United States -5 · Job market showing modest improvement Non-farm employment, United States ......

Real gross domestic productUnited States

Sources: Bureau of Economic Analysis, IHS Global Insight.

11090705030199979593918987858381

10

5

0

-5

-10

Compound annual growth rate

Consumer spending picks upReal personal consumption expenditures


20112010200920082007200620052004200320022001

4

3

2

1

0

-1

-2

-3

Percent change, year ago

Job declines in postwar recessions

By year of employment peak

Sources: Bureau of Labor Statistics, IHS Global Insight.

20082001199019811980197319701960195719531948

0.0

-1.0

-2.0

-3.0

-4.0

-5.0

-6.0

-7.0

Percent change from peak to trough

1110090807060504030201

4.0

2.0

0.0

-2.0

-4.0

-6.0

600

400

200

0

-200

-400

-600

-800

-1000

Percent change, year ago Difference from previous month

Job market showing modest improvementNon-farm employment, United States


Absolute change,

ths. (R)

% change (L)

Unemployment rate falls slightly Civilian unemployment rate


11060196918681

11

10

9

8

7

6

5

4

3

Percent

20112010200920082007200620052004200320022001

30

20

10

0

-10

-20

-30

-40

-50


Business investment fuels recovery Fixed nonresidential private domestic investment


Equip. and

software

Structures

20112010200920082007200620052004200320022001

60

40

20

0

-20

-40

-60


Median single-family home salesUnited States

Sources: National Association of Realtors, Moody’s Analytics.

Existing

homes

New

homes

20112010200920082007200620052004200320022001

30

20

10

0

-10

-20

-30

-40


U.S. international trade Exports vs. Imports (goods and services)

Sources: U.S. Census, IHS Global Insight.

Exports

Imports

S&P 500 composite Price index

Sources: S&P, IHS Global Insight.

20112010200920082007200620052004200320022001

1600

1400

1200

1000

800

600

S&P 500 Index

Unemployed waiting longer for work

Percent of the unemployed who are out of work for 27 weeks or more

Sources: Bureau of Labor Statistics, Moody’s Analytics.

20112010200920082007200620052004200320022001

50

40

30

20

10

0

Percent

20112010200920082007

700

600

500

400

300

200

7

6

5

4

3

2

Thousands Millions

Claims fall as hiring picks up

Average weekly unemployment insurance claims


Initial UI

claims (L)

Continuing UI

claims (R)

Labor force participation rate

United States


1008060402009896949290

67.5

67.0

66.5

66.0

65.5

65.0

64.5

64.0

Percent

20102009200820072006200520042003200220012000

9.0

8.5

8.0

7.5

7.0

6.5

6.0

5.5

Millions

2010 Q2 marked first positive net employment

change since start of recent recession


Gross job gains

Gross job losses

Sources: Federal Reserve, Senior Loan Officer Opinion Survey, Moody’s Analytics.

Small businesses facing tight underwriting

Net percent of lenders tightening C&I loans to small businesses

1008060402009896949290

80

60

40

20

0

-20

-40

Percent

Sources: National Federation of Independent Business, Moody’s Analytics.

Small businesses mood still gloomy

Small Business Optimism Index

1008060402009896949290

120

115

110

105

100

95

90

85

Index

Sources: National Federation of Independent Business, Moody’s Analytics.

Lack of credit hurting small businesses

Small Business Optimism Index

Net percent of firms reporting

credit is harder to get

Net percent of firms planning to

add inventory

1008060402009896949290

20

15

10

5

0

-5

-10

-15

Percent

Households deleveraging

Total consumer credit as percent of disposable income

Sources: Federal Reserve Board, Moody’s Analytics.

10050095908580

26

24

22

20

18

16

14

Percent

1008060402009896949290

12.0

10.0

8.0

6.0

4.0

Percent

Households shedding debt

Financial obligations ratio – Homeowner’s debt as percent of disp. income

Sources: Federal Reserve Board, Moody’s Analytics.

Consumer

debt

Mortgage

debt

Consumers purchase more without credit

Non-auto retail sales vs. revolving installment credit

Sources: Federal Reserve Board, Moody’s Analytics, U.S. Census Bureau.

2011201020092008200720062005

10

5

0

-5

-10

-15


Non-auto

sales

Revolving credit

Consumer Sentiment IndexUniversity of Michigan

Sources: Federal Reserve Bank of St. Louis, University of Michigan, Moody’s Analytics.

1008060402009896949290

120

110

100

90

80

70

60

50

Index 1966Q1= 100

Auto sales improving but slowlyLight vehicle sales


2011201020092008200720062005

22

20

18

16

14

12

10

8

Millions, SAAR

Middle East turmoil causes oil prices to riseWest Texas Intermediate Crude

Sources: Wall Street Journal, IHS Global Insight.

20112010200920082007200620052004200320022001

160

140

120

100

80

60

40

20

0

Dollars per barrel

Oil consumption (average per day) per unit of GDP

United States

Sources: Energy Information Administration, Bureau of Economic Analysis, Milken Institute.

100806040200989694929088868482807876

3.5

3.0

2.5

2.0

1.5

1.0

Barrels per $1 Million of real GDP

2010200019901980197019601950

140

120

100

80

60

40

20

0

10

8

6

4

2

0

-2

-4

-6

$ per Bbl (in real terms) Percent

Real oil prices vs. real Fed Funds rateUnited States

Sources: Federal Reserve Bank of St. Louis, U.S. Census Bureau, Moody’s Analytics.

Fed Funds

rate (R)

Oil Price: Domestic

West Texas Intermediate

(L)

Impact of $10 increase in oil prices Over next four quarters, United States

Source: Milken Institute.

Category

Percent

change

Real gross private residential investment -1.4

Consumer spending on all goods and services -0.4

Real gross private fixed nonresidential investment -0.2

Exports -0.3

Total non-farm -0.1

Civilian unemployment rate (DIFF) 0.1

Real gross domestic product -0.2

20102009200820072006200520042003200220012000

7

6

5

4

3

2

1

0

Percent

Interest ratesFed funds rate vs. 10-year bond yield

Sources: Federal Reserve Board, IHS Global Insight.

Federal

funds rate

10-year T-

note yield

Federal Reserve balance sheetUnited States

Sources: Federal Reserve, Moody’s Analytics.

20112010200920082007200620052004200320022001

3.0

2.5

2.0

1.5

1.0

0.5

0.0

US$ trillions

1110090807060504030201

6.0

4.0

2.0

0.0

-2.0

-4.0


Headline CPI inflation gaining momentumOverall vs. core Consumer Price Index


Overall

Less

food and

energy

20112010200920082007200620052004200320022001

5

4

3

2

1

0


Decline in consumer inflation rate indicative of excess capacity in labor market


Average hourly

earnings

Core CPI

Unit labor costsUnited States


20102009200820072006200520042003200220012000

6

4

2

0

-2

-4


Productivity growthOutput per hour among non-farm businesses


20102009200820072006200520042003

7

6

5

4

3

2

1

0

-1


Non-defense capital spending (excl. aircraft)Value of new orders

Sources: U.S. Census Bureau, IHS Global Insight.

20112010200920082007200620052004200320022001

30

20

10

0

-10

-20

-30

-40


Purchasing manager’s index indicates expansionISM diffusion indices

Sources: Institute for Supply Management, IHS Global Insight.

Manufacturing

Non-

Manufacturing

2011201020092008200720062005

65

60

55

50

45

40

35

30

Index

Corporate profits

Profits before tax (without IVA and CCadj.)

Sources: Federal Reserve Board, IHS Global Insight.

2010200920082007200620052004200320022001

80

60

40

20

0

-20

-40

-60


20112010200920082007200620052004200320022001

40

20

0

-20

-40


Exports to BRICs, Japan and EU

Merchandise exports

BRICs

EU


Japan

20112010200920082007200620052004200320022001

60

40

20

0

-20

-40


Exports to newly industrialized countries and China

Merchandise exports

China

Newly industrialized

countries


20112010200920082007200620052004200320022001

40

20

0

-20

-40


Exports to NAFTA Merchandise exports


Mexico

Canada

Weighted average exchange value of U.S. DollarMajor Currencies Index, In real terms

Sources: U.S. Board of Governors of the Federal Reserve System, Moody’s Analytics.

20112010200920082007200620052004200320022001

120

110

100

90

80

70

Index (March 1973=100)

201120102009200820072006200520042003

30

20

10

0

-10

-20

-30

-40


Construction put-in-placeUnited States

Sources: U.S. Census, Moody’s Analytics.

Residential

Non-

residential

20112010200920082007200620052004200320022001

8.0

7.5

7.0

6.5

6.0

5.5

5.0

4.5

4.0

Percent

30-year fixed mortgage rateUnited States

Sources: Mortgage Bankers Association, Moody’s Analytics.

201120102009200820072006200520042003200220012000

240

220

200

180

160

140

120

100

80

Index Jan. 2000=100, 3 month ending

S&P/Case Shiller indexHome price index

Sources: Standard & Poor's and Fiserv, Inc., Moody’s Analytics.

20-metro

composite

10-metro

composite

Median existing single-family home priceUnited States


20112010200920082007200620052004200320022001

20

10

0

-10

-20


Single-family housing startsUnited States

Sources: U.S. Census Bureau, IHS Global Insight.

20112010200920082007200620052004200320022001

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

Millions of units

20112010200920082007200620052004200320022001

4.0

3.5

3.0

2.5

2.0

1.5

1.0

12

10

8

6

4

2

Millions Months

Housing inventoryExisting, Single-family homes, United States

Sources: NAR, Moody’s Analytics.

Months

supply (R)

Available

homes for

sale (L)

20102009200820072006200520042003200220012000

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

Percent Percent

Delinquency rate

Percent of loans past due vs. those in foreclosure

Sources: Mortgage Bankers Association, Moody’s Analytics.

Percent of loans

past due 30 days (L)

Percent in

foreclosure (R)

Eleven million homes are still under water

0

2

4

6

8

10

12

14

16

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

Number of mortgages, millions

Negative equity23%

Near negative

equity5%Others

72%

2010

Source: CoreLogic.

Mortgage principal and interest payments Monthly payment amounts


111009080706050403020100

1200

1100

1000

900

800

700

600

US$

Federal government net savingUnited States


20102009200820072006200520042003200220012000

500

0

-500

-1000

-1500

US$ billions, SAAR

Federal government deficit as percent of GDP

United States


20102009200820072006200520042003200220012000

4.0

2.0

0.0

-2.0

-4.0

-6.0

-8.0

-10.0

-12.0

Percent

Federal expenditures as percent of GDPUnited States


20112010200920082007200620052004200320022001

26

24

22

20

18

Percent

21201918171615141312111009080706

0

-200

-400

-600

-800

-1000

-1200

-1400

-1600

0

-2

-4

-6

-8

-10

-12

US$ billions Percent

CBO baseline projection

Federal budget deficit trajectoryCBO budget outlook

Source: Congressional Budget Office.

Level, (L)

As % of GDP, (R)

21201918171615141312111009080706

26

24

22

20

18

16

14

Percent


Revenues and outlays as share of GDPCBO budget outlook


Revenues

Outlays

21201918171615141312111009080706

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

Percent


Outlays for mandatory spending as share of GDPCBO budget outlook


Medicare and

Medicaid

Social Security

Sources: Bureau of Economic Analysis, IHS Global Insight, Milken Institute.

Real GDP outlook

United States

20152014201320122011201020092008

6

4

2

0

-2

-4

-6

-8


Milken Institute projection

Sources: Bureau of Labor Statistics, IHS Global Insight, Milken Institute.

Employment outlook

United States

20152014201320122011201020092008200720062005

4.0

2.0

0.0

-2.0

-4.0

-6.0



Sources: U.S. Census, IHS Global Insight, Milken Institute.

Housing starts outlook

United States

20152014201320122011201020092008200720062005

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

Millions, annual rate



Business investment in equipment and software outlook

United States

20152014201320122011201020092008

30

20

10

0

-10

-20

-30

-40




Exports outlookUnited States

20152014201320122011201020092008

30

20

10

0

-10

-20

-30

-40




Real consumer spending outlookUnited States

20152014201320122011201020092008

6

4

2

0

-2

-4



20152014201320122011201020092008200720062005

6

5

4

3

2

1

0

Percent


Sources: Federal Reserve Board, IHS Global Insight, Milken Institute.

Interest rate outlookUnited States

Fed funds rate

10-year T-note yield

Sources: Bureau of Labor Statistics, IHS Global Insight, Milken Institute.

Core CPI outlookUnited States

20152014201320122011201020092008200720062005

3.0

2.5

2.0

1.5

1.0

0.5



100806040200989694929088

45

40

35

30

25

Tax rate

Statutory corporate income tax ratesOECD average vs. United States

Sources: OECD, Milken Institute.

United States

OECD average*

*OECD average includes Chile from 2000 onward

National health expenditures per capita 1990-2019

Sources: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.

(1990)$2,853

(2009)$8,086

(2019)$13,387

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Per Capita

Projected Per Capita

Historical Projected

Deleveraging Has Just Begun

299%

of GDP

72%

of GDP29% of GDP

(%)

As of 31 December 2010

Source: U.S. Federal Reserve, U.S. Bureau of Economic Analysis, Morgan Stanley

363%

of GDP

Consumers, in Particular,

Embraced Cheap Debt

As of 31 December 2010

*The assumed conforming borrowing rate is equal to Fannie Mae 30 Year MBS rate + 60bps from 1985 to 1996. From 1996, borrowing rate is average 30-year fixed

rate mortgage rate as published by BanxQuote and Bloomberg.

Source: U.S. Census Bureau, Fannie Mae, Bloomberg, BanxQuote

Government Borrowing from non-Residents

As of April 2011

Source: IMF, Global Financial Stability Report

Most recent data for externally held general government debt (from Joint External Debt Hub) divided by 2010 gross general government debt.

External Debt Across All Sectors

As of April 2011

Source: IMF, Global Financial Stability Report

1 Most recent data divided by 2010 GDP.

2 Calculated from assets and liabilities reported in a country’s international investment position.

Total Economy Gross External Liabilities1,2 Total Economy Net External Liabilities1,2

U.S. CPI Composition

As of December 2010Source: Bureau of Labor Statistics

Housing 41%

Food and beverages15%

Transportation 17%

Other 26%

Sustained Inflation Depends on Labor Pricing Power

Labor accounts for 65%-70% of the cost of goods sold in the U.S.

As of 20 April 2011

Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Bloomberg

* Source: U.S. Census Bureau, Current Population Survey, 2008 Annual Social and Economic Supplement

(%)

15.7%

13.7%

9.5%

7.4%

4.4%

The Implications of QE Diverge Based

on Net Worth

As of 2007

Source: Federal Reserve “Survey of Consumer Finances,” Census Bureau

90-100th Percentile75-89th Percentile50-74th Percentile25-49th Percentile1-24th Percentile

$44,727

$9,907$6,388

$1,628-$60

% of Total Net Worth -0.1% 2.5% 10.2% 15.8% 71.5%

Average Net Worth $-2,186 $58,060 $227,725 $588,623 $3,985,832

The Implications of QE Diverge Based

on Net Worth

As of 2007

Source: Federal Reserve “Survey of Consumer Finances,” Census Bureau

Ownership of Financial Assets

(% of total value)

Ownership of Business Assets

(% of total value)Ownership Residential Assets

(% of total value)

1-24th Percentile

25-49th Percentile

50-74th Percentile

75-89th Percentile

90-100th Percentile

Total Value: $25.0T Total Value: $14.4T Total Value: $23.3T

United States -5 · Job market showing modest improvement Non-farm employment, United States ......

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Transcript of United States -5 · Job market showing modest improvement Non-farm employment, United States ......