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Recession and Recovery: A Look Into Our Economic Future First Coast Real Estate Economic Outlook Conference and Expo Jacksonville, FL March 23 rd , 2010. Credit Freeze. Financial Market Sclerosis that developed into Credit Infarction Plunged the Economy Deep into Recession - PowerPoint PPT Presentation
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Recession and Recovery:A Look Into Our Economic Future
First Coast Real Estate Economic Outlook Conference
and Expo
Jacksonville, FLMarch 23rd, 2010
Credit Freeze
Financial Market Sclerosis that developed into Credit Infarction
Plunged the Economy Deep into Recession
Quadruple Policy Bypass Averted a Worse Fate Interest Rate Cuts/ Quantitative Stimulus Stimulus Package I T.A.R.P. Stimulus Package II
Rehabilitation / Ugly scar
U.S. Forecast U.S. has endured a Severe Recession
The “Great Recession” is now over So why doesn’t it feel like it?
The credit freeze necessitated the quadruple policy bypass Recovery and rehabilitation underway
Ugly “scar” on prominent display and slow to fade Labor market will take a long time to recover
U.S. Forecast
What will be the shape of the recession and recovery?
Alphabet soup:
U-shaped, V-shaped, L-shaped or maybe W-shaped
Sports equipment:
Hockey stick
U.S. Economic Outlook 4th Quarter 2009 Forecast
U.S. Economic Outlook IEC 1st Quarter 2010 Forecast
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
Gross Domestic Product
% Chg, Annual Rate2.2 5.9* 2.6 2.1 2.2 2.5
Consumer Price Index% Chg, Annual Rate 3.6 3.4 2.1 -0.2 1.5 1.4
Consumer Sentiment 68.4 70.2 72.1 73.2 72.2 72.4
Total Consumption% Chg, Annual Rate 2.8 1.2 2.4 2.4 3.0 2.7
1312111009080706050403020100999897
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
Automobile and Light Truck Sales(Millions Vehicles)
Auto SalesLight Truck Sales
1312111009080706050403020100999897
500.0
0.0
-500.0
-1000.0
-1500.0
Federal Budget Surplus(Billions of Dollars)
Federal Budget Surplus
1312111009080706050403020100999897
140.0
135.0
130.0
125.0
120.0
Total Nonfarm Payroll Employment(Millions)
Total Nonfarm Employment
1312111009080706050403020100999897
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
Civilian Unemployment Rate(%)
Unemployment Rate
Capital Continues to Flow into the U.S.
• Foreign countries have purchased U.S. government bonds at record levels.
• Will this continue as the U.S. runs deficits measured in the trillions of dollars?
• A return to crowding out?
Foreign Ownership of US Treasury BondsBillions of Dollars
Dec. 1984
Dec. 1989
Mar. 1994
Jun. 2005
Jun. 2006
Jun. 2008
Total outstanding
1515 2392 2508 3093 3321 3621
Foreign-owned
333 464 884 1599 1727 2211
Percent foreign-owned
22.0 19.4 35.2 51.7 52.0 61.1
Percent foreignofficial
56.0 52.6 61.7 67.5 70.2 76.2
U.S. Forecast
Greatest risks to U.S. Economy may come from policy
Sky Mall™ Policy
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast Sky Mall™ Policies:
T.A.R.P.
Foreclosure Prevention Act 2008
American Recovery and Reinvestment Act of 2009 (Stimulus act)
Health Care Reform?
A look at the housing data:
January 1994–January 2010
Florida Forecast Residential real estate showing signs of
improvement. Sales up, prices still falling.
Commercial real estate: wave of foreclosures poised to impact the sector
Economic recovery in Q1 2010.
Labor market to remain in a funk
Short-run demographics hinder recovery
Long run population growth rates lower
1311090705030199979593918987858381797775737169
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-1.00
Population Growth in Florida and Recessions
Shaded Bars = National Recessions
Population % change year ago
13121110090807060504030201009998
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
Florida Real Gross State Product(% change year ago)
13121110090807060504030201009998
300.0
250.0
200.0
150.0
100.0
50.0
0.0
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
Florida Housing Starts(thousands)
Total Private Housing Starts30 year Mortgage Rates
13121110090807060504030201009998
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
Florida & U.S. Unemployment Rate(%)
FL Unemployment RateU.S. Unemployment Rate
13121110090807060504030201009998
8500.0
8000.0
7500.0
7000.0
6500.0
6000.0
Florida Employment(Thousands)
Wage & Salary Employment
13121110090807060504030201009998
700.0
650.0
600.0
550.0
500.0
450.0
400.0
350.0
Florida Construction Employment(Thousands)
13121110090807060504030201009998
1400.0
1300.0
1200.0
1100.0
1000.0
900.0
800.0
700.0
Florida Professional & Business Services Employment
(Thousands)
13121110090807060504030201009998
1200.0
1150.0
1100.0
1050.0
1000.0
950.0
900.0
850.0
800.0
750.0
Florida Education & Health Services Employment
(Thousands)
RegionPopulation Growth
Average % Chg Rank
Florida 0.9 ---
Deltona 0.2 10
Gainesville 0.8 6
Jacksonville 1.0 4
Lakeland 1.6 2
Miami 0.6 7
Naples 1.0 4
Ocala 2.3 1
Orlando 1.4 3
Palm Bay 0.5 8
Pensacola 0.4 9
Tallahassee 0.8 6
Tampa 0.9 5
2010-2013 Averages;Q4 2009 Forecast
RegionEmployment Growth
Average % Chg Rank
Florida 1.6 ---Deltona 1.1 6
Gainesville 0.6 8Jacksonville 1.6 2
Lakeland 1.0 7Miami 1.3 4Naples 1.2 5Ocala 1.5 3
Orlando 2.1 1Palm Bay 1.1 6Pensacola 0.6 8
Tallahassee 0.5 9Tampa 1.6 2
2010-2013 Averages;Q4 2009 Forecast
Post-recession Outlook for Florida and
Jacksonville in 2010
Sean M. SnaithSean M. Snaith, Ph.D.
Director Institute for Economic Director Institute for Economic CompetitivenessCompetitiveness
[email protected]@SeanSnaith.com
WWW.IEC.UCF.EDUWWW.IEC.UCF.EDU
www.facebook.com/seansnaith www.facebook.com/seansnaith
Twitter: @seansnaithTwitter: @seansnaith
Thank you