Presentation of the 2018 Economic Survey of the United States

1. OECD ECONOMIC SURVEY
UNITED STATES 2018
Sustaining growth and raising
employment
Washington D.C., 6 June 2018
http://www.oecd.org/eco/surveys/economic-survey-united-states.htm
@OECDeconomy
@OECD

2. The expansion is continuing
12
13
14
15
16
17
18
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Real GDP
Trillion USD (2009 prices)
Source: OECD Analytical Database.
2

3. Unemployment continues to fall
Source: OECD Analytical Database.
3
5
7
9
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Unemployment rates
United States
G7
OECD
% of the labour force
3

4. Fiscal stimulus is boosting growth
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2017 2018 2019 2017 2018 2019
United States G20 excluding US
%%
Impact of US fiscal stimulus
Source: OECD Economic Outlook 103.
4

5. Growth is projected to strengthen
2017 2018 2019
Gross domestic product (GDP) 2.3 2.9 2.8
Private consumption 2.8 2.5 2.2
Government consumption 0.1 2.2 4.3
Gross fixed capital formation 3.4 4.9 4.7
Exports of goods and services 3.4 4.8 4.4
Imports of goods and services 4.0 5.3 5.3
Unemployment rate 4.3 3.9 3.6
Personal consumption
expenditures deflator 1.7 2.2 2.2
Note: annual growth rates, with the exception of the unemployment rate, which is % of the labour force.
Source: OECD Economic Outlook 103.
5

6. The government deficit is set to rise
Source: Bureau of Economic Analysis, OECD.
Federal government net saving as a % of GDP, calendar year
6

7. Higher growth and spending restraint
are needed to stabilise public debt
Source: OECD calculations.
Federal debt held by the public, % of GDP, fiscal years
7
50
60
70
80
90
100
110
120
130
140
150
50
60
70
80
90
100
110
120
130
140
150
2015 2020 2025 2030 2035 2040
Baseline Making tax reforms permanent Higher GDP growth and slower spending growth

8. Inflation is returning to target
1. Personal Consumption Expenditures excluding food and energy price index.
Source: OECD Analytical Database.
8
-2
-1
0
1
2
3
4
5
6
2006 2008 2010 2012 2014 2016 2018
CPI PCE Core¹
Y-o-y % changes
Inflation target

9. Monetary policy is tightening
-1
0
1
2
3
4
5
6
-1
0
1
2
3
4
5
6
United States Euro area Japan% %
Note: Policy rates are the federal effective funds rate for the United States, the main refinancing operations for the euro area
and the complementarity lending facility rate for Japan.
Source: OECD Analytical Database.
9

10. • Implement the recently-passed corporate tax
reform and make the temporary investment
incentives set to expire to be permanent.
• Ensure long-term sustainability by reining in
spending growth, particularly by reforming
entitlement programmes where appropriate.
• Continue to raise interest rates at a gradual
pace as long as inflation remains close to the
Fed’s target and the labour market remains
close to full employment.
Recommendations to sustain
economic growth
10

11. Labour productivity growth
has been weak after the crisis
Source: OECD Analytical Database.
11
0.0
0.5
1.0
1.5
2.0
2.5
1997-2007 2008-2017
Labour productivity
Average annual growth
OECD United States

12. Business investment1
has begun to recover
1. Private non-residential fixed investment
Source: BEA and OECD calculations.
12
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Intellectual property products
Structures
Equipment
Private non-residential fixed investment (forecast)
Contributions to annual real GDP growth Contributions to annual real GDP growth
2019

13. Business dynamism has slowed
Notes: Number of enterprise entries and exits in year t over number of active enterprises in year t. Data for the United States are
estimated in 2013-15, using separate data from the US Census Bureau. The Euro Area estimates are an unweighted average of
entry and exit rates in member states
Source: OECD Economic Outlook, Volume 2017 Issue 2. 13
0
2
4
6
8
10
12
2002 2004 2006 2008 2010 2012 2014
% A. Entry rates
United States Euro area Japan
2015
0
2
4
6
8
10
12
2002 2004 2006 2008 2010 2012 2014
% B. Exit rates
United States Euro area Japan
2015

14. Restrictive regulations on
businesses can be reduced
Source: OECD Product Market Regulation database.
14
0
0.4
0.8
1.2
1.6
2
2.4
2.8
Least restrictive OECD USA Most restrictive
Scale 0 (least) - 6 (most restrictive)
NLD
TUR
OECD Product Market Regulation indicator
Latest year available

15. Room to reduce obstacles
to trade in services
Notes: the index includes regulatory transparency, barriers to competition, other discriminatory measures,
restrictions on movement of people and restrictions on foreign entry.
Source: OECD Services Trade Restrictiveness Index (STRI).
Scale from 0 (least) to 1 (the most restrictive), 2017
15
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0
0.1
0.2
0.3
0.4
0.5
0.6
Telecom
Distribution
Railfreighttransport
Motionpictures
Soundrecording
Accounting
Roadfreighttransport
Computer
Architecture
Legal
Logisticsstorageand
warehouse
Engineering
Logisticsfreightforwarding
Commercialbanking
Logisticscustomsbrokerage
Logisticscargo-handling
Construction
Broadcasting
Insurance
Maritimetransport
Courier
Airtransport
United States Best OECD Average OECD

16. Reducing trade barriers further
could boost trade
0
1
2
3
4
5
6
7
8
World United States European
Union
China
%
Real Import demand Real Export demand
Note: Scenario in which tariffs are reduced by all G20 economies to the lowest level applied by any G20 country. With the
exception of food and textiles the lowest tariff rate is 0.
Source: OECD METRO model simulations.
Increase in trade from multilateral tariff reductions
Estimated medium-term impact of lowering tariffs in all G20 economies
16

17. Trade has been an important
driver of job growth
-10
-5
0
5
10
15
20
25
30
35
-10
-5
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Exports Domestic demand
Note: Index of employment in export and final domestic demand sectors, 2005 = 0
Source: OECD Inter-Country Input-Output (ICIO) tables.
U.S. employment embodied in exports and domestic demand, accumulated growth
17

18. • Ease restrictions in services trade.
• Direct state control over business enterprises is
relatively high. Privatise state-owned utilities and
transport authorities.
• Regulatory protection for incumbents is relatively
high in some markets. Remove exemptions from
anti-trust law, including in the digital economy.
• Technological change creates challenges for the
competition authorities as large market shares
may create barriers to competition. Broaden
merger analysis to ensure greater competition.
Recommendations to boost productivity
18

19. Labour force participation
not yet at pre-crisis levels
Note: OECD refers to a simple average. Prime age includes individuals between the ages of 25 and 54.
Source: OECD Employment and Labour Market Statistics
80
82
84
86
88
2006 2008 2010 2012 2014 2016 2018
%
Prime age participation rates
OECD USA JPN GBR
19

20. Workers receive relatively little
support to find new jobs
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
MEX
USA¹
JPN
LVA
ISR
CHL
SVK
AUS
CAN
SVN
KOR
CZE
POL
ITA
NOR
OECD
PRT
IRL
CHE
ESP
DEU
LUX
BEL
AUT
NLD
HUN
FIN
FRA
SWE
DNK
% of GDP% of GDP
1. Includes Temporary Assistance for Needy Families (TANF) work-related activities. Other TANF expenditure (0.20% of
GDP) is not included.
Source: OECD Labour Market Programme Database.
Public spending on Active labour market policies (ALMPs), Latest available date
20

21. Some young people struggle
to enter the labour market
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
ISL
NLD
DNK
LUX
JPN
CHE
DEU
SWE
NOR
CZE
AUS
SVN
NZL
AUT
EST
BEL
CAN
GBR
USA
OECD
SVK
FIN
HUN
ISR
POL
LVA
IRL
CHL
PRT
FRA
MEX
GRC
ESP
ITA
TUR
% of 20-24 year-olds% of 20-24 year-olds
Source: OECD Education at a Glance: Transition from school to work database.
20-24 year-olds not in employment, education or training (NEET), latest available date
21

22. Labour force participation rates vary
a lot across the United States
Note: Civilian noninstitutional population ages 16 and older
Source: Bureau of Labor Statistics. 22

23. Inter-State migration has slowed
Source: U.S. Census Bureau, Current Population Survey. 23
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1980 1990 2000 2010
Migration rate between states
1980-2017
2017

24. Housing cost overburden
Source: OECD Affordable Housing Database. 24
0
10
20
30
40
50
60
70
…on rents (private tenants) ...on mortgages
% of population in the bottom quintile spending more than 40%
of disposable income on rents or mortgages
OECD United States

25. Occupational licensing adds
to constraints on mobility
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
30
35
40
45
50
Total Private industries Federal State Local Self-employed
workers,
unincorporated
Source: Bureau of Labor Statistics.
% of employed with a certification or licence
25

26. • Promote active labour market policies, such as
job placement services and support to
geographic mobility.
• Increase investment in infrastructure, (making
use of greater private-sector financing, user fees
and flexible risk-sharing arrangements).
• Expand the use of apprenticeships and on-the-
job training to ease the school-to-work transition.
Recommendations for helping
workers find jobs
26

27. • Reform the GSEs to redirect housing
support to the rental market.
• Use federal money to encourage States
and localities to remove zoning
restrictions.
• Encourage State and local governments to
deregulate occupational licensing.
Recommendations to reduce
barriers to mobility
27

28. Well-being is generally high
Source: OECD Better Life Index database. 28
28
25
19 19
16
15
14 14
5
2
1
Work & life
balance
Personal
security
Social
connections
Education &
skills
Health status Jobs &
earnings
Subjective
well-being
Environmental
quality
Civic
engagement &
governance
Housing Income
US position in OECD country
ranking (1 to 35)
US position in OECD country
ranking (1 to 35)
Indicators of well-being
20% top performers 60% middle performers 20% bottom performers United States

29. Gains in life expectancy
have stalled recently
Source: World Bank Development Indicators (WDI).
65
70
75
80
85
90
1965 1975 1985 1995 2005 2015
A. Total population
Japan
United States
OECD members
Years
65
70
75
80
85
90
1965 1975 1985 1995 2005 2015
B. Male population
Japan
United States
OECD members
Years
65
70
75
80
85
90
1965 1975 1985 1995 2005 2015
C. Female population
Japan
United States
OECD members
Years
Life expectancy at birth
29

30. Deaths from overdoses are rising
Source: National Center for Health Statistics. 30
0.0
2.5
5.0
7.5
10.0
12.5
15.0
1999 2002 2005 2008 2011 2014
Overdoses deaths involving opioids
Per 100,000 resident population
2016

31. Too many opioids are prescribed
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
USA rest of OECD
Daily doses per million inhabitants per day
Source: National Center for Health Statistics and OECD calculations. 31

32. Low labour force participation and high
opioid use are closely connected
50
55
60
65
70
75
50
55
60
65
70
75
20 30 40 50 60 70 80 90 100 110 120 130
Participation rateParticipation rate
Opoid prescribing rate per 100 persons
Source: Bureau of Labor Statistics, Centers for Disease Control and Prevention.
By State, 2016
32

33. • Adopt best practice for opioid prescriptions.
• Improve access to drugs that can reverse the
effects of opioid overdoses.
• Promote and expand medically assisted
treatment options.
• Help reintegrate into employment those who
have successfully completed treatment for
addiction.
Recommendations to address
the opioid crisis
33

34. 34
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such
data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West
Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the
delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Follow us on twitter:
For more information
http://www.oecd.org/eco/surveys/economic-survey-united-states.htm
OECD Economics
OECD
3