Professor of Economics Bart Hobijn provided the outlook for the national and global economies at the 56th Annual ASU Economic Forecast Luncheon on Dec. 11, 2019, at the Phoenix Convention Center. He joined the W. P. Carey Economics Department at Arizona State University in summer 2015. He is an applied macroeconomist, whose special interests are technological progress and economic growth, price measurement, and labor market dynamics. Prior to joining ASU, Hobijn worked in the Economic Research departments of the Federal Reserve Banks of San Francisco and New York. He has also taught classes at U.C. Berkeley, City University of New York, INSEAD, New York University, and VU University Amsterdam, in the Netherlands. He serves as a member of the Bureau of Labor Statistics’ technical advisory committee. He completed his PhD in economics at New York University and his MS in econometrics at Erasmus University Rotterdam in The Netherlands. His research has been published in several of the leading academic journals in economics, including the American Economic Review, Quarterly Journal of Economics, and Journal of Monetary Economics. He has more than 60 publications and more than 6,000 citations on Google Scholar.

1. December 11, 2019 ASU-ECN-EFL 1Hobijn -
U.S. Economic Outlook:
Cutting through the Alarmist Noise
Prof. Bart Hobijn
December 11, 2019

2. December 11, 2019 ASU-ECN-EFL 2Hobijn -
The R-word is on many minds

3. December 11, 2019 ASU-ECN-EFL 3Hobijn -
Four main sectors of the economy
Y=C+I +G+( X−M)
GDP
HouseholdsBusinesses
Government
Foreigners
Spending on final U.S. goods and services by ...

4. December 11, 2019 ASU-ECN-EFL 4Hobijn -
Current economy in a nutshell
Y=C+I +G+( X−M)
GDP
HouseholdsBusinesses
Government
Foreigners
Spending on final U.S. goods and services by ...

5. December 11, 2019 ASU-ECN-EFL 5Hobijn -
Smiley is bulk of the economy

6. December 11, 2019 ASU-ECN-EFL 6Hobijn -
Main takeaways
●
Economy growing at trend pace
– Recent GDP growth in line with estimates
●
Household sector keeps economy humming
– Solid consumer spending and confidence
– Improved wage gains for lower skilled (finally)
●
Uncertainty affecting business decisions
– Business confidence near recession levels
– Subdue business fixed investment
●
Limited impact of trade disputes
– U.S. a relatively closed economy

7. December 11, 2019 ASU-ECN-EFL 7Hobijn -
Economy growing at trend pace

8. December 11, 2019 ASU-ECN-EFL 8Hobijn -
Steady growth expected to continue

9. December 11, 2019 ASU-ECN-EFL 9Hobijn -
Accompanied by solid job growth

10. December 11, 2019 ASU-ECN-EFL 10Hobijn -
That keeps unemployment rate flat

11. December 11, 2019 ASU-ECN-EFL 11Hobijn -
Inflation expected to remain tame

12. December 11, 2019 ASU-ECN-EFL 12Hobijn -
Living in Low-Interest-Rate World
FOMC Participants’ Assesment of Appropriate Monetary Policy
September 18, 2019, midpoint of Fed-Funds target range
2019 2020 2021 2022 Long run
3.0
2.0
1.0
0.0
Percent(annualized)
Source: Federal Reserve Board of Governors

13. December 11, 2019 ASU-ECN-EFL 13Hobijn -
Household Sector
Keeps Economy Humming

14. December 11, 2019 ASU-ECN-EFL 14Hobijn -
Consumers feeling good...

15. December 11, 2019 ASU-ECN-EFL 15Hobijn -
… and seeing wage increases

16. December 11, 2019 ASU-ECN-EFL 16Hobijn -
Uncertainty is Affecting
Business Decisions

17. December 11, 2019 ASU-ECN-EFL 17Hobijn -
Business Sentiment Sagging

18. December 11, 2019 ASU-ECN-EFL 18Hobijn -
Business investment has slowed

19. December 11, 2019 ASU-ECN-EFL 19Hobijn -
Limited Impact of
Trade Disputes

20. December 11, 2019 ASU-ECN-EFL 20Hobijn -
Trade is small part of GDP

21. December 11, 2019 ASU-ECN-EFL 21Hobijn -
Trade is small part of macroeconomy
Indicator Amount Interpretation
Jobs
(exports)
11 million
Number of jobs that involved in the production of
exports of goods and services from U.S. to rest of
world.
Jobs
(imports)
15 million
Number of jobs needed to add to U.S. employment to
produce imports at current prices, wages, and
productivity levels.
Inflation 10 percent
One tenth of the price of consumer spending is due to
the cost of imported goods and services
Source: Hale, Hobijn, Nechio (2018) and own calculations

22. December 11, 2019 ASU-ECN-EFL 22Hobijn -
A Quick Recap
●
Economy growing at trend pace
– Recent GDP growth in line with estimates
●
Household sector keeps economy humming
– Solid consumer spending and confidence
– Improved wage gains for lower skilled (finally)
●
Uncertainty affecting business decisions
– Business confidence near recession levels
– Subdue business fixed investment
●
Limited impact of trade disputes
– U.S. a relatively closed economy

23. December 11, 2019 ASU-ECN-EFL 23Hobijn -
Recessions are like death...
… in this world
nothing can be
said to be
certain,
except death,
taxes,
and recessions.
… No reason to
worry a lot about
a recession now.
It will come, but
the patient is
relatively healthy.