View
2
Download
0
Category
Preview:
Citation preview
Federal Reserve Bank of New York
33 Liberty Street, New York, NY 10045
Second District Advisory Council
Thursday, March 5, 2020
AGENDA 10:30 a.m. – 10:40 a.m. Welcome Remarks, John Williams, President & CEO
Committee Protocols, Claire Kramer Mills, AVP
10:40 a.m. – 10:55 a.m. National Economy Update, David Lucca, VP
10:55 a.m. – 11:10 a.m. International Update, Matthew Higgins, VP
11:10 a.m. – 11:40 a.m. Facilitated Discussion, Claire Kramer Mills, AVP
11:40 a.m. – 11:45 a.m. Concluding Remarks, John Williams, President & CEO
Federal Reserve Bank of New York
33 Liberty Street, New York, NY 10045
Second District Advisory Council
Thursday, March 5, 2020
ATTENDEE LIST
SDAC Advisory Members
Donnel Baird
Founder & CEO
BlocPower
Jaswinder Chadha
President & CEO
Axtria, Inc.
Michellene Davis
EVP, Chief Corporate Affairs Officer
RWJBarnabas Health
Lynn Marie Finn
President & CEO
Broadleaf Results
Sarah LaFleur
Founder & CEO
M.M.LaFleur
Melanie Littlejohn
VP NY Customer & Community Engagement
National Grid
Steve Priest
EVP & CFO
JetBlue Airways Corp.
Anthony E. Shorris
John Weinberg/Goldman Sachs Visiting Scholar &
Senior Advisor
Princeton University, McKinsey & Company
Federico Stubbe, Jr.
President
PRISA Group
Federal Reserve Bank of New York
John Williams
Michael Strine
Jack Gutt
David Erickson
Rosanne Notaro
David Lucca
Matthew Higgins
Jaison Abel
Claire Kramer Mills
Tony Davis
Edison Reyes
Rebecca Landau
President & CEO
First Vice President
EVP, Communications & Outreach
SVP, Outreach & Education
VP, Legal
VP, Research & Statistics
VP, Research & Statistics
AVP, Research & Statistics
AVP, Outreach & Education
Officer, Outreach & Education
Associate, Outreach & Education
Senior Analyst, Outreach & Education
March 2, 2020
U.S. Economic ConditionsDavid Lucca
The views expressed here are those of the presenter and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System.
2
Real GDP grew 2.1% (annual rate) in 2019:Q4:
Growth in personal consumption expenditure moderated, residential investment picked up but business investment declined for the third quarter in a row.
Labor market remained strong in January; inflationary pressures remained muted.
Significant uncertainty stemming from increased confirmed cases of the new coronavirus disease (COVID-19) outside China.
Overview
3
-10
-8
-6
-4
-2
0
2
4
6
8
-10
-8
-6
-4
-2
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Percent Change, Annual Rate
Note: Data through 2019:Q4. Shading shows NBER recessions. Source: BEA.
Percent Change, Annual Rate
Remains StrongReal GDP Growth Fluctuating Around 2%
4
-2
0
2
4
6
8
10
-2
0
2
4
6
8
10
2014 2016 2018 2020
Percent Percent
Personal Savings Rate
Growth in Real Consumption
Note: Data through January 2020. Annualized consumption growth from three-month average level over three month prior. Savings rate as percent of disposable income. Source: BEA.
Consumer Spending Moderated
5
0
20
40
60
80
100
120
140
160
0
20
40
60
80
100
120
140
160
2000 2005 2010 2015 2020
Index
Note: Data through February 2020. Shading shows NBER recessions. Source: The Conference Board, University of Michigan.
Index
Conference Board
Michigan Survey
Consumer Confidence Remained High
6
0
2
4
6
8
10
12
58
59
60
61
62
63
64
65
66
67
2006 2008 2010 2012 2014 2016 2018 2020
Percent
Note: Data through January 2020. Shading shows NBER recessions. Source: BLS.
Percent
Unemployment Rate(Right Axis)
Labor Force Participation Rate
(Left Axis)
Employment-to-Population Ratio
(Left Axis)
Labor Market Remained Strong
7
-2
-1
0
1
2
3
4
5
-2
-1
0
1
2
3
4
5
2000 2005 2010 2015 2020
12 Month Percent Change
Note: Data through January 2020. Shading shows NBER recessions. Source: BEA.
12 Month Percent Change
Total PCE
Core PCE
FOMC Objective
Core PCE Inflation Rising but Still MutedPCE Inflation Remained Muted
8
45
50
55
60
65
45
50
55
60
65
2014 2016 2018 2020
Index
Note: Data through February 2020 except for ISM non-manufacturing. PMI non-manufacturing is flash estimate. Source: IHS Markit and Institute for Supply Management.
Index
PMIISMManufacturingNon-Manufacturing
National Business Activity Moderated
9
0
1000
2000
3000
4000
5000
6000
7000
0
10000
20000
30000
40000
50000
60000
70000
80000
22-Jan 3-Feb 15-Feb 27-Feb 10-Mar
Cases Cases
North America
Europe
OceaniaSouth America
Africa
China(Left Axis) Asia ex China
Note: Confirmed cases through March 1. Except for China and rest of Asia, cases on the right axis. Source: Johns Hopkins CSSE.
Increased COVID-19 Cases Outside China
10
0
500
1000
1500
2000
2500
3000
3500
1
2
3
4
5
6
7
8
9
10
2010 2012 2014 2016 2018
Percent
Note: Data through February 28. Source: Federal Reserve Board, Financial Times.
Index
10-Year Treasury Yield (Left Axis)
S&P500 Index(Right Axis)
Moody’s BAA Yield (Left Axis)
Sharp Movements in Financial Conditions
1
Global Economic Outlook and Risks
Second District Advisory CouncilMatthew Higgins, 5 March 2020
The views expressed here are those of the author, and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System
Roadmap
Global business conditions before the COVID-19 outbreak
Economic impact of outbreak in China
Early economic echoes outside China
Lessons from prior global pandemics
2
-1
0
1
2
3
4
5
6
7
8
9
12 13 14 15 16 17 18 19 20
China
Quarterly percent change, annualized
EMEs outside China
Advanced economies outside U.S.
Source: national sources, staff calculations. AE series is a GDP-weighted average for the euro area, Japan, UK, the Nordic countries, Switzerland and Australia. EME ex. China series is a GDP-weighted average for 24 countries.
Global growth was sluggish ahead of virus outbreak
2.4
0.7
6.0
2019:Q4
25
30
35
40
45
50
55
60
65
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
NBS purchasing managers’ indexes (> 50 signals expansion)
Source: China Federation of Logistics and Purchasing.
35.7February
29.6
Services
Manufacturing
Chinese surveys show plunge in activity
3
0
10
20
30
40
50
60
70
80
90
100
-15 -10 -5 0 5 10 15 20 25 30 35 40
Passenger volume (persons x hours, in millions)
Sources: Wind, Ministry of Transportation, UBS. Index includes rail, highway, waterway and air transport. Day 1 of Chinese New Year is Jan. 25 in 2020, and various dates in prior years.
2019
2020
Chinese daily indicators show little rebound in activity
Chinese New Year March 2
30
40
50
60
70
80
90
-30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40 45
Coal consumption at six major power generators (10,000 metric tons)
Source: Wind, Standard Chartered. Day 1 of Chinese New Year is Jan. 25 in 2020, and various dates in prior years.
Average 2017-19
2020
Daily coal consumption reflects factory shutdowns
Chinese New Year
March 2
4
0
5
10
15
20
25
30
Sources: World Bank World Development Indicators, IMF Direction of Trade Statistics.
share of global totals, U.S. dollar terms
Exports
2003 2019
Industrial Production
GDP
2003 2019 2003 2019
China occupies key role in global production, trade
40.0
42.5
45.0
47.5
50.0
52.5
55.0
57.5
60.0
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Diffusion index, > 50 signals expansion
Source: Markit Economics. Series is a GDP-weighted average for roughly 45 economies.
Average 2004 – 2008:Q1 = 56.8
February46.1
Average 2011 – 2019:Q4 = 52.8
Global survey data weakened in February
5
45.0
47.5
50.0
52.5
55.0
57.5
10 11 12 13 14 15 16 17 18 19 20
Diffusion indexes, > 50 signals expansion
Source: Markit Economics.
February47.1, 47.2
Services
Manufacturing
Manufacturing and services both contracted
44
46
48
50
52
54
56
58
10 11 12 13 14 15 16 17 18 19 20
Diffusion indexes, > 50 signals expansion
Source: Markit Economics, JPMorgan.
45.3, 45.0
February
New Export Orders
New Orders
Manufacturing new orders point to further weakness
6
-8
0
8
16
24
00 01 02 03 04 05 06
GDP growth in Hong Kong, Singapore and Taiwan (annual rate)
Global Recession
SARS Epidemic
Global Industrial Soft Patch
Note: Weighted average based on 2003 GDP in $U.S.
Growth in EMEs followed see-saw pattern during SARS
Hospitality and transport saw the sharpest swings
Hong Kong, Singapore and Taiwan, Selected GDP Components ( percent change, SAAR )
2003:Q1 2003:Q2 2003:Q3
Goods Producing -4.1 -6.8 20.8
Trade 1.1 -11.6 29.4
Hotels, Restaurants1/ -1.7 -41.7 119.5
Tranport & Comm. 13.4 -19.2 34.5
Financial Services1/ -8.3 20.0 25.7
1/ Singapore and Taiw an. Sources: Local statistical agencies, via Haver Analytics. Individual country percent changes weighted by 2003 $U.S. GDP.
7
-3
-2
-1
0
1
2
1915 16 17 18 19 20 21 22 23 24
U.S. industrial production and trade ( standardized* )
NBER recessions shaded
U.S. economy slumped during 1918-19 pandemic
Source: NBER Macrohistory Database. * Series shows normalized deviations from average activity levels (mean = 0.0, STD = 1.0).
Reference Charts
8
-12.5
-10
-7.5
-5
-2.5
0
2.5
5
7.5
10
12.5
-12.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
12.5
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Industrial production growth, 3-mo. change, annualized
Source: CPB World Trade Monitor. Data exclude construction.
Average 2005 – 2008:Q1Average 2011 – 2019:Q4
Dec.0.2
Global industrial activity has slumped since mid-2018
-25
-20
-15
-10
-5
0
5
10
15
20
25
-25
-20
-15
-10
-5
0
5
10
15
20
25
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Trade volume growth, 3-mo. change, annualized
Source: CPB World Trade Monitor. Data are the average of global import and export volume growth.
Average 2005 – 2008:Q1
Average 2011 – 2019:Q4
Dec.-1.5
Trade growth has also slumped
9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Core CPI, percent change from year earlier
Emerging Economies
Foreign Advanced
Source: Federal Reserve Bank of Dallas. Core CPI excludes food (or fresh food) and energy. Series are GDP-weighted averages.
1.4
2.9
Core inflation has been low and stable worldwide
Recommended