U.S. Forecast September 2009

U.S. Forecast September 2009

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

Message From Dean Thomas L. Keon

A b o ut U n i v e r s it y o f C e n t r al F l o r ida ( U C F ) 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.

Labor Day is over and so is the summer of 2009. As we transition into fall, we experience many changes and fresh starts. Students attend new schools, football teams start new seasons and new television shows debut.

Perhaps the biggest change we will see this fall however, deals with the economy. After suffering through the worst economic recession since the Great Depression, we are finally starting to see signs of a recovery.

We still have a long way to go, but this latest U.S. Economic Forecast includes some encouraging news and some predictions about the future. When you read the forecast, you will discover why Dr. Sean Snaith agrees that the reappointment of Ben Bernanke to his position as the Chairman of the Board of Governors of the Federal Reserve System was a smart move.

So, have a great fall season! Enjoy the cooler temperatures, the changing of the leaves, and some great football games. I think we can be (cautiously) optimistic about the U.S. economy and I hope the forecast next quarter includes more encouraging news. It appears we are headed in the right direction.

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 2009 - 2013 September 2009 Report

Published quarterly by the Institute for Economic Competitiveness, College of Business Administration, University of Central Florida Copyright Š 2009 Institute for Economic Competitiveness. All rights reserved.

Publications of the Institute for Economic Competitiveness are made possible by the following staff: Dr. Sean Snaith, Director Barbie Barontini, Editor Elaine Vogt, Administrative Assistant Amanda Silvestri, Researcher Erin Garlow, Researcher Laura Burkstrand, Researcher McGregor Love, Researcher Laura Stockbridge, Researcher Evgenia Volkonitskaya, Researcher Cecilia Chirinos, 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 20 09 U. S . FOR ECA ST In this quarter’s U.S. Forecast from the University of Central Florida’s Institute for Economic Competitiveness: • The recession is over, so why doesn’t it feel like it is?

• The gravy boat recession has been redubbed the genie’s lamp recession. Not because our forecast of the shape of this recession and recovery has changed, but because we will all be wishing for stronger job growth over the next year.

H I GHL I GHTS

• After at least 18 months of the worst recession since the Great Depression, signs of a recovery are multiplying. The recovery starts in Q3 2009 but growth will remain weak during the first five quarters of this expansion.

• The U.S. economy will have shed 7.6 million payroll jobs before the employment drain hole is plugged after the 1st quarter of 2010.

• President Obama’s decision to reappoint Ben Bernanke as Chairman of the Board of Governors of the Federal Reserve System is the best policy decision of this administration to date.

• Oil prices, which precipitously fell after spiking to record highs last summer, have already climbed in anticipation of the recovery.

Prices will continue to climb back to the low $90s per barrel by the end of 2013.

• Housing starts have finally bottomed out. Starts will slowly rise from this historic low but will remain below one million through 2010. 2013 levels will be on par with the 2002 levels of housing starts, both around 1.7 million.

• Unemployment, a lagging indicator of the business cycle, will reach double digits and peak at 10.2% in 2010 before falling gradually to 7.8% by the end of 2013.

• The U.S. consumer has shown some vital signs as of late. Pent-up demand and “Cash for Clunkers” rebates sent many onto car lots in the 3rd quarter as light vehicle sales soared. The automotive component of the surge is over and it will be 2011 before we see sales of light vehicles reach the pace witnessed in the clunkerfueled 3rd quarter.

• The dollar, which had been appreciating during the financial crisis as safe haven for investors, will begin to depreciate. Continuance of a reckless fiscal policy ensures that by the end of our forecast horizon, the dollar will fall to record lows against some currencies.

• Trying to do too much too fast, the Obama Administration is exhibiting the audacity of scope.

U . S . F o r eca s t

Th e Rece ssio n is Ove r , So Wh y Do e s n ’ t It Fee l Li k e It Is ?

Th e G r av y B oat Rece ss io n i s N ow th e Genie ’ s Lam p Rece ss io n The U.S. economy is out of recession, although the “official” declaration will not come out for a year, possibly longer. Second quarter GDP numbers indicated a decline in real GDP of only 1%, after a staggering decline of 6.4% in the 1st quarter.

GDP data is reported quarterly, and for each quarter’s data there are three sequential releases, beginning with the advance, followed by the preliminary, and then the final. As data is collected by the U.S. Bureau of Economic Analysis (BEA), estimates of GDP growth are revised and fine tuned.

Both the advance (released on July 31) and the preliminary (released on August 27) data showed the same 1.0% decline in the rate of GDP growth.

However, the mix of final spending was much more favorable in August’s preliminary numbers, with stronger GDP growth in the second half of 2009.

More of the GDP was allocated to final spending, and less to private inventory accumulation, a revision that bodes well for stronger growth in the future.

When firms see their inventories declining, it triggers a process of increased orders to replenish the inventory, and thus, production in the future. Based in part on this data, we have raised our forecast for the second half of 2009. In the Q2 2009 U.S. Forecast, we predicted very paltry growth, averaging just 0.6% in the second half of the year. We have raised the growth outlook for the second half of the year in this Q3 2009 U.S. Forecast to average 1.9%.

This is not an earth-shaking growth rate, but does indicate an improved short-term outlook.

If the recession is over, why doesn’t it feel like it is over? If we are emerging from the worst financial crisis and economic contraction since the Great Depression, shouldn’t there be more joy, more celebration, and more merriment?

The answer to this question lies in the nature of this recession and in the shape that this recovery will take. Both of these topics have been touched upon in previous U.S. Forecast publications and are worth revisiting.

Reprinted from the 4th quarter 2008 U.S. Forecast, published in November:

Financial Market Sclerosis Develops into Credit Infarction and Plunges the U.S. Economy Deep into Recession A Quadruple Policy Bypass Keeps the Economy from a Worse Fate but After the Recession a Long Rehabilitation Awaits

James Thorner of the St. Petersburg Times referred to the credit crunch as “financial sclerosis.”

While this is a witty metaphor and appropriate on many levels, I think we can build upon his cardiac allusion to further explain what has transpired over the past 15 months in U.S. financial markets.

Think of the U.S. economy as a heart and the pumping of blood throughout the body as the flow of goods and services through the U.S. economy (an anatomical equivalent to the circular flow of GDP we teach in introductory macroeconomics courses). The role of credit would be the equivalent to the blood that flows through arteries that feed the heart itself.

There are multiple arteries and branches thereof that feed the cardiac muscle and keep the heart pumping.

The same is true of credit markets; there are a large variety of channels that exist for the financing of different economic activities from housing finance to consumer credit to business investments to government finance.

When the flow of blood through those cardiac arteries is impaired, as is the case with sclerosis, or hardening of the arteries, where a build-up of plaque reduces the volume of blood that can pass through that vessel, the performance of the heart is impaired, thus reducing the flow of blood throughout the system. In our analogy, this equates to a reduction in the production of goods and services, or a slowing of GDP growth.

In August 2007, the subprime meltdown was the start of problems in credit markets. This primarily had an effect on housing finance. Mortgages that Institute for Economic Competitiveness

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U . S . F o r eca s t were widely available in a wide assortment of interest rate structures, amortization periods, and other terms, suddenly became extremely difficult to procure. A year earlier, anyone with a pulse and a pencil could qualify for a $500,000 mortgage. The free flow of housing finance and home equity loans were a large contributor to the housing boom. After August 2007, this particular branch of credit markets became severely occluded, and the flow of real estate finance was reduced to a trickle. This reduced flow had a severe impact on the beating of the economic heart. Real GDP growth plunged from 4.8% in the 3rd quarter of 2007 to -0.2% in the 4th quarter of that year. It was a dramatic turnaround in GDP growth, but despite this turn of events, the condition had not yet reached its worst.

In the wake of the subprime meltdown, the Federal Reserve Bank embarked on a dramatic interest rate cutting spree that took the target interest rate for the federal funds market from 5.25% to 1.00% as of this writing. The federal government also put into place an economic stimulus package to help the ailing economy. This policy stent helped keep the artery from completely closing, but it did not address the spread of the sclerosis that was slowly affecting virtually all of the other credit arteries in the economy.

In March 2008, additional symptoms of these blockages began to emerge. The Fed announced a $200 billion program of loans to banks and brokerage houses, allowing them to put toxic mortgage-backed securities as collateral. This was followed just a few days later by the spectacular collapse of Bear Stearns.

In the 3rd quarter of 2008, the blockages had reached nearly all types of credit channels in the economy, ranging from car loans to credit cards to commercial paper. In the face of this severe restriction in the flow of blood to the heart of the economy, the prognosis has understandably become much worse. The U.S. economy that was teetering on the edge of recession for over a year was knocked into the deepest and longest recession since the 1980s.

As the credit crisis reached a crescendo, policy makers went into overdrive, and the Federal Reserve unleashed a slew of policy actions in addition to those it had already taken, which included some that had been put into place as early as December 2007, and many of which had not been seen since the Great Depression.

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U.S. Forecast | September 2009

The government took control of Fannie Mae and Freddie Mac and bailed out AIG before the passage of the $700 billion Troubled Asset Relief Program (TARP), also known as the bailout. Originally conceived as a fund to be used to buy mortgagebacked securities from financial institutions whose balance sheets were clogged with billions of these assets whose market value had fallen to zero, but whose economic value was much higher than that, the TARP has now changed focus. It was announced on November 12 that the $700 billion authorized for the TARP program would not be used to actually purchase troubled assets; rather, it would be used for direct capital injections into banks.

The sometimes frenetic series of policy moves that have been made over the course of this credit crisis were/are primarily aimed at unclogging these credit arteries and restoring the critical flow of credit to the economy. While there is evidence (smaller interest rate spreads) that these actions are starting to have the desired effect, the economy will be spending significant time in the Intensive Care Unit.

The recession will be in full effect during the 4th quarter of 2008 (the worst three months of the recession) and the 1st quarter of 2009. The recession will continue throughout the 2nd quarter as well, but the severity of the slowdown will be greatly reduced.

The recession will finally come to an end in the 3rd quarter of 2009, and the economy moves out of the ICU. Unfortunately, the end of the recession will not represent the end of this episode. The ramifications of the credit meltdown will last beyond 2009 and right through 2010. Any cardiac event this severe will require a significant rehabilitation period, and the U.S. economy will spend all of 2010 experiencing a rate of growth that is well below its trend rate of growth. It will be 2011 when the credit channels are completely unblocked and the U.S. economy beats powerfully once again.

The next excerpt is from the 2nd quarter 2009 U.S. Forecast published in May:

How shall we describe this recession and recovery in light of the failure of this line-up of usual suspects? Alphabet and sports fans, don’t fret. I will

U . S . F o r eca s t offer you two alternatives that will be more accurate representations of how real GDP has/will behave over the course of this recession and recovery. But before I do that, let me introduce the true shape of this recession: Figure 1

The Shape of Recession and Recovery

11800

Recession Officially Begins

Real GDP (Billions $)

11700 11600 11500 11400 11300 11200

2008

2009

2010

2011

The Gravy Boat™ As you can see, the gravy boat pictured above does bear some resemblance to Figure 1. The early part of the recession actually saw GDP rising; this represents the “handle” of the gravy boat. As we move past those first few quarters of the recession, GDP begins to plunge toward the bottom of the boat in the 4th quarter of 2008 and the 1st quarter of 2009. As we move from there, we gently taper to the bottom of this cycle in the 3rd quarter of 2009. After touching bottom, we begin to see GDP slowly climb like the graduated, tapered pouring spout of the gravy boat.

The spout is longer and less steep than the back end of the gravy boat and, similarly, GDP will take a long time and will only slowly recover from the sharp plunge that it took in the earlier portion of the downturn.

If the gravy boat recession is not appetizing to you, and you insist on having a alphabetical or sports-oriented metaphor, allow me to suggest some alternatives that are more accurate in shape given the path of real GDP that we are forecasting.

There is no letter in the English alphabet that is appropriate, so I scoured alphabets from around the world both past and present. From Cyrillic to Sinhala and from Chinese to cuneiform, I searched and I believe I found a letter that is up to the task:

This is a lowercase character from the Korean alphabet, pronounced NEE-Youn. The shape of this character captures the sharp decline in real GDP as well as its gradual rise from the nadir of this business cycle.

If you are seeking a replacement for the hockey stick, then I have a special Florida-centric alternative taken from another fast paced sport, Jai Alai. The baskets that the players in Jai Alai wear on their hand and use to hurl the ball, or pelota, at speeds in excess of 150 miles per hour is known as a cesta. The cesta pictured below has a shape that resembles the path of real GDP throughout the recession and recovery more accurately than the hockey stick-shaped path.

The commonality of the gravy boat, nee-youn, and cesta-shaped recessions is that all three characterize the recovery phase of this cycle as a slow and gradual process.

Given the severity of the recession and the particular characteristics of this downturn, most notably the credit crisis, recovery is going to take some time. While we can all hope for a V-shaped recession, we almost certainly will not get one. In the meantime, please pass the mashed potatoes.

We are now in the recovery/rehabilitation phase after the economy’s treatment for the credit infarction. The economy is out of the intensive care unit but still in serious condition. The quadruple policy bypass performed by the Federal Reserve Bank and the Federal Government did indeed save the economy from a much more dire fate, but the recovery from this trauma will be slower than many had hoped it would be.

We believe that the path of this recovery will not be much different from the path of the gravy boat recession described above, but we are redubbing it as the genie’s lamp recession. The genie’s lamp is similar in shape to a gravy boat, and the recovery path we’re forecasting the economy to follow is not much different. So why the name change? In the early part of this recovery, we will all be wishing for stronger job growth.

Institute for Economic Competitiveness

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U . S . F o r eca s t

The Shape of Recession and Recovery 13500

Recession Officially Begins

Real GDP (Billions $)

13400 13300 13200 13100 13000 12900 12800

2008

2009

Labor markets will remain the ugly scar that serves as a constant reminder of the economic trauma that we have been through. The quadruple policy bypass may have saved the life of the economy, but the recovery and rehabilitation phase has only just begun. This life-saving treatment will also have side effects that we have not yet begun to feel.

Anxious Index

2010

2011

David Leonhardt) is the probability of a decline in real GDP in the quarter after a survey is taken. In the survey taken in the 3rd quarter of 2009, the index stands at 23.73%, which means that forecasters believe there is a 23.73% chance that real GDP will decline in the 4th quarter of 2009, considerably down from last quarter’s anxious index of 46.47%.

The forecasters also report a 25.88% chance that we are currently (3rd quarter of 2009) in a recession, down significantly from the 78.91% assigned to the 2nd quarter of 2009 reported in the last survey.

According to the panel, the probability that we will

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

Probability (percent)

The most recent release (3rd quarter 2009) of the Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia suggests that Figure 2. The Anxious Index the 33 forecasters (including Probability of Decline in Real GDP in the Following Quarter Quarterly, 1968:Q4 to 2009:Q3 yours truly) surveyed for this publication are less 100 than 24% convinced that 90 the decline in real GDP currently taking place will 80 continue into the 4th quarter 70 of this year.

60 The survey asks panelists 50 to estimate the probability that real GDP will decline 40 in the quarter in which the 30 survey is taken as well as 20 the probabilities of a decline 10 in each of the following four quarters. The anxious 0 index (a term coined by The New York Times reporter Survey Date 8

U.S. Forecast | September 2009

U . S . F o r eca s t remain in recession drops off significantly in 2010 to just 17.83% in the 1st quarter of 2010, and to just 13.49% in the 3rd quarter.

Figure 2 plots the historical values of the anxious index. The gray bars indicate periods of recession.

The current levels of the anxious index and its sharp decline from the start of this year may indicate an end to the recession is at hand.

Big Ben Is Back In arguably the best move of the new administration, President Obama recently announced the reappointment of Ben Bernanke to his position as the Chairman of the Board of Governors of the Federal Reserve System. Last forecast I called upon the Obama Administration to reappoint Ben Bernanke as soon as possible. I laid out a number of reasons about why the Fed chief should be reappointed to another term as chair of the Federal Reserve System.

The myriad reasons to reappoint Bernanke included everything from his management style and openness to opposing viewpoints, to his embracing of several of the tenets of inflation targeting as a method of conducting monetary policy. In that discussion I also drew comparisons between Ben Bernanke and his predecessor Alan Greenspan, indicating that if each were airline pilots as opposed to central bankers, Ben Bernanke could be likened to Capt. “Sully” Sullenberg, the pilot of the US Airways jumbo jet that made an emergency landing on the Hudson River without a single casualty.

This comparison might seem somewhat overdramatic, but as we review the depth of the financial and economic crisis we found ourselves in just a few months ago, it was as if the U.S. economy had indeed lost both engines and was headed for unspeakable fate. But unlike Capt. Sullenberg, whose job was over once the plane had made its landing on the Hudson and the passengers were safe, Bernanke is now responsible for repairing the engines, refueling and lifting our economic airplane back up into the sky and at the same time he must make sure that none of the engines become overheated in the process. No rest for the weary.

Speaking of overheating, many people are concerned that the massive stimulus put in place by the Federal Reserve Bank could ultimately lead

to much higher inflation down the road. While I don’t think that the United States is headed for some Zimbabwean or Argentinean episode of hyperinflation, the Fed is going to have to start pulling back on the reins and absorb some of the liquidity pumped into the system at the height of the crisis.

The Fed rapidly cut their target for the federal funds rate to zero in the effort to fight the crisis, but they continued to stimulate the economy through what’s known as “quantitative easing.” The Fed’s balance sheet grew tremendously as they purchased a variety of assets through a number of term facilities all aimed at restoring proper function to a variety of credit markets. The size of the Fed’s balance sheet skyrocketed from under $900 billion to in excess of $2 trillion. The reason that the growth in the Federal Reserve’s balance sheet has caused such angst amongst inflation hawks is not that the Fed’s assets are growing so rapidly, but that the Fed’s liabilities have had to keep up with the pace.

Two key components of the Federal Reserve Bank’s liabilities are currency in circulation, and bank reserves. Currency and bank reserves comprise what is known as the monetary base, also known as high-powered money. The monetary base is a key determinant of the money supply, so the concern is that such large growth in the monetary base will result in a large growth in the money supply, which in turn will result in an acceleration of inflation. I think these concerns are valid, but the progression from the growth in the Federal Reserve’s balance sheet to a definitive outcome of higher inflation, is dependent upon a chain of causality and a set of economic and financial linkages that are uncertain, to say the least.

GDP Outlook

The End of the Recession has Arrived

The U.S. economy is now emerging from what became the worst recession since the Great Depression. While the official designation of the end of this recession may still be a year or more away, we believe that the bottom of this downturn will have taken place in the 3rd quarter of 2009. “Bottom” in this instance refers to the lowest point for real GDP, or the trough of this particular cycle. Labor Institute for Economic Competitiveness

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U . S . F o r eca s t markets, unfortunately, are still months away from reaching their bottom.

As discussed above, and in previous forecast releases, economic growth, as we emerge from this recession, is going to be tepid at best. We are forecasting that through 2010, average real GDP growth is going to be just 1.8%. With the growth in spending this anemic, there is little need for firms to go on hiring sprees. Consequently, we expect job growth through the end of 2010 to average -0.4%.

Payroll job losses, fortunately, will come to an end in the 2nd quarter of 2010, but the pace of hiring through the end of that year will be less than what is necessary to overcome the job losses that we will still have to endure through the 1st quarter of 2010.

Recently revised data released by the U.S. Bureau of Economic Analysis indicates that this recession was indeed more severe than the preliminary numbers suggested. The revised data shows that in the 1st quarter of 2008, real GDP actually contracted, contrary to the preliminary data that suggested that the economy grew in the first three months of the year. The 2nd quarter GDP growth was revised downward as well. Growth fueled by the first stimulus package, which provided tax rebate checks, was less than initially reported. The revisions also showed that when the “economic Red Bull” wore off, 3rd quarter real GDP contracted by more than the preliminary data suggested.

The new data also showed that the 4th quarter of 2008 and the 1st quarter of 2009, which we have been referring to as the “valley of the shadow of death” of this particular recession, played itself out differently than the unrevised data indicated. The worst quarter of this recession was previously thought to be the 4th quarter of 2008, but was actually was the 1st quarter of 2009, when real GDP contracted by 6.4%.

Although data revisions indicate that the economy followed a different path through this recession than previously thought, what hasn’t changed is that this remains a traumatically long and deep recession that put the economy deep into a hole that is going to take some time to come out of. We will, however, emerge from this hole, and once the economy is back on its own two feet again we will see growth begin to accelerate. In 2011 and in 2012 we are anticipating that the economy will expand at a rate of 3.3% and 4%, respectively. The strong growth in 10

U.S. Forecast | September 2009

these two years will be fueled by the lagged effects of stimulative policies, and perhaps more importantly, by the resurgence of consumer spending, which will grow at its fastest pace since 2006.

Consumer Spending This economic cycle has been like a bipolar episode for the U.S. consumer. After emerging from the last jobless recovery, which followed the 2001 recession, consumers began to spend, partly fueled by interest rates that remained at low levels for an extended period of time. As the unemployment rate continued to drop below 5%, housing prices began their meteoric rise, which coupled with the equity markets making annual gains measured in the double digits, consumers’ euphoria soon progressed into outright mania.

From 2003 through 2007 real consumption expenditures increased at an average rate of 3% per year. Real consumer spending on durable items increased by an even gaudier average of 5.6% per year, made possible in part by easy credit and consumers dipping into what seemed like an evergrowing pot of home equity wealth. This manic spending felt good, but even as consumers were basking in the glory of their unabashed consumerism, they were sowing the seeds for its dramatic end.

In August 2007, the house of cards began to come crashing down around the U.S. consumer when the subprime mortgage meltdown put a waning housing market into a nose dive from which it would not recover. As the housing bust unfolded, consumers across the nation witnessed something many had thought couldn’t be possible: the prices of their homes were declining. As it is well documented, these prices declined continuously for nearly 2 years, and may only now be reaching an end to the declines.

Trillions of dollars of home equity wealth went up in smoke in a matter of months and the so-called “home equity ATM,” that had financed a great deal of this consumer spending, was out of service.

As if the housing bust was not enough misery to rain down upon the consumer, equity markets taking their cue from the housing sector began an equally dramatic plunge of greater than 32% in the S&P 500 during 2008 alone. This stock market fall resulted in the destruction of trillions of additional dollars of consumers’ wealth. Throw in the start of

U . S . F o r eca s t a recession that would turn out to be the longest in decades, replete with rising unemployment rates, and you’ve got everything you need for consumer mania to swing into consumer depression.

Consumers’ depression was evidenced by the tumbling numbers of the consumer sentiment index put out by the University of Michigan. This measure of consumer attitudes reached lows that had not been seen since the early 1980s, when high inflation and high unemployment conspired to make consumers miserable. Consumer sentiment has improved since its nadir at the peak of the financial and economic crisis, but they are a far cry from the lofty heights reached during the mania phase of the cycle. The hopelessness that was associated with the depression has passed, but consumers will still be feeling the blues for some time.

Last quarter we described the consumer as a zombie, back from the dead but moving very slow— as zombies are wont to do. However, in the 3rd quarter of this year, this quarter, the zombies must have taken a bite out of a coffee addict, because we are expecting consumer spending to rise by 2.2% in the quarter.

Okay… it wasn’t really the flesh of a java lover, but the “Cash for Clunkers” program that is responsible for this surge in spending. You may not have been aware of this but zombies are really “green” in their thinking. Decomposition has a way of bringing oneself more in tune with nature and the chance to reduce greenhouse gases from fuel-inefficient vehicles. This had the zombies dragging themselves onto car lots all across the country.

Enough with the zombie-nomics. Cash for Clunkers, coupled with an aging fleet of light vehicles on American highways, has resulted in a spike of new vehicle purchases and a 20% surge in consumer durables spending. The program has come to an end, and so will this surprising show of strength from the American consumer. Just like the tax rebates of 2008, Cash for Clunkers is a temporary fix and does nothing to address the deep underlying problems that American consumers still face.

Unemployment continuing to rise into the double digits and a stock market that is still a long way from reaching its previous highs will keep consumption spending muted. Average consumption spending growth through the end of 2010 will be 1.4%, and

that includes this quarter’s Clunkers boost.

Job insecurity, along with a significant portion of the population, i.e. the baby boomers, trying to replenish their nest eggs and rescue the hope of retirement from the ashes of their 401k statement, will keep consumption spending from taking off.

With consumption representing such a large part of the GDP, it will keep the U.S. economy from taking off as well.

Investment Nonresidential fixed investment had two quarters of crushing declines during the valley of the shadow death period in this recession. The 3rd quarter will be a minor respite as we are predicting mild positive growth for the quarter’s spending on transportation equipment, computers, and communications equipment. This spending will outweigh the large downward pull of investment spending on structures.

In the next several quarters following the 3rd quarter, we are expecting some oscillations in nonresidential investment spending. The shifting sands on which this genie’s lamp recovery now sits do not provide a strong enough foundation for a return of strong investment spending in the early part of the recovery.

We expect double digit investment spending growth to return in the 4th quarter of 2010, as a surge of spending takes place ahead of the rise in marginal tax rates taking place in 2011. The good news is that double digit investment spending growth will persist beyond the 4th quarter of 2010, and we are expecting it to last through 2012 as the economy finally grows at a robust pace.

A thawing of the credit freeze, and equity markets recovering from the lowest lows, will help make financing of investment spending a relatively easier proposition than the difficult task it had become during the peak of the financial crisis. We are assuming that despite continued record budget deficits, the rise in interest rates will not be sufficient to choke off investment spending. The rise in rates will, of course, make financing investment a more costly proposition.

Investment in structures will continue to contract throughout 2010. Commercial building will see an ongoing and significant contraction over the next five quarters. The average rate of contraction is Institute for Economic Competitiveness

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U . S . F o r eca s t expected to be -13.4%. High unemployment, weak job growth, and consumers exhibiting restraint in spending have curtailed the need for office space and retail space, and the commercial outlook will continue to decline even as the economy recovers.

We do not expect an improvement in commercial building to take place until the middle of 2011.

Residential fixed investment growth has been in a near freefall. The double-digit declines will ease in the 3rd quarter of 2009 with a contraction of just 2.2%. This will make for a total of four straight years of double-digit contraction in this sector. In 2009, the long lingering misery will finally lift. The 4th quarter of 2009 should put an end to this string of dismal residential fixed numbers as positive growth finally returns. 2010 will finally see some stronger growth return to this sector, as residential fixed investment growth accelerates through the end of the year. Double-digit growth is expected to remain in place until the second half of 2013.

Government Spending

Of Demagoguery and Deficits

Budget deficits are back in force, and it looks like they are going to be persistent. As a result, the national debt will be ballooning between now and 2013. We are forecasting the total increase in the national debt during 2009-2013 to be in excess of $5.8 trillion. That would put the total national debt at approximately $15.8 trillion. This debt will be approaching 94% of what we are forecasting GDP to be in 2013, $16.9 trillion.

To say that the path of fiscal policy that we are currently following is unsustainable is most certainly an understatement. The combined impact of the second stimulus package, the overall costs of the bailout of the financial sector, and the recession itself will result in this massive run-up of the national debt.

The administration recently released a revised budget projection. This revision showed that the debt being accrued over the next 10 years will be $2 trillion higher than their initial forecasts. The administration is going to have to make some very difficult choices regarding their spending priorities.

The panoramic policies laid out during the campaign 12

U.S. Forecast | September 2009

are now meeting the cold calculus of budgetary finance. Hope and change lay defeated at the feet of scarcity, and in the battle between demagoguery and deficits, deficits will always emerge the victor.

A second fault of this administration could be called the “audacity of scope.” By trying to attack multiple issues simultaneously: healthcare reform, financial regulatory reform, the nearly $800 billion stimulus package, the foreclosure crisis, cap and trade, and wars in Iraq and Afghanistan, the administration risks failure to properly address any of them. These are vexing problems, complex and difficult to solve. Any of these issues by themselves, if it were successfully addressed would represent a crown jewel for the administration. But instead of a crown jewel it looks like we are going to get a bunch of cubic zirconia.

One thing is certain: taxes are going to go up. The Bush Administration tax cuts, some of which are set to expire in 2010, will most certainly go by the wayside. There may also be additional explicit new tax increases. When it comes to tax revenue, trillion dollar deficits have a voracious appetite and we will have no choice but to feed the beast.

Various policies that result in budget deficits may be partisan, but the deficits themselves have no party affiliation. Markets care not whether the deficit was run-up by an expansion of social policy or by a large supply-side tax cut. The bonds that the Treasury must auction off in order to pay for these deficits don’t have a Republican or Democrat stamp on them. They are liabilities of the U.S. government, and therefore, liabilities of every man, woman, and child that pays taxes in the United States.

Inflating national debt carries with it a number of potential problems and threats to the U.S. economy.

The trillions of dollars we’re currently adding to the pile of U.S. government debt pales in comparison to the fiscal problems that are slowly chugging down the demographic tracks. Of course, what I’m referring to here are Social Security, Medicare, and Medicaid. These entitlement programs represent an unfunded liability of the U.S. government that is approaching $60 trillion. Choosing to run trillion dollar deficits in the short-term seems imprudent, to say the least, without addressing these particular entitlement programs and the huge obligation they represent.

U . S . F o r eca s t We continue to gamble that the hundreds of billions of dollars that have flowed into the United States from the rest of the world, most notably China–who is now the largest holder of U.S. treasuries in the world–will continue to flow into U.S. capital markets even as U.S. deficits are now measured in the trillions rather than billions. If the global appetite for dollar-denominated government debt starts to wane, we could face a significant increase in long-term interest rates and the U.S. dollar could face a significant depreciation.

While there has been some chest thumping by the Central Bank of China with regard to its U.S. dollar holdings and the role of the dollar as an international reserve currency, it seems unlikely, at least in the short-term, that there will be a momentous run on the U.S. dollar.

Net Exports The financial crisis provided a temporary boost to the value of the dollar. During the crisis, investors no longer cared about returns—all they sought to do was protect their capital, and the safest way to do that was to sink money into U.S. treasuries. This massive flight to safety resulted in a spike in treasury prices and a corresponding drop in treasury yields.

In order to purchase U.S. government treasury bonds, international investors require U.S. dollars.

The surge in the demand for the dollar led to its sharp appreciation. Now that the global panic has dissipated, both the U.S. dollar and U.S. Treasury bonds have experienced price declines.

While it seems unlikely that there will be a speculative run on the U.S. dollar, we are expecting that it will continue to depreciate over the next several years. The improvement in the current account deficit in 2009 should begin to reverse itself going forward. The weakening dollar and U.S. economic recovery will both conspire to drive net exports lower over the next several years. Current account deficit should rise to over $725 billion in the year 2012 before improving slightly to just over $700 billion in 2013.

Unemployment The unemployment rate, which currently stands at 9.4%, will continue to drift higher throughout the rest of the year and into 2010. We anticipate that the unemployment rate will peak at 10.2% in the 1st quarter of next year. As we discussed earlier, the nature of this recovery will be far too weak in the early stages to put much of a dent in the unemployment rate. Consequently, we believe that unemployment will remain in double-digits throughout 2010 and into the 1st quarter of 2011.

As the pace of real GDP growth picks up in 2011, so will the pace of decline in the unemployment rate. Unfortunately, because of the severity of the state of labor markets in the wake of this recession, we anticipate that the unemployment rate by the end of 2013 will only have fallen to 7.8%. This is an unemployment rate that is still well above what most would consider the full employment level of unemployment.

We’ve referred to labor markets as the ugly scar that will serve as a reminder of the economic trauma that we’ve been through. The scar unfortunately will be extremely slow to fade. There is no concealer we can put over it that will diminish its detrimental effect on the visage of our economy.

Institute for Economic Competitiveness

13

Automobile and Light Truck Sales September 2009 (Millions Vehicles)

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

Charts

98 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 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5

(Mortgage rates - Left axis, %)

2.5 2.0 1.5 1.0 0.5

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

15

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

Consumer Prices (% Change Year Ago)

6.0 4.0 2.0 0.0 -2.0

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

16

(%)

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 2009

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

Industrial Production 115.0

(2002=100)

110.0 105.0 100.0 95.0 90.0 85.0

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

Private Fixed Nonresidential Investment 2000.0

(Billions of Dollars)

1800.0 1600.0 1400.0 1200.0 1000.0 800.0

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

Manufacturing Employment 18.0

(Millions)

16.0 14.0 12.0 10.0

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

17

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

Money Supply

(Annual Growth Rate %)

40.0 30.0 20.0 10.0 0.0 -10.0

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

Total Nonfarm Payroll Employment (Millions)

145.0 140.0 135.0 130.0 125.0 120.0

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

18

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 2009

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

19

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

20

(%)

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

U.S. Forecast | September 2009

Table 15. Government Receipts and Expenditures History 2002

2003

2004

1859.3

1885.1

2014.0

2290.1

2524.5

2660.8

2475.0

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1168.1

1102.5

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

370.2

212.3

86.8

89.3

94.3

98.8

99.4

94.7

92.0

739.3

762.8

807.6

852.6

904.6

944.4

974.5

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

2005

2006

2007

September 2009

2008

Federal Government Receipts and

2112.1

2261.5

2393.4

2573.1

2728.3

2897.2

3117.6

Purchases Goods & Services

680.7

756.5

824.7

876.3

931.7

976.7

1082.6

National Defense

437.7

498.0

550.8

589.1

624.9

662.1

737.9

Other

243.0

258.6

273.9

287.3

306.9

314.6

344.7

1252.1

1339.4

1405.1

1491.3

1587.1

1688.6

1840.6

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1388.2

23.3

28.6

30.9

40.9

35.0

42.2

44.8

Grants in Aid to State & local Gov't

304.2

338.0

349.2

361.2

359.0

378.9

391.7

Net Interest

213.7

196.5

204.6

239.0

261.0

290.7

272.3

40.3

45.3

45.7

64.1

53.9

50.3

54.3

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-236.5

-642.6

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1927.4

1974.2

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.4

1336.2

Corporate Profits

330.0

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts

221.8

226.2

248.6

276.7

302.5

322.8

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

56.6

51.0

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

19.8

21.1

304.2

338.0

349.2

361.2

359.0

378.9

391.7

Federal Grants-In-Aid

1535.13

1609.33

1704.50

1778.63

1905.63

2014.40

1302.7

1356.1

1408.2

1493.6

1586.7

1699.8

1800.6

Government Social Benefits

333.0

353.4

384.3

404.8

402.9

433.7

455.0

333.0

353.4

384.3

404.8

402.9

433.7

455.0

Interest Received

12.0

20.6

19.0

10.9

2.1

-2.6

3.9

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

11.0

6.1

1.6

1.7

2.0

2.1

2.3

2.5

2.9

Transfer Payments

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

t ab l e s

1466.78

Purchases Goods & Services

Expenditures

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

21.7

-40.2

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

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

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

Real GDP Nominal GDP

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

2002

2003

2004

1.9 0.8 1.9 1.7 2.1 1.9 -6.2 -2.6 0.0 7.6 -17.0 -0.9 -13.5 -28.7 11.4 -15.6 -12.1 -33.7 -14.2 -9.5 -11.4 7.5 4.2 9.7 8.2 2.0

3.8 3.8 3.4 9.2 4.0 2.2 6.0 7.6 14.4 17.4 17.8 -1.5 8.6 24.3 11.0 1.5 1.1 8.5 -6.3 18.5 1.2 11.7 6.6 5.4 6.0 -0.5

3.1 2.8 3.5 5.5 3.0 3.4 7.2 9.1 5.9 10.9 -1.6 3.9 27.6 64.0 29.9 1.7 -0.8 20.7 -3.6 14.6 1.5 6.7 7.1 11.0 2.5 -0.4

History 2005

2006

2007

2008

Composition of Real GDP, Percent 2.7 2.5 2.5 -1.8 2.7 2.9 2.7 -1.4 2.7 3.3 2.0 -1.8 2.4 6.5 4.6 -11.7 3.3 3.2 1.5 -2.8 2.6 2.8 1.7 0.3 4.4 8.0 8.0 -5.6 6.1 6.2 3.2 -10.2 6.8 7.9 10.3 -1.1 15.1 18.5 23.4 -8.1 5.6 13.1 15.0 -3.3 9.9 5.9 3.6 -6.2 2.8 11.2 -11.5 -43.1 -31.4 15.6 15.5 -18.1 8.2 12.2 -37.9 -17.3 0.0 13.3 19.0 3.5 1.1 7.9 10.3 -9.9 5.8 10.0 43.9 22.1 -4.3 13.8 48.5 -0.5 6.9 25.5 9.2 20.4 -4.6 13.1 23.5 -0.3 5.3 -15.5 -20.2 -20.8 6.8 10.4 10.4 -2.8 5.2 4.2 1.0 -6.6 1.3 2.3 3.6 8.9 0.4 1.2 1.9 -0.3

Billions of Dollars 11553.0 11840.7 12263.8 12638.4 12976.3 13254.1 13312.2 10642.3 11142.2 11867.8 12638.4 13398.9 14077.7 14441.4

2.1 2.0 1.2 3.6 4.0

3.2 3.4 2.2 4.7 3.7

26.1 3.2 2.5 72.7 15.6 89.6 16.816 1.710 4.997 5.8 -0.5 -160 -459

31.1 5.1 1.7 73.7 17.2 87.6 16.643 1.854 5.443 6.0 -0.1 -375 -522

41.5 1.5 3.0 76.2 58.3 95.2 16.867 1.949 5.914 5.5 1.6 -411 -631

56.6 1.5 2.7 78.6 49.8 88.6 16.948 2.073 6.181 5.1 1.8 -321 -749

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 -17.3 1.266 -5.1

1.13 1.01 1.24 2.97 4.02 5.05 5.82 964 20.8 1.111 -14.1

1.35 1.36 1.89 3.43 4.27 5.12 5.84 1131 11.2 1.020 -6.1

3.21 3.13 3.62 4.05 4.29 4.56 5.86 1207 6.1 1.000 4.9

Financial Markets, NSA 4.96 5.02 1.93 4.72 4.38 1.40 4.93 4.52 1.82 4.75 4.43 2.80 4.79 4.63 3.67 4.87 4.84 4.28 6.42 6.33 6.04 1311 1477 1221 13.8 7.9 -32.4 0.985 0.930 0.889 -4.7 -9.9 13.1

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 2.4 8010 5.3 8637 3.3 3.5 573 38.0

9378 5.0 8378 5.9 8854 3.9 3.5 660 14.5

9937 6.7 8889 6.7 9155 3.5 3.4 923 36.3

10486 5.1 9277 4.0 9277 0.6 1.4 1228 41.9

11268 7.1 9916 6.6 9651 4.6 2.4 1349 2.8

22

U.S. Forecast | September 2009

Change -0.9 -1.3 0.4 1.0 0.1 0.5 -12.9 -7.9 -3.3 8.4 1.4 -20.3 42.7 17.3 6.7 -21.0 -17.7 13.5 3.6 -41.2 -16.2 -13.6 -5.4 -4.4 2.8 0.5

66.1 0.9 1.8 79.4 63.2 87.3 16.504 1.812 5.712 4.6 1.6 -248 -804

Other Measures 72.2 99.8 2.9 0.9 1.8 -6.6 79.0 75.1 20.4 -20.4 85.6 63.8 16.089 13.195 1.342 0.900 4.960 4.341 4.6 5.8 0.9 -1.6 -162 -455 -727 -706

Incomes 11894 12239 5.2 1.1 10403 10806 4.6 2.3 9861 9911 1.0 0.6 1.7 2.6 1323 1171 2.7 -26.1

2010

Forecast 2011

2012

2013

1.7 1.8 1.6 1.8 2.3 1.4 3.8 11.6 10.5 14.5 11.5 10.9 28.1 18.7 50.4 -12.2 -5.8 -26.7 -27.7 22.5 -12.7 10.1 6.0 4.4 -1.5 1.0

3.3 3.0 2.5 8.1 1.5 2.0 12.8 13.4 7.5 20.7 8.3 21.7 37.1 15.1 25.9 11.4 10.4 -4.7 7.9 35.3 11.7 24.2 7.9 8.4 -3.4 -0.3

4.0 3.8 2.8 7.1 1.6 2.6 13.1 13.3 8.0 18.4 7.8 14.3 36.5 18.8 29.8 12.6 19.6 38.5 2.2 1.1 7.8 18.8 8.0 7.6 -1.6 1.2

2.9 3.2 2.0 4.5 1.3 1.9 7.8 7.3 9.7 17.4 12.0 -6.0 14.7 8.5 14.2 9.2 15.6 10.3 6.0 1.6 6.4 9.4 8.6 4.4 -0.5 1.8

12944.3 13136.8 13493.0 14027.3 14493.0 14255.9 14647.0 15263.0 16103.1 16918.5

Prices & Wages, Percent Change, Annual Rate 3.5 2.9 2.7 2.0 1.3 3.8 2.0 4.0 1.7 1.4 2.1 2.7 2.3 2.0 1.9 5.3 0.3 6.8 2.2 0.5 3.0 3.1 3.1 2.4 1.0

1.8 2.3 2.1 1.0 3.1

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. $)

2009

1.3 1.5 1.7 0.1 1.9

1.5 2.4 1.6 4.0 1.5

1.5 1.8 1.7 1.2 2.2

1.7 1.8 1.8 1.6 2.6

65.4 3.4 -5.7 66.2 -88.4 63.3 10.199 0.584 4.312 9.2 -3.7 -1524 -452

77.2 0.7 2.1 68.2 11.6 65.9 10.383 0.784 4.110 10.2 0.6 -1389 -544

87.8 1.0 4.2 70.8 23.0 68.5 12.719 1.140 4.180 9.8 1.9 -1118 -621

94.3 1.2 4.1 73.8 69.8 77.3 15.0 1.5 4.9 8.8 2.6 -1048.0 -725.8

92.8 1.0 3.4 74.4 53.3 81.5 16.6 1.7 5.6 8.0 2.0 -793.2 -708.3

0.15 0.22 0.54 2.30 3.35 4.17 5.17 927 18.4 0.945 -3.5

0.99 1.29 1.65 3.26 4.32 5.11 5.80 1040 1.2 0.924 -1.7

4.56 4.71 5.16 5.22 5.54 6.06 7.06 1002 -2.9 0.904 -1.8

5.4 5.2 5.4 5.3 5.4 5.7 7.1 1105.8 21.7 0.9 0.4

4.4 4.4 4.7 4.9 5.2 5.5 6.7 1350.0 14.0 0.9 -0.8

11993 -1.6 10884 1.3 9953 0.1 4.2 1099 42.8

12291 3.7 11084 2.7 9983 1.3 3.7 1191 4.6

12809 4.6 11457 4.0 10131 2.0 3.1 1334 12.6

13503.7 5.5 12001.3 4.4 10436.5 2.8 3.1 1419.31 7.668

14230.3 5.4 12434.5 3.8 10647.5 2.1 2.6 1481.29 -1.0542

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 13254.1 13312.2

12944.3 13136.8 13493.0 14027.3 14493.0

11543.5 11824.8 12198.2 12588.4 12917.1 13234.4 13341.2

13047.3 13141.1 13486.7 13975.9 14458.2

8021.9

8247.6

8532.7

8819.0

9073.5

9313.9

9290.9

9212.0

9301.8

9505.1

9781.8 10011.7

930.0

986.1

1051.0

1105.5

1150.4

1199.9

1146.3

1088.1

1070.4

1144.3

1241.0

1314.1

Nondurables

1780.2

1845.6

1904.6

1968.4

2023.6

2074.8

2057.3

2026.1

2055.9

2090.2

2124.9

2153.4

Services

5318.1

5418.4

5577.6

5745.1

5899.7

6040.8

6083.1

6087.0

6159.9

6264.8

6424.2

6563.5

1180.2

1191.0

1263.0

1347.3

1453.9

1544.3

1569.7

1296.0

1297.8

1431.1

1622.4

1780.3

830.3

851.4

917.3

995.6

1069.6

1097.0

1068.6

882.6

957.2

1089.6

1227.3

1348.7

379.3

405.0

443.1

475.3

514.8

555.7

588.8

537.3

579.9

633.3

678.1

743.8

Computers & Peripherals

58.2

63.4

70.7

79.1

97.3

114.5

123.7

112.5

127.4

153.8

182.5

216.1

Communications Equipment

73.7

75.4

81.7

83.2

92.2

98.2

101.6

93.1

103.2

113.7

121.8

134.6

Industrial Equipment

151.9

151.6

147.4

159.6

172.9

180.9

174.7

135.3

133.9

162.3

190.3

191.1

Transportation equipment

141.6

132.9

161.1

181.7

198.2

181.7

132.3

81.7

119.4

159.1

211.2

259.8

31.6

22.6

25.1

22.0

20.6

22.3

18.0

14.2

17.1

19.9

23.4

26.1

32.7

31.7

40.8

48.2

51.6

37.1

29.3

18.5

23.9

28.3

37.7

44.2

356.6

343.0

346.7

351.8

384.0

441.4

486.8

401.4

339.9

345.4

398.4

435.5

142.8

133.8

137.1

135.9

144.2

158.5

155.6

123.6

107.8

116.9

134.3

159.2

Manufacturing

26.2

24.3

25.5

29.9

33.0

40.4

50.6

64.7

45.7

36.3

47.8

56.7

Power & Communication

60.5

55.7

46.2

45.2

48.7

65.3

77.3

75.4

60.7

56.2

59.1

61.1

Mining & Petroleum

52.6

60.0

69.9

77.1

88.3

97.1

112.7

63.2

65.1

75.8

91.4

86.2

Other

68.9

66.5

67.4

63.7

69.6

80.8

89.8

77.4

64.7

66.8

73.6

78.0

613.9

664.3

729.5

775.0

718.2

585.0

451.1

347.1

369.4

435.5

531.9

605.5

Exports

1099.2

1116.8

1222.8

1305.1

1422.1

1546.2

1629.3

1436.8

1513.1

1625.5

1752.0

1900.7

Imports

1648.0

1720.7

1910.8

2027.8

2151.2

2193.8

2123.5

1823.5

1942.9

2067.8

2238.9

2368.4

779.5

831.1

865.0

876.3

894.9

906.4

975.9

1020.4

1033.6

993.8

972.5

963.6

1500.7

1499.7

1497.1

1493.6

1507.2

1536.7

1543.7

1542.3

1552.5

1560.4

1569.9

1596.2

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

23

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

of the Forecast of the U.S.

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

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. $)

1.7 0.3 2.2 20.5 -0.6 0.6 0.8 6.1 2.5 23.3 18.3 4.1 103.6 -13.2 44.3 -7.9 -6.6 -16.3 -1.8 13.2 -22.5 -2.2 9.7 21.6 2.4 1.1

Composition of Real GDP, Percent Change, Annual Rate 2.7 2.4 3.4 3.8 3.7 4.4 4.1 2.9 2.4 2.8 3.2 3.4 4.0 3.8 2.2 1.7 2.0 3.0 3.3 2.9 3.1 7.3 8.2 2.9 8.8 12.3 10.2 6.8 1.9 0.7 1.5 2.2 1.7 1.4 1.8 1.7 1.1 2.0 2.4 2.5 2.4 2.9 10.6 11.9 14.4 12.6 12.2 14.5 14.4 15.6 14.8 17.9 12.1 8.9 12.3 14.1 10.6 9.4 9.0 6.0 5.6 6.4 7.7 19.0 20.5 22.5 23.3 16.6 16.3 18.5 12.6 11.8 10.5 4.6 6.1 7.1 7.7 24.6 25.9 21.9 21.6 17.4 17.2 17.7 39.7 36.2 70.7 29.4 12.1 34.5 39.1 19.1 15.0 20.5 10.9 13.9 19.8 23.5 99.3 8.0 32.2 30.4 33.0 50.2 26.5 -1.4 4.5 5.6 13.9 21.6 20.2 15.2 14.2 13.0 11.6 10.3 6.7 16.1 18.4 -7.0 -33.9 -34.3 -0.4 50.0 54.9 43.3 -23.5 3.4 11.1 6.4 10.5 8.3 -1.6 9.2 19.7 18.0 42.8 60.5 27.7 13.6 -8.0 11.7 10.7 12.1 12.5 12.1 9.6 11.1 18.1 23.6 27.5 27.5 23.3 17.4 7.3 7.6 8.6 8.0 7.2 7.4 7.7 4.7 6.0 8.1 9.8 9.7 6.7 8.6 -4.8 -4.1 -3.9 -3.5 -2.2 -1.9 -1.6 2.8 -0.1 -0.2 -0.1 -0.6 1.2 1.1

2.1 -1.0 -0.1 -13.3 1.7 1.4 -4.3 7.7 8.6 20.2 3.9 -19.8 93.9 26.8 63.5 -23.8 -16.7 -39.6 -15.3 -27.2 -24.8 15.1 5.7 12.2 2.3 0.0

1.6 0.9 0.5 -7.8 2.1 1.2 3.0 12.1 8.2 -6.5 12.8 -2.9 70.6 21.3 178.3 -13.7 -20.0 -40.2 -26.5 93.1 -20.0 11.0 5.3 5.3 2.5 -0.1

1.1 1.1 1.2 -2.1 2.2 1.3 -1.8 8.6 11.9 27.7 9.6 6.9 -2.5 16.9 -56.8 -21.7 -19.8 -41.2 -32.6 2.4 -14.2 10.1 5.2 4.5 1.8 1.0

1.5 2.2 2.6 9.9 2.9 1.6 3.4 10.3 11.1 17.7 11.0 14.9 4.5 17.7 -19.1 -11.8 2.3 -18.3 -27.9 -14.7 -8.8 8.4 6.1 3.2 -5.6 0.4

12945.7 13013.7 14305.8 14389.9

13065 14494

13100 14581

13148 14685

13235 14828

0.2 1.4 1.6 -0.9 1.5

1.3 0.5 1.4 -3.5 2.5

1.3 1.4 1.8 -0.1 1.9

1.4 2.2 1.8 2.1 1.8

1.2 2.1 1.6 1.7 1.4

78.0 80.9 4.4 2.5 3.3 4.5 65.8 67.2 -97.8 3.6 62.2 64.4 11.609 10.138 0.613 0.654 4.405 4.490 9.6 10.0 -2.8 -1.6 -1231 -1265 -468 -553

2.9 5.4 1.9 8.1 0.9

13315 14978

13428 15160

Billions of Dollars 13553 13676 13823 15363 15552 15789

4.0 3.7 2.7 5.7 1.5 2.6 13.2 15.1 8.6 20.1 7.4 16.7 42.4 17.5 23.1 8.4 22.0 34.8 1.0 -17.3 4.7 16.7 8.7 7.9 -1.4 1.3

13963 15995

14099 16209

Prices & Wages, Percent Change, Annual Rate 1.6 1.5 1.6 1.3 1.8 1.2 2.2 2.6 2.8 2.2 2.3 1.5 1.7 1.6 1.7 1.6 1.7 1.7 2.3 6.1 5.9 1.5 3.2 -0.6 1.7 1.3 1.5 1.4 2.1 2.0

1.4 1.6 1.8 0.4 2.4

3.6 3.6 2.7 5.8 1.7 2.6 10.4 11.8 9.4 19.0 9.1 5.5 29.9 14.4 19.4 6.8 21.9 21.2 1.1 -19.7 4.6 17.7 8.4 6.9 -1.5 1.3

3.3 3.6 2.3 8.7 0.9 1.8 9.9 9.6 10.8 19.1 11.2 -2.5 21.0 8.8 13.5 10.9 19.8 20.2 2.4 0.2 5.0 18.6 8.4 5.8 -0.9 2.1

3.0 3.4 2.1 6.5 1.2 1.8 8.2 7.9 10.7 18.3 12.1 -7.2 16.7 9.2 17.3 8.8 17.5 11.3 6.6 -7.3 7.8 10.7 8.7 4.3 -0.4 2.1

2.7 2.9 1.9 1.9 1.5 2.0 7.4 6.5 9.6 16.9 12.9 -7.6 12.4 8.7 14.5 9.6 13.7 8.0 6.4 7.3 7.0 6.1 8.7 4.2 -0.2 1.5

2.5 2.7 1.8 1.1 1.5 2.0 5.8 5.0 7.7 15.4 12.0 -6.5 8.8 7.5 11.7 7.7 11.3 1.7 8.4 6.3 5.9 2.1 8.7 3.4 -0.3 1.4

14225 14341.8 14448.6 14546.1 14635.4 16419 16636.7 16832.0 17016.7 17188.5

1.6 1.8 1.8 1.8 2.4

2.0 1.8 1.8 1.1 2.7

1.7 1.9 1.8 2.2 2.6

1.7 1.9 1.8 2.0 2.6

1.6 1.8 1.8 1.3 2.6

75.7 1.2 3.0 67.8 25.6 65.3 9.843 0.720 4.293 10.2 -0.7 -1180 -543

Other Key Measures 74.6 77.5 80.8 83.6 86.4 89.2 92.0 94.4 94.4 94.2 94.1 0.6 0.2 0.9 0.2 1.4 1.3 1.2 1.2 1.5 1.2 1.1 1.1 2.0 2.3 3.1 4.2 4.8 4.8 4.4 4.1 3.9 3.9 68.0 68.2 68.9 69.5 70.5 71.3 71.9 72.9 73.5 74.2 74.5 25.1 2.0 -6.0 -3.9 17.0 35.0 43.9 55.5 67.0 78.3 78.3 65.7 66.3 66.4 66.8 67.8 69.0 70.4 72.4 76.3 79.3 81.2 9.948 10.633 11.108 11.817 12.346 13.028 13.685 14.326 14.737 15.247 15.612 0.760 0.792 0.864 0.964 1.087 1.206 1.304 1.381 1.475 1.572 1.639 4.160 4.011 3.974 4.047 4.083 4.213 4.377 4.563 4.773 5.053 5.256 10.2 10.2 10.1 10.0 9.9 9.7 9.5 9.2 8.9 8.6 8.4 0.9 0.7 1.4 1.6 2.0 2.1 2.2 2.5 2.7 2.7 2.5 -936 -1200 -1207 -1209 -1045 -1045 -1055 -1069 -1023 -1023 -983 -537 -546 -551 -567 -594 -638 -684 -708 -728 -735 -732

93.0 0.7 3.2 74.5 68.4 82.6 16.3 1.7 5.5 8.2 2.3 -826.7 -724.1

92.9 1.2 3.5 74.5 55.4 82.4 16.7 1.7 5.6 8.0 2.2 -760.1 -703.1

92.7 1.0 3.1 74.3 48.4 81.2 16.8 1.7 5.7 7.9 1.9 -731.4 -698.2

92.7 1.2 4.0 74.1 41.2 79.7 16.8 1.7 5.7 7.8 1.7 -747.1 -707.8

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))

0.14 0.19 0.47 2.55 3.61 4.44 5.25 987 49.8 0.914 -13.8

0.11 0.30 0.58 2.66 3.75 4.62 5.35 1019 13.6 0.931 7.9

0.15 0.43 0.71 2.73 3.85 4.73 5.41 1039 8.1 0.931 0.0

0.51 0.81 1.13 3.02 4.12 4.95 5.60 1050 4.4 0.926 -2.1

1.17 1.52 1.91 3.43 4.47 5.25 5.92 1043 -2.8 0.924 -0.9

2.14 2.41 2.83 3.85 4.82 5.53 6.26 1029 -5.1 0.916 -3.6

3.17 3.41 3.86 4.34 5.15 5.80 6.61 1014 -5.8 0.911 -2.1

Financial Markets, NSA 4.18 5.08 5.82 6.03 4.36 5.21 5.88 5.95 4.81 5.67 6.30 6.24 4.98 5.59 5.98 5.92 5.44 5.66 5.92 5.88 6.03 6.17 6.22 6.08 6.93 7.20 7.50 7.56 1002 995 999 1016 -4.6 -3.0 1.7 7.2 0.906 0.899 0.899 0.903 -2.2 -3.1 0.2 1.7

5.78 5.54 5.72 5.55 5.59 5.86 7.36 1062 19.3 0.904 0.3

5.14 4.97 5.09 5.09 5.22 5.55 6.95 1133 29.7 0.904 0.0

4.55 4.1 3.9 4.3 5.1 4.44 4.0 3.9 4.4 5.4 4.55 4.1 4.1 4.7 5.8 4.70 4.4 4.4 5.0 5.9 4.90 4.7 4.7 5.2 6.1 5.29 5.1 5.1 5.6 6.4 6.58 6.3 6.3 6.7 7.5 1212 1289.4 1353.2 1383.9 1373.5 30.6 28.2 21.3 9.4 -3.0 0.903 0.9 0.9 0.9 0.9 -0.4 -0.9 -1.0 -0.8 -0.4

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

11971 -0.6 10895 -0.5 9911 -4.6 3.7 1174 37.4

12029 2.0 10940 1.6 9926 0.6 3.9 1163 -3.5

12123 3.2 10931 -0.3 9904 -0.9 3.6 1188 8.6

12228 3.5 11027 3.5 9960 2.3 3.9 1183 -1.4

12346 3.9 11139 4.1 10013 2.1 3.8 1180 -1.2

12468 4.0 11237 3.6 10057 1.8 3.7 1215 12.4

12590 4.0 11246 0.3 10019 -1.5 2.9 1273 20.8

12722 4.3 11373 4.6 10082 2.6 3.1 1336 21.2

Incomes 12879 13044 5.0 5.2 11528 11681 5.6 5.4 10166 10257 3.4 3.7 3.2 3.2 1365 1363 9.1 -0.6

13419 5.7 11944 5.4 10407 4.0 3.2 1396 4.1

13596 5.4 12076 4.5 10485 3.0 3.2 1431 10.4

13765 5.1 12196 4.0 10549 2.5 3.1 1467 10.4

24

U.S. Forecast | September 2009

13235 6.0 11789 3.8 10305 1.9 3.0 1382 5.7

13950.8 5.5 12250.0 1.8 10554.5 0.2 2.5 1485.1 5.0

14132.8 5.3 12347.0 3.2 10594.2 1.5 2.3 1502.9 4.9

14324.3 5.5 12485.0 4.5 10668.6 2.8 2.5 1488.5 -3.8

14513.2 5.4 12656.0 5.6 10772.8 4.0 3.0 1448.7 -10.3

U . S . F o r eca s t Tab l e s Table 4. Quarterly Gross Domestic Product Table 4. Quarterly Gross Domestic Product 2009Q3 2009Q4 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

12945.7 13013.7 13064.5 13099.6 13147.8 13235.1 13315.4 13427.9 13552.7 13676.0 13822.7 13962.6 14099.2 14224.6 14341.8 14448.6 14546.1 14635.4 13058.0 13025.9 13055.2 13090.8 13161.6 13256.8 13335.0 13427.4 13534.8 13649.5 13785.0 13913.7 14039.6 14165.1 14292.1 14411.8 14516.2 14612.6 9230.5 9227.7 9238.5 9265.2 9325.8 9377.7 9416.8 9462.5 9532.1 9609.0 9677.8 9751.2 9815.8 9882.4 9938.0 9990.4 10036.8 10081.6

Durables

1118.4 1079.1 1057.4 1051.7 1076.8 1096.0 1117.8 1125.8 1149.8 1183.7 1212.8 1233.0 1250.1 1268.0 1294.8 1315.3 1321.5 1325.0

Nondurables

2019.1 2027.4 2037.8 2048.8 2063.5 2073.2 2076.7 2084.3 2095.5 2104.3 2111.7 2121.1 2128.8 2137.9 2142.8 2149.0 2156.9 2164.8

Services Nonresidential Fixed Investment Equipment & Software Information Processing Equipment Computers & Peripherals Communications Equipment Industrial Equipment Transportation equipment Aircraft Other Equipment Structures Commercial & Health

6086.4 6108.2 6126.6 6146.4 6170.5 6196.0 6213.2 6243.8 6281.4 6321.0 6358.0 6404.3 6446.3 6488.2 6517.0 6546.4 6578.8 6611.6 1293.3 1279.0 1288.5 1282.8 1293.5 1326.4 1364.2 1411.0 1453.3 1495.9 1547.2 1600.1 1650.4 1691.7 1732.3 1766.6 1798.3 1823.9 879.8

896.2

922.2

941.4

534.6

545.7

556.6

572.5

964.8 1000.3 1035.5 1078.9 1110.1 1134.1 1167.5 1206.6 1249.8 1285.2 1314.9 1340.2 1361.4 1378.3 587.7

602.8

616.5

629.9

639.1

647.8

658.0

670.3

684.3

699.7

717.9

736.4

753.4

767.5

114.4

119.8

117.8

125.2

130.4

136.2

142.7

150.1

158.2

164.4

170.7

178.1

186.4

194.7

203.4

212.1

220.5

228.6 140.5

95.5

96.4

99.4

101.7

104.4

107.5

110.5

113.3

114.6

116.3

118.4

120.6

122.8

125.5

128.8

132.6

136.6

136.3

129.0

128.0

130.2

134.8

142.4

150.9

158.5

166.5

173.3

180.3

187.8

195.2

197.8

196.5

192.9

189.1

186.0

86.6

102.2

116.8

116.0

117.3

127.6

137.8

157.5

168.0

172.9

186.2

202.2

220.8

235.8

247.3

257.0

264.6

270.2

14.4

15.3

16.0

16.7

17.4

18.2

18.8

19.7

20.2

20.9

21.8

23.0

24.0

24.8

25.3

25.9

26.4

26.9

18.7

21.2

27.4

22.2

21.0

25.0

25.5

27.3

29.2

31.4

34.7

36.8

38.8

40.5

41.8

43.5

45.0

46.3

401.4

375.1

361.5

340.1

329.5

328.4

332.0

336.6

347.8

365.2

382.4

396.2

404.2

410.9

421.7

430.7

440.6

448.9

122.9

117.4

111.0

105.1

105.7

109.3

112.7

115.8

118.7

120.6

125.2

130.6

137.2

144.2

150.9

157.1

162.2

166.6

Manufacturing

66.9

59.0

51.8

45.4

43.1

42.4

38.2

34.4

34.4

38.0

42.4

46.4

50.0

52.5

54.9

56.4

57.5

57.8

Power & Communication

77.6

74.5

69.0

62.5

57.6

53.8

54.3

55.7

56.6

58.0

59.2

59.0

59.1

59.3

59.6

60.6

61.5

62.8

Mining & Petroleum

60.4

55.8

65.7

66.1

63.5

65.0

67.9

70.8

77.4

87.1

92.6

95.6

91.2

86.3

86.3

84.7

86.2

87.5

Other

76.9

71.6

67.7

65.2

63.7

62.4

64.1

65.8

67.7

69.7

71.7

73.4

74.2

75.1

76.0

77.4

78.7

79.9

335.5

347.6

356.7

365.4

372.8

382.8

399.0

420.7

447.1

475.1

500.6

521.2

541.7

564.3

588.9

604.0

613.1

616.2

Residential Fixed Investment Exports

1441.7 1461.9 1480.9 1499.9 1522.3 1549.3 1577.9 1610.9 1642.1 1670.9 1700.9 1732.8 1769.1 1805.3 1841.9 1880.5 1920.0 1960.5

Imports

1835.7 1889.1 1913.7 1935.0 1950.2 1972.7 2001.6 2041.2 2089.5 2138.7 2173.8 2219.3 2262.1 2300.3 2332.8 2357.3 2381.8 2401.7

Federal Government

1028.4 1034.4 1040.8 1045.3 1030.4 1017.8 1007.1

State & Local Government

1546.6 1546.5 1546.3 1550.1 1551.4 1562.2 1561.8 1561.0 1560.6 1558.3 1562.8 1567.2 1572.2 1577.4 1585.7 1593.8 1599.9 1605.5

997.2

988.2

982.8

978.1

974.0

970.7

967.1

964.9

963.8

963.3

962.6

Table 5. Annual Employment

Table 5. Annual Employment 2002

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

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

2003

2004

History 2005

2006

2007

2008

Millions 130.340 129.996 131.419 133.699 136.098 137.604 137.046 108.831 108.416 109.801 111.890 114.123 115.384 114.550 0.512 0.503 0.523 0.562 0.620 0.664 0.716 6.715 6.736 6.973 7.333 7.693 7.632 7.213 15.257 14.508 14.315 14.226 14.159 13.880 13.423 25.500 25.287 25.536 25.963 26.277 26.627 26.381 4.224 4.184 4.250 4.364 4.469 4.540 4.503 7.848 7.976 8.031 8.153 8.329 8.301 8.144 16.201 16.588 16.950 17.370 17.824 18.320 18.855 15.975 15.985 16.388 16.949 17.573 17.948 17.779 3.394 3.189 3.117 3.061 3.038 3.032 2.997 11.986 12.175 12.492 12.814 13.109 13.427 13.457 21.509 21.580 21.618 21.810 21.974 22.220 22.496 2.766 2.760 2.731 2.732 2.732 2.733 2.764 18.744 18.820 18.887 19.078 19.243 19.487 19.732

-1.13 -1.69 -4.01 -1.32 -5.35 -1.07 -0.89 0.71 3.17 -1.27 -6.12 0.93 1.21 0.83 1.27

-0.26 -0.38 -0.23 1.53 -4.46 -0.57 -1.00 1.25 2.12 1.08 -5.02 1.59 -0.14 -1.55 0.08

1.09 1.28 5.16 4.31 -0.05 1.52 2.58 0.95 2.36 2.99 -2.04 2.59 0.62 -0.37 0.77

1.73 1.90 9.47 5.89 -0.77 1.68 2.51 2.16 2.53 3.76 -1.07 2.19 0.78 0.32 0.85

1.79 2.00 10.06 2.47 -0.98 1.13 2.55 1.42 2.64 3.14 -0.89 2.86 1.02 -0.33 1.21

Growth Rates 1.11 -0.40 1.11 -0.72 5.89 8.73 -1.87 -7.91 -1.99 -5.15 1.19 -2.65 1.00 -2.86 -1.25 -2.47 2.90 2.75 1.71 -3.12 0.01 -2.16 2.15 -1.37 1.17 0.93 0.49 1.44 1.27 0.86

Forecast 2011

2012

2013

131.913 130.879 132.929 109.361 108.332 110.572 0.679 0.639 0.654 6.235 5.658 5.632 12.005 11.347 11.359 25.229 24.911 25.078 4.209 4.099 4.208 7.761 7.555 7.586 19.236 19.811 20.389 16.719 16.941 18.224 2.834 2.618 2.686 13.192 13.344 13.402 22.552 22.547 22.357 2.830 2.941 2.807 19.722 19.606 19.550

136.13 113.64 0.67 5.93 11.73 25.63 4.46 7.77 20.68 19.36 2.65 13.63 22.49 2.79 19.70

139.26 116.35 0.65 6.40 12.14 26.27 4.70 7.93 20.79 20.08 2.67 13.82 22.91 2.78 20.12

2.41 2.78 0.29 7.01 3.48 2.41 5.90 3.05 0.76 5.78 -1.06 2.31 1.25 -0.34 1.47

2.30 2.39 -4.13 7.52 3.26 2.35 4.96 0.62 0.52 2.88 2.17 0.87 1.97 -0.17 2.27

2009

-3.75 -4.53 -11.67 -14.10 -9.82 -4.12 -7.09 -4.99 1.51 -5.53 -7.05 -1.21 -0.06 2.18 -0.37

2010

-0.77 -0.93 -1.56 -6.20 -3.90 0.15 -0.41 -1.62 3.94 5.12 -3.12 1.64 -0.50 2.36 -0.62

1.57 2.07 4.54 2.07 1.68 1.13 5.12 1.55 2.41 7.54 0.55 0.23 -0.24 -1.53 -0.05

Institute for Economic Competitiveness

25

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

Table 6. Quarterly Employment 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

Employment (Millions) Total Nonfarm Employment

131.2 130.7 130.4 130.7 131.0 131.4 131.9 132.6 133.2 134.0 134.8 135.7 136.6 137.4 138.2 139.0 139.6 140.20

Private Nonfarm

108.6 108.1 107.9 108.0 108.4 109.0 109.6 110.2 110.9 111.6 112.4 113.3 114.1 114.8 115.5 116.1 116.7 117.13

Mining

0.7

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.6

0.64

Construction

6.1

6.0

5.8

5.7

5.6

5.6

5.6

5.6

5.6

5.7

5.8

5.9

6.0

6.1

6.2

6.4

6.5

6.56

Manufacturing

11.8

11.8

11.5

11.3

11.2

11.3

11.3

11.3

11.4

11.5

11.6

11.7

11.8

11.9

12.0

12.1

12.2 12.26

Trade, Transportation and Utilities

26.4 26.46

25.1

24.9

24.8

24.9

25.0

25.0

25.0

25.0

25.1

25.2

25.4

25.6

25.7

25.9

26.0

26.2

Transportation & Warehousing

4.2

4.1

4.1

4.1

4.1

4.1

4.1

4.2

4.2

4.3

4.4

4.4

4.5

4.6

4.6

4.7

4.7

4.78

Financial Activities

7.7

7.6

7.6

7.6

7.5

7.5

7.5

7.6

7.6

7.6

7.7

7.7

7.8

7.9

7.9

7.9

7.9

7.92

Education & Health

19.3

19.3

19.5

19.7

20.0

20.1

20.2

20.3

20.5

20.6

20.6

20.7

20.7

20.7

20.7

20.8

20.8 20.83

Professional & Business Services

16.6

16.5

16.7

16.8

17.0

17.4

17.7

18.1

18.4

18.7

18.9

19.2

19.5

19.7

19.9

20.0

20.1 20.30

2.8

2.8

2.6

2.6

2.6

2.7

2.7

2.7

2.7

2.7

2.7

2.7

2.6

2.6

2.6

2.7

Leisure & Hospitality

13.2

13.2

13.2

13.3

13.4

13.4

13.4

13.4

13.4

13.4

13.5

13.6

13.7

13.7

13.8

13.8

13.8 13.86

Government

22.6

22.5

22.5

22.7

22.5

22.4

22.4

22.4

22.3

22.3

22.4

22.4

22.5

22.6

22.7

22.9

23.0 23.07

2.8

2.8

2.9

3.1

2.9

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

2.8

19.7

19.7

19.6

19.6

19.6

19.6

19.6

19.5

19.5

19.6

19.6

19.7

19.7

19.8

19.9

20.1

Total Nonfarm Employment

-2.85

-1.58

-0.74

0.89

0.74

1.38

1.59

1.94

2.04

2.15

2.5

2.7

2.6

2.4

2.3

2.2

1.9

Private Nonfarm

-3.28

-1.81

-0.91

0.31

1.66

2.13

2.01

2.40

2.49

2.58

2.9

2.9

2.9

2.6

2.4

2.2

1.8

1.63

Mining

-5.73 -12.98

-8.45

4.28

-1.60

-0.80

0.79

5.93

6.19

4.89

4.9

1.1

-1.1

-3.9

-5.9

-4.0

-3.7

-3.13

Information

Federal State & Local

2.7

2.8

2.70

2.78

20.2 20.29

Growth Rates

Construction

1.65

-13.38

-8.38

-9.26 -11.03

-7.45

1.95

-0.30

1.32

3.39

3.78

5.5

6.7

7.1

8.1

8.7

8.0

6.9

5.64

Manufacturing

-6.98

-1.44

-7.61

-6.96

-3.04

1.56

0.21

0.39

2.23

3.82

4.0

3.3

3.0

3.4

4.6

3.3

2.6

2.37

Trade, Transportation and Utilities

-3.87

-2.25

-1.32

0.46

1.38

0.05

0.28

0.33

1.34

2.54

2.5

2.4

2.4

2.3

2.8

2.8

2.2

1.58

Transportation & Warehousing

-6.58

-5.14

-0.91

0.00

0.05

-0.77

2.27

5.55

6.85

5.82

5.5

5.8

6.5

5.8

5.5

5.2

5.3

3.89

Financial Activities

-3.62

-3.46

-2.24

-2.05

-1.23

-0.96

1.18

1.19

1.80

2.02

1.9

2.8

4.3

3.2

2.1

1.3

0.4

-1.33

Education & Health

1.18

1.08

3.32

4.94

5.15

2.35

1.70

3.44

2.93

1.59

1.0

1.1

0.6

0.3

0.3

0.7

0.6

0.44

Professional & Business Services

-3.32

-1.91

3.49

3.11

4.94

8.94

8.66

9.04

7.21

5.26

6.2

6.5

5.9

4.6

2.9

2.9

2.7

3.11

Information

-7.35

-7.36 -15.19

-9.14

2.51

9.35

7.02

-0.39

-2.62

-1.82

-0.7

-0.9

-1.4

-1.2

0.7

2.1

3.0

2.79

Leisure & Hospitality

-0.38

0.52

0.84

4.05

2.38

-0.73

-0.41

0.44

-0.09

1.01

2.7

2.4

2.1

2.0

1.2

0.8

0.4

1.12

Government

-0.75

-0.48

0.09

3.70

-3.62

-2.18

-0.46

-0.32

-0.20

0.02

0.3

1.4

1.5

1.7

1.9

2.1

2.1

1.76

Federal

-2.62

0.66

6.13 37.36 -22.03 -12.04

-2.19

-1.50

-1.36

-1.06

-0.6

-0.4

-0.2

-0.2

-0.2

-0.2

-0.2

-0.17

State & Local

-0.47

-0.65

-0.20

-0.15

-0.04

0.17

0.5

1.7

1.7

2.0

2.2

2.4

2.4

2.02

-0.76

-0.65

-0.42

-0.64

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

Table 7. Quarterly Implicit Price Deflators (2005=100) 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP

110.5 110.6 110.9 111.3 111.7 112.0 112.5 112.9 113.4 113.7 114.2 114.6 115.0 115.4 116.0 116.5 117.0 117.4

Consumption

109.9 110.2 110.4 110.7 111.3 111.7 112.3 112.8 113.4 113.9 114.4 114.8 115.2 115.6 116.1 116.5 117.0 117.5

Durables

94.4

93.9

93.3

92.8

92.5

92.0

91.7

91.5

91.2

90.9

90.6

90.4

90.1

89.9

89.6

89.4

89.1

88.8

Motor Vehicles

99.6 100.0

99.9 100.3 100.5 100.4 100.6 100.8 101.1 101.3 101.4 101.5 101.7 101.9 102.1 102.2 102.4 102.6

Furniture

98.7

97.4

98.0

96.8

96.4

96.1

95.8

95.7

95.5

95.4

95.2

95.1

95.0

94.9

94.7

94.6

94.5

94.3

Other Durables

113.3 113.1 113.2 113.5 113.8 114.1 114.4 114.8 115.2 115.5 115.9 116.3 116.6 117.0 117.4 117.8 118.1 118.4

Nondurables

111.7 112.2 111.9 112.1 112.9 113.6 114.4 115.2 116.1 116.8 117.7 118.1 118.5 118.9 119.3 119.7 120.1 120.5

Food

112.9 113.1 113.5 113.9 114.4 114.8 115.2 115.7 116.1 116.5 117.0 117.5 117.9 118.4 118.9 119.4 119.9 120.4

Clothing & Shoes

100.0

Gasoline & Oil

121.2 123.2 119.7 118.7 121.5 124.4 128.0 130.8 133.6 136.4 139.5 139.7 139.6 139.5 139.5 139.5 139.4 139.4

Fuel

112.0 118.6 120.5 123.1 127.7 131.4 135.0 138.6 142.1 145.6 149.0 149.9 150.5 151.1 151.8 152.6 153.4 154.2

99.7

99.5

99.5

99.4

99.2

99.3

99.2

99.2

99.2

99.2

99.1

99.1

99.0

99.0

99.0

98.9

98.8

Services

112.3 112.7 113.1 113.6 114.3 114.8 115.4 116.0 116.7 117.2 117.8 118.2 118.8 119.4 120.0 120.6 121.3 121.9

Housing

113.0 113.5 114.1 114.8 115.4 116.0 116.5 117.1 117.6 118.2 118.8 119.4 120.0 120.6 121.3 121.9 122.5 123.1

Electricity

125.4 122.8 120.7 119.3 118.9 118.6 118.4 118.9 120.2 121.7 122.9 123.8 124.6 125.4 126.4 127.5 128.5 129.5

Natural Gas Water & Sewer

82.7

76.4

72.0

70.6

72.0

73.9

76.6

89.0 103.3 106.8 110.6 106.0 102.6 102.9 102.4 104.9 107.5 108.2

124.6 125.6 126.5 127.3 128.0 128.7 129.4 130.2 131.2 132.2 133.2 134.2 135.2 136.2 137.2 138.2 139.2 140.3

Telephone

105.7 105.3 104.8 104.4 104.1 103.8 103.5 103.1 102.7 102.3 101.8 101.3 100.9 100.4 100.0

Transportation

114.8 115.5 116.1 116.6 117.1 117.4 117.9 118.3 118.8 119.2 119.7 120.1 120.6 121.1 121.6 122.1 122.7 123.2

Other Services

114.9 115.1 115.4 115.8 116.4 116.9 117.4 117.8 118.2 118.6 119.1 119.5 120.1 120.6 121.3 122.0 122.7 123.5

26

U.S. Forecast | September 2009

99.6

99.2

98.8

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

Table 8. Percent Change in Implicit Price Deflators 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4

GDP

2.9

0.2

1.3

1.3

1.4

1.2

1.6

1.5

1.6

1.3

1.8

1.2

1.4

1.6

2.0

1.7

1.7

1.6

Consumption

4.2

1.0

0.6

1.2

2.0

1.8

1.9

2.0

2.1

1.7

1.9

1.3

1.4

1.5

1.6

1.7

1.7

1.6

Durables

0.2

-2.4

-2.6

-1.7

-1.6

-1.8

-1.4

-1.1

-1.0

-1.3

-1.2

-1.3

-1.2

-1.1

-1.1

-1.1

-1.1

-1.2

7.3

1.3

-0.3

1.5

0.8

-0.1

0.5

0.9

1.1

0.8

0.5

0.5

0.7

0.8

0.7

0.6

0.6

0.7

-0.6

-2.9

-2.6

-2.2

-1.7

-1.3

-1.0

-0.7

-0.6

-0.6

-0.6

-0.5

-0.5

-0.5

-0.6

-0.5

-0.6

-0.6

Other Durables

-0.4

-0.5

0.5

1.0

1.1

0.9

1.2

1.4

1.4

1.1

1.3

1.3

1.2

1.3

1.3

1.3

1.2

1.1

Nondurables

15.6

1.6

-0.9

0.6

2.8

2.6

3.1

2.8

2.9

2.6

2.9

1.5

1.3

1.4

1.4

1.4

1.4

1.3

Food

-1.5

0.8

1.3

1.5

1.9

1.4

1.4

1.5

1.7

1.4

1.6

1.6

1.6

1.7

1.7

1.7

1.7

1.5

6.7

-1.2

-0.5

-0.3

-0.3

-0.6

0.1

0.0

0.0

-0.4

0.1

-0.2

-0.2

-0.1

-0.2

-0.1

-0.2

-0.3

171.0

6.9

-10.7

-3.5

9.9

9.8

12.0

9.1

8.9

8.6

9.6

0.6

-0.3

-0.3

0.0

-0.2

-0.1

-0.1

33.7

25.8

6.6

9.0

15.8

12.0

11.5

10.9

10.6

10.0

9.9

2.3

1.6

1.7

1.9

2.2

2.1

2.1

1.3

1.3

1.5

1.9

2.2

2.0

1.9

2.2

2.3

1.8

1.9

1.6

1.8

2.0

2.0

2.2

2.2

2.1 2.0

Motor Vehicles Furniture

Clothing & Shoes Gasoline & Oil Fuel Services Housing Electricity Natural Gas

1.4

2.1

2.0

2.3

2.2

2.1

1.9

1.9

1.9

1.9

2.0

2.1

2.1

2.1

2.1

2.1

2.0

-7.4

-8.0

-6.7

-4.5

-1.5

-1.0

-0.5

1.7

4.4

5.0

4.0

3.1

2.4

2.7

3.3

3.4

3.2

3.2

-17.3

-27.2

-21.2

-7.7

8.4

11.1

15.2

82.0

82.2

14.2

15.1

-15.8

-12.4

1.2

-1.7

10.1

10.1

2.8

Water & Sewer

6.1

3.5

2.7

2.4

2.4

2.3

2.1

2.5

3.0

3.2

3.1

3.1

3.0

3.0

3.0

3.0

2.9

2.9

Telephone

0.6

-1.6

-1.8

-1.5

-0.9

-1.1

-1.3

-1.6

-1.4

-1.8

-1.7

-2.1

-1.6

-1.8

-1.7

-1.7

-1.6

-1.7

Transportation

0.8

2.4

2.0

2.0

1.6

1.1

1.6

1.4

1.6

1.3

1.8

1.4

1.6

1.6

1.8

1.7

1.7

1.7

Other Services

1.2

0.8

1.0

1.4

2.1

1.8

1.7

1.3

1.6

1.3

1.5

1.4

1.9

1.9

2.2

2.3

2.5

2.4

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

Table 9. Annual Implicit Price Deflators (2005=100) History 2002

2003

2004

2005

Forecast 2006

2007

2008

2009

2010

2011

2012

2013

GDP

92.1

94.1

96.8

100.0

103.3

106.2

108.5

110.1

111.5

113.1

114.8

116.7

Consumption

92.7

94.6

97.1

100.0

102.7

105.5

109.0

109.4

111.0

113.1

115.0

116.8

Durables

106.7

102.9

101.0

100.0

98.5

96.7

95.5

94.3

92.6

91.3

90.2

89.2

Motor Vehicles

101.9

99.1

98.4

100.0

100.1

99.5

98.5

98.5

100.3

100.9

101.6

102.3

Furniture

104.1

101.2

99.9

100.0

99.5

98.7

98.0

98.5

96.7

95.6

95.0

94.5

Other Durables

103.3

101.6

101.4

100.0

101.9

106.1

111.5

113.1

113.7

115.0

116.5

117.9

Nondurables

90.9

92.8

96.1

100.0

103.2

106.3

112.2

109.6

112.6

115.6

118.3

119.9

Food

93.5

95.3

98.3

100.0

101.7

105.6

111.9

113.4

114.2

115.9

117.7

119.7

103.9

101.3

100.9

100.0

99.6

98.6

97.8

99.0

99.4

99.2

99.1

98.9

Gasoline & Oil

Clothing & Shoes

59.9

69.8

82.1

100.0

112.8

122.4

142.2

107.5

121.1

132.2

139.6

139.5

Fuel

53.1

64.2

74.7

100.0

114.1

121.9

166.2

112.0

125.7

140.3

150.1

153.0

Services

90.8

93.7

96.7

100.0

103.4

107.0

110.6

112.2

114.0

116.3

118.5

120.9

Housing

93.0

95.4

97.6

100.0

103.6

107.4

110.4

112.8

115.1

117.4

119.7

122.2

Electricity

90.3

92.5

94.2

100.0

112.0

116.5

123.9

126.5

119.4

119.8

124.2

128.0

Natural Gas

62.8

77.2

83.6

100.0

102.6

101.4

115.4

86.6

72.1

93.9

105.5

105.8

Water & Sewer

86.5

89.7

95.0

100.0

104.9

110.2

116.7

123.5

127.6

130.7

134.7

138.7

102.7

102.3

100.7

100.0

100.6

102.4

104.1

105.5

104.3

102.9

101.1

99.4

Transportation

93.1

95.1

96.5

100.0

104.2

106.6

112.4

115.0

116.8

118.6

120.4

122.4

Other Services

87.0

91.2

95.4

100.0

104.1

107.3

112.4

114.7

116.1

118.0

119.8

122.4

Telephone

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

2.7

2.0

1.3

1.3

1.5

1.5

1.7

2.0

1.9

3.0

3.3

1.9

3.6

1.8

1.3

1.4

1.9

1.5

1.6

Durables

-2.6

-4.0

-0.8

-1.2

-1.7

-1.8

-1.3

-0.9

-1.9

-1.2

-1.2

-1.1

Motor Vehicles

-0.7

-3.8

1.6

1.0

-0.6

0.3

-2.9

3.2

0.5

0.8

0.6

0.6

Furniture

-2.0

-3.1

-0.1

-0.4

-0.2

-1.6

0.3

-0.1

-1.9

-0.8

-0.5

-0.6

Other Durables

-2.3

-1.5

-0.1

0.0

3.3

2.9

5.9

0.2

0.9

1.3

1.3

1.2

Nondurables

1.9

2.1

4.9

4.4

0.5

6.5

0.8

3.3

1.3

2.8

1.8

1.4

Food

0.8

3.2

2.7

1.5

1.7

4.7

6.9

-1.4

1.5

1.5

1.6

1.7

Clothing & Shoes

-1.9

-1.6

-0.5

-1.3

0.2

-1.2

-0.9

2.4

-0.4

-0.1

-0.1

-0.2

Gasoline & Oil

19.8

19.4

28.8

31.8

-0.8

31.5

0.7

35.2

1.4

9.6

2.4

-0.1

Fuel

7.2

21.3

41.6

32.8

-0.4

33.0

16.5

-6.5

10.9

10.8

3.9

2.1

Services

3.0

3.2

3.2

3.8

3.1

3.6

2.9

1.0

1.9

2.1

1.8

2.1

Housing Electricity

3.4

2.2

2.4

2.5

4.4

3.1

2.6

1.9

2.2

1.9

2.1

2.0

-2.2

3.2

1.8

10.2

8.6

5.1

8.3

-4.1

-3.4

2.6

3.0

3.3

Natural Gas

5.3

22.2

14.7

44.7

-18.3

3.2

18.0

-29.7

-2.3

48.4

-3.0

5.3

Water & Sewer

3.1

4.6

5.9

5.0

4.9

5.2

6.8

4.8

2.4

2.7

3.1

3.0

Telephone

1.0

-1.7

-1.7

0.2

1.3

1.5

2.1

0.3

-1.3

-1.5

-1.8

-1.6

Transportation

1.3

2.6

1.4

4.9

2.5

3.4

5.9

0.8

1.7

1.5

1.6

1.7

Other Services

4.5

4.9

4.4

4.6

4.0

3.3

4.6

1.1

1.6

1.5

1.7

2.3

Table 11. Personal Income and its Components

Table 11. Personal Income and its Components History 2004

2005

Forecast

2002

2003

2006

2007

2008

2009

2010

2011

2012

2013

Personal Income

9060.1

9378.2

9937.3 10485.9 11268.1 11894.1 12238.8

Wages & Salaries

6110.8

6382.6

6693.4

7065.1

7477.0

7856.5

8037.4

7789.9

7940.3

8239.8

8642.2

9098.6

Other Labor Income

747.4

845.6

874.6

931.6

960.2

993.0

1023.9

1045.7

1089.5

1139.8

1204.6

1269.1

Nonfarm Income

1210.4

Personal Income Billions Current Dollars 11992.8 12291.2 12808.7 13503.7 14230.3

871.9

894.1

984.1

1025.9

1103.6

1056.9

1057.5

1002.3

1030.6

1081.1

1132.5

Farm Income

18.5

36.5

49.7

43.9

29.4

39.5

48.7

25.4

35.5

35.5

35.3

37.1

Rental income

218.8

204.2

198.4

178.2

146.5

144.9

210.4

259.4

301.9

296.9

245.4

183.4

Dividends

397.7

423.1

548.3

555.0

702.2

765.1

686.5

534.8

525.0

547.9

560.8

581.5

Interest Income

911.9

889.8

860.2

987.0

1127.5

1266.4

1308.0

1253.0

1268.3

1389.9

1625.9

1807.1

1282.2

1341.8

1415.5

1508.6

1605.0

1718.0

1875.9

2099.0

2180.0

2248.6

2346.7

2461.0

385.3

396.5

419.2

445.2

475.1

498.5

517.9

507.9

521.4

543.5

573.8

609.4

2.0

3.5

6.0

5.5

2.9

-2.0

2.5

4.2

5.4

5.4

Transfer Payments Personal Social Insurance Tax

Percent Change, Annual Rate Personal Income Wages & Salaries Other Labor Income

7.5

5.6

2.2

4.4

4.9

5.6

5.8

5.1

2.3

-3.1

1.9

3.8

4.9

5.3

11.7

13.2

3.5

6.5

3.1

3.4

3.1

2.1

4.2

4.6

5.7

5.4

3.8

2.5

10.1

4.3

7.6

-4.2

0.1

-5.2

2.8

4.9

4.7

6.9

Farm Income

Nonfarm Income

-38.8

113.5

38.7

-11.1

-32.7

33.9

26.8

-47.0

41.3

1.1

0.2

5.2

Rental income

-13.1

14.9

-9.4

-10.9

-23.8

35.2

41.5

15.4

16.2

-10.5

-22.5

-24.0

7.6

14.0

43.3

-0.6

26.8

-0.4

-10.9

-21.6

5.3

3.4

2.5

4.5

-6.5

-2.2

0.2

19.4

10.9

14.4

-2.1

-2.8

2.6

15.0

15.1

10.9

Dividends Interest Income Transfer Payments

5.7

4.5

6.0

6.3

6.7

7.6

9.6

13.7

2.8

3.3

4.5

5.2

Personal Social Insurance Tax

3.2

4.2

6.1

5.9

6.7

5.1

2.8

-2.3

3.6

4.5

6.4

5.9

28

U.S. Forecast | September 2009

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) 2009Q3

Consumer spending on… all goods & services durable goods furniture and appliances information processing equipment motor vehicles and parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

Consumer Expenditures by Type Billions Current Dollars 10147.7 10170.3 10197.0 10257.9 10375.1 10478.3 10570.5 10674.2 10809.3 10942.3 11071.5 11191.8 11305.0 11424.9 11534.4 11643.3 11745.7 11844.0 1056.2 1012.9

986.0

976.4

995.6

1008.6

1048.8

1076.2

1126.4

1139.3

1177.6

1177.2

251.2

251.3

250.5

247.8

246.0

244.2

244.0

244.3

245.5

247.4

251.1

255.6

259.6

263.8

268.0

271.8

273.5

274.3

63.7

63.4

62.9

63.2

63.9

64.4

64.8

65.8

67.0

68.3

69.4

71.1

72.6

74.0

75.0

76.0

77.0

78.1

345.9

305.0

281.9

277.0

294.7

306.4

319.7

319.4

332.0

351.7

365.9

368.7

370.6

372.9

384.0

390.6

388.7

385.3

95.7

94.8

94.0

93.6

94.4

95.1

95.6

96.2

97.2

98.2

98.8

99.8

100.6

101.5

102.1

102.5

102.3

102.2

2280.5 2296.1

2328.8

2354.8

2376.7 2402.0

2432.1

2458.2

2484.7 2505.0

2522.2

2541.7

2556.4 2572.7

2590.8

2608.5 359.5

2255.4 2273.9

1025.1 1029.5

1099.4 1114.2

1160.2 1175.3

326.0

329.2

331.1

334.0

336.9

338.4

336.9

339.3

341.7

344.0

345.2

347.7

349.6

352.0

352.8

354.5

356.7

21.4

21.7

21.7

22.0

22.7

23.1

23.5

23.7

24.2

24.8

25.2

25.1

25.2

25.2

25.4

25.5

25.7

25.9

328.4

333.3

324.0

320.0

328.6

335.5

343.0

348.4

357.8

365.7

374.0

375.1

374.5

375.9

374.6

374.5

374.7

375.1

food

792.3

799.8

810.3

821.6

833.2

843.3

851.9

860.9

870.0

878.1

885.8

893.0

899.9

906.9

913.1

919.3

925.6

932.1

other nondurable goods

787.2

789.8

793.4

798.6

807.2

814.4

821.5

829.6

838.4

845.6

854.5

864.0

873.0

881.6

890.6

898.9

908.0

916.0

Consumer Expenditures by Type Billions 2005 Dollars Consumer spending on… all goods & services durable goods furniture and appliances information processing equipment motor vehicles and parts other durable goods nondurables clothing & shoes fuel oil & coal gasoline & motor oil

9230.5 9227.7

9238.5 9265.2

9325.8

9377.7

9416.8 9462.5

9532.1

9609.0

9677.8 9751.2

9815.8

9882.4

9938.0 9990.4 10036.8 10081.6

1118.4 1079.1

1057.4 1051.7

1076.8

1096.0

1117.8 1125.8

1149.8

1183.7

1212.8 1233.0

1250.1

1268.0

1294.8 1315.3

1321.5

1325.0

254.4

256.4

257.3

255.9

255.2

254.2

254.6

255.4

257.0

259.4

263.7

268.7

273.3

278.1

282.9

287.3

289.5

290.8

99.0

101.4

103.3

106.4

110.2

113.9

117.7

122.6

127.9

133.8

139.6

146.8

153.8

160.9

167.3

173.8

180.6

187.7

347.2

305.2

282.3

276.3

293.3

305.1

317.9

316.9

328.5

347.3

360.7

363.1

364.4

365.9

376.2

382.1

379.6

375.6

82.3

81.7

81.0

80.6

81.1

81.6

81.9

82.3

82.9

83.7

83.9

84.6

85.1

85.7

86.1

86.3

86.0

85.7

2037.8 2048.8

2063.5

2073.2

2076.7 2084.3

2095.5

2104.3

2111.7 2121.1

2128.8

2137.9

2142.8 2149.0

2156.9

2164.8 363.7

2019.1 2027.4 326.1

330.4

332.6

335.8

339.0

341.0

339.5

341.9

344.3

346.9

348.1

350.8

352.9

355.4

356.4

358.2

360.6

19.2

18.3

18.0

17.8

17.8

17.6

17.4

17.1

17.0

17.0

16.9

16.8

16.7

16.7

16.7

16.7

16.8

16.8

271.1

270.6

270.6

269.6

270.4

269.7

267.9

266.3

267.8

268.1

268.0

268.4

268.2

269.4

268.5

268.5

268.7

269.1

food

701.8

707.0

714.0

721.3

728.1

734.4

739.3

744.4

749.2

753.5

757.0

760.2

763.1

765.8

767.7

769.6

771.7

774.2

other nondurable goods

703.3

704.0

705.6

707.6

711.7

714.2

716.4

718.9

721.6

723.5

726.6

730.3

733.6

736.6

739.9

742.6

746.0

748.5

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

2.2

-0.1

0.5

1.2

2.6

2.2

1.7

1.9

2.9

3.2

2.9

3.0

2.6

2.7

2.3

2.1

1.9

1.8

19.1

-14.1

-8.1

-2.2

9.5

7.1

8.0

2.9

8.6

11.8

9.9

6.7

5.5

5.7

8.5

6.3

1.9

1.1

furniture and appliances

0.4

3.1

1.4

-2.2

-1.1

-1.6

0.7

1.2

2.6

3.7

6.6

7.6

6.8

7.0

7.0

6.2

3.1

1.9

information processing equipment

7.8

9.4

7.6

12.0

14.5

13.5

13.3

16.5

17.5

18.2

17.6

20.4

19.2

18.5

16.0

15.5

15.5

15.8

60.7

-48.4

-30.0

-8.4

24.6

16.0

16.8

-1.3

14.7

22.9

15.5

2.6

1.4

1.6

11.3

6.2

-2.6

-4.2

1.7

-2.6

-3.5

-2.2

2.8

2.5

1.3

1.8

3.0

3.7

1.3

3.5

2.3

2.9

1.5

0.9

-1.4

-1.3

nondurables

-0.6

1.6

2.1

2.2

2.9

1.9

0.7

1.5

2.1

1.7

1.4

1.8

1.5

1.7

0.9

1.2

1.5

1.5

clothing & shoes

-2.4

5.2

2.8

3.8

3.9

2.4

-1.9

2.9

2.8

3.1

1.3

3.2

2.3

2.8

1.1

2.0

2.7

3.4

fuel oil & coal

-2.5

-17.9

-6.3

-3.6

-1.1

-4.4

-5.4

-5.8

-2.2

-0.1

-2.8

-2.8

-0.8

-2.0

1.0

0.2

1.2

1.3

gasoline & motor oil

-2.1

-0.8

0.0

-1.5

1.2

-1.1

-2.6

-2.4

2.2

0.5

-0.1

0.6

-0.3

1.8

-1.4

0.0

0.4

0.5

3.9

3.0

4.0

4.1

3.8

3.5

2.7

2.8

2.6

2.4

1.9

1.7

1.5

1.4

1.0

1.0

1.1

1.3

-3.7

0.4

0.9

1.1

2.3

1.4

1.2

1.4

1.5

1.0

1.8

2.0

1.8

1.6

1.8

1.5

1.8

1.4

durable goods

motor vehicles and parts other durable goods

food other nondurable goods

Institute for Economic Competitiveness

29

U . S . F o r eca s t Tab l e s Table 13. 13.

Personal Consumption Expenditures (2000 Dollars) Table 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

10073.7 10327.0 10749.1 11248.3 11691.8

7439.2

7804.0

8285.1

8819.0

9322.7

9826.4 10129.9

durable goods

992.1

1014.8

1061.6

1105.5

1133.0

1160.5

1095.2

1025.4

991.7

1044.9

1119.8

1172.6

furniture and appliances

225.9

233.3

249.2

263.9

276.5

279.8

270.1

252.4

247.1

245.3

257.5

271.9

44.5

46.6

51.5

55.9

60.4

65.3

66.3

64.1

63.6

66.5

71.8

76.5

401.3

401.5

404.7

409.6

397.1

400.3

342.3

311.6

290.0

330.7

369.5

387.2

79.3

82.4

87.0

90.4

95.7

99.5

98.3

95.3

94.3

96.8

100.2

102.3 2582.1 355.9

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

1617.9

1712.6

1830.7

1968.4

2088.7

2204.5

2308.0

2220.0

2315.0

2417.2

2513.4

278.8

287.0

300.0

315.5

330.1

341.2

337.5

326.5

335.1

340.5

348.6

14.3

16.8

18.4

21.0

22.3

24.1

26.6

21.2

22.4

24.0

25.2

25.6

160.3

192.8

231.6

283.8

314.7

343.9

386.4

292.2

327.0

353.7

374.9

374.7

food

569.6

593.1

628.2

665.0

698.0

740.1

784.3

791.7

827.1

865.2

896.4

922.5

other nondurable goods

594.9

622.9

652.6

683.0

723.7

755.2

773.1

788.5

803.4

833.8

868.3

903.4

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

8021.9

8247.6

8532.7

8819.0

9073.5

9313.9

9290.9

9212.0

9301.8

9505.1

9781.8 10011.7

durable goods

930.0

986.1

1051.0

1105.5

1150.4

1199.9

1146.3

1088.1

1070.4

1144.3

1241.0

furniture and appliances

217.0

230.6

249.3

263.9

277.9

283.6

275.5

256.1

255.6

256.6

270.9

287.6

28.3

36.0

44.8

55.9

69.2

82.4

92.6

98.6

108.5

125.5

150.3

177.3

394.0

405.3

411.3

409.6

396.6

402.4

347.5

316.3

289.2

327.6

363.5

378.4

74.7

79.4

84.7

90.4

94.1

93.0

85.8

82.0

81.1

82.7

84.9

86.0

1780.2

1845.6

1904.6

1968.4

2023.6

2074.8

2057.3

2026.1

2055.9

2090.2

2124.9

2153.4

268.5

283.4

297.3

315.5

331.5

345.9

345.0

329.6

337.1

343.1

351.8

359.7

26.9

26.2

24.6

21.0

19.5

19.7

16.0

18.9

17.8

17.1

16.8

16.7

gasoline & motor oil

267.5

276.3

282.1

283.8

278.9

280.9

271.7

272.0

270.1

267.5

268.5

268.7

food

609.0

622.4

639.2

665.0

686.2

700.7

700.7

697.8

724.5

746.6

761.6

770.8

other nondurable goods

612.5

640.1

662.6

683.0

708.4

729.4

728.7

710.5

709.8

720.1

731.8

744.2

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

1314.1

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

1.9

3.4

3.5

2.7

3.3

2.0

-1.8

0.4

1.6

2.5

2.8

2.0

1.7

9.2

5.5

2.4

6.5

4.6

-11.7

1.0

1.8

8.1

7.1

4.5

5.8

9.4

6.1

6.8

2.6

2.5

-7.3

-2.8

-0.9

2.1

7.2

4.6

information processing equipment

29.8

30.1

21.4

25.1

22.5

21.1

6.3

6.9

12.4

17.4

20.3

16.6

motor vehicles and parts

-4.3

5.9

1.7

-6.6

5.8

0.7

-23.7

7.6

2.2

14.3

5.5

2.9

other durable goods

8.1

9.1

4.2

6.8

1.2

0.6

-14.6

3.0

0.0

2.5

2.5

-0.1

nondurables

2.1

4.0

3.0

3.3

3.2

1.5

-2.8

0.1

2.3

1.5

1.6

1.3

clothing & shoes

3.9

5.6

5.1

7.4

3.9

3.5

-3.7

-1.4

3.2

1.8

2.4

2.3

10.2

1.7

-15.6

-16.2

6.1

-7.9

-1.3

13.0

-3.8

-3.3

-2.1

0.9

0.6

4.8

0.7

-0.6

-0.4

0.3

-3.3

0.0

-0.3

-0.6

0.5

-0.1

fuel oil & coal gasoline & motor oil food

1.0

1.6

3.9

4.2

3.4

1.3

-2.8

3.0

3.9

2.6

1.6

1.1

other nondurable goods

2.7

5.6

2.7

2.9

4.4

1.8

-1.7

-2.2

1.4

1.3

1.8

1.6

30

U.S. Forecast | September 2009

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

Business Fixed Investment Table Business Fixed Investment History

Forecast

2002

2003

2004

2005

2006

2007

Business Fixed Investment

1125.4

1135.7

1223.0

1347.3

1505.3

1640.2

Producers Dur. Equipment

842.7

853.8

916.4

995.6

1071.7

Nonresidential Structures

282.8

281.9

306.7

351.8

433.7

Non-Farm Buildings

188.1

182.1

196.7

212.9

99.8

94.6

104.3

112.9

2008

2009

2010

2011

2012

2013

1693.6

1399.3

1378.6

1522.0

1741.7

1940.1

1104.8

1084.1

902.4

975.0

1111.0

1252.1

1379.9

535.3

609.5

496.9

403.5

411.0

489.6

560.1

247.6

298.9

328.3

302.7

243.6

249.1

302.4

366.1

128.4

150.8

151.3

115.7

96.1

107.4

131.7

168.9

Billions Current Dollars

Commercial Industrial

22.7

21.4

23.7

29.9

35.1

45.3

60.8

81.4

57.5

46.8

64.3

79.5

Other Buildings

65.6

66.0

68.7

70.2

84.1

102.8

116.3

105.6

90.0

94.9

106.5

117.6

Utilities

56.3

53.5

48.6

51.4

61.1

82.8

103.4

102.7

82.6

77.7

83.6

88.9

Mines & Wells

30.2

38.4

51.9

77.1

114.2

142.5

165.9

82.0

68.7

75.0

93.2

94.5

Billions 2005 Dollars Business Fixed Investment

1180.2

1191.0

1263.0

1347.3

1453.9

1544.3

1569.7

1296.0

1297.8

1431.1

1622.4

1780.3

Producers Dur. Equipment

830.3

851.4

917.3

995.6

1069.6

1097.0

1068.6

882.6

957.2

1089.6

1227.3

1348.7

Nonresidential Structures

356.6

343.0

346.7

351.8

384.0

441.4

486.8

401.4

339.9

345.4

398.4

435.5

Non-Farm Buildings

222.3

210.0

213.9

212.9

229.2

262.1

277.4

250.3

203.9

205.3

240.9

279.4

Commercial

119.5

110.3

114.4

112.9

118.4

131.1

126.3

93.0

78.5

86.7

102.8

126.4

26.2

24.3

25.5

29.9

33.0

40.4

50.6

64.7

45.7

36.3

47.8

56.7

Industrial Other Buildings

76.6

75.4

74.1

70.2

77.9

90.7

100.8

92.7

80.4

83.7

90.8

96.2

Utilities

66.0

61.3

52.1

51.4

56.2

73.0

85.8

83.7

68.3

63.3

66.5

68.7

Mines & Wells

52.6

60.0

69.9

77.1

88.3

97.1

112.7

63.2

65.1

75.8

91.4

86.2

Annual Growth Rate Business Fixed Investment

-6.3

6.2

9.5

8.4

11.7

9.8

-3.2

-15.0

2.9

13.4

14.5

9.5

Producers Dur. Equipment

-4.1

6.7

8.5

6.3

6.9

3.5

-8.8

-8.4

11.5

13.5

13.5

7.6

Nonresidential Structures

-12.0

4.8

12.6

14.9

25.2

24.9

8.0

-25.7

-14.3

13.3

17.3

14.3

Non-Farm Buildings

-14.5

3.8

10.8

7.3

18.7

23.4

2.5

-14.2

-13.4

9.4

25.6

17.5

Commercial

-15.3

4.3

9.3

10.0

15.3

17.2

-10.0

-22.7

-7.5

15.6

29.7

24.3

Industrial

-31.9

9.1

30.4

13.8

16.1

52.1

34.9

13.0

-25.6

-1.6

44.5

15.3

Other Buildings Utilities Mines & Wells

-4.4

2.5

9.2

1.7

26.0

22.6

6.7

-15.0

-10.3

12.4

11.7

10.0

-10.7

-3.7

5.5

3.8

23.9

46.9

8.7

-0.3

-25.9

8.9

5.0

8.8

9.1

29.4

38.0

51.3

50.0

17.6

21.8

-53.2

4.1

33.4

6.6

8.4

Institute for Economic Competitiveness

31

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

Government Receipts and Expenditures

and Expenditures History

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

1859.3

1885.1

2014.0

2290.1

2524.5

2660.8

2475.0

2223.9

2344.4

2585.3

2821.4

3174.7

Personal Tax and Nontax Receipts

828.6

774.2

799.2

931.9

1049.9

1168.1

1102.5

836.7

898.4

1017.3

1159.4

1432.4

Corp. Profits Tax Accruals

150.5

197.8

250.3

341.0

395.0

370.2

212.3

223.4

279.7

360.1

396.3

407.0

86.8

89.3

94.3

98.8

99.4

94.7

92.0

89.3

87.3

91.5

97.4

99.7

739.3

762.8

807.6

852.6

904.6

944.4

974.5

949.5

973.5

1014.1

1067.9

1130.9

Federal Government Receipts and Expenditures Receipts

Indirect Business Tax and Nontax Accruals Contributions for Social Insurance

2112.1

2261.5

2393.4

2573.1

2728.3

2897.2

3117.6

3409.8

3543.4

3638.7

3812.7

3941.0

Purchases Goods & Services

Expenditures

680.7

756.5

824.7

876.3

931.7

976.7

1082.6

1137.8

1176.2

1155.9

1154.9

1168.0

National Defense

437.7

498.0

550.8

589.1

624.9

662.1

737.9

771.5

783.1

765.4

758.8

764.1

Other

243.0

258.6

273.9

287.3

306.9

314.6

344.7

366.3

393.1

390.5

396.1

403.9

1252.1

1339.4

1405.1

1491.3

1587.1

1688.6

1840.6

2127.2

2204.7

2195.8

2257.0

2350.6

914.9

962.6

1014.3

1078.0

1180.7

1254.2

1388.2

1581.9

1628.7

1667.4

1726.7

1797.9

23.3

28.6

30.9

40.9

35.0

42.2

44.8

46.4

37.6

36.6

37.6

38.6

Grants in Aid to State & local Gov't

304.2

338.0

349.2

361.2

359.0

378.9

391.7

483.2

521.5

474.2

474.3

494.9

Net Interest

213.7

196.5

204.6

239.0

261.0

290.7

272.3

226.1

249.6

368.6

482.1

503.7

40.3

45.3

45.7

64.1

53.9

50.3

54.3

59.6

57.0

54.5

51.5

50.1

Surplus (+) or Deficit (-)

-252.8

-376.4

-379.5

-283.0

-203.8

-236.5

-642.6

-1185.9

-1199.0

-1053.4

-991.2

-766.3

Receipts

1412.7

1496.3

1601.0

1730.5

1829.7

1927.4

1974.2

2008.2

2120.4

2154.1

2225.7

2315.1

Personal Tax/Nontax Receipts

928.7

977.7

1059.4

1163.1

1249.1

1313.4

1336.2

1271.4

1336.0

1404.4

1460.6

1516.1

Corporate Profits

221.8

226.2

248.6

276.7

302.5

322.8

330.0

272.4

309.2

334.5

343.1

363.4

Indirect Business Tax and Nontax Accruals

30.9

34.0

41.7

55.0

59.1

56.6

51.0

56.0

59.6

66.3

69.6

69.7

Contributions for Social Insurance

15.9

20.1

24.1

24.8

21.8

19.8

21.1

21.8

22.1

22.5

23.0

24.0

304.2

338.0

349.2

361.2

359.0

378.9

391.7

483.2

521.5

474.2

474.3

494.9

1466.78

1535.13

1609.33

1704.50

1778.63

1905.63

2014.40

2028.72

2091.94

2153.81

2237.93

2340.9

1302.7

1356.1

1408.2

1493.6

1586.7

1699.8

1800.6

1791.9

1829.8

1867.1

1910.9

1984.1

Transfer Payments To Persons To Foreigners

Subsidies less Surplus of Gov't Entities

State and Local Government Receipts and Expenditures

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

333.0

353.4

384.3

404.8

402.9

433.7

455.0

484.4

520.9

550.2

585.4

623.5

333.0

353.4

384.3

404.8

402.9

433.7

455.0

484.4

520.9

550.2

585.4

623.5

Interest Received

12.0

20.6

19.0

10.9

2.1

-2.6

3.9

5.9

9.2

14.9

23.3

28.1

Net Subsidies

-5.2

-3.2

-0.6

0.3

1.7

11.0

6.1

6.0

6.2

2.5

-1.3

-2.1

Dividends Received

1.6

1.7

2.0

2.1

2.3

2.5

2.9

2.3

1.9

2.1

2.2

2.3

Net Wage Accruals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-54.1

-38.8

-8.4

26.0

51.0

21.7

-40.2

-20.6

28.4

0.2

-12.2

-25.8

Transfer Payments

Surplus (+) or Deficit (-)

32

U.S. Forecast | September 2009

U . S . F o r eca s t Tab l e s Table 16. 16.

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

Forecast

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Net Exports Goods & Services

-427.2

-504.1

-618.7

-722.7

-769.3

-713.8

-707.8

-405.2

-461.8

-520.7

-612.2

-606.0

Current Account

-459.1

-521.5

-631.1

-748.7

-803.5

-726.6

-706.1

-451.7

-543.9

-620.9

-725.8

-708.3

Exports -Goods & Services

1003.0

1041.0

1180.2

1305.1

1471.1

1656.0

1831.1

1525.8

1630.9

1783.8

1949.8

2140.7

Merchandise Balance

-482.8

-549.0

-671.8

-790.9

-847.3

-831.0

-840.3

-518.6

-573.4

-640.7

-737.1

-747.8

Food, Feed & beverage

49.60

55.03

56.55

58.95

65.98

84.28

108.35

91.40

90.04

93.42

98.70

104.16

Industrial Supplies Excl Petroleum

153.5

168.3

199.5

227.5

267.3

303.1

369.4

275.7

322.4

359.1

391.1

424.7

78.9

80.7

89.2

98.4

107.3

121.3

121.5

79.8

105.9

128.4

154.1

181.0

290.5

293.7

327.6

358.4

404.1

433.0

457.7

379.6

390.0

432.5

483.2

542.1

38.6

39.9

42.8

45.5

47.6

45.6

43.9

36.4

38.9

42.3

47.2

52.8

201.5

207.1

238.7

257.0

291.9

314.5

339.8

270.6

274.0

306.4

346.7

389.8 185.3

Billions of Dollars

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

84.4

89.9

103.3

115.3

129.1

146.0

161.3

146.6

151.9

161.8

171.4

Other Consumer

43.5

39.4

41.0

47.5

50.8

51.8

48.8

37.5

39.7

44.2

48.6

53.0

302.8

314.2

363.3

399.0

446.7

516.5

564.2

515.2

530.9

564.3

602.7

650.4

Imports -Goods & Services

1430.2

1545.2

1798.9

2027.8

2240.4

2369.7

2538.9

1931.0

2092.7

2304.5

2562.0

2746.7

Merchandise

1193.9

1289.3

1501.7

1708.0

1884.9

1987.7

2126.4

1557.9

1704.7

1892.3

2117.4

2271.2

Services

Billions of Dollars

49.7

55.8

62.1

68.1

75.0

81.7

89.0

81.9

86.0

91.8

96.0

99.6

Petroleum & Products

Food, Feed & Beverage

103.5

133.1

180.5

251.9

302.5

331.0

453.3

254.7

277.2

320.1

362.4

366.3 321.4

Industrial Supplies Excl Petroleum

159.6

175.7

226.4

266.0

291.4

295.7

316.5

194.0

226.9

263.0

301.0

Motor Vehicles & Parts

203.8

210.1

228.2

239.5

256.6

259.3

233.8

153.6

180.9

198.4

242.6

276.0

Capital Goods, Excl. MVP

284.0

296.4

344.5

380.8

420.0

446.0

455.2

361.1

395.4

452.8

504.2

549.1

75.2

76.5

88.6

93.3

101.4

105.2

100.9

84.9

91.2

100.5

109.5

119.2

Other

Computer Equipment

183.3

195.8

231.6

261.7

290.2

306.5

318.9

244.0

266.4

310.3

348.2

378.3

Consumer Goods, Excl. MVP

310.7

337.7

377.2

411.5

446.1

478.2

484.8

425.5

450.2

477.3

516.0

555.8

82.7

80.5

82.9

90.3

93.5

95.9

94.0

87.1

88.1

88.9

95.1

102.9

236.4

255.9

297.3

319.8

355.4

382.1

412.4

373.0

388.0

412.2

444.7

475.6

Net Exports Goods & Services

-548.8

-604.0

-688.0

-722.7

-729.2

-647.7

-494.3

-386.7

-429.8

-442.3

-486.8

-467.7

Exports G & S

1099.2

1116.8

1222.8

1305.1

1422.1

1546.2

1629.3

1436.8

1513.1

1625.5

1752.0

1900.7

Imports G & S

1648.0

1720.7

1910.8

2027.8

2151.2

2193.8

2123.5

1823.5

1942.9

2067.8

2238.9

2368.4

Exports G & S

5.6

9.0

11.7

10.3

14.0

15.4

-0.8

-5.5

7.1

9.9

9.3

9.9

Imports G & S

13.4

8.0

19.1

12.1

5.4

9.9

-3.2

-4.2

5.1

12.5

9.6

5.8

Real Exports G & S

4.2

6.6

7.1

6.8

10.4

10.4

-2.8

-5.4

6.0

7.9

8.0

8.6

Real Imports G & S

9.7

5.4

11.0

5.2

4.2

1.0

-6.6

-4.4

4.4

8.4

7.6

4.4

Other Consumer Services

Billions 2005 Dollars

Exports & Imports % Change

Institute for Economic Competitiveness

33

In Appreciation

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 t Brokers t 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

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