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Barings/UNC CharlotteEconomic Forecast
May 8th, 2019
Outline for Today
• U.S. Economic Trends
• U.S. Long Term Growth
• U.S. Economic Forecast
• Regional GDP Growth Patterns
U.S. Economic Trends
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Current Expansion
• Began July 2009
• 119 months
• 2nd longest of 33 total expansions since December 1854
• Mar 1991-Mar 2001 120
• Feb 1961-Dec 1969 106
• Nov 1982-Jul 1990 92
• Jun 1938-Feb 1945 80
History of Expansions
Average (all cycles) Length of Contraction Length of Expansion
1854‐2009 (33 cycles) 17.5 38.7
1854‐1919 (16 cycles) 21.6 26.6
1919‐1945 (6 cycles) 18.2 35.0
1945‐2009 (11 cycles) 11.1 58.4
Annual GrowthRates in RGSP
2010-2018
U.S. Annual Average 2.3%
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Actual vs. Potential U.S. Real GDP
Bil
lion
s of
Dol
lars
2018 IV Gap $115.4 Billion
U.S. Job Growth During Expansion
Description 2009‐2018
U.S. Jobs Lost 8,693,000
U.S. Jobs Gained 20,167,000
U.S. Jobs Added Annually: 2010-2018
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Number of Job Openings per
Unemployed Persons: 2003-2018
Average Annual U.S. Wage Increase:
2010-2018
Nominal Wage Increase
Real Wage Increase
U3, U4, U5, U6: 1994-2018
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Long Term Growth
The 2 Percent Problem
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Only Two Things Increase Potential GDP
• Labor Force Growth
• Productivity
1950 - 2017Average Annual
Productivity and Labor Force Growth Rates
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0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Population by Age Cohort: 2015
Future LaborForce Growth
Social NetworkUsage
Ten-YearU.S. Economic Forecast
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CBO Potential RGDP Projections
August 2018 Projection: 2019-2028 Average: 1.9%
January 2019 Projection: 2019-2028 Average: 1.8%
Year 2017 2018 2019f 2020f 2021f 2022f 2023f 2024f 2025f 2026f 2027f 2028fJan‐19 2.22% 2.90% 2.67% 1.89% 1.59% 1.60% 1.68% 1.84% 1.82% 1.69% 1.83% 1.80%
Aug‐18 2.30% 3.00% 2.80% 1.90% 1.60% 1.60% 1.60% 1.70% 1.80% 1.60% 1.80% 1.80%
What You Do and Where You Live Matters!
Industry Change
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US IndustryGrowth Rates:
2000- 2017
US Industry Percent of Total 2000-2009-2017
U.S. MSA Growth
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Per Capita Personnel Income
Rank MSA1969-2017
Rank Change2017 PCPI
1969-2017 MSA PCPI Growth/U.S PCPI Growth
- United States (Metropolitan Portion) $53,617 100.01 Fayetteville-Springdale-Rogers, AR-MO (Metropolitan Statistical Area) 338 $59,425 173.82 Charlottesville, VA (Metropolitan Statistical Area)* 257 $58,767 142.03 Bismarck, ND (Metropolitan Statistical Area) 231 $54,606 131.04 Austin-Round Rock, TX (Metropolitan Statistical Area) 197 $54,817 125.95 Santa Fe, NM (Metropolitan Statistical Area) 192 $55,553 126.46 The Villages, FL (Metropolitan Statistical Area) 183 $43,464 143.47 Nashville-Davidson--Murfreesboro--Franklin, TN (Metropolitan Statistical Area) 182 $55,944 125.68 Lake Charles, LA (Metropolitan Statistical Area) 180 $46,451 119.59 Winchester, VA-WV (Metropolitan Statistical Area)* 177 $46,036 119.3
10 Birmingham-Hoover, AL (Metropolitan Statistical Area) 176 $48,105 116.311 Durham-Chapel Hill, NC (Metropolitan Statistical Area) 175 $52,277 120.212 Flagstaff, AZ (Metropolitan Statistical Area) 172 $46,266 117.513 Wausau, WI (Metropolitan Statistical Area) 172 $47,617 115.214 Daphne-Fairhope-Foley, AL (Metropolitan Statistical Area) 166 $44,079 123.315 Sioux Falls, SD (Metropolitan Statistical Area) 166 $55,947 122.916 Fort Collins, CO (Metropolitan Statistical Area) 164 $50,539 116.617 Baton Rouge, LA (Metropolitan Statistical Area) 160 $45,775 115.618 Grand Forks, ND-MN (Metropolitan Statistical Area) 157 $48,176 113.419 St. Cloud, MN (Metropolitan Statistical Area) 154 $43,894 118.120 Burlington-South Burlington, VT (Metropolitan Statistical Area) 152 $55,785 121.121 State College, PA (Metropolitan Statistical Area) 149 $44,152 115.122 Knoxville, TN (Metropolitan Statistical Area) 147 $43,903 116.023 Raleigh, NC (Metropolitan Statistical Area) 145 $52,444 116.524 Sebastian-Vero Beach, FL (Metropolitan Statistical Area) 145 $73,274 152.725 Charlotte-Concord-Gastonia, NC-SC (Metropolitan Statistical Area) 143 $49,758 112.8
Top 25 MSAs by PCPI Rank Change:
1969 - 2017
383 U.S. Metro Areas
Rank MSA2009-2017 Rank
Change2017 PCPI
1969-2017 MSA PCPI Growth/U.S PCPI Growth
- United States (Metropolitan Portion) $53,617 100.01 El Centro, CA (Metropolitan Statistical Area) -245 $36,206 72.42 Lake Havasu City-Kingman, AZ (Metropolitan Statistical Area) -236 $30,865 63.73 Jackson, MI (Metropolitan Statistical Area) -235 $38,069 74.44 Fayetteville, NC (Metropolitan Statistical Area) -233 $36,369 73.45 Elizabethtown-Fort Knox, KY (Metropolitan Statistical Area) -232 $40,805 72.16 Flint, MI (Metropolitan Statistical Area) -228 $39,636 75.27 Battle Creek, MI (Metropolitan Statistical Area) -218 $38,683 76.18 Bakersfield, CA (Metropolitan Statistical Area) -217 $38,560 76.19 Wichita Falls, TX (Metropolitan Statistical Area) -209 $40,617 76.9
10 Riverside-San Bernardino-Ontario, CA (Metropolitan Statistical Area) -207 $39,052 76.911 Hanford-Corcoran, CA (Metropolitan Statistical Area) -201 $35,326 74.412 Mansfield, OH (Metropolitan Statistical Area) -199 $37,977 77.113 Sierra Vista-Douglas, AZ (Metropolitan Statistical Area) -196 $39,294 78.114 Merced, CA (Metropolitan Statistical Area) -195 $38,716 77.615 Kokomo, IN (Metropolitan Statistical Area) -190 $40,135 78.516 East Stroudsburg, PA (Metropolitan Statistical Area) -182 $40,706 79.617 Killeen-Temple, TX (Metropolitan Statistical Area) -182 $40,773 79.418 Danville, IL (Metropolitan Statistical Area) -180 $37,387 78.319 Lansing-East Lansing, MI (Metropolitan Statistical Area) -175 $40,148 79.920 Rockford, IL (Metropolitan Statistical Area) -174 $42,192 79.021 Springfield, OH (Metropolitan Statistical Area) -174 $39,289 79.322 Yuba City, CA (Metropolitan Statistical Area) -171 $41,673 79.223 Palm Bay-Melbourne-Titusville, FL (Metropolitan Statistical Area) -166 $43,592 75.324 Yuma, AZ (Metropolitan Statistical Area)* -166 $34,752 76.625 Columbus, GA-AL (Metropolitan Statistical Area) -165 $40,247 80.4
Bottom 25 MSAsby PCPI Rank Change:
1969 - 2017
383 U.S. Metro Areas
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Gross Domestic Product
Distribution of GDP Gains Across MSA and Non‐MSA Region 2007‐2016
Area GDP Increase 2007‐2016* GDP 2007* GDP 2016*
Share of U.S. GDP Growth
US $1,842,500 $14,873,700 $16,716,200
MSAs $1,444,451 $13,419,428 $14,863,879 78.40%
Non‐Metro $398,049 $1,454,272 $1,852,321 21.60%
US GDP Growth By Area 2007 - 2016
79%
93%
8%
3%0.1%
‐5%
50%
69%
13%
8%5% 6%
‐20%
0%
20%
40%
60%
80%
100%
Top 30 1‐76 77‐153 154‐229 230‐306 307‐382
GDP Growth Average Population
US GDP Growth in MSAs 2007 - 2016
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US GDP Growth 2007 - 2016
62%
73%
6%2% 0.1% ‐4%
22%
43%
59%
11%6% 4% 5%
15%
‐20%
0%
20%
40%
60%
80%
Top 30 1‐76 77‐153 154‐229 230‐306 307‐382 Non‐Metro
GDP Growth Average Population
95% of U.S. GDP Growth Accounted for by the Top MSA Quintile and the Non-Metro Areas
Percent Population
GDP Increase % Change Population Population
Rank Area 2007‐2016 2007‐2016 2007 2016
United States $1,842,500 12.39% 301,231 323,128
United States (Metropolitan Portion) $1,444,451 10.76% 255,359 277,080
1 New York‐Newark‐Jersey City, NY‐NJ‐PA $116,567 8.90% 19,236 20,154
2 Dallas‐Fort Worth‐Arlington, TX $116,559 32.86% 6,082 7,233
3 Los Angeles‐Long Beach‐Anaheim, CA $111,341 14.39% 12,632 13,310
4 San Jose‐Sunnyvale‐Santa Clara, CA $79,464 50.49% 1,766 1,979
5 Houston‐The Woodlands‐Sugar Land, TX $72,195 19.50% 5,541 6,772
6 San Francisco‐Oakland‐Hayward, CA $67,320 19.86% 4,184 4,679
7 Boston‐Cambridge‐Newton, MA‐NH $51,834 16.21% 4,448 4,794
8 Seattle‐Tacoma‐Bellevue, WA $48,307 19.70% 3,304 3,799
9 Washington‐Arlington‐Alexandria $47,298 11.77% 5,373 6,132
10 Austin‐Round Rock, TX $43,030 51.98% 1,578 2,056
11 Philadelphia‐Camden‐Wilmington, PA‐NJ‐DE‐MD $35,984 10.42% 5,882 6,071
12 Denver‐Aurora‐Lakewood, CO $33,435 22.74% 2,419 2,853
13 Portland‐Vancouver‐Hillsboro, OR‐WA $30,989 25.65% 2,138 2,425
14 Atlanta‐Sandy Springs‐Roswell, GA $29,531 10.16% 5,066 5,790
15 San Antonio‐New Braunfels, TX $28,510 35.27% 2,012 2,430
Top 30 MSAs by GDP Growth
2007-2016
(GDP in $ millions, population in 000s)
Top 30 MSAs by GDP Growth
2007-2016 GDP Increase % Change Population Population
Rank Area 2007‐2016 2007‐2016 2007 2016
16 Nashville‐Davidson‐‐Murfreesboro‐‐Franklin, TN $27,939 34.31% 1,592 1,865
17 Charlotte‐Concord‐Gastonia, NC‐SC $21,301 17.82% 2,086 2,474
18 Pittsburgh, PA $18,757 17.38% 2,359 2,342
19 Columbus, OH $17,477 18.01% 1,842 2,042
20 Minneapolis‐St. Paul‐Bloomington, MN‐WI $17,243 8.61% 3,270 3,551
21 Midland, TX $16,945 133.99% 133 168
22 Baltimore‐Columbia‐Towson, MD $16,772 11.35% 2,668 2,799
23 Chicago‐Naperville‐Elgin, IL‐IN‐WI $15,834 2.86% 9,337 9,513
24 Raleigh, NC $14,302 25.34% 1,034 1,303
25 Oklahoma City, OK $12,243 22.92% 1,200 1,373
26 Tulsa, OK $11,628 25.33% 906 987
27 Cincinnati, OH‐KY‐IN $10,545 9.99% 2,084 2,165
28 Kansas City, MO‐KS $10,344 9.94% 1,955 2,105
29 Salt Lake City, UT $10,297 16.31% 1,038 1,186
30 Indianapolis‐Carmel‐Anderson, IN $8,810 8.10% 1,827 2,004
Top 30 MSA Totals $1,142,801 114,990 126,355
Top 30 MSAs as a % of US Total 62.02% 38.17% 39.10%
Top 30 MSAs as a % of MSA Total 79.12% 45.03% 45.60%
(GDP in $ millions, population in 000s)
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• Centralization– Shifting of population from non-metro to metro
• Concentration– Metro population growing faster in central city than
in suburbs
Centralization vs. Concentration
• Period of increasing centralization and increasing concentration 1900-1970
• Period of increasing centralization and decreasing concentration 1970-2000
• Period of increasing centralization and increasing concentration 2000-present
Centralization vs. Concentration
Take Aways
• U.S. population and economic growth will be slower over the next two decades
• Aging population and tight labor markets will dominate the U.S. economy over the next two decades
• For the most part, a small number of highly successful MSAs along with non-metro areas account for almost 90 percent of U.S. GDP growth so far in this century.
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Keys to Watch
• Interest Rates (June 18-19, 2019)*
• Consumer Confidence
• Possible Trade War
• U.S. Monthly Job Growth (1st Friday)
• Second Quarter GDP (July 26, 2019)
Barings/UNC CharlotteEconomic Forecast
May 8th, 2019
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