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U.S., Florida & Orange County
Economic Update
2015 Economic Summit
Orlando, FL
December 15th, 2015
Economic Policy
Uncertainty
 Health Care Reform
 Employer mandates
 Impact on labor market
 Dodd-Frank Financial Regulatory Reform
 Impact on credit flows & financial sector
 37.1% (104 – 94 without proposals)
 Fiscal Policy
 Monetary Policy
 When will interest rate hikes commence?
 Labor market/wage growth
 How will financial markets react?
U.S. Forecast
Total Nonfarm Payroll Employment
(Millions)
145.0
140.0
135.0
130.0
125.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Total Nonfarm Employment
U.S. Forecast
 Payroll jobs to reach potential
U.S. Forecast
 Missing Workers
U.S. Forecast
Civilian Unemployment Rate
(%)
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Unemployment Rate
U.S. Forecast
Unemployment if “missing workers” were found
U.S. Economic Outlook
2014
Q2
2014
Q3
GDP
% Change, Annual
Rate
4.6
5.0 2.4
Consumer Price Index
% Change, Annual
Rate
3.0
Consumer Sentiment
Consumption
% Change, Annual
Rate
2014
Q4
2014
2015
2016
2017
2.3
2.5
2.7
2.9
1.1 -1.2 1.6
0.4
1.9
2.2
82.8 83.0 89.8 84.1 90.4 89.5 88.9
2.5
2.2 2.6
2.4
2.9
3.0
2.8
U.S. Forecast
 The Arithmetic of Higher Oil
Prices:
 Each $1 decrease in the price of a
barrel of oil will:
 Decrease price of gallon of gas 2.5 cents
 Push consumer gasoline bills down $3
billion
 Lower the CPI 0.03%
 Raise real disposable income 0.25%
U.S. Forecast
 The Economics of lower Oil
Prices:
 Each permanent $10 decrease in the
price of a barrel of oil will:
 Raise forecast real GDP growth 0.2% in 1st year,
0.5% in the 2nd
 Raise forecast of payroll employment 110,000 in
1st year and 390,000 in 2nd
 Psychic Impact
 Domestic production impacts?
U.S. Forecast
30-Year Mortgage Rates and Housing Starts
(Mortgage rates - Left axis, %)
9.0
2.5
8.0
2.0
7.0
1.5
6.0
1.0
5.0
0.5
4.0
3.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
30-Year Fixed Mortgage Rate
Housing Starts - Millions
0.0
Florida Housing Market
Housing market recovery
continues
Now single-digit price
appreciation
Still high level of investor
activity
Housing finance still an issue
Florida Housing Market
Florida Housing Market
Florida Housing Market
November
2014
November
2013
Closed Sales
17,772
16,061
10.7%
Median Sale
Price
$176,000
$170,000
3.5%
Median Days
on Market
54
49
10.2%
5.3
5.6
-4.8%
Inventory
(Months Supply)
Percent
change
Florida Housing Market
Investors are still active in
Florida residential real estate
Still high share of cash
transactions
Private equity, hedge funds
international buyers
Housing Market
Cash Sales
 Why are investors still active in
Florida residential real estate?
Median
Median Home
Annual yield
Monthly Rent
Price
January2012
$1,233
$129,000
11.5%
January-2013
$1,289
$145,000
10.7%
January-2014
$1,395
$163,000
10.3%
November2014
$1,420
$176,000
8.1%
Housing Market
Cash Sales
November
2014
November
2013
Cash as % of
November
2014 Sales
Florida
6,961
7,048
39.2%
Miami
1,292
1,393
41.9%
Tampa
1,224
1,098
39.1%
Jacksonville
439
428
32.4%
Orlando
723
731
33.0%
Florida Forecast
Florida Forecast
Florida Housing Starts
(thousands)
300.0
9%
250.0
8%
200.0
7%
150.0
6%
100.0
5%
50.0
4%
0.0
3%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Total Private Housing Starts
30 year Mortgage Rates
Florida Forecast
Florida Population
(Thousands)
21000.0
20000.0
19000.0
18000.0
17000.0
16000.0
15000.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast
Florida & U.S. Unemployment Rate
(%)
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
FL Unemployment Rate
U.S. Unemployment Rate
Florida Forecast
Florida Real Gross State Product
(% change year ago)
10%
5%
0%
-5%
-10%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast
Florida Employment
(Thousands)
8400.0
8200.0
8000.0
7800.0
7600.0
7400.0
7200.0
7000.0
6800.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Wage & Salary Employment
Florida Forecast
Florida Construction Employment
(Thousands)
700.0
600.0
500.0
400.0
300.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast
Florida Professional & Business
Services Employment
(Thousands)
1300.0
1200.0
1100.0
1000.0
900.0
800.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Florida Forecast
Florida Leisure & Hospitality
Employment
(Thousands)
1150.0
1100.0
1050.0
1000.0
950.0
900.0
850.0
800.0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
2014-2017 Averages;
Q4 2014 Forecast
Florida
Sector
% Average Annual
Growth
Construction
9.2
Professional & Business Services
3.5
Trade, Transportation & Utilities
3.3
Leisure & Hospitality
2.0
Education-Health Services
Information
Financial
Manufacturing
State & Local Government
Federal Government
1.9
1.2
0.9
0.6
0.5
-0.6
2014-2017 Averages;
Q4 2014 Forecast
Region
Florida
Deltona
Gainesville
Jacksonville
Lakeland
Miami
Naples
Ocala
Orlando
Palm Bay
Pensacola
Tallahassee
Tampa
Population Growth
Average % Chg
Rank
1.4
1.2
0.8
1.4
1.0
1.2
2.4
1.6
2.1
1.1
0.6
0.8
1.2
--7
11
4
9
5
1
3
2
8
12
10
6
2014-2017 Averages;
Q4 2014 Forecast
Region
Florida
Deltona
Gainesville
Jacksonville
Lakeland
Miami
Naples
Ocala
Orlando
Palm Bay
Pensacola
Tallahassee
Tampa
Employment Growth
Average % Chg
Rank
2.2
1.7
1.1
2.3
1.5
2.1
2.9
1.5
2.7
1.7
1.3
1.4
1.8
--7
12
3
9
4
1
8
2
6
11
10
5
2014-2017 Averages;
Q4 2014 Forecast
Orlando MSA
Sector
% Average Annual
Growth
Construction
8.6
Professional & Business Services
4.1
Leisure & Hospitality
2.9
Trade, Transportation & Utilities
2.4
Education-Health Services
2.2
Information
Manufacturing
State & Local Government
Financial
1.8
1.2
1.1
0.4
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Orange County Forecast
Thank you
Sean M. Snaith, Ph.D.
Director
Institute for Economic Competitiveness
(407) 823-1453
[email protected]
WWW.IEC.UCF.EDU
www.facebook.com/seansnaith
Twitter: @seansnaith