Southeast Texas Economic Development Foundation slides for the economic outlook for Southeast Texas in 2019. All systems are go for a good year. The only thing that can hold us back is our belief that we are "overdue" for a recession. Stay positive.

1. 2019 Economic Outlook
Presented to the Southeast
Texas Economic Development
Foundation
By Patrick Jankowski
Senior Vice President, Research
Greater Houston Partnership

3. 73
80
92
106
114
120
Housing Bubble '01 - '07
World War II Economy '38 - '45
Reagan Years '82 - '90
60s Boom '61 - '69
Current Boom June '09 to Present
Tech Boom '91 - '01
Source: National Bureau for Economic Research
Months
Longest U.S. Expansions

5. “Expansions don’t
die of old age.”
Janet Yellen
Chair, Board of Governors
U.S. the Federal Reserve
System, 2014–2018

6. “Expansions don’t
die of old age.”
Janet Yellen
Chair, Board of Governors
U.S. the Federal Reserve
System, 2014–2018

7. Typical Recession Causes
Bursting of an asset bubble
Commodity price spikes
Credit crunch
Debt accumulation
Financial institution failures
Government spending cuts
Loss of consumer confidence
Loss of business confidence
Rising interest rates
Reductions in business investment

8. When? Cause
’69 – ’70 Interest rate hikes, fiscal austerity
’73 – ’75 Stock market crash, oil price spike
’80 - ’82 Interest rate hikes, oil price spike
’90 – ’91 High debt levels, consumer pessimism, oil price spike,
’01 – ’02 Dot-com bust, weak business investment, 9/11
’08 – ’09 Subprime mortgage crisis
Six Most Recent Recessions

9. www.nber.org

10. Real Gross Domestic Product
Employment
Real Personal Income
Real Sales (business and retail)
Industrial Production
What NBER considers when dating a business cycle

11. RealGDP
Time
NBER Business Cycle
Peak
Recession
Trough
Expansion

12. RealGDP
Time
Jankowski Business Cycle
Peak
Recession
Trough
Recovery
Expansion

13. 10
11
12
13
14
15
16
17
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Income($Trillions)
Source: U.S. Bureau of Economic Analysis
96 months
U.S. Real Personal Income

14. 14
15
16
17
18
19
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: U.S. Bureau of Economic Analysis
$ Trillions
U.S. Real Gross Domestic Product
90 months

15. 125
130
135
140
145
150
155
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Jobs(Millions)
Source: U.S. Bureau of Labor Statistics
56 months
U.S. Payroll Employment

16. 85
90
95
100
105
110
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
2012=100
Source: Board of Governors of the Federal Reserve System
U.S. Industrial Production Index
13months

17. What the current
data tells us
about the
economy.

18. The Consumer
Side of the
Economy

19. 0
50
100
150
200
250
300
350
400
'11 '12 '13 '14 '15 '16 '17 '18 '19
Jobs(000s)
Source: U.S. Bureau of Labor Statistics
1-Month Net Change
U.S. Job Growth

20. 200
250
300
350
400
450
Source: U.S. Employment and Training Administration
4-Week Moving Average, Seasonally Adjusted, 000s
Initial Claims for Unemployment Insurance

21. 2
3
4
5
6
7
8
9
10
'11 '12 '13 '14 '15 '16 '17 '18 '19
%Unemployed
Source: U.S. Bureau of Labor Statistics * seasonally adjusted
U.S. Unemployment Rate*

22. 61.5
62.0
62.5
63.0
63.5
64.0
64.5
'11 '12 '13 '14 '15 '16 '17 '18 '19
Source: U.S. Bureau of Labor Statistics
Percent Population 16 and Older in the Workforce
U.S. Labor Force Participation Rate

23. 0
20
40
60
80
100
120
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: University of Michigan
1966:Q1=100, Not Seasonally Adjusted
Consumer Confidence

24. The Financial Side
of the Economy

25. 0
2
4
6
8
10
12
14
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Board of Governors of the Federal Reserve System
Percent, Quarterly, Seasonally Adjusted
Delinquencies Single-Family Mortgages

26. 0
1
2
3
4
5
6
7
8
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Board of Governors of the Federal Reserve System
Percent, Quarterly, Seasonally Adjusted
Credit Card Delinquencies

27. 0
1
2
3
4
5
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Board of Governors of the Federal Reserve System
Percent, Quarterly, Seasonally Adjusted
Delinquencies Commercial & Industrial Loans

28. 9
10
11
12
13
14
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: Board of Governors of the Federal Reserve System (US)
Percent, Quarterly, Seasonally Adjusted
Household Debt as Percent of Personal
Income

29. The Business
Side of the
Economy

30. 1.5
3.7
3.0
2.0
-1.0
2.9
-0.1
4.7
3.2
1.7
0.50.5
3.6
0.5
3.23.2
-1.0
5.14.9
1.9
3.33.3
1.0
0.4
1.5
2.3
1.91.81.8
3.02.8
2.32.2
4.2
3.5
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: U.S. Bureau of Economic Analysis
Growth Rate, % Change from Previous Quarter
U.S. Real Gross Domestic Product

31. -3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Federal Reserve Bank of Philadelphia
Percent, Monthly, Seasonally Adjusted
U.S. Leading Economic Index

32. -30
-20
-10
0
10
20
30
40
50
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Federal Reserve Bank of Philadelphia
Future Capital Expenditures Index*
*Calculated by subtracting percent
reporting increases from percentage
reporting decreases.

33. 400
600
800
1,000
1,200
1,400
1,600
'11 '12 '13 '14 '15 '16 '17 '18 '19
Source: U.S. Census Bureau
Seasonally Adjusted Annual Rate
U.S. Housing Permits

34. 12.7
14.4
15.5
16.4
17.4 17.5 17.1 17.5
'11 '12 '13 '14 '15 '16 '17 '18
Source: National Automobile Dealers Association
New, Light-Duty Vehicles, Millions
U.S. Vehicle Sales

35. 300
330
360
390
420
450
480
'11 '12 '13 '14 '15 '16 '17 '18
Source: U.S. Bureau of the Census * excludes food services
Billions of Dollars, Monthly, Seasonally Adjusted*
U.S. Retail Sales

36. 36
Texas
Economy

37. 0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
$Trillions
Source: U.S. Bureau of Economic Analysis
37
Texas Real GDP

38. 8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
13.0
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Millions
Source: U.S. Bureau of Labor Statistics *
seasonally adjusted
38
Total Employment*

39. -30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Jobs(000s)
Source: U.S. Bureau of Labor Statistics *seasonally
adjusted
39
Texas Monthly Job Growth

40. 3
4
5
6
7
8
9
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
%Unemployed
Source: U.S. Bureau of Labor Statistics * seasonally adjusted
40
Texas Unemployment Rate*

41. 20
30
40
50
60
70
80
90
100
110
120
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19
$PerBarrel
Source: U.S Energy Information Administration
Crude Spot Price, Weekly Average
West Texas Intermediate

42. 104
95 95 99
117
129
151
168
192
163
207
251
265
278 286
249
231
265
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Source: U.S. Trade Administration
$ Billions
42
Texas Exports

43. -50
-40
-30
-20
-10
0
10
20
30
40
50
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Federal Reserve Bank of Dallas
Survey Production Index
43
Texas Manufacturing Outlook

44. -30
-20
-10
0
10
20
30
40
50
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Federal Reserve Bank of Dallas
Above 50 = Expansion
44
Texas Service Sector Outlook

45. -60
-40
-20
0
20
40
60
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Source: Federal Reserve Bank of Dallas
Above 50 = Expansion
45
Texas Retail Outlook

47. A self-fulfilling
prophesy?

48. Trade Tariffs, Higher Interest Rates
Slowing Global Growth, OECD Says

51. “NABE Outlook panelists continue to view the economy as having solid momentum
entering 2019, but they foresee GDP growth cooling from 2.9% this year to 2.7% in
2019,” said NABE President Kevin Swift . . .

52. So, what about
Beaumont-Port
Arthur

53. Beaumont-Port Arthur Gross Domestic
Product
15.3 15.8
16.6
19.0
17.3 17.8
18.9
17.3
18.7
19.8
18.2
18.7
19.4 19.7
20.4 20.7
20.1
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Source: U.S. Bureau of Economic Analysis
$ Billions

54. 0
10
20
30
40
50
60
70
80
90
100
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18*
Source: WISERTrade * 12 months ending October
‘18
Metric Tons
Port Arthur Customs District Traffic

55. 12-Month Running Totals
152
154
156
158
160
162
164
166
168
170
172
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Jobs(000s)
Source: Texas Workforce Commission
Beaumont-Port Arthur Payroll
Employment

56. 2
4
6
8
10
12
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
%Unemployed
Beaumont Texas U.S.
Unemployment Rates

57. Recent Headlines

58. Bottom line: Growth for
the U.S., Texas and
Beaumont in 2019.

59. Thank you

60. 2019 Economic Outlook
Presented to the Southeast
Texas Economic Development
Foundation
By Patrick Jankowski
Senior Vice President, Research
Greater Houston Partnership