Us economic outlook micky levy, chief economist - bank of america 25 january 2012

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Us economic outlook micky levy, chief economist - bank of america 25 january 2012

  1. 1. US Economic & Financial Perspectives Mickey D. Levy Chief Economist Bank of America Going Global: Partnering for International Business Growth Charlotte, North Carolina January 25, 2012
  2. 2. Slower Global Growth in 2012• Emerging nations (again) will significantly outperform advanced nations – Europe in mild recession – Japan stabilizes after rebound from 2011 supply shock – Latin America and Middle East generally healthy growth – US moderate growth continues• Europe: no financial calamity, but intermediate-term economic prospects are dim• International trade rising moderately amid global
  3. 3. US: Moderate Growth with HighUnemployment• Moderate expansion, gaining traction – Consumer spending growing, but household balance sheet repair has further to go – Housing beginning to rise from depressed levels – Business investment remains healthy; exports are key• Employment lagging well behind GDP, but beginning to improve – Higher returns to capital, lower returns to labor• US vulnerable to European crisis
  4. 4. US: Real GDP and Employment 14.0 140 138 13.5 136 13.0 $ Trillions 134 Millions 12.5 132 130 12.0 Real GDP (left scale) 128 11.5 Nonfarm Payrolls (right scale) 126 11.0 124Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Haver Analytics
  5. 5. Operating Profits and Cash Flows 2,500 2,000 $ Billions 1,500 1,000 500 Corporate Profits with IVA and CCadj Corporate Net Cash Flow 0 88 90 92 94 96 98 00 02 04 06 08 10Source: Bureau of Economic Analysis, Haver Analytics
  6. 6. Labor Share of GDP 66 64 62percent 60 58 56 54 88 90 92 94 96 98 00 02 04 06 08 10Source: Bureau of Labor Statistics, Haver Analytics
  7. 7. 1.0% Consumer Spending Trend 4%0.8% 3%0.6% 2%0.4%0.2% 1%0.0% 0%-0.2% -1%-0.4% -2%-0.6%-0.8% -3%-1.0% -4% 07 08 09 10 11 Monthly % Change Year-over-year % Change (right axis)Source: Bureau of Economic Analysis
  8. 8. Real Consumption and Personal Income 10.0 2.2 Government Transfers (right axis) 9.5 Real Consumption (left axis) 2.0 9.0 1.8 $ Trillions $ Trillions 8.5 1.6 8.0 1.4 7.5 1.2 7.0 1.0 00 01 02 03 04 05 06 07 08 09 10 11Source: BEA/Haver Analytics
  9. 9. Mortgage Debt as a Percent of Disposable Income 110% 100%% of Disposable Income 90% 80% 70% 60% 50% 40% 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Source: Federal Reserve Board , Haver Analytics
  10. 10. Home Sales 1600 7000 1400 6000 1200 5000 1000Thousands Thousands 4000 800 3000 600 New Home Sales (left) 2000 400 Existing Home Sales (right) 1000 200 0 0 00 01 02 03 04 05 06 07 08 09 10 11Source: Census Bureau/National Association of Realtors, Haver Analytics
  11. 11. Housing Starts 2500 2000Thousands 1500 1000 500 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11Source: Census Bureau
  12. 12. Business Fixed Investment 1400 1200 1000 Bil Chain 2005$ 800 Equipment and Software 600 Structures 400 200 0 00 01 02 03 04 05 06 07 08 09 10 11Source: Bureau of Economic Analysis, Haver Analytics
  13. 13. Imports and Exports 2500 2000 Bil Chain 2000$ Real Imports 1500 1000 Real Exports 500 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11Source: BEA/Haver Analytics
  14. 14. Distribution of US Exported Goods (2011 H1 = $721.92b)* Africa Other Emerging 2.3% 5.4% Canada 19.3% Australia & Other Asia Japan 13.3% 4.5% Latin America (Ex Mexico) India 11.2% 1.5% China 6.9% Mexico 13.1% Eastern & Other Eurozone Europe 13.5% 5.2% UK*NSA, Customs Basis 3.8%
  15. 15. Composition of US Exported Goods (2011H1 = $725.38 Billion)* Consumer Foods, feeds & Other goods goods (ex-food beverages 3.7% and autos) 8.8% 11.9% Motor vehicles & parts 8.9% Industrial supplies & materials 33.6% Capital goods ex-autos 33.1% *SA, f.a.s.
  16. 16. Sources of US Imported Goods Other Emerging 7.2% (2011 H1 = $1,067.78b)* Africa 4.5% Canada Australia & Other Asia 14.7% 8.7% Latin America (Ex Mexico) 7.9% Japan 5.5% India Mexico 1.7% 12.1% China 17.1% Eurozone UK 13.1% 2.3% Eastern & Other Europe*NSA, Customs Basis 5.2%
  17. 17. Composition of US Imported Goods (2011H1 = $1093.39 Billion)* Foods, feeds & Other beverages, 4.80 goods, 2.90 Consumer goods (ex-food Industrial and autos), supplies & 23.60 materials, 34.50 Motor vehicles & parts, 11.20 Capital goods ex-autos, 23.00 *SA, Customs Value

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