Slidedeck for Spring 2017 Economic Update webinar, presented May 9, 2017

1. Presented By
Kenneth Hunter, MPA
May 9, 2017
SPRING 2017
ECONOMIC UPDATE

2. Sources for Information
Special Thank You!

3. Overview – Key Themes
Grading the First Quarter
Status of Manufacturing & Retail
Home & Auto Sale Trends
Expectations for Short-Term

4. Grading the First Quarter

5. The National Picture - Predictions
2/1/17, 3.4%
4/24/17, 0.2%
%
1%
2%
3%
4%
Atlanta Fed GDPNow Forecast, 2017 Q1 Real GDP Growth
Group Predictions:
New York Fed Forecast: +2.7%
Philly Fed Survey: +2.2%
WSJ: +1.4%
Zero Hedge: 0.8%
Mish: 0.7%

6. The National Picture - Predictions
Group Predictions:
New York Fed Forecast: +2.7%
Philly Fed Survey: +2.2%
WSJ: +1.4%
Zero Hedge: 0.8%
Mish: 0.7%

7. The National Picture - Actual
2017 Q1
(Annualized)
$16.842T
(+1.9%)

8. The National Picture - Actual
2017 Q1
(Annual Growth)
+1.9%

9. The National Picture - Actual
2017 Q1
(Compounded Annual Growth)
+0.7%

10. The National Picture - Actual
2017 Q1 (Annualized)
$51,860/capita
(Compounded Annualized +0.08%)

11. Culprits?
Consumer Confidence > Consumer Spending
Warmer Winter = Less Utility Spending
Gas Prices?
Inventory Buildup, Leading to Manufacturing Slowdown

12. Consumer Confidence

13. Consumer Sentiment
March 2017
1-Year: +6.5%

14. Consumer Spending
2017 Q1
From Prior Quarter: +0.08%
Compounded Annualized: +0.33%

15. Consumer Spending Per Capita
2017 Q1
$35,963 (-0.07% from Prior Quarter)
(Compounded Annualized, -0.27%)

16. Consumer Spending on Energy

17. Inflation – CPI

18. Inflation - CPI
March 2017
All Items: +2.4%
Less Food & Energy: +2.0%

19. Inflation - PPI
March 2017
1-Year Growth: +5.1%
(December 2016: +2.6%)

20. Energy – Crude Oil
1-Month: -$6 (-11.5%)
12-Month: -$5 (-9.7%)

21. Energy – Natural Gas
1-Month: -$0.20 (-5%)
12-Month: -$0.08 (-2%)

22. Energy – Gasoline
US Average
1-Month: Unchanged
12-Month: +$0.12 (+5%)

23. Markets Remain Confident
Year-to-Date
+6.6%

24. Markets Remain Confident
1-Year Change: +16.5%

25. Growth Diverse, Except for Energy

26. What Market Stress?

27. Treasuries Continue Upward Swing
1-Year Change: +18%

28. Industrial Activity Slowly Upward
1-Year Change: +18%

29. Business Inventory Growth Continues
1-Year Change: +2.75%

30. Inventory-to-Sales Declining
1-Year Change: +18%

31. Exports Holding Their Own
1-Year Change: +3.1%

32. Trade Deficit Stability Continues
1-Year Change: +18%

33. Status of Manufacturing & Retail

34. Manufacturing Orders Remain Sluggish
1-Year Change: +3.3%

35. Consumer Good Manufacturing Activity
1-Year Change
Durable: -1.3%
Nondurable: +10.4%

36. First 2-Month Slide in Retail Sales Since Fall 2015
March 2017:
1-Month: -0.17%
YTD: -0.05%
1-Year: +5.48%

37. eCommerce Now 8.3% of Total Retail Sales

38. Overall Retail Sales Growth Steady

39. The Opportunity Rests with Online Sales

40. PANIC in Brick & Mortar Chains

41. Manufacturing & Retail Sector Employment
1-Year, as of April 2017:
Retail: +0.47%
Manufacturing: +0.32%

42. 1 Million More Employed in 2017 So Far
1-Year Change: +18%

43. Opportunities Plentiful, Voluntary Turnover Growing
1-Year Change: +18%

44. Wage Growth Steady, Not Surging
1-Year Change: +18%

45. “Full Employment” Not a Reality
1-Year Change: +18%

46. Home & Auto Sales Trends

47. Strong New Home Sales Growth in March
Sales +5.8%
621k Unit Annual
Pace
Q1 Revised
Upward 43k Sales
Activity Still
Nowhere Near
Pre-Recession

48. Sharp Increase for Existing Homes in South,
Inventories Still Low, Price Growth Continues
1-Year Change: +18%

49. Total Housing Starts +8% YTD
Single-Family +6% Multi-Family +14%

50. Housing Price Growth Continues

51. Consistent Appreciation

52. Bumpy Ride Ahead for Vehicle Sales
March 2017
16.9 Million Annual Units
1-Yr Dif: -0.5%
YTD Dif: -5.6%

53. Household Credit in Good Shape
Source: New York Federal Reserve Bank
0
3
6
9
12
15
0
3
6
9
12
15
Mortgage HE Revolving Auto Loan Credit Card Student Loan Other
Trillions of Dollars
Total Debt Balance and its Composition
Trillions of Dollars
Source: FRBNY Consumer Credit Panel/Equifax
2016Q4 Total: $12.58 Trillion
2016Q3 Total: $12.35 Trillion
(3%)
(10%)
(6%)
(9%)
(4%)
(67%)
0
5
10
15
0
5
10
15
03:Q1 04:Q1 05:Q1 06:Q1 07:Q1 08:Q1 09:Q1 10:Q1 11:Q1 12:Q1 13:Q1 14:Q1 15:Q1 16:Q1
Credit Card
Mortgage
Auto Loan
HE Revolving
Percent of Balance 90+ Days Delinquent
by Loan Type
Percent Percent
Source: FRBNY Consumer Credit Panel/Equifax
Student Loan

54. Rocky Mount Update

55. Rocky Mount MLS 2016
Jan-Apr
2017 Change
New Listings 1,452 189
Average List 137,925$ 134,402$ -2.6%
Total Sold 1,010 99
Average Sold Price 118,305$ 132,669$ 12.1%
Active Count (EOP) 569 529 -7.0%
Local Housing Market
Needs Supply to Match Growth
Information courtesy Kathy Akers, Boone, Hill, Allen & Ricks Real Estate

56. Local Employment Update
Since March '16 Since December '16 Since February '17
Change in Labor Force
Edgecombe -436 -1.87% -430 -1.85% -101 -0.4%
Nash -210 -0.47% -357 -0.80% -93 -0.2%
Rocky Mount MSA -646 -0.95% -787 -1.16% -194 -0.3%
Change in Employment
Edgecombe -112 -0.53% -260 -1.22% 100 0.5%
Nash 132 0.32% -254 -0.61% 107 0.3%
Rocky Mount MSA 20 0.03% -514 -0.81% 207 0.3%
1-Yr YTD 1-Mth
Since March '16 Since December '16 Since February '17
Change in Labor Force
In Edgecombe -63 -0.97% 96 1.52% -3 0.0%
In Nash 38 0.21% -108 -0.60% -69 -0.4%
Citywide -25 -0.10% -12 -0.05% -72 -0.3%
Change in Employment
In Edgecombe -31 -0.54% -72 -1.24% 28 0.5%
In Nash 14 0.08% -140 -0.84% 43 0.3%
Citywide -17 -0.08% -212 -0.94% 71 0.3%

57. 1.9%
0.0%
0.0%
-3.2%
-4.3%
-5.8%
-8.8%
-7.2%
-8.0%
-2.4%
-3.7%
-4.6%
0.0%
3.9%
1.8%
1.5%
0.9%
0.0%
0.0%
0.0%
-2.5%
0.0%
0.9%
0.7%
0.7%
0.9%
-15% -10% -5% 0% 5% 10% 15%
Professional and Business Services
Leisure and Hospitality Services
Education and Health Services
Private Service Providing
Mining, Logging, and Construction
Trade, Transportation, and Utilities
Manufacturing
Retail Trade
Goods Producing
Service-Providing
Total
Total Private
Government
Nonfarm Employment by Sector, Rocky Mount MSA, March 2017
Year-to-Date 1-Year
Local Employment Update

58. How Do We Compare to Rest of NC?
25.4%
23.6%
15.9%
15.6%
13.6%
11.4%
10.8%
5.2%
3.2%
2.2%
2.0%
1.8%
0.4%
-1.9%
-5.0%
-9.1%
14.8%
10.5%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Raleigh
Charlotte
Burlington
Wilmington
Durham-CH
Asheville
Greenville
Jacksonville
Winston-Salem
Hickory
G'boro-HighPoint
NewBern
Goldsboro
Fayetteville
RockyMountMSA
CityofRockyMount
NCCombinedMetros
Statewide
Change in Employment Since January 2008
(as of March 2017)

59. 0.1%
-0.3%
-1.2%
0.1%
-0.9%
-1.2%
-3.3%
-3.9%
-1.2%
-1.5%
-0.8%
-1.0%
0.2%
4.6%
4.3%
4.7%
2.7%
3.1%
-0.5%
2.0%
1.8%
1.0%
2.1%
2.6%
2.7%
2.2%
-15% -10% -5% 0% 5% 10% 15%
Leisure and Hospitality Services
Professional and Business Services
Mining, Logging, and Construction
Education and Health Services
Private Service Providing
Manufacturing
Trade, Transportation, and Utilities
Retail Trade
Goods Producing
Service-Providing
Total
Total Private
Government
Nonfarm Employment by Sector, NC Statewide, March 2017
Year-to-Date 1-Year
North Carolina Labor Market Activity

60. Predictions

61. Predictions on Q2 GDP

62. Small Business Optimism Remains Strong
Apr-17, 104.5
80
90
100
110
120
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
NFIB Small Business Optimism Index
(As of April 2017)
1-Year: +11%
Since October: +10%

63. And Small Business in HIRING!

64. Consumers Feel Better
1-Year: +6.5%
Since October: +11.1%

65. Capital Momentum Calming Down

66. Optimism Continues with Indicators

67. Carolinas Looking Good

68. North Carolina’s Outlook (Dr. Connaughton)

69. North Carolina’s Outlook (Dr. Connaughton)

70. North Carolina’s Outlook (Dr. Walden)
April 2017
-0.4% 1-Month Change
+4.3% 12-Month Change

71. Return of GROCERY WARS!!!

72. Questions?
Kenneth Hunter
kwhunter@gmail.com
Kenneth.Hunter@rockymountnc.gov