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An Economic Outlook The State of the Economy in Florida Orlando, FL August 12 th , 2011. U.S. Economic Outlook 2 nd Quarter 2009 Forecast. U.S. Forecast. Labor market, Stock Market and Recession? Recovery Showing Some Cracks Fiscal and Monetary Policy Stimulus What now?.
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An Economic Outlook The State of the Economy in Florida Orlando, FL August 12th, 2011
U.S. Economic Outlook 2nd Quarter 2009 Forecast
U.S. Forecast Labor market, Stock Market and Recession? Recovery Showing Some Cracks Fiscal and Monetary Policy Stimulus What now?
U.S. Forecast Tectonic Forces Impacting Consumers: Pent-up Demand, Rising Incomes An upward force on consumer spending Lost Wealth, Labor Market Downward force on spending
U.S. Household Wealth (Trillions of $)
U.S. Forecast Will the debt downgrade put an end to Sky Mall™ Policies in Washington? Sky Mall™ Policy: An Expensive Policy that Fails to Achieve its Stated Outcome
U.S. Forecast Sky Mall™ Policies: T.A.R.P. Foreclosure Prevention Act 2009 ARRA of 2009 Shovel ready projects? Making work pay tax breaks Health Care Reform HIRE Act 2010
Two Slippery Subjects Greece and Oil Greece Contagion concerns (PIIGS) abated? Financial market fear returned Euro facing greatest threat since inception Is the U.S. “going Greek?” Debt Downgrade Proof?
Capital Flows into the U.S. Foreign countries have purchased U.S. government bonds at record levels. Will this continue as the U.S. runs deficits that are measured in the trillions of dollars? Could we see a return to crowding out?
Foreign Ownership of US Treasury Bonds Billions of Dollars
U.S. Forecast The Arithmetic of Higher(Lower) Oil Prices: Each $1 increase in the price of a barrel of oil will: Increase price of gallon of gas 2.5 cents Push consumer gasoline bills up $3 billion Raise the CPI 0.03% Lower real disposable income 0.25%
U.S. Forecast The Economics of Higher (Lower) Oil Prices: Each permanent $10 increase in the price of a barrel of oil will: Lower forecast real GDP growth 0.2% in 1st year, 0.5% in the 2nd Lower forecast of payroll employment 110,000 in 1st year and 390,000 in 2nd Psychic Impact of $3 or $4 of $5 per gallon gasoline
Florida Economic Outlook • Florida’s Siamese Twins: • The Labor Market • The Housing Market
Florida’s Housing Market Foreclosure Moratorium Delayed Recovery Housing market still struggling to find the bottom for prices Housing Market is a War Policy has NOT been battlefield triage.
Florida Forecast • Florida’s economy like a jumbo jet • In 2010, we finished some repairs, loaded up and pushed back from the gate and slowly taxied to the runway.
Florida Forecast • 2011 is our runway. • And we are cleared for takeoff – finally. • As year progresses we will pickup speed. • Did the runway just get longer???
Florida Forecast • Economic and job growth doesn’t gain significant altitude until 2012 and 2013
