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Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy

Learn all about the economic outlook from Sage Policy Group, Inc.'s presentation for Citrin Cooperman's October 17 event, Economic Summit: Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy.

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Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy

  1. 1. By: Anirban Basu Sage PolicyGroup, Inc. On Behalfof Economic Summit Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy October17th,2019
  2. 2. “There is always somechance of recession in any year. But the evidence suggests that expansions don't die of old age.” –JanetYellen
  3. 3. Historical U.S. Treasury Yield Curve Inversions 10-Year v. 1-Year Source:FederalReserveBankofSt.Louis ShadedareasindicateU.S. Recessions 0 1 2 3 4 5 6 7 8 9 10 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Recession 10-Year 1-Year
  4. 4. U.S. Unemployment&NaturalRate of Unemployment Sources:FRED;CongressionalBudgetOffice,U.S.BureauofLaborStatistics 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015 2019 Natural Rate of Unemployment Civilian Unemployment Rate ShadedareasindicateU.S. Recessions
  5. 5. “Nosociety can surelybeflourishing and happy,of which thefar greater part ofthe members are poor and miserable.” –AdamSmith
  6. 6. Shareof all IncomeHeld by the Top1% in theU.S., 1917-2015 Source:EconomicPolicyInstitute,Authors'analysisofstate-leveltax data fromSommeiller(2006) extendedto2015 usingstate-leveldatafromtheInternalRevenueServiceSOI TaxStats (various years),andPikettyandSaez(2012). Note:Data arefortax units. 0.0 5.0 10.0 15.0 20.0 25.0 30.0 1917 1920 1923 1926 1929 1932 1935 1938 1941 1944 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 1929: 22.4% 2015: 22.0%
  7. 7. Estimated Growth in Output by Select Global Areas 2019Projected Source: International MonetaryFund: World Economic Outlook, October 2019 0.9% 0.4% 0.2% 0.9% 6.1% 6.1% 5.9% 1.1% 1.8% 3.2% 3.9% 2.4% 1.7% 1.5% 1.2% 0.9% 2.2% 0.0% 0.5% 1.2% 1.2% 1.7% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Brazil Mexico Latin America & the Caribbean Middle East & Central Asia India China Emerging & Developing Asia Russia Emerging & Developing Europe Sub-Saharan Africa Emerging Market & Developing Economies United States Australia Canada United Kingdom Japan Spain Italy Germany France Euro Area Advanced Economies Annual % Change 2019 Proj. Global Output Growth: +3.0% 2018 Growth (Estimate) World: 3.6% Euro Area: 1.9% United States: 2.9% Japan: 0.8%
  8. 8. “Inflation is the oneformof taxation that can beimposed without legislation.” –Milton Friedman
  9. 9. GrossDomestic Product 1990Q2through2019Q2* Source:U.S.BureauofEconomicAnalysis *3rd (Final)Estimate -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 1990Q2 1991Q2 1992Q2 1993Q2 1994Q2 1995Q2 1996Q2 1997Q2 1998Q2 1999Q2 2000Q2 2001Q2 2002Q2 2003Q2 2004Q2 2005Q2 2006Q2 2007Q2 2008Q2 2009Q2 2010Q2 2011Q2 2012Q2 2013Q2 2014Q2 2015Q2 2016Q2 2017Q2 2018Q2 2019Q2 %ChangefromPrecedingPeriod(SAAR) 2019Q2: +2.0%
  10. 10. U.S.Industrial Production Index August2010 –August2019 Source:FederalReserve,G.17IndustrialProduction&CapacityUtilization 90 95 100 105 110 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Industrial Production 109.9
  11. 11. U.S.CapacityUtilization Index August2010 –August2019 Source:FederalReserve,G.17IndustrialProduction&CapacityUtilization 70 72 74 76 78 80 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Capacity Utilization (%) 77.9
  12. 12. U.S. Job Openings August2001 throughAugust2019 Source:U.S.BureauofLaborStatistics 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 JobOpenings(Millions) August 2019: 7.05 M Openings
  13. 13. NetChange in U.S. Jobs September2002throughSeptember2019 Source:U.S.BureauofLaborStatistics -1000 -800 -600 -400 -200 0 200 400 600 800 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Thousands September 2019: +136K
  14. 14. National Nonfarm Employment byIndustry Sector,September2018v.September2019 Source:U.S.BureauofLaborStatistics 1 15 90 99 117 119 147 156 349 437 617 0 100 200 300 400 500 600 700 Mining and Logging Information Other Services Financial Activities Manufacturing Trade, Transportation, and Utilities Government Construction Leisure and Hospitality Professional and Business Services Education and Health Services Thousands, SA All told 2,147K jobs gained
  15. 15. U.S. Labor ForceParticipation: Men Ages 25-34 2000–2019 Source:U.S.BureauofLaborStatistics,CurrentPopulationSurvey 88% 89% 90% 91% 92% 93% 94% 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 88.8% “I wish we questioned the aid model as much as we are questioning the capitalism model. Sometimes the most generous thing you can do is just say no.” – Dambisa Moyo
  16. 16. Connecticut NonfarmEmployment byIndustrySectorGroups(SA) August2018v.August2019AbsoluteChange Source:U.S.BureauofLaborStatistics -2,400 -1,200 -1,000 -800 -600 -100 400 1,000 2,700 3,600 6,000 -4,000 -2,000 0 2,000 4,000 6,000 8,000 Trade, Transportation & Utilities Government Construction Professional & Business Services Other Services Mining & Logging Manufacturing Information Financial Activities Leisure & Hospitality Education & Health Services CT Total: +7.6K; +0.4% US Total (SA): +2,119K; +1.4% *Accordingto the Local AreaUnemploymentStatistics (LAUS) series CT added 3,750jobs between August 2018and August 2019.
  17. 17. Massachusetts Nonfarm Employment byIndustrySectorGroups(SA) August2018v.August2019AbsoluteChange Source:U.S.BureauofLaborStatistics -900 -600 100 1,200 1,800 2,200 3,200 3,300 7,400 8,900 17,000 -5,000 0 5,000 10,000 15,000 20,000 Construction Manufacturing Mining & Logging Trade, Transportation & Utilities Information Financial Activities Other Services Leisure & Hospitality Government Professional & Business Services Education & Health Services MA Total: +43.6K; +1.2% US Total (SA): +2,119K; +1.4% *Accordingto the Local AreaUnemploymentStatistics (LAUS) series MA added 27,965jobs between August2018and August 2019.
  18. 18. -2,400 -400 1,200 1,200 1,600 2,500 3,000 6,500 8,900 17,500 -5,000 0 5,000 10,000 15,000 20,000 Trade, Transportation & Utilities Manufacturing Mining, Logging, and Construction Financial Activities Leisure & Hospitality Government Information Other Services Professional & Business Services Education & Health Services Boston NECTA Total: +39.6K; +1.4% MA Total (SA): +43.6K; +1.2% US Total (SA): +2,119K; +1.4% Boston-Cambridge-NashuaMA-NHNECTA NonfarmEmployment byIndustrySectorGroups(NSA) August2018v.August2019AbsoluteChange Source:U.S.BureauofLaborStatistics
  19. 19. New Hampshire NonfarmEmployment byIndustrySectorGroups(SA) August2018v.August2019AbsoluteChange Source:U.S.BureauofLaborStatistics -1,100 -300 0 0 500 1,500 1,800 1,900 1,900 2,100 4,700 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 Manufacturing Financial Activities Mining & Logging Information Other Services Construction Leisure & Hospitality Trade, Transportation & Utilities Government Professional & Business Services Education & Health Services NH Total: +13.0K; +1.9% US Total (SA): +2,119K; +1.4% *Accordingto the Local AreaUnemploymentStatistics (LAUS) series NHadded 8,381jobs between August 2018and August 2019.
  20. 20. Rhode Island NonfarmEmployment byIndustrySectorGroups(SA) August2018v.August2019AbsoluteChange Source:U.S.BureauofLaborStatistics -1,300 -1,000 -200 0 0 400 700 900 1,000 1,700 5,200 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 Manufacturing Professional & Business Services Leisure & Hospitality Mining & Logging Information Other Services Construction Government Financial Activities Trade, Transportation & Utilities Education & Health Services RI Total: +7.4K; +1.5% US Total (SA): +2,119K; +1.4% *Accordingto the Local AreaUnemploymentStatistics (LAUS) series RIadded 614jobs between August 2018and August 2019. **EmploymentfiguresforRhodeIsland’sInformationsectornotavailableona seasonallyadjustedbasis
  21. 21. RANK STATE % RANK STATE % RANK STATE % 1 NEVADA 3.0 17 SOUTH CAROLINA 1.5 35 VIRGINIA 0.9 2 UTAH 2.8 17 TENNESSEE 1.5 36 IOWA 0.8 3 WASHINGTON 2.6 20 MISSISSIPPI 1.3 36 NEBRASKA 0.8 4 ARIZONA 2.5 20 MISSOURI 1.3 38 WEST VIRGINIA 0.7 4 FLORIDA 2.5 20 MONTANA 1.3 39 INDIANA 0.6 6 COLORADO 2.4 20 WYOMING 1.3 39 NORTH DAKOTA 0.6 6 TEXAS 2.4 24 ARKANSAS 1.2 39 PENNSYLVANIA 0.6 8 IDAHO 2.1 24 DISTRICT OF COLUMBIA 1.2 42 CONNECTICUT 0.4 8 NEW MEXICO 2.1 24 MASSACHUSETTS 1.2 42 MICHIGAN 0.4 10 ALABAMA 2.0 27 ALASKA 1.1 42 OHIO 0.4 11 GEORGIA 1.9 27 DELAWARE 1.1 45 OKLAHOMA 0.3 11 NEW HAMPSHIRE 1.9 27 ILLINOIS 1.1 46 VERMONT 0.2 11 OREGON 1.9 27 KANSAS 1.1 47 HAWAII 0.1 14 CALIFORNIA 1.8 27 MAINE 1.1 47 LOUISIANA 0.1 15 NORTH CAROLINA 1.6 27 NEW JERSEY 1.1 47 MARYLAND 0.1 15 SOUTH DAKOTA 1.6 33 KENTUCKY 1.0 47 MINNESOTA 0.1 17 RHODE ISLAND 1.5 33 NEW YORK 1.0 47 WISCONSIN 0.1 Employment Growth, U.S. States (SA) August2018v.August 2019PercentChange Source:U.S.BureauofLaborStatistics U.S.Year-over-yearPercentChange:+1.4%
  22. 22. Employment Growth, 25 Largest Metros(NSA) August2018v.August 2019PercentChange Source:U.S.BureauofLaborStatistics,CurrentEmploymentStatistics(CES)Survey Rank MSA % Rank MSA % 1 Orlando-Kissimmee-Sanford, FL 4.0 14 San Diego-Carlsbad, CA 1.8 2 Dallas-Fort Worth-Arlington, TX 3.1 15 Tampa-St. Petersburg-Clearwater, FL 1.6 2 Seattle-Tacoma-Bellevue, WA 3.1 16 Atlanta-Sandy Springs-Roswell, GA 1.5 4 Houston-The Woodlands-Sugar Land, TX 2.7 17 Boston-Cambridge-Nashua, MA-NH 1.4 4 Phoenix-Mesa-Scottsdale, AZ 2.7 17 New York-Newark-Jersey City, NY-NJ-PA 1.4 6 Riverside-San Bernardino-Ontario, CA 2.5 17 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1.4 7 San Francisco-Oakland-Hayward, CA 2.4 20 Los Angeles-Long Beach-Anaheim, CA 1.2 8 Charlotte-Concord-Gastonia, NC-SC 2.3 21 Chicago-Naperville-Elgin, IL-IN-WI 1.0 9 Portland-Vancouver-Hillsboro, OR-WA 2.1 21 Washington-Arlington-Alexandria, DC-VA-MD-WV 1.0 9 San Antonio-New Braunfels, TX 2.1 11 Miami-Fort Lauderdale-West Palm Beach, FL 2.0 23 Baltimore-Columbia-Towson, MD 0.9 12 Denver-Aurora-Lakewood, CO 1.9 24 Minneapolis-St. Paul-Bloomington, MN-WI 0.0 12 St. Louis, MO-IL 1.9 25 Detroit-Warren-Dearborn, MI -0.3
  23. 23. Unemployment Rates, 25 Largest Metros(NSA) August2019 Source:U.S.BureauofLaborStatistics,CurrentEmploymentStatistics(CES)Survey.Note:1.Areaboundariesdo notreflectofficialOMB definitions. Rank MSA UR Rank MSA UR 1 Boston-Cambridge-Nashua, MA-NH 2.6 11 Tampa-St. Petersburg-Clearwater, FL 3.5 1 Denver-Aurora-Lakewood, CO 2.6 14 Seattle-Tacoma-Bellevue, WA 3.6 3 San Francisco-Oakland-Hayward, CA 2.7 15 Chicago-Naperville-Elgin, IL-IN-WI 3.7 4 Minneapolis-St. Paul-Bloomington, MN-WI 2.9 16 Charlotte-Concord-Gastonia, NC-SC 3.9 5 Orlando-Kissimmee-Sanford, FL 3.2 16 Houston-The Woodlands-Sugar Land, TX 3.9 5 San Antonio-New Braunfels, TX 3.2 16 New York-Newark-Jersey City, NY-NJ-PA 3.9 5 Washington-Arlington-Alexandria, DC-VA-MD-WV 3.2 19 Baltimore-Columbia-Towson, MD 4.0 20 Los Angeles-Long Beach-Anaheim, CA 4.3 8 Dallas-Fort Worth-Arlington, TX 3.3 20 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 4.3 8 St. Louis, MO-IL (1) 3.3 20 Portland-Vancouver-Hillsboro, OR-WA 4.3 10 San Diego-Carlsbad, CA 3.4 23 Riverside-San Bernardino-Ontario, CA 4.4 11 Atlanta-Sandy Springs-Roswell, GA 3.5 24 Detroit-Warren-Dearborn, MI 4.5 11 Miami-Fort Lauderdale-West Palm Beach, FL 3.5 25 Phoenix-Mesa-Scottsdale, AZ 4.7 U.S.UnemploymentRate Aug:3.7% Sep:3.5%
  24. 24. Growth inWages&Salaries Employment CostIndex(ECI),2002Q2-2019Q2 Source:U.S.BureauofLaborStatistics *AllCivilianWorkers 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2002Q2 2002Q4 2003Q2 2003Q4 2004Q2 2004Q4 2005Q2 2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4 2009Q2 2009Q4 2010Q2 2010Q4 2011Q2 2011Q4 2012Q2 2012Q4 2013Q2 2013Q4 2014Q2 2014Q4 2015Q2 2015Q4 2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 2018Q4 2019Q2 ECI for Wages & Salaries 12-Month % Change 2019Q2: +3.0% YOY
  25. 25. ConsumerPriceIndex: AllItemsLess Food & Energy September2000–September2019 Source:U.S.BureauofLaborStatistics 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Core CPI (All Items Less Food & Energy) 12-Month % Change Sep. 2019: +2.4% YOY
  26. 26. CorePCE Deflator August2012throughAugust2019 Source:BureauofEconomicAnalysis(BEA) CorePCE:PersonalConsumptionExpendituresexcludingfoodandenergy(chain-typepriceindex) 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2% Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Core PCE Index 12-Month % Change Aug. 2019: +1.8% YOY
  27. 27. “Most men love moneyand security more, and creation and construction less, as theyget older.” –JohnMaynard Keynes
  28. 28. Architecture Billings Index August2008 throughAugust2019 Source:TheAmericanInstituteofArchitects 30.0 35.0 40.0 45.0 50.0 55.0 60.0 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 August 2019: 47.2
  29. 29. Architecture Billings Indexby U.S. Region August2019 Source:TheAmericanInstituteofArchitects 47.2 51.2 49.1 48.2 46.4 45.0 50.0 55.0 U.S. West Northeast South Midwest
  30. 30. National Nonresidential Construction Spending by Subsector August2014 v.August 2019 Source:U.S.CensusBureau -25.6% -13.3% 12.8% 14.6% 14.9% 16.7% 17.4% 20.1% 23.6% 28.1% 34.0% 34.4% 38.6% 65.0% 69.7% 98.7% -40% -20% 0% 20% 40% 60% 80% 100% Religious Power Health Care Educational Highway and Street Public Safety Sewage and Waste Disposal Manufacturing Commercial Water Supply Conservation and Development Transportation Communication Amusement and Recreation Office Lodging 5-year % Change Total Nonresidential Construction: +21.1%
  31. 31. Foreign Investmentin U.S. Commercial Real Estate TopDestination Markets,2018 Source:RealCapitalAnalytics $1.5 $1.6 $1.7 $1.9 $2.1 $4.3 $4.4 $5.2 $7.9 $16.6 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 Phoenix Philadelphia San Diego Miami/South Florida Seattle Chicago San Francisco Bay Washington Los Angeles Basin New York 2018 Deals ($Billions)
  32. 32. ForeignInvestmentinU.S. CommercialRealEstatePer 100,000Residents TopDestination Markets,2018 Source:RealCapitalAnalytics $26.2 $30.9 $31.7 $44.0 $45.1 $50.9 $54.3 $65.4 $81.7 $83.6 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 Philadelphia Miami/South Florida Phoenix Los Angeles Chicago San Diego Seattle San Francisco New York Washington, D.C. Investment ($M) Per 100,000 Residents
  33. 33. CoStarCommercialRepeatSalesIndex August2000throughAugust2019 Source:Costar*Based on 1,274 repeat sale pairs in August 2019 and more than 215,000 repeat sales since 1996. 0 50 100 150 200 250 300 Aug-00 Feb-01 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 CCRI: U.S. Composite
  34. 34. “An economistis an expertwho will know tomorrowwhy the things he predictedyesterdaydidn't happen today.” –LaurenceJ. Peter
  35. 35. Conference Board Leading Economic Indicators Index August2007 throughAugust2019 Source:ConferenceBoard -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 One-monthPercentChange August 2019: 112.1 where 2016: 100
  36. 36. University ofMichigan Index of ConsumerSentiment 2005-2019 Source:UniversityofMichigan 50 60 70 80 90 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 October 2019 = 96.0 where 1996 = 100
  37. 37. NFIBIndex ofSmallBusiness Optimism:Good Timeto Expand 1986-2019 Source:NationalFederationofIndependentBusiness(NFIB) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 September 2019: 22% % of respondents who think the next 3 months will be a good time to for small business to expand
  38. 38. TotalU.S.Debt Volumeby SelectLoan Types Index1999Q1=100 Source:NewYorkFedConsumerCreditPanel/Equifax 0 50 100 150 200 250 300 350 400 1999Q2 1999Q4 2000Q2 2000Q4 2001Q2 2001Q4 2002Q2 2002Q4 2003Q2 2003Q4 2004Q2 2004Q4 2005Q2 2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4 2009Q2 2009Q4 2010Q2 2010Q4 2011Q2 2011Q4 2012Q2 2012Q4 2013Q2 2013Q4 2014Q2 2014Q4 2015Q2 2015Q4 2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 2018Q4 2019Q2 Mortgage Auto Credit Card
  39. 39. U.S. Corporate BondDebt Outstanding,1980-2018 Source:SecuritiesIndustryandFinancialMarketsAssociation(SIFMA);FederalReserve $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 $Trillions 2018: $9.2 Trillion
  40. 40. Economists do it with Models • Much of the negativity reflected in forecasts and in financial market volatility relates to things people believe will happen; • But important parts of the U.S. economy continue to perform well – e.g. consumer, corporate earnings, construction. • What’s more, there is significant upside risk. What if the following happens?  Trade deal with China;  Infrastructure spending plan with revenue sources identified;  Elimination of tariffs on steel, aluminum, etc. &  Fed stops tightening!!!! • Hypothesis - 2019 will be decent year for economy, but if we don’t check some of these boxes, watch out for ’20!
  41. 41. Thank You Please followme onTwitter--@sageanirban Please lookfor updatesof informationatwww.sagepolicy.com. Please contactus whenyourequire economic research& policyanalysis.

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