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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. The recession has left lasting damage Credit markets still fundamentally weak

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2012 Economic Outlook

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  1. 2012 Economic Outlook Phoenix Chamber of Commerce Economic Outlook Breakfast September 30, 2011 Beckie Holmes Diretor, Marketing Science, Cox Communications Arizona

  2. 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

  3. The Post-Recession Economy: More Services, Government, Exports, Less Investment, Durable Goods Source: Department of Commerce, Bureau of Economic Statistics

  4. Dropping Out: Labor Force Participation at Decades Lows Source: US Bureau of Labor Statistics

  5. 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

  6. US Job Openings vs Employment: July 2011Jobs Being Created Different From Those Lost Source: US Bureau of Labor Statistics

  7. Job Creation: Entrepreneurship WeakLayoffs Down Sharply But Expansions, Firm Creation Sluggish Source: US Bureau of Labor Statistics

  8. Confidence FalteringNearing Recession Lows

  9. US Median Household IncomeIncome Now at 1996 Levels Source: US Census Bureau

  10. Deleveraging? Source: US Federal Reserve

  11. Massive Fiscal StimulusClosing The Gap Will Be Painful Source: US Department of Commerce, Bureau of Economic Analysis

  12. Balancing The Federal BudgetRevenues and Expenditures Must Be Addressed To Reach Historical Averages Source: US Department of Commerce, Bureau of Economic Analysis

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

  14. 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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