U.S. Forecast September 2010

U.S. Forecast September 2010

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

Message From Dean Thomas L. Keon In this forecast, Sean Snaith refers to Foghat, a British rock band that was popular in the 1970s. That got me thinking about other rock groups from that era.

A b o ut U n i v e r s it y o f C e n t r al F l o r ida ( U C F ) The University of Central F lorida is

a public, multi-campus, metropolitan r e s e a r c h u n i v e r s i t y, d e d i c a t e d t o

ser ving its surrounding communities with their diverse and expanding

populations, technological corridors,

and international partners. The mission

of the university is to offer high-quality undergraduate and graduate education, student development, and continuing education; to conduct research and creative activities; and to provide

services that enhance the intellectual,

cultural, environmental, and economic

development of the metropolitan region, address national and international

issues in key areas, establish UCF as a major presence, and contribute to the g l o b a l c o m m u n i t y.

A b o ut t h e C o lle g e o f B u s i n e s s A dmi n i s t r ati o n The College of Business Administration a d v a n c e s t h e u n i v e r s i t y ’s m i s s i o n

and goals in providing intellectual

leadership through research, teaching, and ser vice. The college is striving

to enhance graduate programs, while

maintaining the strong undergraduate

base. The college delivers research and

quality business education programs at the undergraduate, masters, doctoral,

and executive levels to citizens of the

state of F lorida and to select clientele n a t i o n a l l y a n d i n t e r n a t i o n a l l y.

It amazes me that some of those acts are still performing today.

Artists such as Elton John, Mick Jagger, Paul McCartney and Rod Stewart continue to play. Further, the Eagles, Bruce Springsteen, KISS and AC/DC still earn millions by selling out concerts.

Some musicians from the 1970s have overcome great obstacles and are able to enjoy success once again. For example, Eric Clapton has battled addiction and the death of his son and Aerosmith’s lead vocalist Steven Tyler was recently named a judge on American Idol.

These artists have shown resilience.

I am not suggesting that any of these rock stars serve as role models, but I am pointing out that with a lot of hard work, a successful “comeback” is possible!

Sometimes you just have to hit rock bottom and slowly climb back to the top to be successful again. Take our economy for example. It appears our nation will make a comeback from this economic downturn, but it is going to take some time and Americans must remain patient.

It will not happen overnight.

You can read more about our recovery in this forecast. In the mean time, I can’t help but wonder if any of today’s artists will stand the test of time. Will we still be talking about Lady Gaga or Justin Bieber in 30 years? Only time will tell!

L . Keon omasL. Keon ThThomas Sincerely,

Dean

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

Fo r eca s t fo r t h e N ati o n Forecast 2010 - 2013 September 2010 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2010 Institute for Economic Competitiveness. All rights reserved.

Publications of the Institute for Economic Competitiveness are made possible by the following staff: Dr. Sean Snaith, Director Elaine Vogt, Administrative Assistant Cecilia Chirinos, Researcher Jessica Fears, Researcher Alexandra Betrone-Harpst, Researcher

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

Hi g h li g hts o f th e 3Q 201 0 U. S . FOR ECA ST In this quarter’s U.S. Forecast from the University of Central Florida’s Institute for Economic Competitiveness: • 1970’s rock band Foghat can teach policymakers everything they need to know about the current state of the U.S. economy and what to do about it.

• The U.S. economy continues to flounder in the second half of 2010.

Real GDP growth decelerates to just 1.2% in the 3rd quarter and improves slightly to 1.7% growth in the 4th quarter.

H I GHL I GHTS

• Why didn’t the $800 billion stimulus work as advertised? Ask Sister Clarice, my high school Latin teacher.

• The expansion of real GDP in the economy during 2010 will be about 2.6% versus a year ago and slow to 2.0% in 2011 as consumers are still struggling with ravaged balance sheets and the little labor market that couldn’t.

• The U.S. Dollar is expected to oscillate vis-à-vis major trading partners ending 2013 at about the same level it started 2010. The crisis in the EU appears to have been stemmed and the Euro has been rescued from oblivion.

• The U.S. economy shed in excess of 8.3 million payroll jobs through the end of 2009. Payrolls will not reach their pre-recessions levels and those jobs will not be recovered until the 4th quarter of 2013 – 3 years from now.

• Consumer sentiment and consumer spending growth remain weak. The 2010 holiday shopping season does promise to be an improvement over the 2008 and 2009 seasons, but that ain’t saying much.

• Continuing foreclosures, fed by persistently high unemployment, continue to weigh on the housing market. Prices are likely to fall throughout 2010. Then a long difficult recovery lies ahead for this sector.

• Unemployment, a lagging indicator of the business cycle, will remain in the upper part of the 9.0-10.0% range throughout 2010 before falling gradually to just 8.2% by the end of 2013. Labor markets remain the ugly scar from the trauma caused by the financial crisis and recession. This scar will be excruciatingly slow to fade.

U . S . F o r eca s t

A Case of Jittery Nerves

The most recent release (3rd quarter 2010) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that the 31 forecasters (including yours truly) surveyed for this publication are almost 17% convinced that a decline in real GDP will occur in the 4th quarter of this year.

Th e Anxio u s in d e x

The survey asked panelists two questions: 1) The probability that real GDP will decline in the quarter in which the survey is taken. 2) The probability of a decline in each of the following four quarters. The anxious index (a term coined by The New York Times reporter David Leonhard) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in the 3rd quarter of 2010, the index stands at 16.81%, which means that forecasters believe there is a 16.81% chance that real GDP will decline in the fourth quarter of 2010, up from last quarter’s anxious index of 9.81%. This value for the anxious index is the highest since the 3rd quarter of 2009, when the recession was just coming to an end.

The forecasters also report just a 13.99% chance that we are currently (3rd quarter of 2010) in a recession.

According to the panel, the probability that we will fall back into recession is slowly declining through 2011, which implies the remaining possibility of a double dip recession.

The graph below plots the historical values of the anxious index and gray bars indicate periods of recession.

The current levels of the anxious index and its sharp decline from the start of 2009 indicate the recession is over. A weak and susceptible recovery continues in the U.S. economy.

Figure 1.

The Anxious Index Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2010:Q3 100 90 80

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

Probability (percent)

70

Survey Date

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U . S . F o r eca s t

Everything Policy Makers Need to Know about the U.S. Economy They Learned from Foghat in 1975 In 1975 Foghat released Fool for the City, an album that eventually went platinum. The band’s biggest hit single on that album (and later on the album Foghat Live) was entitled, “Slow Ride.”

In case you have not heard the song, or just wish to relive the glory of the 1970’s, it can be listened to on the band’s website: www.foghat.com. If you are familiar I suppose you may be singing the song right now.

The oft repeated refrain in the song is “Slow ride, take it easy.” These five words tell us everything we need to know about the effectively immutable nature of this economic recovery and what policy makers’ response should be going forward.

Last year in this publication we described the economic recovery as being “gravy boat-shaped.”

It is a long, slow and protracted process that is attributable to the nature of the financial crisis and recession that preceded it.

The collapse of the housing market and the precipitous plunge in the stock market obliterated trillions of dollars of wealth. Homes, that had been a large and liquid component of consumers’ wealth, had plunged in value. What was once a net asset turned into a net liability as many homeowner found themselves “underwater” in their mortgages – owing more in mortgage debt than the market value of the home.

401ks and other retirement accounts and portfolios plunged in value as the stock market precipitously fell. While the market has recovered from the nadir of the financial crisis, it is still well below the precrisis levels. The Dow Jones Industrial Average has stalled in the 10,000 range and has a long way to go to get back to the pre-crisis level of 14,000.

The wealth effect on consumption has resulted in a slow growth in consumer spending as consumers are saving more and spending less in the wake of lost wealth. When housing values and stock prices were rising, consumers were wealthier and thus more willing to spend. The opposite effect is now in 6

U.S. Forecast | September 2010

play as consumers are poorer as a consequence of declining stock and housing prices.

Consumers saw their nest eggs turned into Humpty Dumpty. All the President’s advisors and all the President’s policy makers cannot put Humpty Dumpty together again.

U.S. policy makers have made a plethora of piece meal, patchwork policies including Cash for Clunkers, Cash for Caulkers and the HIRE Act. These and the latest efforts at stimulating the economy will in all likelihood fail. Increasing the pace of the recovery and stimulating job growth will happen, if and when, the pace of consumer spending does.

When they fail to achieve the desired effect, these attempts at stimulus are only working to raise anxiety. They are adding to the deficit while having a negligible effect on the economy as a whole. The U.S. economy is like a ship without a rudder. The frantic and continuous attempts to use policy to spin the wheel of our economic ship and get us back on course are doomed to failure.

The damage done to the economy will take a long time to be repaired, and it is too late for policy to be a panacea.

Policy makers should break out those old albums, dust off some Foghat and listen and learn the lesson contained on that vinyl disc: The recovery is unfortunately going to remain a “Slow ride” and policy makers would be well advised to “take it easy.”

Latin, Lucas and the Lackluster Stimulus I studied Latin in high school.

(That sentence, by the way, was a surprisingly ineffectual pick-up line for me during my college years.)

In my high school, Latin classes, as well as the German, French and Spanish classes, were all taught

U . S . F o r eca s t by a nun, Sister Clarice. There were three of us in that Latin class, a classmate who had previously announced his plans to join the priesthood, myself and fear.

I feared Sister Clarice not because of any physical threat she posed, she was not one of the nuns who meted out justice via her hands, but because I profoundly dreaded disappointing her. If she asked you a question and you did not have the answer, she simply stared at you from behind her lectern– for what seemed like an eternity– with a look on her face that was part disappointment, part anger, part pity and part incredulity. Every day was judgment day in her class.

This fear motivated me to learn some Latin in her class including the phrase, ceteris paribus, meaning “holding other things constant” or “all other things equal.” This is an assumption we teach and invoke in introductory economics classes. It elucidates the impact that a change in one economic variable has on a second variable by holding constant changes in any other variables that could also have an impact on the second.

The importance of taking change into account when using large scale statistical models to predict the impact of economic policy won economist Robert Lucas a Nobel Prize. The “Lucas Critique,” as it is known, warns that the historical statistical relationships in those models are not independent of the policies in place. If policies are changed, or expected to be changed, those relationships will change as well.

Thus the use of these statistical models comes with a caveat emptor. When the rules of the game change, so does the behavior of the players playing the game.

Trying to predict what the players will do under the new rules, by observing what they did under the old rules may lead to faulty predictions.

Let’s say you were scouting the offense of an opposing college football team to predict what offensive plays they run in third down situations by watching video of the previous season. If the NCAA came out and announced that in the new season each possession would consist of five downs instead of four, your predictions would no longer be as accurate.

The same is true when it comes to economic policy changes.

Policy makers told us that the $800 billion stimulus package would boost the economy and keep unemployment from reaching 8%. These predictions were not pulled out of thin air. They were based on simulations of the policy using one of the large scale statistical models that I and many other economists use to make forecasts. These are the type of models that Lucas warned us about.

The errant predictions, however, are not purely the result of the stimulus policy itself changing the model (as Lucas described) but rather that everything else did not remain constant. A large number of the “rules of the game” unrelated to the stimulus package were rapidly changing. Examples include the healthcare reform act, financial regulatory reform, and uncertainty surrounding future tax policy.

How would Sister Clarice respond to policy makers implementing all of these changes before the stimulus had a chance to help put an end to our economic struggles and bring down unemployment?

I am guessing with a long cool stare and a Latin phrase: Errare humanum est.

GDP Outlook The Lump in the Gravy Boat Recovery was an Inventory Driven Pseudo V-Shaped Recovery

The growth rate of real GDP in the 4th quarter of 2009 and the 1st quarter of 2010 gave an illusion of an economy that was roaring out of recession. 5.0% and 3.7% real GDP growth in those quarters gave hope on the surface that a V-shaped recovery was underway. But those of us who look more deeply into the GDP releases made by the Bureau of Economic Analysis (BEA) could see what was powering these large advances in GDP growth. Changes in inventories are counted as a form of investment spending in the accounting process for calculating GDP. Over the course of a long and difficult recession, business slashed inventories especially hard for most of 2009– why keep that entire inventory when nobody was buying? The slashing of inventories in turn slashed the growth rate of the economy Institute for Economic Competitiveness

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U . S . F o r eca s t and weighed down on quarterly GDP growth until the 4th quarter of 2009. In that quarter, the pace of inventory cuts slowed dramatically, by nearly $100 billion. In the 1st quarter of 2010 business inventories began to grow again and in both of those quarters these inventory fluctuations provided a large boost to the growth rate of real GDP.

Inventory cycles are short lived and not the type of stuff that comprises sustained expansions. That short boost had already diminished by the 2nd quarter of 2010 and the change in inventories was just a quarter of the size of the changes in the previous two quarters. Knowing that the inventory boost would be short lived, I began to call the 4th quarter of 2009 and the 1st quarter of 2010 “lumps” in the gravy boat recovery. Now that we have seen these lumps melt away we are back to the true “gravy boat” nature of this recovery.

The 3rd quarter of 2010 will see an even slower rate of real GDP growth than the 1.6% growth in the 2nd quarter. We are anticipating growth in the 3rd quarter to be just 1.2%. In the 4th quarter the pace of growth will pick up slightly to a still lackluster 1.7% rate. This subpar growth will spill into the first half of 2011, but I anticipate that the 2nd half of 2011 will see GDP growth accelerate.

Slow GDP growth is bad news for the labor market, an issue we will address shortly. The consumer is expected to remain bashful about spending given the labor market and the lost wealth touched upon in the “Slow Ride” section above.

Other sectors of the economy will need to step up and fill the gap for consumer spending growth.

Investment spending and the foreign sector will provide the growth as the government influence in the economy continues to fade away over our forecast horizon.

Residential fixed investment spending will continue to contract through the end of 2010 before showing a modest gain in 2011. In 2012 and 2013 the pace of residential fixed investment growth picks up substantially with large double digit growth in each of these years.

Non-residential construction still remains anemic and the ongoing commercial real estate crisis will 8

U.S. Forecast | September 2010

work to delay the recovery. The non-residential investment in structures will continue to contract through 2011 before growing just 3.7% year-overyear in 2012. In 2013 the crisis will have fully abated. After several years of overall economic growth, commercial investment growth year-overyear jumps to 13.0%.

There is no quick fix for the damage that has been wrought by the recession and financial crisis. The trillions of dollars of lost wealth will not be magically restored. The ugly scar on the economy left behind by this recession, the labor market, will not fade away quickly. The current set of policies being concocted in Washington, D.C. will do little to alter the trajectory of the economy.

We are now calling for 2.0% growth yearover-year in real GDP in 2011, 3.0% in 2012. As the massive stimulus fully unwinds, private nonresidential investment spending accelerates to fill in the gaps. As a result we predict a 3.1% rate of growth for 2013.

I still do not believe that a double-dip recession is in the cards, despite the rapid deceleration of growth from the start of this year.

Consumer Spending The consumer is 70% of the U.S. economy.

More than two thirds of the economic output of the economy can be tied to the household sector.

You and I and all the things we buy (or don’t buy) have a tremendous impact on the health of the U.S. economy overall. The good news is that we are spending again and consumer spending growth has been positive since the recession came to an end after the 2nd quarter of 2009. The bad news is the rate at which our spending is growing continues to be slow.

Who could blame us, really, for not dashing out and buying home theatres and new cars and going out to dinner and taking vacations and buying new fishing boats? The recession is over and things are getting better, but we have been through hell in the housing, stock, and labor markets. Did I say, “Have been through hell?” That would imply we are out of hell, we are not. We have simply moved to another

U . S . F o r eca s t level, one that is slightly less hellish than the place we occupied previously.

Consumers have started the process of climbing out of that sulphurous pit, but it is a deep hole we find ourselves in, and it will be a long slow climb out of these fiery depths. The losses households have suffered at the hands of the housing and stock markets depleted wealth that will only be replenished slowly by saving more, spending less, and a slow rate of appreciation of these assets.

Appreciation in the housing sector could take decades before the values of our homes reach where they were prior to the housing bust, assuming the rate of appreciation returns to historical rates that are on par with inflation. The stock market will recover more quickly than this, but has a lot of ground to make up. For those that are close to retirement age, the magic of compounding is not much solace when the compounding period is short.

The negative wealth effect will weigh down consumption for the entire forecast horizon, and probably beyond. Average annual consumption growth 2010 through 2013 will be just 1.9%. To put this in perspective, the average annual growth of consumption during the period 2003-2007 was 3.0%.

The sorry state of the consumer’s balance sheet will be an albatross around the consumer’s neck, and the economy’s neck, for years to come.

The labor market will continue to struggle in 2010 and continue to remain weak in 2011 although the pace of job creation will start to pick up. With unemployment remaining elevated and underemployment higher still, the labor market will not contribute to boosting consumption, at least not in the near term.

Investment

Investment spending is expected to continue to strengthen as the recovery continues. Much of the investment growth early in the recovery has been driven by the inventory cycle, which has played itself out but will be replaced by growth in other types of investment. We expect that non-residential investment will grow at pace of nearly 7.1% through

the end of 2013. This rate of investment growth is higher than the average pace of growth during the 2004-2007 time frame.

The economy is ripe for a pickup in the pace of investment spending since businesses are sitting on a mountain of retained earnings, and interest rates are at historically low levels. Firms can choose to use their stockpiled profits to make purchases and give up the paltry interest that money would have earned.

For those who choose to borrow, the interest costs of doing so will be minimal. We are expecting that business spending on equipment and software will grow at an annual average rate of 10.6% through 2013.

Investment in computers and peripherals will be boosted by replacement cycles (think Windows 7 and Office 2010) and the fact that these types of investments help firms in their continued battle to grow profits by containing costs. Cost control remains paramount in the weak recovery we are now experiencing. This type of investment is expected to average growth of 19.3% through the end of 2013.

Investment in non-residential structures does not have the same strong outlook for the near term.

In fact, we are expecting growth to show a near double digit decline throughout 2011. The crisis in commercial real estate is weighing down on the outlook for this sector. There is little incentive to build additional retail or office space when the current demand for existing inventory is so weak.

As the commercial mortgage crisis continues to play itself out, bank failures and all, financing will remain difficult to access. All crises come to an end. Things will begin to resolve themselves, and growth will resume in this sector. By the time we get into 2013 growth in this component of investment will be 13%.

Investment in transportation equipment, helped by the volatile aircraft industry, is expected to grow robustly throughout our forecast horizon, with an average growth rate of 29.1% during 2010-2013.

Light vehicle sales will steadily grow from current levels to a level in excess of 16 million in 2013.

Residential fixed investment growth has been negative for four straight years. The year 2010 will unfortunately extend that losing streak.

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U . S . F o r eca s t The decelerating recovery and persistently high unemployment have extended the woes of the floundering housing market. In 2011 things start to turn around as residential fixed investment growth finally turns positive. Housing starts should show strong growth from a low level in 2009, the bottom for starts. Inventories of new homes have fallen significantly. We expect starts to accelerate significantly in 2011 and 2012 before hitting nearly 1.5 million in 2013.

Government Spending The Greek crisis was a reminder of where a lack of fiscal restraint can ultimately lead. Fortunately in the U.S. we are not as bad off as Greece – yet. Budget deficits exploded over the course of this recession and financial crisis. These deficits were result of both falling tax revenues and tremendous growth in spending. The national debt is nearly $13.5 trillion and rising. Trillion-dollar federal budget deficits are not likely to go away soon, and we are forecasting deficits to stay above that level through 2012. In 2013 we are forecasting the federal budget deficit to be just $800 billion.

We expect that most of the Bush tax cuts will be extended for two years. The tax cut for the so called rich? This has become a mostly symbolic political symbol that will make very little difference in changing the fiscal imbalances facing the U.S. government. Will the tax cuts be extended for the top tax bracket? It would be nice if things were as simple as taxing this small minority of taxpayers to end our fiscal imbalances, but as wealthy as these people are it is not enough to make the huge deficits go away.

State and local governments will struggle without the stimulus budgetary band-aid that helped to ease the budget shortfalls during the past two years.

Spending at the state and local level will essentially stagnate through 2012. Employment reductions in this sector will be a combination of attrition coupled with layoffs for some.

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U.S. Forecast | September 2010

Net Exports We expect trade growth to continue through the end of our 2013 forecast period. The weakening of the U.S. dollar was temporarily interrupted as the Greek sovereign debt crisis unraveled. This was just a bump on the downward trend of the value of the dollar, and in 2010 it will have pushed export growth below import growth. But starting in 2011 and beyond, the roles will be reversed as export growth driven by a weakening dollar will surpass import growth.

The current account deficit, which improved in 2007-2009, will widen once again in 2012 and 2013 after a small, temporary improvement in 2011. The worsening of the current account will be mild. The deficit will not get as large as those seen in 20042008 time frame when it topped the $800 billion mark.

The long run trends of the dollar are not changed by passing crises. It seems the dollar will continue to appreciate against the Euro in the short run. As the Eurozone recovery proves to be weaker than originally thought, it is likely to weaken against other currencies. This includes the Chinese currency that is long overdue for revaluation and is facing increasing political pressure to be revalued vis-Ă -vis the dollar.

Unemployment One of the most vexing aspects of this recession, which ended over a year ago, has been the high and persistent rates of unemployment, a hallmark of this business cycle. Nationally, the unemployment rate breeched 10%, but only stayed there for a few months. That is the good news. The bad news is that while it has fallen below those peak levels it still remains at an unacceptably high 9.6%. The worse news is that we are forecasting the unemployment rate to remain at unacceptably high levels through the end of 2013. Labor markets remain the ugly reminder of the recession that will linger for years beyond the end of the recession and only slowly fade; a long-lasting reminder of the economic trauma we have endured.

U . S . F o r eca s t Underemployment (U-6) is an even bigger problem and stands at 16.7% in August, down only slightly from our last forecast in April. This excess capacity in the labor market will diminish before many firms are forced to go out and make new payroll hires. As job creation resumes, many who dropped out of the labor force will re-enter it, and this will continue to keep the headline unemployment rate (U-3) elevated.

When do things start to improve? 2011 will be the start of a long-drawn-out decline in the unemployment rate. Unemployment will average 9.2% in 2012, ensuring that, despite the recovery being nearly 2 ½ years old, the economy will still be a major issue in the presidential election that year. It’s the economy, stupid – a recurrent theme.

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

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Automobile Light Truck Sales S e p t e m b e r 2 0 1and 0 (Millions Vehicles)

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

Charts

8 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Auto Sales Light Truck Sales

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

30-Year Mortgage Rates and Housing Starts 9.0

(Mortgage rates - Left axis, %)

2.5

8.0

2.0

7.0

1.5

6.0

1.0

5.0

0.5

4.0

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

0.0

Automobile and Light Truck Sales 11.0

(Millions Vehicles)

10.0 9.0 8.0 7.0 6.0 5.0 4.0

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

Change in Real Business Inventories 150.0

(Billions of 2000 Dollars)

100.0 50.0 0.0 -50.0 -100.0 -150.0

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

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

Federal Budget Surplus (Billions of Dollars)

500.0 0.0 -500.0 -1000.0 -1500.0

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

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

14

(%)

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

U.S. Forecast | September 2010

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

Industrial Production (2002=100)

105.0 100.0 95.0 90.0 85.0 80.0 75.0

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

Private Fixed Non-residential Investment 2000.0

(Billions of Dollars)

1800.0 1600.0 1400.0 1200.0 1000.0 800.0

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

Manufacturing Employment 18.0

(Millions)

17.0 16.0 15.0 14.0 13.0 12.0 11.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Manufacturing Employment Institute for Economic Competitiveness

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

Money Supply

(Annual Growth Rate %)

30.0 20.0 10.0 0.0 -10.0

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

Total Nonfarm Payroll Employment (Millions)

140.0 135.0 130.0 125.0 120.0

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

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

140.0 120.0

110

100.0

100

80.0

90

60.0

80

40.0

70

20.0

60

0.0

16

120

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

U.S. Forecast | September 2010

50

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

Real Disposable Income and Consumption 8.0

(% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

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

Trade Balance and Real Exchange Rate

1.40 1.30 1.20 1.10 1.00 0.90 0.80

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

0.70

Twin Deficits 500.0

(Billions of Dollars)

0.0 -500.0 -1000.0 -1500.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 U.S. Federal Budget Surplus Current Account Institute for Economic Competitiveness

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

Civilian Unemployment Rate 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0

(%)

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

Yield Curve 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

(%)

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

Federal Funds Rate (%)

7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

18

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

U.S. Forecast | September 2010

Table 15. Government Receipts and Expenditures History 2002

2003

2004

1859.3

1885.1

2014.0

2290.1

2524.5

2654.7

2503.1

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1165.6

1102.8

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

362.8

232.2

86.8

89.3

94.3

98.8

99.4

94.5

96.0

739.3

762.8

807.6

852.6

904.6

945.3

972.4

2112.1

2261.5

2393.4

2573.1

2728.3

2900.0

3119.3

3

680.7

756.5

824.7

876.3

931.7

976.4

1079.9

1

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

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

2005

2006

2007

2008

September 2010

Federal Government Receipts and E

2

National Defense

437.7

498.0

550.8

589.1

624.9

662.3

737.3

Other

243.0

258.6

273.9

287.3

306.9

314.1

342.5

1252.1

1339.4

1405.1

1491.3

1587.1

1690.5

1843.7

2

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1387.4

1

Transfer Payments To Persons

23.3

28.6

30.9

40.9

35.0

42.2

44.8

Grants in Aid to State & local Gov't

To Foreigners

304.2

338.0

349.2

361.2

359.0

380.8

396.2

Net Interest

213.7

196.5

204.6

239.0

261.0

291.0

270.1

40.3

45.3

45.7

64.1

53.9

50.2

53.5

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-245.2

-616.3

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1923.1

1967.2

2

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.6

1332.6

1

Corporate Profits

Subsidies less Surplus of Gov't Entities

-1

State and Local Government Receipts an

221.8

226.2

248.6

276.7

302.5

323.1

335.4

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

57.8

48.0

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

18.9

19.7

304.2

338.0

349.2

361.2

359.0

380.8

396.2

Federal Grants-In-Aid Expenditures

1535.13

1609.33

1704.50

1778.63

1910.83

2014.58

20

1302.7

1356.1

1408.2

1493.6

1586.7

1697.9

1798.5

1

Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.2 455.2

Transfer Payments

t ab l e s

1466.78

Purchases Goods & Services

333.0

353.4

384.3

404.8

402.9

433.7

Interest Received

12.0

20.6

19.0

10.9

2.1

0.5

8.8

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

16.2

16.0

Dividends Received

1.6

1.7

2.0

2.1

2.3

2.4

2.5

Net Wage Accruals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

12.2

-47.4

Surplus (+) or Deficit (-)

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.

2003

2004

History 2005 2006

1.8 1.3 2.7 7.7 2.0 1.9 -7.9 -4.2 -2.7 5.1 -18.6 -6.5 -8.2 -24.4 0.2 -17.6 -15.2 -41.3 -1.0 -26.6 -15.1 5.2 -1.8 3.5 7.3 3.3

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

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

Composition of Real GDP, Percent Change 3.1 2.7 1.9 0.0 -2.6 3.2 2.6 2.2 0.5 -2.1 3.4 2.9 2.4 -0.3 -1.2 5.2 4.1 4.2 -5.1 -3.5 3.4 2.8 2.0 -1.1 -1.2 3.0 2.7 2.2 0.9 -0.8 6.7 7.9 6.7 0.4 -17.0 8.6 7.5 3.7 -2.4 -15.0 7.3 8.3 8.9 6.2 0.3 11.7 23.3 14.1 13.7 -0.8 1.8 10.8 16.0 3.1 0.5 8.3 8.4 4.0 -4.2 -23.2 13.5 9.2 -4.1 -22.9 -45.1 -10.0 -5.1 30.6 -4.2 -18.0 18.7 7.2 -18.2 -12.2 -36.9 1.5 9.2 14.0 6.2 -20.4 -0.8 6.1 10.0 -3.6 -30.1 17.8 10.3 18.1 25.6 8.0 -2.0 7.9 39.0 11.6 3.0 10.5 14.7 6.2 6.5 -35.0 -18.7 -5.5 9.3 15.2 13.2 6.2 -7.2 -18.7 -24.0 -22.4 6.7 9.0 9.3 6.2 -9.4 6.2 6.1 2.7 -2.6 -13.7 1.3 2.1 1.3 7.2 5.8 -0.2 0.9 1.4 0.3 -0.9

2008

2009

2.8 2.7 1.8 3.6 3.8

26.1 4.6 0.3 72.8 15.6 89.6 16.816 1.710 4.997 5.8 -1.1 -158 -458

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

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

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

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

1.67 1.61 2.00 3.82 4.61 5.42 6.54 996 -16.7 1.266 -1.5

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

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

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)

9060 2.0 8010 4.7 8637 3.3 3.5 573 13.4

9378 3.5 8378 4.6 8854 2.5 3.5 660 15.5

9937 6.0 8889 6.1 9155 3.4 3.4 923 40.2

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

Other Measures 72.2 99.8 1.6 1.0 2.7 -3.3 79.6 75.0 28.7 -39.0 85.6 63.8 16.089 13.195 1.342 0.900 4.959 4.337 4.6 5.8 1.1 -0.6 -162 -455 -718 -669

2010

Forecast 2011 2012

2013

2.6 1.1 1.5 6.3 2.5 0.4 4.9 14.5 13.0 29.5 10.6 5.9 46.2 -3.4 9.7 -14.5 -26.7 -31.7 -3.4 18.0 -27.0 -4.0 11.9 12.2 3.9 -1.2

2.0 2.2 2.1 6.5 1.7 1.5 6.1 10.4 6.9 16.0 10.9 18.1 19.7 -0.9 28.7 -5.2 -5.7 -20.9 -1.6 0.5 -5.7 5.8 7.5 5.9 -0.7 0.5

3.1 3.1 1.8 5.0 1.2 1.5 9.3 8.2 6.5 17.0 5.5 3.0 23.1 9.0 13.6 13.0 25.9 31.9 -0.5 4.1 11.7 18.1 8.7 4.7 -2.8 1.1

3.0 2.9 2.2 6.9 1.7 1.6 7.9 9.3 5.7 14.8 9.8 11.1 27.4 16.2 25.9 3.7 8.1 3.2 -1.8 0.2 11.2 30.7 7.2 5.1 -3.7 0.1

13211.7 13476.2 13876.9 14310.5 14613.3 15102.6 15746.1 16485.6

Prices & Wages, Percent Change, Annual Rate 3.3 3.3 2.9 2.2 0.9 3.4 3.2 2.9 3.8 -0.3 2.1 2.5 2.3 2.3 1.7 4.9 3.0 3.9 6.4 -2.5 3.1 2.9 3.1 2.9 1.5

2.2 2.3 1.5 3.2 3.8

U.S. Forecast | September 2010

2007

Billions of Dollars 11553.0 11840.7 12263.8 12638.4 12976.3 13228.9 13228.9 12880.6 10642.3 11142.2 11867.8 12638.4 13398.9 14061.8 14369.1 14119.1

1.6 1.6 2.3 -1.3 3.5

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

2002

0.9 1.6 1.0 4.0 1.9

1.3 1.5 1.1 1.0 1.9

1.2 1.7 1.5 1.4 1.9

1.5 1.9 1.8 1.5 2.1

82.6 89.1 0.9 0.9 2.6 3.2 73.6 75.6 34.4 50.3 72.5 74.8 12.604 14.4 0.770 1.2 4.052 4.6 9.8 9.2 0.8 2.1 -1291 -1014.7 -469 -507.2

92.9 1.0 3.9 77.6 55.6 78.1 16.0 1.5 5.1 8.4 2.3 -807.2 -556.3

61.8 3.5 -9.2 67.2 -116.9 66.3 10.402 0.554 4.567 9.3 -4.3 -1416 -378

76.9 3.3 5.3 71.5 52.5 71.0 11.303 0.586 4.202 9.8 -0.6 -1320 -479

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

Financial Markets, NSA 4.96 5.02 1.93 0.16 4.72 4.38 1.40 0.15 4.93 4.52 1.82 0.47 4.75 4.43 2.80 2.19 4.79 4.63 3.67 3.26 4.28 4.07 4.87 4.84 6.42 6.33 6.04 5.04 1311 1477 1221 947 8.6 12.8 -17.2 -18.9 0.985 0.930 0.888 0.926 -1.4 -5.6 -4.1 4.8

0.16 0.14 0.32 1.98 3.20 4.15 4.72 1110 18.9 0.908 -1.7

0.23 0.32 0.50 1.85 2.86 3.75 4.55 1089 -1.8 0.919 1.3

2.2 2.2 2.4 3.3 3.9 4.5 5.5 1085.9 -0.3 0.9 -0.9

2.9 2.9 3.1 4.1 4.6 5.0 6.1 1296.9 19.4 0.9 -0.6

10486 5.5 9277 4.4 9277 1.3 1.4 1228 33.1

11268 7.5 9916 6.9 9651 4.0 2.4 1349 10.1

Incomes 11912 12391 5.7 4.0 10424 10953 5.1 5.1 10043 9874 2.3 1.7 2.1 4.1 1293 1025 -4.2 -20.6

12507 2.7 11361 3.0 10222 1.2 5.9 1354 29.4

12884 3.0 11674 2.8 10366 1.4 5.4 1335 -1.4

13419.2 4.2 12028.5 3.0 10532.3 1.6 4.8 1381.91 3.553

14026.8 4.5 12384.0 3.0 10671.9 1.3 4.2 1364.9 -1.2302

12175 -1.7 11035 0.8 10100 0.6 5.9 1062 13.5

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 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

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

11553.0 11840.7 12263.8 12638.4 12976.3 13228.9 13228.9 12880.6

13211.7 13476.2 13876.9 14310.5

11543.5 11824.8 12198.2 12588.4 12917.1 13200.0 13268.1 12992.8

13141.4 13429.5 13814.9 14242.8

8021.9

8247.6

8532.7

8819.0

9073.5

9289.5

9265.0

9153.9

9289.3

9481.1

9687.3

9863.9

930.0

986.1

1051.0

1105.5

1150.4

1198.5

1136.4

1094.6

1163.0

1238.7

1324.4

1390.2

Nondurables

1780.2

1845.6

1904.6

1968.4

2023.6

2064.3

2041.2

2017.4

2067.0

2102.4

2138.4

2164.0

Services

5318.1

5418.4

5577.6

5745.1

5899.7

6028.3

6082.3

6032.7

6058.9

6150.2

6248.4

6344.5

1180.2

1191.0

1263.0

1347.3

1453.9

1552.0

1556.6

1290.8

1353.8

1436.8

1550.5

1694.8

830.3

851.4

917.3

995.6

1069.6

1109.0

1082.0

916.3

1049.4

1158.2

1266.0

1369.2

379.3

405.0

443.1

475.3

514.8

560.5

594.7

595.8

672.6

719.0

759.7

809.6

Computers & Peripherals

58.2

63.4

70.6

78.9

97.1

110.7

125.5

123.6

159.5

184.7

212.0

248.0

Communications Equipment

73.7

75.4

81.7

83.2

92.2

106.7

109.5

109.8

121.2

134.5

147.5

155.7

Industrial Equipment

151.9

151.6

147.4

159.6

172.9

179.9

172.2

132.2

139.7

164.9

183.0

188.4

Transportation Equipment

141.6

132.9

161.1

181.7

198.2

190.2

147.2

76.4

111.7

133.2

169.8

208.6

31.6

22.6

25.1

22.0

20.6

26.8

25.7

20.7

20.0

19.6

22.7

24.7

32.7

31.7

40.8

48.2

51.6

42.1

36.8

23.1

25.4

32.6

41.1

46.6

356.6

343.0

346.7

351.8

384.1

438.2

464.2

369.6

314.9

298.4

309.2

349.5

142.8

133.8

137.1

135.9

144.2

158.6

152.8

107.0

78.2

73.3

79.3

99.9

Manufacturing

26.2

24.3

25.5

29.9

33.0

39.0

48.5

52.2

35.7

28.0

28.8

38.0

Power & Communication

60.5

55.7

46.2

45.2

48.7

67.8

74.0

75.8

73.2

71.8

70.5

70.1

Mining & Petroleum

52.6

60.0

69.9

77.1

88.3

93.6

99.7

64.3

74.9

75.0

75.0

78.0

Other

68.9

66.5

67.4

63.7

69.6

80.3

90.4

73.5

53.4

50.2

55.9

62.4

613.9

664.3

729.5

775.0

718.2

584.2

444.2

342.7

328.8

346.5

452.8

533.5

Exports

1099.2

1116.8

1222.8

1305.1

1422.1

1554.4

1647.7

1490.7

1667.4

1793.0

1922.3

2089.6

Imports

1648.0

1720.7

1910.8

2027.8

2151.2

2209.3

2151.8

1853.8

2080.3

2201.8

2314.8

2422.7

779.5

831.1

865.0

876.3

894.9

906.1

971.8

1027.6

1067.0

1059.4

1020.5

992.1

1500.7

1499.7

1497.1

1493.6

1507.2

1528.1

1532.6

1518.8

1500.8

1508.6

1510.3

1526.2

Durables

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Aircraft Other Equipment Structures Commercial & Health

Residential Fixed Investment

Federal Government State & Local Government

Institute for Economic Competitiveness

21

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

Table 3. Quarterly Summary of the Forecast of the U.S. 2009Q4

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

Real GDP Nominal GDP

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

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

5.0 2.1 0.9 -1.1 3.1 0.5 -1.4 14.6 22.4 80.7 20.3 -3.0 15.4 -47.1 -16.4 -29.2 -34.8 -41.8 -19.3 -10.4 -37.5 -0.8 24.4 4.9 0.0 -2.3

2010Q1

3.7 1.1 1.9 8.8 4.2 0.1 7.8 20.5 8.4 4.9 2.9 0.2 130.0 -4.3 12.2 -17.8 -28.5 -43.8 -33.7 93.4 -36.0 -12.3 11.4 11.2 1.9 -3.8

2010Q2

1.6 1.0 2.0 6.9 2.1 1.2 17.6 24.9 15.1 44.9 10.0 44.6 70.6 8.8 13.4 0.4 -15.6 -7.9 -3.0 44.6 -15.0 27.1 9.2 32.4 9.0 1.2

2010Q3

1.2 0.5 1.7 4.7 0.9 1.6 5.4 10.5 8.6 19.3 0.7 -1.1 52.8 187.4 44.0 -7.1 -31.5 -48.2 65.0 2.6 -21.0 -32.2 7.3 8.6 1.6 -0.1

2010Q4

1.7 2.9 1.8 4.3 2.5 1.1 2.1 6.2 6.1 12.3 10.9 27.6 -22.0 -71.3 0.6 -8.4 -7.8 -26.3 -10.3 0.9 -8.2 -4.8 9.3 -2.2 -1.1 0.9

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

Composition of Real GDP, Percent Change, Annual Rate 2.2 1.9 2.5 3.6 2.9 2.9 3.2 2.5 2.0 2.4 3.4 2.8 3.0 2.9 2.4 1.7 2.4 3.0 1.7 2.2 1.9 9.9 2.8 8.6 10.3 7.7 5.6 3.8 1.3 1.6 1.9 2.2 1.2 1.8 1.8 1.6 1.6 1.7 2.1 1.0 1.7 1.6 5.7 9.8 8.7 8.4 7.1 6.1 5.9 11.2 10.9 9.0 7.9 10.9 9.3 8.4 6.0 6.3 5.8 6.0 6.0 5.6 4.5 13.8 13.4 13.8 15.1 14.4 15.3 14.8 13.2 13.6 12.4 12.7 12.2 5.9 4.8 21.2 16.2 13.4 12.2 11.8 9.7 8.4 26.1 31.8 19.8 10.6 40.9 30.3 29.5 14.2 15.3 8.8 16.5 18.8 21.9 12.6 68.2 16.4 33.0 6.1 49.4 24.8 19.9 -3.8 -7.2 -3.1 -1.0 6.4 6.9 8.4 -2.6 3.9 4.9 7.1 5.8 3.6 16.5 -17.5 -16.3 -6.2 -7.2 1.4 15.0 8.7 -12.7 -7.9 -7.3 -0.5 4.1 -5.8 -0.9 10.1 -15.5 -9.6 -9.1 3.3 15.5 5.7 -4.7 -0.1 5.0 3.3 18.9 15.4 13.7 22.7 18.1 36.3 36.4 36.1 26.3 6.5 6.9 7.0 7.2 6.2 7.8 7.1 7.3 5.1 6.2 6.3 3.8 5.2 5.6 4.8 -1.7 -2.1 -1.9 -2.8 -5.0 -4.6 -3.6 1.0 0.5 -0.5 -0.3 0.0 0.2 0.6

2012Q4

3.3 3.3 2.3 5.5 1.7 2.0 9.3 8.2 5.1 17.0 4.9 4.5 27.6 11.4 16.2 12.8 29.9 40.6 -1.3 -0.8 12.0 19.4 8.3 5.1 -3.3 1.2

2013Q1

2.9 3.0 1.4 6.7 0.5 0.9 10.0 8.0 6.5 18.7 5.4 0.9 25.0 6.1 10.9 16.5 33.6 46.8 -2.3 8.0 11.3 15.9 9.7 4.7 -2.6 1.2

2013Q2

3.3 3.4 1.9 6.2 0.9 1.6 9.5 7.6 7.7 17.5 5.4 0.4 16.2 5.6 12.2 15.8 28.1 36.9 1.2 8.5 11.5 16.5 9.1 4.1 -2.2 1.1

2013Q3

3.2 3.0 1.6 2.0 1.3 1.7 9.1 8.4 8.7 16.6 6.8 0.7 17.7 7.2 9.5 11.3 23.8 23.6 2.1 -1.5 9.9 10.4 9.2 4.4 -2.0 1.2

2013Q4

3.0 2.9 1.6 0.9 1.3 1.9 8.7 8.0 8.5 15.7 7.1 2.0 14.2 7.7 6.6 10.6 26.2 20.5 5.6 -10.7 9.5 10.3 8.3 4.3 -1.5 1.4

Billions of Dollars 13019.0 13138.8 13191.5 13230.1 13286.3 13357.1 13420.5 13503.9 13623.1 13719.8 13819.8 13927.4 14040.7 14141.5 14257.5 14368.7 14474.2 14277.3 14446.4 14575 14678.6 14753.3 14911.7 15018.8 15152.3 15327.7 15496.7 15650.7 15824.6 16012.4 16200.5 16392.1 16580.3 16769.7

-0.2 2.6 1.5 6.2 1.5

1.0 1.5 0.0 8.5 2.6

1.9 -0.7 0.9 -0.2 1.8

1.7 1.7 1.6 0.9 1.8

0.3 1.5 0.8 2.1 2.0

Prices & Wages, Percent Change, Annual Rate 2.2 1.0 1.1 1.1 1.6 1.1 2.0 1.1 1.5 1.7 1.9 1.6 1.1 1.1 1.1 1.3 1.6 1.7 1.2 -1.0 2.3 2.2 1.5 0.3 2.2 1.7 1.7 1.8 2.2 1.8

1.3 1.8 1.7 2.0 2.0

1.5 2.0 1.8 2.4 2.0

1.8 2.0 1.8 1.6 2.2

1.4 1.8 1.8 0.8 2.2

1.5 1.8 1.9 1.1 2.1

1.6 2.0 1.9 2.0 2.3

Other Key Measures 76.0 78.8 77.9 75.7 75.3 79.5 81.2 84.0 85.6 87.6 88.6 89.6 90.5 91.5 92.5 93.3 94.1 6.0 3.9 -1.8 0.6 1.8 1.3 0.6 0.9 1.6 0.6 0.7 0.9 1.0 0.8 1.2 1.2 1.2 7.0 7.1 6.7 5.1 0.5 1.9 2.2 2.9 3.4 3.1 3.3 3.6 3.5 3.9 4.4 4.5 4.2 72.4 72.7 73.3 74.0 74.5 74.9 75.3 75.9 76.4 76.9 77.4 77.9 78.2 68.8 70.0 71.4 72.2 -43.0 36.5 53.4 77.8 42.1 31.5 29.7 34.7 41.6 45.3 44.9 54.7 56.2 53.7 51.3 57.6 59.9 70.2 73.9 73.9 67.1 69.1 70.2 71.7 72.9 75.3 75.2 74.8 74.4 75.0 76.0 77.7 79.1 79.4 10.774 10.980 11.337 11.448 11.446 11.989 12.290 12.770 13.368 13.982 14.317 14.539 14.921 15.516 16.007 16.226 16.314 0.565 0.617 0.601 0.549 0.575 0.630 0.713 0.813 0.924 1.051 1.160 1.273 1.329 1.395 1.476 1.526 1.555 5.233 4.497 4.887 3.521 3.903 3.973 4.036 4.040 4.159 4.363 4.519 4.826 4.890 4.940 4.991 5.105 5.265 10.0 9.7 9.7 9.7 9.9 9.9 9.8 9.8 9.6 9.5 9.3 9.1 8.9 8.8 8.5 8.3 8.2 2.4 2.2 2.3 2.2 1.9 -1.3 0.2 2.2 -0.5 0.1 0.6 1.1 1.5 2.2 2.3 2.3 2.4 -1310 -1314 -1325 -1335 -1343 -1213 -1195 -1136 -1110 -1006 -1000 -986 -967 -823 -769 -736 -740 -404 -436 -491 -509 -478 -459 -461 -476 -482 -483 -495 -518 -532 -553 -558 -555 -559

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

0.12 0.06 0.35 2.30 3.46 4.33 4.90 1089 42.4 0.869 -12.6

0.13 0.11 0.37 2.42 3.72 4.62 5.00 1122 12.6 0.892 11.3

0.19 0.15 0.38 2.25 3.49 4.37 4.91 1135 5.0 0.925 15.6

0.18 0.14 0.24 1.54 2.75 3.81 4.46 1090 -14.9 0.906 -8.1

0.12 0.17 0.31 1.70 2.83 3.79 4.49 1091 0.1 0.907 0.4

0.11 0.18 0.33 1.70 2.70 3.60 4.46 1085 -2.1 0.916 3.8

0.11 0.19 0.35 1.72 2.73 3.64 4.47 1082 -1.2 0.924 3.8

Financial Markets, NSA 0.19 0.49 1.07 0.32 0.60 1.14 0.50 0.82 1.42 1.85 2.13 2.55 2.87 3.13 3.49 3.77 3.98 4.26 4.55 4.74 5.02 1090 1098 1091 3.0 3.0 -2.5 0.922 0.916 0.910 -0.9 -2.8 -2.5

1.91 1.88 2.18 3.07 3.75 4.49 5.27 1074 -6.2 0.911 0.5

2.66 2.66 2.92 3.68 4.09 4.52 5.69 1071 -0.9 0.912 0.5

3.01 3.03 3.21 3.97 4.34 4.67 6.00 1108 14.3 0.912 -0.3

2.94 2.99 3.10 4.00 4.46 4.87 6.11 1188 32.1 0.909 -0.9

2.86 2.88 3.00 4.01 4.51 4.95 6.03 1275 32.9 0.907 -1.0

2.86 2.89 3.07 4.09 4.60 5.03 6.03 1343 22.9 0.905 -1.1

2.99 3.01 3.22 4.23 4.73 5.14 6.13 1382 12.1 0.902 -1.1

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)

12239 2.5 11122 2.7 10080 0.0 5.6 1229 48.5

12350 3.7 11216 3.4 10113 1.3 5.5 1370 54.1

12471 4.0 11335 4.3 10222 4.4 6.1 1372 0.6

12556 2.7 11406 2.5 10256 1.3 6.0 1331 -11.5

12649 3.0 11488 2.9 10295 1.5 6.0 1345 4.5

12732 2.6 11532 1.5 10286 -0.3 5.4 1315 -8.8

12824 2.9 11621 3.1 10337 2.0 5.5 1320 1.8

12928 3.3 11713 3.2 10387 1.9 5.4 1343 7.0

Incomes 13052 13182 3.9 4.1 11830 11832 4.0 0.1 10455 10416 2.7 -1.5 5.3 4.5 1361 1375 5.4 4.3

13337 4.8 11967 4.6 10500 3.3 4.8 1375 0.0

13497 4.9 12093 4.3 10572 2.8 4.9 1385 3.0

13661 5.0 12221 4.3 10641 2.7 5.0 1393 2.5

13778 3.5 12224 0.1 10598 -1.6 4.2 1357 -10.0

13941 4.8 12310 2.9 10630 1.2 4.0 1362 1.3

14108 4.9 12425 3.8 10687 2.2 4.1 1369 2.3

14280 5.0 12577 5.0 10772 3.2 4.5 1371 0.6

22

U.S. Forecast | September 2010

U . S . F o r eca s t Tab l e s Table 4. Quarterly Gross Domestic Product 2009Q4

Table 4. Quarterly Gross Domestic Product 2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

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

13019.0 13138.8 13191.5 13230.1 13286.3 13357.1 13420.5 13503.9 13623.1 13719.8 13819.8 13927.4 14040.7 14141.5 14257.5 14368.7 14474.2 13051.1 13085.5 13117.6 13134.2 13228.3 13311.6 13378.9 13457.5 13569.9 13662.9 13763.1 13861.1 13972.7 14075.9 14194.1 14299.0 14402.1 9182.9

9225.4

9270.3

9310.4

9351.0

9405.8

9445.3

9501.8

9571.4

9611.9

9663.8

9709.4

9764.2

9798.9

9845.6

9885.5

9925.5

Durables

1115.1

1138.9

1158.0

1171.3

1183.8

1212.1

1220.4

1245.8

1276.6

1300.4

1318.3

1330.6

1348.4

1370.4

1391.2

1398.1

1401.1

Nondurables

2032.3

2053.5

2064.1

2068.6

2081.6

2088.6

2096.7

2106.5

2117.9

2124.1

2133.8

2143.3

2152.5

2154.9

2159.8

2167.0

2174.2

Services

6028.7

6029.6

6047.3

6071.1

6087.7

6111.7

6135.4

6160.7

6193.1

6207.8

6234.8

6260.2

6290.7

6305.4

6330.3

6356.5

6385.8

1278.3

1302.6

1356.5

1374.5

1381.8

1405.7

1426.6

1447.3

1467.5

1502.3

1534.0

1565.3

1600.5

1639.1

1676.8

1713.7

1749.8

944.7

989.7

1046.3

1072.6

1088.8

1118.0

1147.4

1172.4

1194.9

1226.2

1253.7

1279.3

1304.8

1330.3

1354.8

1382.4

1409.4

632.9

645.7

668.8

682.8

693.0

703.2

714.0

724.1

734.7

745.5

755.7

764.1

773.6

785.9

800.6

817.5

834.4

Computers & Peripherals

142.5

144.2

158.2

165.4

170.2

175.8

181.4

187.4

194.1

200.7

208.0

215.3

223.9

233.7

243.3

252.9

262.2

Communications Equipment

117.3

118.2

121.0

121.2

124.4

128.3

132.5

136.4

140.6

144.7

146.7

148.5

150.3

152.3

154.3

156.8

159.5

128.3

128.4

140.8

140.4

149.2

156.6

162.6

167.7

172.6

177.5

181.7

185.4

187.4

187.9

188.1

188.4

189.3

78.8

97.0

110.8

123.2

115.8

122.7

131.5

137.6

141.1

153.7

164.2

175.2

186.2

196.9

204.4

212.9

220.1

Nonresidential Fixed Investment Equipment & Software Information Processing Equipment

Industrial Equipment Transportation Equipment Aircraft Other Equipment Structures

18.8

18.5

18.9

24.7

18.0

18.7

19.3

19.7

20.5

21.4

22.5

23.2

23.8

24.2

24.5

24.9

25.4

23.0

23.6

24.4

26.7

26.8

30.5

31.6

34.0

34.5

38.1

40.3

42.2

43.8

44.9

46.2

47.3

48.1

335.3

319.3

319.6

313.8

307.0

304.0

298.4

296.0

295.3

299.9

305.0

311.2

320.7

333.2

345.7

355.1

364.2

Commercial & Health

92.3

84.9

81.3

74.0

72.5

72.0

72.7

73.6

74.9

75.9

76.6

79.6

85.0

91.4

97.2

102.5

108.6

Manufacturing

46.1

39.9

39.1

33.2

30.7

29.3

28.0

27.6

27.1

27.2

28.1

28.7

31.3

34.4

37.2

39.3

41.1

Power & Communication

77.1

69.6

69.0

78.2

76.1

73.6

72.1

70.8

70.7

71.4

70.3

70.2

69.9

69.5

69.7

70.1

71.1

Mining & Petroleum

59.0

69.6

76.3

76.8

76.9

78.8

75.5

73.7

71.9

72.5

75.2

76.2

76.1

77.5

79.1

78.8

76.6

Other

63.7

57.0

54.7

51.5

50.5

49.8

49.8

50.4

50.9

53.1

55.1

56.8

58.5

60.1

61.7

63.2

64.6

341.7

330.7

351.1

318.6

314.7

319.7

336.5

350.8

379.0

409.6

442.3

469.0

490.3

508.6

528.5

541.7

555.1

Exports

Residential Fixed Investment

1573.5

1616.4

1652.2

1681.5

1719.4

1748.3

1778.0

1809.1

1836.6

1871.5

1903.8

1937.6

1976.4

2022.5

2067.1

2113.1

2155.9

Imports

1903.6

1954.8

2097.0

2140.6

2128.9

2155.4

2188.0

2221.6

2242.2

2270.7

2301.6

2328.9

2358.1

2385.1

2409.2

2435.3

2461.2

Federal Government

1043.6

1048.4

1071.3

1075.5

1072.6

1068.1

1062.3

1057.3

1049.9

1036.5

1024.3

1014.9

1006.4

999.7

994.1

989.2

985.4

State & Local Government

1511.2

1496.8

1501.1

1500.9

1504.4

1508.3

1510.3

1508.3

1507.4

1507.5

1508.1

1510.6

1514.9

1519.3

1523.6

1528.3

1533.5

Institute for Economic Competitiveness

23

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

Table 5. Annual Employment History 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

Millions Total Nonfarm Employment

130.340 129.996 131.419 133.694 136.086 137.588 136.777 130.911

130.151 131.170

133.94

136.97

Private Nonfarm

108.831 108.416 109.801 111.890 114.114 115.371 114.272 108.360

107.640 108.858

111.59

114.43

Mining

0.512

0.503

0.523

0.562

0.620

0.663

0.709

0.650

0.674

0.666

0.65

0.64

Construction

6.715

6.736

6.973

7.333

7.692

7.630

7.161

6.036

5.588

5.426

5.57

6.07

Manufacturing

15.257

14.508

14.315

14.225

14.157

13.877

13.401

11.884

11.655

11.910

12.26

12.59

Trade, Transportation and Utilities

25.500

25.287

25.536

25.960

26.275

26.625

26.292

24.949

24.713

24.785

25.49

26.12

Transportation & Warehousing

4.224

4.184

4.250

4.363

4.469

4.540

4.507

4.234

4.165

4.296

4.55

4.76

Financial Activities

7.848

7.976

8.031

8.153

8.328

8.300

8.143

7.758

7.563

7.585

7.74

7.86

Education & Health

16.201

16.588

16.950

17.370

17.824

18.321

18.840

19.187

19.555

19.888

20.28

20.51

Professional & Business Services

15.975

15.985

16.388

16.952

17.570

17.944

17.735

16.575

16.697

17.374

18.17

19.02

3.394

3.189

3.117

3.061

3.038

3.031

2.984

2.807

2.720

2.768

2.86

2.91

Leisure & Hospitality

11.986

12.175

12.492

12.813

13.108

13.425

13.437

13.100

13.089

13.013

13.10

13.23

Government

21.509

21.580

21.618

21.804

21.971

22.218

22.504

22.551

22.511

22.312

22.35

22.55

2.766

2.760

2.731

2.732

2.733

2.734

2.762

2.827

2.959

2.818

2.77

2.73

18.744

18.820

18.887

19.073

19.239

19.484

19.743

19.724

19.552

19.494

19.59

19.82

-4.29

-0.57

0.78

2.11

2.26

Information

Federal State & Local

Growth Rates Total Nonfarm Employment

-1.13

-0.26

1.09

1.73

1.79

1.10

-0.59

Private Nonfarm

-1.69

-0.38

1.28

Mining

-4.01

-0.23

5.16

1.90

1.99

1.10

-0.95

-5.17

-0.65

1.13

2.51

2.54

9.36

10.01

5.76

6.57

-12.64

10.48

-5.01

-1.96

-1.86

Construction

-1.32

1.53

4.31

5.81

2.38

-1.94

-9.36

-15.92

-3.37

-2.05

5.86

9.72

Manufacturing

-5.35

-4.46

-0.05

-0.84

-1.07

-2.08

-5.45

-10.86

1.39

2.88

2.73

2.39

Trade, Transportation and Utilities

-1.07

-0.57

1.52

1.64

1.12

1.16

-3.34

-4.36

0.20

1.10

3.10

2.14

Transportation & Warehousing

-0.89

-1.00

2.58

2.48

2.54

0.96

-2.68

-5.75

0.19

5.10

5.51

4.14

Financial Activities

0.71

1.25

0.95

2.13

1.35

-1.29

-2.48

-4.61

-2.63

2.29

2.28

1.17

Education & Health

3.17

2.12

2.36

2.51

2.64

2.89

2.56

1.68

2.05

1.82

1.56

0.98

Professional & Business Services

-1.27

1.08

2.99

3.74

3.07

1.61

-3.67

-5.17

2.59

4.99

4.49

4.59

Information

-6.12

-5.02

-2.04

-1.07

-0.96

-0.02

-3.05

-5.80

-1.73

3.03

3.26

0.80

Leisure & Hospitality

0.93

1.59

2.59

2.15

2.83

2.11

-1.65

-2.06

0.82

-1.11

1.37

0.73

Government

1.21

-0.14

0.62

0.81

1.02

1.17

1.02

-0.26

-0.65

-0.19

0.49

1.07

Federal

0.83

-1.55

-0.37

0.34

-0.23

0.53

1.18

2.15

4.17

-1.06

-2.11

-1.12

State & Local

1.27

0.08

0.77

0.88

1.20

1.26

1.00

-0.59

-0.86

-0.06

0.87

1.38

24

U.S. Forecast | September 2010

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

Table 6. Quarterly Employment

2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

Employment (Millions) Total Nonfarm Employment

129.6 129.7 130.4 130.2 130.3 130.5 130.8 131.3 132.0 132.8 133.5 134.3 135.1 135.9 136.6 137.4 138.0

Private Nonfarm

107.1 107.2 107.6 107.8 107.9 108.1 108.5 109.0 109.7 110.5 111.2 112.0 112.7 113.4 114.1 114.8 115.4

Mining

0.6

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.6

0.6

0.6

0.6

0.6

0.6

0.6

Construction

5.7

5.6

5.6

5.6

5.5

5.5

5.4

5.4

5.4

5.4

5.5

5.6

5.7

5.9

6.0

6.1

6.3

Manufacturing

11.6

11.6

11.7

11.7

11.7

11.8

11.9

12.0

12.1

12.1

12.2

12.3

12.4

12.5

12.6

12.6

12.7

Trade, Transportation and Utilities

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.8

25.0

25.2

25.4

25.6

25.8

25.9

26.1

26.2

26.3

4.2

4.1

4.2

4.2

4.2

4.2

4.3

4.3

4.4

4.5

4.5

4.6

4.6

4.7

4.7

4.8

4.8

Transportation & Warehousing Financial Activities

7.7

7.6

7.6

7.6

7.5

7.5

7.6

7.6

7.6

7.7

7.7

7.8

7.8

7.8

7.8

7.9

7.9

Education & Health

19.3

19.4

19.5

19.6

19.7

19.7

19.8

19.9

20.1

20.2

20.2

20.3

20.4

20.4

20.5

20.6

20.6

Professional & Business Services

16.4

16.5

16.7

16.7

16.9

17.1

17.3

17.5

17.7

17.9

18.0

18.3

18.5

18.7

18.9

19.1

19.3

2.8

2.7

2.7

2.7

2.7

2.7

2.8

2.8

2.8

2.8

2.9

2.9

2.9

2.9

2.9

2.9

2.9

Leisure & Hospitality

13.0

13.0

13.1

13.1

13.1

13.0

13.0

13.0

13.0

13.0

13.1

13.1

13.2

13.2

13.2

13.2

13.3

Government

22.5

22.5

22.8

22.5

22.3

22.3

22.3

22.3

22.3

22.3

22.3

22.4

22.4

22.5

22.5

22.6

22.6

Information

Federal State & Local

2.8

2.9

3.2

2.9

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.7

2.7

2.7

2.7

2.7

19.7

19.6

19.6

19.5

19.5

19.5

19.5

19.5

19.5

19.5

19.6

19.6

19.7

19.7

19.8

19.8

19.9

Growth Rates Total Nonfarm Employment

-1.35

0.18

2.14

-0.46

0.10

0.64

1.08

1.48

2.21

2.2

2.3

2.4

2.4

2.2

2.2

2.2

1.9

Private Nonfarm

-1.62

0.30

1.57

0.50

0.59

0.79

1.31

2.00

2.57

2.6

2.6

2.8

2.7

2.5

2.5

2.4

2.0

0.71

-6.58

-6.75

-4.18

-2.97

-3.1

-3.3

-0.9

-0.6

-1.8

-1.5

-1.7

-2.5

-4.91

-5.15

-3.09

-0.13

0.02

2.0

5.3

6.9

8.7

9.3

9.5

9.5

9.3

Mining Construction

-2.73 11.95 15.28 11.98 -10.72

-7.97

0.05

-0.96

Manufacturing

-4.47

0.65

2.88

0.67

1.31

2.16

2.57

3.54

3.14

2.7

3.4

2.2

2.5

3.1

2.9

1.8

1.7

Trade, Transportation and Utilities

-2.24

0.25

0.96

-0.48

0.06

-0.40

-0.09

1.51

3.33

3.6

3.3

2.8

2.5

2.4

2.2

2.2

1.6

Transportation & Warehousing

-1.86

-2.97

2.21

1.28

0.24

2.41

5.56

6.10

6.32

6.7

5.6

5.1

4.6

4.7

4.1

4.2

3.5

Financial Activities

-1.89

-1.99

-1.18

-1.71

-5.62

4.23

1.88

1.51

1.56

2.3

2.1

3.0

1.6

0.9

1.0

1.6

1.2

Education & Health

2.03

1.90

2.02

1.98

2.31

0.29

1.93

2.30

2.78

1.8

1.8

1.4

1.3

0.4

1.8

1.2

0.5

Professional & Business Services

1.55

2.72

2.87

1.01

3.75

4.61

4.89

5.24

5.23

3.8

3.7

5.2

5.2

4.3

4.6

4.7

4.7

Information

-2.57

-3.43

-2.37

-1.61

0.50

3.72

3.46

2.24

2.69

5.7

3.8

2.5

1.2

1.9

0.8

0.5

0.0

Leisure & Hospitality

-2.25

0.18

1.82

0.99

0.27

-2.47

-0.42

-0.99

-0.58

1.8

1.3

1.1

1.3

1.6

0.3

0.4

0.6

Government

-0.05

-0.38

4.95

-4.91

-2.24

-0.04

-0.07

-1.08

0.44

0.2

0.4

0.6

0.7

0.9

1.0

1.1

1.3

6.46 50.61 -27.85 -12.53

-1.37

-1.73

-0.32

-0.80

-2.6

-2.6

-1.7

-1.5

-1.3

-1.2

-1.2

-0.8

0.15

0.18

-1.19

0.62

0.6

0.8

1.0

1.1

1.2

1.3

1.4

1.6

Federal State & Local

2.10 -0.36

-1.34

-0.75

-0.71

-0.62

Institute for Economic Competitiveness

25

U . S . F o r eca s t Tab l e s Table 7. Quarterly Implicit Price Deflators (2000=100)

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

2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP

109.7 110.0 110.5 110.9 111.0 111.6 111.9 112.2 112.5 113.0 113.2 113.6 114.0 114.6 115.0 115.4 115.9

Consumption

110.3 110.9 110.9 111.2 111.6 112.1 112.4 112.8 113.1 113.6 114.0 114.4 114.8 115.3 115.8 116.3 116.8

Durables Motor Vehicles Furniture

93.6

93.1

92.8

92.1

91.5

91.1

90.7

90.4

90.0

89.8

89.5

89.2

89.0

88.8

88.6

88.4

88.3

101.3 102.4 103.0 103.7 103.8 104.0 104.2 104.3 104.5 104.8 104.9 105.2 105.4 105.7 105.9 106.1 106.4 96.1

95.3

94.3

92.9

92.2

91.8

91.5

91.1

90.8

90.5

90.4

90.2

90.1

89.9

89.8

89.8

89.7

Other Durables

112.5 111.2 111.6 110.7 110.9 111.0 111.2 111.5 111.7 112.1 112.4 112.8 113.2 113.6 114.0 114.4 114.9

Nondurables

111.7 112.9 111.6 112.3 113.1 114.3 114.8 115.4 115.8 116.5 116.9 117.3 117.8 118.3 118.9 119.4 120.0

Food

113.0 113.5 113.9 114.1 115.1 115.8 116.0 116.1 116.3 116.5 116.6 116.8 117.1 117.5 117.9 118.3 118.8

Clothing & Shoes

98.8

98.5

97.4

98.7

98.4

98.2

98.0

97.9

97.8

97.8

97.7

97.7

97.7

97.8

97.8

97.8

97.9

Gasoline & Oil

121.2 127.8 117.8 120.4 123.4 129.2 130.8 133.5 135.3 137.9 138.9 139.8 140.9 142.0 142.9 143.7 144.6

Fuel

124.6 133.9 133.3 130.1 130.2 132.9 133.8 135.3 137.2 139.3 140.7 142.1 143.6 144.5 145.5 146.3 147.2

Services

113.1 113.6 114.1 114.5 115.0 115.4 115.8 116.2 116.7 117.2 117.7 118.3 118.9 119.5 120.1 120.7 121.3

Housing

112.4 112.3 112.2 112.4 112.5 112.5 112.7 112.9 113.3 113.8 114.3 114.9 115.5 116.1 116.7 117.3 117.9

Electricity

128.1 127.5 128.7 127.5 127.4 127.9 128.0 127.9 128.4 129.3 130.2 130.7 131.5 132.4 133.2 133.7 134.1

Natural Gas

87.4

92.3

88.6

91.7

91.8

87.6

82.3

83.2

86.4

87.9

86.0

88.4

92.4

94.3

93.1

91.8

92.9

Water & Sewer

126.9 129.2 131.3 133.0 134.0 134.6 135.3 136.3 137.2 138.3 139.2 140.2 141.2 142.2 143.3 144.3 145.4

Telephone

105.8 105.4 105.2 105.4 104.9 104.5 103.8 103.5 103.0 102.6 102.1 101.8 101.3 100.9 100.4 100.1

Transportation

116.7 117.5 118.2 118.7 118.9 119.5 119.9 120.3 120.7 121.3 121.8 122.3 122.9 123.4 123.9 124.4 125.0

Other Services

117.0 118.0 119.2 119.8 120.7 121.7 122.6 123.3 123.8 124.3 124.9 125.5 126.0 126.6 127.2 127.9 128.5

26

U.S. Forecast | September 2010

99.6

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

Deflators Table Percent

Change in Implicit Price Deflators

2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP

-0.2

1.0

1.9

1.7

0.3

2.2

1.0

1.1

1.1

1.6

1.1

1.3

1.5

1.8

1.4

1.5

1.6

Consumption

2.7

2.1

0.0

1.2

1.3

1.9

1.1

1.2

1.3

1.6

1.3

1.5

1.6

1.7

1.6

1.6

1.7

Durables

0.7

-2.0

-1.6

-3.0

-2.4

-1.7

-1.6

-1.6

-1.4

-1.2

-1.2

-1.1

-1.0

-0.9

-0.8

-0.8

-0.7

Motor Vehicles

9.9

4.2

2.6

2.6

0.2

1.0

0.7

0.5

0.8

0.9

0.7

0.9

0.9

0.9

0.9

0.9

1.1

-5.0

-3.4

-4.1

-5.9

-3.0

-1.5

-1.6

-1.6

-1.4

-1.1

-0.8

-0.7

-0.6

-0.5

-0.4

-0.4

-0.3

Other Durables

5.4

-4.5

1.4

-3.0

0.6

0.4

0.7

0.8

1.0

1.2

1.3

1.3

1.4

1.5

1.6

1.5

1.5

Nondurables

3.8

4.7

-4.6

2.4

2.7

4.5

1.7

2.0

1.7

2.2

1.3

1.4

1.7

1.8

1.8

1.8

1.9

Food

-0.1

1.8

1.6

0.6

3.6

2.5

0.6

0.5

0.6

0.5

0.5

0.6

1.0

1.4

1.4

1.4

1.6

Clothing & Shoes

-1.8

-1.3

-4.1

5.4

-1.5

-0.6

-0.8

-0.5

-0.4

-0.1

-0.2

-0.1

0.0

0.2

0.2

0.2

0.2

Gasoline & Oil

25.8

23.8

-27.9

9.2

10.4

20.2

4.9

8.5

5.5

8.1

2.7

2.7

3.4

3.0

2.6

2.2

2.7

Fuel

39.8

33.6

-2.0

-9.2

0.4

8.6

2.7

4.5

5.8

6.3

4.1

3.9

4.3

2.7

2.6

2.2

2.6

Furniture

Services

2.7

1.8

1.8

1.5

1.5

1.6

1.3

1.5

1.7

1.8

1.8

1.9

2.0

2.1

2.0

1.9

2.0

Housing

-0.5

-0.5

-0.2

0.7

0.2

0.3

0.5

0.9

1.3

1.7

1.9

2.0

2.0

2.0

2.1

2.1

2.1

Electricity

7.4

-1.7

3.9

-3.9

-0.3

1.5

0.3

-0.2

1.7

2.8

2.6

1.6

2.5

2.9

2.4

1.4

1.1

Natural Gas

0.4

24.6

-15.1

14.8

0.5

-17.2

-22.2

4.5

16.3

7.3

-8.3

11.6

19.1

8.7

-5.2

-5.6

5.3

Water & Sewer

6.1

7.4

6.7

5.1

2.9

1.8

2.3

2.8

2.9

3.0

2.9

2.8

2.9

2.9

3.1

3.0

3.0

-0.8

-1.8

-0.4

0.4

-1.6

-1.8

-2.6

-1.0

-1.8

-1.7

-1.7

-1.5

-1.8

-1.7

-1.7

-1.5

-1.7

Transportation

3.8

2.7

2.5

1.7

0.5

2.0

1.3

1.4

1.5

1.9

1.6

1.7

1.7

1.8

1.7

1.6

1.7

Other Services

5.1

3.6

4.1

2.0

3.2

3.1

3.2

2.1

1.8

1.6

1.7

2.0

1.8

1.9

1.9

2.0

2.0

Telephone

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

Implicit Price Deflators (2005=100) History

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

GDP

92.1

94.1

96.8

100.0

103.3

106.3

108.6

109.6

110.6

112.1

113.5

115.2

Consumption

92.7

94.6

97.1

100.0

102.7

105.6

109.1

109.3

111.2

112.6

114.2

116.0

Durables

106.7

102.9

101.0

100.0

98.5

96.7

95.3

93.8

92.4

90.6

89.4

88.5

Motor Vehicles

101.9

99.1

98.4

100.0

100.1

99.7

98.6

98.7

103.2

104.3

105.1

106.0

Furniture

104.1

101.2

99.9

100.0

99.5

98.7

98.0

97.7

93.7

91.3

90.3

89.8

Other Durables

103.3

101.6

101.4

100.0

101.9

105.9

109.7

111.2

111.1

111.4

112.6

114.2

Nondurables

90.9

92.8

96.1

100.0

103.2

106.5

112.5

109.3

112.5

115.1

117.1

119.1

Food

93.5

95.3

98.3

100.0

101.7

105.7

112.1

113.5

114.1

116.1

116.7

118.1

103.9

101.3

100.9

100.0

99.6

98.6

97.8

98.6

98.2

98.0

97.7

97.8

Gasoline & Oil

59.9

69.8

82.1

100.0

112.8

123.9

144.5

105.9

122.4

132.2

139.4

143.3

Fuel

53.1

64.2

74.7

100.0

114.1

123.3

167.2

114.7

131.9

134.8

141.4

145.9

Services

90.8

93.7

96.7

100.0

103.4

107.0

110.6

112.2

114.3

116.0

118.0

120.4

Housing

93.0

95.4

97.6

100.0

103.6

107.3

110.3

112.3

112.3

112.9

114.6

117.0

Electricity

90.3

92.5

94.2

99.9

112.0

116.7

124.1

127.9

127.8

128.0

130.4

133.4

Natural Gas

62.8

77.2

83.6

100.2

102.6

102.4

116.6

91.1

91.1

84.9

88.7

93.0

Water & Sewer

86.5

89.7

95.0

100.0

104.9

110.3

116.8

124.0

131.9

135.8

139.7

143.8

Clothing & Shoes

Telephone

102.7

102.3

100.7

100.0

100.6

102.4

104.1

105.7

105.2

103.7

101.9

100.3

Transportation

93.1

95.1

96.5

100.0

104.2

106.6

112.4

115.6

118.3

120.1

122.1

124.2

Other Services

87.0

91.2

95.4

100.0

104.1

107.4

112.4

115.2

119.4

122.9

125.2

127.6

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

GDP Consumption

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

1.8

2.1

3.2

3.5

2.9

2.6

2.1

0.5

1.2

1.3

1.4

1.6

2.0

1.9

3.0

3.3

1.9

3.5

1.8

1.5

1.1

1.4

1.5

1.7

Durables

-2.6

-4.0

-0.8

-1.2

-1.7

-1.7

-1.7

-1.0

-2.3

-1.6

-1.1

-0.8

Motor Vehicles

-0.7

-3.8

1.6

1.0

-0.6

0.5

-3.1

4.6

2.4

0.7

0.8

1.0

Furniture

-2.0

-3.1

-0.1

-0.4

-0.2

-1.6

0.3

-1.9

-4.1

-1.5

-0.8

-0.4

Other Durables

-2.3

-1.5

-0.1

0.0

3.3

2.9

3.7

1.6

-1.4

0.8

1.3

1.5

Nondurables

1.9

2.1

4.9

4.4

0.5

6.4

1.0

2.8

1.3

2.5

1.7

1.8

Food

0.8

3.2

2.7

1.5

1.7

4.8

6.9

-1.6

1.9

1.1

0.7

1.4

Clothing & Shoes

-1.9

-1.6

-0.5

-1.3

0.2

-1.2

-0.9

1.4

-0.4

-0.6

-0.1

0.2

Gasoline & Oil

19.8

19.4

28.8

31.8

-0.8

30.4

4.5

24.1

3.9

9.8

4.2

2.6

Fuel

7.2

21.3

41.6

32.8

-0.4

28.1

22.4

-0.5

5.7

5.4

4.7

2.5

Services

3.0

3.2

3.2

3.8

3.1

3.5

2.9

1.5

1.6

1.5

1.9

2.0

Housing

3.4

2.2

2.4

2.5

4.4

3.0

2.7

0.9

0.1

0.7

1.9

2.1

-2.2

3.2

1.8

10.2

8.6

5.3

8.3

-0.2

-0.5

0.8

2.4

2.0

Natural Gas

5.3

22.2

14.7

44.7

-18.3

3.5

19.1

-18.4

6.2

-4.7

7.4

0.8

Water & Sewer

3.1

4.6

5.9

5.0

4.9

5.2

6.7

6.0

5.5

2.5

2.9

3.0

Telephone

1.0

-1.7

-1.7

0.2

1.3

1.5

2.1

0.8

-0.8

-1.8

-1.7

-1.6

Transportation

1.3

2.6

1.4

4.9

2.5

3.4

5.9

1.9

1.8

1.6

1.7

1.7

Other Services

4.5

4.9

4.4

4.6

4.0

3.3

4.4

3.0

3.2

2.6

1.8

2.0

Electricity

Table 11. Personal Income and its Components Table 11.

2002

2003

Personal Income and its Components 2004

History 2005 2006

2007

2008

2009

2010

Forecast 2011 2012

2013

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

Personal Income Billions Current Dollars 9060.1 9378.2 9937.3 10485.9 11268.1 11912.3 12391.2 12174.9 12506.6 12883.9 13419.2 14026.8 6110.8 6382.6 6693.4 7065.1 7477.0 7855.9 8060.8 7811.7 7939.4 8208.4 8583.8 8999.9 747.4 845.6 874.6 931.6 960.2 980.5 1036.7 1072.0 1107.6 1151.5 1218.0 1282.8 871.9 894.1 984.1 1025.9 1103.6 1052.6 1051.2 981.5 1006.4 1056.6 1114.3 1165.2 18.5 36.5 49.7 43.9 29.4 37.8 50.9 30.5 40.8 44.8 42.3 41.1

Rental Income Dividends Interest Income Transfer Payments

218.8 204.2 198.4 397.7 423.1 548.3 911.9 889.8 860.2 1282.2 1341.8 1415.5

178.2 555.0 987.0 1508.6

146.5 702.2 1127.5 1605.0

143.7 791.9 1265.1 1718.5

222.0 794.6 1314.7 1879.3

274.0 697.5 1222.3 2132.9

303.4 710.4 1199.4 2304.6

290.6 769.7 1176.0 2375.5

244.2 824.3 1282.9 2423.9

185.0 855.1 1472.7 2490.1

499.6

517.1

Personal Social Insurance Tax

385.3

396.5

419.2

445.2

475.1

509.7

522.1

542.5

578.7

638.5

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

2.0 2.2 11.7 3.8 -38.8 -13.1

3.5 4.4 13.2 2.5 113.5 14.9

6.0 4.9 3.5 10.1 38.7 -9.4

5.5 5.6 6.5 4.3 -11.1 -10.9

Percent Change, Annual Rate 7.5 5.7 4.0 -1.7 5.8 5.1 2.6 -3.1 3.1 2.1 5.7 3.4 7.6 -4.6 -0.1 -6.6 -32.7 28.3 38.1 -37.8 -23.8 32.7 58.7 7.8

2.7 1.6 3.3 2.6 34.7 10.4

3.0 3.4 4.0 5.0 11.4 -10.6

4.2 4.6 5.8 5.5 -5.6 -20.7

4.5 4.8 5.3 4.6 -2.8 -23.4

Dividends Interest Income Transfer Payments

7.6 -6.5 5.7

14.0 -2.2 4.5

43.3 0.2 6.0

-0.6 19.4 6.3

26.8 10.9 6.7

7.6 13.7 7.6

-3.8 -1.3 10.4

-11.2 -6.8 15.0

6.0 -1.5 7.6

9.7 0.0 1.3

5.8 14.5 2.8

2.6 13.7 2.8

3.2

4.2

6.1

5.9

6.7

5.2

1.9

-0.6

2.9

4.0

7.4

10.7

Personal Social Insurance Tax

28

U.S. Forecast | September 2010

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)

2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 Consumer Expenditures by Type Billions Current Dollars

Consumer spending on… all goods & services durable goods furniture and appliances information processing equipment motor vehicles and parts other durable goods

10131.5 10230.8 10279.6 10355.0 10434.8 10545.3 10618.9 10715.4 10829.7 10918.5 11014.0 11106.9 11214.1 11302.0 11401.9 11492.9 11588.3 1043.9

1060.7

1074.2

1078.2

1083.1

1104.3

1107.3

1125.7

1149.4

1167.2

1179.7

1187.4

1200.3

1217.1

1233.0

1236.5

1236.8

249.3

255.3

258.1

254.0

252.4

251.8

248.6

250.3

251.2

253.4

256.3

259.8

263.2

266.3

268.8

268.9

269.2

66.5

69.0

70.2

71.8

72.4

72.5

73.3

74.0

75.0

75.4

76.3

77.3

78.4

78.9

79.9

81.1

82.2

327.0

328.3

336.2

340.3

343.9

362.6

366.4

379.8

398.1

411.9

418.0

419.4

424.8

435.0

444.3

445.2

443.2

99.1

102.5

102.3

102.8

103.7

104.5

105.1

105.8

106.9

106.8

106.9

107.1

107.5

107.9

108.3

108.5

108.6

2269.0

2319.3

2304.1

2323.2

2353.4

2387.7

2407.2

2430.1

2453.5

2474.1

2493.7

2513.8

2535.5

2550.0

2567.3

2587.2

2608.2

325.5

333.8

335.4

338.8

341.5

340.3

340.3

341.1

343.2

341.5

342.8

344.4

346.3

344.7

345.7

348.3

351.2

24.9

26.5

24.8

24.9

25.4

25.8

25.8

26.0

26.4

26.8

27.0

27.3

27.5

27.7

27.9

28.1

28.3

gasoline & motor oil

319.2

337.6

316.5

324.8

332.8

347.6

350.8

358.2

363.3

369.6

371.6

374.6

378.2

380.0

381.0

382.6

384.5

food

786.5

797.4

793.9

794.0

805.4

816.1

824.3

832.1

839.7

846.9

854.0

861.0

867.8

873.4

879.0

884.5

890.6

other nondurable goods

812.9

824.1

833.4

840.8

848.3

857.9

866.0

872.7

880.9

889.2

898.2

906.6

915.8

924.2

933.7

943.6

953.5

nondurables clothing & shoes fuel oil & coal

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

9182.9

9225.4

9270.3

9310.4

9351.0

9405.8

9445.3

9501.8

9571.4

9611.9

9663.8

9709.4

9764.2

9798.9

9845.6

9885.5

9925.5

durable goods

1115.1

1138.9

1158.0

1171.3

1183.8

1212.1

1220.4

1245.8

1276.6

1300.4

1318.3

1330.6

1348.4

1370.4

1391.2

1398.1

1401.1

furniture and appliances

259.3

267.9

273.6

273.4

273.7

274.2

271.8

274.7

276.7

279.9

283.7

288.0

292.3

296.1

299.2

299.6

300.1

information processing equipment

107.7

113.0

117.5

123.1

127.5

131.1

135.9

140.9

146.5

151.2

157.2

163.4

170.2

176.2

183.2

190.8

198.7

motor vehicles and parts

322.7

320.6

326.3

328.1

331.4

348.6

351.6

364.1

380.9

393.2

398.3

398.8

403.0

411.7

419.6

419.4

416.5

86.1

90.2

89.2

90.6

91.2

91.9

92.4

92.9

93.7

93.4

93.3

93.3

93.4

93.5

93.6

93.5

93.3

2032.3

2053.5

2064.1

2068.6

2081.6

2088.6

2096.7

2106.5

2117.9

2124.1

2133.8

2143.3

2152.5

2154.9

2159.8

2167.0

2174.2

329.5

339.0

344.2

343.1

347.3

346.6

347.3

348.4

350.9

349.3

350.8

352.5

354.4

352.6

353.5

356.0

358.7

20.0

19.8

18.6

19.1

19.5

19.4

19.3

19.2

19.3

19.3

19.2

19.2

19.1

19.2

19.2

19.2

19.3

263.3

264.0

268.6

269.8

269.7

268.9

268.2

268.4

268.6

268.0

267.6

268.0

268.3

267.6

266.6

266.3

265.9

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

696.3

702.7

697.0

695.9

699.7

704.6

710.6

716.5

721.8

727.1

732.4

737.2

741.2

743.4

745.6

747.6

749.8

other nondurable goods

726.0

731.9

740.1

744.9

750.0

753.6

756.0

758.7

762.3

765.4

769.0

771.9

775.2

777.7

780.8

784.2

787.5

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

0.9

1.9

1.9

1.7

1.7

2.3

1.7

2.4

2.9

1.7

2.2

1.9

2.3

1.4

1.9

1.6

1.6

-1.1

8.5

6.7

4.6

4.3

9.5

2.8

8.3

9.9

7.5

5.5

3.7

5.4

6.5

6.1

2.0

0.9

9.1

13.2

8.5

-0.2

0.5

0.7

-3.6

4.4

2.9

4.6

5.5

6.1

5.9

5.2

4.1

0.5

0.7

16.5

19.5

16.2

18.9

14.3

11.3

14.6

14.7

16.0

12.8

15.8

15.9

16.7

14.1

15.9

16.6

16.5

-23.3

-2.6

7.0

2.3

4.0

20.8

3.4

14.2

18.4

13.0

5.1

0.5

4.3

8.6

7.6

-0.1

-2.8

-3.4

19.1

-4.4

5.9

2.7

3.0

2.3

2.1

3.5

-1.3

-0.2

-0.4

0.6

0.6

0.4

-0.3

-0.9 1.3

nondurables

3.1

4.2

2.1

0.9

2.5

1.3

1.6

1.9

2.2

1.2

1.8

1.8

1.7

0.5

0.9

1.3

clothing & shoes

5.6

11.5

6.1

-1.3

4.8

-0.8

0.8

1.3

2.9

-1.9

1.7

1.9

2.2

-2.0

1.0

2.9

3.1

fuel oil & coal

17.8

-4.9

-23.3

10.2

7.4

-1.1

-3.7

-0.9

1.3

-0.2

-1.4

0.1

-1.3

1.2

-0.3

0.8

0.7

gasoline & motor oil

-3.7

1.1

7.0

1.7

-0.1

-1.1

-1.0

0.3

0.3

-0.9

-0.5

0.6

0.5

-1.0

-1.4

-0.4

-0.7

food

5.1

3.7

-3.2

-0.6

2.2

2.8

3.5

3.3

3.0

2.9

3.0

2.6

2.2

1.2

1.2

1.1

1.2

other nondurable goods

2.4

3.3

4.6

2.6

2.8

1.9

1.3

1.4

1.9

1.7

1.9

1.5

1.7

1.3

1.6

1.8

1.7

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 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

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

10325.1 10677.3 11063.4 11446.3

7439.2

7804.0

8285.1

8819.0

9322.7

9806.3 10104.5 10001.3

durable goods

992.1

1014.8

1061.6

1105.5

1133.0

1159.4

1083.5

1026.5

1074.1

1121.7

1183.6

1230.9

furniture and appliances

225.9

233.3

249.2

263.9

276.5

277.7

266.0

248.1

254.9

250.5

258.2

268.3

44.5

46.6

51.5

55.9

60.4

65.6

65.8

64.7

70.8

73.7

76.8

80.5

401.3

401.5

404.7

409.6

397.1

402.5

343.2

319.7

337.1

376.7

418.5

441.9

information processing equipment motor vehicles and parts other durable goods

79.3

82.4

87.0

90.4

95.7

99.6

98.3

97.2

102.8

105.6

107.1

108.3

1617.9

1712.6

1830.7

1968.4

2088.7

2198.2

2296.0

2204.2

2325.0

2419.6

2504.3

2578.2

278.8

287.0

300.0

315.5

330.1

338.9

334.1

322.2

337.4

341.2

343.8

347.5

14.3

16.8

18.4

21.0

22.3

23.6

28.1

22.9

25.4

26.0

27.1

28.0

gasoline & motor oil

160.3

192.8

231.6

283.8

314.7

343.0

383.3

280.8

327.9

355.0

373.5

382.0

food

569.6

593.1

628.2

665.0

698.0

737.4

775.2

777.9

797.7

828.1

857.4

881.9

869.4

902.4

938.8

nondurables clothing & shoes fuel oil & coal

other nondurable goods

594.9

622.9

652.6

683.0

723.7

755.3

775.4

800.4

836.6

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

8021.9

8247.6

8532.7

8819.0

9073.5

9289.5

9265.0

9153.9

9289.3

9481.1

9687.3

9863.9

durable goods

930.0

986.1

1051.0

1105.5

1150.4

1198.5

1136.4

1094.6

1163.0

1238.7

1324.4

1390.2

furniture and appliances

217.0

230.6

249.3

263.9

277.9

281.5

271.4

253.9

272.1

274.4

286.0

298.8

28.3

36.0

44.8

55.9

69.2

83.0

92.3

101.2

120.3

138.6

160.5

187.2

394.0

405.3

411.3

409.6

396.6

403.9

348.2

324.0

326.6

361.3

398.3

416.8

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

74.7

79.4

84.7

90.4

94.1

93.3

87.9

85.6

90.3

92.7

93.3

93.5

1780.2

1845.6

1904.6

1968.4

2023.6

2064.3

2041.2

2017.4

2067.0

2102.4

2138.4

2164.0

268.5

283.4

297.3

315.5

331.5

343.8

341.7

326.8

343.4

348.3

351.7

355.2

26.9

26.2

24.6

21.0

19.5

19.1

16.8

20.0

19.3

19.3

19.2

19.2

267.5

276.3

282.1

283.8

278.9

276.8

265.3

265.3

268.0

268.5

268.0

266.6

food

609.0

622.4

639.2

665.0

686.2

697.5

691.6

685.1

698.8

713.4

734.5

746.6

other nondurable goods

612.5

640.1

662.6

683.0

708.4

729.5

731.3

723.1

741.7

757.6

770.4

782.5

1.7

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

1.9

3.4

3.5

2.7

3.3

1.8

-1.9

0.2

1.8

2.4

2.0

durable goods

1.7

9.2

5.5

2.4

6.5

3.9

-12.0

5.2

6.2

7.9

5.6

3.9

furniture and appliances

5.8

9.4

6.1

6.8

2.6

1.2

-7.8

0.4

5.7

1.1

5.6

2.7

information processing equipment

29.8

30.1

21.4

25.1

22.5

20.4

5.2

15.3

18.4

15.0

16.2

16.7

motor vehicles and parts

-4.3

5.9

1.7

-6.6

5.8

0.6

-23.2

7.4

2.8

15.2

5.9

3.5

8.1

9.1

4.2

6.8

1.2

1.0

-12.3

5.1

6.2

2.8

-0.3

-0.1

other durable goods nondurables

2.1

4.0

3.0

3.3

3.2

0.8

-2.9

1.1

2.4

1.7

1.6

1.0

clothing & shoes

3.9

5.6

5.1

7.4

3.9

2.2

-3.7

-0.3

5.5

1.1

1.0

1.2

fuel oil & coal

10.2

1.7

-15.6

-16.2

6.1

-8.8

12.6

11.6

-2.0

-1.1

-0.7

0.6

gasoline & motor oil

0.6

4.8

0.7

-0.6

-0.4

-1.8

-3.8

-0.1

2.5

-0.4

-0.1

-0.9

food

1.0

1.6

3.9

4.2

3.4

0.8

-3.9

3.2

0.5

3.2

2.7

1.2

other nondurable goods

2.7

5.6

2.7

2.9

4.4

1.6

-0.9

0.0

3.3

1.6

1.7

1.6

30

U.S. Forecast | September 2010

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

Table 14. Business Fixed Investment History

Forecast

2002

2003

2004

2005

2006

1125.4

1135.7

1223.0

1347.3

1505.3

2007

2008

2009

2010

2011

2012

2013

1403.3

1487.4

1604.6

1765.9 1331.1

Billions Current Dollars Business Fixed Investment

1637.5

1665.3

1364.4

Producers Dur. Equipment

842.7

853.8

916.4

995.6

1071.7

1112.6

1082.9

912.8

1024.6

1123.6

1228.3

Nonresidential Structures

282.7

281.9

306.6

351.7

433.7

524.9

582.5

451.6

378.7

363.8

376.3

434.8

Non-Farm Buildings

188.1

182.1

196.7

212.9

247.6

297.3

322.0

256.3

173.9

160.7

182.3

239.1

Commercial

99.8

94.6

104.3

112.9

128.4

150.8

149.1

96.5

61.0

55.0

62.6

90.9

Industrial

22.7

21.4

23.7

29.9

35.1

43.7

57.4

63.1

42.4

35.0

38.0

52.7

Other Buildings

65.6

66.0

68.7

70.2

84.1

102.8

115.6

96.8

70.5

70.7

81.7

95.5

Utilities

56.3

53.5

48.6

51.4

61.1

85.6

99.5

100.0

97.0

97.0

97.7

100.4

Mines & Wells

30.2

38.4

51.9

77.1

114.2

130.9

147.9

85.0

97.4

95.1

83.8

82.8

Billions 2005 Dollars Business Fixed Investment

1180.2

1191.0

1263.0

1347.3

1453.9

1552.0

1556.6

1290.8

1353.8

1436.8

1550.5

1694.8

Producers Dur. Equipment

830.3

851.4

917.3

995.6

1069.6

1109.0

1082.0

916.3

1049.4

1158.2

1266.0

1369.2

Nonresidential Structures

356.6

343.0

346.7

351.8

384.1

438.2

464.2

369.6

314.9

298.4

309.2

349.5

Non-Farm Buildings

222.3

210.0

213.9

212.9

229.2

260.5

272.0

216.1

151.2

135.4

147.0

184.1

Commercial

119.5

110.3

114.4

112.9

118.4

131.2

124.5

79.2

51.7

45.4

49.6

68.8

Industrial

26.2

24.3

25.5

29.9

33.0

39.0

48.5

52.2

35.7

28.0

28.8

38.0

Other Buildings

76.6

75.4

74.1

70.2

77.9

90.3

99.3

85.3

64.6

63.2

70.1

78.3

Utilities

66.0

61.3

52.1

51.4

56.2

75.6

82.5

83.7

80.5

79.1

78.0

77.8

Mines & Wells

52.6

60.0

69.9

77.1

88.3

93.6

99.7

64.3

74.9

75.0

75.0

78.0

Business Fixed Investment

-6.3

6.2

9.5

8.4

11.7

-15.2

7.8

5.9

9.3

10.5

Annual Growth Rate 9.0

-5.2

Producers Dur. Equipment

-4.1

6.7

8.5

6.3

6.9

3.5

-10.0

-5.3

13.8

9.3

9.3

8.4

Nonresidential Structures

-12.1

4.8

12.6

14.9

25.2

22.0

4.7

-31.8

-6.2

-3.6

9.1

17.2

Non-Farm Buildings

-14.5

3.8

10.8

7.3

18.7

22.6

-0.1

-32.0

-25.1

3.6

21.1

32.1

Commercial

-15.3

4.3

9.3

10.0

15.3

17.3

-11.8

-43.4

-29.3

4.9

25.2

47.5

Industrial

-31.9

9.1

30.4

13.8

16.1

46.6

23.0

-8.6

-30.1

-6.4

22.3

38.7 16.5

Other Buildings Utilities Mines & Wells

-4.4

2.5

9.2

1.7

26.0

22.6

6.7

-29.1

-17.1

8.1

18.1

-10.7

-3.7

5.5

3.8

23.9

54.9

0.8

1.3

6.9

-4.9

1.9

4.9

9.1

29.4

38.0

51.3

50.0

4.8

22.5

-44.9

42.6

-13.7

-5.5

-0.6

Institute for Economic Competitiveness

31

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

Table 15. Government Receipts and Expenditures History

Forecast

2002

2003

2004

2005

2006

2007

2008

1859.3

1885.1

2014.0

2290.1

2524.5

2654.7

2503.1

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1165.6

1102.8

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

362.8

86.8

89.3

94.3

98.8

99.4

739.3

762.8

807.6

852.6

2112.1

2261.5

2393.4

680.7

756.5

824.7

2009

2010

2011

2012

2013

2205.8

2371.3

852.7

858.8

2547.6

2753.9

3106.3

911.1

1075.0

232.2

182.1

1304.4

319.2

403.7

385.8

94.5

96.0

413.6

94.4

104.5

110.9

114.0

119.4

904.6

945.3

972.4

953.5

980.5

1019.8

1078.1

1162.8

2573.1

2728.3

2900.0

3119.3

3457.5

3700.8

3711.1

3743.8

3873.3

876.3

931.7

976.4

1079.9

1139.6

1202.8

1213.9

1193.9

1185.4

Federal Government Receipts and Expenditures Receipts

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

437.7

498.0

550.8

589.1

624.9

662.3

737.3

771.6

812.0

819.6

796.4

781.8

Other

243.0

258.6

273.9

287.3

306.9

314.1

342.5

368.0

390.8

394.3

397.5

403.7

1252.1

1339.4

1405.1

1491.3

1587.1

1690.5

1843.7

2157.5

2333.4

2339.1

2335.4

2383.1

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1387.4

1604.7

1733.6

1774.0

1791.4

1817.9

Transfer Payments To Persons

23.3

28.6

30.9

40.9

35.0

42.2

44.8

52.7

55.6

54.9

55.7

56.6

Grants in Aid to State & local Gov't

To Foreigners

304.2

338.0

349.2

361.2

359.0

380.8

396.2

484.6

528.1

493.2

470.6

490.0

Net Interest

213.7

196.5

204.6

239.0

261.0

291.0

270.1

231.3

250.9

244.0

295.9

385.6

40.3

45.3

45.7

64.1

53.9

50.2

53.5

63.1

59.2

55.2

52.4

51.2

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-245.2

-616.3

-1251.8

-1329.5

-1163.5

-989.8

-766.9

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1923.1

1967.2

2005.8

2116.7

2126.8

2178.2

2276.5

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.6

1332.6

1267.0

1321.0

1352.9

1411.1

1476.4

Corporate Profits

338.4

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts and Expenditures

221.8

226.2

248.6

276.7

302.5

323.1

335.4

287.3

286.5

298.7

315.6

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

57.8

48.0

49.4

81.5

70.1

69.5

71.7

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

18.9

19.7

21.6

22.5

23.2

24.3

25.5

304.2

338.0

349.2

361.2

359.0

380.8

396.2

484.6

528.1

493.2

470.6

490.0

1466.78

1535.13

1609.33

1704.50

1778.63

1910.83

2014.58

2025.90

2095.31

2142.32

2203.22

2290.3

1302.7

1356.1

1408.2

1493.6

1586.7

1697.9

1798.5

1775.4

1788.6

1819.1

1849.6

1906.8

Federal Grants-In-Aid Expenditures Purchases Goods & Services Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.2

492.1

534.1

565.0

595.6

633.0

333.0

353.4

384.3

404.8

402.9

433.7

455.2

492.1

534.1

565.0

595.6

633.0

Interest Received

12.0

20.6

19.0

10.9

2.1

0.5

8.8

9.2

11.2

8.7

4.8

7.3

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

16.2

16.0

10.4

10.6

8.5

4.7

3.9

1.6

1.7

2.0

2.1

2.3

2.4

2.5

2.7

3.3

3.7

3.7

3.8

Transfer Payments

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

32

U.S. Forecast | September 2010

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

12.2

-47.4

-20.1

21.5

-15.6

-25.1

-13.8

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

2002

2003

2004

2005

2006

2007

Net Exports Goods & Services

-427.2

-504.1

-618.7

-722.7

-769.3

-714.0

Current Account

-458.1

-520.7

-630.5

-747.6

-802.6

-718.1

Exports -Goods & Services

1003.0

1041.0

1180.2

1305.1

1471.1

1661.7

Merchandise Balance

2008

2009

2010

2011

2012

2013

-710.5

-386.4

-508.1

-487.8

-496.3

-456.6

-668.9

-378.4

-478.6

-469.5

-507.2

-556.3

1843.4

1578.4

1831.3

2000.3

2172.1

2392.4

Billions of Dollars

-475.3

-541.5

-665.6

-783.8

-839.5

-823.2

-834.7

-506.9

-646.6

-643.9

-671.2

-655.8

Food, Feed & beverage

49.60

55.03

56.55

58.95

65.98

84.28

108.38

93.90

99.41

107.00

111.56

119.13

Industrial Supplies Excl Petroleum

153.5

168.3

199.5

227.5

267.3

316.2

386.9

293.7

382.0

417.0

452.7

491.3

78.9

80.7

89.2

98.4

107.3

121.3

121.4

81.7

114.3

125.3

144.2

168.8

290.5

293.7

327.6

358.4

404.1

433.0

457.7

390.5

449.9

510.4

561.8

637.5

38.6

39.9

42.8

45.5

47.6

45.6

43.9

37.7

44.1

49.0

54.9

61.6

201.5

207.1

238.7

257.0

291.9

314.5

339.8

278.0

335.4

382.8

421.1

480.2

Consumer Goods, Excl. MVP

84.4

89.9

103.3

115.3

129.1

146.0

161.3

150.0

163.5

176.4

192.2

213.8

Other Consumer

43.5

39.4

41.0

47.5

50.8

61.3

59.4

53.2

62.8

67.6

72.7

77.8

302.8

314.2

363.3

399.0

446.7

499.7

548.3

515.3

559.5

596.7

637.0

684.1

Imports -Goods & Services

1430.2

1545.2

1798.9

2027.8

2240.4

2375.7

2553.8

1964.8

2339.5

2488.1

2668.3

2849.0

Merchandise

1193.9

1289.3

1501.7

1708.0

1884.9

2001.6

2148.8

1587.8

1934.7

2060.2

2219.2

2376.4

49.7

55.8

62.1

68.1

75.0

81.7

89.0

81.6

92.1

96.6

99.8

104.2

Petroleum & Products

103.5

133.1

180.5

251.9

302.5

347.6

477.6

267.4

348.3

352.4

371.3

388.7

Industrial Supplies Excl Petroleum

159.6

175.7

226.4

266.0

291.4

295.7

316.5

195.2

251.3

265.1

288.1

317.9

Motor Vehicles & Parts

203.8

210.1

228.2

239.5

256.6

256.6

231.2

157.6

224.7

238.9

273.4

301.5

Capital Goods, Excl. MVP

284.0

296.4

344.5

380.8

420.0

446.0

455.2

369.7

453.6

515.5

558.5

600.4

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

Services

Billions of Dollars

Food, Feed & Beverage

Computer Equipment

75.2

76.5

88.6

93.3

101.4

105.2

100.9

93.9

123.9

134.4

142.0

151.1

Other

183.3

195.8

231.6

261.7

290.2

306.5

318.9

245.3

298.7

345.8

376.4

404.5

Consumer Goods, Excl. MVP

310.7

337.7

377.2

411.5

446.1

478.2

484.7

430.7

475.0

501.9

531.8

559.3

Other Consumer

82.7

80.5

82.9

90.3

93.5

95.9

94.5

85.6

89.7

89.7

96.3

104.4

236.4

255.9

297.3

319.8

355.4

374.0

405.0

377.0

404.8

427.9

449.1

472.6

Net Exports Goods & Services

-548.8

-604.0

-688.0

-722.7

-729.2

-654.9

-504.1

-363.0

-413.0

-408.8

-392.5

-333.0

Exports G & S

1099.2

1116.8

1222.8

1305.1

1422.1

1554.4

1647.7

1490.7

1667.4

1793.0

1922.3

2089.6

Imports G & S

1648.0

1720.7

1910.8

2027.8

2151.2

2209.3

2151.8

1853.8

2080.3

2201.8

2314.8

2422.7

Exports G & S

5.6

9.0

11.7

10.3

14.0

14.6

0.0

2.8

12.4

8.6

8.9

10.5

Imports G & S

13.4

8.0

19.1

12.1

5.4

9.1

-2.1

-0.3

13.6

6.6

7.2

6.6

Real Exports G & S

4.2

6.6

7.1

6.8

10.4

10.2

-2.0

1.9

9.3

6.8

7.6

9.1

Real Imports G & S

9.7

5.4

11.0

5.2

4.2

0.9

-5.4

-4.8

12.5

5.3

5.2

4.4

Services

Billions 2005 Dollars

Exports & Imports % Change

Institute for Economic Competitiveness

33

In Appeciation

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

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

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

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

Responsiveness. You work directly with a decision

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

Consistency. We are a unified firm employing team-

members who are committed to the success of our clients.

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

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

Experience. The staff at Real Property Specialists is

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

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

Director, Institute for Economic Competitiveness.

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

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

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

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

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

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

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

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

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

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

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

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