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Economic Outlook Conference 2012: Maryland's Economic Outlook

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Economic Outlook Conference 2012: Maryland's Economic Outlook

  1. 1. The Light at the End of the Tunnel Facing Sunshine or Oncoming Train? Daraius Irani, PhD November 8, 2012© Towson University, Division of Economic and Community Outreach
  2. 2. Light? Real Gross Domestic Product, Seasonally Adjusted 1981Q1 - 2012Q3Annual Rate of Expansion 15% 10% 2.0 % 5% 0% -5% -10% © Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  3. 3. Jobs US Monthly Change(Thousands) 600 400 200 0 -200 -400 -600 -800-1000 © Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  4. 4. Unemployment, by Party in Office 12%National Unemployment Rate Republican Democrat 10% 8% 6% 4% 2% 0% © Towson University, Division of Economic and Community Outreach Bureau of Labor Statists
  5. 5. Job Hires vs. Job Separations Seasonally Adjusted Jan 2008 through Aug 2012 4.3% 4.1% 3.9% 3.7%Rate 3.5% 3.3% 3.1% 2.9% 2.7% 2.5% Hires Separations© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  6. 6. Measures of Labor Underutilization Average Unemployment, 2011Q4 through 2012Q3 16.0% 14.5% 15.0% 14.0%Unemployment Percent 12.1% 12.0% 11.2% 9.7% 10.0% 8.5% 9.3% 8.3% 8.0% 6.9% 6.0% 4.0% 2.0% 0.0% Maryland District of Columbia United States U-3 U-5 U-6 © Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  7. 7. Unemployment Heat Map Pre-Recession© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  8. 8. Unemployment Heat Map Mid-Recession© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  9. 9. Unemployment Heat Map Current Levels© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  10. 10. Personal Income Percent Change© Towson University, Division of Economic and Community Outreach Bureau of Economic Activity
  11. 11. Home Prices U.S. and Maryland Home Prices, Seasonally Adjusted, 2000Q1 - 2012Q3Avg. Price of Homes Sold $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 US MD $50,000 © Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  12. 12. Consumer Spending Percent Change from Previous Month US May June July August September Personal 0.3% 0.3% 0.2% 0.1% 0.4% Income Disposable 0.5% 0.2% 0.1% -0.3% 0.0% Personal Income Personal 0.0% -0.1% 0.3% 0.1% 0.4% Consumption© Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  13. 13. Consumer Spending Personal Consumption, Seasonally Adjusted, Jan 2005 - Sept 2012Personal Consumption Expenditures Billions of Chained 2005 Dollars $9,800 0.6% Annual Percent Change $9,600 0.4% $9,400 $9,200 0.2% $9,000 0.0% $8,800 $8,600 -0.2% $8,400 -0.4% $8,200 $8,000 -0.6% Consumption Exp. Percent change © Towson University, Division of Economic and Community Outreach Bureau of Economic Analysis
  14. 14. Consumer Sentiment Index Jan 2007 through April 2012 120.0 110.0First Quarter 1966=100 100.0 90.0 Index 80.0 70.0 60.0 50.0 40.0 © Towson University, Division of Economic and Community Outreach University of Michigan
  15. 15. Pulse of Commerce PCI Monthly Index, GDP, Seasonally Adjusted Jan 2002 through May 2012 110 105 100 95Index 90 85 80 75 70 PCI CERIDIAN INDEX GDP © Towson University, Division of Economic and Community Outreach Ceridian-UCLA Pulse of Commerce Index
  16. 16. Inflation Year Over Year Change in CPI (1982) 6.0% 250.0 5.0% 4.0% 230.0 3.0% 2.0% 210.0 1.0% 190.0 0.0%-1.0% 170.0-2.0%-3.0% 150.0 Inflation Rate CPI © Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  17. 17. The Fiscal Cliff© Towson University, Division of Economic and Community Outreach
  18. 18. The Fiscal Cliff Effects of Sequestration on GDP Growth Plausable Best Case Most Likely Downside Worst Case0%-1% -0.90% -1.50%-2% -2.40%-3%-4% -3.80%© Towson University, Division of Economic and Community Outreach Credit Suisse
  19. 19. The Fiscal Cliff Total Gross Total Job Loss State Product Loss Maryland 114,795 $11,546,000,000 D.C. 127,407 $12,814,000,000 Virginia 207,571 $20,876,000,000 Pennsylvania 78,454 $7,890,000,000© Towson University, Division of Economic and Community Outreach GMU Center for Regional Analysis
  20. 20. Euro Crisis© Towson University, Division of Economic and Community Outreach
  21. 21. Euro Crisis• How is it going to affect the U.S. economy• U.S. Banks are heavily invested in Europe o About $1.4 Trillion in loans o Could see a tightening in small business loans in the US• Exports to Eurozone constitute 14% of total, behind Mexico and Canada. To Europe: 20% o 20% drop in exports to Europe means a 5% drop in total exports © Towson University, Division of Economic and Community Outreach ABC New Corp.
  22. 22. Euro Crisis Selected European Unemployment Levels30.0%25.0%20.0%15.0%10.0%5.0%0.0% European Union Euro area Spain Greece United States © Towson University, Division of Economic and Community Outreach EuroStat
  23. 23. Euro Crisis The falling power of the Euro 0.4 USD JPYIndexed Against Other Major 0.3 GBP CNY 0.2 Currencies 0.1 0 -0.1 © Towson University, Division of Economic and Community Outreach Euro ITS
  24. 24. Additional Challenges
  25. 25. Debt Crisis US Debt Ownership China Japan Oil Exporters Brazil Other Foreign Investors Owned Domestically© Towson University, Division of Economic and Community Outreach Congressional Research Service
  26. 26. Gas Prices$3.91$3.71$3.51$3.31$3.11$2.91$2.71 Baltimore United States© Towson University, Division of Economic and Community Outreach GasBuddy.com, U.S. Administration of Energy Statistics
  27. 27. European Gas Prices Dollars per Gallon$10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2007 2008 2009 2010 2011 2012 US Europe US (Before Tax) Europe (Before Tax)© Towson University, Division of Economic and Community Outreach U.S. Energy Information Administration
  28. 28. Banking
  29. 29. Quantitative Easing: Round 3• New Round of Fed Res buying up mortgage backed securities• Effects on inflations• Encourages higher risk investments o Stability of the market© Towson University, Division of Economic and Community Outreach
  30. 30. Banking Indicators Total Value of Loans for All C&I Loans, All Commercial Banks $150,000Millions of Dollars $120,000 $90,000 $60,000 $30,000 $0 © Towson University, Division of Economic and Community Outreach Federal Reserve
  31. 31. Banking Indicators Consumer Loans at All Commercial Banks $1,400 $1,200Billions of Dollars $1,000 $800 $600 $400 $200 $0 © Towson University, Division of Economic and Community Outreach Federal Reserve
  32. 32. Banking Indicators Real Estate Loans at All Commercial Banks $4,000Billions of Dollars $3,200 $2,400 $1,600 $800 $0 © Towson University, Division of Economic and Community Outreach Federal Reserve
  33. 33. Banking IndicatorsLending at All Commercial Banks (Millions of Dollars) $4,000 $1,500 $3,500 $1,400 $1,300Real Estate Loans Consumer Loans $3,000 $1,200 $2,500 $1,100 $1,000 $2,000 $900 $1,500 $800 $700 $1,000 $600 $500 $500 Real Estate Loans Consumer Loans © Towson University, Division of Economic and Community Outreach Federal Reserve
  34. 34. Maryland Outlook
  35. 35. Maryland Performance • Maryland added 9,800 jobs in September • 98 percent of these jobs came from the private sector o Profession and Business Services accounted for 4,100 new jobs o Trade/Transportation/Warehousing and Utilities created approximately 2,000 jobs o Government responsible for only 200 new jobs • Unemployment rate down to 6.9% from last month’s 7.1%© Towson University, Division of Economic and Community Outreach Department of Labor, Licensing and Regulation
  36. 36. Mid-Atlantic Region Unemployment Rankings September Unemployment Rates Seasonally Adjusted State 2010 2011 2012 Maryland 7.4 7.4 6.9 Pennsylvania 8.5 8.3 8.2 Virginia 6.7 6.5 5.9 Delaware 8.3 8.1 6.8 DC 9.7 11.1 8.7 U.S. Unemployment Rate: 8.1 percent in August 7.8 percent in September© Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  37. 37. Measures of Labor UnderutilizationLabor Underutilization, Averages, 2011Q3 - 2012Q2 18 16 15.3 14.5 14 12.7 11.6 12 9.7 9.2 10Percent 10 8.8 8 7.1 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
  38. 38. Maryland Employment Employment Level (,000’s)2,150 5202,100 5002,050 4802,000 4601,9501,900 4401,850 420 Private Government © Towson University, Division of Economic and Community Outreach Bureau of Labor Statistics
  39. 39. Slow Down in Maryland’s Recovery Year over Year Change in Coincidence Index 8.0% 6.0% MD USCoincident Index 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% © Towson University, Division of Economic and Community Outreach Federal Reserve Bank
  40. 40. Maryland Mass Layoffs Total Initial Unemployment Claimants and Layoff Events, Monthly, Jan 2010 - Sep 2012 4,500 40 Total Mass Layoff Events 4,000 35Total Initial Claims 3,500 30 3,000 25 2,500 20 2,000 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
  41. 41. Housing
  42. 42. Housing and Foreclosures • Maryland - November 2012 o 8,306 Foreclosure Homes for Sale o $170,708 Average Foreclosure Sales Price • US – November 2012 o 1,571,644 Foreclosure Homes for Sale o $177,975 Average Foreclosure Sales Price© Towson University, Division of Economic and Community Outreach RealtyTrac
  43. 43. Story Behind the Numbers • Positive housing prices trends have a positive wealth effect • Though inventories have fallen to around 25,000 homes, research suggest that at least 7% of homes are at least 90 day delinquent, making them suspect to foreclosure© Towson University, Division of Economic and Community Outreach CoreLogic
  44. 44. Shadow Inventory Pending Inventory Details Monthly, Jan 2006 through Jul 2012 3.5 3Millions of Units 2.5 2 1.5 1 0.5 0 REO Inventory FC Inventory Delinquency Inventory © Towson University, Division of Economic and Community Outreach CoreLogic, a data and analytics company
  45. 45. MD Homes Sales vs. Inventories Seasonally Adjusted Jan 2000 - Sept 2012 10,000 60,000 9,000 50,000Home Sales 8,000 Inventory 7,000 40,000 6,000 5,000 30,000 4,000 3,000 20,000 2,000 10,000 1,000 0 0 Number of Homes Sold Inventory © Towson University, Division of Economic and Community Outreach Maryland Association of Realtors
  46. 46. MD Homes Prices vs. Inventories Seasonally Adjusted Jan 2000 - Sept 2012 $400,000 60,000Average Home Price $350,000 50,000 $300,000 Inventory $250,000 40,000 $200,000 30,000 $150,000 20,000 $100,000 $50,000 10,000 $0 0 Inventory Price © Towson University, Division of Economic and Community Outreach Maryland Association of Realtors
  47. 47. RESI Forecast
  48. 48. RESI Employment Outlook Maryland Historical & Projected TNA Employment Growth, 2007Q1 through 2015Q4 4.0% 2,700,000Percent change from same 3.0% 2,650,000 TNA Employment Level quarter one year ago 2.0% 2,600,000 2,550,000 1.0% 2,500,000 0.0% 2,450,000 -1.0% 2,400,000 -2.0% 2,350,000 -3.0% 2,300,000 -4.0% 2,250,000 Growth TNA © Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics
  49. 49. RESI Employment Outlook Maryland Projected Employment Growth, Percent, 2012 to 2013 Mgmt of Companies 2.7%Transp./Warehousing 2.6% Accomm/Food Svcs 2.6% Professional/Sci. 2.4% Trade 2.4% Arts/Entertainment 2.3% Healthcare Svcs. 1.9% Admin/Waste 1.6% Construction 1.5% Government 0.9% Educational Svcs. 0.8% Real Estate 0.6% Financial Svcs 0.5% Manufacturing -0.4% Information -2.1% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% © Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics
  50. 50. RESI Outlook - Summary Maryland Indicators - Historical & Projected Annual Figures 2010 2011 2012 2013 2014 Total Non- Agricultural -.02% 1.2% 1.4% 2.3% 2.3% Employment (annual growth) Total Personal Income 3.5% 5.0% 3.3% 2.9% 4.3% (annual growth)© Towson University, Division of Economic and Community Outreach RESI, Bureau of Labor Statistics, Bureau of Economic Analysis
  51. 51. EOC 2012Join us next year to find out how bringing home the World Series will affect Baltimore’s economic outlook.

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