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An Economic Forecast
Tampa, FL
September 1st, 2015
The Rules of the Game
Matter
 They change the way the
players play the game.
 They can change the outcome
of the game itself.
 Freeze tag
The Rules of the Game
Matter
• Federal Regulation and
Aggregate Economic Growth
by John W. Dawson and John J.
Seater
• Journal of Economic Growth
(2013) 18:137-177
Examined Economic Growth and
Productivity 1949-2005
The Rules of the Game
Matter
• Results:
• Regulations have reduced real
GDP growth an average of 2%
per year.
• Real GDP in 2005 would have
been $53.9 trillion instead of
the $15.1 trillion
The Rules of the Game
Matter
• Results:
• Productivity is impacted by
regulatory growth
• The conundrum of declining
productivity in the 1970’s
attributable to a doubling in the
number of pages of regulation.
The Rules of the Game
Matter
• 2013 CFR 175,000
• Dodd-Frank law 2,300 pages
– 22,296 pages of rules so far
– Another 13,000 on the way
• Affordable Care Act
The Rules of the Game
Matter
• Dan Gallagher, Commissioner of
the SEC:
• “And really, to me, Bob, the burden isn’t
necessarily as much as the regulations
that came from Dodd-Frank. Some of
them are just completely nonsensical. I
mean, nothing to do with the financial
crisis, aren’t really germane to the
function of the SEC and that’s what
happens when you get a runaway piece
of legislation.”
Total Nonfarm Payroll Employment
(Millions)
150.0
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 18
Total Nonfarm Employment
U.S. Forecast
 Payroll jobs to reach potential
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 18
Unemployment Rate
U.S. Forecast
2015
Q1
2015
Q2
2015
Q3
0.6
2.9 1.9
2015
2016
2017
2018
2.2
2.6
2.7
2.5
Consumer Price Index
% Change, Annual
Rate
-0.9 -3.1 -0.7 -0.3 2.1
2.4
2.6
Consumer Sentiment
95.5 94.2 92.2 94.1 92.6 92.3 92.6
GDP
% Change, Annual
Rate
Consumption
% Change, Annual
Rate
2.5
2.9 2.4
3.0
3.0
2.7
2.6
Global Factors - Oil
 The Arithmetic of Lower 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%
Global Factors - Oil
 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?
Global Factors - Eurozone
 Greece and the Euro
 All the Greek bailouts, haircut &
the election are stays of
execution and not pardons
 Euro still facing greatest threat
since inception
 Two (long-run) possible outcomes for the
Euro zone
Global Factors - China
 Is the Chinese economy a
pagoda of cards?
 Economy slowing
 Stock market plunge
 Desperate attempts to stop the decline
 Depreciation of the Yuan
Global Factors - ROW
 IMF revised down 2015 world growth
outlook: 3.3%
 2016: 3.8%
 Brazil – worst recession in 25 years
 Latin America/Caribbean sub 2%
outlook
 Canadian recession 1st half 2015
 Stronger U.S. Dollar
U.S. Forecast
 Will the Bankruptcy of Sky Mall
Put an End to Sky Mall™
Policies?
 Sky Mall™ Policy:
 An Expensive Policy that Fails to
Achieve its Desired Outcome
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast
U.S. Forecast
Florida Housing Market
Housing market recovery
continues
Double-digit price appreciation
has returned
Investors chasing shrinking pool of
distressed properties
Housing finance still an issue
Housing Market
Housing Finance
Mortgage availability slowly
improving
Mortgages have been restricted by
Dodd Frank
Capital Standards
Underwriting Standards
Limited Private Securitization
Demise of Mortgage Brokering
U.S. Forecast
Florida Housing Market
Florida Housing Market
Florida Housing Market
June 2015
June 2014
Closed Sales
27,729
23,181
19.6%
Median Sale
Price
$203,500
$185,000
10.0%
Median Days
on Market
47
57
-17.5%
4.6
5.6
-17.4%
Inventory
(Months Supply)
Percent
change
Florida Forecast
Florida Housing Starts
(thousands)
300.0
8%
250.0
7%
200.0
6%
150.0
5%
100.0
50.0
4%
0.0
3%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Total Private Housing Starts
30 year Mortgage Rates
Florida Forecast
Florida Population
(Thousands)
22000.0
21000.0
20000.0
19000.0
18000.0
17000.0
16000.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Florida Forecast
Florida & U.S. Unemployment Rate
(%)
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
FL Unemployment Rate
U.S. Unemployment Rate
Florida Forecast
Florida Real Gross State Product
(% change year ago)
10%
5%
0%
-5%
-10%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Florida Forecast
Florida Employment
(Thousands)
8600.0
8400.0
8200.0
8000.0
7800.0
7600.0
7400.0
7200.0
7000.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Wage & Salary Employment
Florida Forecast
Florida Construction Employment
(Thousands)
700.0
600.0
500.0
400.0
300.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Florida Forecast
Florida Professional & Business
Services Employment
(Thousands)
1400.0
1300.0
1200.0
1100.0
1000.0
900.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Florida Forecast
Florida Leisure & Hospitality
Employment
(Thousands)
1200.0
1100.0
1000.0
900.0
800.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
2015-2018 Averages;
Q2 2015 Forecast
Florida
Sector
% Average Annual
Growth
Construction
7.9
Professional & Business Services
4.1
Trade, Transportation & Utilities
3.4
Education-Health Services
2.2
Leisure & Hospitality
1.9
State & Local Government
Information
Financial
Manufacturing
0.9
0.7
0.5
0.4
2015-2018 Averages;
Q2 2015 Forecast
Region
Population Growth
Average % Chg
Rank
Florida
1.5
---
Deltona
1.2
7
Gainesville
0.8
12
Jacksonville
1.5
5
Lakeland
1.2
9
Miami
1.2
6
Naples
2.6
1
Ocala
1.7
3
Orlando
2.3
2
Palm Bay
1.2
7
Pensacola
0.9
11
Tallahassee
1.1
10
Tampa
1.6
4
2015-2018 Averages;
Q2 2015 Forecast
Region
Employment Growth
Average % Chg
Rank
Florida
2.2
---
Deltona
2.0
6
Gainesville
1.4
12
Jacksonville
1.8
9
Lakeland
1.8
8
Miami
2.0
5
Naples
3.3
1
Ocala
2.5
3
Orlando
3.0
2
Palm Bay
2.3
4
Pensacola
1.4
11
Tallahassee
1.5
10
Tampa
2.0
7
2015-2018 Averages;
Q2 2015 Forecast
Orlando
Sector
% Average Annual
Growth
Construction
7.9
Professional & Business Services
4.7
Trade, Transportation & Utilities
3.4
Leisure & Hospitality
2.6
Education-Health Services
Financial
Manufacturing
Information
State & Local Government
2.6
1.2
1.0
1.0
0.4
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