Two Steps Forward  One Step Back Daraius Irani, PhD    November 9, 2011
National Economy
Two Steps Forward?                                  Real Gross Domestic Product, Seasonally Adjusted 1981Q1 through 2011Q3...
Two Steps Forward?                                              Personal Consumption, Seasonally Adjusted, Jan 2005 throug...
Consumers are Spending but…..    Percent Change from Previous Month               US                      May             ...
The Employment Situation
Post – Recession Employment Picture                                                                                       ...
U.S. Stalled Job Creation and Wages ?                                          Hours, Production and Nonsupervisory Employ...
Manpower Hiring Survey               Hiring Plans, All Industries, Not Seasonally Adjusted, 2007Q1 through 2011Q4        3...
Job Hires vs. Job Separations               Job hires vs. Job Separations, Seasonally Adjusted Jan 2008 through Aug 2011  ...
Return to Peak Employment?© Towson University, Division of Economic and Community Outreach   IHS Global Insight
Checking Consumer and Business         Temperature
Consumer Sentiment Index                                 Consumer Sentiment Monthly Index, Jan 2007 through Oct 2011      ...
Pulse of Commerce                  PCI Monthly Index, GDP, Seasonally Adjusted Jan 2002 through Sept 2011        105.00   ...
Regional PCI Growth© Towson University, Division of Economic and Community Outreach   Ceridian-UCLA Pulse of Commerce Index
ISM: Purchasing Managers Index                        ISM Monthly Index, Jan 2005 through Oct 2011                  65%   ...
Checking the Housing Picture
Shadow Inventory Concerns                          Shadow Inventory Detail, Monthly, Jan 2006 through Jul 2011            ...
Months’ Supply Shadow Inventory                        Months’ Supply Detail, Monthly, Jan 2006 through Jul 2011          ...
Foreclosure Heat Map                September 2011© Towson University, Division of Economic and Community Outreach   Realt...
New Houses For Sale in the United States                                               Months Since Completion            ...
New Houses For Sale in the United States                                       Number of Months to Clear Out Inventories  ...
Distressed Sales as A Percentage of Total Sales                               Monthly, Jan 2006 through July 2011         ...
Story Behind the Numbers  • Incomes have remained stagnant for prime home    buyers  • Negative housing price trends have ...
Maryland Outlook
Slow Down in Maryland’s Economy?                           Annual Rate of Change, Index, Monthly Jan 1997 through Sept 201...
Maryland Performance • Maryland added 10,000 private sector jobs in September • Employment growth is at 0.5 percent – a fa...
Personal Income Percent Change© Towson University, Division of Economic and Community Outreach   Bureau of Economic Activity
Mid-Atlantic Region                                    Unemployment Rankings                 September Unemployment Rates ...
Measures of Labor Underutilization                   Labor Underutilization, Averages, 2010Q3 through 2011Q2            18...
Maryland Mass Layoffs                                   Total Initial Unemployment Claimants and Layoff Events, Monthly, J...
Housing
MD Homes Sales vs. Inventories                      MD Home Sales vs. Inventories, Seasonally Adjusted Jan 2000 through Au...
MD Homes Prices vs. Inventories                                         MD Home Sales vs. Inventories, Seasonally Adjusted...
MD Distressed Properties                             Aug-10                                             Aug-11            ...
Baltimore – Towson Distressed Properties                             Aug-10                                            Aug...
Housing and Foreclosures                          • Maryland - September 2011                                  o 10,662 Fo...
What’s Looming Ahead?
Maryland Federal Government                                                             and Private Sector Employment     ...
Challenges Ahead                   • Maryland fiscal leaders cut the State’s                     economic outlook         ...
Maryland’s Forecast
RESI Employment Outlook                                   Maryland Historical & Projected TNA Employment Growth, 2007Q1 th...
RESI Employment Outlook              Maryland Projected Employment Growth, Percent, 2011 to 2012        Admin/Waste       ...
RESI Outlook - Summary Maryland Indicators - Historical & Projected Annual Figures                                        ...
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Dr. Daraius Irani - Maryland's Economic Outlook Presentation

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Dr. Daraius Irani - Maryland's Economic Outlook Presentation

  1. 1. Two Steps Forward One Step Back Daraius Irani, PhD November 9, 2011
  2. 2. National Economy
  3. 3. Two Steps Forward? Real Gross Domestic Product, Seasonally Adjusted 1981Q1 through 2011Q3 15% 10%Annual Rate of Expansion 2.5 % 5% 0% -5% -10%© Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  4. 4. Two Steps Forward? Personal Consumption, Seasonally Adjusted, Jan 2005 through Sept 2011 $9,600 0.6% 0.5 % $9,400 0.4%Personal Consumption Expenditures Billions of Chained 2005 Dollars $9,200 Annual Percent Change 0.2% $9,000 0.0% $8,800 -0.2% $8,600 $8,400 -0.4% $8,200 -0.6% Consumption Exp. Percent change © Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  5. 5. Consumers are Spending but….. Percent Change from Previous Month US May June July August September Personal 0.3% 0.2% 0.1% -0.1% 0.1% Income Disposable 0.2% 0.1% 0.0% -0.4% -0.1% Personal Income Personal 0.0% -0.1% 0.5% 0.0% 0.5% Consumption© Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  6. 6. The Employment Situation
  7. 7. Post – Recession Employment Picture Maryland Total Nonfarm Employees, in Thousands 133,000 2,510 US Total Nonfarm Employees, in Thousands 132,500 2,500 132,000 131,500 2,490 131,000 2001 Recession 2,480 130,500 130,000 2,470 129,500 2,460 129,000 2,450 128,500 128,000 2,440 US Maryland Maryland Total Nonfarm Employees, in Thousands 140,000 2,650 US Total Nonfarm Employees, in Thousands 138,000 2,600 136,000 134,000 2,550 2007 Recession 132,000 130,000 2,500 128,000 2,450 126,000 124,000 2,400© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics US Maryland
  8. 8. U.S. Stalled Job Creation and Wages ? Hours, Production and Nonsupervisory Employees, Jan 2006 through Aug 2011 6.0 4.5 4.0 4.0 3.5 Year-Over-Year Percent Change Year-Over-Year Percent Change 2.0 Average Hourly Wages Aggregate Weekly Hours 3.0 0.0 2.5 -2.0 2.0 -4.0 1.5 -6.0 1.0 -8.0 0.5 -10.0 0.0 Aggregate Weekly Hours Average Hourly Earnings© Towson University, Division of Economic and Community Outreach Federal Reserve Bank
  9. 9. Manpower Hiring Survey Hiring Plans, All Industries, Not Seasonally Adjusted, 2007Q1 through 2011Q4 35.0 30.0 25.0 20.0Index 15.0 10.0 5.0 0.0 -5.0 Expect increase Expect decrease Net Change © Towson University, Division of Economic and Community Outreach Moody’s Analytics
  10. 10. Job Hires vs. Job Separations Job hires vs. Job Separations, Seasonally Adjusted Jan 2008 through Aug 2011 4.3% 4.1% 3.9% 3.7% 3.5% Rate 3.3% 3.1% 2.9% 2.7% 2.5% Hires Separations© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  11. 11. Return to Peak Employment?© Towson University, Division of Economic and Community Outreach IHS Global Insight
  12. 12. Checking Consumer and Business Temperature
  13. 13. Consumer Sentiment Index Consumer Sentiment Monthly Index, Jan 2007 through Oct 2011 120.0 110.0 100.0First Quarter 1966=100 90.0 80.0 Index 70.0 60.0 50.0 40.0 © Towson University, Division of Economic and Community Outreach University of Michigan
  14. 14. Pulse of Commerce PCI Monthly Index, GDP, Seasonally Adjusted Jan 2002 through Sept 2011 105.00 100.00 95.00 90.00Index 85.00 80.00 75.00 70.00 PCI CERIDIAN INDEX GDP© Towson University, Division of Economic and Community Outreach Ceridian-UCLA Pulse of Commerce Index
  15. 15. Regional PCI Growth© Towson University, Division of Economic and Community Outreach Ceridian-UCLA Pulse of Commerce Index
  16. 16. ISM: Purchasing Managers Index ISM Monthly Index, Jan 2005 through Oct 2011 65% 60% 55% Oct: 50.8 50%Diffusion Index 45% 40% 35% 30% 25% 20%© Towson University, Division of Economic and Community Outreach Institute for Supply Management
  17. 17. Checking the Housing Picture
  18. 18. Shadow Inventory Concerns Shadow Inventory Detail, Monthly, Jan 2006 through Jul 2011 2.5 2Millions of Units 1.5 1 0.5 0 Pending Serious Delinquency Inventory Pending FC Inventory Pending REO Inventory © Towson University, Division of Economic and Community Outreach CoreLogic
  19. 19. Months’ Supply Shadow Inventory Months’ Supply Detail, Monthly, Jan 2006 through Jul 2011 9 8 7 6Number of Months 5 4 3 2 1 0 Pending Serious Delinquency Inventory Pending FC Inventory Pending REO Inventory © Towson University, Division of Economic and Community Outreach CoreLogic
  20. 20. Foreclosure Heat Map September 2011© Towson University, Division of Economic and Community Outreach RealtyTrac
  21. 21. New Houses For Sale in the United States Months Since Completion Not Seasonally Adjusted, Monthly, Jan 2006 through Jul 2011 16 14 12Number of Months 10 8 6 4 2 0 © Towson University, Division of Economic and Community Outreach Census Bureau
  22. 22. New Houses For Sale in the United States Number of Months to Clear Out Inventories Seasonally Adjusted, Months at Current Sales Rate, Jan 2006 through Jul 2011 14 12 10Number of Months 8 6 4 2 0 © Towson University, Division of Economic and Community Outreach Census Bureau
  23. 23. Distressed Sales as A Percentage of Total Sales Monthly, Jan 2006 through July 2011 45% 40% 35%Percent of Total Sales 30% 25% 20% 15% 10% 5% 0% Short Sales REO Sales © Towson University, Division of Economic and Community Outreach CoreLogic
  24. 24. Story Behind the Numbers • Incomes have remained stagnant for prime home buyers • Negative housing price trends have a negative wealth effect© Towson University, Division of Economic and Community Outreach
  25. 25. Maryland Outlook
  26. 26. Slow Down in Maryland’s Economy? Annual Rate of Change, Index, Monthly Jan 1997 through Sept 2011 8.0% 6.0% 4.0%Coincident Index 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% MD US © Towson University, Division of Economic and Community Outreach Federal Reserve Bank
  27. 27. Maryland Performance • Maryland added 10,000 private sector jobs in September • Employment growth is at 0.5 percent – a faster clip than the 0.1 percent for the nation o Federal Government added 2,100 jobs o State Government added 100 jobs o Local Government shed 5,400 jobs • Since January, 95 percent of new jobs have been created by the private sector© Towson University, Division of Economic and Community Outreach Department of Labor, Licensing and Regulation
  28. 28. Personal Income Percent Change© Towson University, Division of Economic and Community Outreach Bureau of Economic Activity
  29. 29. Mid-Atlantic Region Unemployment Rankings September Unemployment Rates Seasonally Adjusted State 2009 2010 2011 Maryland 7.4 7.4 7.4 Pennsylvania 8.5 8.5 8.3 Virginia 7.1 6.7 6.5 Delaware 8.3 8.3 8.1 DC 10.2 9.7 11.1 U.S. Unemployment Rate: 9.1 in September 9.0 in October© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  30. 30. Measures of Labor Underutilization Labor Underutilization, Averages, 2010Q3 through 2011Q2 18 16.2 16 15.4 14 12.7 12 12 10.7 10.2 10 9.2Percent 8.8 8 7.3 6 4 2 0 Maryland District of Columbia United States U-3 U-5 U-6 © Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  31. 31. Maryland Mass Layoffs Total Initial Unemployment Claimants and Layoff Events, Monthly, Jan 2010 through Sep 2011 3,000 35 30 2,500 Layoff Events, Total all Industries 25Total Initial Claimants, 2,000 Total all Industries 20 1,500 15 1,000 10 500 5 0 0 Total Initial Claimants Layoff Events© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  32. 32. Housing
  33. 33. MD Homes Sales vs. Inventories MD Home Sales vs. Inventories, Seasonally Adjusted Jan 2000 through Aug 2011 10,000 60,000 9,000 50,000 8,000 7,000 40,000 6,000Home Sales Inventory 5,000 30,000 4,000 20,000 3,000 2,000 10,000 1,000 0 0 Home Sales Inventories © Towson University, Division of Economic and Community Outreach Maryland Association of Realtors
  34. 34. MD Homes Prices vs. Inventories MD Home Sales vs. Inventories, Seasonally Adjusted Jan 2000 through Aug 2011 $400,000 60,000 $350,000 50,000 $300,000Average Home Price 40,000 $250,000 Inventory $200,000 30,000 $150,000 20,000 $100,000 10,000 $50,000 $0 0 Inventories Home Prices © Towson University, Division of Economic and Community Outreach Maryland Association of Realtors
  35. 35. MD Distressed Properties Aug-10 Aug-11 6% 8% 12% 9% 82% 83% Total Sales REO Sales Short Sales© Towson University, Division of Economic and Community Outreach CoreLogic
  36. 36. Baltimore – Towson Distressed Properties Aug-10 Aug-11 5% 6% 7% 12% 83% 87% Total Sales REO Sales Short Sales© Towson University, Division of Economic and Community Outreach CoreLogic
  37. 37. Housing and Foreclosures • Maryland - September 2011 o 10,662 Foreclosure Homes for Sale o $180,906 Average Foreclosure Sales Price • US – September 2011 o 1,485,418 Foreclosure Homes for Sale o $173,344 Average Foreclosure Sales Price© Towson University, Division of Economic and Community Outreach RealtyTrac
  38. 38. What’s Looming Ahead?
  39. 39. Maryland Federal Government and Private Sector Employment Seasonally Adjusted, Jan 2000 through Sept 2011 150 2,200Federal Government Employment, thousands Private Sector Employment, thousands 145 2,150 140 2,100 135 2,050 130 2,000 125 1,950 120 1,900 115 1,850 110 1,800 Federal Total Private © Towson University, Division of Economic and Community Outreach Bureau Of Labor Statistics
  40. 40. Challenges Ahead • Maryland fiscal leaders cut the State’s economic outlook • The State’s Board of Revenue Estimates expects growth of 2.8 percent – downgraded from 4.7 percent. • Increased Taxes (?) • Federal Budget Cuts© Towson University, Division of Economic and Community Outreach
  41. 41. Maryland’s Forecast
  42. 42. RESI Employment Outlook Maryland Historical & Projected TNA Employment Growth, 2007Q1 through 2013Q4 1.5% 2,600,000 1.0% 0.5% 2,550,000 0.0% TNA Employment LevelPercent change from same -0.5% 2,500,000 quarter one year ago -1.0% -1.5% 2,450,000 -2.0% -2.5% 2,400,000 -3.0% -3.5% 2,350,000 Growth TNA © Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics
  43. 43. RESI Employment Outlook Maryland Projected Employment Growth, Percent, 2011 to 2012 Admin/Waste 2.8% Arts/Entertainment 2.6% Professional/Sci. 2.5% Healthcare Svcs. 1.8% Accomm/Food Svcs 1.6% Government 1.4%Transp./Warehousing 1.1% Trade 0.9% Educational Svcs. 0.7% Mgmt of Companies 0.5% Financial Svcs 0.2% Real Estate 0.1% Manufacturing -1.1% Utilities -1.8% Information -2.3% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% © Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics
  44. 44. RESI Outlook - Summary Maryland Indicators - Historical & Projected Annual Figures 2009 2010 2011 2012 2013 Total Non- -3.0% -0.3% 0.7% 1.1% 1.4% Agricultural Employment (annual growth) Total Personal 0.3% 2.8% 4.5% 3.2% 3.7% Income (annual growth)© Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics, Bureau of Economic Analysis
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