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Baird Family Wealth Group
Presents:
Brian Beaulieu
September 7, 2016
Dallas 5950 Berkshire Lane Dallas, TX 75225 214-373-2974
Milwaukee 777 East Wisconsin Avenue Milwaukee, WI 53202 414-765-7092
Robert W. Baird & Co.
www.BairdFamilyWealthGroup.com
First in Forecasts Since 1948
ITR Economics provides the best economic intelligence to reduce risk and drive practical and profitable business decisions.
Duration 2015 Forecast Result Accuracy
US GDP 18 $16.632 Trillion $16.442 Trillion 98.9%
US Ind. Prod. 17 108.3 (12MMA) 107.1 98.9%
Eur Ind. Prod. 15 100.4 (12MMA) 103.3 97.1%
Canada Ind Prod 17 361.2 (12MMA) C$351.2 97.2%
China Ind Prod 22 607.0 (12MMA) 598.3 98.6%
US Housing 17 1.090 Mils. Units 1.111 Mils. Units 98.1%
US Retail Sales 13 $2.248 Trils deflated $2.244 Trils deflated 99.8%
US Employment 21 147.7 Million 148.8 Million 99.3%
2015 Forecast Results
2
2
First in Forecasts Since 1948
Flubbers
3
CPI forecast 3Q16 3MMA 1.0% v. forecast 2.4% Short-term interest rates forecast 2Q16 .219% v. actual .555% 10-Yr Bond Yields forecast 3Q16 2.78% v. actual 1.55% (est.) Oil prices forecast 3Q16 $60.3 v. actual ~ $45 (est.) USIP forecasted R-o-C stays >zero; actually = Ph D
First in Forecasts Since 1948
Real Gross Domestic Product
Source: BEA 3MMA
10
12
14
16
18
20
10
12
14
16
18
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Sep-15GDPCON 3MMA
4
First in Forecasts Since 1948
US Industrial Production to Gross Domestic Product
Sources: FRB, BEA Year-over-Year, Quarter-to-Quarter (3/12)
-6.8%
-2.9% -5.3%
-15.5%
-0.7%
-16
-12
-8
-4
0
4
8
12
-16
-12
-8
-4
0
4
8
12
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
GDP US IP
GDPUS IP
5
First in Forecasts Since 1948
2016 Global Manufacturing Competitiveness Index
Source: Deloitte Index Score: 100 = High, 10 = Low
6
Rank Country Index Score 1 China 100.0 2 United States 99.5 3 Germany 93.9 4 Japan 80.4 5 South Korea 76.7 6 United Kingdom 75.8 7 Taiwan 72.9 8 Mexico 69.5 9 Canada 68.7 10 Singapore 68.4
2016 (Current) Rank Country Index Score 1 United States 100.0 2 China 93.5 3 Germany 90.8 4 Japan 78.0 5 India 77.5 6 South Korea 77.0 7 Mexico 75.9 8 United Kingdom 73.8 9 Taiwan 72.1 10 Canada 68.1
2020 (Projected)
• Talent is the most important driver of a country’s ability to compete on the global stage
• Cost competitiveness is the second most influential driver
First in Forecasts Since 1948
Real Gross Domestic Product
Source: BEA 3/12 Rate-of-Change
-8
-4
0
4
8
12
16
1950 1960 1970 1980 1990 2000 2010 2020Republican Democrat GDP 3/12
7
First in Forecasts Since 1948
US, Wisconsin and the Midwest Annual GSP Growth Rate
Source: BEA 12/12 Rates-of-Change
-4
-2
0
2
4
6
'00 '02 '04 '06 '08 '10 '12 '14 '16U.S. Wisconsin Midwest
8
First in Forecasts Since 1948
US to Wisconsin Unemployment Rates
Source: BLS
2
3
4
5
6
7
8
9
10
11
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15U.S. Wisconsin
9
July 2016
US 4.9%
WI 4.2%
First in Forecasts Since 1948
Milwaukee County to WI to USA Population Trends
Overall Population Growth (2010-15)
Source: Census Bureau 10
Milwaukee County 1.1% WI 1.5% USA 4.1%
First in Forecasts Since 1948
Millennials as a Percentage of Total Population in Urban Areas
Based on Census Bureau 2014 projection 11
Rank City % 15 Virginia Beach, VA 24.66% 16 San Diego, CA 24.47% 17 Salt Lake City, UT 23.96% 18 Atlanta, GA 23.94% 19 Indianapolis, IN 23.86% 20 Milwaukee, WI 23.73% 21 Minneapolis, MN 23.64% 22 Houston, TX 23.49% 23 Seattle, WA 23.46% 24 Charlotte, NC 23.44% 25 San Antonio, TX 23.38% 26 Dallas, TX 23.31% 27 Chicago, IL 23.26%
First in Forecasts Since 1948
Milwaukee Construction Industry Employment
Seasonally Adjusted, Thousands of Workers
4.8% 3.7%
29.4
20
27
34
41
48
55
62
69
-30
-24
-18
-12
-6
0
6
12
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMA R-O-C
3/12 12/12
3MMA 12MMA
12 Data Source: BLS
Milwaukee-Waukesha-West Allis MSA
First in Forecasts Since 1948
24.5%
15.0%
5.6% 4.6% 3.9% 3.3%
2.9% 2.5%
2.4% 2.1%
1.9% 1.8%
1.7% 1.6% 1.6% 1.2% 1.0% 1.0%
0.9% 0.9%
19.6%
United States
China
Rest of World
Japan
Australia
Percent of 2015 World GDP by Country
Source: IMF, *67% are IMF Estimated Figures 13
*Total 2015 World GDP: $73.171 Trillion, US$
First in Forecasts Since 1948
US States Renamed for Countries with Similar GDPs, 2016
Sources: BEA; IMF 14
Global Leading Indicators
Source: Markit Economics 1/12 Rates-of-Change
15
0.0% -0.8% -1.3%
-60
-40
-20
0
20
40
60
80
-60
-40
-20
0
20
40
60
80
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
EZ Comp PMIEU Manufacturing PMIJP Morgan Global MFG PMI
First in Forecasts Since 1948
US Industrial Production to ITR Leading Indicator™
Sources: FRB, ITR Economics USIP – 12/12 Indicator - Monthly
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Indicator US IP
Indicator - MonthlyUS IP - 12/12
16
Reported in ITR Trends Report – ITR Advisor
First in Forecasts Since 1948
US Purchasing Managers Index
Source: Institute for Supply Management 1/12 Rate-of-Change
-3.1
-50
-25
0
25
50
75
-50
-25
0
25
50
75
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
1/12
17
As seen in
First in Forecasts Since 1948
Nondefense Capital Goods New Orders w/o Aircraft
Source: Census Bureau Billions of Dollars
-4.8% -4.1%
$765.8
500
750
1000
1250
1500
-60
-40
-20
0
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12 12/12
3MMT 12MMT
18
First in Forecasts Since 1948
Non-Manufacturing Purchasing Managers Index
Source: Institute for Supply Management Above 50 Indicates expansion
55.1
45
50
55
60
65
45
50
55
60
65
'10 '11 '12 '13 '14 '15 '16 '17
MMA R-O-C
Raw Data 12MMA
19
First in Forecasts Since 1948
Nondefense Capital Goods New Orders (excl. Aircraft) to Manufacturing Capacity Utilization
Sources: Census Bureau, FRB Rates-of-Change
-30
-20
-10
0
10
20
30
-30
-20
-10
0
10
20
30
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
New OrdersNew Orders ForecastUtilization Rate
Utilization Rate
New Orders
1/12 12/12
20
US Industrial Production Index to US Owner Occupied Housing Inventory
-6
-4
-2
0
2
4
-15
-10
-5
0
5
10
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
US IPUS IP ForecastInventory
Inventory
US IP
Sources: FRB, Census Bureau 12/12 Rates-of-Change
21
US Industrial Production Index to Wilshire Total Market Cap
Sources: FRB, Yahoo Finance Rates-of-Change
22
-60
-40
-20
0
20
40
60
-15
-10
-5
0
5
10
15
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
US IPUS IP ForecastWilshire
Wilshire US IP
3/12
12/12
First in Forecasts Since 1948
S&P500 Stock Prices Index
Source: Wall Street Journal Data Trends
0
400
800
1200
1600
2000
2400
0
400
800
1200
1600
2000
2400
1980 1985 1990 1995 2000 2005 2010 2015 2020
Raw
12MMA
23
First in Forecasts Since 1948
Stock Prices Index
Source: WSJ Raw Data
10
2000
1950 1960 1970 1980 1990 2000 2010 2020Republican Democrat Stock Prices Index - Raw
24
Eisenhower 3.1%
Kennedy 4.6%
Johnson 5.2%
Nixon 2.8%
Carter 3.4%
Reagan/Bush 3.5% 2.3%
Clinton 3.9%
Bush 2.2%
Obama 1.4%
First in Forecasts Since 1948
US Retail Sales Excluding Gas Stations (deflated)
Source: Census Bureau Trillions of Dollars
2.1% 3.3%
2.101
1.0
1.5
2.0
2.5
3.0
3.5
4.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C 3/12
12/12
3MMT 12MMT
25
First in Forecasts Since 1948
Retail Sales
Source: Census Bureau 12/12 Rates-of-Change
12.8 5.9 5.9
5.4 4.9
3.4 0.5 0.4
-1.2
-2 0 2 4 6 8 10 12 14
Online Retailers
Bldg Materials, Garden, Supplies
Health and Personal Care Stores
Furniture Stores
Light Vehicle Sales
Beer, Wine & Alcoholic Beverage
Clothing Stores
General Merchandise Stores
Jewelry Stores
26
First in Forecasts Since 1948
Housing Starts
Source: Census Bureau Millions of Units
3.3% 8.5%
1.155
0.2
1.0
1.9
2.7
3.5
4.4
5.2
-80
-60
-40
-20
0
20
40
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12
12/12
3MMT 12MMT
27
Mar ‘13
May ‘11
Dec ‘09 As seen in
First in Forecasts Since 1948
US New Homes Sold
Source: Census Bureau Thousands
21.6% 10.6%
541.0
200
500
800
1100
1400
1700
2000
2300
-75
-60
-45
-30
-15
0
15
30
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
3/12 12/12
3MMT 12MMT
28
Existing Home Sales
Millions of Units 29
4.2% 4.9%
5.4
4
5
7
8
10
11
13
-48
-36
-24
-12
0
12
24
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMA R-O-C 3/12
12/12
3MMA 12MMA
Source: National Association of Realtors
First in Forecasts Since 1948
Milwaukee Housing Unit Building Permits
Thousands of Units
139.8%
36.7%
3.1 0
3
6
9
12
15
18
21
-200
-150
-100
-50
0
50
100
150
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMT R-O-C
12MMT
3MMT
3/12 12/12
30
Milwaukee-Waukesha-West Allis MSA
Source: US Census Bureau
First in Forecasts Since 1948
Wisconsin Housing Price Index
Year over Year % Change
100
150
200
250
100
150
200
250
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Raw
31 Source: Federal Housing Finance Agency
First in Forecasts Since 1948
US to Milwaukee Median Home Sale Prices
Source: National Association of Realtors: Zillow.com Annual Data Trends
$228.3 $227.3
150
165
180
195
210
225
240
150
165
180
195
210
225
240
'02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Milwaukee US
US
Milwaukee
32
Milwaukee-Waukesha-West Allis, MSA
First in Forecasts Since 1948
US Consumer Price Index to US Producer Price Index
Source: BLS 1/12 Rate-of-Change
0.8%
-2.2%
-10
-5
0
5
10
-10
-5
0
5
10
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Consumer PriceProducer Price
33
First in Forecasts Since 1948
Commodity Prices
Sources: WSJ, London Metal Exchange, Metalprices.com, Steel Market Update 3/12 Rates-of-Change
0.9% Zinc 17.8% Tin
1.8% Lead 1.3% Alum
35.6% Steel
-11.5% Copper
-100
-50
0
50
100
150
200
-100
-50
0
50
100
150
200
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
All Others ZincTinLeadAluminumSteelCopper
Copper & Steel
34
First in Forecasts Since 1948
US Consumption of Crude Oil & Petroleum Products to Real Gross Domestic Product
Sources: EIA, BEA Data Trends
6
10
14
18
0.4
0.5
0.6
0.7
1985 1990 1995 2000 2005 2010 2015 2020
GDP Trils C2009$
Oil Bils Barrels
Oil Consumption - Raw DataGDP - 3MMA
35
First in Forecasts Since 1948
United States Overview Weekly Oil Price & Rig Count
Sources: EIA, Baker Hughes Rigs: Weekly Count WTI: Average Weekly Price
$0
$20
$40
$60
$80
$100
$120
0
250
500
750
1,000
1,250
1,500
1,750
Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017
USD/bbl Rig Count
Oil Rigs
WTI Price - Shifted 13 Weeks
36
First in Forecasts Since 1948
US Crude Oil Production
Source: EIA Millions of Barrels per Day
8.7
3
4
5
6
7
8
9
10
11
3
4
5
6
7
8
9
10
11
37
First in Forecasts Since 1948
US Crude Oil Inventories Since January 2014
Source: EIA
200
300
400
500
Jan 2014 May 2014 Sep 2014 Jan 2015 May 2015 Sep 2015 Jan 2016 May 2016 Sep 2016
US Commercial Crude Oil Inventories
Million Barrels
38
First in Forecasts Since 1948
US Carbon Dioxide Emissions
Source: EIA.gov Million Metric Tons
5129.8
4700
4900
5100
5300
5500
5700
5900
6100
6300
4700
4900
5100
5300
5500
5700
5900
6100
6300
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Dec 2012: 5232.0 MMT
Feb 1995: 5219.7 MMT
39
First in Forecasts Since 1948
US Total Renewable Energy Consumption
Source: EIA Quadrillion Btu
9.9
3
4
5
6
7
8
9
10
3
4
5
6
7
8
9
10
40
First in Forecasts Since 1948
Employment – Private Sector
Source: BLS Annual Data Trend
41
85
95
105
115
125
85
95
105
115
125
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Employment Mils of Jobs
Private Sector Employment Growth Job Openings Involuntary Part Time Employment Quit Rate – Rising
10.7% C 2.1% C
-10.0% A
First in Forecasts Since 1948
Wisconsin to Milwaukee County Wage & Salary Jobs (number of jobs)
Annual data through 2014 12/12 Rates-of-Change
1.4% 0.7%
-6
-4
-2
0
2
4
6
-6
-4
-2
0
2
4
6
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020
Wisconsin
WisconsinMilwaukee County
Milwaukee County
42
Employment of Age 25 & Over: High School Graduate Compared to College Degree & Above
51.8
33.6
25
35
45
55
25
35
45
55
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Degree and Above
High School Graduate
Source: BLS Annual Data Trends
43
Earnings and Unemployment Rates by Educational Attainment, 2015
First in Forecasts Since 1948
US Overall Wage Growth
Source: FRB Atlanta Percent
0
1
2
3
4
5
'06 '08 '10 '12 '14 '16 '18 '20
Raw Data
45
First in Forecasts Since 1948
Wisconsin to Milwaukee County Average Annual Wages
Data through Dec 2015 12/12 Rates-of-Change
3.7% 2.7%
-2
0
2
4
6
-2
0
2
4
6
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Wisconsin
WisconsinMilwaukee County
Milwaukee County
46
First in Forecasts Since 1948
Minimum Wage and Supply & Demand
by Dr. N. Gregory Mankiw
Source: Principles of Macroeconomics 47
First in Forecasts Since 1948
Mortgage Rates to Federal Funds
Sources: Federal Reserve Board, WSJ Raw Data
-2
2
6
10
14
18
22
-2
2
6
10
14
18
22
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Mortgage Rates
Federal Funds
48
First in Forecasts Since 1948
National Defense Expenditures to Defense Capital Goods New Orders
Source: Bureau of Economic Analysis, US Census Bureau 12/12 Rates-of-Change
-45
-30
-15
0
15
30
45
60
75
-12
-8
-4
0
4
8
12
16
20
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Orders Expenditures
ExpendituresOrders
Reagan Bush Clinton Bush Carter Obama
49
US Industrial Production Index to US Operations and Maintenance National Defense Budget
-30
-20
-10
0
10
20
30
-15
-10
-5
0
5
10
15
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
US IPUS IP ForecastBudget
Budget
US IP
Sources: FRB, The White House 12/12 Rates-of-Change
50
Email [email protected] with the subject line
51
Robert W Baird
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