Growth is expected to modestly accelerate in the US in Q3 2013 following sub-2% growth in the first half of the year. Key factors that will influence growth include the household deleveraging cycle, policy decisions around sequestration, manufacturing trends, expectations of Fed policy, and the impact of rising rates on housing. The unemployment rate is expected to continue moving toward 7% as job growth holds around 175,000 per month. The Fed will likely begin tapering asset purchases in September and maintain low rates until 2015.
2. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 2 <<<<
Executive Summary
Growth likely to modestly accelerate following sub 2% 1H’13
• Growth
• Q3’13 growth in line with 2.2 percent cyclical trend
• Keys to growth in second half of 2013 and 2014:
• Is household deleveraging cycle finished?
• Will policy decisions result in reduced drag from sequestration?
• Will domestic manufacturing rebound?
• Will investors change expectations of Fed policy?
• Will rising rates impact residential investment?
• Monthly job creation likely to hold near 175,000 per month.
• Unemployment rate likely to move toward 7 percent.
3. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 3 <<<<
Executive Summary
• Monetary Policy
• Pace of asset purchases likely to slow following September FOMC meeting.
• Any tapering likely to be asymmetrical.
• Tapering of treasuries likely to outweigh mortgage backed securities.
• Fed to remain cautions on tapering purchases due to:
• Prodigious labor slack, output and consumption gaps
• External headwinds.
• Tapering is not tightening.
• Fed will hold off tightening rates until 2015.
4. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 4 <<<<
Executive Summary
• Fiscal Policy
• Fiscal year ends September 30.
• FY 2014 needs to be put in place.
• Debt ceiling debate to influence FY 2014 policy.
• Likely to determine the pace of sequestration.
• Sequestration set to slow in FY 2014
• External Risks
• Slower demand for durable and finished goods from Europe and China.
• Chinese liquidity crunch.
• German election and its aftermath.
5. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 5 <<<<
Executive Summary
• Long Term Future of U.S. Economy Improving
• Natural resource revolution.
• U.S. supplying 85% of own energy needs.
• U.S. production starting to influence global oil prices.
• Nascent manufacturing renaissance.
• 3D printing
• Policy needs to be put in place to support energy and manufacturing revolutions.
• Major Challenges in Near Term
• Underutilization of resources
• Output gap of roughly 4%.
• 25 million unemployed and underemployed.
• Fiscal restraint likely to remain in place.
6. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 6 <<<<
This is an exclusive presentation from Bloomberg Brief newsletters.
Bloomberg BRIEF Economics is an award winning, groundbreaking publication written by leading economists in US,
Europe and Asia, published by Bloomberg, the premier source of data and analytics in the financial world.
Bloomberg BRIEF Economics is already read by thousands every morning and you’ll soon see why – the Economics
Brief provides a clear, concise snapshot every morning of all the key information you need to know:
• Valuable insight and independent analysis from our renowned economists who've spent decades on Wall Street including
Joseph Brusuelas, Michael McDonough, Tamara Henderson, Richard Yamarone, David Powell and Niraj Shah.
• Proprietary data and commentary that gets beneath the numbers with eye catching charts.
• Guest columnists from top-tier firms.
• Exclusive publications such as the Orange Book, Quarterly Economic Overviews, The Economist Notepad, Daily Economic
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9. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 9 <<<<
US Hiring Settles in Near 200,000 Per Month
-975
-875
-775
-675
-575
-475
-375
-275
-175
-75
25
125
225
325
2007 2008 2009 2010 2011 2012 2013
Private Payrolls 12 Month Moving Average
6 Month Moving Average 3 Month Moving Average
Source: Bloomberg
10. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 10 <<<<
Growth Drivers
• Consumer
• Upper two quintiles of households account for 63% of overall spending.
• Falling oil and gasoline prices provide relief to households down the income
ladder. resulting in modestly improved personal disposable income.
• Interest rate sensitive sectors
• Housing
• Reduced supply supporting price appreciation.
• Lack of supply hindering purchases in some areas.
• Shift in buyer preference toward new construction.
• Transportation
• Historically low rates and aggressive discounting by auto dealers.
• Age of auto fleet supports improved total vehicle sales.
• Auto sales settles in above 15 million on annualized pace
• Civilian aircraft orders on pace double that of 1H’12 2012
11. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 11 <<<<
U.S. Home Price Appreciation
-25
-20
-15
-10
-5
0
5
10
15
20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Index
Case-Shiller Home Price Index FHFA Home Price Index
Source: Bloomberg SPCS20Y%, HPIMYOY% INDEX<GO>
13. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 13 <<<<
Improving Employment Picture Supports Rising Auto Purchases
8
10
12
14
16
18
20
224
5
6
7
8
9
10
11
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
U.S. Unemployment Rate Total Vehicle Sales
Source: Bloomberg SAARTOTL, USURTOT INDEX<GO>
14. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 14 <<<<
Global Oil Pricing Starting to Reflect U.S. Production
-5
0
5
10
15
20
25
30
2010 2011 2012 2012
SpreadPerBarrel
Brent/WTI Spread
Source: Bloomberg
15. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 15 <<<<
Condition of the Consumer
• Are Households Ready to Drive Growth
• Cash flow following tax hike still an issue for lower income groups.
• Modest wage growth.
• Inflation adjusted 1.1% on a year ago basis.
• June 0.4% M/M increase in average hourly and average weekly earnings very
encouraging.
• Inflation adjusted spending 1.8% on a year ago basis.
• Income gains still asymmetrically tilted toward wealthy.
• Household deleveraging.
• Household debt as a percentage of GDP still near danger level of 85%.
• Financial obligations ratio to 15.5%.
• Debt service ratio 10.3%.
16. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 16 <<<<
Upper Income Earners Driving Spending
8.9
12.9
17.1
23.1
38.0
Lowest 20%
Second 20%
Third 20%
Fourth 20%
Highest 20%
Source: BLS Consumer Expenditure Survey
17. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 17 <<<<
US Household Deleveraging
85
90
95
100
105
110
115
4
5
6
7
8
9
10
11
12
13
Percentage
Trillions
Other Student Loan Credit Card
Auto Loan HE Revolving Mortgage
Household Debt % of PI
Source: New York Fed, Bloomberg
18. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 18 <<<<
Inflation Adjusted Spending Remains Muted
-4
-3
-2
-1
0
1
2
3
4
5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Real Personal Consumption Expenditures
Source: Bloomberg PCE CHY& INDEX<GO>
19. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 19 <<<<
US Household Deleveraging
75
80
85
90
95
100
105
Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12
US Household Debt to GDP Ratio
Source: St. Louis Fed
20. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 20 <<<<
Financial Conditions Overview
• Financial conditions narrowing in aftermath of June FOMC
• Remain supportive of U.S. growth.
• Financial easing via asset purchases appropriate and necessary in Europe.
• Conditions tightening in Asia.
• Tapering is not tightening.
21. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 21 <<<<
Bloomberg Financial Conditions Indices
-6
-5
-4
-3
-2
-1
0
1
2
3
2010 2011 2012 2013
BFCIAXJ Index US Financial Conditions Index BFCIAXJ Index EU Financial Conditions Index
BFCIAXJ Index Asian Financial Conditions Index
Source: Bloomberg BFCIUS, BFCIEU, BFCIAXJ INDEX<GO>
22. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 22 <<<<
Private Credit Creation Improving
-5%
-3%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013
YearOverYearPercentageChange
Total Private Credit Creation & Nominal GDP
Nominal GDP Total Credit Creation Private Financial Instiutions
Source: Federal Reserve, Bloomberg
Adjusted R2=.64
23. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 23 <<<<
Image pageU.S. Rates Overview
Bloomberg consensus forecast indicates higher 10- and 30-year rates.
Current Rates:
• 2-Year: .37 percent.
• 10-year: 2.63percent.
• 30-year: 3.64 percent.
End of Fourth Quarter Consensus Survey Rate Forecast
• 2-Year: .45 percent.
• 10-year: 2.51 percent.
• 30-year: 3.49 percent.
24. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 24 <<<<
Projected Path of Long- and Short-Term Rates
-0.5
0.5
1.5
2.5
3.5
4.5
5.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
2007 2008 2009 2010 2011 2012 2013 2014 2015
Percent
Percent
US 10-Year (LHS) U.S. 3-Mo. 2-Years Forward
Source: Bloomberg
USGG10YR INDEX, G0025 2Y3M BLC2CURNCY<GO>
Forward Market Estimate of
10-Year Yields in 2-Years' Time
FOMC Implied Forecast of 3-Mo. Rates
in 2-Years' Time
25. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 25 <<<<
Long-Term Rates During Era of Quantitative Easing
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2008 2009 2010 2011 2012 2013
Percentage
Long Run Asset Purchase Programs US 10-Year Yield
Source: Bloomberg
QE 1 QE 2 Op Twist
1 & 2
QE 3
26. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 26 <<<<
U.S. Long Term Yields Likely to Decline In Near Term
1.40
1.60
1.80
2.00
2.20
2.40
2.60
40
50
60
70
80
90
100
110
120
2012 2013
Merrill Lynch Option Volatility Index US 10-Year Yield
Source: Bloomberg
27. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 27 <<<<
U.S. Economic Surprise Index & 10-Year Treasury Yields
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
-1.2
-0.8
-0.4
0.0
0.4
0.8
1.2
2010 2011 2012 2013
Percentage
Z-Score
Bloomberg Economic Surprise Index(LHS)
US 10-Year Yield(RHS, 6-Mo. Basis Point Change)
Source: Bloomberg ECSURPUS, USGG10YR INDEX<GO>
28. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 28 <<<<
U.S. Economic Surprise Index & U.S. Equity Markets
-60%
-40%
-20%
0%
20%
40%
60%
-1.2
-0.8
-0.4
0.0
0.4
0.8
1.2
2010 2011 2012 2013
Index(PercentageChange)
Z-Score
Bloomberg Economic Surprise Index(LHS) S&P 500 (RHS,6-mo. % chg.)
Source: Bloomberg ECSURPUS, SPX INDEX<GO>
29. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 29 <<<<
Central Bank Policy Outlook and Overview
• Reduction of asset purchases likely in September or December
• Why reduce pace of purchases?
• Disruption to asset markets.
• Costs outweigh marginal benefit of further purchases.
• Improving economy.
• Risks
• Economy remains stuck in liquidity trap producing 2 percent growth amidst
substantial labor and economic slack.
• Asymmetry in Pace of Reduction
• Continue to purchase mortgage backed securities at a faster pace than
treasuries.
30. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 30 <<<<
Central Bank Policy Outlook and Overview
• U.S. policy rate to remain effectively at zero until 2015.
• 6.5 percent employment threshold likely to be achieved in 9-12 months.
• Inflation expectations remain well behaved.
• ECB and Japan Likely to Become More Aggressive
• Japan: Debt-Deflation, growth and structural.
• Europe: Post German election, asymmetrical business cycle, labor crisis.
.
31. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 31 <<<<
The Long Road Ahead
Slow Grind Back To Full Employment
Scenario 1: Structural Break Scenario 2: Cyclical Recovery
6.5% Full
Employment
6.5% Full
Employment
5.5% Full
Employment
5.5% Full
Employment
Monthly Job Gains 200,000 200,000 200,000 200,000
Labor Force Participation Rate 63.50% 63.50% 63.50% 63.50%
Average Annual Population Growth 0.92% 0.50% 0.92% 0.50%
Years to Full Employment 2 Years 1 Years 4 Years 2 Years
32. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 32 <<<<
Long Term Inflation Expectations Remain Soft
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
2008 2009 2010 2011 2012 2013
Percent
Fed 5 Year Forward 200-2012 Average
Source: Bloomberg FED5YEAR INDEX<GO>
33. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 33 <<<<
Mortgage Backed Primary Secondary Spread
-20
0
20
40
60
80
100
120
140
160
2005 2006 2007 2008 2009 2010 2011 2012 2013
BasisPoints:30DayMovingAverage
Start Dates of Fed MBS
Purchase Programs
QE 1 QE 3
Source: Bloomberg
34. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 34 <<<<
Global Money Supply Set to Rapidly Accelerate
20
30
40
50
60
70
80
Q1'04 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11 Q1'12 Q1'13
M2Trillions
Global Money Supply: Q1'13 $63 Trillion
Source: Bloomberg
Q2'07:Fed Begins Response to Financial
Crisis
ECB 3-Yr Term LTRO
BOJ Liquidity Operations to Support Abenomics
35. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 35 <<<<
Europe: Monetary Policy at the Zero Bound
-6
-4
-2
0
2
4
6
8
10
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
PolicyRate(Percent)
ECB Rate Core Euro Area Non-Core Euro Area
Source: Bloomberg
36. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 36 <<<<
Expansion of Monetary Base Carries Long Term Inflation Risk
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2000 2001 2002 2002 2003 2004 2004 2005 2006 2006 2007 2008 2008 2009 2010 2010 2011 2012
Ratio of Monetary Base to GDP (Euro Area)
Ratio of Monetary Base to GDP (U.S.)
Source: Bloomberg
37. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 37 <<<<
Economic Challenges Targeted by Policymakers
• Substantial Output Gap.
• Labor Market Slack.
• Low Wage Bias in Hiring.
• Consumption Gap.
38. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 38 <<<<
Significant Output Gap Remains
7
8
9
10
11
12
13
14
15
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Trillions(2005Chained$)
US Retains Substantial Output Gap
Real GDP Real Potential Output
Source: Bloomberg
39. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 39 <<<<
Labor Slack and the American Economy
3
4
5
6
7
8
9
10
1158
59
60
61
62
63
64
65
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Percent
Percent
Employment to Population Ratio (LHS, Inverted)
Unemployment Rate (RHS)
Source: Bloomberg USERTOT , USURTOT INDEX<GO>
11.7 Million Unemployed
12.7 Million Underemployed
40. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 40 <<<<
Low Wage Bias in Hiring
-50
-25
0
25
50
75
100
125
150
175
2010 2011 2012 2013
Low Wage Bias Driving Hiring
Leisure and Hospitality Health Care and Social Assistance Temp Retail Trade
Source: Bloomberg
USRTTOT, USESTEMP, USEETOTS, USEHTOTS INDEX<GO>
41. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 41 <<<<
Real Consumption on Lower Trend
8000
8500
9000
9500
10000
10500
11000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Billions(Chained2005$)
Real PCE Trend Prior to Recession
Source: Bloomberg US.HHSPNR BEA INDEX<GO>
42. U.S. Q3’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 42 <<<<
This is an exclusive presentation from Bloomberg Brief newsletters.
Bloomberg BRIEF Economics is an award winning, groundbreaking publication written by leading economists in
US, Europe and Asia, published by Bloomberg, the premier source of data and analytics in the financial world.
Bloomberg BRIEF Economics is already read by thousands every morning and you’ll soon see why – the Economics
Brief provides a clear, concise snapshot every morning of all the key information you need to know:
• Valuable insight and independent analysis from our renowned economists who've spent decades on Wall Street including
Joseph Brusuelas, Michael McDonough, Tamara Henderson, Richard Yamarone, David Powell and Niraj Shah.
• Proprietary data and commentary that gets beneath the numbers with eye catching charts.
• Guest columnists from top-tier firms.
• Exclusive publications such as the Orange Book, Quarterly Economic Overviews, The Economist Notepad, Daily Economic
Outlook Videos and much more!
Your time is valuable. Maximize it by switching to Bloomberg BRIEF Economics today.
Take a free 30 day trial today!
www.bloombergbriefs.com for more information.
43. Joseph Brusuelas,
Senior Economist
Bloomberg, LP
jbrusuelas3@bloomberg.net
Bloomberg
Joseph Brusuelas is an economist who writes for the Bloomberg Economic Brief. The observations he makes
are his own. Bloomberg is a leading source of data, news, and analytics for financial and legal
professionals, corporations, media organizations and private individuals around the globe. The
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