Economic Forecast - Chase Online · 2020-03-30 · Economic Forecast OUTPUT AND EMPLOYMENT WHAT THE...

Economic Forecast

OUTPUT AND EMPLOYMENT WHAT THE TABLE SHOWS:

Louisiana’s GDP forecast is derived from

the national forecast by allocating output to

each of the 50 states based on employment

shares. So, forecast misses reflect surprises

in the aggregate forecast as well as

unexpected shifts in a state’s GDP share.

Louisiana has been swimming against the

national economic tide, thanks to the

rebuilding from damage caused by

Hurricane Katrina in 2005.

KEY MESSAGES:

Louisiana benefits from the ongoing

recovery from Hurricane Katrina and the

nation’s strong energy conditions.

Note: GDP figures are based on quarterly values that are

interpolated from annual GDP estimates using quarterly

employment changes. Unbolded figures are reported actual

values and bold figures represent forecasts.

Sources: US Department of Commerce;

US Department of Labor.

November 30, 2012

Regional Perspectives: Louisiana Economic Outlook

Commercial Banking 2

2007 2008 2009 2010 2011 2012 2013 2014

United States

Real GDP

$ billions (fourth quarter) $13,326 $12,884 $12,873 $13,181 $13,441 $13,739 $14,203 $14,771

% change over the four quarters 2.2% -3.3% -0.1% 2.4% 2.0% 2.2% 3.4% 4.0%

Nonfarm employment

Job count (fourth quarter) 137,885,333 135,087,333 129,447,000 130,225,667 131,985,000 133,880,120 135,600,470 137,918,040

% change over the four quarters 0.9% -2.0% -4.2% 0.6% 1.4% 1.4% 1.3% 1.7%

Average monthly change 98,778 -233,167 -470,028 64,889 146,611 157,927 157,927 157,927

Louisiana

Real GDP

$ billions (fourth quarter) $187 $184 $187 $205 $206 $212 $218 $227

% change over the four quarters -2.4% -0.2% 4.5% 6.0% 1.4% 2.8% 3.2% 4.1%

Nonfarm employment

Job count (fourth quarter) 1,931,533 1,940,200 1,881,600 1,884,433 1,924,067 1,948,991 1,976,331 2,013,162

% change over the four quarters 2.7% 0.4% -3.0% 0.2% 2.1% 1.3% 1.4% 1.9%

Average monthly change 4,267 722 -4,883 236 3,303 2,077 2,278 3,069

The Economy’s Structure

PERCENT OF TOTAL GDP DERIVED FROM SELECTED INDUSTRIES WHAT THE CHART SHOWS:

The percentage of private-sector real GDP

produced by each industry, compared with

the national foot print of each industry.

Louisiana’s economy is heavily concentrated

in the energy and forest products area and

so far this has been an asset. Real estate

has a much smaller footprint in the state

compared with the national economy.

KEY MESSAGES:

Louisiana’s steady performance rests

importantly on the robustness of its oil and

natural gas businesses.

Source: US Department of Commerce. Updated through

2008.

November 30, 2012



0

2

4

6

8

10

12

14

16

18

Ag

ricu

lture

Min

ing

Util

itie

s

Co

nst

ruct

ion

Du

rab

le m

an

ufa

ctu

ring

No

nd

ud

rab

le m

an

ufa

ctu

ring

Wh

ole

sale

tra

de

Re

tail

tra

de

Tra

nsp

ort

atio

n

Info

rma

tion

Fin

an

ce a

nd

insu

ran

ce

Re

al e

sta

te

Pro

fess

ion

al a

nd

tech

nic

al …

Ma

na

ge

me

nt o

f co

mp

an

ies

Ad

min

istr

ativ

e a

nd

wa

ste

se

rvic

es

Ed

uca

tion

al s

erv

ice

s

He

alth

ca

re a

nd

so

cia

l ass

ista

nce

Art

s, e

nte

rta

inm

en

t, a

nd

…

Ho

tel a

nd

foo

d s

erv

ice

Oth

er

serv

ice

s

Go

vern

me

nt

US industry mix

Louisiana's industry mix

Bankruptcies

RATIO OF BANKRUPTCY FILINGS TO THE 2007 Q4 NUMBER WHAT THE CHART SHOWS:

The ratio of bankruptcy filing by businesses

and persons to filings in 2007 Q4.

Bankruptcy filings remain low and are

receding.

KEY MESSAGES:

Indicators of financial stress are a useful

coincident barometer of economic distress.

Financial strains remain relatively muted, all

things considered.

Source: Administrative Office of the U.S. Courts; Updated

through June 2012 (state) and September 2012 (national).

November 30, 2012



0

1

2

3

4

5

0

1

2

3

4

5

90 92 95 98 01 04 07 10

Business bankruptcy filingsNonbusiness bankruptcy filings

All US bankruptcy filings (shaded area)

Oil & Gas Activity

NUMBER OF DRILLING RIGS ON LAND, INLAND WATERS, AND OFFSHORE WHAT THE CHART SHOWS:

The number of oil and gas drilling rigs in

operation (Smith Bits), including activity on

land, in inland waters, and offshore.

Offshore drilling activity fell back, following

the President’s 6-month moratorium on

deepwater oil exploration that temporarily

suspended the activity of 33 deep-water rigs.

Such activity is picking up slowly again.

Drilling other than deep-water activity is

mixed. Offshore activity is recovering slowly.

KEY MESSAGES:

The BP accident is likely to be a cloud over

the long-term outlook for some time.

Source: Smith Rig Count. Updated through 2012 Q3

(quarterly) and November 9, 2012 (weekly).

November 30, 2012



0

20

40

60

80

100

120

140

160

180

200

220

240

0

20

40

60

80

100

120

140

160

180

200

220

240

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

All drilling

LandInland watersOffshore drilling

FRB Atlanta Business Survey

REAL GDP (% CHANGE 12 MONTHS EARLIER) DIFFUSION INDEXES (0 = NO CHANGE) WHAT THE CHART SHOWS:

The figure compares an index of business

activity produced by the Federal Reserve

Bank of Atlanta with Louisiana’s real GDP

growth. The index is an estimate of the trend

common to 25 distinct monthly series of

economic data for the six states in the

Bank’s. The D6 Factor filters out

idiosyncratic shocks that disproportionately

affect individual states. A “0” value for the

index appears to match trend-like growth for

the national economy.

The FRB Atlanta’s index stands at a level

consistent with growth that is slightly subpar.

KEY MESSAGES:

The Southeast region of the country is

recovering but at a slow pace.

Sources: Federal Reserve Bank of Atlnata; US Department

of Commerce. Updated through September 2012 (surveys)

and 2012 Q3 (GDP).

November 30, 2012



-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

-7

-6

-5

-4

-3

-2

-1

0

1

2

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

FRB Atlanta D6 Factor, columns (left)

Louisiana real GDP, line (right)

Initial Jobless Claims

RATIO OF INITIAL CLAIMS FOR UNEMPLOYMENT INSURANCE TO THE 2007 Q4 LEVEL WHAT THE CHART SHOWS:

The figure tracks layoffs in Louisiana and the

national level of claims.

Weekly layoffs, both the state and national

tallies, are illustrated in the figure as a ratio

to the level of layoffs in the fourth quarter of

2007, prior to the recession.

Layoffs are trending down, but remain

elevated.

KEY MESSAGES:

Louisiana’s job market is slowly improving.

Source: US Department of Labor. Updated through

November 17, 2012 (state) and November 24, 2012 (US).

November 30, 2012



0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

2007 2008 2009 2010 2011 2012 2013

LouisianaUS (solid area)

Economic Growth

REAL GDP GROWTH (PERCENT CHANGE FROM FOUR QUARTERS EARLIER) WHAT THE CHART SHOWS:

Real GDP growth in Louisiana (the line in

the figure) is superimposed on top of US

real GDP growth (bars in the figure).

Louisiana’s economy has been recovering

amid the national recession, faster when the

national economy began to recover and

more in line with national growth trends now.

KEY MESSAGES:

Development of the Barnett shale field and

the rebuilding from hurricane damage has

cushioned the state amid a severe national

recession.

Growth is forecast to speed up again this

year and the next.


2012 Q3.

November 30, 2012



-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

LouisianaUS

Economic Output

REAL GDP LEVEL (RATIO TO 2000 Q4) WHAT THE CHART SHOWS:

The figure illustrates the evolution of real

GDP of the state and the overall US

economy since the fourth quarter of 2000,

the peak of the previous business cycle—

that is, at any point in time the lines trace the

ratio of real GDP to its level in 2000 Q4.

Louisiana has enjoyed slow but steady

growth since the devastation from Hurricane

Katrina.

KEY MESSAGES:

Louisiana has recovered much of the ground

it lost against the national economy,

following the devastation from Hurricane

Katrina, with the job count back to pre-

Katrina levels.


2012 Q3.

November 30, 2012



0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US

Louisiana

Employment Growth

NONFARM PAYROLL EMPLOYMENT (PERCENT CHANGE FROM 12 MONTHS EARLIER) WHAT THE CHART SHOWS:

Job growth in the state, compared with the

national job market.

Hurricane Katrina was highly disruptive, but

the recovery effort insulated Louisiana’s

economy somewhat.

Employment continues to accelerate.

KEY MESSAGES:

Louisiana made a strong comeback after

Hurricane Katrina, although many displaced

New Orleans residents relocated in nearby

communities.

Source: US Department of Labor. Updated through October

2012.

November 30, 2012



-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

LouisianaUS

Employment

NONFARM PAYROLL EMPLOYMENT (RATIO TO THE 2000 Q4 LEVEL) WHAT THE CHART SHOWS:

The figure illustrates the evolution of

employment in the state compared with the

nation since 2000 Q4, the peak of the

previous business cycle. The lines trace out

the ratio of employment at the time to

employment in 2000 Q4.

Louisiana lost almost 10% of its job base in

the aftermath of Hurricane Katrina. The state

regained all of those within two years.

Remarkably, Louisiana’s employment base

has increased more since the 2000 business

cycle peak than the national average and

the job count in Louisiana now is a record.

KEY MESSAGES:

The state’s jobs outlook is promising.


2012.

November 30, 2012



0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

1.00

1.01

1.02

1.03

1.04

1.05

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

1.00

1.01

1.02

1.03

1.04

1.05

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US

Louisiana

Intrastate Employment

NONFARM PAYROLL EMPLOYMENT IN SELECTED COMMUNITIES (RATIO TO 2000 Q4 LEVEL) WHAT THE CHART SHOWS:

Job trends in local communities within the

state.

Employment in New Orleans plunged 25% in

the wake of Hurricane Katrina and has only

recovered 40% of those losses since then.

Nonetheless, employment in New Orleans

has steadied 15 percent below pre-Katrina

levels. Job markets in most communities are

turning up.

KEY MESSAGES:

The state’s employment has almost fully

recovered, implying that many of the

displaced residents of New Orleans moved

to nearby communities.

Source: US Department of Labor. Updated through July

2012.

November 30, 2012



0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US forecast

US

Houma

Baton Rouge

Alexandria

Shreveport

Lake Charles

Monroe

New Orleans

Louisiana forecast

Louisiana

Unemployment

UNEMPLOYMENT (PERCENT OF THE LABOR FORCE) WHAT THE CHART SHOWS:

Unemployment rate trends in Louisiana,

compared with the national average.

Louisiana’s unemployment experience is

relatively impressive, considering the

severity of the national recession.

Louisiana’s unemployment rate is coming

down and stands at about 7 percent

currently.

KEY MESSAGES:

The unemployment rate is the single best

indicator of the relative economic

performance of a region and by this

standard the local economy is weakening,

like the national economy.

Unemployment rate is expected to continue

to drop, although at a slower rate in 2013.


2012.

November 30, 2012



0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018

Louisiana

US (shaded)

Relative House Prices

RATIO OF THE STATE’S HOUSE PRICES TO THE NATIONAL AVERAGE (1995 Q2 = 1.0) WHAT THE CHART SHOWS:

The figure tracks the relative price of houses

in the state versus the nation—that is, it

reflects the ratio of the state price index to

the national house price index, with that ratio

set to unity in the summer of 1995. A drop

in the line means that house prices in the

state lag the national trend. States that did

not suffer from speculative conditions saw a

decline in the relative price of houses in this

last decade.

Louisiana averted a housing bubble.

KEY MESSAGES:

The state has recovered some, following the

devastation from Hurricane Katrina.

Source: FHFA. Updated through 2012 Q3.

November 30, 2012



0.7

0.8

0.9

1.0

1.1

1.2

0.7

0.8

0.9

1.0

1.1

1.2

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Real Estate Markets

HOUSE PRICES IN SELECTED COMMUNITIES (RATIO TO THE 1995 Q2 LEVEL) WHAT THE CHART SHOWS:

The figure tracks the cumulative percentage

deviation in house prices since 1995 in

selected local markets and compares those

with the national average.

Real estate values in most markets have

bucked the national downdraft.

KEY MESSAGE:

Slower activity in the energy industry may

moderate trends in some communities.

Sources: FHFA; Standard & Poor’s. Updated through

2012 Q3.

November 30, 2012



1.00

1.25

1.50

1.75

2.00

2.25

1.00

1.25

1.50

1.75

2.00

2.25

1995 1997 1999 2001 2003 2005 2007 2009 2011

US

New Orleans-Metairie-Kenner, LA

Lake Charles, LA

Lafayette, LA

Monroe, LA

Houma-Bayou Cane-Thibodaux, LA

Baton Rogue, LA

Alexandria, LA

Shreveport-Bossier City, LA

New Home Building

HOUSING STARTS (RATIO TO THE JULY 1990 LEVEL) WHAT THE CHART SHOWS:

New home construction in Louisiana,

compared with the US average level of

construction.

New home building in the state has been

quite robust all things considered, and is

only down to half the level of the pre-

recession years.

New home building may be on the mend.

KEY MESSAGES:

The muted cutbacks in new home building is

a testimony to the absence of a real estate

bubble in the state.

Source: Census Department. Updated through October

2012 (US) and September 2012 (state).

November 30, 2012



0

1

2

3

4

5

0

1

2

3

4

5

2000 2003 2006 2009 2012 2015

LouisianaUS

Economic Forecast - Chase Online · 2020-03-30 · Economic Forecast OUTPUT AND EMPLOYMENT WHAT THE...

Documents

Transcript of Economic Forecast - Chase Online · 2020-03-30 · Economic Forecast OUTPUT AND EMPLOYMENT WHAT THE...