National and Regional Economic Outlook Terry L. Clower, Ph.D. - PowerPoint PPT Presentation

2017 National and Regional Economic Outlook Terry L. Clower, Ph.D. Director, Center for Regional Analysis Schar School of Policy and Government George Mason University

U.S. Gross Domestic Product Quarterly Change Real GDP (Billions) 6.0 $17,000 5.0 $16,500 4.0 $16,000 3.0 $15,500 % 2.0 $15,000 1.0 $14,500 0.0 $14,000 -1.0 -2.0 $13,500 2010 2011 2012 2013 2014 2015 2016 4Q16 +1.9% Source: Bureau of Economic Analysis (Seasonally Adjusted, Chained 2009 Dollars )

US Payroll Jobs Month-to-Month Change (000s) Total (Millions) 400 148 2016 146 350 +2.2 144 M 300 142 140 250 Dec 138 +156, 200 136 000 150 134 132 100 Since 130 50 2010 128 +14.4 0 126 M 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis

U.S. Unemployment 20 15 U-6 Dec 10 2016 9.2% 5 UR U-6 Dec -0.7% 0 4.7% Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 UR. 70 -0.2% LFPR 65 Dec 62.7% 60 Source: Bureau of Labor Statistics (Seasonally Adjusted)

Average Weekly Wages Across all Industries QOTYC Average Weekly Wage 4 per. Mov. Avg. (Average Weekly Wage) $1,200 $60 $50 $1,000 $40 $800 $30 $20 $600 $10 $400 $0 -$10 $200 -$20 $0 -$30 2010 2011 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics, GMU Center for Regional Analysis

ISM Manufacturing and Non-Manufacturing Indices 65 60 Dec 2016 Mfg = 54.7 N-Mfg = 57.2 55 50 Mfg N-Mfg 45 40 Source: Institute for Supply Management

U.S. New and Existing Home Sales (000s) (000s) 7,000 700 6,500 650 2016 6,000 600 Existing (Left Axis) 5,500 550 +0.7% 5,000 500 40,000 4,500 450 4,000 400 New (Right Axis) 3,500 350 2016 3,000 300 2,500 250 +10% 2,000 200 54,000 Source: U.S. Census (New), National Association of Realtors (Existing)

Labor Productivity Nonfarm business, seasonally adjusted 6 120 QOTYC Productivity Index 5 100 4 80 3 60 2 40 1 20 0 -1 0 Base year (100) = 2009 Source: U.S. Bureau of Labor Statistics

U.S. Leading Index Month-Over-Year Percent Change 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 15 10 Nov = 124.6 5 (2010 = 100.0) 0 -5 -10 -15 -20 -25 Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Source: The Conference Board, GMU Center for Regional Analysis

Consumer Confidence Source: The Conference Board, GMU Center for Regional Analysis

Determinants of Growth • Inflation • Corporate tax rates • When does the spending become • When and how much inflationary? • Infrastructure • Spending vs. Revenue vs. Debt • What, where, when, how • Interest rates • Immigration • Fed action and market reaction • Impact on labor force availability • Productivity • Corporateinvestment • Will we prioritize productivity enhancing programs & spending • Repatriating profits does not mean spending. Global markets matter. • Adaptability • Technology change is a given • Tradepolicy

U.S. GDP 2007 – 2016 – 2020 % (Annual % Change) 4 1.6 1.8 2.2 2.8 2.4 2.6 2.5 1.6 2.2 1.7 1.8 2 1.2 0 % -0.3 -2 -2.8 -4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Economic Analysis , GMU Center for Regional Analysis, Forecast: January, 2017

The Washington Economy

Annual Job Change -Washington MSA 000’s MOTYC Non-Farm Jobs 000’s 110 3,350 3,300 90 3,250 3,200 70 3,150 2016 50 3,100 +66.6 3,050 K 30 3,000 2,950 10 2,900 -10 2,850 2011 2012 2013 2014 2015 Dec-16 Total: 3,288 K Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Federal Government Washington MSA (000s) (000s) 30 390 25 385 20 380 15 375 2016 10 370 +2.0% 5 365 7,500 0 360 -5 355 MOTYC -10 350 -15 -20 345 2010 2011 2012 2013 2014 2015 2016 Dec-16 Total: 374.3 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Federal Procurement in the Washington MSA 1980-2016 (Fiscal Years) $ Billions 90 82.4 TOTAL = $1,409.7 Billion 79.9 80 76.3 73.8 71.2 71.1 69.1 70 60 50 40 30 20 10 0 Source: US Census, Consolidated Federal Funds Report and USAspending.gov

Professional & Business Services Washington MSA

Job Change by Sector Dec 2015 – Dec 2016 Washington MSA (000s) Total = 66,600 Prof. & Bus. Svcs 24 Federal Govt. 7 Educ & Health Svcs 13 State & Local Govt 7 Retail Trade 7 Leisure & Hosp. 8 Construction 1 Other Services 2 Financial 0 Information -3 Manufacturing 1 Wlse Trade 1 Transp. & Util. 0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Unemployment Rates in the WMSA By Sub-State Area, 2009-2016 12 10 5.4 – DC 8 4.7 – U.S. 3.7 – MSA 6 3.6 – SMD 3.3 – NVA 4 2 0 Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)

Median House Sales Price Washington MSA (000s) (000s) 500 $395.7K 450 Dec 2016 400 350 300 250 200 150 100 Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis

U.S. GDP and Washington Area GRP 2007 – 2016 – 2020 % (Annual % Change) Source: Bureau of Economic Analysis , GMU Center for Regional Analysis, Forecast: January, 2017

Employment Change in the Washington MSA (Thousands of Jobs) 80 66.6 70 59.4 60 49.2 50 36.0 40 31.2 29.6 28.1 30 18.6 20 10 0 2013 2014 2015 2016 2017 2018 2019 2020 Source: BLS, GMU Center for Regional Analysis (January 2016) Average Annual Change 1990-2012 = 36,500 NOTE: The regional totals do not include Jefferson, WV.

Where are we? • • We are growing : Advantages • Challenges • • Drain the swamp/Sequester Government Center • Some diversification • International Institutions • Further market shifts needed • Some catch-up • Connectivity to the World • Cost of living/doing business • Recent job growth across all • Concentration of Leaders • Mobility wage levels • Access to capital • Access to capital • Growth will continue in • 2017, but at a moderating High Quality-of-Life • Regional branding / pace • Diverse Population cooperation • Higher Education • Globally competitive? • Educated Work Force • Understanding changing • nature of jobs Advanced Occupational • Productivity Specializations

Thank You Questions tclower@gmu.edu cra.gmu.edu