Old Florida National Bank Economic UpdatePresentation Transcript
U.S. & Florida Economic Update Orlando, FL January 30th, 2013
U.S. Forecast§ A Pall of Uncertainty Hangs Over the Economy § Health Care Reform § Impact on labor market § Dodd-Frank Financial Regulatory Reform § Impact on credit flows § Fiscal Cliff § Little resolved with lame duck agreement § Euro
U.S. Forecast§ A recent paper has created an index that quantifies economic policy uncertainty and analyzes its economic impact:§ Measuring Economic Policy Uncertainty By Scott R. Baker Nicholas Bloom, and Steven J. Davis
U.S. Forecast§ The index has three components: 1. Newspaper coverage of policy- related economic uncertainty. 2. Number of federal tax code provisions set to expire in future years 3. Disagreement among economic forecasters (Survey of Professional Forecasters)
U.S. Forecast§ The economic impact of economic policy uncertainty The results of the statistical analysis in the paper show that higher policy uncertainty causes: 1. Lower private investment 2. Lower industrial production 3. Much lower employment
Economic Policy Uncertainty Index
U.S. Forecast§ Sky Mall™ Policy: § An Expensive Policy that Fails to Achieve its Desired Outcome
U.S. Forecast§ Sky Mall™ Policies: § American Reinvestment and Recovery Act of 2009 § Aka Stimulus Act
Why Didn’t the Stimulus Act Work?
Why Didn’t the Stimulus Act Work?§ The Nun§ The Nobel Prize Winner§ Non-starter Stimulus
U.S. Forecast§ Depleted Housing Wealth§ Still Weak Labor Market§ A continuing ballast on consumer spending
A Slippery Subject§ Greece and the Euro§ Greek bailouts, haircut & the election stays of execution and not pardons § Contagion concerns (PIIGS) § Euro still facing greatest threat since inception § Two possible outcomes for the Euro zone in the long run.
A Slippery SubjectThe Euro and the Tacoma NarrowsBridge
Florida’s Housing Market§ Housing market showing signs oflife § Has housing market found a solid bottom for prices?§ A Tale of Two Markets§ Distressed vs. Traditional § Investor role in distressed market
Florida Forecast§ In 2010 the economic recovery began• Real GSP growth 1.4% that year• In 2011 the economy limped further along • 1.3% Real GSP growth§ In 2012 we expect 1.6% growth§ Job growth has limped alongside but only starting late in 2010.
Florida Forecast§ Economic and job growth doesn’t gain significant altitude until 2014 and 2015§ Real GSP growth: § 2014 = 3.3% § 2015 = 4.0%
Florida Forecast Florida Real Gross State Product (% change year ago)8%6%4%2%0%-2%-4%-6%-8% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15