Total nonfarm payroll employment increased by 128,000 jobs in October. Job growth has averaged 167,000 per month thus far in 2019, compared with an average monthly gain of 223,000 in 2018. Employment declined in motor vehicles and parts manufacturing due to strike activity. Federal government employment was also down, reflecting a drop in the number of temporary jobs for the 2020 Census.

1. U.S. Economic Overview
Q3 2019

2. 1
U.S. Economic Overview Q3 2019
U.S. Recession
-900.0
-600.0
-300.0
0.0
300.0
600.0
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13 Apr-15 Oct-16 Apr-18 Oct-19
Monthly Change 12-Month Moving Average
Source: U.S. Bureau of Labor Statistics; National Bureau of Economic Research
Employment Growth
United States, Total Nonfarm, Seasonally Adjusted, Thousands
Total nonfarm payroll employment increased by 128,000 jobs in October. Job growth has averaged 167,000 per month thus far in 2019,
compared with an average monthly gain of 223,000 in 2018. Employment declined in motor vehicles and parts manufacturing due to strike
activity. Federal government employment was also down, reflecting a drop in the number of temporary jobs for the 2020 Census.

3. 2
U.S. Economic Overview Q3 2019
Mining and
Logging
0.5%
Construction
5.0%
Manufacturing
8.4%
Trade,
Transportation,
and Utilities
18.2%
Information
1.9%
Financial
Activities
5.7%
Professional
and Business
Services
14.3%
Education and
Health Services
16.1%
Leisure and
Hospitality
11.0%
Other Services
3.9%
Government
15.1%
Source: U.S. Bureau of Labor Statistics
Employment By Industry
United States, Thousands, October 2019
Employment Growth By Industry
United States, 12-Month % Change, October 2019
Mining and Logging
Construction
Manufacturing
Trade, Transportation, and Utilities
Information
Financial Activities
Professional and Business Services
Education and Health Services
Leisure and Hospitality
Other Services
Government
Total Nonfarm
-1.0% 1.0% 3.0%

4. 3
U.S. Economic Overview Q3 2019
Employment Growth by Metropolitan Area
Total Nonfarm, Not Seasonally Adjusted, 12-Month % Change, September 2018 to September 2019
Source: U.S. Bureau of Labor Statistics
In September, nonfarm payroll employment
increased in 13 of the 38 metropolitan
divisions over the last 12 months and was
essentially unchanged in 25 divisions.
The largest year-over-year increase in
employment among the metropolitan
divisions occurred in Dallas-Plano-Irving, TX
(+99,500), followed by New York-Jersey
City-White Plains, NY-NJ (+86,100), and
Seattle-Bellevue-Everett, WA (+61,100).
The largest year-over-year percentage
increases in employment occurred in
Dallas-Plano-Irving, TX (+3.8%), Seattle-
Bellevue-Everett, WA (+3.5%), and San
Francisco-Redwood City-South San
Francisco, CA (+3.3%).

5. 4
U.S. Economic Overview Q3 2019
U.S. Recession
0.0%
3.0%
6.0%
9.0%
12.0%
0
200
400
600
800
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13 Apr-15 Oct-16 Apr-18 Oct-19
Initial Claims (Thousands) Unemployment Rate (%)
Source: U.S. Bureau of Labor Statistics; U.S. Employment and Training Administration; National Bureau of Economic Research
Unemployment Rate and Initial Unemployment Claims
United States, Seasonally Adjusted, Monthly, End of Period
Both the unemployment rate, at 3.6%, and the number of unemployed persons, at 5.9 million, changed little in October. The number of
long-term unemployed (27 weeks or more) was essentially unchanged at 1.3 million in October and accounted for 21.5% of the
unemployed. The labor force participation rate was little changed at 63.3% in October, and the employment-population ratio held at 61.0%.

6. 5
U.S. Economic Overview Q3 2019
U.S. Recession
0.0
3.5
7.0
10.5
14.0
17.5
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13 Apr-15 Oct-16 Apr-18 Oct-19
Unemployed Persons Job Openings
Source: U.S. Bureau of Labor Statistics; National Bureau of Economic Research
Job Openings and Labor Turnover
United States, Millions, Seasonally Adjusted, Monthly
The job openings level edged down to 7.0 million (-277,000). The job openings rate was 4.4%. The number of job openings edged down for
private firms (-262,000) and was little changed for government. The job openings level decreased in health care and social assistance
(-124,000), retail trade (-102,000), and federal government (-19,000). Job openings increased in information (+25,000).

7. 6
U.S. Economic Overview Q3 2019
U.S. Recession
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13 Apr-15 Oct-16 Apr-18 Oct-19
CPI All Items Rent of Primary Residence
Consumer Price Index: Rent and Rent Equivalence
United States, All Items, Not Seasonally Adjusted, 12-Month % Change, 1982-84=100
The Consumer Price Index (CPI) increased 1.8% over the last 12 months, falling below the Federal Reserve’s target level of 2.0%. Key
indicators of affordability worsened, as the CPI rent index increased 3.7%, significantly higher than inflation, while average hourly earnings
rose at a slower rate of 3.0%.
Source: U.S. Bureau of Labor Statistics; National Bureau of Economic Research

8. 7
U.S. Economic Overview Q3 2019
U.S. Recession
-10.0%
-5.0%
0.0%
5.0%
10.0%
3Q04 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 3Q17 3Q18 3Q19
Gross Domestic Product (%) 15-Year Average
Source: U.S. Bureau of Economic Analysis; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Gross Domestic Product
United States, Quarterly Change from Preceding Period, Seasonally Adjusted at Annual Rates, Based on Chained 2009 Dollars
Real gross domestic product (GDP) increased 1.9% in the third quarter of 2019. In the second quarter, real GDP increased 2.0%. The third-
quarter increase in real GDP reflected increases in consumer spending, government spending, housing investment, and exports, while
business investment and inventory investment decreased. Imports, which are a subtraction in the calculation of GDP, increased.

9. 8
U.S. Economic Overview Q3 2019
U.S. Recession
0.0
200.0
400.0
600.0
800.0
1,000.0
1955
1957
1959
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
Corporate Profits Compensation of Employees
Source: U.S. Bureau of Economic Analysis; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Corporate Profits and Compensation of Employees
Includes Gross Domestic Product: Implicit Price Deflator, Seasonally Adjusted Annual Rate, Quarterly, Index 1954=100
“The trends of the two series tend to track each other over several decades, reflecting the general growth of the economy. The past
decade and a half seems to be different, though. Never have corporate profits outgrown employee compensation so clearly and for so
long.” - Federal Reserve Bank of St. Louis, August 9, 2018

10. 9
U.S. Economic Overview Q3 2019
U.S. Recession
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19
Average Hourly Earnings S&P/Case-Shiller Home Price Index
Source: U.S. Bureau of Labor Statistics; S&P Dow Jones Indices; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Home Prices and Wage Growth
United States, Not Seasonally Adjusted, 12-Month % Change
“Housing affordability has long been a problem for low-income families. Roughly 80% of renters and 63% of owners making under $30,000
per year spend more than 30% of their income on rent. Middle-income families are increasingly facing affordability challenges in urban
areas with strong labor markets, especially along the Northeast and West coasts.” - Brookings

11. 10
U.S. Economic Overview Q3 2019
U.S. Recession
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
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
3Q19
Homeownership Rate Homeowner Vacancy Rental Vacancy
Source: U.S. Census Bureau; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Homeownership Rate
United States, Not Seasonally Adjusted, Annual, End of Period
The homeownership rate was 64.8% at the end of the third quarter of 2019, remaining at the highest level since 2014. Increased first-time
homeowner demand was one of the biggest trends influencing the housing market, as the homeownership rate for those under 35 years
old increased to 42.0%, as compared with the most recent low of 34.7% in 2016.

12. 11
U.S. Economic Overview Q3 2019
11
Homeownership and Household Formation
United States, Not Seasonally Adjusted, Annual, End of Period
Source: U.S. Census Bureau; Retrieved from FRED, Federal Reserve Bank of St. Louis
60.0%
62.5%
65.0%
67.5%
70.0%
-1.0
0.0
1.0
2.0
3.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q19
Thousands
Owner-Occupied Housing Units (Millions) Renter-Occupied Housing Units (Millions) Homeownership Rate (%)

13. 12
U.S. Economic Overview Q3 2019
30.0%
42.0%
54.0%
66.0%
78.0%
90.0%
All Ages Under 35 years 35 to 44 years 45 to 54 years 55 to 64 years 65 years and over
Previous Peak (2003) Q3 2019
Source: U.S. Census Bureau
Homeownership Rate by Age of Householder
United States, Not Seasonally Adjusted, Annual, End of Period

14. 13
U.S. Economic Overview Q3 2019
0
25
50
75
100
125
150
Apr-33to
Apr-37
Jul-38to
Jan-45
Nov-45to
Oct-48
Nov-49to
Jun-53
Jun-54to
Jul-57
May-58to
Mar-60
Mar-61to
Nov-69
Dec-70to
Oct-73
Apr-75to
Dec-79
Aug-80to
Jun-81
Dec-82to
Jun-90
Apr-91to
Feb-01
Dec-01to
Nov-07
Jul-09to
Current
Time Between Recessions (Months) Average
Source: National Bureau of Economic Research
Durations of Expansions: Time Between Recessions
NBER-Based Recession Indicators for the U.S. from the Peak Through the Trough
The economy has grown 123 consecutive months,
the longest economic expansion in U.S. history.

15. 14
U.S. Economic Overview Q3 2019
U.S. Recession
0.0%
1.5%
3.0%
4.5%
6.0%
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13 Apr-15 Oct-16 Apr-18 Oct-19
3-Month Treasury 2-Year Treasury 10-Year Treasury 30-Year Treasury
Source: Board of Governors of the Federal Reserve System; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Treasury Yield Curve as a Predictor of U.S. Recessions
Monthly, End of Period, Not Seasonally Adjusted
“Research beginning in the late 1980s documents the empirical regularity that the slope of the yield curve is a reliable predictor of future
real economic activity.” - Federal Reserve Bank of New York

16. 15
U.S. Economic Overview Q3 2019
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Oct-05 Oct-10 Oct-15 Oct-20
Source: The Wall Street Journal Economic Forecasting Survey
When Will the Next Recession Begin?
34.2%
29.3%
14.6%
7.3% 7.3% 7.3%
0.0%
8.0%
16.0%
24.0%
32.0%
40.0%
2020 2021 2022 2023 2024 2025
Source: Federal Reserve Bank of New York
Probability of a Recession 12 Months Ahead
“A large majority of economists, 84.2%, said they saw a greater risk that the economy would grow more slowly than it would grow more
quickly over the next 12 months. When asked about the biggest downside risk to their forecasts, nearly half of respondents, 46.8%,
mentioned trade policy or China.” - The Wall Street Journal

17. 16
U.S. Economic Overview Q3 2019
U.S. Recession
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19
Leading Index (%) 15-Year Average
Source: Federal Reserve Bank of Philadelphia; National Bureau of Economic Research; Retrieved from FRED, Federal Reserve Bank of St. Louis
Leading Index for the U.S.
United States, Seasonally Adjusted, 6-Month Growth Rate
The leading index for each state predicts the six-month growth rate of the state's coincident index. The models include other variables that
lead the economy: state-level housing permits (one to four units); state initial unemployment insurance claims; delivery times from the
ISM manufacturing survey; and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.

18. ARBOR.COM • 1.800.ARBOR.10
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