Growth in the US economy is expected to slow in Q2 2013 following strong growth in Q1. While consumption and government spending are expected to slow, capital expenditures, manufacturing growth, and trade are expected to continue driving growth. The pace of job creation may slow due to government spending cuts from sequestration. Monetary policy is expected to remain accommodative with no changes to asset purchase programs due to continued high unemployment and output gaps.
2. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Executive Summary
Growth Likely to Slow Following Solid Q1’13
• Growth
• Q1’13 Growth likely to accelerate above 3 percent.
• Personal consumption tracking near 3 percent for Q1’13
• Capital expenditures and residential investment, manufacturing growth, trade all
drivers in Q2’13
• Pace of consumption and government spending to slow in Q2’13.
• Monthly job creation to slow due to sequestration.
• What’s driving consumption?
• Income pulled forward to avoid tax hikes
• Spending by upper 2 quintile of income earners
• Drawing down of savings rate by lower income cohorts
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 2 <<<<
4. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Jobs and Growth
Jobs and Growth
600 8
6
400
4
Quarterly Average (Percentage)
200
Quarterly Average (Thousands)
2
0 0
-200 -2
-4
-400
-6
-600
-8
Real GDP Y/Y (RHS) Total Change in Employment (LHS)
-800 -10
1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg R2=.77
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 4 <<<<
5. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Imbalance Between Income and Spending
Divergence Between Income and Spending
10 65
8
60
6
Year Over Year Percentage Change
4 55
2
50
0
-2 45
-4 Nominal Income (RHS)
Nominal Spending (LHS) 40
-6 Real Disposable Personal Income(LHS)
ISM Non Man (RHS)
-8 35
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 5 <<<<
6. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Upper Income Earners Driving Spending
8.9
Lowest 20%
12.9
Second 20% 38.0
Third 20%
Fourth 20%
17.1
Highest 20%
23.1
Source: BLS Consumer Expenditure Survey
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 6 <<<<
7. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Sustained Residential Investment Growth in 2013
Considerable Room to Grow
90 2.5
Multi-Family Starts (RHS)
Single Family Starts (RHS)
80
NAHB Housing Market Index (LHS)
2
70
Millions (Annualized Pace
60
1.5
50
Index
40
1
30
20
0.5
10
0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg USHBMIDX, NHSPS1, NHSPSM INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 7 <<<<
8. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Executive Summary
• Monetary Policy
• Pace of asset purchases to remain unchanged
• Employment, not inflation primary concern of policy
• Fed to remain cautions on tapering purchases due to:
• Prodigious labor slack, output and consumption gaps
• External headwinds
• Fiscal Policy restraint and layoffs to restrain growth
• What to watch?
• Rising initial jobless claims
• Slower pace of spending
• Bloomberg economic surprise index reflects likely slowing
• Risk of another spring swoon in fundamental data
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 8 <<<<
9. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Fed Balance Sheet Swells to $3.2 Trillion
Fed Balance Sheet Swells To $3 Trillion
3.5
Fed Agency Debt Mortgage-Backed Securities Purchases
Liquidity to Key Credit Markets
3
Lending to Financial Institutions
Long Term Treasury Purchases
2.5
Traditional Security Holdings
2
Trillions ($)
1.5
1
0.5
0
2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg FED<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 9 <<<<
10. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Growth Drivers
• Housing
• Reduced supply supporting price appreciation
• Shift in buyer preference toward new construction
• Autos
• Historically low rates and aggressive discounting by auto dealers
• Age of auto fleet supports improved total vehicle sales
• Manufacturing
• Rebound following 2012 second half swoon
• Civilian aircraft, domestic auto production and external demand
• Trade
• Growing U.S. energy independence
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 10 <<<<
11. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Housing Supply Dwindles
Falling Supply Supporting Price Appreciation
250 1
Median Price (RHS) Homes for Sale (LHS, Inverted)
225 1.25
1.5
200
1.75
175
Units for Sale: Millions
2
Thousands
150
2.25
125
2.5
100
2.75
75
3
50 3.25
25 3.5
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: Bloomberg EHSLMP, EHSLHAFS INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 11 <<<<
12. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Industrial Production and Growth
6.0 10.0
5.0
Y/Y Percentage Change (Quarterly Average)
4.0
5.0
3.0
Y/Y Percentage Change
2.0
0.0
1.0
0.0
-5.0
-1.0
-2.0
-10.0
-3.0
-4.0
GDP CYOY (LHS) Industrial Production (RHS)
-5.0 -15.0
1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg
IP YOY, GDP CYOY INDEX<GO> R2=.76
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 12 <<<<
13. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Industrial Production and Growth
Solid Manufacturing Growth Likely to Continue
30 70
25
65
Year over Year Percentage Change
20
60
15
Index
10
55
5
50
0
Durable Goods Orders (LHS) ISM New Orders (RHS)
-5 45
2010 2011 2012 2013
Source: Bloomberg DGNOYOY, NAPMNEWO INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 13 <<<<
14. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Less Trade Drag on Growth in 2013
Trade Balance Likely to Narrow This Year
-5 90
-10 95
-15 100
-20 105
Billions ($)
-25 110
Index
-30 115
-35 120
-40 125
-45 130
US Trade Balance Excluding Petroleum(LHS) Trade Weighted Dollar Index 18 Month Lag(RHS)
-50 135
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Source: Bloomberg
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 14 <<<<
15. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Less Trade Drag on Growth in 2013
Narrowing Gap Between Supply and Demand
0.0
-1.0
Million Barrels Per Day (3-Month Average)
-2.0
-3.0
-4.0
-5.0
-6.0
-7.0
US Oil Imbalance: Supply and Demand
-8.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Bloomberg DOIDCRUD, DOSUUSA INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 15 <<<<
16. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Financial Conditions Overview
• Global central banks asset purchase supportive of financial conditions.
• Improved financial conditions supportive of U.S.
• Financial easing via asset purchases appropriate and necessary in Europe
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 16 <<<<
17. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Euro Area Economy Monetary Policy
E.U. Taylor Rules Suggest Aggressive Easing Appropriate
7
6
5
4
3
2
Percent
1
0
-1
-2
-3
ECB Rate Traditional Taylor Rule Estimate Aggressive Taylor Rule
-4
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: Bloomberg TAYL<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 17 <<<<
18. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Bloomberg Financial Conditions Indices
2
1
0
-1
Index(Z-Score)
-2
-3
-4
-5
US Financial Conditions Index EU Financial Conditions Index
-6
2010 2011 2012 2013
Source: Bloomberg BFCIUS, BFCIEU INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 18 <<<<
19. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Private Credit Creation Improving
Private Credit Creation & Nominal Growth
20%
Nominal GDP Total Credit Creation Private Financial Instiutions
15%
Year Over Year Percentage Change
10%
5%
0%
Adjusted R2=.64
-5%
1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012
Source: Federal Reserve, Bloomberg
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 19 <<<<
20. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Credit Markets Healing, Not Translating to Rising Velocity
Velocity of Money
2.2
M2
2.1
2
1.9
1.8
1.7
1.6
1.5
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
Source: Bloomberg VELOM2 INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 20 <<<<
21. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Image page
U.S. Rates Overview
Bloomberg consensus forecast indicates higher 10- and 30-year rates.
Current Rates:
• 2-Year: .25 percent
• 10-year: 1.85 percent
• 30-year: 3.17 percent
Fourth Quarter Consensus Survey Rate Forecast: Rising Appetite for Risk Assets
• 2-Year: .46 percent
• 10-year: 2.31 percent
• 30-year: 3.46 percent
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 21 <<<<
22. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Projected Path of Long- and Short-Term Rates
4.50
4.00
3.50
3.00
2.50
Percent
2.00
1.50
1.00
0.50
US 10-Year (LHS) 3-Month, 2-Year Forward (RHS)
0.00
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Source: Bloomberg
USGG10YR INDEX, G0025 2Y3M BLC2CURNCY<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 22 <<<<
23. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
U.S. Economic Surprise Index & 10-Year Treasury Yields
1.2 2.0
1.5
0.8
1.0
0.4 0.5
0.0
0.0
-0.5
-0.4 -1.0
-1.5
-0.8
-2.0
U.S. Economic Surprise Index US 10-Yr Yield (6-Mo. Basis Point Chg.)
-1.2 -2.5
2010 2011 2012
Source: Bloomberg ECSURPUS, USGG10YR Index<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 23 <<<<
24. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
U.S. Economic Surprise Index & U.S. Equity Markets
U.S. Economic Surprise Index & the U.S. Equity Market
1.2 60%
0.8 40%
Index (Percentage Change)
0.4 20%
Z Score
0.0 0%
-0.4 -20%
-0.8 -40%
U.S. Economic Surprise Index S&P 500 (6-mo. % chg.)
-1.2 -60%
2010 2011 2012
Source: Bloomberg ECSURPUS, SPX INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 24 <<<<
25. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
FX Overview
Investors Likely to Favor Risk Assets in Q2’13
• Flight to quality likely to dominate given EU economic and financial issues.
• Favors USD and CAD
• Yen to benefit from flight to quality in short-term and times of Euro stress
• Further depreciation ahead contingent on BOJ policy
• Short term rally in Euro likely to fade as fundamentals to asset themselves.
• Contraction in real economy
• Rising unemployment
• Country risk
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 25 <<<<
26. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Economic Fundamentals Favor EUR/USD Depreciation
100 1.4
Citigroup European Economic Surprise Index EUR/USD
80
60 1.35
40
20 1.3
EUR/USD
Index
0
-20 1.25
-40
-60 1.2
-80
-100 1.15
2012 2013
Source: Bloomberg EUR Curncy, CESIER INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 26 <<<<
27. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Central Bank Policy Outlook and Overview
Fed will likely remain on hold throughout 2013
• Forward guidance to remain unchanged.
• Aggressive action to unclog monetary transmission mechanism to remain in place
through 2013, then slow 2014.
• Balance sheet likely to expand to $4 trillion by end early 2014.
.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 27 <<<<
28. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Central Bank Policy Outlook and Overview
Fed will likely remain on hold throughout 2013
• Policy made for economy stuck in liquidity trap
• Labor slack, consumption and employment gaps drive Fed policy
• If policy does not gain traction, Fed will begin to create conditions for targeting of
nominal GDP.
.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 28 <<<<
29. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
The Long Road Ahead
Slow Grind Back To Full Employment
Scenario 1: Structural Break Scenario 2: Cyclical Recovery
6.5% NAIRU 6.5% NAIRU 5.5% NAIRU 5.5% NAIRU
200,000 200,000 200,000 200,000
Monthly Job Gains
63.50% 63.50% 63.50% 63.50%
Labor Force Participation Rate
0.92% 0.50% 0.92% 0.50%
Average Annual Population Growth
2 Years 1 Years 4 Years 2 Years
Years to Full Employment
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 29 <<<<
30. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Monetary Policy at the Zero Bound
Taylor Rule & Evans Rule Estimates of the Fed Funds Rates
8
6
Taylor Rule Estimates
Fed Funds Rate
4
2
Percentage
0
Evans Rule
-2 Estimates
-4
-6
-8
-10
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Bloomberg USFEDL01, PCE CYOY, USURTOT INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 30 <<<<
31. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Significant Output Gap Remains
US Retains Substantial Output Gap
15
Real GDP Real Potential Output
14
13
Trillions (2005 Chained $)
12
11
10
9
8
7
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 31 <<<<
32. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Labor Market Slack Persists
58 11
Employment to Population Ratio (LHS) Unemployment Rate (RHS, Inverted)
10
59
9
60
8
61
Percent
Percent
7
62
6
63
5
64
4
65 3
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Bloomberg USERTOT , USURTOT INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 32 <<<<
33. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Real Consumption on Lower Trend
11000
10500
Real PCE Trend Prior to Recession
Billions (Chained 2005 $)
10000
9500
9000
8500
8000
2005 2006 2007 2008 2009 2010 2011 2012
Source: Bloomberg US.HHSPNR BEA INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 33 <<<<
34. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Negative and Near Negative Equity Still A Policy Challenge
First Mortgages in Negative and Near Negative Equity Positions
32
Near Negative
Near Negative Equity Negative Equity
Equity
4.8%
30
Percent: First Mortgages
28
26
24
22
Negative Equity 22%
20
Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Source: Bloomberg NESHNATI, NNSHNATI INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 34 <<<<
35. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Low Wage Bias in Hiring
150
125
100
75
Thousands
50
25
0
-25
Leisure and Hospitality Health Care and Social Assistance Temp Retail Trade
-50
2010 2011 2012
Source: Bloomberg USRTTOT, USESTEMP, USEETOTS, USEHTOTS INDEX<GO>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 35 <<<<
36. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Labor Slack Sustained
Jobs Lost in the Recession and Gained in the Recovery
19% of Job Losses
Higher-Wage Occupations during Recession
60% of Job Losses 22% of Job Growth
Mid-Wage Occupations during Recession during Recovery
21% of Job Losses 58% of Job Growth
Lower-Wage Occupations during Recession during Recovery
-4 -3 -2 -1 0 1 2 3 4
Net Change in Occupational Employment (millions)
Source: National Employment Law Project
analysis of CPS data Recession (Q1 2008 - Q1 2010)
Recovery (Q1 2010 - Q1 2012)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 36 <<<<
37. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Mortgage Backed Primary Secondary Spread
Mortgage Backed Primary-Secondary Spread
160
140
QE 1 Start Dates of Fed MBS QE 3
Purchase Programs
120
Basis Points: 30 Day Moving Average
100
80
60
40
20
0
-20
2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 37 <<<<
38. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Labor Slack Sustained
Occupational Growth Rates since 2001
10%
Lower-Wage
8%
6%
Occupational Growth Rate
4% Higher-Wage
2%
0%
-2%
-4%
-6% Mid-Wage
-8%
-10%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Lower-Wage Occupations Mid-Wage Occupations Higher-Wage Occupations
Source: National Employment Law Project analysis of CPS
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 38 <<<<
39. U.S. Q2’ 2013 Economic Overview and Outlook Email jbrusuelas3@bloomberg.net or call 212-617-7664
Labor Slack Sustained
Net Employment Growth of Low-Wage Occupations
Construction Laborers Lower-Wage
Customer Service Representatives
Miscellaneous Assemblers and Fabricators
Higher-Wage
Office Clerks
Laborers and Freight, Stock & Material Movers
Grounds Maintenance Workers
Retail Salespersons
Personal and Home Care Aides Mid-Wage
Food Preparations Workers
Waiters and Waitresses
0 50 100 150 200 250 300 350 400
Occupational Growth Rate
Source: National Employment Law Project analysis of CPS
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SUBSCRIBE @BRIEF<GO> | 39 <<<<
40. Bloomberg
Joseph Brusuelas,
Senior Economist
Bloomberg, LP
jbrusuelas3@bloomberg.net
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 BLOOMBERG
PROFESSIONAL® service and Bloomberg’s media services provide real-time and historical pricing, indicative
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management systems, multimedia events and electronic communications to Bloomberg clients in more
than 150 countries, 24 hours a day.
bloomberg.com
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