Ted C. Jones, PhD - Yukon Title · 2020-02-24 · Fairbanks Northstar Borough 3 & Up Median Price $...
Transcript of Ted C. Jones, PhD - Yukon Title · 2020-02-24 · Fairbanks Northstar Borough 3 & Up Median Price $...
Ted C. Jones, PhDChief Economist
Stewart Title
MillennialsBegin
Turning40
ThisYear
1967 – An Economic
Forecast for2020
The beat goes on, the beat goes on
Drums keep pounding a rhythm to the brain
La de da de de, la de da de da
Sonny & Cher
Charleston was once the rage, uh huh
History has turned the page, uh huh
The mini skirts, the current thing, uh huh
Teenybopper is our newborn king, uh huh
Sonny & Cher
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U.S. JobsJobs (Millions) Seasonally Adjusted
1.40% Prior 12 Months 145,000 Net New Jobs December
2.108 Million Net New Jobs in Past 12-Months
More Jobs Than AnytimeIn History
1.40%December 2019
Compound Annual Job Growth Rate
1.31%Past 40-Years
6.4%BetterThan
Average
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 20
U.S. Hourly Wage GrowthPercent Change – Prior 12 Months Seasonally Adjusted
2.9% Prior 12 Months 2.4% 10-Year Compound Annual Average Growth
2019 – Best Wage Increases in a Decade
U.S. Leisure & Hospitality Jobs
12.5
13.5
14.5
15.5
16.5
0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Recession
Millions of JobsSeasonally-Adjusted
+2.34% Past 12 Months
The Blood Pressure Test of the U.S. Economy
HurricanesHarvey & Irma
Recession is Defined as Two or MoreQuarters of Negative GDP Growth
Recession
3.1%Q1 2019
2.0%Q2 2019
2.1%Q3 2019
2.1%Q4 2019
Yield Curve Inversion May 1998
Recession Started March 2001, 34 Months Later
When Did the Recession Start?
Stock Market
Performance Following Inverted
Yield Curve
Retail sales (which make up approximately 68% of GDP) were up
6.0% in December 2019Vs December 2018
Retail Sales Say No Recession
$250
$300
$350
$400
$450
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U.S. Retail Sales$ Billions – Seasonally Adjusted
0%
2%
4%
6%
8%
10%
12%
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E-Commerce Sales - Quarterly
Percent of Retail Sales – Seasonally Adjusted
Percent
0
4
8
12
16
20
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Light Weight Vehicle SalesMillions – Seasonally Adjusted Annual Rate
Bureau of Economic Analysis
Cash For Clunkers
Utah 3.11% Arkansas 1.44% Missouri 0.69%
Idaho 2.91% Kansas 1.41% Pennsylvania 0.54%
Arizona 2.79% Dist of Columbia 1.37% North Dakota 0.53%
Texas 2.71% Delaware 1.34% Mississippi 0.52%
Washington 2.44% South Carolina 1.26% Ohio 0.49%
Florida 2.38% Massachusetts 1.23% Louisiana 0.45%
Alabama 2.22% Maine 1.18% Michigan 0.44%
North Carolina 2.09% Virginia 1.13% Wisconsin 0.23%
Colorado 2.06% Maryland 1.12% Minnesota 0.21%
Nevada 1.94% New York 1.10% Connecticut 0.21%
Oregon 1.92% New Hampshire 0.94% Indiana 0.14%
New Mexico 1.84% New Jersey 0.93% Alaska 0.03%
California 1.79% South Dakota 0.88% Iowa -0.15%
Rhode Island 1.73% Montana 0.77% Oklahoma -0.28%
Tennessee 1.59% Hawaii 0.76% Vermont -0.35%
Nebraska 1.53% Illinois 0.73% West Virginia -0.40%
Georgia 1.45% Kentucky 0.70% Wyoming -1.07%
State Job Growth -- 12 Months Ending December 2019
State Business Tax Environments 2020
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Fairbanks MSA JobsJobs (Thousands) Seasonally Adjusted
-0.80% Prior 12 Months 300 Net Lost Jobs in Past 12-Months
Total Jobs Net New Net New
Thousands Jobs Percent Jobs Percent
Employment Supersector Dec 2019 Today 5-Years Ago Thousands Change Thousands Change
Total 36.2 100.0% 100.0% (0.3) -0.8% (1.4) -3.7%
Mining & Logging 0.7 1.9% 1.9% - 0.0% - 0.0%
Mining, Logging and Construction 2.9 8.0% 9.3% (0.3) -9.4% (0.6) -17.1%
Construction 2.2 6.1% 7.4% (0.3) -12.0% (0.6) -21.4%
Manufacturing 0.5 1.4% 1.6% (0.1) -16.7% (0.1) -16.7%
Trade-Transport-Utilities 7.1 19.6% 20.5% (0.3) -4.1% (0.6) -7.8%
Information 0.4 1.1% 1.3% - 0.0% (0.1) -20.0%
Financial Activites 1.1 3.0% 3.2% - 0.0% (0.1) -8.3%
Professional and Business Service 2.6 7.2% 5.9% - 0.0% 0.4 18.2%
Education and Health Services 5.6 15.5% 14.1% - 0.0% 0.3 5.7%
Leisure & Hospitality 4.2 11.6% 10.1% 0.2 5.0% 0.4 10.5%
Other 0.9 2.5% 2.7% (0.1) -10.0% (0.1) -10.0%
Government 10.9 30.1% 31.4% 0.3 2.8% (0.9) -7.6%
All Jobs
Fairbanks MSA Supersector Job Growth Analysis -- December 2019Not Seasonally Adjusted
12-Months 5 Years
Percent of
Not Seasonally Adjusted
Employment Supersector Fairbanks U.S. Fairbanks U.S.
Mining & Logging 1.9% 0.5% 0.0% -2.9%
Mining & Logging + Construction 8.0% 5.3% -9.4% 1.5%
Construction 6.1% 4.9% -12.0% 2.0%
Manufacturing 1.4% 8.4% -16.7% 0.4%
Trade-Transport-Utilities 19.6% 18.7% -4.1% 0.5%
Information 1.1% 1.9% 0.0% 0.6%
Financial Activities 3.0% 5.7% 0.0% 1.4%
Professional and Business Service 7.2% 14.2% 0.0% 1.9%
Education and Health Services 15.5% 16.1% 0.0% 2.7%
Leisure & Hospitality 11.6% 10.8% 5.0% 2.5%
Other 2.5% 3.9% -10.0% 1.3%
Government 30.1% 15.0% 2.8% 0.7%
U.S. Vs Fairbanks MSA Supersector Employment Analysis
Source: U.S. Bureau of Labor Statistics, Stewart Title Guaranty Company
Percent of
All Jobs
12-Month
Job Growth
December 2019 (November Fairbanks)
Unemployment Rate
3.5%U.S.
6.1%Alaska
5.3%Fairbanks
30-Year Conventional Residential Mortgage Rates
3.2%
3.5%
3.8%
4.1%
4.4%
4.7%
5.0%
5.3%
J F M M A M J J A S O N D
Percent
2017 2018 2019 2020
Year Fannie Freddie MBA Average
2019 3.9% 3.9% 3.7% 3.83%
2020 3.6% 3.8% 3.7% 3.70%
2021 3.6% 3.8% 3.8% 3.73%
2022 4.1% 4.10%
30-Year Fixed-Rate Forecast
December
December U.S. Housing Sales
2018 377,0002019 434,000
Up 13.1 Percent
U.S. Existing Home Sales & Median PricesSales - Trailing 12 Months
4.8
5.0
5.2
5.4
5.6
$180
$200
$220
$240
$260
$280
$300
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Median Price Homes Sales
Median Price $ Thousands Home Sales 12-Months Millions
Fairbanks Home Sales & Median PricesSales Trailing 12 Months
900
1,000
1,100
1,200
1,300
$150
$175
$200
$225
$250
$275
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Average Price Homes Sales
Average Price $ Thousands Home Sales 12-Months
5%
6%
7%
8%
9%
10%
11%
12%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Fairbanks U.S.
Home Sales SeasonalityMonthly Percentage of Annual Home Sales – 2013 - 2019
Fairbanks
USA 5.6% 5.8% 7.7% 8.6% 9.9% 10.4% 9.9% 9.9% 8.5% 8.5% 7.4% 7.9%
4.6% 4.7% 7.0% 8.4% 10.0% 10.5% 11.2% 11.1% 10.4% 9.1% 7.0% 6.1%
NormalIs
1.25 to 1.50Net NewJobs Per
New Dwelling
Net Dwelling Jobs
New Unit Per New
Year Jobs Permits Dwelling
2013 (500) 56 (8.93)
2014 (500) 54 (9.26)
2015 (500) 7 (71.43)
2016 400 11 36.36
2017 (700) 15 (46.67)
2018 - 13 -
Total (1,800) 156 (11.54)
Fairbanks
Jobs & Residential Dwelling Unit Permits
Average Rent 1,652$ Average Rent 1,652$
Rate 3.51% Rate 3.46%Term 30 Years Term 30 Years
Fairbanks Northstar Borough 3 & Up
Median Price 242,400$ Median Price 242,400$
Less 20% Down (48,480) Less 3.5% Down (8,484)
Loan Amount 193,920$ Loan Amount 233,916$
Monthly Payment (872) Monthly Payment (1,045)
Residual 780$ Residual 607$
Conventional - 20% Down FHA - 3.5% Down
Conventional Loan FHA
Monthly Rental
Payment Applied to HomePurchase
$0
$100
$200
$300
$400
$500
$600
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U.S. Commercial Real Estate Sales Volume
$ Billions – Trailing 12 Months
Property and Portfolio Sales $2.5 Million and Up
+6.0% Year-Over-Year
$0
$50
$100
$150
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Alaska Commercial Real Estate Sales Volume
$ Millions – Trailing 12 Months
Property and Portfolio Sales $2.5 Million and Up
Cap Rates
All Seniors
Hotels
Apartments
Industrial
Retail
Office
6.21
%6.71
%6.68
%6.10
%5.35
%8.53
%7.76
%
Q3 2019
Federal Debt – Total Public Debt
0
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$ Trillions
St Louis Federal reserve
Federal Debt Interest Payments+30.0% March 2017 Vs 2016+10.7% March 2018 Vs 2017+15.5% March 2019 Vs 2018
+56.2% in 36 MonthsDebt Up 16.3%
Oil Prices
$30
$50
$70
$90
$110
$130
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Recession
$ Per BarrelMonthly Average
West Texas Intermediate Crude
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Alaska Drilling Rig CountsNumber of Operating Rigs
36.5%
30.6%
13.1%
8.3%
5.1%
2.5%
0.2%
2.5%
0.9%
2018
Manhattan Institute
“$200,000 worth of Tesla batteries, which collectively weigh over 20,000 pounds, are needed to store the energy equivalent of one barrel of oil. A barrel of oil, meanwhile, weighs 300 pounds and can be stored in a $20 tank.” 1
Barrel
$200,000Batteries
=
Manhattan Institute
“The $5 billion Tesla “Gigafactory” world’s biggest battery manufacturing facility
Total annual production …. store 3 minutes worth of
annual U.S. electricity demand”
3Minutes
Manhattan Institute
“…… to fabricate a quantity of batteries to
store two days’ worth of U.S. electricity demand
would require 1,000 years of Gigafactory production” 2
1,000Years
$5 Billion
Days
What the U.S. Bought from China in 2018 $US Billions
What China Bought from the U.S. in 2018
China Trade
$US Billions
$539.0 Imported$120.3 Exported$418.7 Deficit
$US Billions
25.0% Tariff Paid on U.S. Cars in China
2.5% Tariff Paid on Chinese Cars in U.S.
China-U.S. Tariffs – April 9, 2019
Good Economy just so average
Growing Jobs & Wages best wage growth in 10 years
Stable & Low Interest Rates no place but up
Rising Home Prices albeit at a Lower PaceCheap (But Profitable) Energy fuels the economy
Manufacturing Comeback no college or debt required
2020 Economic Outlook
http://blog.stewart.com
DrTCJ
Cybersecurity