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By: Anirban Basu Sage Policy Group, Inc. September 13, 2012 The Dog Ate My Home On Behalf of Greater Susquehanna Valley Chamber of Commerce.

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Presentation on theme: "By: Anirban Basu Sage Policy Group, Inc. September 13, 2012 The Dog Ate My Home On Behalf of Greater Susquehanna Valley Chamber of Commerce."— Presentation transcript:

1 By: Anirban Basu Sage Policy Group, Inc. September 13, 2012 The Dog Ate My Home On Behalf of Greater Susquehanna Valley Chamber of Commerce

2 Penny wise, Euro foolish

3 Historic and Projected World Output Growth 2004 through 2013* Source: International Monetary Fund *2012-2013 data are projections

4 Source: Moodys Economy.com Global Recession Watch as of August 2012

5 Debt by Country 2011 Source: IMF; BIS; Bloomberg L.P.

6 Top 12 Stock Exchanges 2011 Growth RankExchangeIndex% Change 1NYSE GroupDJI A5.5% 2NasdaqNASDAQ Composite-1.8% 3London SEFTSE 100-5.6% 12Swiss ExchangeSwiss Market-7.8% 9TSX GroupS&P TSX Composite-9.2% 8Bolsa De MadridIGBM-14.6% 6Frankfurt SEDAX-14.7% 5EuronextCAC 40-17.0% 4Tokyo SENikkei 225-17.3% 11Hong Kong ExchangesHang Seng Index-20.0% 7Shanghai SEShanghai Composite-21.7% 10Borsa ItalianaFTSE MIB-25.2% Source: Yahoo! Finance

7 Top 12 Stock Exchanges Year-to-date Growth through 9/7 RankExchangeIndex% Change 6Frankfurt SEDAX 22.3% 2NasdaqNASDAQ Composite 20.4% 5EuronextCAC 40 11.4% 12Swiss ExchangeSwiss Market 10.1% 1NYSE GroupDJI A 8.9% 11Hong Kong ExchangesHang Seng Index 7.4% 10Borsa ItalianaFTSE MIB 6.8% 4Tokyo SENikkei 225 4.9% 3London SEFTSE 100 4.0% 9TSX GroupS&P TSX Composite 2.6% 7Shanghai SEShanghai Composite -3.3% 8Bolsa De MadridIBEX 35 -8.0% Source: Yahoo! Finance

8 All dressed up with no place to go

9 Industrial Production February 2001 through July 2012 Source: Federal Reserve The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

10 Gross Domestic Product 1990Q1 through 2012Q2 Source: Bureau of Economic Analysis

11 Source: Bureau of Labor Statistics Net Change in U.S. Jobs, BLS January 2002 through August 2012 Aug. 2012: +96K Between Aug. 2011 and Aug. 2012, the nation gained 1,808,000 jobs.

12 Source: Bureau of Labor Statistics National Nonfarm Employment by Industry Sector August 2012 v. August 2011 All told 1,808K Jobs gained

13 Issues with the Federal Budget The automatic sequestration mandated by the Budget Control Act of 2011 is set to begin in January 2013. Both defense and non-defense programs will be cut by $54.7 billion each year from 2013 through 2021 – a total of approximately $109.3 billion per year or $984 billion through 2021. In addition, if Congress does not act by the end of the year, nearly 50 items in the tax code will expire. Among the most significant items are the Bush tax cuts and the payroll tax cut. Bush Tax Cuts: If tax cuts are not extended, approximately 60 percent of taxpayers will see an increase in their tax rate between 3 and 5 percentage points (e.g. a couple that makes $90,000/year will pay an extra $2,700 in federal income taxes). Expiring tax cuts also mean reductions to investment income. If the current rates expire, the tax rate for capital gains would increase from 15 percent to 20 percent and dividends would be taxed as normal income, instead of at the current 15 percent rate. Payroll Tax Cut: If allowed to expire, roughly 160 million workers will see a 2 percentage point tax increase in payroll taxes, or an average of $714 or more/year for each worker. The Joint Committee on Taxation reports that the payroll tax cut will save workers $114 billion in 2012.

14 Pennsylvania Nonfarm Employment by Industry Sector Groups (SA) July 2011 v. July 2012 Absolute Change Source: Bureau of Labor Statistics PA Total: +20K; +0.4% US Total: +1,797K; +1.4%

15 Philadelphia-Camden-Wilmington Nonfarm Employment by Industry Sector Groups (NSA) July 2011 v. July 2012 Absolute Change Source: Bureau of Labor Statistics Philly MSA Total: +13.2K; +0.5% PA Total (SA): +20K; +0.4% US Total (SA): +1,797K; + 1.4%

16 Harrisburg-Carlisle Nonfarm Employment by Industry Sector Groups (NSA) July 2011 v. July 2012 Absolute Change Source: Bureau of Labor Statistics Harrisburg MSA Total: -2.2K; -0.7% PA Total (SA): +20K; +0.4% US Total (SA): +1,797K; + 1.4%

17 Scranton-Wilkes-Barre MSA Nonfarm Employment by Industry Sector Groups (NSA) July 2011 v. July 2012 Absolute Change Source: Bureau of Labor Statistics Scranton-Wilkes-Barre Total: +2.3K; +0.9% PA Total (SA): +20K; +0.4% US Total (SA): +1,797K; + 1.4%

18 Source: Bureau of Labor Statistics U.S. Year-over-year Percent Change: 1.4% Employment Growth, U.S. States (SA) July 2012 v. July 2011 Percent Change RankState%RankState%RankState% 1North Dakota6.818District of Columbia1.435South Carolina0.6 2California2.618Kansas1.435South Dakota0.6 3Oklahoma2.420Georgia1.337Illinois0.5 4Arizona2.320Idaho1.338Connecticut0.4 5Indiana2.220Massachusetts1.338Pennsylvania0.4 6Kentucky2.120New York1.340Alabama0.3 6Louisiana2.124Montana1.240Maine0.3 6Minnesota2.124Tennessee1.242West Virginia0.1 6Texas2.126Oregon1.143Delaware0.0 6Utah2.127Florida1.044New Mexico-0.3 11Ohio2.027Hawaii1.044Wyoming-0.3 11Vermont2.027New Jersey1.046Mississippi-0.4 13Washington1.930Maryland0.946New Hampshire-0.4 14Nebraska1.830Nevada0.948Alaska-0.5 14Virginia1.830North Carolina0.948Missouri-0.5 16Colorado1.733Arkansas0.850Wisconsin-0.8 17Michigan1.533Iowa0.851Rhode Island-1.6

19 Source: Bureau of Labor Statistics U.S. Unemployment Rate: 8.3% Unemployment Rates, U.S. States (SA) July 2012 RankStateRateRankStateRateRankStateRate 1 North Dakota3.018Maryland7.035Tennessee8.4 2 Nebraska4.019Missouri7.236Connecticut8.5 3 South Dakota4.419Ohio7.236Washington8.5 4 Oklahoma4.919Texas7.238Oregon8.7 5 Vermont5.022Arkansas7.339Florida8.8 6 Iowa5.322Wisconsin7.340District of Columbia8.9 7 New Hampshire5.424West Virginia7.440Illinois8.9 8 Wyoming5.625Idaho7.542Michigan9.0 9 Minnesota5.826Louisiana7.643Mississippi9.1 10 Virginia5.926Maine7.643New York9.1 11 Utah6.028Alaska7.745Georgia9.3 12 Massachusetts6.129Pennsylvania7.946North Carolina9.6 13 Kansas6.330Indiana8.246South Carolina9.6 14 Hawaii6.431Alabama8.348New Jersey9.8 14 Montana6.431Arizona8.349California10.7 16 New Mexico6.631Colorado8.350Rhode Island10.8 17 Delaware6.831Kentucky8.351Nevada12.0

20 Unemployment Rates, Selected Large Metros (NSA) July 2012 Source: Bureau of Labor Statistics RankMSAUR RankMSAUR 1 Washington-Arlington-Alexandria, DC-VA-MD- WV 5.611Chicago-Joliet-Naperville, IL-IN-WI9.1 2Minneapolis-St. Paul-Bloomington, MN-WI5.912 Philadelphia-Camden-Wilmington, PA- NJ-DE-MD 9.2 3Boston-Cambridge-Quincy, MA-NH6.112San Diego-Carlsbad-San Marcos, CA9.2 4San Antonio-New Braunfels, TX7.314Atlanta-Sandy Springs-Marietta, GA9.3 5Dallas-Fort Worth-Arlington, TX7.414 Miami-Fort Lauderdale-Pompano Beach, FL 9.3 6Houston-Sugar Land-Baytown, TX7.516Tampa-St. Petersburg-Clearwater, FL9.4 6Phoenix-Mesa-Glendale, AZ7.517 New York-Northern New Jersey-Long Island, NY-NJ-PA 9.5 8Baltimore-Towson, MD7.718Los Angeles-Long Beach-Santa Ana, CA10.9 9Seattle-Tacoma-Bellevue, WA8.319Detroit-Warren-Livonia, MI11.9 10San Francisco-Oakland-Fremont, CA8.520Riverside-San Bernardino-Ontario, CA12.7

21 Unemployment Rates, Pennsylvania MSAs (NSA) July 2012 Source: Bureau of Labor Statistics RankMSAURRankMSAUR 1 State College, PA6.6 9 Reading, PA8.3 2 Lebanon, PA6.7 10 Williamsport, PA8.5 3 Lancaster, PA6.9 11 Youngstown-Warren-Boardman, OH-PA8.7 4 Harrisburg-Carlisle, PA7.6 12 Allentown-Bethlehem-Easton, PA-NJ9 4 Pittsburgh, PA7.6 13 Philadelphia-Camden- Wilmington, PA-NJ-DE-MD9.2 6 Altoona, PA7.7 14 New York-Northern New Jersey- Long Island, NY-NJ-PA9.5 7 Erie, PA7.8 14 Johnstown, PA9.5 8 York-Hanover, PA8.3 16 Scranton--Wilkes-Barre, PA9.8

22 Sunbury Micropolitan Area Labor Force January 2001 through July 2012 Source: Bureau of Labor Statistics

23 Sunbury Micropolitan Area Unemployment Rates January 2001 through July 2012 Source: Bureau of Labor Statistics

24 Sunbury Micropolitan Area Employment Growth January 2001 through July 2012 Source: Bureau of Labor Statistics

25 It could be worse, right??

26 15-Year & 30-Year Fixed Mortgage Rates January 1995 through September 2012* Source: Freddie Mac *Average rate through 9/6.

27 U.S. New Home Sales January 1999 through July 2012 Source: Economy.com, Census Bureau

28 U.S. Housing Starts February 1999 through July 2012 Source: Census Bureau

29 A penny saved is a penny earned

30 Conference Board Consumer Confidence 2005 – August 2012 Source: Conference Board

31 U.S. Retail and Food Service Sales January 2002 through July 2012 Source: Census Bureau

32 U.S. Chain Store Sales Growth by Type of Store August 2011 v. August 2012 Source: Economy.com

33 National Vehicle Sales June 2004 through August 2012 (SAAR) Source: Autodata Corp.

34 U.S. Personal Savings Rate January 2002 through July 2012 Source: Bureau of Economic Analysis

35 Conference Board Leading Economic Indicators Index August 2007 through July 2012 Source: Conference Board

36 Its difficult to forecast, particularly the future Economy hit a soft patch; Recession not imminent; Black swan threats: (1) Iran (2) Israel/Iran (3) Europe; 2013 could be very different depending on…; Many headwinds remain and the nascent recovery could easily falter; and Geographic patterns of economic growth in Pennsylvania have shifted.

37 Thank You You can always reach me at abasu@sagepolicy.com abasu@sagepolicy.com Please look for updates of information at www.sagepolicy.com. www.sagepolicy.com Also, if you need us in a hurry, we are at 410.522.7243 (410.522.SAGE) Please contact us when you require economic research & policy analysis.


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