National Economic Indicators
February 29, 2016
Table of Contents
GDP
Table : Real Gross Domestic Product
Real Gross Domestic Product
Decomposition of Real Gross Domestic Product
Households
Retail Sales
Disposable Personal Income and Expenditures
Sales of Automobiles and Light Trucks
Personal Saving Rate
Household Net Worth
Existing Single-Family Home Sales
New Single-Family Home Sales
Private Single-Family Housing Starts & Permits
Private Multi-Family Housing Starts & Permits
Business Investment
Real Investment in Nonresidential Structures
Real Private Construction Put in Place
Real Nonresidential Fixed Investment
Real Investment in Equipment
Real Investment in Intellectual Property
Trade
Balance of International Trade
Exchange Value of the USD
Manufacturing
Industrial Production
Capacity Utilization Rate: Manufacturing
Indexes of Manufacturing Activity
Indexes of Non-Manufacturing Activity
Table : ISM Business Survey Indexes
Manufacturers' New Orders
Core Capital Goods
Business Inventory/Sales Ratios
Release Date
Latest Period
Feb-26-2016 08:31 Q4-2015
Feb-26-2016 08:31 Q4-2015
Feb-26-2016 08:31 Q4-2015
Page
4
5
6
Feb-12-2016 08:30
Feb-26-2016 10:01
Feb-02-2016 14:29
Feb-26-2016 10:01
Dec-10-2015 12:05
Feb-23-2016 10:02
Feb-24-2016 10:00
Feb-17-2016 08:30
Feb-17-2016 08:30
Jan-2016
Jan-2016
Jan-2016
Jan-2016
Q3-2015
Jan-2016
Jan-2016
Jan-2016
Jan-2016
7
8
9
10
11
12
13
14
15
Feb-26-2016 08:31
Feb-01-2016 10:02
Feb-26-2016 08:31
Feb-26-2016 08:31
Feb-26-2016 08:31
Q4-2015
Dec-2015
Q4-2015
Q4-2015
Q4-2015
16
17
18
19
20
Feb-05-2016 08:30 Dec-2015
Feb-01-2016 10:11 Jan-2016
21
22
Feb-17-2016 09:16
Feb-17-2016 09:16
Feb-01-2016 10:02
Feb-03-2016 10:01
Feb-01-2016 10:02
Feb-25-2016 08:31
Feb-25-2016 08:31
Feb-12-2016 10:01
23
24
25
26
27
28
29
30
Jan-2016
Jan-2016
Jan-2016
Jan-2016
Jan-2016
Dec-2015
Dec-2015
Dec-2015
Table of Contents (continued)
Labor Market
Nonfarm Payroll Employment
Unemployment Rate Measures
Labor Market Flows
Labor Force Participation
Aggregate Weekly Hours Index
Average Hourly Earnings
Employment Cost Index
Business Labor Productivity
Unit Labor Costs, Nonfarm Business
Inflation
Table : Gauges of Inflation
Expenditure Price Indexes
Consumer Price Indexes
Producer Price Indexes
Commodity Price Indexes
Crude Oil Prices
TIPS Inflation Compensation
Monetary Policy & Financial Markets
Federal Reserve System Assets
Monetary Policy Instruments
Real Federal Funds Rate
FOMC Statement
Eurodollar Futures
SEP: Federal Funds Rate
Monetary Base
M2
Money Market Rates
Capital Market Rates
Treasury Yield Curve
Risk Premium
Release Date
Feb-05-2016 08:32
Feb-05-2016 08:32
Feb-09-2016 10:01
Feb-05-2016 08:32
Feb-05-2016 08:32
Feb-05-2016 08:32
Jan-29-2016 08:32
Feb-04-2016 08:32
Feb-04-2016 08:32
Latest Period
Jan-2016
Jan-2016
Dec-2015
Jan-2016
Jan-2016
Jan-2016
Q4-2015
Q4-2015
Q4-2015
Page
31, 32
33,34
35
36
37
38
39
40
41
Feb-03-2016 15:08
Feb-26-2016 10:01
Feb-19-2016 08:32
Jan-15-2016 08:33
Feb-03-2016 15:08
Feb-26-2016
Feb-23-2016 17:03
Jan-2016
Jan-2016
Jan-2016
Dec-2015
Jan-2016
26-Feb-2016
19-Feb-2016
42
43, 44
45
46
47
48
49
Feb-25-2016 16:32
Feb-25-2016 18:55
Feb-26-2016 10:01
Jan-27-2016
Feb-26-2016
Dec-16-2015 14:29
Feb-25-2016 16:31
Feb-25-2016 16:33
Feb-25-2016 18:55
Feb-25-2016 18:55
Feb-25-2016 16:20
Feb-25-2016 18:55
24-Feb-2016
19-Feb-2016
Jan-2016
50
51
52
53, 54
55
56
57
58
59
60
61
62
26-Feb-2016
17-Feb-2016
Jan-2016
19-Feb-2016
19-Feb-2016
19-Feb-2016
19-Feb-2016
Real Gross Domestic Product
2015
2014
Change from previous quarter at compound annual rate, %
Gross Domestic Product
Q4
Q1
Q2
Q3
Q4
2.1
0.6
3.9
2.0
1.0
4.3
1.8
3.6
3.0
2.0
Nonresidential Fixed Investment
Structures
Equipment
Intellectual Property Products
0.7
4.3
-4.9
6.9
1.6
-7.4
2.3
7.4
4.1
6.2
0.3
8.3
2.6
-7.2
9.9
-0.8
-1.9
-6.6
-1.8
1.3
Residential Fixed Investment
10.0
10.1
9.3
8.2
8.0
Exports of Goods & Services
Imports of Goods & Services
5.4
10.3
-6.0
7.1
5.1
3.0
0.7
2.3
-2.7
-0.6
Government Consumption Expenditures & Gross
Investment
-1.4
-0.1
2.6
1.8
-0.1
3.0
1.7
3.7
2.9
1.4
78.2
112.8
113.5
85.5
81.7
-463.6
-541.2
-534.6
-546.1
-556.8
Personal Consumption Expenditures
Final Sales to Domestic Purchasers
Billions of chained (2009) dollars
Change in Private Inventories
Net Exports of Goods & Services
Source: Bureau of Economic Analysis via Haver Analytics 4
Real Gross Domestic Product
6
Percent change from previous quarter at annual rate
6
5
5
4
FOMC Projection
3
4
3
2
2
Q4
1.0%
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
-9
Note: Projection is the median, central tendency, and range from the December 2015 Summary of Economic
Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP)
are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
5
Decomposition of Real GDP
5
10-year annual growth rates
5
4.5
4.5
4
GDP
4
3.5
3.5
3
3
2.5
2.5
Productivity
2
2
1.5
1.5
1
1
HH Employment
0.5
0.5
0
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
0
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
Source: Bureau of Economic Analysis via Haver Analytics 6
Retail Sales
16
12 Month % Change
16
14
14
3 Month
Annualized
% Change
12
10
12
10
8
8
6
6
4
4
January
3.4%
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
Month over Month % Change
-10
Overall
Core
-12
-14
2007
2008
2009
2010
2011
2012
2013
2014
2015
Nov. Dec. Jan.
0.3 0.2 0.2
0.5 0.2 0.4
2016
-8
-10
-12
-14
2017
Note: Retail sales includes food services.
Source: Census Bureau via Haver Analytics
7
Disposable Personal Income & Expenditures
6
12 Month % Change
6
5
5
Real Disposable Personal
Income
4
4
3
3
January
2
2
1
1
0
0
Real Personal
Consumption Expenditure
-1
-1
-2
November December
Income
0.1
0.4
Expenditures
0.3
0.2
-3
-4
2007
-2
Month over Month % Change
2008
2009
2010
2011
2012
2013
2014
2015
January
0.4
0.4
2016
-3
-4
2017
Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012.
Source: Bureau of Economic Analysis via Haver Analytics 8
Sales of Automobiles & Light Trucks
20
Millions of Vehicles
20
18
Autos and Light Trucks
January
17.58 mil.
18
16
16
14
14
12
12
Light Trucks
10
10
8
8
Autos
6
6
4
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
4
2017
Source: Autodata Corporation via Haver Analytics 9
Personal Saving Rate
10
Percent of disposable personal income
10
9
9
8
8
7
7
6
6
January
5.2%
5
5
4
4
3
3
2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2
2017
Note: The personal saving rate was adjusted to remove tax-induced income shifting near the end of 2012.
Source: Bureau of Economic Analysis via Haver Analytics 10
Household Net Worth
700
650
Percent of disposable personal income
700
Q3.
650
600
600
550
550
500
500
450
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
450
Source: Z.1 Financial Accounts of the United States via Haver Analytics 11
Existing Single-Family Home Sales
6.5
Millions of Homes
6.5
6
6
5.5
5.5
January
4.86 mil.
5
4.5
4.5
4
3.5
3
5
Average Annual Existing Home Sales:
1990 through 1999
4
3.5
3
2.5
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 20092010 2011 2012 2013 2014 2015 2016 2017
Source: National Association of Realtors via Haver Analytics 12
New Single-Family Home Sales
1.4
Millions of Homes
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.6
Average Annual New Home Sales:1990 through 1999
0.7
January
.49 mil.
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Census Bureau via Haver Analytics 13
Private Single-Family Housing Starts & Permits
2.0
Millions of Starts & Permits
2.0
1.8
1.8
1.6
1.6
1.4
1.4
1.2
1.2
1990 - 1999 Average Housing Starts
1.0
1.0
Starts
January
0.8
0.6
0.6
Permits
0.4
0.2
2000
0.8
0.4
0.2
2002
2004
2006
2008
2010
2012
2014
2016
Source: Census Bureau via Haver Analytics 14
Private Multi-Family Housing Starts & Permits
0.7
Millions of Starts & Permits
0.7
0.6
0.6
Permits
0.5
0.5
0.4
0.4
January
0.3
0.3
1990 – 1999 Average Multi-Family Starts
0.2
0.2
Starts
0.1
0.1
0.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Census Bureau via Haver Analytics 15
Real Investment in Nonresidential Structures
40
Percent change from previous quarter at annual rate
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
Q4
-6.6%
-15
-15
-20
-20
-25
-25
-30
-30
-35
-35
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 16
Real Private Construction Put In Place
670
620
570
2009$, Billions
670
620
Real Private
Residential
Construction
570
520
520
470
470
420
Real Private
Nonresidential
Construction
420
December
370
370
320
320
270
270
220
220
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Notes: Private nonresidential construction deflated using the price index for private fixed investment in nonresidential
structures and private residential construction deflated using the private residential investment chain price index.
Source: Census Bureau via Haver Analytics 17
Real Nonresidential Fixed Investment
20
Percent change from previous quarter at annual rate
20
15
15
10
10
5
5
0
0
Q4
-1.9%
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 18
Real Investment in Equipment
40
Percent change from previous quarter at annual rate
40
30
30
20
20
10
10
0
0
Q4
-1.8%
-10
-10
-20
-20
-30
-30
-40
-40
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 19
Real Investment in Intellectual Property
12
Percent change from previous quarter at annual rate
12
10
10
8
8
6
6
4
4
Q4
1.3%
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Economic Analysis via Haver Analytics 20
Balance of International Trade
0
Current $, Billions
0
Petroleum Balance
-10
-10
-20
-20
-30
-40
December
-43.36 Bil.
Non-Petroleum
Balance
-30
-40
-50
-50
Trade Balance
-60
-60
-70
-70
-80
-80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Note: Customs Value of Trade Balance
Source: Census Bureau via Haver Analytics
21
Exchange Value of the USD
135
Index, March 1973 = 100
135
125
125
115
115
105
January
105
95
95
85
85
75
1980
75
1984
1988
1992
1996
2000
2004
2008
2012
2016
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.
Source: Board of Governors via Haver Analytics 22
Industrial Production
140
2012 = 100
140
135
135
130
130
Mining
125
125
120
120
115
115
Overall
110
January
110
105
105
100
100
Manufacturing
95
95
90
90
85
85
80
80
75
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
75
2017
Source: Board of Governors via Haver Analytics 23
Capacity Utilization Rate: Manufacturing
82
Percent
82
80
80
78
78
January
77.1
76
76
74
74
72
72
70
70
68
68
66
66
64
64
62
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
62
2017
Source: Board of Governors via Haver Analytics 24
Indexes of Manufacturing Activity
65
Diffusion Index, percent
40
30
60
ISM (Left Axis)
20
55
10
January
48.2
50
-10
45
Richmond Fed
(Right Axis)
-20
40
35
2007
0
-30
-40
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 25
Indexes of Non-Manufacturing Activity
65
Diffusion Index, percent
40
30
60
ISM (Left Axis)
20
January
53.5
55
50
0
Richmond Fed
Service Sector
Index: Revenues
(Right Axis)
45
-10
-20
40
35
2007
10
-30
-40
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 26
ISM: Business Survey Indexes
MANUFACTURING BUSINESS:
NON-MANUFACTURING BUSINESS:
Dec.
Jan.
Dec.
Jan.
Purchasing Managers Index
48.0
48.2
Non-Manufacturing Index
55.8
53.5
Production
49.9
50.2
Business Activity
59.5
53.9
New Orders
48.8
51.5
New Orders
58.9
56.5
Employment
48.0
45.9
Employment
56.3
52.1
Supplier Deliveries
49.8
50.0
Supplier Deliveries
48.5
51.5
Inventories
43.5
43.5
Inventories
53.0
51.5
Prices
33.5
33.5
Prices
51.0
46.4
Backlog of Orders
41.0
43.0
Backlog of Orders
50.0
52.0
New Export Orders
51.0
47.0
New Export Orders
53.5
45.5
Imports
45.5
51.0
Imports
49.0
46.0
DIFFUSION INDEXES: Numbers above 50 percent indicate more favorable responses towards economic activity.
Source: Institute for Supply Management via Haver Analytics 27
Manufacturers’ New Orders
600
Current $, Billions
600
550
550
500
500
December
450
450
400
400
Twelve-Month
Moving Average
350
300
2007
350
2008
2009
2010
2011
2012
2013
2014
2015
2016
300
2017
Source: Census Bureau via Haver Analytics 28
Core Capital Goods
75
Current $, Billions
75
New Orders
70
January
70
65
65
Shipments
60
60
55
55
50
50
45
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
45
2017
Notes: Core capital goods are nondefense capital goods excluding aircraft.
Source: Census Bureau via Haver Analytics 29
Business Inventory/Sales Ratio
1.7
Percent
1.7
1.6
1.6
Retailers
1.5
1.5
December
1.4
1.3
1.4
Total Business
Manufacturers
1.2
1.1
2007
1.3
2008
2009
2010
1.2
2011
2012
2013
2014
2015
2016
1.1
2017
Source: Census Bureau via Haver Analytics 30
Nonfarm Payroll Employment
144
Millions of Persons
January
143.29 mil.
144
142
142
140
140
138
138
136
136
134
134
132
132
130
130
128
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
128
2017
Source: Bureau of Labor Statistics via Haver Analytics
31
Nonfarm Payroll Employment
400
Quarterly average of monthly changes, thousands of persons
400
300
300
Q1
Average
200
200
100
100
0
0
-100
-100
-200
-200
-300
-300
-400
-400
Monthly Change
Jan.
151
Dec.
262
Nov.
280
Oct.
295
Sep.
149
-500
-600
-700
-500
-600
-700
-800
-800
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bureau of Labor Statistics via Haver Analytics
32
Unemployment Rate
11
Percent
11
10.5
10.5
10
10
9.5
9.5
9
9
8.5
8.5
8
8
7.5
7.5
7
7
6.5
6.5
6
January
4.9%
5.5
6
FOMC Projection
5.5
5
5
4.5
4
2008
4.5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
4
2020
Notes: FOMC projection is the median, range, and central tendency for the Q4 levels, from the December 2015
meeting. Red dots indicate median projections
Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics
33
Measures of Labor Utilization
19
Percent
19
17
17
15
15
13
13
U6: U5 + Involuntarily Part-Time
11
11
9
January
U5: U3 + Discouraged + Marginally Attached
7
5
3
1994
9
7
5
U3: Official Unemployment Rate
3
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Source: Bureau of Labor Statistics via Haver Analytics 34
Labor Market Flows
4.5
Percent
4.5
4
Hires Rate*
December
4
3.5
3.5
3
3
2.5
2.5
Job Openings Rate**
2
2
1.5
1
2000
Quits Rate*
1.5
1
2002
2004
2006
2008
2010
2012
2014
2016
Note: *Percent of total employment. **Percent of total employment plus job openings.
Source: JOLTS via Haver Analytics
35
Labor Force Participation
68
Percent of Population
68
67
67
66
66
65
65
64
64
63
63
62
January
62
61
61
60
60
59
59
58
58
57
57
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: Bureau of Labor Statistics via Haver Analytics
36
Aggregate Weekly Hours Index
106
Index, 2007 = 100
106
January
104
104
102
102
100
100
98
98
96
96
94
94
92
92
90
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
90
2017
Source: Bureau of Labor Statistics via Haver Analytics
37
Average Hourly Earnings
4
12 Month % Change
Monthly % Change
Jan.
0.5%
Dec.
0.0%
Nov.
0.2%
Oct.
0.3%
3.5
3
3.5
3
January
2.54%
2.5
2.5
2
2
1.5
1
2007
4
1.5
2008
2009
2010
2011
2012
2013
2014
2015
2016
1
2017
Source: Bureau of Labor Statistics via Haver Analytics
38
Employment Cost Index
4
Year over Year % Change
4
3.5
3.5
Benefits Cost
3
3
2.5
2.5
Total Compensation
Q4
2
2
1.5
Q4.2015 YoY % Change
Total Comp.
2.0
Benefits Cost
1.7
Wages & Salaries 2.1
1
2007
2008
2009
1.5
Wages and Salaries
2010
2011
2012
2013
2014
2015
2016
1
2017
Source: Bureau of Labor Statistics via Haver Analytics
39
Labor Productivity, Nonfarm Business
6
Year over Year % Change
Quarterly Change
at Annual Rate
Q4 15
Q3 15
Q2 15
Q1 15
5
4
-3.0%
2.1%
3.5%
-1.1%
3
6
5
4
3
Post-War Average
2
2
Q4
0.3%
1
1
0
0
-1
-1
-2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-2
2017
Source: Bureau of Labor Statistics via Haver Analytics
40
Unit Labor Cost, Nonfarm Business
6
Year over Year % Change
6
5
5
4
Q4
2.8%
3
4
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-4
-5
-6
2007
Quarterly Change
at Annual Rate
Q4 15
Q3 15
Q2 15
Q1 15
-2.7%
2.6%
3.7%
-1.3%
2008
-3
Alternate Series
-4
-5
2009
2010
2011
2012
2013
2014
2015
2016
-6
2017
Notes: Alternate series is derived from the Employment Cost Index.
Source: Bureau of Labor Statistics via Haver Analytics
41
Gauges of Inflation
Expenditure Price Indexes
[Percent Change from Previous Month at Annual Rate]:
Dec.
-0.8
1.0
Personal Consumption Expenditures
Core (excludes Food and Energy)
Consumer Price Indexes
Dec.
-1.3
1.9
Jan.
0.3
3.6
YoY %
1.4
2.2
[Percent Change from Previous Month at Annual Rate]:
Dec.
-8.9
3.2
-3.2
-34.1
Finished Goods
Core (excludes Food and Energy)
Core Intermediate Goods
Crude Goods
Spot Commodity Price Index
YoY %
1.3
1.7
[Percent Change from Previous Month at Annual Rate]:
All Items
Core (excludes Food and Energy)
Producer Price Indexes
Jan.
1.2
3.2
Jan.
-6.1
1.2
-6.2
-7.6
YoY %
-1.4
1.6
-3.1
-17.8
[Percent Change from Previous Month]:
Dec.
-2.4
CRB Spot Commodity Price Index
Jan.
2.3
YoY %
-9.3
Notes: Core PCE Price Index includes expenditures on food services.
Source: BEA, BLS, & Commodity Research Bureau via Haver Analytics 42
Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
FOMC Projection
2.5
2.5
2% Longer-run Target
2
2
1.5
1.5
1
1
January
1.3%
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
2008
3
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
-1.5
2019
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the December
2015 meeting. Red dots indicate median projections.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 43
Core Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
3
FOMC Projection
2.5
2% Longer-run Target
2
2
1.5
1.5
January
1.7%
1
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
2008
2.5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
-1.5
2019
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the December
2015 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and
food services.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 44
Consumer Price Indexes
6
12 Month % Change
6
5
5
All Items
4
4
3
3
January
2
2
1
1
Core CPI
0
0
-1
-1
December
CPI: All Items
0.7%
Core CPI
2.1%
-2
-3
2007
2008
2009
2010
2011
2012
2013
2014
2015
January
1.3%
2.2%
2016
-2
-3
2017
Source: Bureau of Labor Statistics via Haver Analytics
45
Producer Price Indexes
12
12 Month % Change
12
10
10
8
8
Core Finished
Goods
6
6
4
January
4
2
2
0
0
-2
-2
All Finished
Goods
-4
-4
January (percent)
All Finished Goods
-1.4%
Core Finished Goods
1.6%
-6
-8
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-6
-8
2017
Source: Bureau of Labor Statistics via Haver Analytics
46
Commodity Price Indexes
30
12 Month % Change
12 Month % Change
45
27
40
24
35
21
30
Commodity
Research Bureau
Spot Commodity
Price Index
(Right Axis)
18
15
12
25
20
15
9
10
6
5
3
0
0
January
PPI Core
Intermediate
Goods
(Left Axis)
-3
-6
-9
-10
-15
-20
-12
-15
Price Indexes
PPI Core Intermed. Goods
CRBS Spot Commodities
-18
-21
2007
-5
2008
2009
2010
2011
2012
2013
2014
December
-3.6%
-14.4%
2015
January
-3.1%
-9.3%
2016
-25
-30
-35
2017
Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics 47
Crude Oil Prices
160
Current US$/Barrel
160
140
140
120
120
100
100
80
80
60
Spot Price
40
40
29-Feb-16
20
Futures Price
0
1994
60
20
0
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Notes: Spot and Futures Prices are for Brent Crude Oil.
Source: Financial Times & New York Mercantile Exchange via Haver Analytics & Bloomberg
48
TIPS Inflation Compensation
3.5
Percent
3.5
3.0
3.0
2.5
2.5
5-Year
5 Years Ahead
2.0
2.0
1.5
1.5
February 19th
1.0
1.0
5-Year
0.5
0.5
0.0
0.0
-0.5
-0.5
2009
2010
2011
2012
2013
2014
2015
2016
Source: Board of Governors Research Series via Haver Analytics 49
Federal Reserve System Assets
5,000
$, Billions
Total: $4,532
4,500
Agency Debt:
$31
4,000
3,500
Agency MBS: $1,759
Total: $2,865
3,000
2,500
2,000
Miscellaneous: $281
Agency Debt:
$87
Miscellaneous: $282
Agency MBS: $844
1,500
1,000
Treasury Securities:
$2,461
Treasury Securities:
$1,652
500
0
9/12/2012
2/24/2016
Note: Numbers may not add up due to rounding.
Source: Board of Governors via Haver Analytics 50
Monetary Policy Instruments
7.0
Percent
7.0
6.5
6.5
6.0
6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5
3.0
3.0
Federal Funds Target Rate
2.5
2.5
2.0
2.0
1.5
1.5
Primary Credit Rate
February 26th
1.0
0.5
0.0
Interest Rate Paid on Reserves
0.5
Federal Funds Rate Target Range
2005
2006
2007
2008
1.0
0.0
2009
2010
2011
2012
2013
2014
2015
2016
Source: Board of Governors via Haver Analytics
51
Real Federal Funds Rate
4
Percent
4
3
3
2
2
1
1
0
0
-1
-1
January
-2
-2
-3
-3
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note: The Real Federal Funds Rate is the difference between the effect Fed Funds rate and the lagged year-over-year
change in the core PCE price index.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 52
FOMC Statement
January 27, 2016
Information received since the Federal Open Market Committee met in December suggests that labor market conditions improved further even
as economic growth slowed late last year. Household spending and business fixed investment have been increasing at moderate rates in recent
months, and the housing sector has improved further; however, net exports have been soft and inventory investment slowed. A range of recent
labor market indicators, including strong job gains, points to some additional decline in underutilization of labor resources. Inflation has
continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy
imports. Market-based measures of inflation compensation declined further; survey-based measures of longer-term inflation expectations are
little changed, on balance, in recent months.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently
expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market
indicators will continue to strengthen. Inflation is expected to remain low in the near term, in part because of the further declines in energy
prices, but to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor
market strengthens further. The Committee is closely monitoring global economic and financial developments and is assessing their
implications for the labor market and inflation, and for the balance of risks to the outlook.
Given the economic outlook, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance
of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent
inflation.
Source: Board of Governors
53
Continued…
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will
assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent
inflation. This assessment will take into account a wide range of information, including measures of labor market
conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international
developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and
expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that
will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below
levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the
economic outlook as informed by incoming data.
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and
agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities
at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This
policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain
accommodative financial conditions.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael
Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and
Daniel K. Tarullo.
January 27, 2016
Source: Board of Governors
54
Eurodollar Futures
3.5
Percent
3.5
3
3
January 26, 2016
2.5
2.5
2
2
1.5
1.5
February 29, 2016
1
1
0.5
0
2016
0.5
2017
2018
2019
2020
2021
2022
0
2023
Source: CME Group via Bloomberg 55
Summary of Economic Projections: Federal Funds Rate
5
Percent
5
4
4
3
3
2
2
1
1
0
2015
2016
2017
2018
Longer run
0
Note: Each dot in the chart represents the value of an FOMC participant’s judgment of the midpoint of the appropriate
target range (or the appropriate target level) for the federal funds rate at the end of the calendar year.
Projections made for the December 2015 meeting.
Source: Board of Governors
56
Monetary Base
4500
Current $, Billions
4500
February 17th
4000
4000
3500
3500
3000
3000
2500
2500
2000
2000
1500
1500
1000
1000
500
500
0
2009
0
2010
2011
2012
2013
2014
2015
2016
Source: Board of Governors via Haver Analytics 57
M2
11
12 Month % Change
11
10
10
9
9
8
8
7
January
6.1%
7
6
6
5
5
4
4
3
3
2
2
1
1
0
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Board of Governors via Haver Analytics 58
Money Market Rates
1.50
Percent
1.50
1.25
1.25
February 26th
1.00
1.00
Primary Credit Rate
0.75
0.75
3-Month LIBOR
0.50
0.50
IOER
0.25
0.25
Federal Funds Rate
0.00
0.00
Fed Reverse Repo Rate
on Treasuries
3-Month T-Bill
-0.25
2009
-0.25
2010
2011
2012
2013
2014
2015
2016
Source: Board of Governors & Financial Times via Haver Analytics & Bloomberg
59
Capital Market Rates
10
Percent
10
9
9
8
8
7
7
30-Year
Conventional
Mortgage Rate
Corporate BBB
Bond Rate
6
6
5
February 26th
5
4
4
3
3
2
2
Corporate AAA
Bond Rate
1
10-Year Treasury
Bond Rate
0
0
2009
1
2010
2011
2012
2013
2014
2015
2016
Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 60
Treasury Yield Curve
2.50
Percent
2.50
2.25
2.25
January 26, 2016
February 26, 2016
2.00
2.00
1.75
1.75
1.50
1.50
1.25
1.25
1.00
1.00
0.75
0.75
0.50
0.50
0.25
0.25
0.00
0.00
6M
2 Yrs
3 Yrs
5 Yrs
Time to Maturity
7 Yrs
10 Yrs
Source: Board of Governors via Haver Analytics
61
Risk Premium
8
Percent
8
7
7
6
6
5
5
4
4
February 26th
3
3
2
2
1
1
10 Year Rolling Average Risk Premium
0
2009
0
2010
2011
2012
2013
2014
2015
2016
Note: Risk Premium is defined as the difference in yields between BofA Merrill Lynch BBB and 10-year Treasury.
Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 62