3 days ago - Unit Labor Costs, Nonfarm Business. Aug-09-2017 ... 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020. Percent ...
National Economic Indicators September 5, 2017
Table of Contents GDP Table : Real Gross Domestic Product Real Gross Domestic Product Decomposition of Real Gross Domestic Product Households Retail Sales Consumer Spending and Income Sales of Automobiles and Light Trucks Personal Saving Rate Household Net Worth Existing Single-Family Home Sales New Single-Family Home Sales Private Single-Family Housing Starts & Permits Private Multi-Family Housing Starts & Permits Business Investment Real Investment in Nonresidential Structures Real Private Construction Put in Place Real Nonresidential Fixed Investment Real Investment in Equipment Real Investment in Intellectual Property Trade Balance of International Trade Exchange Value of the USD Manufacturing Industrial Production Capacity Utilization Rate: Manufacturing Indexes of Manufacturing Activity Indexes of Non-Manufacturing Activity Table : ISM Business Survey Indexes Manufacturers' New Orders Core Capital Goods Business Inventory/Sales Ratios
Release Date Latest Period Aug-30-2017 08:30 Q2-2017 Aug-30-2017 08:30 Q2-2017 Aug-30-2017 08:30 Q2-2017
Page 4 5 6
Aug-15-2017 08:30 Aug-31-2017 08:30 Sep-01-2017 15:06 Aug-31-2017 08:30 Jun-08-2017 12:05 Aug-24-2017 10:00 Aug-23-2017 10:00 Aug-16-2017 08:31 Aug-16-2017 08:31
Jul-2017 Jul-2017 Aug-2017 Jul-2017 Q1-2017 Jul-2017 Jul-2017 Jul-2017 Jul-2017
7 8 9 10 11 12 13 14 15
Aug-30-2017 08:30 Sep-01-2017 10:01 Aug-30-2017 08:30 Aug-30-2017 08:30 Aug-30-2017 08:30
Q2-2017 Jul-2017 Q2-2017 Q2-2017 Q2-2017
16 17 18 19 20
Aug-04-2017 08:30 Jun-2017 Sep-01-2017 10:04 Aug-2017
21 22
Aug-17-2017 09:06 Aug-17-2017 09:06 Sep-01-2017 10:02 Aug-03-2017 10:01 Sep-01-2017 10:02 Aug-25-2017 08:32 Aug-25-2017 08:32 Aug-15-2017 08:31
23 24 25 26 27 28 29 30
Jul-2017 Jul-2017 Aug-2017 Jul-2017 Aug-2017 Jun-2017 Jun-2017 Jun-2017
Table of Contents (continued) Labor Market Nonfarm Payroll Employment Unemployment Rate Measures Non-Employment Index Labor Market Flows Labor Force Participation Aggregate Weekly Hours Index Average Hourly Earnings Employment Cost Index Business Labor Productivity Unit Labor Costs, Nonfarm Business Inflation Table : Gauges of Inflation Expenditure Price Indexes Consumer Price Indexes Producer Price Indexes Commodity Price Indexes Crude Oil Prices TIPS Inflation Compensation Monetary Policy & Financial Markets Federal Reserve System Assets Monetary Policy Instruments Real Federal Funds Rate FOMC Statement Eurodollar Futures SEP: Federal Funds Rate Monetary Base M2 Money Market Rates Capital Market Rates Treasury Yield Curve Risk Premium
Release Date Sep-01-2017 08:31 Sep-01-2017 08:31 Aug-14-2017 11:16 Aug-08-2017 10:00 Sep-01-2017 08:31 Sep-01-2017 08:31 Sep-01-2017 08:31 Jul-28-2017 08:30 Aug-09-2017 08:30 Aug-09-2017 08:30
Latest Period Aug-2017 Aug-2017 Jul-2017 Jun-2017 Aug-2017 Aug-2017 Aug-2017 Q2-2017 Q2-2017 Q2-2017
Page 31, 32 33,34 35 36 37 38 39 40 41 42
Aug-31-2017 20:41 Aug-31-2017 08:30 Aug-11-2017 08:34 Aug-10-2017 08:35 Aug-31-2017 20:41 Sep-05-2017 Aug-29-2017 16:13
Aug-2017 Jul-2017 Jul-2017 Jul-2017 Aug-2017 05-Sep-2017 25-Aug-2017
43 44, 45 46 47 48 49 50
Aug-31-2017 16:32 30-Aug-2017 Sep-04-2017 19:06 01-Sep-2017 Aug-31-2017 08:30 Aug-2017
51 52 53 54, 55 56 57 58 59 60 61 62 63
Sep-05-2017
05-Sep-2017
Aug-31-2017 16:30 Aug-31-2017 16:45 Sep-04-2017 19:06 Sep-04-2017 19:06 Sep-01-2017 16:32 Sep-04-2017 19:06
30-Aug-2017 Jul-2017 01-Sep-2017 01-Sep-2017 01-Sep-2017 01-Sep-2017
Real Gross Domestic Product 2016 Q2 Q3 Q4 CHANGE FROM PREVIOUS QUARTER AT COMPOUND ANNUAL RATE [Percent]:
2017 Q1
Q2
Gross Domestic Product
2.2
2.8
1.8
1.2
3.0
3.8
2.8
2.9
1.9
3.3
Nonresidential Fixed Investment Structures Equipment Intellectual Property
3.3 0.5 -0.6 11.1
3.4 14.3 -2.1 4.2
0.2 -2.2 1.8 -0.4
7.2 14.8 4.4 5.7
6.9 6.2 8.8 4.9
Residential Fixed Investment
-4.7
-4.5
7.1
11.1
-6.5
Exports of Goods & Services Imports of Goods & Services
2.8 0.4
6.4 2.7
-3.8 8.1
7.3 4.3
3.7 1.6
-0.9
0.5
0.2
-0.6
-0.3
2.6
2.2
2.3
2.4
2.7
Personal Consumption Expenditures
Government Consumption Expenditures & Gross Investment Final Sales to Domestic Purchasers
LEVEL IN QUARTER AT SEASONALLY ADJUSTED ANNUAL RATE [Billions of Chained (2005) Dollars]: Change in Private Inventories Net Exports of Goods & Services
12.2
17.6
63.1
1.2
1.8
-572.4
-557.3
-631.1
-622.2
-613.4
Source: Bureau of Economic Analysis via Haver Analytics 4
Real Gross Domestic Product 6
Percent change from previous quarter at annual rate
6
5
5
4
Q2 3.0%
3
4 3
FOMC Projection
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
-9
Note: Projection is the median, central tendency, and range from the June 2017 Summary of Economic Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP) are from the fourth quarter of the previous year to the fourth quarter of the year indicated. Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
5
Decomposition of Real GDP 5.0
10-Year Annual Growth Rates
5.0 4.5
4.5 4.0
GDP
4.0
3.5
3.5
3.0
3.0
2.5
Productivity
2.5
2.0
2.0
1.5
1.5
1.0
Employment
1.0
0.5
0.5
0.0 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014
0.0
Note: Productivity is calculated as real GDP per employee, from the Household Survey. Source: Bureau of Economic Analysis and Bureau of Labor Statistics via Haver Analytics
6
Retail Sales 16
12 Month % Change
16
14
14 3 Month Annualized % Change
12 10 8
12 10 8
July 4.2%
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
Month over Month % Change
-10 Total x Gasoline
-12 -14 2007
May. 0.0 0.3
Jun. Jul. 0.3 0.6 0.4 0.7
-8 -10 -12 -14
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Note: Retail sales includes food services. Source: Census Bureau via Haver Analytics
7
Consumer Spending and Income 8
12 Month % Change
8
6
6 Real Personal Consumption Expenditure
4
4
2
July
2
0
0
-2
-2 Real Disposable Personal Income
-4
-4
Month over Month % Change
-6
-8 2007
Income
May 0.5
June 0.0
July 0.2
Expenditures
0.3
0.2
0.2
2015
2016
2017
-6
-8 2008
2009
2010
2011
2012
2013
2014
Note: Income has been adjusted to account for temporary fiscal actions in 2008 and 2012-2013. Source: Bureau of Economic Analysis via Haver Analytics 8
Sales of Automobiles & Light Trucks 20
Millions of Vehicles
20 Autos and Light Trucks
18
18 16
August 16.1 mil.
16 14
14 12
Light Trucks
12
10
10
8
8
6 4 2007
Autos
6 4
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Autodata Corporation via Haver Analytics 9
Personal Saving Rate 10
Percent of disposable personal income
10
9
9
8
8
7
7
6
6
5
July 3.5%
5
4
4
3
3
2
2
1
1
0 2007
0 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Note: Income has been adjusted to account for temporary events Source: Bureau of Economic Analysis via Haver Analytics 10
Household Net Worth 700
Percent of disposable personal income
700
Q1
650
650
600
600
550
550
500
500
450 1990
450 1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Source: Z.1 Financial Accounts of the United States via Haver Analytics 11
Existing Single-Family Home Sales 6.5
6.5
6
6
5.5
5.5 July
5
5
4.5
4.5
4
4
3.5
3.5
3
3
2.5 200020012002200320042005200620072008200920102011201220132014201520162017
2.5
Source: National Association of Realtors via Haver Analytics 12
New Single-Family Home Sales 1.4
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
July
0.7
0.6
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2 2004
0.2 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Census Bureau via Haver Analytics 13
Private Single-Family Housing Starts & Permits 2.0
Millions of Starts & Permits, Annual Rate
2.0
1.8
1.8
1.6
1.6
1.4
1.4
1.2
1.2
1990 - 1999 Average Housing Starts
1.0
Starts
July
0.8
0.8 Permits
0.6
0.6
0.4
0.2 2000
1.0
0.4
0.2 2002
2004
2006
2008
2010
2012
2014
2016
Source: Census Bureau via Haver Analytics 14
Private Multi-Family Housing Starts & Permits 0.7
3-Month Moving Average, Millions of Starts & Permits, Annual Rate
0.7
0.6
0.6
0.5
0.5
Permits
0.4
0.4
0.3
July
0.3
1990 – 1999 Average Multi-Family Starts 0.2
0.2 Starts 0.1
0.1
0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0.0
Source: Census Bureau via Haver Analytics 15
Real Investment in Nonresidential Structures 35
Percent change from previous quarter at annual rate
35
30
30
25
25
20
20
15
Q2 6.2%
10
15 10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
-35 2007
-35 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 16
Real Private Construction Put In Place 670
2009$, Billions
670
620
620 Real Private Residential Construction
570
570
520
520
470
470
Real Private Nonresidential Construction
420
June
420
370
370
320
320
270
270
220 2000
220 2002
2004
2006
2008
2010
2012
2014
2016
Notes: Private nonresidential construction deflated using the price index for private fixed investment in nonresidential structures and private residential construction deflated using the private residential investment chain price index. Source: Census Bureau via Haver Analytics 17
Real Nonresidential Fixed Investment 20
Percent change from previous quarter at annual rate
20 15
15 Q2 6.9%
10
10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30 2007
-30 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 18
Real Investment in Equipment 35
Percent change from previous quarter at annual rate
35
30
30
25
25
20
20
15
Q2 8.8%
10
15 10
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
-35
-35
-40 2007
-40 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 19
Real Investment in Intellectual Property 12
Percent change from previous quarter at annual rate
12
10
10
8
8
6
Q2 4.9%
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8 2007
-8 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 20
Balance of International Trade 0
Current $, Billions
0 Petroleum Balance
-10
-10
-20
-20 Non- Petroleum Balance
-30
-30 June -44 Bil.
-40
-40
-50
-50
-60
-60
-70
-70 Trade Balance
-80 1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
-80 2018
Note: Customs Value of Trade Balance Source: Census Bureau via Haver Analytics
21
Exchange Value of the USD 135
Index, March 1973 = 100
135
125
125
115
115
105
105
95
August
95
85
85
75 1980
75 1984
1988
1992
1996
2000
2004
2008
2012
2016
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar. Source: Board of Governors via Haver Analytics 22
Industrial Production 140
2012 = 100
140 135
135 Mining
130
130
125
125
120
120
115
Overall
July
115
110
110
105
105
100
100 Manufacturing
95
95
90
90
85
85
80
80
75 2007
75 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors via Haver Analytics 23
Capacity Utilization Rate: Manufacturing 82
Percent
82 80
80 78
July 75.4%
78
76
76
74
74
72
72
70
70
68
68
66
66
64
64
62 2007
62 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors via Haver Analytics 24
Indexes of Manufacturing Activity 65
Diffusion Index, percent
40 ISM (Left Axis) August 58.8
60
30 20
55 10 50
0 -10
45
Richmond Fed Manufacturing Survey: Current Conditions Composite Index (Right Axis)
-20
40 -30 35 2007
-40 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 25
Indexes of Non-Manufacturing Activity 65
Diffusion Index, percent
40 30
60
ISM (Left Axis)
20 55 10 July 53.9
50
0 -10
45
Richmond Fed Service Sector Index: Revenues (Right Axis)
-20
40 -30 35 2007
-40 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 26
ISM: Business Survey Indexes MANUFACTURING BUSINESS:
NON-MANUFACTURING BUSINESS:
July
Aug.
June
July
Purchasing Managers Index
56.3
58.8
Non-Manufacturing Index
57.4
53.9
Production
60.6
61.0
Business Activity
60.8
55.9
New Orders
60.4
60.3
New Orders
60.5
55.1
Employment
55.2
59.9
Employment
55.8
53.6
Supplier Deliveries
55.4
57.1
Supplier Deliveries
52.5
51.0
Inventories
50.0
55.5
Inventories
57.5
56.5
Prices
62.0
62.0
Prices
52.1
55.7
Backlog of Orders
55.0
57.5
Backlog of Orders
52.5
52.0
New Export Orders
57.5
55.5
New Export Orders
55.0
53.0
Imports
56.0
54.5
Imports
51.0
51.5
DIFFUSION INDEXES: Numbers above 50 percent indicate more favorable responses towards economic activity. Source: Institute for Supply Management via Haver Analytics 27
Manufacturers’ New Orders 600
600
550
550
500
June
500
450
450
400
400
350
350
300 2007
300 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Census Bureau via Haver Analytics 28
Core Capital Goods 75
75
70
70
65
June
65
60
60
55
55
50
50
45 2007
45 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Notes: Core capital goods are nondefense capital goods excluding aircraft. Source: Census Bureau via Haver Analytics 29
Business Inventory/Sales Ratio 1.7
Percent
1.6
1.7
1.6
Retailers
1.5
1.5
June
1.4
1.4
Total Business
1.3
1.3
Manufacturers
1.2
1.2
1.1 2007
1.1 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Census Bureau via Haver Analytics 30
Nonfarm Payroll Employment 150
Millions of Persons
150 August 146.73 mil.
145
145
140
140
135
135
130
130
125
125
120 2007
120 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
31
Nonfarm Payroll Employment Quarterly average of monthly changes, thousands of persons
400
400
300
Q2 Average
200 100
300 200 100
0
0
-100
-100
-200
-200
-300
-300
-400
-400
-500
Monthly Change Aug 156 Jul 189 Jun 210 May 145 Apr 207
-600 -700 -800
-500 -600 -700 -800
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
32
Unemployment Rate 11.0
Percent
11.0
10.5
10.5
10.0
10.0
9.5
9.5
9.0
9.0
8.5
8.5
8.0
8.0
7.5
7.5
7.0
7.0
6.5
6.5
6.0
6.0
5.5
5.5 FOMC Projection
5.0
August 4.4%
5.0
4.5
4.5
4.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4.0
Notes: FOMC projection is the median, range, and central tendency for the Q4 levels, from the March 2017 meeting. Red dots indicate median projections Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics
33
Measures of Labor Utilization 18
Percent
18
15
15 U6: U5 + Involuntary Part-Time
12
12
9
9 August
U5: U3 + Discouraged + Marginally Attached
6
6 U3: Official Unemployment Rate
3 1994
3 1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Source: Bureau of Labor Statistics via Haver Analytics 34
Non-Employment Index 14
Percent
14
13
13
12
12
Non-Employment Index Including People Working Part-Time for Economic Reasons
11
11
10
10
9
9
8
8 Non-Employment Index
7
7
6
6
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Based on “Measuring Resource Utilization in the Labor Market,” Andreas Hornstein, Marianna Kudlyak, and Fabian Lange, Federal Reserve Bank of Richmond Economic Quarterly, First Quarter 2014.
35
Labor Market Flows 4.5
Percent
4.5 June
4.0
4.0
Hires Rate*
3.5
3.5
3.0
3.0
2.5
2.5 Job Openings Rate**
2.0
2.0
Quits Rate*
1.5
1.0 2000
1.5
1.0 2002
2004
2006
2008
2010
2012
2014
2016
Note: *Percent of total employment. **Percent of total employment plus job openings. Source: JOLTS via Haver Analytics
36
Labor Force Participation 68
Percent of Population
68
67
67
66
66
65
65
64
64 August
63
63
62
62
61
61
60
60
59
59
58
58
57 57 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: Bureau of Labor Statistics via Haver Analytics
37
Aggregate Weekly Hours Index 108
Index, 2007=100
108 August
106
106
104
104
102
102
100
100
98
98
96
96
94
94
92
92
90 2007
90 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
38
Average Hourly Earnings 4.0
12 Month % Change of 3-Month Moving Average
4.0 Monthly % Change Aug 0.1% Jul 0.3% Jun 0.2% May 0.2% Apr 0.2%
3.5
3.0
3.5
3.0 August 2.5%
2.5
2.5
2.0
2.0
1.5
1.5
1.0 2007
1.0 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
39
Employment Cost Index 4.0
Year over Year % Change
4.0
3.5
3.5 Benefits Cost
3.0
3.0
Q2
2.5
2.5
Total Compensation
2.0
2.0
1.5
1.5 Wages and Salaries
1.0 2007
1.0 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
40
Labor Productivity, Nonfarm Business 6
Year over Year % Change Quarterly Change at Annual Rate
Q2 17 Q1 17 Q4 16 Q3 16
5
0.9% 0.1% 1.3% 2.5%
6
5
4
4
3
3 Post-War Average (Labor Productivity)
2
2 Q2 1.2%
1
1
0
0
-1 2007
-1 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
41
Unit Labor Cost, Nonfarm Business 6
Year over Year % Change
6
5
5
4
4
3
3
2
Q2 1.2%
2
1
1
0
0
-1
-1 -2
-2 -3 -4 -5 -6 2007
Quarterly Change at Annual Rate
Q2 17 Q1 17 Q4 16 Q3 16
-3
Alternate Series
0.6% 5.4% -6.3% -0.2%
-4 -5 -6
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Notes: Alternate series is derived from the Employment Cost Index. Source: Bureau of Labor Statistics via Haver Analytics
42
Gauges of Inflation Expenditure Price Indexes
[Percent Change from Previous Month at Annual Rate]:
June 0.5 1.6
Personal Consumption Expenditures Core (excludes Food and Energy) Consumer Price Indexes
June -0.3 1.4
July 1.3 1.4
YoY % 1.7 1.7
[Percent Change from Previous Month at Annual Rate]:
June 2.5 2.4 -1.8 19.5
Finished Goods Core (excludes Food and Energy) Core Intermediate Goods Crude Goods Spot Commodity Price Index
YoY % 1.4 1.4
[Percent Change from Previous Month at Annual Rate]:
All Items Core (excludes Food and Energy) Producer Price Indexes
July 1.1 1.1
July -2.4 0.6 -3.1 -4.3
YoY % 2.2 1.8 3.1 5.2
[Percent Change from Previous Month]:
July -1.1
CRB Spot Commodity Price Index
Aug. -1.4
YoY % 8.1
Notes: Core PCE Price Index includes expenditures on food services. Source: BEA, BLS, & Commodity Research Bureau via Haver Analytics 43
Personal Consumption Expenditure Price Index 5
12 Month % Change
5
4
4
3
3
2% Longer-run Target 2
2 FOMC Projection July 1.4%
1
1
0
0
-1
-1
-2 2007
-2 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the June 2017 meeting. Red dots indicate median projections. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 44
Core Personal Consumption Expenditure Price Index 5
12 Month % Change
5
4
4
3
3
2% Longer-run Target 2
2 FOMC Projection July 1.4%
1
1
0
0
-1
-1
-2 2007
-2 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the June 2017 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and food services. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 45
Consumer Price Indexes 6
12 Month % Change
6
5
5
All Items
4
4
3
3 July
2 1
2 1
Core CPI
0
0
-1
-1
-2 -3 2007
CPI: All Items Core CPI
June 0.0% 0.1%
July 0.1% 0.1%
-2 -3
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
46
Producer Price Indexes 12
12 Month % Change July (percent) All Finished Goods Core Finished Goods
10
12 2.2% 1.8%
8
10 8
6
6
Core Finished Goods
4
4 July
2
2
0
0
-2
-2
-4
All Finished Goods
-4
-6
-6
-8 2007
-8 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
47
Commodity Price Indexes 30
12 Month % Change
12 Month % Change
45
27
40
24
35 Commodity Research Bureau Spot Commodity Price Index (Right Axis)
21 18 15
30 25 20
12
15
9
August
6
5
3
0
0
-5
PPI Core Intermediate Processed Materials (Left Axis)
-3 -6 -9
-10 -15 -20
-12 -15
Price Indexes PPI Core Intermed. Goods CRBS Spot Commodities
-18 -21 2007
10
June 3.4% 8.2%
July --8.2%
-25 -30 -35
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics 48
Crude Oil Prices 160
Current US$/Barrel
160
140
140
120
120
100
100
80
80 5-Sep-17 Spot Price
60
40
40 Futures Price
20 0 1994
60
20 0
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Notes: Spot and Futures Prices are for Brent Crude Oil. Source: Financial Times & New York Mercantile Exchange via Haver Analytics & Bloomberg
49
TIPS Inflation Compensation 3.5
Percent
3.5 3.0
3.0 2.5
5-Year 5 Years Ahead
2.5 2.0
2.0 1.5
August 25th
1.5
5-Year
1.0
1.0
0.5
0.5
0.0
0.0
-0.5 2009
-0.5 2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors Research Series via Haver Analytics 50
Federal Reserve System Assets 5,000
$, Billions
Total: $4,500
4,500 Agency Debt: $7
4,000
Miscellaneous: $259
3,500 Agency MBS: $1,769 Total: $2,865
3,000 2,500 2,000
Agency Debt: $87
Miscellaneous: $282
Agency MBS: $844
1,500 1,000
Treasury Securities: $2,465 Treasury Securities: $1,652
500 0
9/12/2012
8/30/2017
Note: Numbers may not add up due to rounding.
Source: Board of Governors via Haver Analytics 51
Monetary Policy Instruments 7.0
Percent
7.0
6.5
6.5
6.0
6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5
3.0
3.0
2.5
2.5
Federal Funds Target Rate
2.0
September 1st
1.5 1.0 0.5
1.5
Primary Credit Rate
1.0
Interest Rate Paid on Reserves
0.5
Federal Funds Rate Target Range
0.0 2005
2.0
0.0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors via Haver Analytics
52
Real Federal Funds Rate 4
Percent
4
3
3
2
2
1
1
0
August
0
-1
-1
-2
-2
-3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-3
Note: The Real Federal Funds Rate is the difference between the effect Fed Funds rate and the lagged year-over-year change in the core PCE price index. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 53
FOMC Statement July 26, 2017
Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely. In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.
Source: Board of Governors
54
Continued… In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated; this program is described in the June 2017 Addendum to the Committee's Policy Normalization Principles and Plans. Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell.
July 26th, 2017 Source: Board of Governors
55
Eurodollar Futures 4
Percent
4
3.5
3.5
3
3 July 26, 2017
2.5
2.5
2
2
1.5
1.5 September 05, 2017
1
1
0.5 0 2017
0.5
2018
2019
2020
2021
2022
2023
0 2024
Source: CME Group via Bloomberg 56
Summary of Economic Projections: Federal Funds Rate
Note: Each dot in the chart represents the value of an FOMC participant’s judgment of the midpoint of the appropriate target range (or the appropriate target level) for the federal funds rate at the end of the calendar year. Projections made for the June 2017 meeting. Source: Board of Governors
57
Monetary Base 4500
Current $, Billions
4500
4000
August 30th
4000
3500
3500
3000
3000
2500
2500
2000
2000
1500
1500
1000
1000
500
500
0 2009
0 2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors via Haver Analytics 58
M2 11
12 Month % Change
11
10
10
9
9
8
8
7
7
6
6 July
5
5
4
4
3
3
2
2
1
1
0 2005
0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors via Haver Analytics 59
Money Market Rates 1.75
Percent
2.00 September 1st
1.75
1.50
1.50
1.25
1.25
Primary Credit Rate
1.00 1.00 0.75 0.75
3-Month LIBOR
0.50 0.50 IOER
0.25
0.25
Federal Funds Rate
0.00
0.00 Fed Reverse Repo Rate on Treasuries
3-Month T-Bill
-0.25 2009
-0.25 2010
2011
2012
2013
2014
2015
2016
2017
Source: Board of Governors & Financial Times via Haver Analytics & Bloomberg
60
Capital Market Rates 10
Percent
10
9
9
8
8
7
7 30-Year Conventional Mortgage Rate
Corporate BBB Bond Rate
6
6
5
September 1st
5
4
4
3
3
2
2
Corporate AAA Bond Rate
10-Year Treasury Bond Rate
1 0 2009
1 0
2010
2011
2012
2013
2014
2015
2016
2017
Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 61
Treasury Yield Curve 1.00
Percent
2.75 June 02, 2017
2.50
September 01, 2017
2.25 0.75
2.00 1.75 1.50
0.50 1.25 1.00 0.75
0.25
0.50 0.25 0.00 6M
2 Yrs
3 Yrs
5 Yrs Time to Maturity
7 Yrs
0.00 10 Yrs
Source: Board of Governors via Haver Analytics
62
Risk Premium 8
Percent
8
7
7
6
6
5
5
4
4
3
3 September 1st
2
2
1
1 10 Year Rolling Average Risk Premium
0 2009
0 2010
2011
2012
2013
2014
2015
2016
2017
Note: Risk Premium is defined as the difference in yields between BofA Merrill Lynch BBB and 10-year Treasury. Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 63
