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National and Regional Economic Update
South Carolina Department of CommerceFebruary 26, 2020
Laura UllrichRegional Economist
National Economy
What is the Story?
• U.S. economic growth by the numbers looks solid
– GDP is growing as anticipated
– Labor markets are strong
• Manufacturing seems to be softening and sentiment broadly
is less positive than the numbers. Data at the end of 2019
showed continued strength and slight rebounds from earlier
in the year.
• The economies in North Carolina and South Carolina are
growing robustly overall and this growth is outpacing the
U.S.
• 2020 looks promising, but there are potential speed bumps
ahead.
– Election, Coronavirus fears
3
What is the Story?
4
What is the Story?
5
-6
-4
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
% Change, SAAR
U.S. Real Gross Domestic Product
6
Source: Bureau of Economic Analysis, Federal Reserve Board /Haver Analytics
Q4: 2019
US: 2.1%
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Average Monthly Change, Thous.
Total Employment Growth
Monthly Change
January: 225
December: 147
November: 261
7
Source: Bureau of Labor Statistics/Haver Analytics
Unemployment Rate
Source: Bureau of Labor Statistics, Federal Reserve Board of Governors/Haver Analytics
0
1
2
3
4
5
6
7
8
9
10
11
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
UnemploymentRate (Percent)
January 2020
US: 3.6%
8
Average Hourly Earnings
9
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
YoY % Chg
January: 3.1%
Source: Bureau of Labor Statistics/Haver Analytics
National House Prices
-20
-15
-10
-5
0
5
10
15
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YoY % Chg Total Sales Non-Distressed Sales
December 2019Total: 4.0%
Non-Distressed: 3.7%
Source: CoreLogic Information Solutions, Inc.
10
Home Sales: United States
Source: National Association of Realtors/Haver Analytics
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions, SAARMillions, SAAR
New Home Sales (Left axis) Existing Home Sales (Right axis)
90s Average: New Sales
90s Average: Existing Sales
11
Private Single-family Housing Starts & Permits
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions, SAAR Single-family Housing Permits
Single-family Housing Starts
January 2020Permits: 0.99
Starts: 1.0
90's Average Permits: 1.010
90's Average Starts: 1.105
Source: U.S. Census Bureau/Haver Analytics
12
Private Multi-family Housing Starts & Permits
Source: U.S. Census Bureau/Haver Analytics
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions, 3-month average, SAAR
Multi-family Housing Permits
Multi-family Housing Starts
January 2020Permits: 0.56
Starts: 0.52
90's Average Permits: 0.313
90's Average Starts: 0.268
13
University of Michigan Consumer Expectations
14
Source: University of Michigan via Haver Analytics
40
50
60
70
80
90
100
2009 2011 2013 2015 2017 2019
Index, Q1 1966=100
Jan
PCE Inflation
15
Source: Bureau of Economics Analysis, Federal Reserve Board of Governors/Haver Analytics
-2
-1
0
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
YoY % ChgDecember 2019
PCE Inflation: 1.6
PCE Less Food & Energy: 1.6
Federal Funds Rate
16
Source: Federal Reserve Board and FRBNY via Haver Analytics
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Percent
Fed Funds Effective Rate
Fed Funds Target Rate
The dot plot for the Fed Funds Rate
Note: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual
participant’s judgment of the midpoint of the appropriate target range for the federal funds rate or the appropriate target
level for the federal funds rate at the end of the specified calendar year or over the longer run. One participant did not
submit longer-run projections for the federal funds rate.
Source: Federal Reserve Board, September 2019 Summary of Economic Projections
0
1
2
3
4
5
0
1
2
3
4
5
2019 Longer run
Percent
2020 2021 2022
17
Regional Economy
Manufacturing Index
Source: Federal Reserve Bank of Richmond/Institute of Supply Management/Haver Analytics
19
30
35
40
45
50
55
60
65
70
-40
-30
-20
-10
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
3-m
onth
avera
ge
Manufacturing Composite Index (Left Axis)
ISM Manufacturing (Right Axis)
Richmond Manufacturing Survey and ISM Manufacturing Survey
Service Sector Index
Source: Federal Reserve Bank of Richmond/Institute of Supply Management/Haver Analytics
20
30
35
40
45
50
55
60
65
70
-40
-30
-20
-10
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
3-m
onth
avera
ge
Services Revenue Index (Left Axis)
ISM Nonmanufacturing (Right Axis)
Richmond Service Sector Survey and ISM Nonmanufacturing Survey
South Carolina Industry Structure
Source: Bureau of Labor Statistics/Haver Analytics
21
0.5
4.9
8.4
18.7
1.9
5.7
14.2
16.1
10.8
3.9
15.0
0.2
4.7
11.6
19.4
1.2
4.7
13.5
11.8
11.9
3.5
17.3
0 2 4 6 8 10 12 14 16 18 20
Natural Resources and Mining
Construction
Manufacturing
Trade, Transportation & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Government
Employment Share (Percent)
December 2019 U.S.
South Carolina
South Carolina Industry Growth
Source: Bureau of Labor Statistics/Haver Analytics
22
1.4
-2.9
2.0
0.4
0.5
0.6
1.4
1.9
2.7
2.5
1.3
0.7
1.4
4.5
3.8
2.1
1.5
-3.5
0.8
-1.0
1.4
2.6
1.5
1.7
-4 -2 0 2 4 6
Total
Natural Resources & Mining
Construction
Manufacturing
Trade, Transportation & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Government
YoY % Chg (NSA)
December 2019 U.S.
South Carolina
South Carolina Unemployment Rate
Source: Bureau of Labor Statistics/Haver Analytics
23
0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Percent U.S.
South Carolina
December 2019
US: 3.5%
SC: 2.3%
Charlotte MSA Payroll Employment
Source: Bureau of Labor Statistics/Haver Analytics
24
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YoY % Chg U.S.
South Carolina
Charlotte
December 2019US: 1.4
SC: 1.3Charlotte: 2.8
MSA Payroll Employment Growth in South Carolina
Source: Bureau of Labor Statistics/Haver Analytics
25
4.7
2.9
1.7
1.4
1.3
1.1
0.8
0.7
-0.5
-1 0 1 2 3 4 5
Myrtle Beach (NSA)
Spartanburg (NSA)
Greenville (NSA)
US
South Carolina
Charleston
Florence
Columbia
Sumter
YoY % Chg
December 2019
Employment Growth by Locality
Source: Bureau of Labor Statistics/Haver Analytics
26
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YoY % Change York County Chester County Lancaster County
Unemployment Rates by Locality
27
December 2019
US: 3.5%
SC: 2.3%
York County: 2.3%
Chester County: 5.7%
Lancaster County: 2.9%
0
2
4
6
8
10
12
14
16
18
20
22
24
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Unemployment Rate (Percent)
York County Chester County Lancaster County
Source: Bureau of Labor Statistics/Haver Analytics
A Closer Look at MSA Growth: South Carolina
28
Charleston
Columbia
Florence
Greenville
Hilton Head
Spartanburg
Sumter
Myrtle Beach
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
-1 0 1 2 3 4 5 6
10-y
ear
Ave
rag
e A
nn
ual
% C
han
ge
YoY % Change
Bubble size: Total Employment - December 2019
Source: Bureau of Labor Statistics/Haver Analytics
Summary
• Recent economic data indicates continued growth in the U.S.
economy. Labor markets are tight and consumer spending is solid.
• After declining sentiment through the midpoint of 2019, the
economy ended 2019 on a strong point with increased sentiment
and a rebound in residential fixed investment.
• The states in the corner of the Southeast continue to grow, and
cities like Charlotte and Raleigh continue to outpace the rest of the
U.S.
• All of the quickly growing metro areas are experiencing typical
issues related to rapid growth: increased demand for talent,
increased housing prices, and increased stress on public
infrastructure.
• Things aren’t this positive everywhere. It’s important to remember
that some of our communities are facing declining populations,
employment and tax bases.
29
Expectations for 2020
• Continued positive economic growth, likely in line with
2019, with estimates remaining around 2.0%.
• 2020 does bring with it some uncertainty
– Elections
– Recession in Europe?
– Trade/international relations
– Coronavirus
• The outlook for North Carolina and South Carolina remains
positive, and regional growth will likely exceed national
growth again in 2020.
30
The views expressed here are those of the author, and do not necessarily represent those of the Federal Reserve Bank of Richmond or the Federal Reserve System.
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