Post on 22-Mar-2016
description
U.S. ECONOMIC GROWTH
AND ITS ENTREPRENEURIAL SECTOR
BILL DUNKELBERG
CHIEF ECONOMISTNATIONAL FEDERATION OF INDEPENDENT BUSINESS
PROFESSOR OF ECONOMICS, TEMPLE UNIVERSITYCHAIR, GLOBAL INTERDEPENDENCE CENTER
CHAIRMAN OF THE BOARD, LIBERTY BELL BANK
ECONOMIC GROWTH
• LABOR GROWTH, QUALITY• CAPITAL WIDENING AND DEEPENING• PRODUCTIVITY – HOW WELL IS CAPITAL
USED, LABOR REALLOCATED TO BEST USE, RETRAINED FOR NEW JOBS
• SMALL BUSINESS AT THE CORE OF THIS GROWTH
-10
-5
0
5
10
15
20
76 79 82 85 88 91 94 97 '00 '03 '06
PERCENTAGE CHANGE IN REAL GDP
HOME OWNERSHIP RATES
60
62
64
66
68
70
Perc
ent
RESIDENTIAL VACANCY RATES
0
2
4
6
8
10
86 91 96 '01
VACANCY RATES
ENTREPRENEURIAL FACTS
• 90% OF ALL EMPLOYERS HAVE FEWER THAN 20 EMPLOYEES
• 98% HAVE FEWER THAN 500• PRODUCE HALF OF THE PRIVATE
SECTOR GROSS DOMESTIC PRODUCT• EMPLOY 60% OF PRIVATE SECTOR
EMPLOYEES• PRODUCE 2/3RDS OF THE NEW JOBS
3
3.5
4
4.5
5
5.5
6
6.5
95 98 '01 '04 '07
Perc
ent
ACTUAL PREDICTED
THE UNEMPLOYMENT RATE
FOURTH QUARTER FORECAST
54
56
58
60
62
64
66
RATIO OF # EMPLOYED TO POPULATION AGE 16
YEARS +
10% + UNEMPLOYMENT
JOB CREATION BY FIRM SIZE2000:1 - 2001:1 (000)
-200
0
200
400
600
800
1000
1200
UNDER 20 20-499 500+ EMPLOYEES
1,111,183
39,692 -150,905
IMMIGRATION STATISTICS
0
510
15
2025
30
35
1850 1870 1890 1910 1930 1950 1970 1990 2010
FOREIGN BORN POPULATION (MM)% FOREIGN BORNLEGAL IMMIGRATION PER 1000 POPULATION
IMMIGRATION• NUMBER OF ILLEGALS LOWERED BY AMNESTY
OF 1987-88• 300,000 + ILLEGAL ENTRANTS PER YEAR• HALF ENTER LEGALLY AND OVERSTAY• CONCENTRATED IN YOUNG LABOR FORCE
GROUP• GROWING % OF SCIENTIFIC PROFESSIONALS• FIRST AND SECOND GENERATION IMMIGRANT
CHILDREN DO EXCEPTIONALLY WELL IN SCHOOL• 200,000 PEOPLE LEAVE THE U.S. EACH YEAR• ILLEGAL IMMIGRANT FLOWS DEPEND ON
ECONOMIES IN THE SOURCE COUNTRIES
SMALL BUSINESS OPTIMISM INDEX
(QUARTERLY, 1986 = 100)
80
85
90
95
100
105
110
76 79 82 85 88 91 94 97 '00 '03 '06
SEASONALLY ADJUSTED MONTHLY APR-AUG QUARTERLY
GREEN DOTS=APR,JUL,OCT QUARTERLY
UNFILLED JOB OPENINGS% WITH AT LEAST ONE UNFILLED OPENING
0
5
10
15
20
25
30
35
40
Perc
ent
of F
irms
QUARTERLY MONTHLY, APR-NOV
JOB CREATION PLANS % PLAN INCREASE - % PLAN DECREASE
-10
-5
0
5
10
15
20
25
Perc
ent
of F
irms
QUARTERLY MONTHLY, APR-NOV
PRODUCTIVITY(OUTPUT PER HOUR)
0
50
100
150
200
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002
IND
EX
OUTPUT PER HOUR (1992=100) MFG OUTPUT PER HOUR
TRADEEDUCATION IS ONE OF OUR LARGEST
EXPORTS(MOST RETURN HOME)
US WORKERS SEND MONEY TO THEIR HOME COUNTRIES
IMPORTS = HIRING FOREIGN LABOR TO PRODUCE IN THEIR COUNTRIES RATHER THAN MOVING HERE
“OUTSOURCING” IS OFTEN A “NEW” JOB, NOT THE LOSS OF A DOMESTIC JOB
U.S. Trade Deficit
-800
-700
-600
-500
-400
-300
-200
-100
0
100
Bill
ions
of D
olla
rs
EXPORTS-IMPORTS [CONSTANT DOLLARS]
TALK ABOUT OUTSOURCING!!
MOST IMPORTANT PROBLEMS
0
5
10
15
20
25
Perc
ent
of
Firm
s
LABOR COST LABOR QUALITY
FIRST MONTH IN EACH QUARTER: + NOV
MOST IMPORTANT PROBLEMS
0
5
10
15
20
25
30
35
40
45
Perc
ent
of F
irms
INFLATION CREDIT
FIRST MONTH IN EACH QUARTER: + NOV
CENTRAL BANK MUST CONTROLINFLATION AND CREDIT DEMAND
SMALL BUSINESS CREDIT PROBLEMS
(% HARDER TO GET - % EASIER)
-505
1015202530
Perc
ent
of F
irms
QUARTERLY MONTHLY, APR-NOV
-4-202468
1012141618
Perc
ent
PREDICTED ACTUAL
INFLATION: CONSUMER PRICE INDEXPREDICTED BY NFIB SURVEY
NFIB Q3 FORECAST 4.7%
02468
10121416
76 79 82 85 88 91 94 97 '00 '03 '06
Perc
ent
PREDICTED ACTUAL
CORE CPI INFLATIONPREDICTED BY NFIB SURVEY
INDEX OF CONSUMER SENTIMENT
50
60
70
80
90
100
110
78 80 82 84 86 88 90 92 94 96 98 '00 '02 '04 '06Source: University of Michigan
Inde
x V
alue
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
70 73 76 79 82 85 88 91 94 97 '00 '03
NYSE S&P NASDQ
STOCK MARKET
INTEREST RATES
0
2
4
6
8
10
12
14
16
80 85 90 95 '00 '05
2 YEAR 10 YEAR FED FUNDS