Economic Forecast - Credit Card, Mortgage, Banking, …€¦ · · 2015-10-04Economic Forecast OUTPUT AND ... unexpected shifts in a state’s GDP share. ... NUMBER OF DRILLING

Economic Forecast

OUTPUT AND EMPLOYMENT WHAT THE TABLE SHOWS:

Alaska’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.

Alaska’s economy has been lagging the

growth of the national economy in recent

years.

KEY MESSAGES:

Alaska’s economy is expected to continue to

run slower than the national recovery pace

for a while, in part, because the state’s

economy did not fall into recession like the

lower forty-eight states.

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

June 3, 2014

Regional Perspectives: Alaska Economic Outlook

Commercial Banking 2

2007 2008 2009 2010 2011 2012 2013 2014 2015

United States

Real GDP

$ billions (fourth quarter) $14,996 $14,575 $14,540 $14,942 $15,242 $15,540 $15,942 $16,501 $17,120

% change over the four quarters 1.9% -2.8% -0.2% 2.8% 2.0% 2.0% 2.6% 3.5% 3.8%

Nonfarm employment

Job count (fourth quarter) 138,246,000 135,493,667 129,877,667 130,652,000 132,642,667 134,853,667 137,247,667 139,694,848 141,679,460

% change over the four quarters 0.9% -2.0% -4.1% 0.6% 1.5% 1.7% 1.8% 1.8% 1.4%

Average monthly change 101,667 -229,361 -468,000 64,528 165,889 184,250 184,250 184,250 184,250

Alaska

Real GDP

$ billions (fourth quarter) $41 $42 $44 $44 $44 $45 $45 $47 $48

% change over the four quarters 1.7% 3.4% 4.1% -0.4% 1.5% 1.0% 1.2% 2.6% 3.6%

Nonfarm employment

Job count (fourth quarter) 317,667 321,800 319,700 326,833 331,367 336,500 338,200 340,703 344,764

% change over the four quarters 1.1% 1.3% -0.7% 2.2% 1.4% 1.5% 0.5% 0.7% 1.2%

Average monthly change 283 344 -175 594 378 428 142 209 338

The Economy’s Structure

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

The figure compares the relative importance

of selected industries to the state’s economy

with the national footprint of each industry

(state and national figures reflect the value

added of each industry as a percent of

aggregate state or US nominal GDP,

respectively).

The energy sector, transportation

businesses, and government represent an

outsized footprint in Alaska’s economy,

compared with the composition of the

national economy.

KEY MESSAGES:

Strength in the energy sector is Alaska’s key

strong point.

Source: US Department of Commerce. Updated through

2011.

June 3, 2014



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US industry mix Alaska's industry mix

Bankruptcies

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

The figure illustrates trends in bankruptcy

filings by businesses and persons relative to

the number of filings in 2007 Q4, prior to the

recession.

Bankruptcy filings are relatively low.

KEY MESSAGES:

Indicators of financial stress are a useful

coincident indication of economic distress.

From this perspective, Alaska appears to

have averted most of the problems that

plagued the West Coast and financial

pressures appear to be easing.

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

through March 2014.

June 3, 2014



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1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

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 active petroleum drilling rigs

in operation.

Drilling activity in Alaska’s energy sector

remains steady, supported by strong global

energy demand and high petroleum prices.

KEY MESSAGES:

Alaska’s important energy sector remains

strong.

Source: Baker Hughes rig count. Updated through 2014 Q1.

June 3, 2014



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1,500

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1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

United States (left scale)Alaska (right scale)

Initial Jobless Claims

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

The figure tracks layoffs in Alaska 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 have fallen back to normal since last

summer.

KEY MESSAGES:

The low level of layoffs is a good omen for

the economy.

Source: US Department of Labor. Updated through May 17,

2014 (state) and May 24, 2014 (US).

June 3, 2014



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2007 2008 2009 2010 2011 2012 2013 2014

AlaskaUS (solid area)

Economic Growth

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

Real GDP growth in Alaska (the line in the

figure) is superimposed on top of US real

GDP growth (bars in the figure).

Alaska’s economy is volatile but its

underlying performance is strong.

KEY MESSAGES:

Alaska benefits from the global boom in

energy demand.


2012 (state) and 2014 Q1 (US). Quarterly estimates for

states after 2012 are interpolated from employment figures

(through April 2014), based on the historical correlation of

state and national employment changes.

June 3, 2014



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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

Alaska

USForecast

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.

Alaska’s economy has fared far better than

the national economy and is on the leading

edge of the national recovery.

KEY MESSAGES:

Alaska’s economy is likely to remain on a

fast track into 2014.


2012 (state) and 2014 Q1 (US). Quarterly estimates for

states after 2012 are interpolated from employment figures

(through April 2014), based on the historical correlation of

state and national employment changes.

June 3, 2014



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

Alaska

US

Forecast

Employment Growth

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

A comparison of job growth in Alaska versus

the nation.

Alaska’s job market seemed to lose

momentum last year, perhaps related to the

government sequestration cuts, but is

expanding even so.

KEY MESSAGES:

Job growth is forecast to pick up speed

again in the coming year.

Source: US Department of Labor. Updated through April

2014 (state) and April 2014 (US).

June 3, 2014



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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

AlaskaUS

Forecast

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.

Alaska’s job count stands 15 percent above

decade-ago levels.

KEY MESSAGES:

From an employment perspective, Alaska is

on a steady ascending path.



June 3, 2014



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

Alaska

US

Forecast

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.

KEY MESSAGES:

Alaska’s economic strength is fairly well

diversified.



June 3, 2014



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2001 2003 2005 2007 2009 2011 2013 2015

US forecast

US

Anchorage

Fairbanks

Alaska

forecast

Alaska

Forecast

Unemployment

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

Unemployment rate trends in Alaska,

compared with the national average.

Unemployment is back to the historical low

points at about 6 percent.

KEY MESSAGES:

The unemployment rate is the single best

indicator of the relative economic

performance of a region.

Alaska’s falling unemployment rate confirms

the robust trends in employment.



June 3, 2014



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

Alaska

US (shaded)

Forecast

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

versus the nation in the state—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.

House prices in Alaska have risen 15

percent more than the national average,

because prices elsewhere lost ground.

KEY MESSAGES:

Alaska’s housing market remains pricey in

comparison with the national real estate

market.

Source: FHFA. Updated through 2013 Q4.

June 3, 2014



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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.

Prices have flattened since 2006 even as

prices in most other markets have fallen.

KEY MESSAGE:

Real estate values held up better in Alaska

than in the lower 48, perhaps a sign that

speculation was less intense in the state’s

real estate markets.

Source: FHFA. Updated through 2013 Q4.

June 3, 2014



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

US

Anchorage

Fairbanks

New Home Building

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

Home building in the state, compared with

the US.

Housing activity is relatively flat.

KEY MESSAGES:

Housing activity is expected to strengthen in

coming years, in line with a national housing

recovery.

Source: Census Department. Updated through March 2014

(state) and April 2014 (US).

June 3, 2014



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USAlaska

Forecast

Documents

Economic Forecast - Credit Card, Mortgage, Banking, …€¦ · · 2015-10-04Economic Forecast OUTPUT AND ... unexpected shifts in a state’s GDP share. ... NUMBER OF DRILLING