National and Virginia Economic Update · 2018-05-31 · Vice President, Regional Research and...
Transcript of National and Virginia Economic Update · 2018-05-31 · Vice President, Regional Research and...
Ann Battle MacherasVice President, Regional Research and Economic EducationResearch Department
National and Virginia Economic UpdateSoutheast Fairfax Development Corporationand Mount Vernon-Lee Chamber of Commerce2017 Economic Outlook SummitApril 6, 2017
The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.
Overview• National Economic Trends
– Gross Domestic Product– Productivity– Labor Force Participation– Employment Growth and Unemployment
• Virginia Economic Overview– Regional Growth– Labor Market– Metro Area Growth– Industry Growth
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National Economic Trends
3
-10
-8
-6
-4
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% Change, SAAR
Q4: 2016US: 2.1%
U.S. Real Gross Domestic Product
4
Source: Bureau of Economic Analysis via Haver Analytics
Real Gross Domestic Product
3.5 3.0
-4.1
12.0
-4.5
2.13.5
9.6
-1.9
1.9
-10
-5
0
5
10
15
20
25
30
-6
-4
-2
0
2
4
6
8
10
12
14
Real GDP PCE ResidentialInvestment
NonresidentialInvestment:Structures
NonresidentialInvestment:Equipment
% Change, SAAR Q3-16Q4-16
5
Source: Bureau of Economic Analysis/Haver Analytics
Decomposition of Real GDP
6Source: Bureau of Economic Analysis/Haver Analytics
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
0
1
2
3
4
5
0
1
2
3
4
5
1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
10-year annual growth rate
GDP
HouseholdEmployment
Productivity
Uncertainty of Future Productivity Growth
7
Source: John Fernald, FRBSF, NABE Policy Conference, March 2017
Labor Productivity – Nonfarm Business
-1
0
1
2
3
4
5
6
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
YoY % Chg
Post-War Average: 2.3
Q4 2016US: 1.0%
Source: Bureau of Labor Statistics via Haver Analytics
8
Slower Labor Force Growth Expected
9
Source: John Fernald, FRBSF, NABE Policy Conference, March 2017
Labor Force Participation
10
Source: Bureau of Labor Statistics via Haver Analytics
52
54
56
58
60
62
64
66
68
1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
Percent of Population
February 2017US: 63%
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Average Monthly Change, Thous.
Total Employment Growth
Monthly ChangeFebruary: 235January: 238
December: 155
11
Source: Bureau of Labor Statistics/Haver Analytics
Unemployment Rate
Source: Bureau of Labor Statistics/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
Percent
February 2017US: 4.7%
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Virginia Economic Overview
13
20
25
30
35
40
45
50
55
60
65
70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
3-m
onth
ave
rage
Richmond Manufacturing Survey (Left Axis) ISM Manufacturing (Right Axis)
Richmond Manufacturing Survey and ISM Manufacturing Survey
Manufacturing Activity: Richmond District
14
Richmond ISMMarch: 22 57.2February: 17 57.7Jan: 12 56.0
Source: Federal Reserve Bank of Richmond, Institute for Supply Management via Haver Analytics
Surveys of Nonmanufacturing Activity
Source: The Federal Reserve Bank of Richmond, Institute of Supply Managers
35
40
45
50
55
60
65
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
3-m
onth
ave
rage
Richmond Service Sector Survey (Left Axis) ISM Nonmanufacturing (Right Axis)
Richmond Service Sector Survey and ISM Nonmanufacturing Survey
(Current index) Richmond ISM NonmfgMarch 9 --
February 15 57.6January 15 56.5
15
Virginia Employment Growth
-6
-5
-4
-3
-2
-1
0
1
2
3
4
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
YoY % Chg (SA) U.S.Virginia
February 2017US: 1.6%VA: 1.4%
16
Source: Bureau of Labor Statistics/Haver Analytics
MSA Payroll Employment Growth in Virginia
2.9
2.7
2.2
1.9
1.6
1.4
1.3
1.2
0.9
0.9
0.6
0 1 2 3 4
Charlottesville
Harrisonburg
Northern Virginia
Winchester
US
Virginia
Blacksburg
Roanoke
Lynchburg
Richmond
Virginia Beach
YoY% Change (SA)
February 2017
17
Source: Bureau of Labor Statistics/Haver Analytics
Virginia Industry Growth
1.6
-4.2
3.3
0.1
1.0
-0.5
2.3
3.0
2.4
2.0
1.0
0.9
1.4
-2.5
-0.7
-0.4
1.2
-4.0
2.6
2.3
2.8
2.0
1.1
0.7
-5 -4 -3 -2 -1 0 1 2 3 4
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 (SA)
February 2017
U.S.Virginia
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Source: Bureau of Labor Statistics/Haver Analytics
Virginia Unemployment Rate
0
1
2
3
4
5
6
7
8
9
10
11
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent U.S.Virginia
February 2017US: 4.7%VA: 3.9%
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Source: Bureau of Labor Statistics/Haver Analytics
Virginia Labor Force Participation Rate
20
58
59
60
61
62
63
64
65
66
67
68
69
70
71
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Percent U.S.Virginia
Source: Bureau of Labor Statistics/Haver Analytics
February 2017US: 63.0%VA: 65.2%
Virginia Population and Labor Force
21
Source: Bureau of Labor Statistics, Census Bureau/Haver Analytics
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1984 1988 1992 1996 2000 2004 2008 2012 2016
Annual % Change, 4 year moving avg.
Labor Force
Population 16-64
Summary
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• Economy continues on moderate growth path for reasons related to growth in the labor force and productivity
• Productivity growth has been disappointing relative to previous periods
• Labor force and population growth are expected to slow in the coming decades
• Virginia’s overall employment growth is comparable to the U.S., though some industry sectors are not performing as well
• Virginia’s labor force participation rate shows a similar trend to the U.S. (as does population)