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Economic Forecast
OUTPUT AND EMPLOYMENT WHAT THE TABLE SHOWS:
Missouri’s GDP forecast is derived from the
national forecast by allocating output to each
of the 50 states based on employment
shares. So, forecast misses reflect surprises
in the aggregate forecast as well as
unexpected shifts in a state’s GDP share.
Missouri’s recovery has slowed.
KEY MESSAGES:
Both the economy and jobs are expected to
improve a bit in 2014 and 2015.
Note: GDP figures are based on quarterly values that are
interpolated from annual GDP estimates using quarterly
employment changes. Unbolded figures are reported actual
values and bold figures represent forecasts.
Sources: US Department of Commerce;
US Department of Labor.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 2
2007 2008 2009 2010 2011 2012 2013 2014 2015
United States
Real GDP
$ billions (fourth quarter) $14,996 $14,575 $14,540 $14,942 $15,242 $15,540 $15,942 $16,501 $17,120
% change over the four quarters 1.9% -2.8% -0.2% 2.8% 2.0% 2.0% 2.6% 3.5% 3.8%
Nonfarm employment
Job count (fourth quarter) 138,246,000 135,493,667 129,877,667 130,652,000 132,642,667 134,853,667 137,247,667 139,694,848 141,679,460
% change over the four quarters 0.9% -2.0% -4.1% 0.6% 1.5% 1.7% 1.8% 1.8% 1.4%
Average monthly change 101,667 -229,361 -468,000 64,528 165,889 184,250 184,250 184,250 184,250
Missouri
Real GDP
$ billions (fourth quarter) $220 $219 $214 $217 $219 $223 $228 $234 $242
% change over the four quarters 1.1% -0.8% -2.0% 1.3% 0.9% 1.9% 2.0% 2.9% 3.3%
Nonfarm employment
Job count (fourth quarter) 2,801,600 2,769,367 2,661,567 2,662,333 2,672,600 2,705,467 2,747,133 2,776,794 2,801,201
% change over the four quarters 0.5% -1.2% -3.9% 0.0% 0.4% 1.2% 1.5% 1.1% 0.9%
Average monthly change 1,236 -2,686 -8,983 64 856 2,739 3,472 2,472 2,034
The Economy’s Structure
PERCENT OF TOTAL GDP DERIVED FROM SELECTED INDUSTRIES WHAT THE CHART SHOWS:
The figure compares the relative importance
of selected industries to the state’s economy
with the national footprint of each industry
(state and national figures reflect the value
added of each industry as a percent of
aggregate state or US nominal GDP,
respectively).
Missouri’s fairly diverse economy is not as
concentrated in real estate as many and that
is a plus. Now the manufacturing revival is
becoming an asset for the state.
KEY MESSAGES:
Missouri’s economy is more diversified than
the national economy.
Source: US Department of Commerce. Updated through
2011.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 3
0
2
4
6
8
10
12
14
Agr
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Min
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Gov
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US industry mix
Missouri industry mix
Bankruptcies
RATIO OF BANKRUPTCY FILINGS TO THE 2007 Q4 NUMBER WHAT THE CHART SHOWS:
The figure illustrates trends in bankruptcy
filings by businesses and persons relative to
the number of filings in 2007 Q4, prior to the
recession.
Financial strains are back to normal levels.
KEY MESSAGES:
Indicators of financial stress are a useful
coincident indication of economic distress.
Financial stresses are beginning to wane.
Source: Administrative Office of the U.S. Courts; Updated
through March 2014.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 4
0
1
2
3
4
5
0
1
2
3
4
5
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Business bankruptcy filingsNonbusiness bankruptcy filings
All US bankruptcy filings (shaded area)
FRB KC Business Survey
REAL GDP (% CHANGE 12 MONTHS EARLIER) DIFFUSION INDEXES (0 = NO CHANGE) WHAT THE CHART SHOWS:
The figure traces real GDP growth in
Missouri along with the Federal Reserve
Bank of Kansas City’s survey of local
manufacturing conditions.
Business conditions have perked up a llitle
recently.
KEY MESSAGES:
Business is expected to quicken somewhat
in coming quarters.
Note: Survey data are unavailable prior to 2001.
Sources: Federal Reserve Bank of Kansas City; US
Department of Commerce. Updated through May 2014
(surveys) and 2014 Q1 (GDP).
Note: diffusion indexes represent the percentage of respondents seeing an increase in activity plus one half of the percentage
reporting no change in activity.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 5
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
-4
-2
0
2
4
6
8
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Missouri real GDP (left scale)
FRB-Kansas City's manufacturing survey (right scale)
Forecast
Private Business Surveys REAL GDP (% CHANGE 12 MONTHS EARLIER) DIFFUSION INDEXES (50 = NO CHANGE)
WHAT THE CHART SHOWS:
The figures shows the Business Barometer
Index, based on the survey of purchasing
managers, and real GDP growth in Missouri
(a reading above 50 means the state’s
economy is growing, while less than 50
means the economy is shrinking). The index
comprises seven business activity
indicators, including production, new orders,
order backlogs, inventories, employment,
supplier deliveries, and prices paid.
The index, which is a timely measure of the
strength of the local economy, has
rebounded recently.
KEY MESSAGES:
This index will be a useful leading indicator
of the direction of the economy.
Note: Business Barometer data are unavailable prior to
1997.
Sources: Institute of Supply Management; US Department
of Commerce. Updated through April 2014 (survey) and
2014 Q1 (GDP).
Note: diffusion indexes represent the percentage of respondents seeing an increase in activity plus one half of the percentage
reporting no change in activity.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 6
10
20
30
40
50
60
70
80
90
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Real GDP in the Midwest (left scale)
Business Barometer Index, Mid-America Purchasing Managers (right scale)
Forecast
Initial Jobless Claims
RATIO OF INITIAL CLAIMS FOR UNEMPLOYMENT INSURANCE TO THE 2007 Q4 LEVEL WHAT THE CHART SHOWS:
The figure tracks layoffs in Missouri and the
national level of claims.
Weekly layoffs, both the state and national
tallies, are illustrated in the figure as a ratio
to the level of layoffs in the fourth quarter of
2007, prior to the recession.
Layoffs are well below pre-recession levels.
KEY MESSAGES:
The low level of jobless claims points to a
positive outlook for the state’s job market.
Source: US Department of Labor. Updated through May 17,
2014 (state) and May 24, 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 7
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2007 2008 2009 2010 2011 2012 2013 2014
MissouriUS (solid area)
Missouri accounts for 1.3% of auto manufacturing employment
Economic Growth
REAL GDP GROWTH (PERCENT CHANGE FROM FOUR QUARTERS EARLIER) WHAT THE CHART SHOWS:
Real GDP growth in Missouri (the line in the
figure) is superimposed on top of US real
GDP growth (bars in the figure).
Missouri’s economy grew more slowly than
the national economy for the past 15 years
and the same theme is present in the
recovery.
Missouri’s recovery has been lagging the
national recovery.
KEY MESSAGES:
Missouri’s growth is expected to pick up
speed a bit in coming years.
Source: US Department of Commerce. Updated through
2012 (state) and 2014 Q1 (US). Quarterly estimates for
states after 2012 are interpolated from employment figures
(through April 2014), based on the historical correlation of
state and national employment changes.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 8
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
MissouriUS
Forecast
Economic Output
REAL GDP LEVEL (RATIO TO 2000 Q4) WHAT THE CHART SHOWS:
The figure illustrates the evolution of real
GDP of the state and the overall US
economy since the fourth quarter of 2000,
the peak of the previous business cycle—
that is, at any point in time the lines trace the
ratio of real GDP to its level in 2000 Q4.
Missouri’s economy has been steady, if a bit
slow since the mid-2000s.
KEY MESSAGES:
The state’s economy has been affected, like
others, by the disruptions in the industrial
sector.
Source: US Department of Commerce. Updated through
2012 (state) and 2014 Q1 (US). Quarterly estimates for
states after 2012 are interpolated from employment figures
(through April 2014), based on the historical correlation of
state and national employment changes.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 9
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US
Missouri
Forecast
Employment Growth
NONFARM PAYROLL EMPLOYMENT (PERCENT CHANGE FROM 12 MONTHS EARLIER) WHAT THE CHART SHOWS:
Employment in Missouri, compared with the
nation.
Missouri’s job trends parallel the nation’s but
the slowdown in 2011 was a bit more
noticeable in Missouri than for the nation.
Job growth has been picking up.
KEY MESSAGES:
Employment is forecast to continue to grow
at a moderate pace.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 10
-5
-4
-3
-2
-1
0
1
2
3
4
-5
-4
-3
-2
-1
0
1
2
3
4
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
MissouriUS
Forecast
Employment
NONFARM PAYROLL EMPLOYMENT (RATIO TO THE 2000 Q4 LEVEL) WHAT THE CHART SHOWS:
The figure illustrates the evolution of
employment in the state compared with the
nation since 2000 Q4, the peak of the
previous business cycle. The lines trace out
the ratio of employment at the time to
employment in 2000 Q4.
Employment remains well below the 2007
cycle peak.
KEY MESSAGES:
Missouri’s economy is likely to improve
gradually in 2014 and 2015.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 11
0.96
0.97
0.98
0.99
1.00
1.01
1.02
1.03
1.04
1.05
1.06
1.07
0.96
0.97
0.98
0.99
1.00
1.01
1.02
1.03
1.04
1.05
1.06
1.07
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US
Missouri
Forecast
Intrastate Employment
NONFARM PAYROLL EMPLOYMENT IN SELECTED COMMUNITIES (RATIO TO 2000 Q4 LEVEL) WHAT THE CHART SHOWS:
Job trends in local communities within the
state.
Missouri’s slow economic performance
masks a wide disparity of activity across the
state.
Economies of some communities are faring
better than others.
KEY MESSAGES:
Missouri’s economy has lagged the national
economy but some local economies remain
strong.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 12
0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
1.12
1.14
1.16
1.18
1.20
0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
1.12
1.14
1.16
1.18
1.20
2001 2003 2005 2007 2009 2011 2013 2015
US forecast
US
St. Joseph
Columbia
Springfield
Joplin
Kansas City, MO-KS
Jefferson City
St. Louis
Kansas City
Missouri forecast
Missouri
Forecast
Unemployment
UNEMPLOYMENT (PERCENT OF THE LABOR FORCE) WHAT THE CHART SHOWS:
Unemployment rate trends in Missouri,
compared with the national average.
Missouri’s unemployment rate is falling
faster than the national unemployment rate.
KEY MESSAGES:
The unemployment rate is the single best
indicator of the relative economic
performance of a region.
Missouri’s falling unemployment rate is a
good sign that the economy is in recovery
mode.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 13
0
2
4
6
8
10
12
0
2
4
6
8
10
12
1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018
Missouri
US (shaded)
Forecast
Relative House Prices
RATIO OF THE STATE’S HOUSE PRICES TO THE NATIONAL AVERAGE (1995 Q2 = 1.0) WHAT THE CHART SHOWS:
The figure tracks the relative price of houses
in the state versus the nation—that is, it
reflects the ratio of the state price index to
the national house price index, with that ratio
set to unity in the summer of 1995. A drop
in the line means that house prices in the
state lag the national trend. States that did
not suffer from speculative conditions saw a
decline in the relative price of houses in this
last decade.
The state’s house prices lagged the boom in
the national market in this decade. Prices
are back in normal alignment with others,
however, as speculative excesses
elsewhere are history.
KEY MESSAGE:
The gap between the state’s real estate
market and the national housing market has
narrowed some, as inflated housing
conditions have corrected.
Source: FHFA. Updated through 2013 Q4.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 14
0.8
0.9
1.0
1.1
0.8
0.9
1.0
1.1
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Real Estate Markets
HOUSE PRICES IN SELECTED COMMUNITIES (RATIO TO THE 1995 Q2 LEVEL) WHAT THE CHART SHOWS:
The figure tracks the cumulative percentage
deviation in house prices since 1995 in
selected local markets and compares those
with the national average.
House prices are rising at a moderate pace.
KEY MESSAGES:
Real estate trends have been steady for
most of this decade amid the national
housing bubble.
Source: FHFA. Updated through 2013 Q4.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 15
0.75
1.00
1.25
1.50
1.75
2.00
0.75
1.00
1.25
1.50
1.75
2.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
US
St. Louis
Kansas City
Springfield
St. Joseph
Joplin
Columbia
US
New Home Building
HOUSING STARTS (RATIO TO THE JULY 1990 LEVEL) WHAT THE CHART SHOWS:
New home building activity compared with
the national building pace.
Housing activity is shown as a ratio to the
1990 level to enable proportionate
comparisons with national activity.
Home building is up slightly.
KEY MESSAGES:
Although Missouri did not suffer a bubble in
house values, the credit crunch has taken a
toll on the home building business
nonetheless.
Source: Census Department. Updated through March 2014
(state) and April 2014 (US).
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 16
0
1
1
2
2
3
0
1
1
2
2
3
2000 2003 2006 2009 2012 2015
USMissouri
Forecast
Office Markets
PERCENT OF OFFICE SPACE THAT IS VACANT WHAT THE CHART SHOWS:
Conditions in local office markets, compared
with the nation.
Vacancy rates have stabilized at a high
level.
KEY MESSAGES:
Commercial real estate conditions remain
challenging.
Source: CB Richard Ellis (formerly CB Commercial Property
Information Systems), Office Vacancy Index of the United
States. Updated through 2014 Q1.
June 3, 2014
Regional Perspectives: Missouri Economic Outlook
Commercial Banking 17
0
5
10
15
20
25
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Kansas City metropolitan areaSt. Louis metropolitan area
All metropolitan areas (shaded area)