National Economic Outlook Alan Gin Associate Professor of Economics School of Business Administration
U.S GDP Growth Rate 2000 ‐ Present 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 % Change 0.0 ‐ 1.0 ‐ 2.0 ‐ 3.0 ‐ 4.0 ‐ 5.0 ‐ 6.0 ‐ 7.0 ‐ 8.0 ‐ 9.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Source: Bureau of Economic Analysis, University of San Diego
Contributions to % Change in Real GDP 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 GDP Consumption Investment Net Exports Government Expenditures ‐ 0.50 1947 ‐ Great Recession Recovery Source: Bureau of Economic Analysis, University of San Diego
Change in Employment National Economy (2005 ‐ Present) 600 500 400 300 200 100 0 Thousands ‐ 100 ‐ 200 ‐ 300 8.7 million jobs 15.6 million jobs gained ‐ 400 ‐ 500 lost in Great in the last 83 months ‐ 600 Recession ‐ 700 ‐ 800 ‐ 900 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics, University of San Diego
Unemployment Rate U.S. (2005 - present) 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics, University of San Diego
Labor Underutilization 18.0 17.0 16.0 15.0 14.0 13.0 12.0 11.0 10.0 Percent 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Unemployed Discouraged Workers Marginally Attached Part Time for Economic Reasons Source: Bureau of Labor Statistics, University of San Diego
Source: Federal Reserve Bank of St. Louis
Reasons for decline in labor force participation rate Retirement of Baby Boom generation Less participation by students More people leaving for disability reasons Affordable Care Act allows some to leave work force and still have health insurance
Source: Federal Reserve Bank of St. Louis
Labor Market Labor market finally beginning to tighten Operations streamlined during Great Recession, more productivity from remaining workers Greater use of temporary/part-time workers Downward pressure on middle and lower income workers Technological changes Globalization Decline in unionization Reduced real value of the minimum wage
Employment Investment Income and Hiring Consumer Spending
Outlook Economy growing, but slowly GDP growth of 2.5 percent expected for 2017 Probability of a recession is low, but not zero Unemployment rate may edge up slightly Fed likely to increase interest rates by 50 basis points by the end of the year
Four Big, Long-Term Issues Reduced employment opportunities Globalization Technology – Internet, automation “Gig” economy Retirement crisis Low level of savings STEM divide Education and skills more important than ever Growing income inequality Social unrest?
Income inequality has increased significantly since the 1980s Source: Federal Reserve Bank of St. Louis
Source: Mother Jones
Source: Mother Jones
Outlook for San Diego Growth in the local economy slowing Job growth of 30,000 expected in 2016, 25,000 in 2017 Unemployment rate to edge up slightly Job growth in health care, administrative and waste services, leisure and hospitality, and construction Low single digit gain expected in housing prices
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