growth to average just 2.1% over the four year span of 2012-2015. This will hamper growth in the U.S. economy where consumer spending is nearly 71% of overall GDP. Consumers are showing a bit of a new attitude as far as consumer sentiment is concerned. In the second half of 2011 consumer sentiment took a steep dive.

There were a lot of things in the first half of 2011 to bring consumers down, from a decelerating economy to the debt ceiling debacle to the general political rancor that would dishearten the most Pollyanna among us.

But a funny thing was happening as we all trod into this pity party of declining sentiment in the hopes of dancing with Debbie downer: the annual rate of light vehicle sales went from 12.1 million at an annual rate in the 2nd quarter of 2011 to 13.4 million in the 4th quarter. It is a strange way for someone to demonstrate their economic despondency – to go out and buy a new car. Actions speak louder than words they say and sure enough consumer sentiment has rebounded from that temporary lull and is at the highest level since the recession’s end.

Energy prices, however, are never ones to allow us to enjoy too much good cheer, and the surge in oil and gasoline prices are threatening to wipe that smile from our faces. Higher gas prices erode disposable

income and, depending how high they ultimately go, could begin to erode the turnaround in confidence and weigh on consumer spending.

The labor market is showing some signs of recovery, but the pace of that recovery remains subdued. Job growth is expected to maintain momentum in the next few years, but an acceleration of job growth is still likely another two years away.

The unemployment rate will follow a path downward, the steepness of which, as discussed earlier, will be a function of labor force participation rates. At what point does payroll hiring begin to inspire those who have dropped out of the labor force to get back into the job hunt? In 2012, we expect that the decline in participation rates will turn around and thus prevent unemployment rates from falling very much over the course of the year.

Investment Nonresidential fixed investment spending surged in the 2nd and 3rd quarters of 2011 before cooling again in the 4th quarter. Businesses are sitting on record profits, but uncertainty has many pulling the trigger on investment spending sporadically. We expect that those trigger fingers will get a bit itchy in the 1st half of 2012 when nonresidential investment will grow at an average pace of 7.2%. From 2012 through 2015 the average rate of investment growth is expected to be 6.6%.

Retained earnings represent a deep pool of resources that businesses can use to finance investment expenditures. The cost of borrowing is likely to remain subdued for an extended period given the Fed’s extended commitment to low interest rates. We expect the 10-year Treasury yield to remain below 3.0% through the end of 2014. We are expecting that business spending on equipment and software will grow at an annual average rate of 7.1% during 2012 through 2015.

Investment in computers and peripherals will continue to be strong due to pent-up investment demand, companies seeking cost reduction, and productivity-focused IT plans. The expanded investment incentives included in the legislation that extended the Bush tax cuts will also push spending higher, particularly in the second half of 2012 with Institute for Economic Competitiveness

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U . S . F o r eca s t growth near 22%. This type of investment will experience average growth of 14.5% in 2012 through the end of 2015.

The commercial real estate sector experienced a burst of activity in investment in non-residential structures with robust growth in 2011Q2 and 2011Q3 before contracting in Q4. We expect growth to continue to decelerate in 2012 and into 2013. As the commercial credit crisis continues to play itself out, financing will remain difficult to obtain for many commercial developers. Demand for retail and office space will be held in check by weary consumers and middling job growth.

Growth in nonresidential structures will turn around into 2014 and accelerate in 2015; we expect spending growth on structures to average 9.0%, the highest growth rate since 2007.

Investment in transportation equipment grew robustly in 2010 (57.4%) and 2011 (28.3%) and will grow in double digits in 2012 and 2013 before decelerating to a 2.1% growth rate in 2015. This type of investment will have an average growth rate of 9.1% during the four years from 2012 through 2015.

Continued venting of pent-up demand and persistent low interest rates will bolster light vehicle sales which will grow from 2011 levels of 12.7 million to a level slightly more than 16.0 million in 2015.

Residential fixed investment growth has been negative for six straight years including 2011. The subpar recovery, labor market struggles, and mortgage underwriting difficulties have all contributed to the miseries of the housing market. In 2012, things finally start to turn around as residential fixed investment growth turns positive this year and is expected to grow by 8.7% from depleted levels. It will average 19.6% growth through 2013-2015 with a peak growth rate in 2014 of nearly 26.4%.

Housing starts bottomed out in 2009 at 0.554 million and have bounced along that mucky bottom since that time. Inventories of new homes have fallen significantly and existing inventories are being absorbed. We expect starts to accelerate in 2012 before hitting nearly 1.66 million in 2015.

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U.S. Forecast | March 2012

G o v e r n m e n t Spe n d i n g Despite running deficits from 2009-2012 that we are projecting will exceed $5 trillion in total, the economy continues to grow at a sluggish pace. The debate surrounding the American Reinvestment and Recovery Act (it worked, it didn’t work) and the current state of government finance have eliminated the chance for any additional fiscal stimulus beyond the recent extension of payroll tax cuts and the extension of emergency unemployment benefits.

Election year politics will put Washington, DC into a holding pattern until after the election. Despite this circling above the economy, there is a lot of heavy lifting that has yet to be done to address current and future debt and deficit problems. Politically, these issues are going to require difficult adult decisions to be made, the type of choices that politicians loathe making. Fixing our deficit and debt problem must include substantive entitlement reform. This is not an option or just one way to fix our fiscal situation, but it is a necessary component of any solution.

On these pages we have advocated for a plan along the lines of the Simpson-Bowles deficit reduction committee report which included significant reform to entitlements, Social Security, and Medicare. It also included a simplification of the tax code that would result in an increase in revenues without tacking additional taxes onto an already broken system that grants exemptions like political party favors.

Government is not Santa Claus. The policies and programs run by the federal government are not pulled out of a sack that is constantly replenished by the work of magical elves. Resources are not created by the government; they are taken from and redistributed to the population of the country. We are the elves. There is no magic and there is no free lunch.

The national debt is over $15.4 trillion and rising.

This represents a debt of over $136,000 per capita for those who pay income taxes. The debt/GDP ratio has now reached 100%, a high debt to income ratio to be sure, but a far cry from the fiscal basket case that is Greece. Trillion-dollar federal budget deficits are a hallmark of the Obama administration, who we are forecasting will have run average deficits of $1.26 trillion during 2009-2012. Despite the debt-ceiling showdown and the failure of the deficit reduction

U . S . F o r eca s t

super committee to agree to austerity measures, we are forecasting deficits to stay above the trillion-dollar level through 2012. In 2013, we are forecasting the federal budget deficit to be $800 billion, $708 billion in 2014 and $606 billion in 2015. The 2015 deficit represents the smallest government overrun since the $455 billion deficit in 2009.

Ne t E x p o r t s Overall trade growth will continue through the end of our 2015 forecast period. However, we expect that both real export and import growth will decelerate in 2012. Factors both internal and external will contribute to the slowing growth.

Average real export growth is expected to be 6.0% through 2012-2015, with a slowdown in 2012 as the European debt crisis has triggered recession in Europe and has weighed down the value of the Euro. Real imports will expand over the same period with an average growth of 3.8%. Decelerating imports is a function of the continuing balance sheet blues of the U.S. consumer and a still languishing labor market.

In 2012 and 2013, the U.S. dollar will appreciate vis-Ă -vis major trading partners helped in part by the recession and continuing uncertainty due to the sovereign debt crisis in the E.U. and a continued flight to quality of US treasuries. The weakening of the U.S. dollar was interrupted by the European sovereign debt crisis that continues to unfold, but we expect the dollar will begin to depreciate again in 2014 and 2015.

Recall that as workers become discouraged by the job search that does not bear fruit, they throw up their hands in frustration and stop looking for a job; they become what are known in the parlance of the Bureau of Labor Statistics (BLS) as discouraged workers.

These workers are no longer counted in the headline unemployment rate known as U-3, the unemployment statistic that is the focus of most media and political scrutiny.

The BLS does have alternative measures of labor market slack. The broadest measure of unemployment (U-6) takes into account these discouraged workers as well as those who are underemployed - working part-time but not by choice - and workers who are marginally attached to the labor force and have looked for work in the past 12 months, but are not currently looking, yet indicate a willingness to work.

Discouraged workers are a subset of these marginally attached workers. U-6 has declined but remains painfully high at 15.1% in January; down from the November 2011 level of 15.6%.

It will be several years before we see the unemployment rate fall back into a range consistent with the full employment level. By the end of 2015, the unemployment rate will still stand at 7.0%.

The current account deficit will be fairly stable through the end of our forecast horizon averaging $539 billion. We expect net exports to average -$357 billion in 2012 through the end of 2015. The trend during this time frame will be downward with net exports coming in at -$295 billion in 2015, narrowing from -$417 billion in 2012.

U n e m p loy m e n t

As discussed earlier, the labor market in the United State is showing signs of improvement, and that includes a substantial decline in the unemployment rate. The national unemployment rate ticked down in January by 0.2% to 8.3%. That is good news, but with the caveat of a falling labor force participation rate.

Institute for Economic Competitiveness

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utomobile Light Truck Sales M a r c h 2 0 1and 2 (Millions Vehicles)

Charts

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

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

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

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

9.0

2.5

8.0

2.0

7.0

1.5

6.0

1.0

5.0

0.5

4.0 3.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 30-Year Fixed Mortgage Rate Housing Starts - Millions

0.0

Automobile and Light Truck Sales 11.0

(Millions Vehicles)

10.0 9.0 8.0 7.0 6.0 5.0 4.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 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 -200.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Change in Real Business Inventories Institute for Economic Competitiveness

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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

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Consumer Price Index Core Consumer Price Index

Federal Budget Surplus 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Federal Budget Surplus

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

14

U.S. Forecast | March 2012

(%)

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Fed Funds Rate

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

Real GDP Growth and Federal Funds Rate (%)

10.0 5.0 0.0 -5.0 -10.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Quarterly Growth Rate Real GDP Fed Funds Rate

Industrial Production (2002=100)

110.0 105.0 100.0 95.0 90.0 85.0 80.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 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

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Private Fixed Nonresidential Investment Institute for Economic Competitiveness

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

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Manufacturing Employment

Money Supply

40.0

(Annual Growth Rate %)

30.0 20.0 10.0 0.0 -10.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 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

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U.S. Forecast | March 2012

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Total Nonfarm Employment

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

Oil and Consumer Confidence 140.0

Oil ($ Per Barrel) - Left Axis

120

120.0

110

100.0

100

80.0

90

60.0

80

40.0

70

20.0

60

0.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 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 -4.0

-200 -300 -400

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Real Disposable Income Consumption

Trade Balance and Real Exchange Rate

1.40 1.30 1.20

-500 -600 -700 -800

1.10 1.00 0.90 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Trade Balance (Billions $) Left axis U.S. Dollar Real Exchange Rate (2000 = 1.0) Right axis

0.80

Institute for Economic Competitiveness

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

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 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

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Unemployment Rate

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

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U.S. Forecast | March 2012

(%)

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 1-Year T-Bill Yield 5 Year Treasury Bond Yield 30 year Treasury Bond Yield

Table 15. Government Receipts and Expenditures History 2004

2005

2006

2007

2014.0

2290.1

2524.5

2654.7

Personal Tax and Nontax Receipts

2502.3

799.2

931.9

1049.9

1165.6

1101.3

Corp. Profits Tax Accruals

250.3

341.0

395.0

362.8

233.6

94.3

98.8

99.4

94.5

94.0

807.6

852.6

904.6

945.3

973.1

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

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance Expenditures

March 2012

2008

Federal Govern

2393.4

2573.1

2728.3

2900.0

3115.7

Purchases Goods & Services

824.7

876.3

931.7

976.4

1080.1

National Defense

550.8

589.1

624.9

662.3

737.8

Other

273.9

287.3

306.9

314.1

342.3

Transfer Payments

1405.1

1491.3

1587.1

1690.5

1841.9

To Persons

1014.3

1078.0

1180.7

1254.2

1385.7

30.9

40.9

35.0

42.2

45.3

Grants in Aid to State & Local Gov't

349.2

361.2

359.0

380.8

395.5

Net Interest

204.6

239.0

261.0

291.0

272.1

45.7

64.1

53.9

50.2

53.6

Surplus (+) or Deficit (-)

-379.5

-283.0

-203.8

-245.2

-613.5

Receipts

1601.0

1730.5

1829.7

1923.1

1944.8

Personal Tax/Nontax Receipts

1059.4

1163.1

1249.1

1313.6

1326.4 334.4

To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Go

Corporate Profits

276.7

302.5

323.1

41.7

55.0

59.1

57.8

47.4

Contributions for Social Insurance

24.1

24.8

21.8

18.9

19.0

349.2

361.2

359.0

380.8

395.5

Federal Grants-In-Aid Expenditures

t ab l e s

248.6

Indirect Business Tax and Nontax Accruals

1609.33 1704.50 1778.63 1910.83 2017.05 2

Purchases Goods & Services

1408.2

1493.6

1586.7

1697.9

Government Social Benefits

384.3

404.8

402.9

433.7

456.7

384.3

404.8

402.9

433.7

456.7

Interest Received

19.0

10.9

2.1

0.5

16.2

Net Subsidies

-0.6

0.3

1.7

16.2

15.3

2.1

2.3

2.4

2.9

0.0

0.0

0.0

0.0

26.0

51.0

12.2

-72.3

Transfer Payments

Dividends Received

2.0

Net Wage Accruals

0.0

Surplus (+) or Deficit (-)

-8.4

1798.0

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.

2005

2006

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

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

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

History 2007 2008

2010

2011

Billions of Dollars 12246.9 12623.0 12958.5 13206.4 13161.9 12703.1 13088.0 13313.4 11853.3 12623.0 13377.2 14028.7 14291.6 13938.9 14526.6 15087.8

2012

2.1 1.9 2.0 5.3 1.6 1.6 6.7 7.8 7.8 16.1 8.4 13.6 12.6 8.7 11.6 3.6 1.1 8.4 7.4 1.1 4.4 8.7 4.1 3.5 -1.9 -1.7

3.2 3.2 2.5 3.0 2.9

41.5 2.7 2.3 76.1 58.3 95.2 16.867 1.949 5.914 5.5 1.1 -413 -629

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

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

72.3 1.5 2.7 79.2 28.7 85.6 16.089 1.342 4.418 4.6 1.1 -162 -710

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

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

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

4.96 4.73 4.93 4.75 4.79 4.88 6.41 1311 8.6 0.985 -1.4

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

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)

9937 6.0 8889 6.1 9153 3.4 3.6 923 40.2

10486 5.5 9277 4.4 9277 1.4 1.6 1228 33.1

11268 7.5 9916 6.9 9653 4.0 2.6 1349 10.1

11912 5.7 10424 5.1 9880 2.4 2.4 1293 -4.2

Forecast 2013 2014

2.1 2.3 2.0 4.5 1.6 1.7 5.5 7.3 7.7 14.1 7.6 5.8 13.2 7.5 10.7 0.6 12.9 10.3 -10.8 -3.3 1.7 15.2 6.4 3.6 -3.4 -0.8

3.2 3.2 2.2 3.6 1.4 2.3 7.6 7.3 7.7 16.1 10.0 3.6 8.5 6.8 5.9 8.4 17.5 13.5 -0.2 0.3 16.0 26.4 6.9 4.1 -2.8 0.2

2015

3.1 3.1 2.2 4.4 1.3 2.1 6.8 5.9 6.8 14.6 8.9 4.3 2.1 5.8 -4.2 9.6 21.7 8.8 1.8 -0.2 13.1 17.1 6.7 4.0 -2.0 0.6

13587.9 13876.2 14321.5 14760.0 15580.5 16116.3 16892.2 17685.9

Prices & Wages, Percent Change, Annual Rate 2.9 2.2 1.1 1.2 2.1 2.9 3.8 -0.3 1.6 3.1 2.3 2.3 1.7 1.0 1.7 3.9 6.4 -2.5 4.2 6.0 3.1 2.9 1.4 1.9 2.2

3.3 3.4 2.1 4.9 3.1

U.S. Forecast | March 2012

2009

Composition of Real GDP, Percent Change 1.9 -0.3 -3.5 3.0 1.7 2.2 0.2 -2.6 1.4 1.9 2.3 -0.5 -1.9 2.0 2.2 5.0 -4.9 -5.2 7.2 8.1 1.9 -1.2 -1.8 2.9 1.8 2.0 0.5 -1.4 1.0 1.4 6.5 -0.7 -17.8 4.6 8.6 3.3 -4.2 -15.7 14.6 10.3 8.1 2.2 -3.6 9.9 6.0 14.1 8.4 -2.2 30.9 17.4 11.5 -4.7 -7.6 12.6 -2.6 4.0 -3.8 -20.7 7.1 12.9 -4.1 -23.0 -44.2 57.4 28.3 30.6 -3.3 -23.6 -1.0 2.3 -18.2 -12.7 -22.7 -0.9 34.9 14.0 6.7 -21.3 -15.0 4.1 10.0 -3.6 -30.9 -23.7 -4.2 18.1 25.8 5.0 -31.9 -8.6 39.0 11.6 1.0 -14.9 7.1 6.2 8.4 -34.4 21.9 23.5 15.2 13.2 -18.8 -25.9 -7.1 -18.7 -23.9 -21.8 -4.2 -1.3 9.3 6.3 -9.3 11.4 6.8 2.4 -2.7 -13.5 12.6 5.1 1.3 7.2 6.0 4.5 -2.0 1.4 0.0 -0.9 -1.8 -2.3

2.8 2.7 1.8 3.6 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

2004

1.2 1.9 1.9 1.1 2.0

1.3 1.7 1.8 1.2 2.1

1.6 1.8 2.0 1.1 2.5

1.6 1.7 1.9 1.0 2.6

Other Measures 61.7 79.4 95.1 2.3 4.1 0.8 -11.0 5.3 4.2 66.2 71.7 74.9 -143.8 60.7 44.9 66.3 71.8 67.4 10.402 11.555 12.741 0.554 0.585 0.607 3.867 3.707 3.808 9.3 9.6 9.0 -4.4 -0.7 1.2 -1416 -1294 -1297 -377 -471 -473

101.7 0.5 3.7 76.8 60.4 75.6 13.5 0.7 4.1 8.4 1.4 -1027.9 -545.7

115.5 0.9 2.6 77.6 41.3 78.5 14.6 1.0 4.5 8.3 1.4 -800.4 -521.8

115.9 1.6 3.4 78.8 43.7 80.9 15.4 1.4 4.8 7.8 1.6 -684.5 -528.3

112.9 1.3 3.0 79.2 39.9 81.5 16.0 1.7 5.3 7.2 1.6 -606.4 -560.9

Financial Markets, NSA 1.93 0.16 0.18 0.10 1.37 0.15 0.14 0.05 1.82 0.47 0.32 0.18 2.80 2.19 1.93 1.52 3.67 3.26 3.21 2.79 3.91 4.27 4.07 4.25 6.04 5.04 4.69 4.46 1221 947 1139 1269 -17.2 -18.9 21.6 11.5 0.888 0.926 0.898 0.846 -4.1 4.8 -2.8 -5.8

0.1 0.0 0.1 1.1 2.2 3.2 4.0 1315.9 3.8 0.9 4.3

0.1 0.0 0.1 1.4 2.6 3.6 4.2 1328.9 1.0 0.9 0.8

0.0 0.0 0.2 1.5 2.8 3.8 4.4 1360.9 2.4 0.9 -0.7

1.1 1.2 1.6 2.5 3.5 4.1 4.9 1405.3 3.3 0.9 -1.2

Incomes 11930 12374 -4.2 3.7 10789 11180 -2.1 3.6 9883 10062 -2.3 1.8 5.2 5.3 1183 1408 24.5 21.2

13399 3.4 11876 2.8 10286 1.3 3.8 1503 1.0

13899 3.7 12220 2.9 10435 1.4 3.2 1603 6.7

14552 4.7 12780 4.6 10737 2.9 3.8 1672 4.3

15205 4.5 13332 4.3 11020 2.6 4.2 1605 -4.0

99.6 0.7 -3.7 74.9 -37.6 63.8 13.195 0.900 3.655 5.8 -0.6 -455 -677

12460 4.6 11025 5.8 10119 2.4 5.4 1051 -18.6

12961 4.8 11556 3.4 10154 0.9 4.4 1489 5.9

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 2004

2005

2006

2007

Forecast 2008

2009

2010

2011

2012

2013

2014

2015

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

12246.9 12623.0 12958.5 13206.4 13161.9 12703.1 13088.0 13313.4

13587.9 13876.2 14321.5 14760.0

12181.3 12573.0 12899.3 13177.6 13200.6 12852.7 13028.9 13281.8

13531.6 13837.2 14279.9 14722.2

8515.8

8803.5

9054.5

9262.9

9211.7

9037.5

9220.9

9421.1

9610.2

9800.7 10019.8 10240.5

Durables

1060.9

1123.4

1174.2

1232.4

1171.8

1108.3

1188.3

1284.5

1352.5

1413.2

1464.6

1528.3

Nondurables

1892.8

1953.4

2005.0

2042.9

2019.1

1983.4

2041.3

2077.0

2110.8

2145.3

2174.6

2203.9

Services

5562.7

5726.8

5875.6

5990.1

6017.0

5935.5

5991.8

6075.4

6173.1

6277.7

6422.9

6560.9

1263.0

1347.3

1455.5

1549.9

1537.7

1263.2

1319.2

1432.4

1527.2

1611.4

1733.1

1851.6

917.3

995.6

1071.1

1106.8

1059.4

889.7

1019.4

1124.1

1211.8

1300.0

1394.6

1476.5

443.1

475.3

516.3

558.2

569.7

548.3

602.6

638.4

688.5

741.4

798.4

852.4

Computers & Peripherals

70.6

78.9

97.1

110.7

119.5

115.7

150.9

177.3

205.5

234.4

272.0

311.8

Communications Equipment

81.7

83.2

93.8

104.4

99.1

91.0

102.4

99.5

107.4

115.4

127.1

138.3

Industrial Equipment

147.4

159.6

172.9

179.9

172.9

137.1

146.6

165.4

187.7

198.5

205.6

214.4

Transportation Equipment

161.1

181.7

198.2

190.2

146.9

77.8

122.7

156.8

176.2

199.6

216.5

220.9

25.1

22.0

20.6

26.8

26.0

19.4

19.2

19.4

20.9

22.5

24.0

25.4

40.8

48.2

51.6

42.1

36.5

28.2

27.9

37.6

41.7

46.2

48.9

46.8

346.7

351.8

384.0

438.2

466.4

367.3

309.1

321.8

333.0

334.9

362.9

397.7

137.1

135.9

144.2

158.6

152.7

105.9

80.0

76.5

77.3

87.3

102.6

124.9

Manufacturing

25.5

29.9

33.0

39.0

48.6

50.8

34.6

31.1

33.5

37.0

42.0

45.7

Power & Communication

46.2

45.2

48.7

67.8

74.0

74.5

63.2

67.6

72.4

64.6

64.4

65.5

Mining & Petroleum

69.9

77.1

88.3

93.6

101.5

65.8

76.7

93.5

94.4

91.3

91.5

91.3

Other

67.4

63.7

69.6

80.3

90.4

73.5

54.2

50.2

52.4

53.3

61.8

69.9

729.5

775.0

718.2

584.2

444.4

345.6

330.8

326.2

354.6

408.9

516.5

603.8

Exports

1222.6

1305.1

1422.1

1554.4

1649.3

1494.0

1663.2

1776.4

1848.8

1966.9

2102.7

2244.2

Imports

1910.4

2027.8

2151.5

2203.3

2144.0

1852.9

2085.0

2188.7

2265.3

2346.0

2441.9

2539.1

865.0

876.3

894.9

906.1

971.1

1029.5

1075.9

1054.8

1034.6

999.0

971.0

951.9

1497.1

1493.6

1507.2

1528.1

1528.1

1514.2

1487.0

1453.4

1428.3

1417.3

1420.2

1429.2

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. 2012Q1

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

2.2 2.4 1.9 3.0 2.1 1.6 7.1 5.8 7.9 3.1 16.1 9.0 8.7 -39.5 2.5 10.8 -1.6 11.3 11.4 18.3 12.8 13.4 3.7 2.6 1.9 -1.3

2012Q2

2.1 1.6 2.5 1.6 2.5 2.6 7.2 8.6 11.1 14.3 26.1 10.7 11.8 16.0 12.7 3.5 6.2 3.5 2.2 5.1 -1.7 8.1 2.5 5.4 -3.4 -1.4

2012Q3

1.4 1.4 2.1 5.4 2.1 1.6 3.0 6.9 10.0 19.8 16.4 10.9 8.6 11.6 -1.8 -7.1 5.9 6.2 -14.7 -14.5 -3.9 8.3 4.7 4.6 -3.7 -1.6

2012Q4

1.8 2.3 2.6 8.7 1.6 1.9 4.6 8.7 10.7 24.0 10.5 8.4 5.6 9.7 -9.4 -6.3 1.3 8.5 -13.7 -12.8 -0.2 6.4 6.8 3.5 -3.7 -1.1

2013Q1

1.9 2.1 1.7 3.2 1.6 1.4 2.9 3.6 2.1 2.2 -3.4 2.0 18.1 7.2 20.5 0.8 24.7 3.1 -10.6 -7.7 1.4 12.7 7.5 2.1 -3.6 -0.9

2013Q2

2014Q2

2014Q3

2014Q4

3.6 3.6 2.7 6.2 1.6 2.6 7.3 6.4 6.5 14.3 8.0 4.8 4.6 7.8 -2.4 9.9 24.4 2.5 6.8 -1.8 13.6 21.9 7.1 4.3 -2.2 0.5

2015Q1

2.8 2.7 1.5 2.0 0.9 1.6 7.8 6.8 7.5 14.2 11.3 7.3 1.6 4.4 -8.5 10.8 24.4 12.0 4.1 -1.4 12.8 18.8 6.5 4.2 -1.8 0.6

2015Q2

2.7 2.9 2.2 4.8 1.3 2.1 6.0 4.6 6.5 15.5 7.3 3.3 -2.4 4.7 -4.8 10.0 22.0 12.4 -0.7 2.2 10.3 13.8 6.1 3.9 -1.8 0.8

2015Q3

2.8 2.9 2.2 3.9 1.6 2.1 5.7 4.5 6.4 14.1 7.8 1.4 -1.7 4.8 -4.2 9.1 19.1 12.8 -3.9 3.4 10.8 10.0 6.3 3.3 -1.7 0.7

2015Q4

2.5 2.8 2.3 6.2 1.5 2.0 5.0 3.9 6.4 14.9 7.5 1.2 -3.9 4.5 -3.6 7.9 16.9 10.6 -6.4 1.6 13.0 5.1 6.3 3.1 -1.4 0.7

Billions of Dollars

Prices & Wages, Percent Change, Annual Rate 0.8 1.6 1.5 1.8 1.5 0.8 2.1 1.8 1.9 1.8 1.8 1.9 1.9 2.1 2.1 -0.6 1.9 1.6 1.3 0.7 2.3 2.2 2.4 2.8 2.5

0.5 0.7 1.7 -2.5 1.8

1.4 2.4 1.8 -0.2 1.8

1.4 2.0 1.7 2.7 1.9

1.5 1.9 1.7 2.6 2.3

99.8 -0.3 4.6 76.4 55.7 74.5 13.636 0.690 4.117 8.3 1.9 -1035 -510

97.7 1.0 3.5 76.7 68.4 76.5 13.262 0.719 4.089 8.4 1.2 -1041 -558

102.0 0.4 2.8 76.9 66.7 75.2 13.422 0.753 4.145 8.4 1.0 -1010 -565

107.3 0.3 1.6 77.1 50.9 76.3 13.845 0.771 4.204 8.3 1.7 -970 -549

111.4 0.7 2.4 77.3 43.7 77.6 14.143 0.822 4.318 8.3 1.4 -826 -520

112.7 1.3 2.8 77.5 39.1 78.9 14.529 0.908 4.463 8.3 1.4 -792 -517

0.10 0.04 0.13 0.89 1.97 3.00 3.92 1312 31.3 0.873 4.9

0.11 0.04 0.12 1.11 2.16 3.14 3.97 1336 7.5 0.882 4.0

0.11 0.06 0.15 1.24 2.28 3.23 4.04 1313 -6.6 0.886 1.8

0.09 0.05 0.16 1.32 2.36 3.31 4.09 1303 -3.2 0.886 0.2

0.07 0.03 0.14 1.40 2.50 3.44 4.14 1318 4.7 0.886 0.1

0.06 0.02 0.13 1.42 2.61 3.55 4.18 1325 2.3 0.888 0.7

Personal Income (Bil. of $) 13195 (% change) 4.1 Disposable Income (Bil. of $) 11718 (% change) 3.6 Real Disposable Income (Bil. of 2005 $) 10195 (% change) 2.2 Saving Rate (%) 3.8 After-Tax Profits (Billions of $) 1556 (% change) 7.5

13335 4.3 11834 4.0 10277 3.3 4.0 1476 -19.0

13467 4.0 11930 3.3 10315 1.5 3.8 1483 1.7

13600 4.0 12023 3.2 10355 1.6 3.6 1496 3.8

13699 3.0 12073 1.7 10358 0.1 3.2 1598 30.1

13829 3.8 12153 2.7 10405 1.8 3.2 1584 -3.4

22

2014Q1

Composition of Real GDP, Percent Change, Annual Rate 2.4 2.7 3.4 3.2 3.3 3.6 2.6 2.7 3.2 3.2 3.3 3.7 1.7 1.8 1.9 2.4 2.4 2.7 3.4 4.0 3.1 2.5 3.5 5.5 1.5 1.2 1.3 1.4 1.5 1.3 1.5 1.6 2.0 2.7 2.5 2.6 8.8 7.4 8.5 7.2 7.0 7.5 9.8 8.3 7.9 6.2 7.0 7.1 8.0 9.8 8.5 7.2 7.3 6.5 10.8 22.5 18.3 14.5 15.1 15.0 7.6 7.9 10.3 11.8 11.4 8.5 4.5 5.0 4.1 1.5 4.2 3.7 25.0 6.4 9.2 6.0 7.7 10.4 2.6 4.8 6.8 8.2 5.9 9.0 25.8 16.6 9.3 1.8 2.0 -0.1 6.0 4.6 10.4 9.9 6.8 8.8 20.0 6.3 19.0 19.5 16.5 19.6 15.9 26.3 14.9 15.9 13.0 0.2 -11.3 -13.5 1.1 2.5 3.3 3.3 10.9 4.6 4.7 -0.5 -8.7 1.2 -4.4 15.4 17.2 19.0 18.9 16.5 20.9 28.4 31.5 28.6 23.5 22.1 6.8 6.0 7.2 6.1 7.5 7.9 4.1 3.6 3.8 4.3 4.2 4.4 -3.2 -3.0 -3.0 -2.9 -2.7 -2.5 -0.1 -0.2 0.1 0.2 0.4 0.6

1.1 2.0 2.0 1.9 2.6

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

2013Q4

13495.96 13566.74 13613.46 13675.58 13739.34 13821.99 13914.03 14029.40 14139.58 14254.74 14381.48 14510.23 14611.92 14710.95 14812.47 14904.55 15420.25 15520.40 15628.00 15753.17 15886.56 16014.47 16184.44 16379.69 16583.50 16782.30 16992.81 17210.30 17408.98 17593.47 17781.56 17959.44

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

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

2013Q3

U.S. Forecast | March 2012

1.5 1.6 1.9 0.6 2.5

1.5 1.6 1.9 1.1 2.5

1.8 1.8 1.9 1.4 2.7

1.5 1.7 1.9 0.8 2.5

1.5 1.7 1.8 1.0 2.6

1.5 1.7 1.8 1.1 2.6

Other Key Measures 119.4 118.6 117.6 116.5 1.5 1.9 1.4 1.5 3.4 3.1 3.5 3.5 77.7 78.1 78.3 78.6 38.2 44.1 44.9 44.4 78.1 79.2 79.6 80.2 14.812 14.860 15.024 15.259 1.043 1.126 1.222 1.322 4.508 4.561 4.604 4.742 8.3 8.2 8.0 7.9 1.4 1.6 1.6 1.6 -769 -766 -735 -742 -527 -523 -523 -526

115.4 1.7 3.5 78.9 42.9 81.3 15.648 1.430 4.870 7.7 1.8 -732 -531

114.2 1.6 3.4 79.2 42.8 82.2 15.835 1.516 5.031 7.5 1.8 -717 -534

113.5 1.0 3.0 79.3 46.9 82.0 15.853 1.584 5.115 7.3 1.6 -660 -565

113.1 1.1 2.7 79.2 41.8 81.7 15.987 1.646 5.300 7.2 1.5 -673 -570

112.6 1.4 2.5 79.2 39.8 81.3 16.077 1.691 5.433 7.1 1.5 -677 -556

112.2 1.3 2.4 79.0 31.2 81.0 16.192 1.709 5.373 7.0 1.5 -677 -553

Financial Markets, NSA 0.05 0.05 0.04 0.04 0.01 0.00 0.00 -0.01 0.13 0.13 0.13 0.12 1.43 1.43 1.45 1.48 2.69 2.73 2.76 2.80 3.63 3.69 3.75 3.81 4.23 4.27 4.31 4.35 1333 1340 1349 1357 2.3 2.3 2.6 2.4 0.891 0.892 0.888 0.884 1.3 0.5 -1.5 -1.7

0.03 -0.01 0.13 1.52 2.83 3.80 4.37 1365 2.4 0.880 -1.8

0.05 0.09 0.33 1.71 2.96 3.83 4.48 1373 2.4 0.877 -1.3

0.39 0.47 0.80 2.00 3.20 3.96 4.69 1382 2.8 0.876 -0.4

0.88 0.94 1.30 2.28 3.31 3.97 4.78 1397 4.3 0.874 -1.3

1.36 1.42 1.85 2.70 3.54 4.10 4.99 1413 4.5 0.870 -1.5

1.89 1.94 2.40 3.12 3.76 4.31 5.24 1429 4.7 0.867 -1.6

Incomes 14105 14303 4.1 5.7 12395 12546 4.5 4.9 10525 10605 2.9 3.1 3.4 3.5 1630 1658 7.5 7.2

14638 4.9 12861 5.1 10784 3.5 3.9 1673 1.1

14804 4.6 13012 4.8 10868 3.2 4.0 1688 3.7

14965 4.4 13107 2.9 10900 1.2 3.9 1602 -18.9

15125 4.4 13259 4.7 10982 3.0 4.1 1599 -0.8

15284 4.3 13411 4.7 11063 3.0 4.3 1611 3.2

15445 4.3 13553 4.3 11135 2.6 4.3 1607 -1.2

13963 3.9 12260 3.6 10451 1.8 3.2 1601 4.1

14465 4.6 12703 5.1 10693 3.3 3.7 1669 2.6

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

Table 4. Quarterly Gross Domestic Product

2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4

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

13496.0 13566.7 13613.5 13675.6 13739.3 13822.0 13914.0 14029.4 14139.6 14254.7 14381.5 14510.2 14611.9 14710.9 14812.5 14904.6 13447.7 13502.6 13548.7 13627.3 13697.8 13785.2 13878.1 13987.5 14096.8 14212.5 14340.7 14469.6 14567.1 14671.3 14774.9 14875.4

9525.7 9584.0 9635.0 9695.9 9736.3 9776.9 9821.5 9868.0 9925.9 9984.3 10050.4 10118.7 10157.2 10212.2 10267.0 10325.5 1332.6 1337.8 1355.6 1384.0 1394.9 1406.5 1420.3 1431.1 1439.8 1452.3 1472.0 1494.2 1501.8 1519.6 1534.3 1557.4

Nondurables

2093.2 2106.4 2117.6 2126.0 2134.7 2141.6 2149.4 2155.7 2162.6 2170.3 2178.4 2186.9 2192.1 2199.1 2208.1 2216.3

Services

6123.8 6163.2 6188.0 6217.4 6239.6 6263.4 6288.4 6319.3 6362.0 6401.7 6443.2 6484.6 6511.2 6544.6 6577.9 6609.9

Nonresidential Fixed Investment Equipment & Software

1497.5 1523.8 1535.1 1552.6 1563.7 1597.1 1625.7 1659.2 1688.2 1716.8 1748.2 1779.3 1813.2 1839.7 1865.3 1888.0 1176.9 1201.4 1221.6 1247.4 1258.4 1288.1 1314.1 1339.2 1359.6 1382.9 1406.9 1428.9 1452.7 1469.0 1485.1 1499.3 662.5

680.3

696.6

714.6

718.4

732.4

749.6

765.1

778.6

792.4

804.9

817.6

832.6

845.8

859.0

872.4

Computers & Peripherals

193.1

199.6

208.9

220.4

221.6

227.3

239.2

249.4

258.0

267.2

276.7

286.1

295.8

306.6

316.9

328.1

Communications Equipment

100.2

106.2

110.3

113.1

112.1

114.2

116.3

119.2

122.6

126.0

128.6

131.1

134.6

137.0

139.6

142.1

Information Processing Equipment

Industrial Equipment

180.8

185.5

190.3

194.2

195.2

197.3

199.7

201.8

202.5

204.6

206.4

208.9

212.6

214.3

215.1

215.7

Transportation Equipment

170.2

175.0

178.6

181.1

188.8

199.6

202.7

207.2

210.3

214.2

219.6

222.1

223.0

221.6

220.7

218.5

20.0

20.7

21.3

21.8

22.2

22.3

22.6

22.9

23.4

23.7

24.2

24.7

25.0

25.3

25.6

25.8

41.1

42.4

42.2

41.2

43.1

45.7

47.5

48.5

48.8

49.0

49.0

48.7

47.6

47.0

46.5

46.1

335.2

338.1

331.9

326.6

327.3

332.1

335.9

344.3

352.6

358.4

366.0

374.8

384.5

393.7

402.4

410.1

Commercial & Health

75.8

77.0

78.1

78.4

82.8

86.7

88.0

91.9

96.1

99.8

104.4

110.2

116.4

122.4

127.8

132.9

Manufacturing

32.9

33.2

33.7

34.4

34.6

35.9

38.1

39.4

40.9

42.2

42.2

42.5

43.7

45.0

46.4

47.6

Aircraft Other Equipment Structures

Power & Communication

74.2

74.6

71.7

69.1

67.2

65.2

62.9

63.1

63.5

64.0

64.5

65.6

66.2

66.1

65.5

64.4

Mining & Petroleum

96.2

97.4

93.7

90.5

88.7

91.1

92.1

93.2

93.0

90.9

91.2

90.8

90.5

91.0

91.7

92.1

Other

52.8

52.6

52.1

52.1

52.3

51.7

53.6

55.7

58.2

60.8

63.1

65.2

67.2

68.9

70.6

72.8

344.5

351.3

358.4

364.0

375.1

393.4

418.7

448.3

477.5

503.3

529.1

556.0

580.4

599.4

613.8

621.5

Residential Fixed Investment Exports

1822.0 1833.5 1854.5 1885.3 1919.9 1951.8 1980.6 2015.5 2045.5 2082.9 2122.8 2159.7 2193.8 2226.6 2260.8 2295.6

Imports

2225.5 2255.0 2280.4 2300.3 2312.3 2335.8 2356.7 2379.0 2403.9 2428.7 2454.7 2480.5 2506.2 2529.9 2550.4 2569.9

Federal Government

1048.7 1039.6 1029.8 1020.2 1010.9 1002.8

State & Local Government

1436.0 1430.9 1425.2 1421.2 1417.9 1417.5 1416.7 1416.9 1417.6 1419.1 1421.1 1423.0 1425.0 1428.0 1430.6 1433.1

995.1

987.4

980.3

973.7

967.6

962.4

957.9

953.6

949.6

Institute for Economic Competitiveness

946.2

23

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

Table 5. Annual Employment 2004

2005

2006

History 2007 2008

2009

2010

2011

2012

Forecast 2013 2014

2015

Millions Total Nonfarm Employment

131.419 133.694 136.091 137.595 136.794 130.787 129.856 131.358

133.18 135.050 137.218

139.46

Private Nonfarm

109.801 111.890 114.116 115.375 114.288 108.231 107.368 109.254

111.29 113.200 115.316

117.47

Mining

0.523

0.562

0.620

0.663

0.709

0.644

0.655

0.735

0.78

0.755

0.733

0.70

Construction

6.973

7.333

7.690

7.627

7.162

6.013

5.518

5.504

5.53

5.630

6.167

6.95

Manufacturing

14.315

14.226

14.156

13.878

13.403

11.845

11.527

11.737

11.97

12.180

12.334

12.53

Trade, Transportation and Utilities

25.536

25.960

26.277

26.627

26.296

24.906

24.637

25.018

25.40

25.901

26.154

26.40

Transportation & Warehousing

4.250

4.363

4.469

4.542

4.509

4.240

4.189

4.290

4.41

4.570

4.723

4.87

Financial Activities

8.031

8.153

8.328

8.300

8.143

7.769

7.653

7.681

7.68

7.763

7.764

7.78

Education & Health

16.950

17.370

17.825

18.321

18.838

19.190

19.528

19.884

20.30

20.533

20.801

21.00

Professional & Business Services

16.388

16.952

17.572

17.947

17.740

16.570

16.721

17.329

17.87

18.311

19.144

20.00

3.117

3.061

3.038

3.031

2.984

2.803

2.707

2.658

2.63

2.710

2.741

2.79

Leisure & Hospitality

12.492

12.813

13.109

13.428

13.441

13.074

13.042

13.317

13.67

13.881

13.917

13.81

Government

21.618

21.804

21.975

22.219

22.507

22.556

22.488

22.104

21.89

21.850

21.902

21.99

2.731

2.732

2.733

2.735

2.762

2.831

2.976

2.857

2.79

2.717

2.645

2.59

18.887

19.073

19.242

19.484

19.745

19.725

19.512

19.247

19.10

19.134

19.257

19.40

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

1.10

1.73

1.79

1.11

-0.58

-4.39

-0.70

1.16

1.39

1.41

1.60

1.63

Private Nonfarm

1.28

1.90

1.99

1.10

-0.94

-5.30

-0.78

1.76

1.86

1.72

1.87

1.86

Mining

5.16

9.36

10.03

5.74

6.70

-14.62

11.54

12.32

1.08

-3.23

-3.59

-3.52

Construction

4.31

5.81

2.36

-1.95

-9.22

-16.60

-3.43

0.77

-0.09

4.33

12.12

11.72

-0.05

-0.84

-1.04

-2.05

-5.37

-11.44

0.57

1.97

2.27

1.40

1.52

1.49

Trade, Transportation and Utilities

1.53

1.65

1.14

1.17

-3.28

-4.72

0.65

1.59

1.92

1.64

0.81

0.88

Transportation & Warehousing

2.58

2.48

2.60

0.89

-2.71

-5.67

1.35

2.04

3.59

3.63

3.12

2.87

Financial Activities

0.95

2.13

1.35

-1.31

-2.45

-4.32

-0.32

0.35

0.14

1.06

-0.15

0.14

Education & Health

2.36

2.51

2.62

2.88

2.56

1.71

1.77

1.99

1.88

0.86

1.28

1.25

Professional & Business Services

2.99

3.74

3.08

1.64

-3.65

-5.19

2.96

3.55

2.68

3.05

5.33

3.71

-2.04

-1.07

-0.93

-0.04

-3.10

-6.04

-2.31

-1.65

-0.91

5.35

-0.39

1.96

Leisure & Hospitality

2.59

2.15

2.85

2.15

-1.63

-2.49

1.23

2.26

2.73

0.89

-0.23

-0.84

Government

0.62

0.81

1.03

1.16

1.00

-0.20

-0.97

-1.21

-0.71

0.06

0.33

0.47

-0.37

0.34

-0.21

0.54

1.19

2.40

4.72

-0.93

-2.62

-2.78

-2.44

-1.79

0.77

0.88

1.20

1.25

0.98

-0.55

-1.34

-1.25

-0.43

0.47

0.72

0.78

Manufacturing

Information

Federal State & Local

24

U.S. Forecast | March 2012

U . S . F o r eca s t Tab l e s Table 6. Quarterly Employment Table 6. Quarterly Employment 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4

Employment (Millions) Total Nonfarm Employment

132.6

133.0

133.3

133.9

134.3

134.8

135.3

135.8

136.3

136.9

137.5

138.1

138.7

139.2

139.7

140.2

Private Nonfarm

110.6

111.1

111.4

112.0

112.5

113.0

113.4

113.9

114.5

115.0

115.6

116.2

116.7

117.2

117.7

118.2

Mining

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

Construction

5.5

5.5

5.5

5.5

5.5

5.6

5.6

5.8

5.9

6.1

6.2

6.5

6.7

6.9

7.1

7.2

Manufacturing

11.9

12.0

12.0

12.1

12.1

12.2

12.2

12.2

12.3

12.3

12.4

12.4

12.5

12.5

12.6

12.6

Trade, Transportation and Utilities

25.3

25.3

25.4

25.6

25.7

25.8

26.0

26.0

26.1

26.1

26.2

26.3

26.3

26.4

26.4

26.5

Transportation & Warehousing

4.3

4.4

4.4

4.5

4.5

4.5

4.6

4.6

4.7

4.7

4.7

4.8

4.8

4.8

4.9

4.9

Financial Activities

7.7

7.7

7.7

7.7

7.7

7.8

7.8

7.8

7.8

7.8

7.8

7.8

7.8

7.8

7.8

7.8

Education & Health

20.2

20.3

20.3

20.4

20.5

20.5

20.5

20.6

20.7

20.8

20.8

20.9

20.9

21.0

21.0

21.1

Professional & Business Services

17.7

17.9

17.9

18.0

18.1

18.2

18.4

18.5

18.8

19.0

19.3

19.5

19.7

19.9

20.1

20.3

2.6

2.6

2.6

2.6

2.6

2.7

2.8

2.8

2.7

2.7

2.7

2.7

2.8

2.8

2.8

2.8

Leisure & Hospitality

13.5

13.6

13.7

13.8

13.9

13.9

13.9

13.9

13.9

13.9

13.9

13.9

13.9

13.8

13.8

13.8

Government

22.0

21.9

21.9

21.8

21.9

21.8

21.8

21.9

21.9

21.9

21.9

21.9

22.0

22.0

22.0

22.0

Information

Federal State & Local

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

2.6

2.6

2.6

2.6

19.1

19.1

19.1

19.1

19.1

19.1

19.1

19.2

19.2

19.2

19.3

19.3

19.3

19.4

19.4

19.5

1.64

1.76

1.83

1.61

1.49

1.48

1.47

Growth Rates Total Nonfarm Employment Private Nonfarm

1.84

1.15

0.98

1.71

1.42

1.36

1.40

1.58

1.59

2.40

1.56

1.35

2.06

1.69

1.66

1.66

1.83

1.85

1.89

2.02

2.11

1.84

1.69

1.65

1.64

11.10

3.16

-5.31

-5.37

-4.71

-3.93

-2.28

-2.18

-2.26

-2.97

-4.69

-4.63

-3.56

-4.06

-3.77

-2.89

Construction

1.17

-0.89

-0.31

-0.32

0.84

2.72

5.19

8.17

9.40

11.03

12.51

13.46

13.23

11.92

10.47

9.29

Manufacturing

3.56

2.12

0.84

2.47

1.90

2.39

0.34

0.93

1.06

1.64

1.64

1.68

1.73

1.68

1.24

1.29

Trade, Transportation and Utilities

1.73

0.57

2.32

3.00

1.89

1.46

1.88

1.26

0.24

0.77

1.09

1.11

0.83

0.97

0.80

0.91

Mining

2.99

3.20

4.36

3.81

3.48

3.38

3.95

3.70

3.25

3.07

3.02

3.15

3.23

2.82

2.79

2.65

Financial Activities

Transportation & Warehousing

-0.21

-0.88

0.23

1.43

1.82

1.30

0.98

0.16

-0.80

-0.36

0.28

0.29

-0.09

0.48

0.85

-0.68

Education & Health

2.16

2.24

1.27

1.84

0.81

0.99

0.60

1.04

2.45

1.24

0.62

0.80

0.45

1.22

1.49

1.86

Professional & Business Services

4.47

3.13

0.89

2.24

2.55

2.54

3.03

4.08

4.72

5.38

5.64

5.58

4.25

3.60

3.46

3.53

-1.93

0.04

-2.25

0.51

2.06

9.54

8.72

1.09

-1.71

-1.70

-0.30

2.15

5.11

1.51

0.51

0.70

3.15

2.95

2.81

2.02

1.72

0.49

0.27

1.08

0.85

-0.43

-0.74

-0.60

-0.54

-1.53

-0.82

-0.46

Government

-0.93

-0.92

-0.88

-0.11

0.05

-0.15

0.06

0.27

0.21

0.31

0.42

0.37

0.35

0.43

0.56

0.53

Federal

-2.29

-2.72

-2.72

-2.72

-2.78

-2.78

-2.78

-2.77

-2.78

-2.53

-2.30

-2.14

-2.14

-1.76

-1.64

-1.64

State & Local

-0.73

-0.66

-0.61

0.27

0.46

0.24

0.47

0.70

0.64

0.71

0.80

0.72

0.70

0.73

0.85

0.82

Information Leisure & Hospitality

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)

2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4

GDP

114.3

114.4

114.8

115.2

115.6

115.9

116.3

116.8

117.3

117.7

118.2

118.6

119.1

119.6

120.0

120.5

Consumption

114.9

115.2

115.7

116.1

116.6

116.8

117.3

117.8

118.3

118.8

119.3

119.7

120.2

120.7

121.2

121.7

89.6

89.4

89.2

89.1

89.0

88.8

88.7

88.6

88.6

88.5

88.4

88.2

88.1

88.0

87.8

87.7

106.8

107.0

107.3

107.6

107.8

108.0

108.2

108.5

108.8

109.1

109.3

109.6

109.9

110.2

110.4

110.6

91.8

91.8

91.8

91.8

91.7

91.8

91.8

91.9

91.9

92.0

92.1

92.1

92.2

92.2

92.3

92.2

Other Durables

115.5

115.9

116.4

116.9

117.5

118.1

118.6

119.2

119.9

120.5

121.1

121.6

122.1

122.6

123.0

123.5

Nondurables

121.4

121.2

122.4

123.3

123.8

123.5

124.1

124.5

125.0

125.3

125.7

126.1

126.6

127.0

127.5

127.9

Food

120.6

121.0

121.0

121.1

121.2

121.3

121.4

121.6

122.0

122.3

122.6

122.9

123.3

123.6

124.0

124.3

Clothing & Shoes

101.7

101.7

101.9

102.0

102.2

102.3

102.5

102.7

103.0

103.2

103.4

103.5

103.7

103.8

103.8

103.9

Gasoline & Oil

160.4

155.2

162.4

167.1

168.6

162.6

164.7

164.0

163.5

162.5

161.5

160.5

160.4

160.0

159.6

159.3

Fuel

175.8

172.2

173.5

179.3

180.0

177.0

178.7

178.7

178.9

178.7

178.5

178.3

178.6

178.8

178.9

179.1

Services

117.8

118.2

118.7

119.1

119.6

120.2

120.8

121.4

122.1

122.7

123.3

124.0

124.6

125.3

125.9

126.6

Housing

115.3

115.8

116.4

117.0

117.5

118.1

118.7

119.4

119.9

120.5

121.0

121.6

122.1

122.7

123.2

123.8

Electricity

131.9

132.1

132.4

132.3

132.7

134.0

135.7

137.3

138.3

138.9

139.5

140.1

140.8

141.8

142.7

143.6

77.8

75.6

71.3

69.8

74.6

77.8

79.8

82.7

85.5

87.3

88.2

89.8

91.7

92.2

92.8

94.0

Water & Sewer

141.9

143.4

144.6

145.8

147.0

148.3

149.4

150.5

151.6

152.8

153.9

155.1

156.3

157.5

158.7

159.9

Telephone

103.5

103.0

102.9

102.4

101.9

101.5

101.1

100.7

100.4

100.1

99.9

99.6

99.3

99.0

98.8

98.5

Transportation

123.1

123.3

123.6

124.0

124.5

124.9

125.3

125.8

126.4

127.0

127.5

128.0

128.5

129.0

129.6

130.1

Other Services

124.4

124.9

125.6

126.2

126.8

127.3

128.0

128.6

129.3

130.0

130.8

131.6

132.3

133.0

133.8

134.6

Durables Motor Vehicles Furniture

Natural Gas

26

U.S. Forecast | March 2012

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

Table 8. Percent Change in Implicit Price Deflators

2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4

GDP

1.1

0.5

1.4

1.4

1.5

0.8

1.6

1.5

1.8

1.5

1.5

1.5

1.8

1.5

1.5

1.5

Consumption

1.4

0.8

1.8

1.6

1.5

0.9

1.7

1.6

1.8

1.7

1.6

1.6

1.7

1.6

1.6

1.6

Durables

-2.0

-0.9

-0.6

-0.6

-0.6

-0.6

-0.4

-0.4

-0.3

-0.4

-0.5

-0.5

-0.6

-0.6

-0.7

-0.8

Motor Vehicles

-0.5

0.7

1.1

1.1

0.8

0.7

1.0

1.0

1.1

1.1

1.0

1.0

1.0

1.0

0.9

0.8

Furniture

-0.9

0.1

0.0

-0.2

0.0

0.1

0.1

0.2

0.3

0.3

0.3

0.3

0.3

0.2

0.0

-0.1

Other Durables

0.2

1.6

1.7

1.8

2.0

1.9

2.0

2.0

2.1

2.1

2.0

1.8

1.7

1.6

1.5

1.4

Nondurables

2.4

-0.8

3.8

3.1

1.8

-1.2

2.2

1.2

1.5

1.2

1.2

1.3

1.6

1.4

1.4

1.3

Food

1.9

1.3

-0.2

0.3

0.4

0.2

0.5

0.8

1.1

1.0

1.0

1.1

1.2

1.1

1.0

1.1

Clothing & Shoes

0.3

0.1

0.5

0.5

0.7

0.5

0.9

0.8

1.0

0.8

0.8

0.6

0.4

0.4

0.3

0.2

Gasoline & Oil

7.1

-12.3

19.8

12.0

3.7

-13.4

5.3

-1.9

-1.1

-2.4

-2.4

-2.4

-0.4

-0.9

-0.9

-0.9

Fuel

8.5

-7.9

3.1

13.9

1.6

-6.6

4.0

0.0

0.4

-0.4

-0.5

-0.5

0.7

0.5

0.3

0.3

Services

1.7

1.6

1.5

1.4

1.8

1.9

2.0

2.1

2.3

2.2

2.0

2.0

2.2

2.1

2.1

2.1

Housing

2.3

1.9

2.0

2.1

1.9

2.0

2.1

2.1

1.8

1.8

1.9

1.9

1.8

1.8

1.8

1.8

Electricity

-0.6

0.6

1.0

-0.2

1.1

4.0

5.1

4.8

2.9

1.9

1.8

1.6

2.2

2.7

2.7

2.6

-26.2

-11.0

-20.6

-8.2

29.8

18.7

10.8

15.4

13.9

8.7

4.2

7.6

8.6

2.3

2.7

5.3

Water & Sewer

3.1

4.1

3.5

3.3

3.5

3.4

3.2

2.9

3.0

3.1

3.0

3.1

3.1

3.1

3.1

3.1

Telephone

0.9

-1.9

-0.2

-2.0

-2.0

-1.6

-1.4

-1.5

-1.3

-1.2

-0.9

-1.2

-1.1

-1.1

-1.0

-1.2

Transportation

1.7

0.7

1.0

1.4

1.5

1.2

1.6

1.5

1.9

1.7

1.6

1.6

1.8

1.6

1.6

1.6

TableServices 9. Annual Implicit Deflators Other 2.3Price1.7 2.3 (2000=100) 1.8 1.8

1.8

2.1

2.1

2.0

2.2

2.5

2.3

2.3

2.3

2.4

2.4

Natural Gas

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

GDP

2004

2005

2006

History 2007 2008

96.8

100.0

103.2

106.2

108.6

109.7

111.0

113.3

114.7

116.1

117.9

119.8 121.0

2009

2010

2011

2012

Forecast 2013 2014

2015

Consumption

97.1

100.0

102.7

105.5

108.9

109.2

111.1

113.8

115.5

117.1

119.0

Durables Motor Vehicles

101.1

100.0

98.4

96.4

94.6

92.9

91.3

90.4

89.3

88.8

88.4

87.9

98.4

100.0

100.1

99.6

97.8

98.2

103.1

106.2

107.2

108.1

109.2

110.3

Furniture Other Durables Nondurables Food Clothing & Shoes

99.9

100.0

99.6

98.9

98.1

97.8

93.7

92.3

91.8

91.8

92.0

92.2

101.5

100.0

101.8

105.5

109.1

110.4

110.9

114.3

116.2

118.4

120.8

122.8

96.1

100.0

103.2

106.5

112.6

109.3

112.7

119.6

122.1

124.0

125.5

127.3 123.8

98.3

100.0

101.7

105.6

112.1

113.5

113.9

118.4

120.9

121.4

122.4

100.9

100.0

99.6

98.6

97.9

98.7

98.0

99.7

101.8

102.4

103.3

103.8

Gasoline & Oil

82.1

100.0

112.8

123.9

144.9

106.1

125.4

157.9

161.3

165.0

162.0

159.8

Fuel

74.6

100.0

114.2

123.5

168.4

114.1

133.9

171.8

175.2

178.6

178.6

178.9

Services

96.7

100.0

103.4

107.0

110.6

112.4

114.5

116.5

118.4

120.5

123.0

125.6

Housing Electricity Natural Gas

97.6

100.0

103.6

107.3

110.2

112.2

112.3

113.7

116.1

118.4

120.7

123.0

94.2

100.0

112.1

116.7

124.2

128.0

128.2

130.6

132.2

134.9

139.2

142.2

83.7

100.3

102.7

102.5

116.1

90.6

88.8

86.4

73.6

78.7

87.7

92.7

Water & Sewer Telephone

95.0

100.0

104.9

110.3

116.7

123.9

131.8

138.7

143.9

148.8

153.4

158.1

100.7

100.0

100.6

102.4

104.0

105.5

104.9

103.3

102.9

101.3

100.0

98.9

96.5

100.0

104.2

106.6

112.5

115.7

118.1

121.4

123.5

125.1

127.2

129.3

95.4

100.0

104.1

107.4

112.5

115.4

119.1

122.4

125.3

127.7

130.4

133.5

Transportation Other Services

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 2007 2008

2004

2005

2006

GDP Consumption Durables Motor Vehicles Furniture

3.2 3.0 -0.9 1.6 -0.1

3.5 3.3 -1.3 1.0 -0.3

2.9 1.9 -1.8 -0.7 -0.1

2.6 3.5 -1.9 0.5 -1.5

Other Durables Nondurables Food Clothing & Shoes Gasoline & Oil

-0.3 4.9 2.7 -0.5 28.8

-0.2 4.5 1.5 -1.3 31.8

3.2 0.5 1.7 0.2 -0.8

Fuel Services Housing Electricity Natural Gas

41.8 3.2 2.4 1.8 14.7

33.1 3.8 2.5 10.2 44.9

Water & Sewer

5.9 -1.7 1.4 4.4

5.0 0.2 4.9 4.7

Telephone Transportation Other Services

Forecast 2013 2014

2009

2010

2011

2012

2015

2.1 1.8 -2.1 -4.0 0.3

0.7 1.5 -1.1 5.4 -2.0

1.6 1.3 -2.3 2.3 -4.3

2.0 2.6 -0.5 3.4 -0.2

1.1 1.4 -1.0 0.6 -0.3

1.4 1.4 -0.5 0.9 0.1

1.6 1.7 -0.4 1.0 0.3

1.6 1.7 -0.7 0.9 0.1

2.5 6.4 4.7 -1.2 30.4

3.4 1.0 7.0 -0.9 5.1

1.4 2.8 -1.7 1.4 24.8

0.5 2.2 1.3 -1.4 13.4

3.2 5.9 5.1 4.4 21.0

1.3 2.1 0.8 0.3 6.6

2.0 1.0 0.5 0.7 -1.6

2.0 1.3 1.1 0.8 -2.1

1.5 1.4 1.1 0.3 -0.8

-0.3 3.1 4.4 8.6 -18.3

28.5 3.5 3.0 5.3 3.5

23.2 3.0 2.6 8.4 19.1

-0.3 1.6 0.9 -0.2 -18.4

16.2 1.6 0.3 0.5 -1.0

27.5 2.0 1.9 2.6 -1.8

4.4 1.5 2.1 0.2 -16.5

-0.3 1.9 2.0 3.8 18.7

-0.2 2.1 1.9 2.0 8.6

0.5 2.1 1.8 2.5 4.7

4.9 1.2 2.5 4.0

5.2 1.5 3.4 3.3

6.7 2.0 6.0 5.0

6.0 0.7 2.0 2.2

5.8 -1.0 1.4 3.0

4.9 -1.3 3.3 2.9

3.5 -0.8 1.2 2.0

3.3 -1.6 1.5 1.9

3.0 -1.2 1.7 2.3

3.1 -1.1 1.6 2.3

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2004

Forecast

2005

2006

2007

2008

2009

2010

Personal Income

9937.3 10485.9

11268.1

11912.3

12460.2

11930.2

12373.5

Wages & Salaries

6693.4

7065.1

7477.0

7855.9

8068.3

7806.4

7971.4

Other Labor Income

874.6

931.6

960.2

980.5

1052.4

1073.1

Nonfarm Income Farm Income

984.1

1025.9

1103.6

1052.6

1046.1

49.7

43.9

29.4

37.8

Rental Income

198.4

178.2

146.5

143.7

Dividends

548.3

555.0

702.2

791.9

783.4

Interest Income

860.2

987.0

1127.5

1265.1

1382.0

1415.5

1508.6

1605.0

1718.5

1879.2

419.2

445.2

475.1

499.6

517.2

Personal Income

6.0

5.5

7.5

5.7

4.6

-4.2

3.7

Wages & Salaries Other Labor Income

4.9

5.6

5.8

5.1

2.7

-3.2

2.1

3.5

6.5

3.1

2.1

7.3

2.0

Nonfarm Income

10.1

4.3

7.6

-4.6

-0.6

Farm Income

38.7

-11.1

-32.7

28.3

Rental Income

-9.4

-10.9

-23.8

32.7

Dividends Interest Income

43.3

-0.6

26.8

7.6

0.2

19.4

10.9

13.7

Transfer Payments

6.0

6.3

6.7

Personal Social Insurance Tax

6.1

5.9

6.7

2011

2012

2013

2014

2015

12961.0

13399.3

13899.1

14552.1

15204.8

8242.4

8530.6

8869.5

9272.7

9704.0

1090.0

1111.0

1141.2

1194.4

1263.6

1338.0

902.1

984.2

1042.9

1087.4

1141.9

1221.9

1299.7

51.8

39.2

52.2

64.9

64.5

71.7

72.7

72.7

231.6

305.9

350.2

404.2

458.5

465.1

448.2

420.2

598.8

717.7

792.9

854.2

890.8

908.6

928.7

1108.9

1003.4

997.8

977.1

1013.5

1101.5

1222.4

2138.1

2281.2

2336.0

2392.2

2482.2

2632.1

2773.2

506.1

513.6

425.0

443.5

492.1

536.6

619.4

4.8

3.4

3.7

4.7

4.5

3.4

3.5

4.0

4.5

4.7

1.6

1.9

2.7

4.7

5.8

5.9

-13.7

9.2

6.0

4.3

5.0

7.0

6.4

39.9

-22.8

32.8

27.2

-0.1

11.5

1.4

0.0

66.4

18.9

9.2

21.3

8.8

-0.6

-5.4

-6.1

-9.1

-13.6

27.2

7.9

7.8

2.0

2.8

1.5

2.6

-21.7

-4.5

-1.2

1.4

4.9

10.1

11.9

7.6

10.1

15.2

7.2

-0.4

4.0

3.7

6.1

5.4

5.2

2.0

-2.1

2.5

-11.6

4.6

11.6

9.7

17.2

Personal Income Billions Current Dollars

Transfer Payments Personal Social Insurance Tax

Percent Change, Annual Rate

28

U.S. Forecast | March 2012

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)

2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4

Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services

10948.0 11036.1 11143.8 11257.8 11347.9 11420.1 11521.7 11621.6 11742.2 11861.1 11986.1 12115.0 12213.5 12329.6 12446.0 12567.6

durable goods

1193.4 1195.4 1209.4 1232.8 1240.8 1249.2 1260.1 1268.4 1275.0 1284.8 1300.6 1318.6 1323.4 1337.1 1347.7 1365.3

furniture and appliances

260.2

263.9

267.0

269.7

271.9

274.0

276.7

279.2

280.9

281.6

282.5

283.6

284.7

288.0

289.7

291.2

97.6

102.1

102.5

103.2

103.8

104.4

105.0

106.0

106.7

107.9

109.2

110.5

111.2

112.4

113.6

114.6

motor vehicles and parts

401.5

392.5

399.6

415.1

416.7

419.7

425.9

428.5

430.1

435.3

445.7

457.9

458.1

465.0

470.5

483.4

other durable goods

126.9

127.7

128.5

129.6

130.5

131.1

131.5

132.2

132.8

133.5

134.3

135.2

135.8

136.4

137.0

137.5

information processing equipment

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

2542.1 2553.3 2590.9 2621.0 2643.6 2644.1 2668.1 2683.6 2702.2 2720.2 2738.7 2758.0 2775.2 2793.9 2814.8 2834.6 358.7

362.9

364.2

364.2

365.1

366.3

367.7

368.8

369.6

371.9

374.0

375.5

374.9

377.6

380.5

25.8

26.3

26.3

26.9

26.8

26.3

26.5

26.5

26.5

26.4

26.3

26.3

26.3

26.3

26.3

383.1 26.3

405.3

391.6

411.6

424.4

429.8

415.6

421.6

419.4

416.7

412.2

408.6

405.7

403.5

400.6

399.3

397.6

880.8

888.0

894.8

901.4

907.1

913.2

919.8

926.2

food

826.7

834.6

842.2

849.0

855.8

861.1

867.5

873.7

other nondurable goods

925.6

937.9

946.6

956.5

966.1

974.8

984.7

995.3 1008.6 1021.7 1035.0 1049.1 1063.4 1076.2 1088.9 1101.3

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

9525.7 9584.0 9635.0 9695.9 9736.3 9776.9 9821.5 9868.0 9925.9 9984.3 10050.4 10118.7 10157.2 10212.2 10267.0 10325.5

durable goods

1332.6 1337.8 1355.6 1384.0 1394.9 1406.5 1420.3 1431.1 1439.8 1452.3 1472.0 1494.2 1501.8 1519.6 1534.3 1557.4

furniture and appliances

283.5

287.5

290.8

293.9

296.3

298.6

301.4

304.0

305.5

306.1

306.8

307.8

308.7

312.2

314.0

315.7

information processing equipment

173.0

185.1

189.8

195.3

200.8

206.3

212.0

218.6

225.2

232.9

241.3

249.8

257.4

265.9

274.5

283.2

motor vehicles and parts

375.9

366.8

372.5

385.9

386.7

388.8

393.6

395.0

395.4

399.1

407.6

417.7

416.8

422.1

426.1

436.9

other durable goods

106.0

106.3

106.6

107.1

107.4

107.5

107.3

107.4

107.4

107.5

107.7

108.0

108.2

108.3

108.4

108.6

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

2093.2 2106.4 2117.6 2126.0 2134.7 2141.6 2149.4 2155.7 2162.6 2170.3 2178.4 2186.9 2192.1 2199.1 2208.1 2216.3 352.7

356.7

357.5

357.1

357.4

358.1

358.6

359.0

358.9

360.4

361.8

362.7

361.7

363.9

366.5

14.7

15.3

15.1

15.0

14.9

14.9

14.8

14.8

14.8

14.7

14.7

14.7

14.7

14.7

14.7

368.8 14.7

252.6

252.3

253.5

254.1

255.0

255.5

255.9

255.8

254.8

253.6

253.0

252.7

251.6

250.4

250.1

249.6

food

685.3

689.6

696.2

701.2

706.1

710.2

714.6

718.3

722.2

726.1

729.9

733.3

735.7

738.6

742.0

745.2

other nondurable goods

799.3

804.6

807.4

810.8

813.4

815.1

817.7

820.4

825.0

829.2

833.5

838.4

843.4

847.3

851.3

855.1

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

1.9

2.5

2.1

2.5

1.7

1.7

1.8

1.9

2.3

2.4

2.6

2.7

1.5

2.2

2.1

2.3

durable goods

3.0

1.6

5.3

8.4

3.1

3.3

3.9

3.0

2.4

3.5

5.4

6.0

2.0

4.8

3.9

6.0

furniture and appliances information processing equipment

3.9

5.5

4.7

4.3

3.3

3.1

3.7

3.4

2.0

0.8

1.0

1.2

1.3

4.4

2.4

2.1

-4.8

27.9

10.2

11.6

11.1

11.0

11.1

12.5

11.9

13.7

14.4

14.2

12.1

13.2

13.0

12.7 10.2

motor vehicles and parts

4.1

-9.6

6.2

14.4

0.8

2.2

4.9

1.4

0.4

3.7

8.6

9.9

-0.9

5.0

3.8

other durable goods

2.7

1.3

0.9

1.8

1.3

0.3

-0.6

0.4

0.0

0.3

0.8

1.2

0.6

0.5

0.6

0.6

nondurables

2.1

2.5

2.1

1.6

1.6

1.3

1.5

1.2

1.3

1.4

1.5

1.6

0.9

1.3

1.6

1.5

clothing & shoes fuel oil & coal

2.9

4.6

0.9

-0.5

0.3

0.8

0.6

0.4

-0.1

1.6

1.5

1.0

-1.1

2.4

2.8

2.6

-4.0

16.6

-4.0

-4.1

-1.7

-0.8

-1.1

-1.1

-0.4

-1.2

-0.4

0.3

0.2

-1.2

0.1

0.1 -0.9

gasoline & motor oil

0.4

-0.5

1.9

0.9

1.4

0.9

0.6

-0.2

-1.4

-1.9

-1.0

-0.5

-1.7

-2.0

-0.4

food

0.7

2.5

3.9

2.9

2.8

2.4

2.5

2.1

2.1

2.2

2.1

1.9

1.3

1.6

1.9

1.7

other nondurable goods

4.1

2.7

1.4

1.7

1.3

0.8

1.3

1.3

2.3

2.1

2.1

2.3

2.4

1.9

1.9

1.8

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 2004

2005

2006

2007

Forecast 2008

2009

2010

2011

2012

2013

2014

2015

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

8270.6

8803.5

9301.0

9772.3 10035.5

9866.1 10245.5 10722.6

durable goods

1072.9

1123.4

1155.0

1188.4

1108.9

1029.6

1085.5

1161.9

1207.8

1254.6

1294.8

1343.4

247.0

261.3

271.5

271.3

257.9

235.3

243.8

253.2

265.2

275.5

282.1

288.4

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

11096.4 11477.8 11926.1 12389.2

59.4

67.0

75.3

86.1

84.9

83.0

91.3

96.6

101.3

104.8

108.6

113.0

403.9

408.2

394.8

399.9

339.3

316.5

340.1

378.3

402.2

422.7

442.3

469.2

92.9

99.5

109.9

118.8

117.9

111.0

116.9

126.4

128.1

131.3

133.9

136.7

1819.3

1953.4

2069.8

2175.5

2272.8

2167.8

2301.5

2483.3

2576.8

2659.9

2729.8

2804.6

298.7

314.0

327.3

335.4

330.9

318.2

334.3

350.3

362.5

367.0

372.8

379.0

17.9

20.0

20.6

21.8

25.9

20.3

22.7

25.7

26.3

26.5

26.3

26.3

gasoline & motor oil

231.6

283.8

314.7

343.0

384.5

279.1

331.4

401.7

408.2

421.6

410.8

400.3

food

613.0

644.5

674.2

711.2

746.4

746.0

766.4

809.0

838.1

864.5

891.3

916.6

other nondurable goods

658.2

691.1

733.0

764.1

785.1

804.1

846.7

896.6

941.7

980.2

1028.6

1082.4

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

8515.8

8803.5

9054.5

9262.9

9211.7

9037.5

9220.9

9421.1

9610.2

9800.7 10019.8 10240.5

durable goods

1060.9

1123.4

1174.2

1232.4

1171.8

1108.3

1188.3

1284.5

1352.5

1413.2

1464.6

1528.3

247.2

261.3

272.5

274.4

262.8

240.6

260.1

274.2

288.9

300.1

306.6

312.7

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

52.5

67.0

85.0

105.9

113.6

120.4

142.4

164.8

185.8

209.4

237.3

270.2

410.4

408.2

394.4

401.4

346.8

322.5

330.1

356.5

375.3

391.0

404.9

425.5

90.3

99.5

108.2

111.9

106.4

98.9

103.2

107.1

106.5

107.4

107.7

108.4

1892.8

1953.4

2005.0

2042.9

2019.1

1983.4

2041.3

2077.0

2110.8

2145.3

2174.6

2203.9

296.0

314.0

328.7

340.1

338.1

322.4

341.0

351.3

356.0

358.3

360.9

365.2

24.0

20.0

18.0

17.6

15.4

17.8

17.0

15.0

15.0

14.9

14.8

14.7

gasoline & motor oil

282.1

283.8

278.9

276.8

265.3

263.1

264.2

254.4

253.1

255.5

253.5

250.4

food

623.9

644.5

663.0

673.2

666.0

657.3

673.1

683.6

693.1

712.3

727.9

740.4

other nondurable goods

668.2

691.1

717.3

737.5

739.7

725.8

750.7

782.5

805.5

816.6

831.5

849.3

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

3.3

2.8

3.2

1.7

-2.5

-0.2

3.0

1.6

2.3

1.8

2.5

2.0

durable goods

5.9

3.1

7.1

4.6

-12.6

3.5

10.9

6.7

4.7

3.4

4.4

4.2

furniture and appliances information processing equipment

6.5

6.2

1.4

1.2

-9.2

-1.4

9.3

5.2

4.7

3.4

1.2

2.6

25.9

26.8

28.7

21.3

0.8

12.1

18.2

16.5

12.3

11.9

14.3

13.3

motor vehicles and parts

1.6

-6.8

5.8

0.6

-23.5

8.0

12.9

7.4

4.1

2.4

5.8

4.7

other durable goods

6.8

10.8

5.8

4.1

-12.5

0.3

6.4

0.9

1.7

0.3

0.6

0.6

nondurables

2.7

3.1

2.9

0.8

-3.1

0.6

3.5

0.7

2.1

1.4

1.5

1.3

clothing & shoes

5.2

7.2

3.4

2.3

-3.8

-0.5

7.8

0.1

2.0

0.5

1.0

1.7

-18.3

-18.2

3.5

-7.9

9.1

8.5

-3.0

-11.2

1.4

-1.2

-0.4

-0.2

gasoline & motor oil

0.7

-0.6

-0.4

-1.8

-4.0

-0.7

0.1

-3.4

0.7

0.7

-1.2

-1.2

food

2.5

3.6

2.9

0.8

-4.0

2.6

2.1

0.5

2.5

2.4

2.1

1.6

other nondurable goods

3.3

3.3

4.2

1.7

-1.2

-0.3

4.8

3.5

2.5

1.2

2.2

2.0

fuel oil & coal

30

U.S. Forecast | March 2012

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

Table 14. Business Fixed Investment History

2004

2005

2006

2007

Forecast

2008

2009

2010

2011

2012

2013

2014

2015

Billions Current Dollars Business Fixed Investment

1223.0 1347.3 1505.3 1637.5 1656.3 1353.0 1390.1 1529.2

1648.0 1745.4 1891.3 2038.5

Producers Dur. Equipment

916.4

995.6 1071.7 1112.6 1070.0

903.0 1015.7 1121.4

Nonresidential Structures

306.7

351.8

433.7

524.9

586.3

449.9

374.4

407.8

1213.2 1306.4 1407.2 1492.3 434.8

439.0

484.1

546.2

Non-Farm Buildings

196.7

212.9

247.6

297.3

322.0

253.9

174.8

163.9

176.0

202.9

248.9

307.1

Commercial

104.3

112.9

128.4

150.8

149.1

95.5

64.5

63.7

67.2

80.6

101.4

134.3

Industrial

23.7

29.9

35.1

43.7

57.4

61.2

40.8

37.3

42.1

48.3

57.1

64.9

Other Buildings

68.7

70.2

84.1

102.8

115.6

97.1

69.5

63.0

66.6

74.0

90.3

107.9

Utilities

48.6

51.4

61.1

85.6

99.5

98.6

89.4

100.3

110.9

100.9

101.3

104.4

Mines & Wells

51.9

77.1

114.2

130.9

151.7

87.9

100.9

133.5

136.7

124.9

122.6

123.4

Billions 2005 Dollars Business Fixed Investment

1263.0 1347.3 1455.5 1549.9 1537.7 1263.2 1319.2 1432.4

1527.2 1611.4 1733.1 1851.6

Producers Dur. Equipment

917.3

995.6 1071.1 1106.8 1059.4

889.7 1019.4 1124.1

Nonresidential Structures

346.7

351.8

384.0

438.2

466.4

367.3

309.1

321.8

1211.8 1300.0 1394.6 1476.5 333.0

334.9

362.9

397.7

Non-Farm Buildings

213.9

212.9

229.2

260.5

272.0

214.1

151.8

139.8

144.0

159.8

188.0

222.4

Commercial

114.4

112.9

118.4

131.2

124.5

78.4

54.4

52.5

53.1

61.3

74.0

93.9

Industrial

25.5

29.9

33.0

39.0

48.6

50.8

34.6

31.1

33.5

37.0

42.0

45.7

Other Buildings

74.1

70.2

77.9

90.3

99.3

85.7

63.5

56.6

57.8

61.8

72.4

83.0

Utilities

52.1

51.4

56.2

75.6

82.5

82.4

71.9

76.6

81.8

73.5

73.1

74.0

Mines & Wells

69.9

77.1

88.3

93.6

101.5

65.8

76.7

93.5

94.4

91.3

91.5

91.3

9.4

6.0

7.4

8.2

7.0

Annual Growth Rate Business Fixed Investment Producers Dur. Equipment

9.5

8.4

11.7

9.0

-5.8

-16.7

11.1

8.5

6.3

6.9

3.5

-11.2

-5.9

15.3

9.7

7.8

7.9

7.1

5.0

Nonresidential Structures

12.6

14.9

25.2

22.0

5.1

-34.4

2.1

9.5

1.6

6.2

11.5

12.9

Non-Farm Buildings

10.8

7.3

18.7

22.6

-0.1

-33.7

-21.8

5.3

7.6

20.9

22.8

23.1

9.3

10.0

15.3

17.3

-11.8

-44.7

-17.3

5.1

6.9

26.5

29.3

31.1

Commercial

30.4

13.8

16.1

46.6

23.0

-12.0

-32.4

17.7

11.8

19.7

12.7

16.8

Other Buildings

Industrial

9.2

1.7

26.0

22.6

6.7

-29.7

-18.7

-0.5

5.8

16.9

22.6

17.7

Utilities

5.5

3.8

23.9

54.9

0.8

-4.1

15.4

9.9

-0.6

-7.4

4.6

0.0

38.0

51.3

50.0

4.8

24.1

-45.1

62.1

17.7

-3.9

-1.7

-2.9

2.7

Mines & Wells

Institute for Economic Competitiveness

31

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

Table 15. Government Receipts and Expenditures History

Forecast

2004

2005

2006

2007

2008

2014.0

2290.1

2524.5

2654.7

2502.3

2009

2010

2011

2012

2013

2014

2015

Federal Government Receipts and Expenditures Receipts

2232.5

2429.6

2566.8

2740.2

3013.8

3205.0

3419.1

Personal Tax and Nontax Receipts

799.2

931.9

1049.9

1165.6

1101.3

856.6

896.4

1075.9

1178.8

1329.3

1412.5

1498.6

Corp. Profits Tax Accruals

250.3

341.0

395.0

362.8

233.6

201.7

329.6

339.6

364.0

415.1

436.7

441.6

94.3

98.8

99.4

94.5

94.0

97.3

101.5

110.9

115.3

120.6

135.7

142.5

807.6

852.6

904.6

945.3

973.1

948.9

970.9

903.0

947.8

1017.7

1087.0

1196.6

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2393.4

2573.1

2728.3

2900.0

3115.7

3450.4

3703.3

3753.6

3754.4

3802.3

3936.5

4090.6

Purchases Goods & Services

Expenditures

824.7

876.3

931.7

976.4

1080.1

1142.7

1222.9

1232.7

1224.7

1200.1

1185.6

1180.0

National Defense

550.8

589.1

624.9

662.3

737.8

774.9

819.2

824.8

817.5

798.0

786.9

782.8

Other

273.9

287.3

306.9

314.1

342.3

367.8

403.7

407.9

407.1

402.1

398.7

397.2

Transfer Payments

1405.1

1491.3

1587.1

1690.5

1841.9

2153.6

2313.7

2306.1

2323.7

2391.4

2522.0

2649.5

To Persons

1014.3

1078.0

1180.7

1254.2

1385.7

1601.8

1708.3

1739.4

1795.5

1856.1

1927.6

2014.1

30.9

40.9

35.0

42.2

45.3

53.3

57.3

57.5

58.5

60.2

61.2

62.2

Grants in Aid to State & Local Gov't

349.2

361.2

359.0

380.8

395.5

482.4

531.5

492.5

452.5

457.4

515.2

554.7

Net Interest

204.6

239.0

261.0

291.0

272.1

227.5

250.0

282.1

270.2

276.2

291.0

319.5

45.7

64.1

53.9

50.2

53.6

62.7

60.6

64.0

60.0

52.7

51.2

50.7

Surplus (+) or Deficit (-)

-379.5

-283.0

-203.8

-245.2

-613.5 -1217.9 -1273.7 -1186.9

-1014.1

-788.5

-731.4

-671.6

Receipts

1601.0

1730.5

1829.7

1923.1

1944.8

1953.6

2064.7

2088.3

2105.5

2170.0

2292.5

2398.2

Personal Tax/Nontax Receipts

1059.4

1163.1

1249.1

1313.6

1326.4

1252.8

1307.9

1368.1

1413.9

1459.0

1509.3

1560.5 373.9

To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts and Expenditures

Corporate Profits

248.6

276.7

302.5

323.1

334.4

284.8

297.5

328.9

344.2

349.4

359.3

Indirect Business Tax and Nontax Accruals

41.7

55.0

59.1

57.8

47.4

47.4

57.9

51.8

51.7

56.4

60.3

58.6

Contributions for Social Insurance

24.1

24.8

21.8

18.9

19.0

20.2

20.8

21.6

22.3

23.2

24.3

25.5

349.2

361.2

359.0

380.8

395.5

482.4

531.5

492.5

452.5

457.4

515.2

554.7

Federal Grants-In-Aid Expenditures

1609.33 1704.50 1778.63 1910.83 2017.05 2031.70 2090.00 2148.68

2154.43 2203.04 2310.25 2398.61

Purchases Goods & Services

1408.2

1493.6

1586.7

1697.9

1798.0

1774.8

1780.0

1797.0

1799.3

1821.9

1865.2

Government Social Benefits

384.3

404.8

402.9

433.7

456.7

498.1

534.6

557.1

556.7

584.9

660.6

711.4

384.3

404.8

402.9

433.7

456.7

498.1

534.6

557.1

556.7

584.9

660.6

711.4

Interest Received

19.0

10.9

2.1

0.5

16.2

28.0

35.4

43.7

46.4

44.9

41.1

35.2

Net Subsidies

-0.6

0.3

1.7

16.2

15.3

11.9

12.4

13.8

12.1

10.1

9.0

8.2

2.0

2.1

2.3

2.4

2.9

2.5

2.6

3.1

3.3

3.4

3.4

3.5

Transfer Payments

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

32

U.S. Forecast | March 2012

1919.5

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-8.4

26.0

51.0

12.2

-72.3

-78.1

-25.3

-60.4

-48.9

-33.0

-17.7

-0.4

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

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

Forecast

2004

2005

2006

2007

2008

-618.7

-722.7

-769.3

-713.1

-709.8

2009

2010

2011

2012

2013

2014

2015

-578.2

-629.1

-615.2

-594.9

-569.1

Billions of Dollars Net Exports Goods & Services

-391.5

-516.9

Current Account

-628.5

-745.8

-800.6

-710.3

-677.1

-376.6

-470.9

-472.7

-545.7

-521.8

-528.3

-560.9

Exports -Goods & Services

1180.2

1305.1

1471.1

1661.7

1846.8

1583.1

1839.8

2087.6

2179.6

2341.5

2526.6

2716.8

Merchandise Balance

-663.5

-780.7

-835.7

-818.9

-830.1

-505.9

-645.9

-741.2

-789.4

-779.7

-770.3

-761.7

Food, Feed & Beverage

56.55

58.95

65.98

84.28

108.33

93.93

107.73

125.20

120.49

122.00

125.41

131.36

Industrial Supplies Excl Petroleum

199.5

227.5

267.3

316.2

386.9

293.8

388.7

485.9

504.8

538.8

574.1

610.3

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

89.2

98.4

107.3

121.3

121.5

81.7

112.0

132.5

141.5

151.6

166.9

182.0

327.6

358.4

404.1

433.0

457.7

390.5

446.6

491.5

519.9

579.2

639.5

696.9

42.8

45.5

47.6

45.6

43.9

37.7

43.9

48.8

50.0

58.2

65.6

73.8

Other

238.7

257.0

291.9

314.5

339.8

278.0

330.8

362.6

377.5

417.2

458.7

494.8

Consumer Goods, Excl. MVP

103.3

115.3

129.1

146.0

161.3

150.0

165.9

176.8

191.5

210.7

230.0

245.6

41.0

47.5

50.8

61.3

61.8

54.8

56.9

62.5

63.4

68.1

73.4

78.8

363.2

399.0

446.6

499.7

549.3

518.4

562.0

613.2

638.1

671.2

717.4

771.9

Imports -Goods & Services

1798.9

2027.8

2240.4

2374.8

2556.5

1974.6

2356.7

2665.8

2808.7

2956.7

3121.5

3285.9

Merchandise

1501.7

1708.0

1884.9

2000.7

2146.3

1587.3

1947.3

2239.5

2360.9

2479.7

2608.8

2735.4

Other Consumer Services

Billions of Dollars

62.1

68.1

75.0

81.7

90.4

82.9

92.5

108.9

114.6

116.9

122.0

125.8

Petroleum & Products

Food, Feed & Beverage

180.5

251.9

302.5

346.7

476.1

267.7

353.7

464.0

487.2

486.2

482.7

475.3

Industrial Supplies Excl Petroleum

226.4

266.0

291.4

295.7

318.9

197.1

250.4

296.6

297.5

319.4

349.1

374.6

Motor Vehicles & Parts

228.2

239.5

256.6

256.6

233.2

159.2

225.6

255.7

280.9

298.8

317.6

338.4

Capital Goods, Excl. MVP

344.5

380.8

420.0

446.0

458.7

372.7

450.0

512.5

537.1

571.5

619.5

670.3

88.6

93.3

101.4

105.2

101.2

94.2

117.3

120.0

125.1

133.3

142.2

151.3

Computer Equipment Other

231.6

261.7

290.2

306.5

322.0

247.8

301.5

357.5

372.5

395.0

430.3

467.9

Consumer Goods, Excl. MVP

377.2

411.5

446.1

478.2

486.7

432.5

486.6

518.3

554.1

592.1

617.6

644.5

82.9

90.3

93.5

95.9

82.3

75.4

88.6

83.5

89.5

94.8

100.4

106.6

297.3

319.8

355.4

374.0

410.1

387.3

409.4

426.2

447.7

477.0

512.7

550.5

Net Exports Goods & Services

-687.9

-722.7

-729.4

-648.8

-494.8

-358.8

-421.8

-412.4

-416.5

-379.0

-339.2

-294.9

Exports G & S

1222.6

1305.1

1422.1

1554.4

1649.3

1494.0

1663.2

1776.4

1848.8

1966.9

2102.7

2244.2

Imports G & S

1910.4

2027.8

2151.5

2203.3

2144.0

1852.9

2085.0

2188.7

2265.3

2346.0

2441.9

2539.1

Exports G & S

11.7

10.3

14.0

14.6

0.5

3.0

13.9

9.9

5.1

8.0

8.1

7.0

Imports G & S

19.1

12.1

5.4

9.0

-1.7

0.4

14.2

11.6

6.2

5.0

5.7

4.8

Other Consumer Services

Billions 2005 Dollars

Exports & Imports % Change

Real Exports G & S

7.2

6.8

10.5

10.1

-1.7

2.0

8.8

5.2

4.4

6.9

7.2

6.3

Real Imports G & S

11.0

5.3

4.2

0.9

-5.7

-3.9

11.0

3.8

4.0

3.4

4.3

3.6

Institute for Economic Competitiveness

33

In Appeciation

The UCF College of Business Administration would like to thank Alan C. Charron, ‘84, for his generous gift to the Institute for Economic Competitiveness. His support enables the Institute to publish this forecast and will help fund future activities and research. Charron graduated in 1984 with a degree in finance.

He is president of Real Property Specialists, Inc., located in Orlando, Florida.

Founded in 1992, Real Property Specialists, Inc., is a fullservice brokerage company that has built a reputation of providing highly personalized service while being responsive and flexible to its clients' individual needs. They offer a range of commercial real estate services in the Central Florida area including brokerage, appraisal, development, property management and tenant representation.

Real Property Specialists, Inc., has set a new standard of excellence in client service by providing these key advantages over the competition:

Responsiveness. You work directly with a decision

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

Consistency. We are a unified firm employing team-

members who are committed to the success of our clients.

We pride ourselves on our ability to maintain a dedicated, professional staff that is able to build long-term, comfortable and prosperous relationships with our clients.

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

Experience. The staff at Real Property Specialists is

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

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

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

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

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

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

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