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7/30/2019 Calhoun County 2013-14 Economic Forecast
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20132014 Forecast for
Calhoun County
2012 was not a good year.
George A. Erickcek
Brian Pittelko
W.E. Upjohn Institute for Employment Research
January 17, 2013
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Thanks to Our Sponsors
1
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Agenda
Looking at the usual suspects for economic growth
The state economy continues to be driven by the carindustry.
Employment in Calhoun County was at a standstill in2012.
Stepping into the skill gap vs. wage gap debate.
Comparison analysis with similar areas Review of last years forecasta very quick review
Forecast for 2013 and 2014
2
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Nationwide, GDP grew at a strong 3.1% rate
during the third quarter. However, the forecast is
pretty boring.
3Source: BEA, University of Michigan RSQE forecast.
If this forecast holds, productivity will generate much of the nations output.
-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13Q1 14Q1
Employmentchange
(000s)
Percentchangein
GDP
Gross Domestic Product and Nonfarm Employment
GDP Nonfarm employment
Forecast
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There are still three job seekers for every job
opening, up from less than two before the recession.
0
1
2
3
4
5
6
7
8
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2006 2007 2008 2009 2010 2011 2012
Unem
ployedperopening
Thousands
Job Openings
Job seekers per
opening
Job openings at end of month
4
Source: BLS, JOLTS, and LAUS.
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Looking for a power source:
the usual suspects
Consumers
BusinessInvestment
Export
Market
Government
5
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Looking for a power source
Consumers
6
Consumer confidence is at a low
level.
Debt levels have increased.
Employment growth is
improving.
The housing market is
improving but prices are still
low.
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Consumer confidence is growing
but still weak.
0
20
40
60
80
100
120
140
160
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Consumer Confidence 1999 to Present
Recession Consumer confidence
7Source: Conference Board and NBER.
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Consumer spending is not as robust as
previous recoveries.
100
102
104
106
108
110
112
114
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Quarters Since Recessions End
Post Recession Index, Last Quarter of Recession = 100:
Consumer Expenditures
1991 Recession 2001 Recession Great Recession
8Source: BEA and NBER.
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Consumers appear to be
unhappily in debt.
0
20
40
60
80
100
120
-25
-20
-15
-10
-5
0
510
15
20
25
2007 2008 2009 2010 2011 2012
Index:1995=1
00
Billions($)
Consumer Confidence and Change in Consumer Debt
Consumer debt Consumer confidence
9Source: Conference Board and the Federal Reserve
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Conditions appear to be improving:
employment is on the rise.
Employment In December 155,000 net jobs werecreated, and we need 150,000 jobs per month just
to break even.
In 2012, employment gains have averaged157,000 per month, compared with an average
monthly gain of 153,000 in 2011.
Nationwide, the unemployment rate is now 7.8.However, the labor participation rate is down to
63.6% from a low of 64.1% last year.
10
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Being unemployed for more than six months is bad
for your health. The good news is that it is
going down.
11
0
5
10
15
20
25
30
35
40
45
50
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
Percent Unemployed for More Than 27 Weeks
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Looking for a power source
BusinessInvestment
12
Depends upon consumer
spending and was down in the
third quarter
The Fed has been extremelyaggressive lowering interest
rates and increasing liquidity.
Loan activity appears to be
normal.
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Business investment is up but dipped
in the 3rd Quarter.
90
95
100
105
110
115
120
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Quarters Since Recessions End
Post Recession Index, Last Quarter of Recession = 100:
Nonresidential Private Investment
2001 Recession Great Recession
13Source: BEA and NBER.
*Includes residential
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Credit: Banks are still holding more than a trillion
dollars in excess reservesbut it is going down.
0
200400
600
800
1,000
1,200
1,400
1,600
1,800
1996 1998 2000 2002 2004 2006 2008 2010 2012
$Billions
Total and Required Reserves at the Federal Reserve
Total reserves Required reserves
14Source: Federal Reserve.
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Interest rates must matter
15
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2007 2008 2009 2010 2011 2012
Annual%rate
Interest Rates and Inflation
30-year mortgages
10-year Treasury bill
3-month Treasury
12-month change in CPI-U
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Manufacturing activity has slowed but
capacity utilization rates are tightening.
50
55
60
65
70
75
80
85
90
30
35
40
45
50
55
60
65
2006 2007 2008 2009 2010 2011 2012
Perc
entutilization(%)
PMI(>50=ex
pansion;
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