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Rupert Report
Peter RupertProfessor
Department of Economics, UCSBDirector, UCSB Economic Forecast Project
Economic UpdateJanuary 26, 2017
www.efp.ucsb.edu/talk
economics and the election
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
what to expect
uncertainty
Dodd-Frank
international trade
taxes and spending
Obamacare
oil/energy
immigration
ugh, I need a lot more slides! but...
1929 1940 1950 1960 1970 1980 1990 2000 2010
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Real GDPLogged Billions of 2009$, Seasonally Adjusted
Linear Trend
so far...
some positive signs
stock market
gdp
FOMC a bit more upbeat
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016
8
10
12
14
16
18
20
Dow Jones Industrial Index (000’s)
Ele
ctio
n
Jan 012016
Mar 012016
May 022016
Jul 012016
Sep 012016
Nov 012016
Jan 022017
16
17
18
19
20
Dow Jones Industrial Index (000’s)
My
Bir
thda
y
Jan 012016
Mar 012016
May 022016
Jul 012016
Sep 012016
Nov 012016
Jan 022017
16
17
18
19
20
Dow Jones Industrial Index (000’s)
Per
cent
−2
0
2
4
6
2.8%
0.8%
3.1%
4%
−1.2%
4%
5%
2.3%2%
2.6%
2%
0.9% 0.8%
1.4%
3.5%
2013
2014
2015
2016
Econsnapshot.com Source: BEA
Real GDP
quarterly change at an annual rateyear−over−year change
what’s up with our friends at the Fed?
increases this year?
housing and financial aspects
home price growth has moderated
mortgage crisis has abated
foreclosures back to “normal”
yet, foreclosure timelines not!
2000 2002 2004 2006 2008 2010 2012 2014 2016
20
40
60
80
100
120
Santa Barbara[ $1,064,100]Carpinteria[ $788,600]Montecito[ $3,048,500]Goleta[ $786,800]Santa Maria[ $352,500]Lompoc[ $307,000]Guadalupe[ $266,900]
Zillow Home Value IndexIndex (100 = Pre−Recession Max Value)
2001−Feb 2004−Feb 2007−Feb 2010−Feb 2013−Feb 2016−Feb
−40
−20
0
20
40 Santa Barbara[6%]Carpinteria[0%]Montecito[7%]Goleta[3%]Santa Maria[8%]Lompoc[10%]Guadalupe[12%]
Zillow Home Value IndexYoY Growth Rate (%)
Q1 1995 Q1 1998 Q1 2001 Q1 2004 Q1 2007 Q1 2010 Q1 2013 Q4 2015
16
18
20
22
24
26
www.efp.ucsb.edu Source: Board of Governors, Flow of Funds
Ratio of HH Liabilities to HH Net WorthPercent (%)
2000 2002 2004 2006 2008 2010 2012 2014 2016
0
10
20
30
40
50
60 Riverside, CASacramento, CASan Diego, CALos Angeles, CASan Francisco, CACalifornia
Homes foreclosed per month, by MSANumber of homes per 10,000
2011−Q2 2012−Q1 2012−Q4 2013−Q3 2014−Q2 2015−Q1 2015−Q4 2016−Q3
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Santa Barbara
California
United States
Percent of Home with Negative Equity
San
ta B
arba
raC
ount
y
San
ta M
aria
San
ta B
arba
raC
ity
Lom
poc
Gol
eta
Car
pint
eria
Sol
vang
Gua
dalu
pe
Bue
llton
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
Percent of Homes with Negative Equity
San
ta B
arba
raC
ount
y
San
ta M
aria
San
ta B
arba
raC
ity
Lom
poc
Gol
eta
Car
pint
eria
Sol
vang
Gua
dalu
pe
Bue
llton
0 %
20 %
40 %
60 %
80 %
100 %
Negative Equity Loan−to−Value: 2016Q3
100−120% 120−140% 140−160% 160−180% 180−200% >200%
income and wages
1969 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014
0.08
0.10
0.12
0.14
0.16
0.18 USCalifornia
Gini CoefficientReal per capita personal income across counties
new findings on inequality
most of the inequality is “between firms”
not “within firms”
labor markets
wages
wage growth picking up in the US
but not evenly across the state
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016
−2
0
2
4
CPI AHE
Inflation and Average Hourly EarningsPercent change from a year ago, all private workers
[−1%, 0%]
(0%, 1%]
(1%, 2%]
(2%, 3%]
(3%, 6%]
Real Mean Wage Growth 2015 − 2016
Source: CA EDD
employment
employment growth strong
but varies by industry and geography
unemployment as well
2000 2002 2004 2006 2008 2010 2012 2014 2016
95
100
105
Santa Barbara County [ 175,120 ]California [ 15,476,015 ]United States [ 138,434,120 ]
www.efp.ucsb.edu
Total Nonfarm Payrolls, Seasonally AdjustedIndex (Dec 2007 = 100)
Notes: December 2007 level in brackets.
Source: BLS & CA EDD
2010 2011 2012 2013 2014 2015 2016 2016
100
105
110
115Buellton [ 3,127 ]Carpinteria [ 7,775 ]Goleta [ 17,433 ]Guadalupe [ 3,231 ]Lompoc [ 17,601 ]Santa Barbara City [ 51,151 ]Santa Maria [ 46,649 ]Solvang [ 2,706 ]
www.efp.ucsb.edu
Total Civilian Employment, Seasonally AdjustedIndex (Jan 2010 = 100)
Note: Current level in brackets.
Source: BLS & CA EDD
2010 2011 2012 2013 2014 2015 2016 2016
4
6
8
10
12
Buellton [ 2.9% ]Carpenteria [ 3.97% ]Goleta [ 2.71% ]Guadalupe [ 4.3% ]Lompoc [ 5.95% ]Santa Barbara City [ 3.64% ]Santa Maria [ 5.53% ]Solvang [ 5.63% ]
www.efp.ucsb.edu
Unemployment Rate, Seasonally AdjustedPercent (%)
Note: Most recent rate in brackets.
Source: BLS & CA EDD
Government
Leisure & Hospitality
Educ. & Health ServicesGoods Producing
Prof. & Bus. ServicesTotal Farm
Retail Trade
Financial ActivitiesOther Services
Wholesale Trade
Information
Trans., Ware. & Util.
19.2 14.2 13 11 10.6 10.29.5
3.12.8
2.52.1
1.7
−2.5
0.0
2.5
5.0
7.5
0 25 50 75 100Percent of Total Employment
Dec
201
5 −
Dec
201
6 G
row
th R
ate
(%)
December 2016 Employment by Industry Santa Barbara County
final thoughts
policy uncertainty
strong growth in the US
FOMC forecast: 3 25bp increases in 2017?
1929 1940 1950 1960 1970 1980 1990 2000 2010
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Real GDPLogged Billions of 2009$, Seasonally Adjusted
Linear Trend
thank you!
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