2012 economic outlook
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2012 Economic Outlook. Phoenix Chamber of Commerce Economic Outlook Breakfast September 30, 2011 Beckie Holmes Diretor, Marketing Science, Cox Communications Arizona. Overview. The recession has left lasting damage Credit markets still fundamentally weak

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2012 Economic Outlook

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2012 economic outlook

2012 Economic Outlook

Phoenix Chamber of Commerce Economic Outlook Breakfast

September 30, 2011

Beckie Holmes

Diretor, Marketing Science, Cox Communications Arizona


Overview

Overview

  • The recession has left lasting damage

  • Credit markets still fundamentally weak

  • No political will for further fiscal support, unclear that monetary policy can help

  • Bottom line: Slow and painful recovery continues into 2012; risk of recession is high


The post recession economy more services government exports less investment durable goods

The Post-Recession Economy: More Services, Government, Exports, Less Investment, Durable Goods

Source: Department of Commerce, Bureau of Economic Statistics


Dropping out labor force participation at decades lows

Dropping Out: Labor Force Participation at Decades Lows

Source: US Bureau of Labor Statistics


Where is the job growth employment still down 5 from 2007 peak

Where Is the Job Growth?Employment still down 5% from 2007 Peak

’07-’11 cg

-5.7%

-14.5%

-23.5%

-5.7%

-2.3%

-7.7%

-1.7%

+8.2%

US Job Growth:

Lost: -8.6M, -6%

Regained +1.9M, +1%

*US Jobs lost: Nov-07 to Jan-10. US Jobs gained Jan-10 to Aug-11

Source: US Bureau of Labor Statistics

5


Us job openings vs employment july 2011 jobs being created different from those lost

US Job Openings vs Employment: July 2011Jobs Being Created Different From Those Lost

Source: US Bureau of Labor Statistics


Job creation entrepreneurship weak layoffs down sharply but expansions firm creation sluggish

Job Creation: Entrepreneurship WeakLayoffs Down Sharply But Expansions, Firm Creation Sluggish

Source: US Bureau of Labor Statistics


Confidence faltering nearing recession lows

Confidence FalteringNearing Recession Lows


Us median household income income now at 1996 levels

US Median Household IncomeIncome Now at 1996 Levels

Source: US Census Bureau


Deleveraging

Deleveraging?

Source: US Federal Reserve


Massive fiscal stimulus closing the gap will be painful

Massive Fiscal StimulusClosing The Gap Will Be Painful

Source: US Department of Commerce, Bureau of Economic Analysis


2012 economic outlook

Balancing The Federal BudgetRevenues and Expenditures Must Be Addressed To Reach Historical Averages

Source: US Department of Commerce, Bureau of Economic Analysis


Baseline projections for declining debt extension of current policy results in rising debt

Baseline Projections for Declining DebtExtension of Current Policy Results in Rising Debt


Conclusions

Conclusions

  • Recovery at risk

    • Risk of another recession now about 50%

    • Fiscal contraction will subtract 2-4 points from GDP growth

  • Good Signs

    • Household and corporate balance sheets healthy

    • Job creation has returned

  • Worrying Signs

    • No turnaround in hardest-hit sectors

    • Lasting damage to labor market

    • Congressional discord on deficit reduction


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