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Board of Governors of the Federal Reserve System
The Federal Reserve, the central bank of the United States, provides the nation with
a safe, flexible, and stable monetary and financial system.
Accessible Material
March 2012 Tealbook Tables and Charts
Table of Contents
Book A
Domestic Economic Developments and Outlook
International Economic Developments and Outlook
Financial Developments
Risks and Uncertainty
Greensheets
Book B
Monetary Policy Strategies
Monetary Policy Alternatives
Explanatory Notes
Last update: January 5, 2018
BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM
20th Street and Constitution Avenue N.W., Washington, DC 20551
Board of Governors of the Federal Reserve System
The Federal Reserve, the central bank of the United States, provides the nation with
a safe, flexible, and stable monetary and financial system.
Accessible Material
March 2012 Tealbook A Tables and Charts†
Domestic Economic Developments and Outlook
Key Background Factors underlying the Baseline Staff Projection
Figure: Federal Funds Rate
Line chart, by percent, 2007 to 2013. Data are quarterly average. There are three series, Current Tealbook,
Previous Tealbook, and Market expected rate. Current Tealbook begins in 2007:Q1 at about 5.25 and generally
decreases to about 0.13 by 2009:Q4. From 2009:Q4 to 2012:Q3 it fluctuates between about 0.07 and 0.18. By
2012:Q3 it is at about 0.13 and it remains constant here until 2013:Q4. Previous Tealbook follows Current Tealbook
almost exactly until 2012:Q1 when it moves to 0.13. It remains constant at 0.13 until 2013:Q4. Market expected rate
begins in 2011:Q4 at about 0.13 and generally decreases to about 0.05 by 2012:Q3. It then generally increases to
about 0.13 by 2013:Q4.
Figure: Long-Term Interest Rates
Line chart, by percent, 2007 to 2013. Data are quarterly average. There are six series, "Current Tealbook: BBB
corporate yield," "Current Tealbook: Conforming mortgage rate," "Current Tealbook: 10-year Treasury yield,"
"Previous Tealbook: BBB corporate yield," "Previous Tealbook: Conforming mortgage rate," and "Previous
Tealbook: 10-year Treasury yield." Current Tealbook: BBB corporate yield begins in 2007 at about 6.1 and
generally increases to about 9.4 by late 2008. It then generally decreases to about 4.9 by mid-2011 and then
generally increases to about 5.6 by late 2013. Current Tealbook: Conforming mortgage rate begins in 2007 at about
6.2 and fluctuates but generally decreases to about 4.0 by late 2011. It then increases to about 5.2 by late 2013.
Current Tealbook: 10-year Treasury yield begins in 2007 at about 4.8 and fluctuates but generally decreases to
about 3.2 by early 2009. It then generally increases to about 3.9 by early 2010 and then generally decreases to
about 2.9 by mid-2010. By early 2011 it has generally increased to about 3.6 and by late 2011 it has generally
decreased to about 2.1. It then generally increases to about 3.7 by late 2013. Previous Tealbook: BBB corporate
yield begins in 2007 at about 6.1 and generally increases to about 9.4 by late 2008. It then generally decreases to
about 4.9 by mid-2011 and then generally increases to about 5.1 by late 2013. Previous Tealbook: Conforming
mortgage rate begins in 2007 at about 6.2 and fluctuates but generally decreases to about 4.0 by late 2011. It then
increases to about 5.4 by late 2013. Previous Tealbook: 10-year Treasury yield begins in 2007 at about 4.8 and
fluctuates but generally decreases to about 3.2 by early 2009. It then generally increases to about 3.9 by early 2010
and then generally decreases to about 2.9 by mid-2010. By early 2011 it has generally increased to about 3.6 and
by late 2011 it has generally decreased to about 2.15. It then generally increases to about 3.85 by late 2013.
Figure: Equity Prices
Line chart, by ratio scale where 2007:Q1 = 100, 2007 to 2013. Data are quarter-end. There are two series, Current
Tealbook: Dow Jones U.S. Total Stock Market Index and Previous Tealbook: Dow Jones U.S. Total Stock Market
Index. Current Tealbook: Dow Jones U.S. Total Stock Market Index begins in early 2007 at about 100 and
generally increases to about 107 by mid-2007. It then generally decreases to about 56 by 2009 and then generally
increases to about 85 by early 2010. By mid-2010 it has generally decreased to about 74 and by early 2011 it has
generally increased to about 98. It then generally decreases to about 81 by mid-2011 and then increases to about
111 by late 2013. Previous Tealbook: Dow Jones U.S. Total Stock Market Index begins in early 2007 at about 100
and generally increases to about 107 by mid-2007. It then generally decreases to about 56 by 2009 and then
generally increases to about 85 by early 2010. By mid-2010 it has generally decreased to about 74 and by early
2011 it has generally increased to about 98. It then generally decreases to about 81 by mid-2011 and then
increases to about 110 by late 2013.
Figure: House Prices
Line chart, by ratio scale, 2007:Q1 = 100, 2007 to 2013. Data are quarterly. There are two series, Current
Tealbook: CoreLogic index and Previous Tealbook: CoreLogic index. Current Tealbook: CoreLogic index begins in
2007 at about 100 and generally decreases to about 72.5 by early 2009. It then generally increases to about 74.8
by early 2010 and then generally decreases to about 68.3 by late 2013. Previous Tealbook: CoreLogic index begins
in 2007 at about 100 and generally decreases to about 72.5 by early 2009. It then generally increases to about 74.7
by mid-2010 and then generally decreases to about 68.3 by late 2013.
Figure: Crude Oil Prices
Line chart, by dollars per barrel, 2007 to 2013. Data are quarterly average. There are four series, Current Tealbook:
West Texas Intermediate, Current Tealbook: Imported Oil, Previous Tealbook: West Texas Intermediate and
Previous Tealbook: Imported Oil. Current Tealbook: West Texas Intermediate begins in early 2007 at about 58 and
generally increases to about 125 by 2008. By 2009 it has generally decreased to about 42 and by early 2011 it has
generally increased to about 103. It then generally decreases to about 91 by late 2011 and then increases to about
101 by late 2013. Current Tealbook: Imported Oil begins in early 2007 at about 55 and increases to about 117 by
mid-2008. It then decreases to about 41 by early 2009 and then generally increases to about 109 by mid-2011. By
late 2013 it has generally decreased to about 103. Previous Tealbook: West Texas Intermediate begins in early
2007 at about 58 and generally increases to about 125 by 2008. By 2009 it has generally decreased to about 42
and by early 2011 it has generally increased to about 103. It then generally decreases to about 89 by late 2011 and
then generally increases to about 96 by late 2013. Previous Tealbook: Imported Oil begins in early 2007 at about
55 and increases to about 117 by mid-2008. It then decreases to about 41 by early 2009 and then generally
increases to about 109 by mid-2011. By late 2013 it has generally decreased to about 101.
Figure: Broad Real Dollar
Line chart, by scale where 2007:Q1 = 100, 2007 to 2013. Data are quarterly average. There are two series, Current
Tealbook and Previous Tealbook. Current Tealbook begins in 2007 at about 100 and generally decreases to about
89 by 2008. It then generally increases to about 101 by early 2009 and then generally decreases to about 92 by
late 2009. By 2010 it has generally increased to about 94 and by mid-2011 it has generally decreased to about
85.2. It then generally increases to about 89 by late 2011 and then decreases to about 85 by late 2013. Previous
Tealbook begins in 2007 at about 100 and generally decreases to about 89 by 2008. It then generally increases to
about 101 by early 2009 and then generally decreases to about 92 by late 2009. By 2010 it has generally increased
to about 94 and by mid-2011 it has generally decreased to about 85.2. It then generally increases to about 88 by
late 2011 and then decreases to about 85 by late 2013.
Note: Blue shading represents the projection period, which begins in 2012:Q1.
[Box:] Assessing the Near Term Outlook with Factor Models
Figure: Activity Factor
Line chart, by standard deviations from the mean, 1984 to 2012. There is a horizontal line at zero. There are three
series, Activity factor, Chicago Fed National Activity Index 3-month moving average, and 68 percent confidence
interval. Activity factor begins in 1984 at about 2.4 and generally decreases to about -0.5 by 1986. It then generally
increases to about 1.2 by 1988 and then generally decreases to about -3 by 1991. It then generally increases to
about 1.5 by 1994 and then generally decreases to about -0.6 by 1995. It then generally fluctuates between -0.5
and 1.2 from 1995 to 1999. It then generally decreases to about -2.1 by 2001 and then generally increases to about
1 by 2005. It then generally decreases to about -3.3 by 2008 and then generally increases to about 0.3 by 2012.
Chicago Fed National Activity Index 3-month moving average begins in 1984 at about 1.5 and generally decrease
to about -0.1 by 1985. It generally increases to about 0.7 by 1987 and then generally decreases to about -1.7 by
1990. It then generally increases to about 0.5 and fluctuates between -0.3 and 0.5 from 1994 to about 2000. It then
generally decreases to about -1.2 by 2011 and then generally increases to about 0.9 by 2006. It generally
decreases to about -3.95 by 2008 and then generally increases to about 0.1 by 2012. The 68 percent confidence
interval starts at about between 2.25 and 2.6 and decreases to between about -2.9 and -3.5 by 1990, then
increases to about between 1.6 and 1.9. It then decreases to about between -2.7 and -3.9 by 2008 and then
increases to end between -0.3 and 0.5 by 2012.
Note: Shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research: July 1990-March 1991, March
2001-November 2001, and December 2007-June 2009.
Figure: Recession Probabilities
Line chart, by probability, February 2011 to February 2012. The series begins in February 2011 at about 0.095 and
increases to about 0.14 by March 2011. It decreases to about 0.095 by April 2011 and then generally increases to
about 0.32 by May 2011. It generally decreases to about 0.25 by July 2011 and then generally increases to about
0.44 by August 2011. It then generally decreases to about 0.9 by February 2012.
Note: Chart shows the probably of two consecutive quarters of declining output.
Factor Model Projections of Real GDP Growth
2012:Q1
2012:Q2
Real GDP growth (percent)
Current
1.4
3.5
As of January Tealbook
2.0
2.4
-0.6
1.1
Production and labor
1.3
1.4
Financial
0.2
1.0
-2.0
-1.3
Revision since January (percentage points)
Contributions of:
Spending and other
Summary of the Near-Term Outlook
(Percent change at annual rate except as noted)
2011:Q4
Measure
Previous
Tealbook
Real GDP
2012:Q1
Current
Tealbook
Previous
Tealbook
2012:Q2
Current
Tealbook
Previous
Tealbook
Current
Tealbook
2.9
3.1
1.6
1.8
1.8
2.2
2.4
2.5
1.9
1.9
2.4
2.9
Personal consumption expenditures
2.2
2.1
2.0
1.2
2.4
2.6
Residential investment
9.7
11.5
8.5
13.9
4.0
7.7
Business Fixed Investment
2.6
3.2
-.1
4.5
2.1
3.9
-4.5
-4.2
.0
-1.4
-.8
-.3
1.6
1.9
-.1
.0
-.1
-.4
.2
-.1
.1
.5
.1
.2
8.7
8.7
8.7
8.4
8.7
8.4
.5
1.2
1.4
2.1
1.7
2.2
.9
1.3
1.5
1.8
1.5
1.7
Private domestic final purchases
Government Purchases
Contributions to change in real GDP
Inventory investment 1
Net exports 1
Unemployment Rate 2
PCE Chain Price Index
Ex. food and energy
1. Percentage points. Return to table
2. Percent. Return to table
Recent Nonfinancial Developments (1)
Figure: Real GDP and GDI
Line chart, by 4-quarter percent change, 2003 to 2011. There is a horizontal line at zero. There are two series,
Gross domestic product and Gross domestic income. Gross domestic product begins in 2003 at about 1.8 and
increases to about 4.1 by 2004. It then generally decreases to about 1 by early 2007 and then increases to about
2.4 by mid-2007. By 2009 it has generally decreased to about -5.3 and by 2010 it has generally increased to about
3.5. It then decreases to about 1.7 by 2011:Q3. Gross domestic income begins in 2003 at about 1.2 and increases
to about 3.8 by early 2004. From early 2004 to early 2006 it fluctuates between about 3.2 and 4.2. It then
decreases to about -0.3 by late 2007 and then increases to about 0.7 by early 2008. By 2009 it has decreased to
about -5.5 and by 2010 it has increased to about 4.3. It then decreases to about 1.2 by 2011:Q3.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Figure: Change in Private Payroll Employment
Line chart, by thousands of employees, 2003 to 2011. There is a horizontal line at zero. There are two series,
Change in Private Payroll Employment and 3-month moving average. Change in Private Payroll Employment begins
in early 2003 at about 40 and generally decreases to about -210 by mid-2003. It then generally increases to about
320 by early 2004. From early 2004 to early 2006 it fluctuates between about -10 and 350. It then generally
decreases to about -20 by early 2006 and then generally increases to about 220 by 2007. By early 2009 it has
generally decreased to about -880 and by November 2011 it has generally increased to about 130. 3-month moving
average begins in early 2003 at about -40 and generally decreases to about -130 by mid-2003. By early 2006 it has
generally increased to about 300 and by early 2009 it has generally decreased to about -800. It then generally
increases to about 200 by November 2011.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Figure: Unemployment Rate
Line chart, by percent, 2003 to 2011. The series begins in early 2003 at about 5.9 and generally increases to about
6.3 by mid-2003. It then generally decreases to about 4.3 by 2007 and then generally increases to about 10.1 by
2009. By November 2011 it has generally decreased to about 8.3.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Figure: Manufacturing IP excluding Motor Vehicles and Parts
Line chart, by 3-month percent change, annual rate, 2003 to 2011. There is a horizontal line at zero. The series
begins in early 2003 at about 0 and then generally increases to about 5 within a month or two. It then generally
decreases to about -2 by mid-2003. By early 2005 it has generally increased to about 9 and by mid-2005 it has
generally decreased to about -5. It then generally increases to about 12.5 by late 2005 and then generally
decreases to about -0.5 by late 2006. By early 2007 it has generally increased to about 7.5 and by early 2009 it has
generally decreased to about -25. It then generally increases to about 11 by early 2010 and then generally
decreases to about 3.0 by early 2011. It generally increases to about 8 by mid-2011 and then generally decreases
to about 0. By late 2011 it generally increases to about 7.
Source: Federal Reserve Board, G.17 Statistical Release, "Industrial Production and Capacity Utilization."
Recent Nonfinancial Developments (2)
Figure: Production of Light Motor Vehicles
Line chart, by millions of units, annual rate, 2003 to 2011. The series begins in 2003 at about 12.8. It then
fluctuates, but generally decreases to about 3.5 by early 2009 and then fluctuates, but generally increases to about
10 by late 2011.
Source: Ward's Auto Infobank
Figure: Sales of Light Motor Vehicles
Line chart, by millions of units, annual rate, 2003 to 2011. The series begins in early 2003 at about 16.2. From
early 2003 to early 2005 it fluctuates between about 15.2 and 18.1. It then generally increases to about 20.5 by
mid-2005 and then decreases to about 14.5 by late 2005. By early 2006 it has generally increased to about 18 and
by early 2009 it has generally decreased to about 9.0. It then generally increases to about 14 by mid-2009 and
within a month or so decreases to about 8.95. By late 2011 it has generally increased to about 15.
Source: Ward's Auto Infobank.
Figure: Real PCE Goods excluding Motor Vehicles
Line chart, by billions of chained (2005) dollars, 2003 to 2011. The series begins in 2003 at about 2400 and
generally increases to about 2950 by 2007. It then generally decreases to about 2775 by 2009 and then generally
increases to about 3040 by October 2011.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Figure: Single-Family Housing Starts
Line chart, thousands of units, annual rate, 2003 to 2011. There are two series, Starts and Adjusted permits. Starts
begins in 2003 at about 1530 and generally decreases to about 1280 within a month or so. It then fluctuates, but
generally increases to about 1810 by 2006 and then generally decreases to about 350 by early 2009. By early 2010
it has generally increased to about 580 and by October 2011 it has generally decreased to about 480. Adjusted
permits begins in 2003 at about 1450 and generally increases to about 1840 by 2005. It then generally decreases to
about 350 by 2009 and then generally increases to about 575 by early 2010. By October 2011 it has generally
decreased to about 430.
Note: Adjusted permits equal permits plus starts outside of permit-issuing areas.
Source: U.S. Census Bureau.
Figure: Single-Family Home Sales
Line chart, by thousands of units, annual rate, 2003 to 2011. There are two series, New and Existing. New begins
in 2003 at about 1000 and fluctuates, but generally increases to about 1400 by 2005. It then generally decreases to
about 300 by October 2011. Existing begins in 2003 at about 5350 and fluctuates, but generally increases to about
6350 by 2005. It then generally decreases to about 3400 by late 2008 and then generally increases to about 5000
by late 2009. By mid-2010 it has generally decreased to about 29000 and by late 2011 it has generally increased to
about 3800.
Source: For existing, National Association of Realtors; for new, U.S. Census Bureau.
Figure: Nondefense Capital Goods Excluding Aircraft
Line chart, by billions of dollars, 2003 to 2011. There are two series, Orders and Shipments. Orders begins in 2003
at about 49. It then fluctuates, but generally increases to about 68.5 by early 2008 and then generally decreases to
about 47 by 2009. By October 2011 it has generally increased to about 66. Shipments begins in 2003 at about 49.3
It then generally increases to about 66 by 2008 and then generally decreases to about 52 by 2009. By October
2011 it has generally increased to about 65.
Source: U.S. Census Bureau.
Recent Nonfinancial Developments (3)
Figure: Nonresidential Construction Put in Place
Line chart, by billions of chained (2005) dollars, 2003 to 2011. The series begins in 2003 at about 226. It then
generally increases to about 410 by late 2007. From late 2007 to late 2008 it fluctuates between about 400 and
415. It then generally decreases to about 245 by early 2011 and then generally increases to about 280 by October
2011.
Source: U.S. Census Bureau.
Figure: Inventory Ratios ex. Motor Vehicles
Line chart, by months, 2003 to 2011. There are two series, Staff flow-of-goods system and Census book-value
data. Staff flow-of-goods system begins in 2003 at about 1.6 and generally decreases to about 1.48 by late 2007. It
then generally increases to about 1.63 by early 2009 and then generally decreases to about 1.5 by October 2011.
Census book-value data begins in 2003 at about 1.3 and generally decreases to about 1.18 by 2005. It then
generally increases to about 1.26 by 2006 and then generally decreases to about 1.18 by 2008. By early 2009 it
has generally increased to about 1.41 and by September 2011 it has generally decreased to about 1.22.
Note: Flow-of-goods system covers total industry ex. motor vehicles and parts, and inventories are relative to consumption. Census data cover
manufacturing and trade ex. motor vehicles and parts, and inventories are relative to sales.
Source: U.S. Census Bureau; staff calculation.
Figure: Defense Spending
Line chart, by billions of chained (2005) dollars, 2003 to 2011. There are two series, "Unified" in which the data are
monthly and "NIPA" in which the data are quarterly. Unified begins in 2003 at about 450 and generally increases to
about 555 by 2004. From 2004 to early 2007 it fluctuates between about 465 and 575. It then generally increases to
about 690 by late 2010 and then generally decreases to about 610 by late 2011. NIPA begins in 2003 at about 450
and generally increases to about 525 by 2004. From 2004 to early 2007 it fluctuates between about 505 and 535. It
then generally increases to about 640 by mid-2010 and then generally decreases to about 610 by Q4 2011.
Note: The unified series is seasonally adjusted and deflated by BEA prices. The NIPA series excludes the consumption of fixed capital.
Source: Monthly Treasury Statement; U.S. Department of Commerce, Bureau of Economic Analysis.
Figure: Exports and Non-Oil Imports
Line chart, by billions of dollars, 2003 to 2011. There are two series, Non-oil imports and Exports. Non-oil imports
begins in early 2003 at about 112. It then generally increases to about 180 by 2008 and then generally decreases
to about 132 by 2009. By September 2011 it has generally increased to about 187. Exports begins in early 2003 at
about 81. It then generally increases to about 165 by 2008 and then generally decreases to about 122 by 2009. By
September 2011 it has generally increased to about 180.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis; U.S. Census Bureau.
Figure: Total PCE Prices
Line chart, by percent, 2003 to 2011. There is a horizontal line at zero. There are two series, 12-month change and
3-month change. There is a horizontal line at zero. 12-month change begins in 2003 at about 2.3 and generally
decreases to about 1.8 by mid-2003. It then generally increases to about 4 by 2005 and then generally decreases
to about 1.5 by 2006. By 2008 it has generally increased to about 4.5 and by 2009 it has generally decreased to
about -1. It then generally increases to about 2.5 by early 2010 and then generally decreases to about 1.0 by late
2010. By October 2011 it has generally increased to about 2.5. 3-month change begins in early 2003 at about 2. It
then generally increases to about 4 by early 2002 and then generally decreases to about -1 by mid-2003. By late
2003 it has generally increased to about 4. From late 2003 to mid-2005 it fluctuates between about 1.0 and 4.0. It
then generally increases to about 8.5 by mid-2005 and then generally decreases to about -1 by late 2005. By mid2008 it has generally increased to about 6.5 and by late 2008 it has generally decreased to about -9.0. It then
generally increases to about 4.0 by 2009 and then generally decreases to about -1.2 by 2010. By early 2011 it has
generally increased to about 4.7 and by October 2011 it has generally decreased to about 1.6.
Note: 3-month changes are at an annual rate.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Figure: PCE Prices ex. Food and Energy
Line chart, by percent, 2003 to 2011. There are two series, 12-month change and 3-month change. 12-month
change begins in early 2003 at about 1.7 and generally decreases to about 1.3 by 2003. By mid-2008 it has
generally increased to about 2.5 and by 2009 it has generally decreased to about 1.4. It then generally increases to
about 1.8 by early 2010 and then generally decreases to about 0.9 by late 2010. By October 2011 it generally
increases to about 1.8. 3-month change begins in early 2003 at about 0.9. It then generally increases to about 3.45
by 2005. From 2005 to early 2008 it fluctuates between about 1 and 3.45. It then generally decreases to about 0.3
by late 2008 and then generally increases to about 2.6 by 2009. By late 2010 it has generally decreased to about
0.5 and by mid-2011 it has increased to about 2.5. It then decreases to about 1 by October 2011. By late 2011, it
generally increases to about 1.8.
Note: 3-month changes are at an annual rate.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Projections of Real GDP and Related Components
(Percent change at annual rate from final quarter of preceding period except as noted)
2011
Measure
Real GDP
2010
H1
3.1
H2
.8
2012
2.4
2013
2.4
2.7
Previous Tealbook
3.1
.8
2.4
2.1
2.4
2.4
.8
2.2
2.3
2.4
2.4
.8
2.2
2.0
2.2
3.0
1.4
1.9
2.4
2.6
Previous Tealbook
3.0
1.4
2.0
2.4
2.4
Residential investment
-6.3
.8
6.3
9.6
8.2
Previous Tealbook
-6.3
.8
5.4
6.6
7.3
-1.8
2.5
6.3
.6
2.0
-1.8
2.5
7.8
-2.1
1.1
16.6
7.5
10.3
5.3
5.6
16.6
7.5
9.4
3.8
6.4
2.9
-3.9
-2.5
-1.6
-4.1
2.9
-3.9
-3.9
-1.0
-4.1
-1.7
-3.1
-1.9
-.4
.7
-1.7
-3.1
-1.2
-.5
.7
8.8
5.7
4.5
5.9
5.7
8.8
5.7
4.9
4.8
5.2
10.7
4.8
2.5
3.7
3.9
10.7
4.8
2.1
3.9
4.1
Final sales
Previous Tealbook
Personal consumption expenditures
Nonresidential structures
Previous Tealbook
Equipment and software
Previous Tealbook
Federal purchases
Previous Tealbook
State and local purchases
Previous Tealbook
Exports
Previous Tealbook
Imports
Previous Tealbook
Contributions to change in real GDP
(percentage points)
Inventory change
Previous Tealbook
Net exports
Previous Tealbook
.7
.0
.3
.1
.3
.7
.0
.1
.1
.2
-.6
-.1
.2
.2
.1
-.6
-.1
.3
.0
.0
Figure: Real GDP
Line chart, by 4-quarter percent change, 1983 to 2013. There are two series, Current and Previous Tealbook. There
is a horizontal line at 0. Current begins in early 1983 at about 1.5. By 1984 it has generally increased to about 8.5
and by 1991 it has generally decreased to about -1.2. It then generally increases to about 4.2 by late 1992. From
late 1992 to early 2000 it fluctuates between about 2 and 5.7. It then generally decreases to about 0.2 by 2001 and
then generally increases to about 4.1 by 2004. By 2009 it has generally decreased to about -5.4 and by 2010 it
generally increases to about 3.8. It then generally decreases to about 1.5 by 2011 and then generally increases to
about 2.3 by late 2013. Previous Tealbook follows the Current series almost exactly until 2011 when it begins
decreasing at a slower rate. By late 2011 it has generally decreased to about 1.8 and by late 2013 it has generally
increased to about 3.2.
Note: The gray shaded bars indicate a period of business recession as defined by the National Bureau of Economic Research: July 1990-March
1991, March 2001-November 2001, and December 2007-June 2009.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Components of Final Demand
Figure: Personal Consumption Expenditures
Line chart, by 4-quarter percent change, 2008 to 2013. There is a horizontal line at zero. There are two series,
Current and Previous Tealbook. Current begins in 2008:Q1 at about 1.9 and generally decreases to about -3.1 by
2009:Q2. It then generally increases to about 3.0 by 2010:Q4 and then generally decreases to about 1.5 by
2011:Q4. By 2013:Q4 it has generally increased to about 2.5. Previous Tealbook follows the Current series almost
exactly until 2011 when it begins decreasing at a different rate. By 2012:Q1 it has generally decreased to about 1.4
and by 2013:Q4 it has increased to about 2.4.
Figure: Residential Investment
Line chart, by 4-quarter percent change, 2008 to 2013. There is a horizontal line at zero. There are two series,
Current and Previous Tealbook. Current begins in 2008:Q1 at about -24 and generally decreases to about -28 by
2009:Q2. It then generally increases to about 5 by 2010:Q2 and then generally decreases to about -8.5 by 2010:Q3.
By 2011:Q1 it has generally increased to about -2.5 and by 2011:Q2 it has generally decreased to about -7.5. It
then generally increases to about 8 by 2013:Q4. Previous Tealbook follows the Current Tealbook series almost
exactly until 2012:Q3 when it begins increasing at a different rate. By 2013:Q4 it has increased to about 7.7.
Figure: Equipment and Software
Line chart, by 4-quarter percent change, 2008 to 2013. There is a horizontal line at zero. There are two series,
Current and Previous Tealbook. Current begins in 2008:Q1 at about 3. It then generally decreases to about -21 by
2009:Q1. By 2010:Q3 it has generally increased to about 17.5 and by 2012:Q3 it has generally decreased to about
4.9. It then generally increases to about 5.1 by 2013:Q4. Previous Tealbook begins in 2008:Q1 at about 3. It then
generally decreases to about -21 by 2009:Q1. By 2010:Q3 it has generally increased to about 17.5 and by 2012:Q3
it has generally decreased to about 3.0. It then generally increases to about 6.2 by 2013:Q4.
Figure: Nonresidential Structures
Line chart, by 4-quarter percent change, 2008 to 2013. There is a horizontal line at zero. There are two series,
Current and Previous Tealbook. Current begins in 2008:Q1 at about 14.8. By 2009:Q4 it has generally decreased to
about -29.8 and by 2012:Q1 it has generally increased to about 9.5. It then generally decreases to about 0 by
2012:Q4 and then generally increases to about 2 by 2013:Q4. Previous Tealbook begins in 2007:Q1 at about 14.8.
By 2009:Q4 it has generally decreased to about -29.8 and by 2011:Q4 it has generally increased to about 8. By
2012:Q3 it has generally decreased to about -3 and by 2013:Q4 it has increased to about 1.2.
Figure: Government Consumption & Investment
Line chart, by 4-quarter percent change, 2008 to 2013. There are two series, Current and Previous Tealbook.
Current begins in 2008:Q1 at about 2.9. By 2011:Q3 it has generally decreased to about -2.5. It then generally
increases to about -1 by 2012:Q4 and then generally decreases to about -1.3 by 2013:Q4. Previous Tealbook
begins in 2008:Q1 at about 2.9. By 2011:Q3 it has generally decreased to about -2.6. It then generally increases to
about -0.9 by 2012:Q3 and generally decreases to about -1.29 by 2013:Q4.
Figure: Exports and Imports
Line chart, by 4-quarter percent change, 2008 to 2013. There is a horizontal line at zero. There are four series,
Exports Current Tealbook, Imports Current Tealbook, Exports Previous Tealbook and Imports Previous Tealbook.
Exports Current Tealbook begins in 2008:Q1 at about 10 and generally increases to about 11.5 by 2008:Q2. It then
generally decreases to about -14.8 by 2009:Q2 and then generally increases to about 14 by 2010:Q2. By 2013:Q4 it
has generally decreased to about 5.2. Exports Previous begins in 2008:Q1 at about 10 and generally increases to
about 11.5 by 2008:Q2. It then generally decreases to about -14.8 by 2009:Q2 and then generally increases to
about 14 by 2010:Q2. By 2013:Q4 it has generally decreased to about 5.1. Imports Current Tealbook begins in
2008:Q1 at about -0.2 and generally decreases to about -19 by 2009:Q2. It then generally increases to about 17 by
2010:Q2 and then generally decreases to about 1.5 by 2011:Q3. By 2013:Q4 it has generally increased to about
4.5. Imports Previous Tealbook begins in 2007:Q1 at about -0.2 and generally decreases to about -19 by 2009:Q2.
It then generally increases to about 17 by 2010:Q2 and then generally decreases to about 1.6 by 2011:Q3. By
2013:Q4 it has generally increased to about 4.6.
Note: Blue shading represents the projection period, which begins in 2011:Q4.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Aspects of the Medium-Term Projection
Figure: Personal Saving Rate
Line chart, by percent, 1995 to 2013. There are two series, Current and Previous Tealbook. Current begins in 1995
at about 6.05. By 1997 it has generally decreased to about 4.4 and by 1998 it has generally increased to about
5.95. It then generally decreases to about 1.5 by late 2001 and then generally increases to about 4.1 by early 2002.
By 2005 it has generally decreased to about 1.2 and by 2009 it has generally increased to about 6.3. It then
generally decreases to about 4.3 by 2013. Previous Tealbook follows the Current Tealbook series almost exactly
until 2010 when it begins decreasing at a faster rate to about 3.8. It then generally increases to about 4.1 by 2013.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Figure: Wealth-to-Income Ratio
Line chart, by ratio, 1995 to 2013. There are two series, Current and Previous Tealbook. Current begins in 1995 at
about 4.88. It then generally increases to about 6.15 by 2000 and then generally decreases to about 4.97 by 2002.
By 2005 it has generally increased to about 6.45 and by 2009 it has generally decreased to about 4.63. It then
generally increases to about 5.25 by early 2011 and then generally decreases to about 4.9 by late 2011. By late
2013 it has generally increased to about 5.81. Previous Tealbook begins in 1995 at about 4.88. It then generally
increases to about 6.15 by 2000 and then generally decreases to about 4.97 by 2002. By 2005 it has generally
increased to about 6.4 and by 2009 it has generally decreased to about 4.57. It then generally increases to about
5.18 by early 2011 and then generally decreases to about 4.95 by late 2011. It then generally increases to about
5.05 by late 2013.
Note: Household net worth as a ratio to disposable personal income.
Source: For net worth, Federal Reserve Board, flow of funds data; for income, Department of Commerce, Bureau of Economic Analysis.
Figure: Single-Family Housing Starts
Line chart, by millions of units, 1995 to 2013. There are two series, Current and Previous Tealbook. Current begins
in 1995 at about 1.05. It then generally increases to about 1.75 by 2006 and then generally decreases to about 0.33
by 2009. By early 2010 it has generally increased to about 0.52 and by 2011 it has generally decreased to about
0.40. It then generally increases to about 0.55 by late 2013. Previous Tealbook follows the Current Tealbook series
almost exactly.
Source: U.S. Census Bureau.
Figure: Equipment and Software Spending
Line chart, by share of nominal GDP, 1995 to 2013. There are two series, Current and Previous Tealbook. Current
begins in 1995 at about 8.15. It then generally increases to about 9.6 by 2000 and then generally decreases to
about 7.5 by 2004. By 2006 it has generally increased to about 8.03 and by 2009 it has generally decreased to
about 6.45. It then generally increases to about 7.7 by the end of 2013. Previous Tealbook follows the Current
Tealbook series almost exactly except that it ends in late 2013 at about 7.65.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Figure: Federal Surplus/Deficit
Line chart, by share of nominal GDP, 1995 to 2013. Data is 4-quarter moving average. There is a horizontal line at
zero. There are two series, Current and Previous Tealbook. Current begins in 1995 at about -2.7. It then generally
increases to about 2.5 by 2000 and then generally decreases to about -3.8 by 2004. By 2007 it has generally
increased to about -1.2 and by 2009 it has generally decreased to about -10.7. It has generally increased to about 5.2 by the end of 2013. Previous Tealbook follows the Current Tealbook series almost exactly except that it ends in
late 2013 at about -5.25.
Source: Monthly Treasury Statement.
Figure: Current Account Surplus/Deficit
Line chart, by share of nominal GDP, 1995 to 2013. There is a horizontal line at zero. There are two series, Current
and Previous Tealbook. Current begins in early 1995 at about -1.75 and generally increases to about -1.1 by late
1995. It then generally decreases to about -6.7 by 2005 and then generally increases to about -2.35 by 2009. By
2010 it has generally decreased to about -3.3 and by 2012 it has generally increased to about -2.6. It then generally
decreases to about -2.88 by the end of 2013. Previous Tealbook follows the Current Tealbook series almost exactly
until 2011 when it begins increasing at a different rate. By the end of 2013 it has increased to about -3.
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Note: The gray shaded bars indicate a period of business recession as defined by the National Bureau of Economic
Research: March 2001-November 2001, and December 2007-June 2009. Blue shading represents the projection
period, which begins in 2011:Q4.
Decomposition of Potential GDP
(Percent change, Q4 to Q4, except as noted)
Measure
Potential Real GDP
1974-1995
1996-2000
2001-2009
2010
2011
2012
2013
3.0
3.4
2.3
1.5
1.7
2.0
2.1
3.0
3.5
2.4
1.6
1.7
2.0
2.1
Structural labor productivity
1.4
2.6
2.3
1.4
1.5
1.6
1.7
Previous Tealbook
1.5
2.7
2.4
1.4
1.5
1.6
1.7
.7
1.5
.8
.4
.6
.6
.7
.7
1.5
.8
.4
.5
.5
.7
.5
.8
1.3
.9
.8
.9
.9
.5
.9
1.4
.9
.8
.9
.9
1.5
1.0
.6
.4
.5
.6
.6
Previous Tealbook
1.5
1.0
.6
.5
.6
.7
.6
Labor force participation
.4
.0
-.3
-.5
-.4
-.3
-.3
.4
.0
-.3
-.4
-.3
-.2
-.3
Previous Tealbook
Selected contributions 1
Capital deepening
Previous Tealbook
Multifactor productivity
Previous Tealbook
Structural hours
Previous Tealbook
Note: Components may not sum to totals because of rounding. For multiyear periods, the percent change is the annual average from Q4 of the
year preceding the first year shown to Q4 of the last year shown.
1. Percentage points. Return to table
Figure: Structural and Actual Labor Productivity (Nonfarm Business Sector)
Line chart, by chained (2005) dollars per hour, 2001 to 2013. There is a shaded bar from 2011:Q3 to 2013:Q4 that
represents the forecast period. There are two series, Structural labor productivity and Actual labor productivity.
Structural labor productivity begins in 2001 at about 43.9 and generally increases to about 57.4 by the end of 2013.
Actual labor productivity begins in 2001 at about 43.5 and generally increases to about 52 by 2007. It then generally
decreases to about 51.3 by 2008 and then generally increases to about 57.5 by the end of 2013.
Note: Blue shading represents the projection period, which begins in 2011:Q4.
Source: U.S. Department of Labor, Bureau of Labor Statistics; Bureau of Economic Analysis; and staff assumptions.
Figure: Structural and Actual Labor Force Participation Rate
Line chart, by percent, 2001 to 2013. There is a shaded bar from 2011:Q4 to 2013:Q4 that represents the forecast
period. There are two series, Structural Labor Force Participation Rate and Actual Labor Force Participation Rate.
Structural Labor Force Participation Rate begins in 2001 at about 66.75 and generally decreases to about 64 by the
end of 2013. Actual Labor Force Participation Rate begins in 2001 at about 67.1 and generally decreases to about
65.8 by 2005. It then generally increases to about 66.3 by 2007 and then generally decreases to about 63.8 by the
end of 2013.
Note: Blue shading represents the projection period, which begins in 2012:Q1.
Source: U.S. Department of Labor, Bureau of Labor Statistics; Bureau of Economic Analysis; and staff assumptions.
The Outlook for the Labor Market and Resource Utilization
(Percent change from final quarter of preceding period)
2011
Measure
2010
Output per hour, nonfarm business
H1
H2
2012
2013
2.3
-.7
1.4
1.1
1.6
2.5
-.4
1.4
1.4
1.4
104
185
163
193
195
98
165
155
163
171
Labor force participation rate2
64.4
64.1
64.0
63.7
63.7
Previous Tealbook
64.4
64.1
64.0
64.0
63.9
Civilian unemployment rate2
9.6
9.1
8.7
8.2
7.8
Previous Tealbook
9.6
9.1
8.7
8.6
8.2
-4.9
-5.3
-5.0
-4.6
-4.0
-5.4
-5.8
-5.5
-5.4
-5.2
Previous Tealbook
Nonfarm private employment 1
Previous Tealbook
Memo:
GDP gap 3
Previous Tealbook
1. Thousands, average monthly changes. Return to table
2. Percent, average for the final quarter in the period. Return to table
3. Percent difference between actual and potential GDP in the final quarter of the period indicated. A negative number indicates that the economy is
operating below potential. Return to table
Source: U.S. Department of Labor, Bureau of Labor Statistics; staff assumptions.
Figure: Nonfarm Private Employment (Average Monthly Changes)
Line chart, by thousands, 1995 to 2013. There is a horizontal line at zero. There are two series, Current and
Previous Tealbook. Current begins in 1995 at about 220. From 1995 to 1999 it fluctuates between about 100 and
320. It then generally decreases to about -350 by 2001 and then generally increases to about 320 by 2006. By
2009 it has generally decreased to about -820 and by the end of 2013 it has generally increased to about 210.
Previous Tealbook follows the Current Tealbook series almost exactly until 2011. By the end of 2013 it has
generally increased to about 195.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Figure: Unemployment Rate
Line chart, by percent, 1995 to 2013. There are four series, Current Tealbook, Previous Tealbook, NAIRU, and
NAIRU with EEB adjustment. Current Tealbook begins in early 1995 at about 5.5 and generally increases to about
5.75 by mid-1995. It then generally decreases to about 3.95 by 2000 and then generally increases to about 6.2 by
2003. By 2007 it has generally decreased to about 4.5 and by 2009 it has generally increased to about 10. It then
generally decreases to about 7.9 by the end of 2013. Previous Tealbook follows Current Tealbook exactly except
that it ends in late 2013 at about 8.1. NAIRU begins in 1995 at about 5.0 and remains constant at 5.0 until 2008. It
then generally increases to about 6 by 2009 and remains constant here until the end of 2013. NAIRU with EEB
adjustment begins in 1995 at about 5.01 and remains relatively constant at 5 until 2001. It then increases to about
5.1 by 2002. It then generally decreases to about 5 by 2004 and remains constant here until 2008. By 2010 it has
increased to about 6.85 and by the end of 2013 it has generally decreased to about 6.0.
Note: The EEB adjustment is the staff estimate of the effect of extended and emergency unemployment compensation programs on the NAIRU.
Source: U.S. Department of Labor, Bureau of Labor Statistics; staff assumptions.
Figure: GDP Gap
Line chart, by percent, 1995 to 2013. There is a horizontal line at zero. There are two series, Current and Previous
Tealbook. Current begins in 1995 at about -2. It then generally increases to about 3.5 by 2000 and then generally
decreases to about -1.7 by 2003. By 2006 it has generally increased to about 1.7 and by 2009 it has generally
decreased to about -7.6. It then generally increases to about -4 by the end of 2013. Previous Tealbook follows
Current Tealbook almost exactly until 2003 where it generally decreases to about -2.4. It generally increases to
about 0.3 by 2005 and then generally decreases to about -7.9 by 2009. By the end of 2013 it has generally
increased to about -5.2.
Note: The GDP gap is the percent difference between actual and potential GDP; a negative number indicates that the economy is operating below
potential. Blue shading represents the projection period, which begins in 2011:Q4.
Source: U.S. Department of Commerce, Bureau of Economic Analysis; staff assumptions.
Figure: Manufacturing Capacity Utilization Rate
Line chart, by percent, 1995 to 2013. There is a horizontal line at about 79 which represents the average rate from
1972 to 2010. There are two series, Current and Previous Tealbook. Current begins in 1995 at about 84.3 and
generally decreases to about 82 by 1996. It then generally increases to about 84 by 1997 and then generally
decreases to about 71.5 by 2001. By 2007 it has generally increased to about 79.7 and by 2009 it has generally
decreased to about 64.5. It then generally increases to about 78.3 by the end of 2013. Previous Tealbook follows
the Current Tealbook series almost exactly until 2010 when it begins increasing at a slower rate. By the end of 2013
it has generally increased to about 77.5.
Source: Federal Reserve Board, G.17 Statistical Release, "Industrial Production and Capacity Utilization."
Note: The gray shaded bars indicate a period of business recession as defined by the National Bureau of Economic
Research: March 2001-November 2001, and December 2007-June 2009. Blue shading represents the projection
period, which begins in 2012:Q1, except as noted.
Inflation Projections
(Percent change at annual rate from final quarter of preceding period)
2011
Measure
2010
PCE chain-weighted price index
H1
H2
2012
2013
1.3
3.6
1.8
1.8
1.4
Previous Tealbook
1.3
3.6
1.4
1.4
1.3
Food and beverages
1.3
6.4
4.0
1.6
1.2
1.3
6.4
3.7
1.1
1.2
6.2
27.2
.0
3.8
-1.6
Previous Tealbook
6.2
27.2
-1.9
1.4
-.8
Excluding food and energy
1.0
1.9
1.7
1.7
1.6
Previous Tealbook
1.0
1.9
1.5
1.5
1.4
2.6
7.7
1.0
.9
1.5
2.6
7.7
.8
.2
1.5
Previous Tealbook
Energy
Prices of core goods imports 1
Previous Tealbook
1. Core goods imports exclude computers, semiconductors, oil, and natural gas. Return to table
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis.
Figure: Total PCE Prices
Line chart, by 4-quarter percent change, 1995 to 2013. There is a shaded bar from 2011:Q4 through 2013:Q4 that
represents the forecast period. There is a horizontal line at 0. There are two series, Current and Previous Tealbook.
Current begins in 1995 at about 2.5 and decreases to about 2 by 1996. It then general increases to about 2.5 by
1997 and then generally decreases to about 1.8 by 1997. By 2000, it increases to about 2.5 percent and then
decreases to about 0.7 by 2001. By mid-2002, it increases to about 2.9. Between 2003 and 2006, it fluctuates
between 2.9 and 1.7. By mid-2007, it generally increases to about 4.35. By late 2008, it decreases to about -0.78
and then increases to about 2.6. It generally decreases to about 1.1 in 2010 and then increases to about 2.95. By
2013, it generally decreases to about 1.3. Previous generally follows the same path as Current until 2011 where it
begins decreasing at a faster rate. By 2013, it generally decreases to about 1.2.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Figure: PCE Prices ex. Food and Energy
Line chart, by 4-quarter percentage change, 1995 to 2013. There is a shaded bar from 2011:Q4 through 2013:Q4
that represents the forecast period. There are four series, Current Tealbook, Previous Tealbook, Current Tealbook:
Market-based, and Previous Tealbook: Market-based. Current Tealbook begins in 1995 at about 2.5 and generally
decreases to about 1.3 by 1997. It generally increases to about 2.4 by 2007 and then generally decreases to about
0.9 by 2010. It generally increases to about 1.9 by 2011 and then generally decreases to about 1.6 by 2013.
Previous Tealbook generally follows the same exact path as Current Tealbook until about 2011 when it begins
decreasing at a faster rate. By 2013 it decreases to about 1.45. Current Tealbook: Market-based begins in 1995 at
about 2.15 and generally decreases to about 0.9 by 1997. It then generally increases to about 2.4 by 2007 and then
generally decreases to about 0.7 by 2010. It generally increases to about 2 by 2011 and then generally decreases
to about 1.5 by 2013. Previous Tealbook: Market-based generally follows the same exact path until 2011 when it
begins decreasing at a faster rate. By 2013 it generally decreases to about 1.15.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Figure: Compensation per Hour
Line chart, by 4-quarter percentage change, 1995 to 2013. There is a shaded bar from 2011:Q4 through 2013:Q4
that represents the forecast period. There is a horizontal line at 0. There are four series, Current Tealbook:
Productivity and Costs, Previous Tealbook: Productivity and Costs, Current Tealbook: Employment cost index, and
Previous Tealbook: Employment cost index. Current Tealbook: Productivity and Costs begins at about 1.7 and
generally increases to about 4.85 by late 1995. It decreases to about 3.2 in 1996 and then increases to about 7.7
by 1998. By mid-1999 it decreases to about 3.5 and then generally increases to about 9.4 by 2000. By 2001, it
generally decreases to about 3.3. Between late 2001 and mid-2008, it generally fluctuates between 3.3 and 5.9. In
2009, it decreases to about 0 and then generally fluctuates between about 1.5 and 3.8 between late 2009 and late
2011. By 2013, it generally decreases to about 2.3. Previous Tealbook: Productivity and Costs generally follows the
same path as Current Tealbook: Productivity and Costs until 2010 when it begins decreasing. By 2011, it has
decreased to about 1.5 and then generally increases to about 2.1 by 2013. Current Tealbook: Employment cost
index begins in 1995 at about 2.4. Between 1996 and 2007, it generally fluctuates between 1.5 and 4.2, and by
2008 it decreases to 0. By mid-2008, it increases to about 2.2. It then fluctuates between 1.7 and 3.9 until it
decreases to about 2.3 in 2013. The Previous Tealbook: Employment cost index generally follows the same path as
the Current Tealbook: Employment cost until 2012, when it begins to decrease at a faster rate. By 2013, it
decreases to about 2.15.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Figure: Long-Term Inflation Expectations
Line chart, by percent, 1995 to 2013. There are two series, Thomson Reuters/Michigan next 5 to 10 years and SPF
next 10 years. Thomson Reuters/Michigan next 5 to 10 years begins in 1995 at about 3.1 and generally fluctuates
between 3.5 and 2.5 until February 2011. SPF next 5 years begins in 2006 at about 2 and generally fluctuates
between 2 and 2.3 until February 2011.
Note: The Survey of Professional Forecasters (SPF) projection is for the PCE price index.
Source: Thomson Reuters/University of Michigan Surveys of Consumers; Federal Reserve Bank of Philadelphia.
Note: The gray shaded bars indicate a period of business recession as defined by the National Bureau of Economic
Research: March 2001-November 2001, and December 2007-June 2009.
[Box:] Framework for Board Staff Inflation Projections
Core Inflation Simulations in a Stylized Model with Anchored Expectations
Figure: Permanent increase in the level of relative core import prices
Line chart, by percent, from -4 to 24. The x-axis is quarters. There are two series, Relative import price inflation and
Core inflation. Relative import price inflation begins in Quarter -4 at 0 where it remains relatively constant until
Quarter 0. It then increases to 4 where it remains relatively constant until about Quarter 4. It then decreases to 0 by
Quarter 5 where it remains relatively constant until Quarter 24. Core inflations begins in Quarter -4 at 2 and
generally increases to about 2.3 by Quarter 4. It then generally decreases to about 2 by Quarter 12 where it remains
relatively constant until Quarter 24.
Figure: Transitory rise in the unemployment rate
Line chart, by percent, from -4 to 24. The x-axis is quarters. There are two series, Unemployment gap and Core
inflation. Unemployment begins in Quarter -4 at 0 where it remains relatively constant until Quarter 0. It then
increases to 2 by Quarter 4 where it remains relatively constant until Quarter 9. It then decreases to 0 by Quarter 13
where it remains relatively constant until Quarter 24. Core inflation begins in Quarter -4 at 2 where it remains
relatively constant until Quarter 0. It then generally begins to decrease to about 1.5 by Quarter 7. It then generally
increases to 2 by Quarter 18 where it remains relatively constant until Quarter 24.
The Long-Term Outlook
(Percent change, Q4 to Q4, except as noted)
Measure
Real GDP
2012
2013
2014
2015
2016
2.4
2.7
3.3
3.7
3.4
Previous Tealbook
2.1
2.4
3.6
4.2
3.7
Civilian unemployment rate1
8.2
7.8
7.5
6.9
6.2
Previous Tealbook
8.6
8.2
7.8
7.2
6.5
1.8
1.4
1.4
1.5
1.6
1.4
1.3
1.5
1.5
1.6
1.7
1.6
1.6
1.6
1.7
1.5
1.4
1.4
1.4
1.5
.1
.1
.8
2.1
3.0
Previous Tealbook
.1
.1
.3
1.5
2.5
10-year Treasury yield1
2.8
3.6
3.7
4.0
4.1
Previous Tealbook
2.7
3.5
3.7
3.9
4.1
PCE prices, total
Previous Tealbook
Core PCE prices
Previous Tealbook
Federal funds rate1
1. Percent, average for the final quarter of the period. Return to table
Figure: Real GDP
Line chart, by 4-quarter percent change, 2003 to 2020. There is a horizontal line at 0. There are four series, Current
Tealbook: Real GDP, Previous Tealbook: Real GDP, Current Tealbook: Potential GDP, and Previous Tealbook:
Potential GDP. Current Tealbook: Real GDP begins in 2003 at about 4.1 and generally decreases to about -5.2 by
mid-2007. It increases to about 3.9 by 2009 and then decreases to about 2.7 by mid-2010. It then generally
increases to about 3.7 by 2014. By 2020, it generally decreases to about 3.5 Previous Tealbook: Real GDP
generally follows the same path as Current Tealbook: Real GDP until 2011 when it begins to increase at a faster
rate. By mid-2014, it increases to about 4.2 and then generally decreases to about 3.85 by 2020. Current Tealbook:
Potential GDP begins in 2003 at about 2.5 and generally stays at about 2.4 until 2007. It then decreases to about
1.7 by 2008. It generally increases to about 2.6 by 2020. Previous Tealbook: Potential GDP begins at about 2.6 in
2003 and generally decreases to about 1 by 2007. It then generally increases to about 2.6 by 2020.
Figure: Unemployment Rate
Line chart, by percent, 2004 to 2020. There is a shaded by from 2012 to 2020 that represents the forecast period.
There are six series, Current Tealbook, Previous Tealbook, Current Tealbook: NAIRU, Previous Tealbook: NAIRU,
Current Tealbook: NAIRU with EEB adjustment, and Previous Tealbook: NAIRU with EEB adjustment. Current
Tealbook begins in 2004 at about 5.8 and generally decreases to about 4.15 by 2006. It then generally increases to
about 10 by 2010 and then generally decreases to about 5.1 by 2020. Previous Tealbook generally follows the
same exact path as Current Tealbook until about 2012 when it begins decreasing at a slower rate. By 2020, it
decreases to about 5.11. Current Tealbook: NAIRU begins in 2004 at 5 where it remains relatively constant until
about 2007. It then increases to about 5.8 where it remains relatively constant until about 2014. It then decreases to
about 5.10 where it remains relatively constant until 2020. Previous Tealbook: NAIRU follows the same exact path
as Current Tealbook: NAIRU. Current Tealbook: NAIRU with EEB adjust begins in 2004 at about 5 where it remains
relatively constant until 2008. It then increases to about 6.25 by 2009 and then decreases to about 5.10 by 2017. It
remains relatively constant here until 2020. Previous Tealbook: NAIRU with EEB adjustment generally follows the
same path as Current Tealbook: NAIRU with EEB adjustment until 2008 when it begins increasing at a faster rate. It
increases to about 6.7 by 2009 and then generally decreases to about 5.10 by 2017. It remains relatively constant
here until 2020.
Figure: PCE Prices
Line chart, by 4-quarter percent change, 2003 to 2020. There are four series, Current Tealbook: PCE prices
excluding food and energy, Previous Tealbook: PCE prices excluding food and energy, Current Tealbook: Total
PCE prices, and Previous Tealbook: Total PCE prices. Current Tealbook: PCE prices excluding food and energy
begins in 2003 at about 1.85 and generally fluctuates between 2 and 2.4 from 2004 to 2007. It then decreases to
about 1.5 by mid-2008. By 2008, it increases to about 1.75 and then decreases to about .95 by 2009. By 2010, it
increases to about 1.8 and then decreases to about 1.65 by 2011. It then generally increases to about 2 by 2020.
Previous Tealbook: PCE prices excluding food and energy generally follows the same path as Current Tealbook:
PCE prices excluding food until 2011 when it begins decreasing at a faster rate. By mid-2011, it decreases to about
1.25 and then generally increases to about 1.95 by 2020. Current Tealbook: Total PCE prices begins in 2003 at
about 2 and generally increases to about 3.2 by 2005. It then decreases to about 1.8 by 2006. By 2008, it generally
increases to about 4.2 and then decreases to about -.75 by mid-2008. It then increases to about 2.5 in 2009 and
then decreases to about 1.2 by 2010. By late 2010, it increases to about 2.9 and then generally decreases to about
1.3 by mid-2012. By 2020, it generally increases to about 2. Previous Tealbook: Total PCE prices generally follows
the same path as Current Tealbook: Total PCE prices until about mid-2010 where it begins decreasing at a faster
rate. It then increases to about 1.95 by 2020.
Figure: Interest Rates
Line chart, by percent, 2003 to 2020. There are six series, Current Tealbook: Federal funds rate, Previous
Tealbook: Federal funds rate, Current Tealbook: 10-year Treasury, Previous Tealbook: 10-year Treasury, Current
Tealbook: BBB corporate, and Previous Tealbook: BBB corporate. Current Tealbook: Federal funds rate begins in
2003 at about 1 and increases to about 5.2 by 2005. It then generally decreases to about 0.1 by 2008 where it
remains until about 2013. It then generally increases to about 4.1 by 2020. Previous Tealbook: Federal funds rate
generally follows the same path as Current Tealbook: Federal funds rate until about mid-2013, when it begins
increasing at a slower rate. By 2020, it generally increases to about 4.15. Current Tealbook: 10-year Treasury
begins in 2003 at about 4.1. It generally increases to about 5 by 2005. It then generally decreases to about 2 by
2011 and then generally increases to about 4.6 by 2020. Previous Tealbook: 10-year Treasury generally follows the
same path as Current Tealbook: 10-year Treasury, and by 2020 it also ends at about 4.6. Current Tealbook: BBB
corporate starts in 2003 at about 5.3 and generally increases to about 9.5 by 2008. It generally decreases to about
4.7 by mid-2011. It then generally increases to about 6.1 by 2020. Previous Tealbook: BBB corporate generally
follows the same path as Current Tealbook: BBB corporate, and by 2020 it also ends at about 6.1.
Note: In each panel, shading represents the projection period, which begins in 2012:Q1; dashed lines are the
previous Tealbook.
Evolution of the Staff Forecast
Figure: Change in Real GDP
Line graph, by percent Quarter 4 over Quarter 4, January 20, 2010 to December 5, 2012. The x-axis is Tealbook
publication date. There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 2010 at about 4.9 and
generally decreases to about 3.25 by September 15, 2010. It generally increases to about 3.5 by January 19, 2011
and then generally decreases to about 1.25 by September 14, 2011 where it remains relatively constant. By March
7, 2012 it is at about 1.3. 2012 begins on September 15, 2010 at about 4.4 and generally decreases to about 2 by
January 18, 2012. It then generally increases to about 2.4 by March 7, 2012. 2013 begins on September 14, 2011
at about 3.1 and generally declines to about 2.25 by December 7, 2011. It then generally increases to about 2.8 by
March 7, 2012.
Figure: Unemployment Rate
Line graph, by percent fourth quarter, January 20, 2010 to December 5, 2012. The x-axis is Tealbook publication
date. There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 2010 at about 8.2 and generally
increases to about 9.1 by September 15, 2010. It then generally decreases to about 8.6 by March 9, 2011 and then
generally increases to about 9.2 by August 3, 2011. By March 7, 2012 it decreases to about 8.6. 2012 begins on
September 15, 2010 at about 7.95 and generally decreases to about 7.5 by March 9, 2011. It then generally
increases to about 8.5 by September 14, 2011 and then generally decreases to about 8 by March 7, 2012. 2013
begins on September 14, 2011 at about 7.7 and remains relatively constant until about January 18, 2012. It then
decreases to about 7.5 by March 7, 2012.
Figure: Change in PCE Prices excluding Food and Energy
Line chart, by percent Quarter 4 over Quarter 4, January 20, 2010 to December 5, 2012. The x-axis is Tealbook
Publication date. There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 2010 at about 1.1 and
generally decreases to about 0.75 by June 16, 2010. It then generally increases to about 1.85 by September 14,
2011 and then generally decreases to about 1.7 by March 7, 2012. 2012 begins on September 15, 2010 at about
0.8 and generally increases to about 1.45 by June 15, 2011 where it remains relatively constant until about January
18, 2012. It then increases to about 1.6 by March 7, 2012. 2013 begins on September 14, 2011 at about 1.35 and
generally increases to about 1.5 by March 7, 2012.
International Economic Developments and Outlook
Recent Foreign Indicators
Figure: Nominal Imports
Line chart, log scale where Jan. 2008 = 100, 2008 to 2012. There is a horizontal line at 100. There are three series,
Foreign exports, AFE exports, and EME exports. EME exports excludes Venezuela. Foreign exports starts in 2008
at 100 and generally increases to about 108 by late 2008. It then decreases to about 69 by early 2009. It generally
increases to about 115 by 2012. AFE exports begins at 100 and generally increases to about 109 by late 2008. It
then decreases to about 68 by early 2009. It generally increases to about 109 by mid-2011. By early 2012, it
generally decreases to about 102. EME exports begins at about 100 and generally increases to 109 by late 2008. It
then decreases to about 70 by early 2009. It generally increases to about 120 by late 2010 and then decreases to
about 112 by 2011. It then increases to about 128 but then decreases to about 121 by late 2011. By early 2012, it
increases to about 127.
Figure: Industrial Production
Line chart, by log scale where Jan. 2008 = 100, 2008 to 2012. There is a horizontal line at 100. There are three
series, Foreign Industrial Production, AFE Industrial Production, and EME Industrial Production. AFE Industrial
Production excludes Australia and Switzerland, and EME Industrial Production excludes Colombia, Hong Kong,
Philippines, and Venezuela. Foreign Industrial Production begins in 2008 at 100 and generally decreases to about
86 by early 2009. It then generally increases to about 101 by early 2012. AFE Industrial Production begins at about
100 and generally decreases to about 84 by early 2009. It then generally increases to about 94 by early 2012. EME
Industrial Production begins at about 100 and generally decreases to about 87 by early 2009. It then generally
increases to about 111 by early 2012.
Figure: Retail Sales
Line chart, by 12-month percent change, 2008 to 2012. There is a horizontal line at 0. There are three series,
Foreign retail sales, AFE retail sales, and EME retail sales. AFE retail sales excludes Australia and Switzerland,
and EME retail sales excludes Brazil, China, Israel, Korea, Singapore, and Taiwan. Foreign retail sales begins in
2008 at about 5.1 and generally decreases to about -1.5 by early 2009. It then generally increases to about 6 by
early 2010. It generally decreases to about 1 by early 2011 and then increases to about 3.4 by mid-2011. By 2012,
it decreases to about 1.3. AFE retail sales begins at about 4.5 and generally decreases to -4 by early 2009. It
generally increases to about 5 by early 2010. It then generally decreases to about -1.5 by early 2011. By 2012, it
generally increases to about 0.5. EME retail sales begins at about 7.5 and generally decreases to about 4 by late
2008. It then generally increases to about 11 by early 2010. It then generally decreases to about 4 by early 2011.
By mid-2011, it increase to about 7 and then generally decreases to about 5.1 by 2012.
Figure: Employment
Line chart, by 4-quarter percent change, 2008 to 2012. There is a horizontal line at 0. There are three series,
Foreign employment, AFE employment, and EME employment. EME employment excludes Argentina and Mexico.
Foreign employment begins in 2008 at about 2 and generally decreases to -1.1 by mid-2009. It then generally
increases to about 1.4 by late 2011. AFE employment begins at 1.8 and generally decreases to about -1.9 by mid2009. It then generally increases to about 0.9 by late 2011. EME employment begins at about 3 and generally
decreases to about 0.4 by mid-2009. It then generally increases to about 2.95 by early 2012.
Figure: Consumer Prices: Advanced Foreign Economies
Line chart, by 12-month percent change, 2008 to 2012. There is a horizontal line at 0. There are two series,
Headline prices and Core prices. Excludes Australia, Sweden, and Switzerland. Core prices excludes all food and
energy; staff calculation. Headline prices begins in 2008 at about 2.15 and decreases to about 2.1. It then increases
to about 3.6 by mid-2008. It then generally decreases to about -0.9 by mid-2009 and then generally increases to
about 2.8 by mid-2011. By early 2012, it generally decreases to about 2. Core prices begins at about 1.1 and
fluctuates between .08 and 1.2 from mid-2008 to late 2011. It then decreases to about 1.1 by early 2012.
Source: Haver Analytics and CEIC.
Figure: Consumer Prices: Emerging Market Economies
Line chart, by 12-month percent change, 2008 to 2012. There is a horizontal line at 0. There are three series,
Headline prices, Ex. Food--East Asia, Ex. Food--Latin America. Headline prices begin in 2008 at about 5.7 and
generally increases to about 6.8 by late 2008. It then generally decreases to about 0.7 by mid-2009. It generally
increases to about 5.7 by mid-2011 and then generally decreases to about 4.1 by early 2012. Ex. Food--East Asia
begins at about 2.6 and generally increases to about 3 by late 2008. It then generally decreases to about -2 by mid2009. It generally increases to about 2.3 by late 2011 and then decreases to about 1.8 by early 2012. Ex. Food-Latin America begins at about 3.85 and generally increases to about 5.8 by 2009. It then generally decreases to
about 3.8 by late 2009. It increases to about 4.6 by early 2010 and then generally decreases to about 3.2 by early
2012.
The Foreign Outlook
(Percent change, annual rate)
2011
H1
2012
Q3
Q4
Q1
Q2
H2
2013
Real GDP
Total foreign
3.0
3.8
1.2
3.1
2.8
2.9
3.2
3.0
3.6
2.0
2.5
2.3
2.6
3.0
.9
3.1
.1
1.1
1.1
1.3
1.8
Previous Tealbook
.9
2.7
.6
.6
.5
1.1
1.5
Emerging market economies
5.2
4.6
2.4
5.2
4.7
4.6
4.6
Previous Tealbook
Advanced foreign economies
Previous Tealbook
5.3
4.6
3.5
4.6
4.3
4.3
4.5
3.7
3.1
2.9
3.1
2.4
2.4
2.4
3.7
3.1
3.1
2.3
2.4
2.3
2.3
2.7
1.1
2.5
2.1
1.4
1.4
1.3
Previous Tealbook
2.7
1.0
2.8
1.6
1.2
1.3
1.1
Emerging market economies
4.6
4.6
3.2
3.8
3.2
3.2
3.2
Previous Tealbook
4.6
4.6
3.3
3.0
3.3
3.1
3.2
Consumer Prices
Total foreign
Previous Tealbook
Advanced foreign economies
Note: Annualized percent change from final quarter of preceding period to final quarter of period indicated.
Figure: Real GDP
Line chart, by percent change, 2008 to 2013. Data are annual rate. There is a horizontal line at zero. There are two
series, Total Foreign Current Tealbook and Total Foreign Previous Tealbook. Total Foreign Current Tealbook
begins in early 2008 at about 3 and generally decreases to about -9.8 by early 2009. It then generally increases to
about 5.5 by late 2009 and then generally decreases to about 2 by late 2011. By the end of 2013 it has generally
increased to about 3.5. Total Foreign Previous Tealbook follows the Current Tealbook series almost exactly except
that it decreases to about 3 by late 2011 and then increases to about 3.7 by the end of 2013.
There is a second line chart, by percent change, 2008 to 2013. Data are annual rate. There is a horizontal line at
zero. There are four series, Advanced Foreign Economies Current Tealbook, Advanced Foreign Economies
Previous Tealbook, Emerging Market Economies Current Tealbook and Emerging Market Economies Previous
Tealbook. Advanced Foreign Economies Current Tealbook begins in early 2008 at about 1 and generally decreases
to about -9.7 by early 2009. It then generally increases to about 4.5 by early 2010 and then generally decreases to
about 0 by early 2011. By mid-2011 it has generally increased to about 3 and by 2012 it has generally decreased to
about 0.5. It then generally increases to about 1.7 by the end of 2013. Advanced Foreign Economies Previous
Tealbook follows the Advanced Foreign Economies Current Tealbook series almost exactly until mid-2011 when it
generally increases to about 2.7. It then generally decreases to about 0.5 by 2012 and then generally increases to
about 2 by the end of 2013. Emerging Market Economies Current Tealbook begins in early 2008 at about 5.2 and
generally decreases to about -9.7 by early 2009. By mid-2009 it has generally increased to about 10 and by late
2011 it has generally decreased to about 3.5. It then generally increases to about 4.8 by the end of 2013. Emerging
Market Economies Previous Tealbook follows the Emerging Market Economies Current Tealbook series almost
exactly until early 2011. By late 2011 it has generally decreased to about 4 and by the end of 2013 it has generally
increased to about 4.9.
Figure: Consumer Prices
Line chart, by percent change, 2008 to 2013. Data are annual rate. There is a horizontal line at zero. There are two
series, Total Foreign Current Tealbook and Total Foreign Previous Tealbook. Total Foreign Current Tealbook
begins in early 2008 at about 5. It then generally decreases to about -1 by late 2008 and then generally increases
to about 3.3 by early 2010. By mid-2010 it has generally decreased to about 1.8 and by late 2010 it has generally
increased to about 5.2. It then generally decreases to about 2.2 by the end of 2013. Total Foreign Previous
Tealbook follows Total Foreign Current Tealbook almost exactly until mid-2011. By the end of 2013 it has generally
decreased to about 2.15.
There is a second line chart, by percent change, 2008 to 2013. Data are annual rate. There is a horizontal line at
zero. There are four series, Advanced Foreign Economies Current Tealbook, Advanced Foreign Economies
Previous Tealbook, Emerging Market Economies Current Tealbook and Emerging Market Economies Previous
Tealbook. Advanced Foreign Economies Current Tealbook begins in early 2008 at about 2.7 and generally
increases to about 3.95 by mid-2008. It then generally decreases to about -2.2 by late 2008. It then generally
increases to about 2 by early 2010 and then generally decreases to about 0.4 by mid-2010. By late 2010 it has
generally increased to about 3.1 and by mid-2011 it has generally decreased to about 0.7. It then generally
increases to about 2.5 by late 2011 and generally decreases to about 1.3 by the end of 2013. Advanced Foreign
Economies Previous Tealbook follows the Advanced Foreign Economies Current Tealbook series almost exactly
until mid-2011. By late 2011 it increases to about 2.6 and by mid-2012 it has generally decreased to about 1.0. It
then generally increases to about 1.2 by the end of 2013. Emerging Market Economies Current Tealbook begins in
early 2008 at about 7.1. It then generally decreases to about -0.7 by early 2009 and then generally increases to
about 4.4 by early 2010. By mid-2010 it has generally decreased to about 2.7 and by late 2010 it has generally
increased to about 6.7. It then generally decreases to about 3.2 by the end of 2013. Emerging Market Economies
Previous Tealbook follows Emerging Market Economies Current Tealbook almost exactly.
Note: Blue shading represents the projection period, which begins in 2012:Q1.
Evolution of Staff's International Forecast
Figure: Total Foreign GDP
Line chart, by percent change, Q4 over Q4, January 20, 2010 to December 5, 2012. The x-axis is Tealbook
publication dates. There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 2010 at about 4.1
and generally decreases to about 3.2 by December 8, 2010. It then generally increases to about 3.6 by June 15,
2011. It then generally decreases to about 2.6 by March 7, 2012. 2012 begins on September 15, 2010 at about 3.6
and remains relatively stable here until about June 15, 2011 when it begins to decrease. By December 7, 2011, it
has generally decreases to about 2.6. It then generally increases to about 3 by March 7, 2012. 2013 begins on
September 14, 2011 at 3.5 and generally decreases to about 2.9 by December 7, 2012. It then generally increases
to about 3.2 by March 7, 2012.
Figure: Total Foreign CPI
Line chart, by percent change, Q4 over Q4, January 20, 2010 to December 5, 2012. The x-axis is Tealbook
publication dates. There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 2010 at about 2. It
then generally increases to about 3.1 by April 20, 2011 and decreases to about 2.8 by June 15, 2011. It then
generally increases to about 3.4 by March 7, 2012. 2012 begins on September 15, 2010 at about 2.25 where it
remains relatively stable until January 18, 2012. It then increases to about 2.55 by March 7, 2012. 2013 begins on
September 14, 2011 at about 2.3 and generally decreases to about 2.1 by December 7, 2011. It then generally
increases to about 2.3 by March 7, 2012.
Figure: U.S. Current Account Balance
Line chart, by percent of GDP, January 20, 2010 to December 5, 2012. The x-axis is Tealbook publication dates.
There are three series, 2011, 2012, and 2013. 2011 begins on January 20, 210 at about -3.1 where it remains
relatively stable until June 16, 2016. It increases to about -2.85 by August 4, 2010 and then decreases to about -3.5
by December 8, 2010. It then generally increases to about -2.6 by June 15, 2011. It remains relatively stable until
about January 18, 2012. It then generally decreases to about -3 by March 7, 2012. 2012 begins on September 15,
2010 at about -2.8 and decreases to about -3.1 by December 8, 2010. It then generally increases to about -2 by
June 15, 2011. It then generally decreases to about -3 by March 7, 2012. 2013 begins on September 14, 2011 at
about -2.2 and decreases to about -3.1 by December 7, 2011. It then generally increases to about -2.7 by March 7,
2012.
Financial Developments
Policy Expectations and Treasury Yields
Figure: Selected Interest Rates
Line chart, by percent, January 23, 2012 to March 6, 2012. There is a vertical line on 24 noting the January FOMC,
on January 28 nothing Consumer confidence, on February 2 noting Nonfarm payrolls, on February 15 nothing
Philadelphia Fed, February 16 noting CPI, February 18 noting the Greek aid agreement, and February 28 nothing
the Chairman's testimony. There are two series, 2-year Treasury yield, and 10-year Treasury yield. 2-year Treasury
yield begins on January 23, 2012 at about .3 and remains relatively stable until about February 6 when it beings
generally increase. By February 14, it increases to about .32 and remains relatively stable until about February 26.
By March 6, it generally decreases to about .29 10-year Treasury yield beings on January 23, 2012 at about 2.49
and generally decreases to about 1.81 by February 2. It then generally increases to about 2.5 by February 9. It
generally decreases to about 1.91 by February 15 and then generally increases to about 2.08 by February 21. It
then generally decreases to about 1.89 by February 27 and generally increases to about 2.09 by March 1. By March
6, it generally decreases to about 1.92.
Note: 5-minute intervals. 8:00 a.m. to 4:00 p.m. No adjustments for term premiums.
Source: Bloomberg
Figure: Long-Term Interest Rate Implied Volatility
Line chart, by percent, January 2010 to May 2012. Data are daily. There is a vertical line in mid-January marking
the January FOMC. The series begins in January 2010 at about 7 and generally decreases to about 5 by March
2010. It then generally decreases to about 8.1 by May 2010 and then generally decreases to about 5.8 by early
August 2010. By late August 2010 it has generally increased to about 7.4 and by November 2010 it has generally
decreased to about 6. It then generally increases to about 9.2 by December 2010 and then generally decreases to
about 5.8 by May 2011. By October 2011 it has generally increased to about 8 and by March 6, 2012 it has
generally decreased to about 5.5.
Note: Derived from options on 10-year Treasury note futures.
Source: Bloomberg.
Figure: Implied Federal Funds Rate
Line chart, by percent, 2012:Q1 to 2015:Q3. There are four series, "Mean: March 6, 2012," "Mean: January 24,
2012," "Mode: March 6, 2012," and "Mode: January 24, 2012." "Mean: March 6, 2012" begins in 2012:Q2 at about
.12 and remains relatively stable here until 2013:Q1. It then generally increases to about 1.0 by 2015:Q3. "Mean:
January 24, 2016" begins in 2012:Q1 at about .11 and remains relatively stable until Q1:2013. It then generally
increases to about 1.12 by 2013:Q3. "Mode: March 6, 2012" begins in 2012:Q1 at about .11 and remains relative
stable until about 2013:Q2 where it begins it increase. By 2014:Q2 it increases to about .2 and then generally
decreases to about .15 by 2015:Q3. "Mode: January 24, 2012" begins in 2012:Q1 at about .10 and remains
relatively stable here until about 2013:Q3. It then generally increases to about .48 by 2015:Q2.
Note: Mean is estimated using overnight index swap quotes. Mode is estimated from the distribution of federal funds rate implied by interest rate
caps. Both include a term premium of zero basis points per month.
Source: Bloomberg and CME Group.
Figure: Distribution of Modal Timing of First Rate Increase from the Desk's Dealer Survey
Bar chart, by percent, from 2013:Q1 to 2016:Q4. There are two series, "Recent: 21 respondents" and "Jan. FOMC:
20 respondents." "Recent: 21 respondents" begins in 2013:Q1 at about 0 and increases to about 10 by 2013:Q3. It
then decreases to about 4.5 by 2014:Q1 and then increases to about 17 by 2014:Q2. It then increases to about 35
by 2014:Q3. By 2014:Q4 it decreases to about 20 and then decreases to about 5 by 2015:Q3. It then decreases to
about 0 where it remains until 2016:Q2. It increases to about 5 and then decreases to about 0 by 2016:Q4. "Jan.
FOMC: 20 respondents" begins in 2013:Q1 at about 0 where it remains until it increases to about 10 in 2013:Q3. It
remains relatively stable here until 2014:Q2 when it increases to about 20. It then increases to about 29 by 2014:Q3
and then decreases to about 0 by 2014:Q4. By 2015:Q1 it increases to about 10 and then decreases to about 0 by
2015:Q2. It increases to about 5 by 2015:Q3 and then decreases to about 0 by 2015:Q4 where it remains relatively
stable. By 2016:Q2 it increases to about 5 and then decreases to about 0 by 2016:Q4.
Source: Desk's Dealer Survey from March 5, 2012.
Figure: Inflation Compensation
Line chart, by percent 2010 to 2012. Data are daily. There is a vertical line in January 2012 representing the
January FOMC. There are two series, 5 to 10 years ahead and Next 5 years. Next 5 years is adjusted for the
indexation-lag (carry) effect. 5 to 10 years ahead begins in 2010:Q1 at about 3.2 and generally decreases to about
2.2 by 2010:Q3. It then generally increases to about 3.3 by 2011:Q1. From 2011:Q1 to 2011:Q3 it generally
fluctuates between 2.8 and 3.3. It then decreases to about 2.1 by 2011:Q4. It then increases to about 2.25 by March
6, 2012. Next 5 years begins in 2010:Q1 at about 2 and generally decreases to about 1.15 by 2010:Q3. It then
generally increases to about 2.25 by 2011:Q1. It generally decreases to about 1.6 by 2011:Q3 and by March 6,
2012 it generally increases to about 2.
Note: Estimates based on smoothed nominal and inflation-indexed Treasury yield curves.
Source: Barclays PLC and staff estimates.
Short-Term Funding Markets and Financial Institutions
Figure: Selected Interest Rate Spreads
Line chart, by basis points, January 2010 to March 2012. Data are daily. There is a label in January 2012
representing the January FOMC. There are two series, 3-month LIBOR over OIS and 1-week LIBOR over OIS. 3month LIBOR over OIS begins in January 2010 at about 9 and generally decreases to about 8 by May 2010. It
increases to about 34 by August 2010 and then decreases to about 10 by September 2010. It generally increases to
about 18 by April 2011 and then decreases to about 11 by August 2011. It then increases to about 50 by December
2011 and then generally decreases to about 37 by March 6, 2012. 1-week LIBOR over OIS begins in January 2010
at about 8 and generally decreases to about 3 by April 2010. It generally increases to about 17 by July 2010 and
then decreases to about 6 by September 2010. It remains relatively constant here until about August 2011. It then
generally increases to about 16 by December 2011. It then generally decreases to about 8.5 by March 6, 2012.
Source: Bloomberg.
Figure: Dollar Funding Spreads
Line chart, by basis points, April 2010 to March 2012. There is a vertical line in January 2012 representing the
January FOMC. There are two series, USD 3x6 FRA-OIS and 3-month euro-dollar implied basis swap. The USD
3x6 FRA OIS spread is calculated from a LIBOR forward rate agreement (FRA) 3 to 6 months in the future and the
implied forward overnight index swap (OIS) rate for the same period. USD 3x6 FRA-OIS begins in April 2010 at
about 16 and generally increases to about 70 by June 2010. It then generally decreases to about 21 by August
2010 and fluctuates between 20 and 29 between August 2010 and May 2010. It generally increases to about 64 by
November 2011 and then generally decreases to about 37 by March 6, 2012. 3-month euro-dollar implied basis
swap begins in April 2010 at about 30 and generally increases to about 60 by June 2010. It decreases to about 20
by August 2010 and then increases to about 45 by September 2010. It then decreases to about 20 in October 2010
and increases to about 58 by December 2010. It then generally decreases to about 2 by April 2011. It generally
increases to about 157 by October 2012 and then generally decreases to about 62 by March 6, 2012.
Source: Bloomberg; staff estimates.
Figure: Asset-Backed Commercial Paper Outstanding in the U.S. Market
Line chart, by billions of dollars, January 2010 to March 2012. Data are daily. There is a vertical line in January
2012 representing the January FOMC. There are four series, "France and Germany," "Ireland, Italy, and Spain,"
"Other Europe," and "United States." "France and Germany" begins in January 2010 at about 105 and remains
relatively constant until about January 2011. It then increases to about 125 by May 2011. It then generally decrease
to about 95 by March 6, 2012. "Ireland, Italy, and Spain" begins in January 2010 at about 5 and remains relatively
constant. By March 6, 2012, it has slightly decreased to about 4. "Other Europe" begins in January 2010 at about
125 and remains relatively constant here until about January 2011. It then generally decreases to about 95 by
March 6, 2012. "United States" begins in January 2010 at about 190 and generally decreases to about 115 by
September 2011. It then increases to about 130 by December 2011. By March 6, 2012 it generally decreases to
about 120.
Source: Depository Trust & Clearing Corporation
Figure: Spreads on Asset-Backed Commercial Paper Issued in the U.S. Market
Line chart, by basis points, January 2010 to March 2012. Data are daily. There is a vertical line in January 2012
representing the January FOMC. There are four series, "France and Germany," "Ireland, Italy, and Spain," "Other
Europe," and "United States." "France and Germany" begins in January 2010 at about 9 and generally remains
constant until about May 2011. It then increases to about 80 by December 2011. It then generally decreases to
about 18 by March 6, 2012. "Ireland, Italy, and Spain" begins in January 2010 at about 19 and generally decreases
to about 15 where it remains relatively constant. It then increases to about 107 by December 2011 and then
generally decreases to about 46 by March 6, 2012. "Other Europe" begins in January 2010 at about 22 and
generally decreases to about 14 by April 2010. It then increases to about 17 by June 2010 and remains relatively
constant here. It then generally increases to about 20 by March 6, 2012. "United States" begins in January 2010 at
about 17 and remains relatively constant here until about August 2011. It then generally increase to about 19 by
March 6, 2012.
Note: 5-day moving average. Spreads computed over the AA nonfinancial unsecured rate.
Source: Depository Trust & Clearing Corporation
Figure: S&P 500 Diversified Financials Stock Price Index
Line chart, by log scale where Nov. 1, 2011 = 100, January 2010 to March 2012. Data are daily. There is a vertical
line in January 2012 representing the January FOMC. The series begins in January 2010 at about 139 and
generally decreases to about 123 by March 2010. It generally increases to about 158 by April 2010 and then
generally decreases to about 122 by June 2010. Between June 2010 and December 2010, it generally fluctuates
between 123 and 128. It then generally increases to about 144 by February 2011. It generally decreases to about
84 by September 2011 and then generally increases to about 115 by October 2010. It generally decreases to about
85 by November 2010 and then generally increases to about 118 by March 6, 2012.
Source: Bloomberg.
Figure: CDS Spreads of Large Bank Holding Companies
Line chart, by basis points, January 2010 to March 2012. There is a vertical line in January 2012 representing the
January FOMC. There are six series, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Bank of America,
and Morgan Stanley. Citigroup begins in January 2010 at about 150 and generally increases to about 230 by March
2010. It generally decreases to about 125 by April 2010 and then generally fluctuates between 100 and 150 from
April 2010 until May 2011. It then generally increases to about 360 by September 2011. It then generally decreases
to about 210 by March 6, 2012. JPMorgan Chase begins in January 2010 at about 50 and generally increases to
about 110 by May 2010. It then remains relatively constant until about June 2011. It generally increases to about
180 by September 2011 and then generally decreases to about 108 by March 6, 2012. Wells Fargo begins in
January 2010 at about 90 and generally fluctuates between 90 and 110 until about August 2011. It generally
increases to about 175 by September 2011 and then generally decreases to about 98 by March 6, 2012. Goldman
Sachs begins in January 2010 at about 90 and generally increases to about 205 by May 2010. It generally
decreases to about 110 by May 2011 and then generally increases to about 405 by August 2011. By March 6, 2012
it generally decreases to about 240. Bank of America begins in January 2010 at about 100 and generally increases
to about 210 by November 2010. It generally decreases to about 115 by April 2011 and then generally increases to
about 500 by September 2011. It then generally decreases to about 280 by March 6, 2012. Morgan Stanley begins
in January 2010 at about 103 and generally increases to about 300 by May 2010. It decreases to about 240 by May
2011 and then generally increases to about 600 by August 2011. It then generally decreases to about 325 by March
6, 2012.
Source: Markit.
[Box:] The ECB's Three Year Longer Term Refinancing Operations
Figure: ECB Liquidity Providing Operations
Stack area chart, by billions of euros, January 2011 to March 2012. There are four series, One month or shorter,
Three to six months, One year, and Three years. One month or shorter begins in January 2011 at about 300 and
generally declines to about 190 by April 2011. It then fluctuates between 200 and 300 until about November 2011. It
then increase to about 360 by December 2011. It then decreases to about 25 by March 2012. Three to six months
begins in January 2011 at about 520 and generally decreases to about 410 by April 2011. It generally increases to
about 600 by October 2011 and then generally decreases to about 80 by March 2012. One year generally follows
the same path as Three to six months until October 2011 when it continues to increase to about 670 by December
2011. It then generally decreases to about 370 in February 2012 before decreasing again to about 90 in March
2012. Three years also follows the same path as Three to six months until November 2011 when it begins
increasing at a much faster rate. It increases to about 850 by December 2011 and then decreases to about 800 in
February 2012. It then increases to about 1150 by March 2012.
Source: ECB.
Figure: Two-Year Sovereign Spreads
Line chart, by basis points, November 2011 to March 2012. There are two series, Italy and Spain. Italy begins in
November 2011 at about 495 and generally increases to about 710 by December 2011. It then generally decreases
to about 160 by March 2012. Spain begins in November 2011 at about 360 and generally increases to about 560 by
December 2011. It then generally decreases to about 225 by March 2012.
Note: Two-year sovereign spread is the difference between given country's yield and Germany's yield.
Source: Bloomberg.
Foreign Developments
Figure: European Central Bank Operations
Line chart, by billions of euros, 2010 to 2012. There is a vertical line in January 2012 representing the January
FOMC. There is one series, Amount outstanding from refinancing operations. Amount outstanding from refinancing
operations begins in early 2010 at about 715 and generally increases to about 900 by mid-2010. It generally
decreases to about 410 by early 2011 and then generally increases to about 820 by late 2011. It then generally
decreases to about 800 by March 2, 2012. Line chart, by percent, 2010 to 2012. There is a vertical line in January
2012 representing the January FOMC. There is one series, EONIA. EONIA begins in early 2010 at about 0.41 and
generally increases to about 1.42 by late 2011. It then generally decreases to about 3.85 by March 2, 2012.
Source: Bloomberg.
Figure: Dollar Exchange Rates
Line chart, by Euros per dollar, 2011 to 2012. There is a vertical line in January 2012 representing the January
FOMC. There is one series, Euro. Euro begins in 2011:Q1 at about 0.75 and generally decreases to about 0.67 by
2011:Q3. It generally increases to about 0.79 by 2012:Q1 and then generally decreases to about 0.75 by March 6,
2012. Line chart, by log scale where Jan. 3, 2011 = 100, 2011 to 2012. There is a vertical line in January 2012
representing the January FOMC. There are two series, Broad and Yen. Broad begins in 2011:Q1 at about 100 and
generally decreases to about 95 by 2011:Q2. It generally increases to about 103.5 by 2011:Q3 and then generally
decreases to about 100.5 by March 6, 2012. Yen begins in 2011:Q1 at about 100 and generally increases to about
105 by 2011:Q2. It then generally decreases to about 94 by 2011:Q3 where it remains relatively constant until about
2012:Q1. It then generally increases to about 100 by March 6, 2012.
Source: Federal Reserve Board; Bloomberg.
Figure: Stock Price Indexes
Line chart, by log where Jan. 3, 2011 = 100, 2011 to 2012. There is a vertical line in January 2012 that represents
the January FOMC. There are four series, DJ Euro, Topix, DJ Euro Banks, MSCI Emerging Markets. DJ Euro
begins in 2011:Q1 at about 100 and generally decreases to about 73 by 2011:Q3. It then generally increases to
about 88 by March 6, 2012. Topix begins in 2011:Q1 at about 100 and generally increases to about 109 before
decreasing to about 87 by 2011:Q2. It remains relatively constant here until about 2011:Q3 when it decreases to
about 85. It then generally increases to about 91 by March 6, 2012. DJ Euro Banks begins in 2011:Q1 at about 100
and generally increases to about 118. It then generally decreases to about 51 by 2011:Q2 and fluctuates between
51 and 70 until 2012:Q1. It then generally increases to about 68 by March 6, 2012. MSCI Emerging Markets begins
in 2011:Q1 at about 99 and generally increases to about 105 by 2011:Q2. It generally decreases to about 70 by
2011:Q3 and then generally increases to about 92 by March 6, 2012.
Source: Bloomberg.
Figure: Emerging Market Economies Fund Flows
Bar chart, by percent of GDP, annual rate, December 2010 to January 2012. Data are monthly. There is a
horizontal line at zero. There are two series, EME bonds and EME equities. EME bonds begins in December 2010
at about 0.15 and increases to about 0.25 by January 2011. By February 2011, it decreases to about -0.2 and then
increases to about 0.1 by March 2011. It then increases to about 0.3 by April 2011 and increases to about 0.5 by
June 2011. It decreases to about -1 by September 2011 and then increases to about -0.05 by October 2011. It
decreases to about -0.1 by November 2011 and then increases to about 0.10 by December 2011. By January 2012,
it increases to about 2. EME equities begins in December 2010 at about 2.15 and then increases to about 5 by
January 2011. It decreases to about -6.1 by February 2011 and then increases to about -1.8 by March 2011. It
increases to about 5 by April 2011 and then decreases to about -2.3 by May 2011. It then increases to about -0.6
by July 2011 and then decreases to about -11.2 by August 2011. It then increases to about -0.5 by October 2011
and then decreases to about -5 by November 2011. It increases to about 1.2 by December 2011, and by January
2012, it increases to about 4.25.
Source: EPFR Global.
Figure: Euro-Area 10-Year Government Bond Spreads
Line chart, by percentage points, 2011 to 2012. Data are daily. There is a vertical line in January 2012 representing
the January FOMC. There are four series, Portugal, Spain, Ireland, and Italy. Portugal begins in 2011 at about 3.95
and generally increases to about 15.7 by early 2012. It then generally decreases to about 12 by March 6, 2012.
Spain begins in 2011 at about 2.25 and generally increases to about 4 by late 2011. It then generally decreases to
about 3.2 by March 6, 2012. Ireland begins in 2011 at about 6 and generally increases to about 11.7 by mid-2011.
It then generally decreases to about 5 by March 6, 2012. Italy begins in 2011 at about 1.99 and generally increases
to about 6 by late 2011. It then generally decreases to about 3.5 by March 6, 2012.
Note: Spread over German bunds.
Source: Bloomberg
Figure: Foreign Net Purchases of U.S. Treasury Securities
Bar chart, by billions of dollars, annual rate, 2010 to 2012. There is a horizontal line at 0. There are two series,
Official and Private. Official begins in 2010 at about 400 and decreases to about 200 by 2011:H1. It then decreases
to about 160 by 2011:Q3 and decreases to -100 by 2011:Q4. It then increases to about 380 by January 2012.
Private begins in 2010 at about 210 and then decreases to about -100 by 2011:H1. It then increases to about 450
by 2011:Q3 and then decreases to 390 by 2011:Q4. It then decreases to about 200 by January 2012.
Source: Treasury International Capital data adjusted for staff estimates.
Domestic Asset Market Developments
Figure: S&P 500 Stock Price Index
Line chart, by log scale where Nov. 1, 2011 = 100, January 2010 to March 2012. Data are daily. There is a vertical
line in January 2012 representing the January FOMC. The series begins in January 2012 at about 93 and generally
decreases to about 87 by February 2012. It generally increases to about 100 by May 2010 and then generally
decreases to about 95 by July 2010. It then generally increase to about 110 by February 2011 where it fluctuates
between 105 and 110 until about June 2011. It decreases to about 92 by August 2011 and then generally increases
to about 110 by March 6, 2012.
Source: Bloomberg.
Figure: Implied Volatility on S&P 500 (VIX)
Line chart, by percent, log scale, 2007 to 2012. Data are daily. There is a vertical line in January 2012 representing
the January FOMC. The series begins in 2007 at about 5 and generally increases to about 34 by mid-2007. It then
fluctuates between 18 and 34 until mid-2008. It generally increases to about 80 by late 2008 and then generally
decreases to about 17 by early 2010. It increases to about 50 by mid-2010 and then generally decreases to about
17 by mid-2011. It then increases to about 50 and then generally decreases to about 21 by March 6, 2012.
Source: Chicago Board Options Exchange.
Figure: Equity Risk Premium
Line chart, by percent, 1992 to 2012. Data are monthly. There is a vertical line in January 2012 representing the
January FOMC. There is a plus-sign in January 2012 denoting the latest observation using daily interest rates and
stock prices and latest earnings data. There are two series, Expected 10-year real equity return and Expected real
yield on 10-year Treasury. The Expected real yield on 10-year Treasury is off-the-run 10-year Treasury yield less
Philadelphia Fed 10-year expected inflation. Expected 10-year real equity return begins in 1992 at about 9.75 and
generally decreases to about 2.25 by 2000. It generally increases to about 12 by 2008 and then generally
decreases to about 9 by 2012. Expected real-yield on 10-year Treasury begins in 1992 at about 4.1 and generally
fluctuates between about 2 and 4.3 until about 2000. It then generally declines to about -.95 by 2012.
Source: Thomson Financial.
Figure: S&P 500 Earnings per Share
Line chart, by dollars per share, from 2001 to 2011. Data are quarterly. The series begins in 2001 at about 13.9
and generally decrease to about 10.5 by 2002. It then generally increases to about 24 by 2007 and then generally
decreases to about 5.6 by 2009. It then generally increases to about 24 by 2011:Q4 (preliminary).
Note: Data are seasonally adjusted by staff.
Source: Thomson Financial
Figure: Corporate Bonds Spreads
Line chart, by basis points, 2007 to 2012. There is a vertical line in January 2012 representing the January FOMC.
There are two series, 10-year high-yield and 10-year BBB. 10-year high-yield begins in 2007 at about 260 and
generally increases to about 1700 by 2009. It generally decreases to about 450 by early 2011 and then generally
increases to about 750 by late 2011. It then generally decreases to about 500 by March 6, 2012. 10-year BBB
begins in 2007 at about 150 and generally increases to about 650 about 2009. It generally decreases to about 175
by 2010 and then generally increases to about 340 by late 2011. It then generally decreases to about 220 by March
6, 2012.
Note: Measured relative to a smoother nominal off-the-run Treasury yield curve.
Source: Merrill Lynch and staff estimates
Figure: Spread on 30-Day A2/P2 Commercial Paper
Line chart, by basis points, March 2009 to March 2012. There is a vertical line in January 2012 representing the
January FOMC. There is a plus-sign on March 6, 2012 denoting the latest available single-day observation. There
is one series, 5-day moving average. 5-day moving average begins in March 2009 at about 83 and generally
decrease to about 13 by January 2010. It generally increases to about 48 by September 2011 and then generally
decreases to about 23 by March 6, 2012.
Note: The A2/P2 spread is the A2/P2 nonfinancial rate minus the AA nonfinancial rate.
Source: Depository Trust & Clearing Corporation.
Business Finance
Figure: Selected Components of Net Debt Financing, Nonfinancial Firms
Bar chart, by billions of dollars, 2008 to 2012. Data are monthly rate. There is a horizontal line at zero. There are
three series, Commercial paper, C&I loans and Bonds. Commercial Paper and C&I loans are on a period-end basis
and are adjusted seasonally. Commercial paper and C&I loans are seasonally adjusted on a period-end basis,
bonds are not. There is also a "Total" series presented as a line chart which sums the total of the other series.
Approximate values are: 2008: Bonds 18, C&I 24, Commercial Paper 25, Total 25. 2009: Bonds 30, C&I -30,
Commercial Paper -35, Total 0. 2010: Bonds 33, C&I -5, Commercial Paper 35, Total 35. 2011:H1: Bonds 33, C&I
40, Commercial Paper 43, Total 43. 2011:H2: Bonds 30, C&I 39, Commercial Paper 40, Total 40. January 2012:
Bonds 17, C&I 23, Commercial Paper 39, Total 39. February 2012: Bonds 53, C&I 50, Commercial Paper -2, Total
48.
Note: The February 2012 values are estimates.
Source: Depository Trust & Clearing Corporation; Thomson Financial; Federal Reserve Board.
Figure: Gross Issuance of Institutional Leveraged Loans
Bar chart, by billions of dollars, 2008 to 2012. Data are monthly rate. The series begins in 2008 at about 5 and
decreases to about 4 by 2009. It then increases to about 17 in 2010 and increases to about 33 by 2011:H1. It then
decreases to about 11 by 2011:Q3 and further decreases to about 10 by 2011:Q4. It decreases to about 8 by
January (preliminary).
Source: Reuters Loan Pricing Corporation.
Figure: Selected Components of Net Equity Issuance, Nonfinancial Firms
Bar chart, by billions of dollars, 2008 to 2011. Data are monthly rate. There is a horizontal line at zero. There are
four series, Private issuance, Public issuance, Repurchases and Cash mergers. There is also a "Total" series
presented as a line chart which sums the total of the other series. Approximate values are: 2008: Public issuance
25, Private issuance 21, Repurchases -30, Cash mergers -47, Total -24. 2009: Public issuance 21, Private
issuance 19, Repurchases -14, Cash mergers -24, Total -2. 2010: Public issuance 19, Private issuance 15,
Repurchases -25, Cash merger -30s, Total -23. 2011:H1: Public issuance 20, Private issuance 15, Repurchases 28, Cash mergers -45, Total -28. 2011:Q3: Public issuance 15, Private issuance 14, Repurchase -26, Cash
mergers -55, Total -26. 2011:Q4: Public issuance 18, Private issuance 14, Repurchases -45, Cash mergers -52,
Total -48.
Note: The 2011:Q4 values are estimates.
Source: Thomson Financial, Investment Benchmark Report; Money Tree Report by Pricewaterhouse Coopers, National Venture Capital Association,
and Venture Economics.
Figure: Financial Ratios for Nonfinancial Corporations
Line chart, by ratio, 1991 to 2011. There are two series, Debt over total assets and Liquid assets over total assets.
Debt over total assets begins in 1991 at about 0.33 and generally decreases to about .0.275 by 1995. It increases
to about 0.31 by 1999 and then decreases to about 0.245 by 2005. It generally increases to about 0.29 by 2008
and then decreases to about 0.249 by 2011:Q4 preliminary. Liquid assets over total assets begins in 1991 at about
0.055 and generally increases to about .109 by 2004. It generally decreases to about .089 by 2007 and then
generally increases to about 0.109 by 2011:Q4 (preliminary).
Note: Data are annual through 1999 and quarterly thereafter.
Source: Compustat.
Figure: Bond Ratings Changes of Nonfinancial Firms
Bar chart, by percent of outstandings, from 1991 to 2012. Data are annual rate. There is a horizontal line at zero.
There are two series, Upgrades and Downgrades. Upgrades begins in 1991 at about 10 and generally increases to
about 15 by 1992. It then decreases to about 8 where it remains relatively constant until about 1994. It then
increases to about 20 in 1995 and then decreases to about 10 in 1997. It increases to about 17 in 1998 and then
decreases to about 4 by 2002. It then generally increases to about 6 by 2005 where it remains relatively constant
until about 2008 and decreases to about 3. It then increases by 2011 to about 10. It increases to about 10.5 by
2011:H1 and then decreases to about 5 by 2011:H2. By February 2012 it has decreased to about 3. Downgrades
begins in 1991 at about -35 and decreases to about -42 by 1992. It then increases to about -11 by 1994 where it
remains relatively constant until about 1998. It then decreases to about -40 by 2002 and then increases to about 12 where it remains relatively constant until about 2008. It then decreases to about -21 in 2009 and then increases
to about -4 in 2010. By 2011:H1 it is at about -3 where it remains until January 2012 when it decreases to about 11. It then increases to about -5 by February 2012.
Source: Calculated using data from Moody's Investors Service.
Figure: CMBS Issuance
Bar chart, by billions of dollars, 2007 to 2011. Data are annual rate. There series begins in 2007 at about 230 and
decreases to about 10 in 2008. It decreases again in 2009 to about 0 and then increases to about 10 in 2010. It
increases to about 35 by 2011:H1 and then decreases to about 30 by 2011:Q3. It increases to about 33 by
2011:Q4. Note: There is a hollow bar on 2011:Q4 from 33 to 35 that indicates an issuance in the pipeline.
Source: Commercial Mortgage Alert.
Household Finance
Figure: Mortgage Rate and MBS Yield
Line chart, by percent, from 2007 to 2012. There is a vertical line in January 2012 representing the January FOMC.
There are two series, 30-year conforming fixed mortgage rate and MBS yield. 30-year conforming fixed mortgage
rate begins in 2007 at about 6.45 and generally increases to about 6.6 by mid-2007. It generally decreases to about
5.5 by early 2008 and then generally increases to about 6.4 by late 2008. It then generally decreases to about 4.6
by early 2009 and then generally increase to about 5.5 by mid-2009. It generally decreases to about 4 by late 2010
and then generally increases to about 5.1 by early 2011. It then generally decreases to about 3.8 by March 6, 2012.
MBS yield begins in 2007 at about 5.6 and generally increases to about 6.4 by mid-2007. It generally decreases to
about 4.6 by early 2008 and then generally increases to about 6.2 by mid-2008. It generally decreases to about 3.6
by early 2009 and then generally increases to about 5.1 by mid-2009. It generally decreases to about 3.2 by late
2010 and then generally increases to about 4.5 by early 2011. By March 6, 2012 it generally decreases to about
2.7.
Note: For mortgage-backed securities (MBS) yield, the data are daily and consist of the Fannie Mae 30-year current-coupon rate; for the mortgage
rate, the data are weekly before 2010 and daily thereafter.
Source: For MBS yield, Barclays; for mortgage rate, Freddie Mac (before 2010) and Loansifter (after 2010).
Figure: Purchase and Refinance Activity
Line chart, by log scale where March 16, 1990 = 100, 2002 to 2012. There is a vertical line in January 2012
representing the January FOMC. There are two series, Purchase Index, and Refi Index. Purchase Index begins in
2002 at about 303 and generally increases to about 500 by 2005. It then generally decreases to about 350 by 2006
and then generally increases to about 550 by 2007. It then generally decreases to about 190 by March 2, 2012. Refi
Index begins in 2002 at about 1,800 and generally increases to about 10,000 by 2003. It then generally decreases
to about 2,000 by 2004 where it fluctuates between 2,000 and 4,000 until about 2008. It then increases to about
6,000 by early 2009 and then decreases to about 2,050 by late 2009. It then increases to about 5,500 by 2010 and
then decreases to about 1,900 by 2011. By March 2, 2012 it increases to about 4,100.
Note: Seasonally adjusted by FRB staff.
Source: Mortgage Bankers Association.
Figure: Price of Existing Homes
Line chart, by index peak normalized to 100, 2005 to 2012. Data are monthly. Series begins in 2005 at about 86
and generally increases to about 100 by 2006. It generally decreases to about 71 by 2008 and then generally
increases to about 73 by 2010. It then generally decreases to about 66 by January 2012.
Source: CoreLogic.
Figure: Delinquencies on Prime Mortgages, Transition Rates
Line chart, by percent of loans, 2004 to 2012. There are two series, 3-month moving average and Monthly rate. 3moth moving average begins in 2004 at about 1.08 and generally increases to about 1.19 by mid-2004. It generally
decreases to about 0.81 by 2006 and then generally increases to about 1.43 by 2009. It then generally decreases
to about 1.05 by January 2012. Monthly rate begins in 2004 at about 1.05 and increase to about 1.19 by mid-2004.
It generally decreases to about 0.78 by early 2006 and then generally increases to about 1.78 by late 2008. It then
generally decreases to about 0.89 by January 2012.
Note: Percent of previously current mortgages that transition to being at least 30 days delinquent each month.
Source: LPS Applied Analytics.
Figure: Consumer Credit
Line chart, by percent change, annual rate, 2004 to 2011. Data are 3-month moving average. There is a horizontal
line at 0. There are two series, Revolving and Nonrevolving. Revolving begins in 2004 at about 3 and generally
increases to about 9 by 2007. It generally declines to about -12.5 by 2010 and then generally increases to about 5
by December 2011. Nonrevolving begins in 2004 at about 5 and fluctuates between 3 and 8.5 until about 2008. It
then generally decreases to about -2 and then generally increases to about 6 by 2010. It then generally decreases
to about 1 by mid-2011 and the increases to about 9.5 by December 2011.
Source: Federal Reserve Board.
Figure: Gross Consumer ABS Issuance
Bar chart, by billions of dollars, 2007 to 2012. Data are monthly rate. There are three series, Auto, Credit card, and
Student loan. Approximate values are: 2007: Auto 6.5, Credit card 15, Student loan 19.6. 2008:H1: Auto 5, Credit
card 14.7 Student loan 15. 2008:H2: Auto 1, Credit card 3, Student loan 3.8. 2009:H1: Auto 7, Credit card 15,
Student loan 17. 2009:H2: Auto 10, Credit card 15.75, Student loan 18.4. 2010:H1: Auto 4.7, Credit card 5.5,
Student loan 7. 2010:H2: Auto 4, Credit card 4.8, Student loan 6.75. 2011:H1: Auto 4, Credit card 4.8, Student loan
6.75. 2011:Q3: Auto 5, Credit card 5, Student loan 7. 2011:Q4: Auto 4.3, Credit card 5.2, Student loan 6.9. January
2012: Auto 6, Credit card 6, Student loan 7.8. February 2012: Auto 5.8, Credit card 7, Student loan 7.8.
Source: Inside MBS & ABS; Merrill Lynch; Bloomberg; Federal Reserve Board.
Commercial Banking and Money
Figure: Changes in Bank Credit
Line chart, by percent, 2005 to 2012. Data are 3-month change, a.r. There is a horizontal line at 0. There are two
series, Total bank credit and C&I loans. Total bank credit begins in 2005 at about 10 and generally fluctuates
between 3 and 10 until early 2008. It then decreases to about -1 by mid-2008 and then increases to about 9 by late
2008. It then decreases to about -10 by early 2009. It then generally increases to about 4 by February 2012. C&I
loans begins in 2005 at about 12 and generally decreases to about 9 by early 2006. It generally increases to about
21 by mid-2006 and then generally decreases to about 4 by late 2006. It generally increases to about 29 by late
2007 and then generally decreases to about 5 by late 2008. It then generally increases to about 21 by early 2009
and then generally decreases to about -29 by late 2009. By February 2012 it generally increases to about 10.
Source: Federal Reserve Board
Figure: Return on Assets
Line chart, by percent, 1998 to 2011. There is a horizontal line at 0. There are two series, Unadjusted and Adjusted.
Adjusted return on assets removes mortgage-related charges by Bank of America in 2011:Q2, debt valuation
adjustment income effects in 2011:Q3 and 2011:Q4, and litigation provisions in 2011. These adjustments assume a
marginal tax rate of 35 percent and are not seasonally adjusted. Unadjusted begins in 1998 at about 1.25 and it
generally fluctuates between 1.0 and 1.35 until 2006. It generally decreases to about -1.7 by 2008 and then
generally increases to about 0.6 by 2011. Adjusted follows the same path as unadjusted until late 2010. It increases
to about 0.75 and then decreases to about 0.65 by 2011.
Source: Federal Reserve Board.
Figure: Bank Holding Company Noninterest Income
Bar chart, by billions of dollars, 2007 to 2011. Data are quarterly. There is a horizontal line at zero. There are six
series, Fiduciary income, Trading income, Securitization income, Deposit fees, Net gains/(losses) on Available-ForSale securities, and Other noninterest income. Fiduciary income begins in 2007:Q1 at about 8 where it remains
relatively constant until 2011:Q4. Trading income begins in 2007:Q1 at about 43 and generally decreases to about
23 by 2008:Q1. It increases to about 25 by 2008:Q2 and then generally decreases to about -8 by 2008:Q4. It then
generally increases to about 65 by 2009:Q3. It then generally fluctuates between 57 and 70 from 2009:Q4 to
2011:Q1. It then generally decreases to about 46 by 2011:Q4. Securitization income begins in 2007:Q1 at about 56
and generally declines to about 17 by 2007:Q4. It then generally increases to about 36 by 2008:Q2 and then
generally decreases to about 8 by 2008:Q4. It then increases to about 66 by 2009:Q1 where it fluctuates between
60 and 66 until 2010:Q4. It then increases to about 77 by 2011:Q1 and then generally decreases to about 50 by
2011:Q4. Deposit fees begins in 2007:Q1 at about 61 and generally decreases to about 23 by 2007:Q4. It then
generally increases to about 48 2008:Q2 and then decreases to about 18 by 2008:Q4. It then increases to about 78
by 2009:Q1 and generally fluctuates between 76 and 90 until about 2011:Q1. It then generally decreases to about
59 by 2011:Q4. Net gains/losses on AFS begins in 2007:Q1 at about 62 and generally decreases to about -1 by
2008:Q1. It then increases to about 27 by 2008:Q2, and by 2008:Q4, it decreases to about -12. It then increases to
about to about 80 by 2009:Q1 and then increases again to about 97 by 2009:Q2. It decreases to about 82 by
2009:Q3 and then decreases to about -1 by 2009:Q4. It then increases to about 84 by 2010:Q1 and decreases to
about -1 by 2010:Q4. It then decreases to about -10 by 2011:Q2 and increases to about 60 by 2011:Q4. Other
noninterest income begins in 2007:Q1 at about 82 and generally decreases to about 43 by 2007:Q4. It then
generally increases to about 81 by 2008:Q2 and then decreases to about 39 by 2008:Q4. It then increases to about
110 by 2009:Q1 where it remains relatively constant until 2009:Q4 when it decreases to about 90. It then increases
to about 115 by 2010:Q1 and then decreases to about 100 by 2010:Q4. It then increases to about 108 by 2011:Q1
and then generally decreases to about 90 by 2011:Q4.
Source: Federal Reserve Board.
Figure: Weighted-Average C&I Loan Rate spread
Line chart, by basis points, 1997 to 2012. Data are quarterly. There are two series, Loan amounts of $1 million or
less and Loan amounts of greater than $1 million. Loan amounts of $1 million or less begins in 1997 at about 395
and generally decreases to about 350 by 2000. It generally increases to about 395 by 2002 and then generally
decreases to about 345 by 2007. It then generally increases to about 440 by 2012:Q1. Loan amounts of greater
than $1 million begins in 1998 at about 255 and generally decreases to about 220 by 2000. It then generally
increases to about 350 by 2001 and then generally decreases to about 165 by 2007. It then generally increases to
about 290 by 2012:Q1.
Note: The rate on C&I loans over the interest rate on a market instrument of comparable maturity.
Source: Survey of Terms of Business Leading.
Growth of M2 and Its Components
Percent, s.a.a.r.
Liquid
deposits
M2
Small time
deposits
Retail
MMFs
Curr.
2010
3.1
10.9
-21.4
-15.7
5.9
2011:H1
6.7
11.9
-19.3
-6.8
9.3
2011:H2
11.9
18.0
-20.4
.5
7.8
Dec.
5.5
8.2
-14.0
-4.9
8.2
Jan.
15.6
21.9
-15.8
-9.8
11.4
2.5
6.2
-19.4
-27.4
12.1
Feb.(e)
Note: Retail MMFs are retail money market funds.
e Estimate. Return to table
Source: Federal Reserve Board.
Figure: Level of Liquid Deposits
Line chart, by trillions of dollars, 2008 to 2012. There is a vertical line in January 2012 representing the January
FOMC. The series begins in 2008 at about 4.5 and generally increases to about 7.45 by February 27, 2012.
Note: Seasonally adjusted.
Source: Federal Reserve Board.
Note: The shaded bars indicate periods of business recession as defined by the National Bureau of Economic
Research: March 2001-November 2001, and December 2007-June 2009.
[Box:] Balance Sheet Developments over the Intermeeting Period
Federal Reserve Balance Sheet
Billions of dollars
Change
since last
FOMC
Current
(03/05/12)
Total assets
-48
2,884
-32
71
-0
+0
-32
71
Term Asset-Backed Securities Loan Facility (TALF)
-1
8
Net portfolio holdings of Maiden Lane LLCs
-6
28
Maiden Lane
-1
6
Maiden Lane II
-5
4
Maiden Lane III
-0
18
-10
2,597
U.S. Treasury securities
+0
1,657
Agency debt securities
-2
100
Agency mortgage-backed securities
-9
841
-48
2,830
Federal Reserve notes in circulation
27
1,051
Reverse repurchase agreements
-3
85
Foreign official and international accounts
-3
85
Others
+0
+0
Reserve balances of depository institutions**
87
1,595
Term deposits held by depository institutions
-3
0
-83
36
0
0
-76
39
1
55
Selected assets:
Liquidity programs for financial firms
Primary, secondary, and seasonal credit
Foreign central bank liquidity swaps
Securities held outright*
Total liabilities
Selected liabilities:
U.S. Treasury, General Account
U.S. Treasury, Supplementary Financing Account
Other deposits
Total capital
Note: +0 (-0) denotes positive (negative) value rounded to zero. Return to table
* Par value. Return to table
** Includes required clearing balances and overdrafts. Excludes as-of adjustments. Return to table
Risks and Uncertainty
Alternative Scenarios
(Percent change, annual rate, from end of preceding period except as noted)
2012
Measure and scenario
H1
H2
2013
2014
2015-16
Real GDP
Extended Tealbook baseline
2.0
2.7
2.7
3.3
3.6
Lost decade
2.0
2.3
2.0
2.2
2.5
Virtuous circle
2.2
3.6
4.4
3.4
2.9
Virtuous circle with higher inflation
2.2
3.6
4.3
3.2
2.6
Disinflation
2.0
2.6
2.3
2.7
3.8
.3
-2.6
-1.6
2.9
4.5
Faster European recovery
2.1
3.1
3.2
3.7
3.5
Higher oil prices
1.5
1.9
2.2
3.2
3.9
Extended Tealbook baseline
8.4
8.2
7.8
7.5
6.2
Lost decade
8.4
8.3
8.3
8.4
8.2
Virtuous circle
8.4
8.0
7.0
6.4
5.8
Virtuous circle with higher inflation
8.4
8.1
7.0
6.5
6.3
Disinflation
8.4
8.2
8.0
7.9
6.6
European crisis with severe spillovers
8.6
9.2
10.6
10.7
8.5
Faster European recovery
8.4
8.1
7.5
7.1
5.8
Higher oil prices
8.5
8.4
8.2
8.0
6.5
Extended Tealbook baseline
2.1
1.5
1.4
1.4
1.5
Lost decade
2.1
1.5
1.4
1.3
1.3
Virtuous circle
2.1
1.5
1.4
1.6
1.9
Virtuous circle with higher inflation
2.2
1.7
2.0
2.5
2.6
Disinflation
1.8
1.0
.6
.3
.3
European crisis with severe spillovers
1.3
-.7
-.3
1.0
1.9
Faster European recovery
2.2
1.9
1.8
1.8
1.6
Higher oil prices
5.7
1.0
1.2
1.3
1.7
Extended Tealbook baseline
1.8
1.6
1.6
1.6
1.7
Lost decade
1.8
1.6
1.6
1.5
1.5
Virtuous circle
1.8
1.6
1.6
1.8
2.1
Virtuous circle with higher inflation
1.8
1.8
2.2
2.7
2.8
Disinflation
1.5
1.1
.8
.5
.5
European crisis with severe spillovers
1.5
.5
.4
1.0
1.9
Faster European recovery
1.8
1.8
1.9
1.8
1.8
European crisis with severe spillovers
Unemployment rate1
Total PCE prices
Core PCE prices
Higher oil prices
1.9
1.8
1.9
1.8
1.8
Extended Tealbook baseline
.1
.1
.1
.8
3.0
Lost decade
.1
.1
.1
.1
.2
Virtuous circle
.1
.3
1.8
2.8
3.6
Virtuous circle with higher inflation
.1
.3
2.3
3.7
4.1
Disinflation
.1
.1
.1
.1
.7
European crisis with severe spillovers
.1
.1
.1
.1
.5
Faster European recovery
.1
.1
.2
1.4
3.3
Higher oil prices
.1
.1
.1
.7
2.3
Federal funds rate1
1. Percent, average for the final quarter of the period. Return to table
Forecast Confidence Intervals and Alternative Scenarios
Confidence Intervals Based on FRB/US Stochastic Simulations
Figure: Real GDP
Line chart, by 4-quarter percent change, 2008 to 2016. There is a horizontal line at zero. There are ten series,
Extended Tealbook baseline, Lost decade, Virtuous circle, Virtuous circle with higher inflation, Disinflation, European
crisis with severe spillovers, Faster European recovery, higher oil prices, 70 percent interval, and 90 percent
interval. Extended Tealbook baseline begins in 2008:Q1 at about 2 and generally declines to about -5 by 2009. It
generally increases to about 3.6 by 2010 and then declines to about 1.6 by 2011. It then generally increases to
about 3.85 by 2015 and then declines to about 3.5 by 2016:Q4. Lost decade begins in 2011:Q4 at about 1.6 and
generally increases to about 2.1 by 2012:Q3. It then generally decreases to about 1.9 by 2013:Q2 and then
generally increases to about 2.6 by 2016:Q4. Virtuous circle begins in 2011:Q4 at about 1.6 and generally increases
to about 4.5 by 2014:Q1. It then generally decreases to about 2.7 by 2015:Q1 and then generally increases to about
2.95 by 2016:Q4. Virtuous circle with higher inflation begins in 2011:Q4 at about 1.6 and generally increases to
about 4.4 by 2014:Q1. It generally decreases to about 2.5 by 2015:Q4 and then generally increases to about 2.75
by 2016:Q4. Disinflation begins in 2011:Q4 at about 1.6 and generally increases to about 2.5 by 2012:Q3. It then
generally decreases to about 2.1 by 2013:Q3 and then generally increases to about 4 by 2016:Q4. European crisis
with severe spillovers begins in 2011:Q4 at about 1.6 and generally decreases to about -2.85 by 2013:Q2. It then
generally increases to about 4.75 by 2015:Q3 and then generally decreases to about 4.15 by 2016:Q4. Faster
European recovery begins in 2011:Q4 at about 1.6 and generally increases to about 4 by 2015:Q1. It then generally
decreases to about 3.1 by 2016:Q4. Higher oil prices begins in 2011:Q4 at about 1.6 and generally decreases to
about 1.8 by 2013:Q3. It then generally increases to about 3.9 by 2015:Q2 where it remains relatively constant until
2016:Q4. The other two series closely track each other throughout the chart, with the 90 percent interval being
about 1.5 percent both lesser and greater than the 70 percent interval. The 70 percent interval starts at about
between 1.5 and 2 and increases to between about 1.6 and 5.7 by 2015:Q2, then increases to end at about
between 1.7 and 5.9.
Figure: Unemployment Rate
Line chart, by percent, 2008 to 2016. There are ten series, Extended Tealbook baseline, Lost decade, Virtuous
circle, Virtuous circle with higher inflation, Disinflation, European crisis with severe spillovers, Faster European
recovery, higher oil prices, 70 percent interval, and 90 percent interval. Extended Tealbook baseline begins in 2008
at about 4.95 and increases to about 10 by 2010:Q1. It then generally decreases to about 6.3 by 2016:Q4. Lost
decade begins in 2012:Q1 at about 8.4 where it remains relatively constant until 2016:Q1. It then decreases to
about 8.25 by 2016:Q4. Virtuous circle begins in 2012:Q1 at about 8.4 and generally decreases to about 5.9 by
2016:Q4. Virtuous circle with higher inflation begins in 2012:Q1 at about 8.4 and generally decreases to about 6.4
by 2014:Q3. It remains relatively constant here until 2016:Q4 when it decreases to about 6.3. Disinflation begins in
2012:Q1 at about 8.4 and generally decreases to about 7.95 by 2014:Q2. It remains relatively constant here until
2014:Q4 and then generally decreases to about 6.51 by 2016:Q4. European crisis with sever spillovers begins in
2012:Q1 at about 8.4 and generally increases to about 10.9 by 2014:Q3. It then decreases to about 8.51 by
2016:Q4. Faster European recovery begins in 2012:Q1 at about 8.4 and generally decreases to about 5.9 by
2016:Q4. Higher oil prices begins in 2012:Q1 at about 8.4 and generally increases to about 8.5 by 2013:Q1. It then
generally decreases to about 6.5 by 2016:Q4. The other two series closely track each other throughout the chart,
with the 90 percent interval being about 1.8 percent greater than and 1.2 less than the 70 percent interval. The 70
percent interval starts at about between 8.1 and 8.6 and increases to between about 6.3 and 8.7 by 2015:Q1, then
increases to end at about between 5.3 and 7.55.
Figure: PCE Prices excluding Food and Energy
Line chart, by 4-quarter percent change, 2008 to 2016. There is a horizontal line at zero. There are ten series,
Extended Tealbook baseline, Lost decade, Virtuous circle, Virtuous circle with higher inflation, Disinflation, European
crisis with severe spillovers, Faster European recovery, higher oil prices, 70 percent interval, and 90 percent
interval. Extended Tealbook baseline begins in 2008:Q1 at about 2.3 and increases to about 2.45 by 2008:Q2. It
then generally decreases to about 1.3 by 2009:Q3 and then generally increases to about 1.75 by 2010:Q2. It
generally decreases to about 0.8 by 2010:Q3 and then generally increases to about 1.8 by 2012:Q2. It generally
decreases to about 1.6 by 2012:Q3 and then increases to about 1.7 by 2012:Q4. It then generally decreases to
about 1.6 where it remains relatively constant here. By 2016:Q4 it increases to about 1.75. Lost decade begins in
2012:Q1 at about 1.75 and generally decreases to about 1.4 by 2016:Q4. Virtuous circle begins in 2012:Q1 at about
1.75 and generally decreases to about 1.6 by 2013:Q1. It then generally increases to about 2.1 by 2016:Q4.
Virtuous circle with higher inflation begins in 2012:Q1 at about 1.75 and generally decreases to about 1.6 by
2012:Q3. It then generally increases to about 2.8 by 2014:Q3 and then generally decreases to about 2.65 by
2016:Q4. Disinflation begins in 2012:Q1 at about 1.75 and generally decreases to about 0.4 by 2015:Q1. It remains
relatively constant here until 2016:Q4. European crisis with severe spillovers begins in 2012:Q1 at about 1.75 and
generally decreases to about 0.3 by 2013:Q2. It then generally increases to about 2.05 by 2016:Q4. Faster
European recovery begins in 2012:Q1 at about 1.75 and generally decreases to about 1.25 by 2012:Q3. It then
increases to about 1.7 by 2012:Q4 and remains relatively constant here until 2016:Q4. Higher oil prices begins in
2012:Q1 at about 1.75 and generally decreases to about 1.25 by 2012:Q3. It then generally increases to about 1.8
by 2012:Q4 and remains relatively constant here. By 2016:Q4 it decreases to about 1.75. The other two series
closely track each other throughout the chart, with the 90 percent interval being about 1.25 percent both lesser and
greater than the 70 percent interval. The 70 percent interval starts at about between 1.75 and 2 and increases to
between about 0.5 and 2.5 by 2014:Q1, then increases to end at about between 0.6 and 2.6.
Figure: Federal Funds Rate
Line chart, by percent, 2008 to 2016. There is a horizontal line at zero. There are ten series, Extended Tealbook
baseline, Lost decade, Virtuous circle, Virtuous circle with higher inflation, Disinflation, European crisis with severe
spillovers, Faster European recovery, higher oil prices, 70 percent interval, and 90 percent interval. Extended
Tealbook baseline begins in 2008:Q1 at about 3.1 and generally decreases to about 0.1 by 2009:Q1. It remains
relatively constant here until 2014:Q1. It then increases to about 3 by 2016:Q4. Lost decade begins in 2012:Q1 at
about 0.1 and remains relatively constant here until 2016:Q4. Virtuous circle begins in 2012:Q1 at about 0.1 and
generally increases to about 3.75 by 2016:Q4. Virtuous circle with higher inflation begins in 2012:Q1 at about 0.1
and generally increases to about 4.1 by 2015:Q2. It remains relatively constant here until 2016:Q4. Disinflation
begins in 2012:Q1 at about 0.1 and remains relatively constant here until about 2015:Q4. It increases to about 0.8
by 2016:Q4. European crisis with severe spillovers begins in 2012:Q1 at about 0.1 and remains relatively constant
here until 2016:Q2. It then increases to about 0.4 by 2016:Q4. Faster European recovery begins in 2012:Q1 at
about 0.1 and increases to about 0.25 by 2012:Q3. It then decreases to about 0.1 by 2012:Q4 and remains
relatively constant here until about 2013:Q3. It then increases to about 3.25 by 2016:Q4. Higher oil prices begins in
2012:Q1 at about 0.1 and remains relatively constant here until about 2014:Q1. It then increases to about 2.3 by
2016:Q4. The other two series closely track each other throughout the chart, with the 90 percent interval being
about 1.1 percent greater than and 0.9 percent less than the 70 percent interval. The 70 percent interval starts at
about between 0.1 and 1 and increases to between about 0.1and 3.25 by 2015:Q2, then increases to end at about
between 0.1 and 5.1.
Selected Tealbook Projections and 70 Percent Confidence Intervals Derived from
Historical Tealbook Forecast Errors and FRB/US Simulations
Measure
2012
2013
2014
2015
2016
2.4
2.7
3.3
3.7
3.4
Tealbook forecast errors
.8-3.9
.9-4.4
…
…
…
FRB/US stochastic simulations
1.1-3.8
.8-4.4
1.0-5.0
1.5-5.8
1.4-5.8
8.2
7.8
7.5
6.9
6.2
Tealbook forecast errors
7.6-8.8
6.8-8.8
…
…
…
FRB/US stochastic simulations
7.6-8.7
6.8-8.8
6.4-8.9
5.8-8.3
5.2-7.5
1.8
1.4
1.4
1.5
1.6
Tealbook forecast errors
.8-2.8
.2-2.5
…
…
…
FRB/US stochastic simulations
.9-2.8
.2-2.6
.1-2.7
.1-2.7
.2-2.8
1.7
1.6
1.6
1.6
1.7
Tealbook forecast errors
1.1-2.3
.8-2.4
…
…
…
FRB/US stochastic simulations
1.1-2.3
.8-2.4
.6-2.4
.6-2.5
.7-2.6
.1
.1
.8
2.1
3.0
.1-1.1
.1-2.0
.1-3.0
.2-4.1
1.0-5.1
Real GDP (percent change, Q4 to Q4)
Projection
Confidence interval
Civilian unemployment rate (percent, Q4)
Projection
Confidence interval
PCE prices, total (percent change, Q4 to Q4)
Projection
Confidence interval
PCE prices excluding food and energy (percent change, Q4 to Q4)
Projection
Confidence interval
Federal funds rate (percent, Q4)
Projection
Confidence interval
FRB/US stochastic simulations
Note: Shocks underlying FRB/US stochastic simulations are randomly drawn from the 1969-2010 set of model equation residuals.
Intervals derived from Tealbook forecast errors are based on projections made from 1979-2010, except for PCE prices excluding food and energy,
where the sample is 1981-2010.
… Not applicable. The Tealbook forecast horizon has typically extended about 2 years. Return to table
Greensheets
Changes in GDP, Prices, and Unemployment
(Percent, annual rate except as noted)
Nominal GDP
Interval
Real GDP
PCE price index
Core PCE price
index
01/18/12
03/07/12
Unemployment
rate 1
01/18/12
03/07/12
01/18/12
03/07/12
01/18/12
03/07/12
01/18/12
03/07/12
Q1
3.1
3.1
.4
.4
3.9
3.9
1.6
1.6
9.0
9.0
Q2
4.0
4.0
1.3
1.3
3.3
3.3
2.3
2.3
9.1
9.1
Q3
4.4
4.4
1.8
1.8
2.3
2.3
2.1
2.1
9.1
9.1
Q4
3.8
4.0
2.9
3.1
.5
1.2
.9
1.3
8.7
8.7
Q1
3.3
3.4
1.6
1.8
1.4
2.1
1.5
1.8
8.7
8.4
Q2
3.6
4.2
1.8
2.2
1.7
2.2
1.5
1.7
8.7
8.4
Q3
3.8
4.1
2.3
2.6
1.4
1.5
1.5
1.6
8.6
8.3
Q4
4.1
4.3
2.7
2.9
1.3
1.4
1.4
1.6
8.6
8.2
Q1
3.5
3.8
2.1
2.3
1.3
1.4
1.4
1.6
8.5
8.1
Q2
3.6
4.1
2.2
2.6
1.3
1.4
1.4
1.6
8.4
8.0
Q3
3.8
4.3
2.4
2.8
1.3
1.4
1.4
1.6
8.3
7.9
Q4
4.2
4.6
2.8
3.0
1.3
1.4
1.4
1.6
8.2
7.8
Q2
3.5
3.5
.8
.8
3.6
3.6
1.9
1.9
-.5
-.5
Q4
4.1
4.2
2.4
2.4
1.4
1.8
1.5
1.7
-.4
-.4
Q2
3.4
3.8
1.7
2.0
1.5
2.1
1.5
1.8
.0
-.3
Q4
4.0
4.2
2.5
2.7
1.3
1.5
1.4
1.6
-.1
-.2
Q2
3.6
3.9
2.1
2.4
1.3
1.4
1.4
1.6
-.2
-.2
Q4
4.0
4.4
2.6
2.9
1.3
1.4
1.4
1.6
-.2
-.2
2010:Q4
4.7
4.7
3.1
3.1
1.3
1.3
1.0
1.0
-.3
-.3
2011:Q4
3.8
3.9
1.6
1.6
2.5
2.7
1.7
1.8
-.9
-.9
2012:Q4
3.7
4.0
2.1
2.4
1.4
1.8
1.5
1.7
-.1
-.5
2013:Q4
3.8
4.2
2.4
2.7
1.3
1.4
1.4
1.6
-.4
-.4
2010
4.2
4.2
3.0
3.0
1.8
1.8
1.4
1.4
9.6
9.6
2011
3.9
3.9
1.7
1.7
2.4
2.5
1.4
1.5
8.9
8.9
Quarterly
2011:
2012:
2013:
Two-quarter 2
2011:
2012:
2013:
Four-quarter 3
Annual
2012
3.7
4.0
2.0
2.3
1.5
1.9
1.5
1.7
8.6
8.3
2013
3.8
4.1
2.3
2.6
1.3
1.5
1.4
1.6
8.4
8.0
1. Level, except for two-quarter and four-quarter intervals. Return to table
2. Percent change from two quarters earlier; for unemployment rate, change is in percentage points. Return to table
3. Percent change from four quarters earlier; for unemployment rate, change is in percentage points. Return to table
Changes in Real Gross Domestic Product and Related Items
(Percent, annual rate except as noted)
2011
Item
Real GDP
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
.4
1.3
1.8
3.1
1.8
2.2
2.6
2.9
2.3
2.6
.4
1.3
1.8
2.9
1.6
1.8
2.3
2.7
2.1
2.2
.0
1.6
3.2
1.2
1.9
2.6
2.4
2.5
2.2
2.5
Previous
Tealbook
.0
1.6
3.2
1.3
1.7
2.0
1.9
2.3
1.8
2.1
Priv. dom. final
purch.
2.0
1.9
3.3
2.5
1.9
2.9
3.0
3.2
2.7
3.0
2.0
1.9
3.3
2.4
1.9
2.4
2.8
3.0
2.6
2.8
2.1
.7
1.7
2.1
1.2
2.6
2.8
2.9
2.3
2.5
2.1
.7
1.7
2.2
2.0
2.4
2.6
2.8
2.2
2.4
11.7
-5.3
5.7
15.3
6.9
3.7
5.9
6.5
5.7
6.7
1.6
.2
-.5
.4
-.4
2.1
2.6
2.7
1.7
1.9
Services
.8
1.9
1.9
.7
.8
2.6
2.3
2.4
1.9
2.0
Residential
investment
-2.4
4.2
1.3
11.5
13.9
7.7
8.7
8.0
8.1
8.2
-2.4
4.2
1.3
9.7
8.5
4.0
6.9
7.0
7.0
7.1
2.1
10.3
15.7
3.2
4.5
3.9
3.6
4.0
4.4
4.9
Previous
Tealbook
2.1
10.3
15.7
2.6
-.1
2.1
3.2
3.6
3.8
4.8
Equipment &
software
8.7
6.2
16.2
4.8
6.2
5.1
4.6
5.2
5.4
6.0
8.7
6.2
16.2
3.0
2.2
3.4
4.8
5.0
4.9
6.1
Previous
Tealbook
Final sales
Previous
Tealbook
Personal cons.
expend.
Previous
Tealbook
Durables
Nondurables
Previous
Tealbook
Business fixed
invest.
Previous
Tealbook
Nonres.
structures
-14.3
22.6
14.4
-1.1
.0
.7
.8
.8
1.7
1.9
-14.3
22.6
14.4
1.7
-6.0
-1.5
-1.0
.1
.7
1.5
-424
-416
-403
-404
-387
-380
-379
-379
-373
-366
-424
-416
-403
-396
-394
-389
-395
-395
-396
-395
Exports
7.9
3.6
4.7
4.3
6.9
5.8
5.5
5.6
5.7
5.7
Imports
8.3
1.4
1.2
3.8
2.3
3.5
4.3
4.6
3.7
3.5
Gov't. cons. &
invest.
-5.9
-.9
-.1
-4.2
-1.4
-.3
-.9
-1.0
-1.2
-1.1
Previous
Tealbook
-5.9
-.9
-.1
-4.5
.0
-.8
-.9
-.9
-1.2
-1.1
-9.4
1.9
2.1
-6.9
-2.6
.2
-1.9
-2.2
-3.4
-3.6
-12.6
7.0
5.0
-12.1
-3.3
1.3
-1.6
-2.1
-3.8
-4.1
-2.7
-7.6
-3.8
4.4
-1.1
-2.2
-2.5
-2.5
-2.5
-2.6
-3.4
-2.8
-1.6
-2.2
-.7
-.5
-.3
-.1
.4
.6
Change in bus.
inventories 2
49
39
-2
57
57
45
53
66
68
71
Previous
Tealbook 2
49
39
-2
51
48
43
56
69
76
77
Nonfarm 2
60
51
6
63
58
45
52
65
67
71
Farm2
-8
-9
-6
-6
-1
0
1
1
1
1
Previous
Tealbook
Net exports 2
Previous
Tealbook 2
Federal
Defense
Nondefense
State & local
1. Change from fourth quarter of previous year to fourth quarter of year indicated. Return to table
2. Billions of chained (2005) dollars. Return to table
Changes in Real Gross Domestic Product and Related Items
(Change from fourth quarter of previous year to fourth quarter of year indicated, unless otherwise noted)
Item
Real GDP
2005
2006
2007
2008
2009
2010
2011
2012
2013
2.8
2.4
2.2
-3.3
-.5
3.1
1.6
2.4
2.7
2.8
2.4
2.2
-3.3
-.5
3.1
1.6
2.1
2.4
2.7
2.8
2.4
-2.6
-.8
2.4
1.5
2.3
2.4
Previous Tealbook
2.7
2.8
2.4
-2.6
-.8
2.4
1.5
2.0
2.2
Priv. dom. final purch.
3.2
2.4
1.2
-4.5
-2.5
3.6
2.4
2.8
3.0
Previous Tealbook
3.2
2.4
1.2
-4.5
-2.5
3.6
2.4
2.5
2.9
Personal cons. expend.
2.8
3.2
1.7
-2.5
-.2
3.0
1.7
2.4
2.6
Previous Tealbook
2.8
3.2
1.7
-2.5
-.2
3.0
1.7
2.4
2.4
Previous Tealbook
Final sales
Durables
2.8
7.0
4.6
-13.0
3.0
10.9
6.6
5.7
6.3
Nondurables
3.1
2.9
.8
-3.1
.6
3.5
.4
1.8
2.0
Services
2.7
2.6
1.4
-.5
-.9
1.6
1.3
2.0
2.1
Residential investment
5.3
-15.7
-20.7
-24.4
-12.9
-6.3
3.5
9.6
8.2
Previous Tealbook
5.3
-15.7
-20.7
-24.4
-12.9
-6.3
3.1
6.6
7.3
4.5
7.8
7.9
-9.4
-14.4
11.1
7.7
4.0
4.6
Previous Tealbook
4.5
7.8
7.9
-9.4
-14.4
11.1
7.5
2.2
4.9
Equipment & software
6.2
6.0
3.9
-13.6
-5.8
16.6
8.9
5.3
5.6
6.2
6.0
3.9
-13.6
-5.8
16.6
8.4
3.8
6.4
-.1
13.0
17.3
-1.2
-29.3
-1.8
4.4
.6
2.0
-.1
13.0
17.3
-1.2
-29.3
-1.8
5.1
-2.1
1.1
-723
-729
-649
-495
-359
-422
-412
-381
-364
-723
-729
-649
-495
-359
-422
-410
-393
-394
Exports
6.7
10.2
10.1
-2.5
-.1
8.8
5.1
5.9
5.7
Imports
5.2
4.1
.8
-5.9
-6.5
10.7
3.6
3.7
3.9
.7
1.5
1.9
2.7
1.1
.1
-2.8
-.9
-1.3
.7
1.5
1.9
2.7
1.1
.1
-2.9
-.7
-1.3
1.2
2.2
3.1
8.8
4.6
2.9
-3.2
-1.6
-4.1
.4
4.4
2.6
9.8
3.5
1.5
-3.6
-1.4
-4.9
2.6
-2.3
4.2
6.8
6.9
5.7
-2.5
-2.1
-2.6
.4
1.2
1.2
-.9
-1.1
-1.7
-2.5
-.4
.7
50
59
28
-36
-145
59
36
55
80
50
59
28
-36
-145
59
34
54
80
50
63
29
-38
-144
61
45
55
79
0
-4
-1
1
-1
-1
-7
0
1
Business fixed invest.
Previous Tealbook
Nonres. structures
Previous Tealbook
Net exports 1
Previous Tealbook 1
Gov't. cons. & invest.
Previous Tealbook
Federal
Defense
Nondefense
State & local
Change in bus. inventories 1
Previous Tealbook 1
Nonfarm 1
Farm1
1. Billions of chained (2005) dollars. Return to table
Contributions to Changes in Real Gross Domestic Product
(Percentage points, annual rate except as noted)
2011
Item
Real GDP
Previous
Tealbook
Final sales
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
.4
1.3
1.8
3.1
1.8
2.2
2.6
2.9
2.3
2.6
.4
1.3
1.8
2.9
1.6
1.8
2.3
2.7
2.1
2.2
.0
1.6
3.2
1.2
1.9
2.6
2.4
2.5
2.2
2.4
Previous
Tealbook
.0
1.6
3.2
1.3
1.7
2.0
1.9
2.3
1.8
2.1
Priv. dom. final
purch.
1.6
1.6
2.8
2.1
1.6
2.4
2.5
2.7
2.3
2.5
1.6
1.6
2.8
2.0
1.6
2.0
2.3
2.5
2.1
2.3
1.5
.5
1.2
1.5
.9
1.9
2.0
2.1
1.6
1.8
1.5
.5
1.2
1.5
1.4
1.7
1.8
2.0
1.6
1.7
Durables
.9
-.4
.4
1.1
.5
.3
.5
.5
.4
.5
Nondurables
.3
.0
-.1
.1
-.1
.3
.4
.4
.3
.3
Services
.4
.9
.9
.4
.4
1.2
1.1
1.1
.9
.9
Residential
investment
-.1
.1
.0
.2
.3
.2
.2
.2
.2
.2
-.1
.1
.0
.2
.2
.1
.2
.2
.2
.2
.2
1.0
1.5
.3
.5
.4
.4
.4
.5
.5
Previous
Tealbook
.2
1.0
1.5
.3
.0
.2
.3
.4
.4
.5
Equipment &
software
.6
.4
1.1
.4
.5
.4
.4
.4
.4
.5
.6
.4
1.1
.2
.2
.3
.4
.4
.4
.5
-.4
.5
.4
.0
.0
.0
.0
.0
.0
.1
-.4
.5
.4
.0
-.2
.0
.0
.0
.0
.0
-.3
.2
.4
-.1
.5
.2
.0
.0
.1
.2
-.3
.2
.4
.2
.1
.1
-.2
.0
-.1
.0
Exports
1.0
.5
.6
.6
.9
.8
.8
.8
.8
.8
Imports
-1.4
-.2
-.2
-.7
-.4
-.6
-.8
-.8
-.6
-.6
Gov't. cons. &
invest.
-1.2
-.2
.0
-.8
-.3
.0
-.2
-.2
-.2
-.2
Previous
Tealbook
-1.2
-.2
.0
-.9
.0
-.2
-.2
-.2
-.2
-.2
-.8
.2
.2
-.6
-.2
.0
-.1
-.2
-.3
-.3
Defense
-.7
.4
.3
-.7
-.2
.1
-.1
-.1
-.2
-.2
Nondefense
-.1
-.2
-.1
.1
.0
-.1
-.1
-.1
-.1
-.1
Previous
Tealbook
Personal cons.
expend.
Previous
Tealbook
Previous
Tealbook
Business fixed
invest.
Previous
Tealbook
Nonres.
structures
Previous
Tealbook
Net exports
Previous
Tealbook
Federal
State & local
Change in bus.
inventories
Previous
Tealbook
Nonfarm
Farm
-.4
-.3
-.2
-.3
-.1
-.1
.0
.0
.0
.1
.3
-.3
-1.4
1.9
.0
-.4
.2
.4
.1
.1
.3
-.3
-1.4
1.6
-.1
-.1
.4
.4
.2
.0
.4
-.3
-1.5
1.9
-.2
-.4
.2
.4
.1
.1
-.1
.0
.1
.0
.1
.0
.0
.0
.0
.0
1. Change from fourth quarter of previous year to fourth quarter of year indicated. Return to table
Changes in Prices and Costs
(Percent, annual rate except as noted)
2011
Item
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
GDP chain-wt.
price index
2.5
2.5
2.6
.9
1.5
2.0
1.5
1.4
1.5
1.5
Previous
Tealbook
2.5
2.5
2.6
.9
1.7
1.7
1.5
1.4
1.5
1.4
PCE chain-wt.
price index
3.9
3.3
2.3
1.2
2.1
2.2
1.5
1.4
1.4
1.4
Previous
Tealbook
3.9
3.3
2.3
.5
1.4
1.7
1.4
1.3
1.3
1.3
40.7
15.0
3.3
-3.2
6.3
9.5
.7
-1.0
-.9
-1.5
40.7
15.0
3.3
-6.8
.7
4.9
.7
-.5
-.6
-.9
6.5
6.4
4.7
3.3
1.7
1.6
1.5
1.3
1.2
1.2
6.5
6.4
4.7
2.6
.9
1.1
1.2
1.2
1.2
1.2
1.6
2.3
2.1
1.3
1.8
1.7
1.6
1.6
1.6
1.6
Previous
Tealbook
1.6
2.3
2.1
.9
1.5
1.5
1.5
1.4
1.4
1.4
Ex. food &
energy,
market based
1.3
2.4
2.3
1.4
1.8
1.6
1.5
1.5
1.4
1.4
Previous
Tealbook
1.3
2.4
2.3
1.1
1.5
1.4
1.3
1.3
1.3
1.3
4.5
4.4
3.1
1.3
2.4
2.6
1.5
1.3
1.4
1.3
5.2
4.1
3.1
.9
1.6
1.9
1.5
1.3
1.3
1.2
1.8
2.4
2.5
1.9
2.1
2.0
1.6
1.6
1.6
1.7
Energy
Previous
Tealbook
Food
Previous
Tealbook
Ex. food &
energy
CPI
Previous
Tealbook
Ex. food &
energy
Previous
Tealbook
1.7
2.5
2.7
1.7
1.7
1.5
1.5
1.5
1.5
1.5
ECI, hourly
compensation2
2.1
3.2
1.4
1.8
2.6
2.5
2.5
2.5
2.6
2.6
Previous
Tealbook 2
2.1
3.2
1.4
2.0
2.5
2.5
2.4
2.4
2.3
2.3
-1.0
-.3
1.8
1.1
-1.6
1.8
1.9
2.2
1.3
1.5
-.6
-.1
1.9
.8
.3
1.3
1.7
2.2
1.1
1.3
5.1
-.5
5.7
3.7
2.1
2.3
2.7
2.7
2.6
2.6
5.6
-.3
-.2
2.3
2.3
2.4
2.3
2.3
2.2
2.2
6.2
-.1
3.9
2.6
3.8
.5
.8
.5
1.4
1.1
6.2
-.2
-2.1
1.5
2.0
1.1
.6
.1
1.1
.9
8.3
7.2
2.4
-.4
-.5
1.5
1.1
1.7
1.6
1.6
8.3
7.2
2.4
-.8
-1.2
.0
.7
1.4
1.5
1.6
Nonfarm business sector
Output per hour
Previous
Tealbook
Compensation
per hour
Previous
Tealbook
Unit labor costs
Previous
Tealbook
Core goods
imports chain-wt.
price index3
Previous
Tealbook 3
1. Change from fourth quarter of previous year to fourth quarter of year indicated. Return to table
2. Private-industry workers. Return to table
3. Core goods imports exclude computers, semiconductors, oil, and natural gas. Return to table
Changes in Prices and Costs
(Change from fourth quarter of previous year to fourth quarter of year indicated, unless otherwise noted)
Item
GDP chain-wt. price index
Previous Tealbook
PCE chain-wt. price index
Previous Tealbook
Energy
Previous Tealbook
Food
Previous Tealbook
Ex. food & energy
Previous Tealbook
Ex. food & energy, market
2005
2006
2007
2008
2009
2010
2011
2012
2013
3.5
2.9
2.6
2.1
.7
1.6
2.1
1.6
1.5
3.5
2.9
2.6
2.1
.7
1.6
2.1
1.6
1.4
3.2
1.9
3.5
1.7
1.5
1.3
2.7
1.8
1.4
3.2
1.9
3.5
1.7
1.5
1.3
2.5
1.4
1.3
21.5
-3.7
19.3
-8.8
2.6
6.2
12.8
3.8
-1.6
21.5
-3.7
19.3
-8.8
2.6
6.2
11.7
1.4
-.8
1.5
1.7
4.7
7.0
-1.7
1.3
5.2
1.6
1.2
1.5
1.7
4.7
7.0
-1.7
1.3
5.0
1.1
1.2
2.3
2.3
2.4
2.0
1.7
1.0
1.8
1.7
1.6
2.3
2.3
2.4
2.0
1.7
1.0
1.7
1.5
1.4
based
2.0
2.2
2.1
2.2
1.7
.7
1.8
1.6
1.5
2.0
2.2
2.1
2.2
1.7
.7
1.8
1.4
1.3
3.7
2.0
4.0
1.6
1.5
1.2
3.3
2.0
1.3
3.7
2.0
4.0
1.6
1.5
1.2
3.3
1.6
1.3
2.1
2.7
2.3
2.0
1.7
.6
2.2
1.8
1.7
2.1
2.7
2.3
2.0
1.7
.6
2.2
1.6
1.5
2.9
3.2
3.0
2.4
1.2
2.1
2.2
2.5
2.6
2.9
3.2
3.0
2.4
1.2
2.1
2.2
2.4
2.3
1.6
.8
2.5
-1.1
5.3
2.3
.4
1.1
1.6
Previous Tealbook
1.6
.8
2.5
-1.1
5.3
2.5
.5
1.4
1.4
Compensation per hour
3.5
4.5
3.6
2.5
1.8
1.4
3.5
2.5
2.7
Previous Tealbook
3.5
4.5
3.6
2.5
1.8
1.6
1.8
2.3
2.2
1.9
3.6
1.1
3.7
-3.3
-.9
3.1
1.4
1.1
1.9
3.6
1.1
3.7
-3.3
-.9
1.3
1.0
.7
Core goods imports chain-wt.
price index2
2.2
2.5
2.9
3.7
-1.7
2.6
4.3
.9
1.5
Previous Tealbook 2
2.2
2.5
2.9
3.7
-1.7
2.6
4.2
.2
1.5
Previous Tealbook
CPI
Previous Tealbook
Ex. food & energy
Previous Tealbook
ECI, hourly compensation1
Previous Tealbook 1
Nonfarm business sector
Output per hour
Unit labor costs
Previous Tealbook
1. Private-industry workers. Return to table
2. Core goods imports exclude computers, semiconductors, oil, and natural gas. Return to table
Other Macroeconomic Indicators
2011
Item
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
Q
Employment and production
Nonfarm payroll
employment 2
.5
.6
.3
.4
.6
.5
.5
.5
.5
.6
Unemployment
rate3
9.0
9.1
9.1
8.7
8.4
8.4
8.3
8.2
8.1
8.0
Previous
Tealbook 3
9.0
9.1
9.1
8.7
8.7
8.7
8.6
8.6
8.5
8.4
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
6.0
-5.2
-5.3
-5.3
-5.0
-5.0
-5.0
-4.8
-4.6
-4.6
-4.4
-5.7
-5.8
-5.8
-5.5
-5.6
-5.7
-5.6
-5.4
-5.4
-5.4
NAIRU 3
Previous
Tealbook 3
GDP gap 4
Previous
Tealbook 4
Industrial
production 5
4.8
.7
6.2
3.9
3.5
5.5
3.9
3.7
2.5
2.4
Previous
Tealbook 5
4.8
.7
6.3
3.1
3.2
2.9
2.2
2.4
2.7
3.2
Manufacturing
industr. prod. 5
7.2
.1
4.9
5.1
8.0
3.8
2.8
3.6
2.3
2.6
Previous
Tealbook 5
7.2
.1
5.0
3.9
4.1
2.5
2.1
2.7
2.5
3.3
Capacity
utilization rate mfg. 3
74.5
74.4
75.1
75.8
77.1
77.6
78.0
78.5
78.7
78.8
Previous
Tealbook 3
74.5
74.4
75.1
75.6
76.2
76.4
76.6
76.9
77.1
77.5
Housing starts 6
.6
.6
.6
.7
.7
.7
.7
.8
.8
.9
13.0
12.1
12.4
13.4
14.5
14.3
14.5
14.5
14.6
14.9
Nominal GDP 5
3.1
4.0
4.4
4.0
3.4
4.2
4.1
4.3
3.8
4.1
Real disposable
pers. income5
1.2
-.5
.7
1.4
1.6
2.8
3.1
3.5
-.8
2.7
1.2
-.5
-1.9
2.7
3.4
3.0
3.3
3.5
-1.3
2.3
5.0
4.8
4.6
4.5
4.6
4.6
4.7
4.8
4.1
4.1
5.0
4.8
3.9
4.1
4.4
4.5
4.7
4.9
4.0
4.0
4.2
13.7
6.9
-7.1
-3.9
7.7
-.4
-.9
-2.5
-.9
12.4
12.7
12.8
12.4
12.2
12.3
12.1
12.0
11.8
11.7
-1,201
-1,275
-1,161
-1,097
-1,022
-1,039
-1,003
-985
-822
-804
-57
-40
-83
-68
-51
-39
-33
-23
-15
-2
12.6
12.4
12.9
13.0
13.2
13.2
13.3
13.4
13.5
13.6
-.1
-.4
.2
.5
.7
.7
.9
1.0
1.1
1.2
Light motor
vehicle sales 6
Income and saving
Previous
Tealbook 5
Personal saving
rate3
Previous
Tealbook 3
Corporate
profits7
Profit share of
GNP 3
Net federal
saving8
Net state & local
saving8
Gross national
saving rate3
Net national
saving rate3
1. Change from fourth quarter of previous year to fourth quarter of year indicated, unless otherwise indicated. Return to table
2. Change, millions. Return to table
3. Percent; annual values are for the fourth quarter of the year indicated. Return to table
4. Percent difference between actual and potential GDP; a negative number indicates that the economy is operating below potential. Annual values
are for the fourth quarter of the year indicated. Return to table
5. Percent change, annual rate. Return to table
6. Level, millions; annual values are annual averages. Return to table
7. Percent change, annual rate, with inventory valuation and capital consumption adjustments. Return to table
8. Billions of dollars; annual values are annual averages. Return to table
Other Macroeconomic Indicators
(Change from fourth quarter of previous year to fourth quarter of year indicated, unless otherwise noted)
Item
2005
2006
2007
2008
2009
2010
2011
2012
2013
Employment and production
Nonfarm payroll employment 1
2.4
2.1
1.2
-2.8
-5.6
.8
1.8
2.1
2.4
Unemployment rate2
5.0
4.5
4.8
6.9
9.9
9.6
8.7
8.2
7.8
5.0
4.5
4.8
6.9
9.9
9.6
8.7
8.6
8.2
5.0
5.0
5.0
5.3
6.0
6.0
6.0
6.0
6.0
5.0
5.0
5.0
5.3
6.0
6.0
6.0
6.0
6.0
.6
.8
.8
-4.5
-6.4
-4.9
-5.0
-4.6
-4.0
.0
.0
-.2
-5.4
-6.9
-5.4
-5.5
-5.4
-5.2
Previous Tealbook 2
NAIRU 2
Previous Tealbook 2
GDP gap 3
Previous Tealbook 3
Industrial
production 4
2.3
2.3
2.5
-9.1
-5.5
6.2
3.9
4.1
2.6
2.3
2.3
2.5
-9.1
-5.5
6.2
3.7
2.7
3.1
Manufacturing industr. prod. 4
3.4
2.0
2.8
-11.8
-6.1
6.1
4.3
4.5
2.9
Previous Tealbook 4
3.4
2.0
2.8
-11.8
-6.1
6.1
4.0
2.8
3.2
Capacity utilization rate - mfg. 2
78.5
78.4
79.0
70.1
67.7
73.3
75.8
78.5
79.5
Previous Tealbook 2
78.5
78.4
79.0
70.1
67.7
73.3
75.6
76.9
78.2
Previous Tealbook 4
Housing
starts 5
2.1
1.8
1.4
.9
.6
.6
.6
.7
.9
16.9
16.5
16.1
13.1
10.3
11.5
12.7
14.4
15.0
6.4
5.3
4.9
-1.2
.0
4.7
3.9
4.0
4.2
Real disposable pers. income 4
.6
4.6
1.6
1.0
-2.4
3.5
.7
2.8
2.0
Previous Tealbook 4
.6
4.6
1.6
1.0
-2.4
3.5
.4
3.3
1.7
1.6
2.8
2.5
6.2
4.3
5.2
4.5
4.8
4.3
1.6
2.8
2.5
6.2
4.3
5.2
4.1
4.9
4.1
Light motor vehicle sales 5
Income and saving
Nominal GDP 4
Personal saving rate 2
Previous Tealbook 2
Corporate
profits6
Profit share of GNP 2
19.6
3.7
-8.1
-33.5
61.8
18.2
4.1
.5
-.1
11.8
11.6
10.1
6.8
11.0
12.4
12.4
12.0
11.5
Net federal
saving7
-283
-204
-245
-613
-1218
-1274
-1184
-1012
-793
Net state & local saving7
26
51
12
-72
-78
-25
-62
-37
-4
Gross national saving
rate2
15.6
16.5
13.9
12.6
11.3
12.3
13.0
13.4
13.9
3.6
4.4
1.7
-.6
-1.9
-.4
.5
1.0
1.5
Net national saving rate2
1. Change, millions. Return to table
2. Percent; values are for the fourth quarter of the year indicated. Return to table
3. Percent difference between actual and potential GDP; a negative number indicates that the economy is operating below potential. Values are for
the fourth quarter of the year indicated. Return to table
4. Percent change. Return to table
5. Level, millions; values are annual averages. Return to table
6. Percent change, with inventory valuation and capital consumption adjustments. Return to table
7. Billions of dollars; values are annual averages. Return to table
Staff Projections of Federal Sector Accounts and Related Items
(Billions of dollars except as noted)
Fiscal year
Item
2010a
2011a
2011
2012
Q1 a
2013
Q2 a
2012
Q3 a
Q4
Q1
Q2
Unified budget
Q
Not seasonally ad
Receipts1
2163
2303
2476
2750
488
714
568
555
527
766
Outlays1
3456
3603
3603
3584
949
855
895
877
959
907
Surplus/deficit 1
-1293
-1300
-1127
-834
-460
-141
-326
-322
-432
-140
Previous
Tealbook
-1293
-1297
-1107
-853
-460
-141
-326
-322
-443
-130
On-budget
-1370
-1367
-1110
-826
-451
-202
-311
-346
-412
-169
Off-budget
77
67
-17
-8
-10
61
-15
24
-20
28
1474
1110
1201
894
260
93
389
326
424
184
-35
252
-12
20
225
-19
79
-28
56
-49
-146
-62
-62
-80
-24
67
-142
23
-47
6
310
58
70
50
118
137
58
86
30
80
Means of
financing
Borrowing
Cash
decrease
Other 2
Cash operating
balance, end of
period
Seasonally adjusted a
NIPA federal
sector
Receipts
2379
2534
2709
2970
2528
2554
2583
2612
2702
2745
Expenditures
3648
3765
3750
3819
3729
3829
3744
3709
3724
3784
Consumption
expenditures
1042
1070
1073
1069
1059
1078
1085
1069
1072
1076
Defense
697
715
715
714
701
723
733
711
713
718
Nondefense
346
355
358
355
358
354
352
358
359
359
2606
2695
2677
2749
2670
2752
2659
2640
2652
2708
-1269
-1231
-1040
-848
-1201
-1275
-1161
-1097
-1022
-1039
165
165
156
152
161
160
164
157
155
156
-1305
-1260
-1052
-846
-1227
-1298
-1185
-1113
-1034
-1050
-985
-969
-769
-576
-941
-1004
-889
-822
-750
-769
Change in HEB,
percent of
potential GDP
1.0
-.3
-1.4
-1.3
-.7
.3
-.8
-.4
-.5
.1
Fiscal impetus
(FI), percent of
GDP
0.5
-0.3
-0.5
-1.1
-0.6
0.4
-0.1
-1.0
-0.7
-0.5
Previous
Tealbook
0.5
-0.4
-0.4
-1.1
-0.6
0.4
-0.1
-1.2
-0.2
-0.5
Other
spending
Current account
surplus
Gross
investment
Gross saving
less gross
investment 3
-
-
Fiscal
indicators 4
Highemployment
(HEB)
surplus/deficit
1. Budget receipts, outlays, and surplus/deficit include corresponding social security (OASDI) categories. The OASDI surplus and the Postal Service
surplus are excluded from the on-budget surplus and shown separately as off-budget, as classified under current law. Return to table
2. Other means of financing are checks issued less checks paid, accrued items, and changes in other financial assets and liabilities. Return to
table
3. Gross saving is the current account surplus plus consumption of fixed capital of the general government as well as government
enterprises. Return to table
4. HEB is gross saving less gross investment (NIPA) of the federal government in current dollars, with cyclically sensitive receipts and outlays
adjusted to the staff's measure of potential output and the NAIRU. The sign on Change in HEB, as a percent of nominal potential GDP, is reversed.
FI is the weighted difference of discretionary changes in federal spending and taxes in chained (2005) dollars, scaled by real GDP. The FI estimates
are calendar year contributions to Q4/Q4 real GDP growth. Also, for FI and the change in HEB, positive values indicate aggregate demand
stimulus. Quarterly figures for change in HEB and FI are not at annual rates. Return to table
a Actual. Return to table
Change in Debt of the Domestic Nonfinancial Sectors
(Percent)
Households
Period 1
Total
Total
Home
mortgages
Consumer
credit
Business
State and local
governments
Federal
government
Memo:
Nominal
GDP
Year
2007
8.5
6.7
6.9
5.8
13.6
5.4
4.9
4.9
2008
6.0
.1
-.5
1.5
6.2
.7
24.2
-1.2
2009
3.1
-1.7
-1.4
-4.4
-2.4
3.9
22.7
.0
2010
4.1
-2.1
-2.9
-1.8
.7
2.2
20.2
4.7
2011
3.7
-.9
-2.1
3.5
4.2
-1.9
11.4
3.9
2012
4.6
.6
-1.2
6.0
4.1
-.2
11.4
4.0
2013
4.0
1.6
-.2
7.0
4.3
.6
7.4
4.2
2014
4.0
1.9
.0
7.5
4.3
1.0
6.5
4.8
1
3.5
-3.1
-4.8
-3.9
-.1
2.4
20.6
5.5
2
3.9
-2.2
-2.5
-3.3
-1.3
-.5
22.5
5.4
3
3.7
-2.2
-2.5
-2.2
1.8
2.1
16.0
3.9
4
4.9
-.7
-1.8
2.3
2.5
4.8
16.4
4.2
1
2.3
-1.9
-2.7
2.2
4.1
-3.3
7.9
3.1
2
3.0
-.6
-2.4
3.6
4.4
-3.5
8.6
4.0
3
4.4
-1.2
-1.9
1.4
3.6
.0
14.1
4.4
4
4.9
.3
-1.5
6.9
4.6
-1.0
13.1
4.0
1
4.9
.2
-1.6
5.5
4.2
-.7
13.3
3.4
2
4.4
.4
-1.3
5.5
3.9
-.3
11.0
4.2
3
3.8
.8
-1.0
6.0
4.0
-.1
8.1
4.1
4
4.9
1.0
-.8
6.3
4.2
.3
11.4
4.3
1
4.7
1.3
-.5
6.6
4.3
.6
10.0
3.8
2
3.5
1.5
-.3
6.9
4.2
.6
5.5
4.1
3
3.0
1.8
.0
6.9
4.3
.6
3.8
4.3
4
4.8
1.8
.0
7.0
4.3
.6
9.5
4.6
Quarter
2010:
2011:
2012:
2013:
Note: Quarterly data are at seasonally adjusted annual rates.
1. Data after 2011:Q4 are staff projections. Changes are measured from end of the preceding period to end of period indicated except for annual
nominal GDP growth, which is calculated from Q4 to Q4. Return to table
Flow of Funds Projections: Highlights
(Billions of dollars at seasonally adjusted annual rates except as noted)
2011
Category
2011
Domestic nonfinancial sectors
2012
2013
2014
Q3
2012
Q4
Q1
Q2
Q3
Q4
Q
Net funds raised
Total
878.5
1338.5
1282.1
1307.7
1029.6
1351.7
1484.2
1298.9
1053.8
1517.1
1
Net equity
issuance
-489.9
-410.0
-340.0
-340.0
-606.6
-514.8
-400.0
-400.0
-420.0
-420.0
-
Net debt
issuance
1368.3
1748.5
1622.1
1647.7
1636.2
1866.5
1884.2
1698.9
1473.8
1937.1
1
249.3
249.7
250.1
248.6
248.0
248.5
249.5
249.8
249.8
249.8
9.1
11.1
9.9
9.6
10.8
12.2
12.2
10.9
9.3
12.2
-113.9
79.8
216.1
262.7
-159.3
43.1
24.2
56.7
103.4
134.9
Home
mortgages
-213.2
-115.0
-19.4
0.0
-184.8
-150.3
-157.3
-127.3
-97.6
-77.9
Consumer
credit
86.3
150.4
187.7
213.3
34.6
170.4
138.4
140.8
156.3
166.3
114.4
110.1
107.5
104.5
113.6
112.8
111.8
110.5
109.4
108.4
Financing
gap 4
-183.2
-102.0
45.2
101.3
-252.9
-136.9
-119.0
-138.4
-98.6
-52.2
Net equity
issuance
-489.9
-410.0
-340.0
-340.0
-606.6
-514.8
-400.0
-400.0
-420.0
-420.0
Credit
market
borrowing
472.9
482.0
525.1
541.5
411.9
531.3
487.4
461.5
474.7
504.3
Borrowing indicators
Debt (percent
of GDP)1
Borrowing
(percent of
GDP)
Households
Net
borrowing2
Debt/DPI
(percent) 3
Business
-
State and local governments
Net
borrowing
-58.6
-6.2
17.8
29.8
1.0
-29.1
-22.2
-10.2
-2.2
9.8
Current
surplus5
214.9
209.7
249.9
236.2
212.1
175.2
192.6
206.1
214.1
226.1
Net
borrowing
1067.9
1192.9
863.1
813.8
1382.6
1321.2
1394.8
1190.9
897.8
1288.1
Net
borrowing
(n.s.a.)
1067.9
1192.9
863.1
813.8
389.1
326.0
423.5
183.8
267.9
317.7
Unified
deficit
(n.s.a.)
1251.4
1122.9
783.1
733.8
328.1
321.7
432.3
140.5
232.6
317.6
Federal government
1
Depository institutions
Funds supplied
200.5
520.7
483.1
598.6
498.1
606.2
776.8
448.8
398.3
458.7
Note: Data after 2011:Q4 are staff projections.
1. Average debt levels in the period (computed as the average of period-end debt positions) divided by nominal GDP. Return to table
2. Includes change in liabilities not shown in home mortgages and consumer credit. Return to table
3. Average debt levels in the period (computed as the average of period-end debt positions) divided by disposable personal income. Return to
table
4. For corporations, excess of capital expenditures over U.S. internal funds. Return to table
5. NIPA state and local government saving plus consumption of fixed capital and net capital transfers. Return to table
n.s.a. Not seasonally adjusted. Return to table
Foreign Real GDP and Consumer Prices: Selected Countries
(Quarterly percent changes at an annual rate)
Projected
Measure and
country
2011
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
Real GDP 1
Total foreign
3.6
2.4
3.8
1.2
3.1
2.8
2.8
3.0
3.0
3.1
Previous
Tealbook
3.7
2.3
3.6
2.0
2.5
2.3
2.5
2.7
2.8
2.9
Advanced
foreign
economies
1.8
.1
3.1
.1
1.1
1.1
1.2
1.5
1.6
1.7
3.7
-.6
4.2
1.8
2.0
1.9
2.2
2.3
2.2
2.2
-6.8
-1.5
7.0
-2.3
2.7
2.3
2.0
1.8
1.4
1.4
United
Kingdom
1.3
.1
2.2
-.8
1.2
.9
.9
1.2
1.7
1.9
Euro area
3.1
.6
.5
-1.3
-.8
-.6
-.4
.1
.6
.9
5.5
1.1
2.3
-.7
.3
.5
.7
1.0
1.3
1.5
5.4
5.0
4.6
2.4
5.2
4.7
4.6
4.6
4.5
4.6
7.5
4.8
4.9
2.6
6.4
5.7
5.5
5.5
5.8
5.8
Korea
5.4
3.6
3.3
1.4
3.2
3.5
3.5
3.5
3.7
3.8
China
8.7
9.5
9.5
8.2
8.0
8.0
8.0
8.0
8.2
8.2
Latin
America
3.1
5.3
4.3
2.1
3.9
3.6
3.5
3.5
3.1
3.2
2.1
6.0
5.1
1.7
4.0
3.5
3.4
3.4
2.9
2.9
Canada
Japan
Germany
Emerging
market
economies
Asia
Mexico
Brazil
2.5
2.0
-.2
1.3
3.1
3.3
3.5
3.5
3.7
3.8
4.1
3.3
3.1
2.9
3.1
2.4
2.4
2.4
2.4
2.4
Previous
Tealbook
4.3
3.2
3.1
3.1
2.3
2.4
2.3
2.3
2.3
2.3
Advanced
foreign
economies
3.0
2.3
1.1
2.5
2.1
1.4
1.4
1.4
1.3
1.3
3.3
3.4
1.0
2.9
2.6
2.0
2.0
1.8
1.8
1.8
.0
-.7
.1
-.7
.6
-.2
-.2
-.2
-.1
-.1
United
Kingdom
6.7
4.1
3.7
4.2
1.3
1.9
1.8
2.9
1.6
1.5
Euro Area
3.7
2.8
1.4
3.8
2.9
1.8
1.6
1.6
1.5
1.5
3.4
2.4
1.9
2.8
2.8
2.2
2.1
2.0
1.9
1.9
5.0
4.1
4.6
3.2
3.8
3.2
3.2
3.2
3.2
3.2
5.3
4.9
5.3
2.4
3.2
3.1
3.0
3.0
3.0
3.0
Korea
6.0
2.8
4.8
2.3
2.9
3.1
3.0
3.0
3.0
3.0
China
4.6
5.8
6.2
1.8
3.3
2.9
2.8
2.9
2.9
2.9
Latin
America
4.2
2.4
3.6
5.5
5.6
3.4
3.7
3.8
3.8
3.8
Mexico
3.6
1.8
3.3
5.3
5.5
3.1
3.5
3.5
3.5
3.5
Brazil
8.1
7.1
5.3
6.4
5.4
5.2
5.0
5.9
6.0
5.1
Consumer prices 2
Total foreign
Canada
Japan
Germany
Emerging
market
economies
Asia
1. Foreign GDP aggregates calculated using shares of U.S. exports. Return to table
2. Foreign CPI aggregates calculated using shares of U.S. non-oil imports. Return to table
Foreign Real GDP and Consumer Prices: Selected Countries
(Percent change, Q4 to Q4)
Projected
Measure and country
2005
2006
2007
2008
2009
2010
2011
2012
2013
Real GDP 1
Total foreign
4.0
4.2
4.4
-.9
.9
4.4
2.8
2.9
3.2
4.0
4.2
4.3
-.9
.9
4.4
2.9
2.5
3.0
2.7
2.6
2.6
-2.0
-1.3
2.8
1.3
1.2
1.8
Canada
3.1
1.9
2.5
-.7
-1.4
3.3
2.2
2.1
2.3
Japan
2.1
2.1
1.6
-4.8
-.6
3.2
-1.0
2.2
1.5
United Kingdom
2.8
2.1
4.1
-5.4
-.8
1.7
.7
1.1
2.1
Previous Tealbook
Advanced foreign economies
Euro area
2.2
3.8
2.3
-2.1
-2.1
2.0
.7
-.5
1.0
1.6
4.9
2.4
-1.9
-2.2
3.8
2.0
.6
1.6
5.8
6.3
6.7
.3
3.5
6.2
4.4
4.8
4.6
7.6
7.8
8.9
.9
8.0
7.6
5.0
5.8
5.8
Korea
5.2
4.6
5.8
-3.2
6.3
4.7
3.4
3.4
3.9
China
10.3
12.8
13.7
7.7
11.4
9.6
9.0
8.0
8.2
3.9
4.8
4.4
-.4
-.9
4.6
3.7
3.6
3.2
Mexico
3.6
4.1
3.5
-1.2
-2.4
4.3
3.7
3.6
3.0
Brazil
2.2
4.9
6.6
.9
5.3
5.4
1.4
3.3
3.9
2.3
2.2
3.7
3.3
1.3
3.2
3.4
2.6
2.4
2.3
2.2
3.7
3.3
1.3
3.2
3.4
2.3
2.3
1.6
1.4
2.2
2.0
.2
1.7
2.2
1.6
1.3
Canada
2.3
1.4
2.5
1.8
.8
2.2
2.7
2.1
1.8
Japan
-.7
.3
.5
1.1
-2.0
-.3
-.3
-.0
-.1
United Kingdom
2.1
2.7
2.1
3.9
2.2
3.4
4.7
1.9
1.7
Euro Area
2.3
1.8
2.9
2.3
.4
2.0
2.9
2.0
1.5
2.2
1.3
3.1
1.7
.3
1.6
2.6
2.3
1.8
3.0
2.9
5.1
4.6
2.1
4.3
4.3
3.4
3.2
2.5
2.4
5.5
3.6
1.3
4.3
4.4
3.1
3.0
Korea
2.5
2.1
3.4
4.5
2.4
3.2
4.0
3.0
3.0
China
1.4
2.1
6.7
2.5
.6
4.7
4.6
3.0
2.9
3.8
4.1
4.2
6.7
3.9
4.4
3.9
4.1
3.8
Mexico
3.1
4.1
3.8
6.2
4.0
4.3
3.5
3.9
3.5
Brazil
6.1
3.1
4.3
6.3
4.3
5.6
6.7
5.4
5.2
Germany
Emerging market economies
Asia
Latin America
Consumer prices 2
Total foreign
Previous Tealbook
Advanced foreign economies
Germany
Emerging market economies
Asia
Latin America
1. Foreign GDP aggregates calculated using shares of U.S. exports. Return to table
2. Foreign CPI aggregates calculated using shares of U.S. non-oil imports. Return to table
U.S. Current Account
Quarterly Data
Projected
2011
Q1
Q2
2012
Q3
Q4
Q1
Q2
2013
Q3
Billions of dollars, s.a.a.r.
U.S. current
account
Q4
Q1
Q2
Q3
balance
-474.9
-495.4
-437.7
-458.5
-467.4
-422.7
-426.3
-450.7
-480.4
-438.4
-44
-478.4
-498.9
-441.1
-453.4
-465.5
-422.5
-439.2
-461.0
-497.7
-463.5
-47
-3.2
-3.3
-2.9
-3.0
-3.0
-2.7
-2.7
-2.8
-3.0
-2.7
-3.2
-3.3
-2.9
-3.0
-3.0
-2.7
-2.8
-2.9
-3.1
-2.9
Net goods &
services
-556.4
-581.4
-538.9
-555.4
-581.7
-531.3
-534.6
-547.5
-570.6
-520.0
-51
Investment
income, net
219.5
236.6
242.1
233.5
255.8
246.2
249.2
239.8
231.7
219.1
20
Direct,
net
315.9
322.1
323.5
295.2
305.0
289.2
292.1
288.0
288.6
285.7
28
Portfolio,
net
-96.4
-85.5
-81.4
-61.7
-49.2
-43.0
-42.9
-48.1
-56.8
-66.6
-7
Other
income and
transfers, net
-138.0
-150.7
-140.9
-136.6
-141.5
-137.6
-140.9
-143.0
-141.5
-137.6
-14
Previous
Tealbook
Current
account as
percent of GDP
Previous
Tealbook
Annual Data
Projected
2005
2006
2007
2008
2009
2010
2011
2012
2013
Billions of dollars
U.S. current account balance
-745.8
-800.6
-710.3
-677.1
-376.6
-470.9
-466.6
-441.8
-455.9
-745.8
-800.6
-710.3
-677.1
-376.6
-470.9
-467.9
-447.1
-483.9
-5.9
-6.0
-5.1
-4.7
-2.7
-3.2
-3.1
-2.8
-2.8
Previous Tealbook
-5.9
-6.0
-5.1
-4.7
-2.7
-3.2
-3.1
-2.9
-3.0
Net goods & services
-708.6
-753.3
-696.7
-698.3
-381.3
-500.0
-558.0
-548.8
-530.1
78.7
54.7
111.1
157.8
137.1
174.5
232.9
247.7
215.0
Direct, net
173.2
174.0
244.6
284.3
262.2
280.6
314.2
293.6
286.7
Portfolio, net
-94.5
-119.4
-133.5
-126.5
-125.1
-106.2
-81.3
-45.8
-71.8
-115.9
-102.0
-124.7
-136.6
-132.3
-145.3
-141.5
-140.8
-140.8
Previous Tealbook
Current account as percent of
GDP
Investment income, net
Other income and transfers,
net
† Note: Data values for figures are rounded and may not sum to totals. Return to text
Last update: January 5, 2018
BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM
20th Street and Constitution Avenue N.W., Washington, DC 20551
Board of Governors of the Federal Reserve System
The Federal Reserve, the central bank of the United States, provides the nation with
a safe, flexible, and stable monetary and financial system.
Accessible Material
March 2012 Tealbook B Tables and Charts†
Monetary Policy Strategies
Policy Rules and the Staff Projection
Near-Term Prescriptions of Selected Policy Rules
Constrained Policy
Unconstrained Policy
2012Q2
2012Q3
2012Q2
2012Q3
1.38
1.27
1.38
1.27
0.65
0.45
0.65
0.45
0.13
0.13
-1.10
-1.14
0.13
0.13
-2.18
-2.34
0.13
0.13
-0.05
-0.20
0.13
0.13
-0.30
-0.77
0.14
0.20
0.14
0.20
Previous Tealbook Outlook
0.13
0.13
-0.07
-0.22
Nominal income targeting rule
0.13
0.13
-0.55
-1.04
Previous Tealbook Outlook
0.13
0.13
-0.75
-1.40
Taylor (1993) rule
Previous Tealbook
Taylor (1999) rule
Previous Tealbook
Outcome-based rule
Previous Tealbook Outlook
First-difference rule
Memo: Equilibrium and Actual Real Federal Funds Rate
Current Tealbook
Loading [MathJax]/jax/output/HTML-CSS/jax.js
Previous Tealbook
Tealbook-consistent FRB/US r* estimate
-2.9
-3.2
Actual real federal funds rate
-1.7
-1.6
Key Elements of the Staff Projection
Figure: GDP Gap
Line chart, by percent, 2011 to 2020. There are two series, "Current Tealbook" and "Previous Tealbook." The
Current Tealbook starts at about -5.3 in 2011:Q1 and increases to about 0.0 in 2020:Q4. Previous Tealbook starts
at about -5.9 in 2011:Q1 and increases to about 0.0 in 2020:Q4.
Figure: PCE Prices ex. Food and Energy
Line chart, by percent, 2011 to 2020. There are two series "Current Tealbook" and "Previous Tealbook." The
Current Tealbook starts at about 1.1 in 2011:Q1 and increases to about 1.8 in 2012:Q2. It then decreases to about
1.7 in 2012:Q3 and then increases to about 1.8 in 2013:Q1. It then generally decreases to about 1.6 in 2015:Q2 and
then increases to about 2.0 in 2020:Q4.
Note: For rules which have the lagged policy rate as a right-hand-side variable, the lines denoted "Previous
Tealbook Outlook" report rule prescriptions based on the previous Tealbook's staff outlook, but jumping off from the
average value for the policy rate thus far in the quarter.
Policy Rule Simulations
Figure: Nominal Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are five series, "Taylor (1993) rule," "Taylor (1999) rule," "Nominal
income targeting rule," "First-difference rule," and "Tealbook baseline." Taylor (1993) rule begins in 2011:Q1 at
about 0.1 and generally increases to about 1.3 in 2012:Q2. It then generally decreases to about 1.0 in 2013:Q3 and
then generally increases to about 4.2 in 2020:Q4. The Taylor (1999) rule beings in 2011:Q1 at about 0.1 and then it
generally remains constant here until 2014:Q1. It then generally increases to about 4.3 by 2020:Q4. Nominal Income
targeting rules beings in 2011:Q1 about 0.1 and then it generally remains constant here until 2014:Q4. By 2020:Q4
it has generally increased to about 4.5. First-difference rule begins in 2011:Q1 at about 0.1 and then it generally
remains constant here until 2013:Q3. By 2020:Q4 it has generally increases to about 4.0. Tealbook baseline begins
at about 0.1 in 2011:Q1 and then it generally remains constant until 2014:Q1. By 2020:Q4 it has increased to about
4.2.
Figure: Real Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are five series, "Taylor (1993) rule," "Taylor (1999) rule," "Nominal
income targeting rule," "First-difference rule," "and "Tealbook baseline." Taylor (1993) rule begins in 2011:Q1 at
about -0.9 It then generally decreases to about -1.8 by 2012:Q1 and then it generally increases to about -0.2 in
2012:Q2. It then generally decreases to about -0.3 in 2013:Q3 and then it generally increases to about 2.2 in
2020:Q4. Taylor (1999) rule begins in 2011:Q1 at -0.9 and then it generally decreases to about -1.8 in 2012:Q2. It
then increases to about -1.6 in 2012:Q3 and then generally decreases to about -1.5 in 2012:Q4. It then generally
increases to about 2.2 in 2020:Q4. Nominal income targeting rule beings in 2011:Q1 at about -0.9 and then
decreases to about -1.8 in 2012:Q1. It then generally increases to about-1.7 in 2012:Q3 and then generally
decreases to about -2 in 2014:Q4. By 2020:Q4 it has increased to about 2.5. First-difference rule begins in 2011:Q1
at about -0.9 and then decreases to about -1.9 in 2012:Q1. By 2017:Q4 it has generally increased to about 2.4 and
then by 2020:Q4 it has generally decreased to about 2.1. Tealbook baseline begins in 2011:Q1 at about -0.9 and
then decreases to about -1.8 in 2012:Q1. It then generally increases to about -1.6 in 2012:Q3 and then generally
decreases to about -1.8 in 2012:Q4. By 2020:Q4 it has generally increased to about 2.4.
Figure: Unemployment Rate
Line chart, by percent, 2011 to 2020. There are five series, "Taylor (1993) rule," "Taylor (1999) rule," "Nominal
income targeting rule," "First-difference rule," and "Tealbook baseline." Taylor (1993) rule begins in 2011:Q1 at
about 8.95 and generally increases to about 9.1 by 2011:Q3. It then generally decreases to about 5.3 in 2020:Q4.
Taylor (1999) rules begins in 2011:Q1 at about 8.95 and increases to about 9.1 by 2012:Q1. It then generally
decreases to about 5.3 in 2020:Q4. Nominal income targeting rule begins in 2011:Q1 at about 8.95 and generally
increases to about 9.1 by 2011:Q3. It then decreases to about 4.8 in 2018:Q4. By 2020:Q4 it has increased to about
5.2. First-difference rule begins in 2011:Q1 at about 8.95 and then generally increases to about 9.1 in 2011:Q3. It
then generally decreases to about 5.4 in 2020:Q4 Tealbook baseline begins in 2011:Q1 at about 8.95 and then
generally increases to about 9.1 in 2011:Q3. It then generally decreases to about 5.3.
Figure: PCE Inflation (Four-quarter average)
Line chart, by percent, 2011 to 2020. There are five series, "Taylor (1993) rule," "Taylor (1999) rule," "Nominal
income targeting rule," "First-difference rule," and "Tealbook baseline." Taylor (1993) rule begins in 2011:Q1 at
about 1.8 and generally increases to about 2.83 by 2011:Q4. It then generally decreases to about 1.7 by 2012:Q3
and then generally increases to about 1.8 by 2012:Q4. It then generally decreases to about 1.3 in 2013:Q3 and by
2020:Q4 it has generally increased to about 1.8. Nomination income targeting rule begins in 2011:Q1 at about 1.8
and it then generally increase to about 2.83 in 2011:Q4. It then generally decreases to about 1.9 in 2012:Q4 and
then generally increases to about 2.2 in 2013:Q1. It then generally decreases to about 1.7 in 2013:Q3 and then
generally increases to about 2.2 in 2018:Q1. By 2020:Q4, it has decreases to about 2.1. First-difference rule begins
in 2011:Q1 at about 1.8 and then generally increases to about 2.83 by 2011:Q4. It then generally decreases to
about 1.2 in 2013:Q4 and then generally increases to about 1.9 in 2020:Q4. Tealbook baseline begins in 2011:Q1 at
about 1.8 and then generally increases to about 2.83 by 2011:Q4. It then generally decreases to about 1.7 2012:Q3
and then increases to about 1.8 in 2012:Q4. By 2013:Q4 it has generally decreased to about 1.4 and then generally
increases to about 1.9 in 2020:Q4.
Note: The policy rule simulations in this exhibit are based on rules that respond to core inflation. This choice of rule
specification was made in light of the tendency for current and near-term core inflation rates to outperform headline
inflation rates as predictors of the medium-term behavior of headline inflation.
Constrained vs. Unconstrained Optimal Monetary Policy
Figure: Nominal Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook:
Constrained," "Current Tealbook: Unconstrained" and "Tealbook baseline." The Current Tealbook: Constrained
begins at about 0.1 in 2011:Q1 and generally decreases to 0. It remains stable here until 2015:Q4. It then increases
to about 4.9 by 2019:Q1. It then generally decreases to about 4.3 in 2020:Q4. The Previous Tealbook: Constrained
begins at about 0.1 in 2011:Q1 and then generally decreases to about 0. It remains constant here until 2016:Q2. It
then increases to about 5.0 by 2020:Q4. The Current Tealbook: Unconstrained begins 2011:Q1 at about 0.1 and
then generally decreases to 0. It remains stable until 2012:Q2. It then generally decreases to about -2.5 in 2013:Q2
and then generally increases to about 4.3 in 2018:Q1. It then generally decreases to 4.1 by 2020:Q4. The Tealbook
baseline begins in 2011:Q1 at about 0.1 and then generally decreases to about 0 in 2011:Q2. It remains constant
here until 2014:Q2. By 2020:Q4 it has increased to about 4.1.
Figure: Real Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook:
Constrained," "Current Tealbook: Unconstrained" and "Tealbook baseline." The Current Tealbook: Constrained
begins at about -1.5 in 2011:Q1 and then generally decreases to about -2.0 by 2013:Q1. It remains constant here
until 2014:Q4. It then generally increases to about 2.6 in 2019:Q1 and it then generally decreases to about 2.8 in
2020:Q4. Previous Tealbook: Constrained begins at about -1.5 in 2011:Q1 and then generally decreases to about -
2.0 in 2013:Q2. It remains steady here until 2016:Q3. It then generally increases to about 2.3 in 2020:Q4. Current
Tealbook: Unconstrained begins at about -1.5 in 2011:Q1 and then generally decreases to about -4.5 in 2013:Q3
and then generally increases to about 2.3 in 2020:Q4. Tealbook baseline begins at about -1.5 in 2011:Q1 and then
generally increases to about 2.3 in 2020:Q4.
Figure: Unemployment Rate
Line chart, by percent, 2011 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook:
Constrained," "Current Tealbook: Unconstrained" and "Tealbook baseline." The Current Tealbook: Constrained
begins at about 9.0 in 2011:Q1 and then decreases to about 4.7 in 2018:Q1. It then generally increases to about
5.4 in 2020:Q4. Previous Tealbook: Constrained begins in 2011:Q1 at 8.9 and then generally decreases to about
4.7 in 2018:Q1. It then generally increases to about 5.4 in 2020:Q4. Current Tealbook: Unconstrained begins at
about 9.0 in 2011:Q1 and then decreases to about 5.2 in 2017:Q4. It then generally increases to about 5.4 in
2020:Q4. Tealbook baseline begins in 2011:Q1 at about 9.0 and then generally decreases to about 5.3 in 2020:Q4.
Figure: PCE Inflation (Four-quarter average)
Line chart, by percent, 2011 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook:
Constrained," "Current Tealbook: Unconstrained" and "Tealbook baseline." The Current Tealbook: Constrained
begins at about 1.7 in 2011:Q1 and then generally increases to about 2.9 in 2011:Q4. It generally decreases to
about 1.9 in 2012:Q2 and then generally increases to about 2.2 in 2013:Q1. It generally decrease to about 1.8 in
2013:Q3 and then increases to about 2.3 in 2018:Q2. By 2020:Q4 it has decreased to about 2.05. Previous
Tealbook: Constrained begins at about 1.7 in 2011:Q1 and then generally increases to about 2.9 in 2011:Q4. It
generally decreases to about 1.57 in 2012:Q3 and then generally increases to about 2.3 in 2018:Q2. It generally
decreases to about 2.15 in 2020:Q4. Current Tealbook: Unconstrained begins at about 1.7 in 2011: Q1 and then
generally increases to about 2.9 in 2011:Q4. It generally decreases to about 1.9 in 2012:Q3 and then generally
increases to about 2.1 in 2013:Q1. It generally decreases to about 1.7 in 2013:Q4 and then generally increases to
about 2.35 in 2017:Q4. By 2020:Q4 it has decreased to about 1.95. Tealbook baseline begins at about 1.7 in
2011:Q1 and then generally increases to about 2.9 in 2011:Q4. It generally decreases to about 1.75 in 2012:Q3 and
then generally increases to about 1.80 in 2013:Q1. It then generally decreases to about 1.35 in 2013:Q4 and then
generally increases to 2.0 by 2020:Q4.
Outcomes under Alternative Policies
(Percent change, annual rate, from end of preceding period except as noted)
2011
Measure and scenario
H2
2012
2013
2014
2015
2016
Unemployment rate1
Extended Tealbook baseline
8.7
8.2
7.8
7.5
6.9
6.2
Taylor (1993)
8.7
8.3
8.2
8.0
7.3
6.5
Taylor (1999)
8.7
8.2
7.8
7.5
6.9
6.2
First-difference
8.7
8.2
8.0
7.8
7.3
6.5
Nominal income targeting
8.7
8.1
7.5
6.9
6.2
5.5
Constrained optimal control
8.7
8.1
7.4
6.7
5.9
5.2
Extended Tealbook baseline
1.7
1.8
1.4
1.4
1.5
1.6
Taylor (1993)
1.7
1.7
1.2
1.2
1.3
1.4
Total PCE prices
Taylor (1999)
1.7
1.8
1.4
1.4
1.5
1.6
First-difference
1.7
1.7
1.2
1.2
1.3
1.4
Nominal income targeting
1.7
2.1
1.8
1.8
1.9
2.0
Constrained optimal control
1.7
2.1
1.9
1.9
2.0
2.1
Extended Tealbook baseline
1.7
1.7
1.6
1.6
1.6
1.7
Taylor (1993)
1.7
1.6
1.4
1.4
1.4
1.5
Taylor (1999)
1.7
1.7
1.6
1.6
1.6
1.7
First-difference
1.7
1.6
1.4
1.4
1.4
1.5
Nominal income targeting
1.7
2.0
2.0
2.0
2.0
2.1
Constrained optimal control
1.7
2.0
2.1
2.1
2.1
2.2
Extended Tealbook baseline
0.1
0.1
0.1
0.8
2.1
3.0
Taylor (1993)
0.1
1.2
1.1
1.5
2.2
3.0
Taylor (1999)
0.1
0.1
0.1
0.7
2.0
3.0
First-difference
0.1
0.1
0.2
1.2
2.3
3.3
Nominal income targeting
0.1
0.1
0.1
0.3
1.4
2.5
Constrained optimal control
0.1
0.1
0.1
0.1
0.3
2.0
Core PCE prices
Federal funds rate1
1. Percent, average for the final quarter of the period. Return to table
Optimal Monetary Policy: Commitment vs. Discretion
Figure: Nominal Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are three series, "Optimal policy: Commitment, constrained," "Optimal
policy: Discretion, constrained," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment,
constrained begins at about 0.1 in 2011:Q1 and generally decreases to 0. It remains stable here until 2015:Q4. It
then increases to about 4.9 by 2019:Q1. It then generally decreases to about 4.5 in 2020:Q4. Optimal policy:
Discretion, constrained begins at about 0.1 in 2011:Q1 and then generally decreases to about 0. It remains constant
here until 2015:Q1. It then increases to about 4.3 in 2018:Q1 and remains steady until 2020:Q4. Optimal policy:
Discretion, unconstrained begins at 0.1 in 2011:Q1 and then decreases to about -2.1 in 2013:Q1. It then generally
increases to about 4 in 2018:Q2 and remains stable here until 2020:Q4.
Figure: Real Federal Funds Rate
Line chart, by percent, 2011 to 2020. There are three series, "Optimal policy: Commitment, constrained," "Optimal
policy: Discretion, constrained," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment,
constrained begins at about -1.0 in 2011:Q1 and then generally decreases to about -2 in 2013:Q1. It remains stable
her until 2016:Q2 and then generally increases to about 2.5. By 2020:Q4, it has generally decreased to about 2.3.
Optimal policy: Discretion, constrained begins in 2011:Q1 at about -1.0 and then generally decreases to about -1.8
in 2013:Q1. It remains stable here until 2015:Q2 and then generally increases to about 2.3 by 2020:Q4. Optimal
policy: Discretion, unconstrained begins in 2011:Q1 at about -1.0 and then generally decreases to about -4.0 in
2013:Q1. It generally increases to about 2.3 by 2020:Q4.
Figure: Unemployment Rate
Line chart, by percent 2011 to 2020. There are three series, "Optimal policy: Commitment, constrained," "Optimal
policy: Discretion, constrained," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment,
constrained begins at about 9.0 in 2011:Q1 and then generally decreases to about 4.7 in 2017:Q4. By 2020:Q4 it
has generally increased to about 5.4. Optimal policy: Discretion, constrained begins at about 9.0 in 2011:Q1 and
then generally decreases to about to about 5.2 in 2018:Q2. By 2020:Q4 it has generally increased to about 5.3.
Optimal policy: Discretion, unconstrained begins at about 9.0 in 2011:Q1 and then generally decreases to about to
about 5.2 in 2018:Q2. By 2020:Q4 it has generally increased to about 5.3.
Figure: PCE Inflation (Four-quarter average)
Line chart, by percent, 2011 to 2020. There are three series, "Optimal policy: Commitment, constrained," "Optimal
policy: Discretion, constrained," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment,
constrained begins at about 1.75 in 2011:Q1 and then generally increases to about 2.85 in 2011:Q4. In 2012:Q4, it
generally decreases to about 1.9 and then generally increases to about 2.2 in 2013:Q1. It generally decreases to
about 1.85 in 2013:Q4 and then generally increases to about 2.25 in 2018:Q1. By 2020:Q4 it has generally
decreased to about 2.09. Optimal policy: Discretion, constrained begins in 2011:Q1 at about 1.75 and then
generally increases to about 2.85 in 2011:Q4. In 2012:Q4, it generally decreases to about 1.75 and then generally
decreases to about 1.58 in 2013:Q4. By 2020:Q4, it has generally increased to about 2.05. Optimal policy:
Discretion, unconstrained begins in 2011:Q1 at about 1.75 and then generally increase to about 2.85 in 2011:Q4. It
then generally decreases to about 1.95 in 2012:Q2 and then generally increases to about 2.09 in 2012:Q4. By
2013:Q2 it has generally decreased to about 1.6 and then generally increased to about 2.03 by 2020:Q4.
Monetary Policy Alternatives
Table 1: Overview of Policy Alternatives for the March 13 FOMC Statement
Selected
Elements
January
Statement
March Alternatives
A
B
C
Forward Rate Guidance
Guidance
at least through
late 2014
unchanged
only as long as inflation is
projected to remain subdued
over the medium term,
longer-term inflation
expectations continue to be
well anchored, and progress
toward maximum
employment remains
insufficient
continue its program
as announced in
September
{$400 billion;
complete by
end of June 2012}
unchanged
reduce program size to $250
billion and complete by end of March 2012
Balance Sheet
MEP
discrete:
$500 billion of agency
Additional
Purchases
Reinvestment
Policies
none
MBS
by end of March 2013
OR
open-ended:
$40 billion of agency MBS
per month; will adjust
program as needed to foster
objectives
principal payments
of agency debt and
MBS into agency
MBS;
Treasuries into
Treasuries
none
unchanged
Future Policy Action
prepared to adjust
holdings as
appropriate to…
Future
Actions
promote stronger
economic recovery
in a context of price
stability
will employ its tools
as needed to…
unchanged
unchanged
promote its objectives of
maximum employment and
price stability
[Note: In the March FOMC Statement Alternatives, emphasis (strike-through) indicates strike-through text in the
original document, and strong emphasis (bold) indicates bold red underlined text in the original document.]
March FOMC Statement--Alternative A
1. Information received since the Federal Open Market Committee met in December January suggests that
the economy has been expanding moderately, notwithstanding some slowing in global growth. While
indicators point to some further improvement in overall labor market conditions have improved somewhat
further, the unemployment rate remains elevated. Household spending and business fixed investment
have continued to advance. but growth in business fixed investment has slowed, and The housing sector
remains depressed. Inflation has been subdued in recent months, and although prices of crude oil and
gasoline have increased lately. Longer-term inflation expectations have remained stable.
2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price
stability. The Committee expects that, absent further policy action, economic growth would slow over
coming quarters to be modest and consequently anticipates that the unemployment rate will would decline
only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in
global financial markets continue to pose significant downside risks to the economic outlook. The recent
increase in oil and gasoline prices is likely to reduce consumers' purchasing power while pushing up
inflation temporarily. Nonetheless, the Committee also anticipates that over coming quarters,
subsequently inflation will run at levels at or below those the rate that it judges most consistent with the
Committee's its dual mandate.
3. To support a stronger economic recovery and to help ensure that inflation, over time, is at levels the rate
most consistent with the its dual mandate, the Committee expects to maintain a highly accommodative
stance for monetary policy. In particular, the Committee decided today to purchase an additional $500
billion of agency mortgage-backed securities by the end of March 2013. In addition, the Committee
decided to continue its program to extend the average maturity of its holdings of securities as announced in
September. The Committee also is maintaining its existing policies of reinvesting principal payments from its
holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and
of rolling over maturing Treasury securities at auction. These programs should put downward pressure on
longer-term interest rates, provide support to mortgage markets, and help make broader financial
conditions more accommodative. The Committee will regularly review the size and composition of its
securities holdings and is prepared to adjust those holdings as appropriate.
OR
3′. To support a stronger economic recovery and to help ensure that inflation, over time, is at levels the rate
most consistent with the its dual mandate, the Committee expects to maintain a highly accommodative
stance for monetary policy. In particular, the Committee decided today to purchase additional agency
mortgage-backed securities, initially at a rate of $40 billion per month. The Committee will adjust the
pace of purchases and determine the ultimate size of the program as needed to foster its objectives.
In addition, the Committee decided to continue its program to extend the average maturity of its holdings of
securities as announced in September. The Committee also is maintaining its existing policies of reinvesting
principal payments from its holdings of agency debt and agency mortgage-backed securities in agency
mortgage-backed securities and of rolling over maturing Treasury securities at auction. These programs
should put downward pressure on longer-term interest rates, provide support to mortgage markets,
and help make broader financial conditions more accommodative. The Committee will regularly review
the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
4. The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and
currently anticipates that economic conditions--including low rates of resource utilization and a subdued
outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds
rate at least through late 2014.
5. The Committee will employ its tools as needed to promote a stronger economic recovery in a context of
price stability.
March FOMC Statement--Alternative B
1. Information received since the Federal Open Market Committee met in December January suggests that
the economy has been expanding moderately, notwithstanding some slowing in global growth. While
indicators point to some further improvement in overall Labor market conditions have improved further; the
unemployment rate has declined notably in recent months but remains elevated. Household spending and
business fixed investment have continued to advance. but growth in business fixed investment has slowed,
and The housing sector remains depressed. Inflation has been subdued in recent months, and although
prices of crude oil and gasoline have increased lately. Longer-term inflation expectations have remained
stable.
2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price
stability. The Committee expects moderate economic growth over coming quarters to be modest and
consequently anticipates that the unemployment rate will decline only gradually toward levels that the
Committee judges to be consistent with its dual mandate. Strains in global financial markets, while having
eased somewhat, continue to pose significant downside risks to the economic outlook. The recent increase
in oil and gasoline prices will push up inflation temporarily, but the Committee also anticipates that over
coming quarters subsequently inflation will run at levels at or below those the rate that it judges most
consistent with the Committee's its dual mandate.
3. To support a stronger economic recovery and to help ensure that inflation, over time, is at levels the rate
most consistent with the its dual mandate, the Committee expects to maintain a highly accommodative
stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal
funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of
resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant
exceptionally low levels for the federal funds rate at least through late 2014.
4. The Committee also decided to continue its program to extend the average maturity of its holdings of
securities as announced in September. The Committee is maintaining its existing policies of reinvesting
principal payments from its holdings of agency debt and agency mortgage-backed securities in agency
mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will
regularly review the size and composition of its securities holdings and is prepared to adjust those holdings
as appropriate to promote a stronger economic recovery in a context of price stability.
March FOMC Statement--Alternative C
1. Information received since the Federal Open Market Committee met in December January suggests that
the economy has been expanding moderately, notwithstanding some slowing in global growth. While
indicators point to some further improvement in overall labor market conditions, Although the unemployment
rate remains elevated, it has declined notably and the pace of employment growth has picked up.
Household spending and business fixed investment have continued to advance, but growth in business
fixed investment has slowed, and indicators of conditions in the housing sector remains depressed have
improved somewhat. Inflation has been subdued in recent months, and longer-term inflation expectations
have remained stable. However, prices of crude oil and gasoline have increased significantly of late.
2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price
stability. The Committee expects a gradual increase in the pace of economic growth over coming quarters
to be modest and consequently anticipates that the unemployment rate will continue to decline only
gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global
financial markets continue to pose significant downside risks to the economic outlook. The Committee also
anticipates that over coming quarters, the recent increase in oil and gasoline prices is likely to push
inflation will run at levels at or below those above the rate that the Committee judges most consistent with
the Committee's its dual mandate. Moreover, the Committee sees some risk that inflation could remain
elevated going forward given the current degree of policy accommodation.
3. To support a stronger the economic recovery and to help ensure that inflation, over time, is at levels the
rate most consistent with the its dual mandate, the Committee expects to maintain a highly accommodative
stance for monetary policy. The Committee also decided today to continue its reduce from $400 billion to
$250 billion the program to extend the average maturity of its holdings of securities as that was announced
in September and to complete this program by the end of March. In particular, The Committee also
decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates
that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over
the medium run--are likely to warrant this exceptionally low levels range for the federal funds rate at least
through late 2014 will be appropriate only as long as inflation is projected to remain subdued over the
medium term, longer-term inflation expectations continue to be well anchored, and progress toward
maximum employment remains insufficient.
4. The Committee is also maintaining its existing policies of reinvesting principal payments from its holdings
of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling
over maturing Treasury securities at auction. The Committee will regularly review the size and composition of
its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger
economic recovery in a context of its objectives of maximum employment and price stability.
Long-Run Projections of the Balance Sheet and Monetary Base
Figure: Total Assets
Line chart, by Billions of dollars, data is Monthly. 2006 to 2020. There are four series, "Alt A," "Alt B," "Alt C" and
"Jan. Alt. B." Alt A begins in January 2006 at about 750 and remains constant here until October 2008. It generally
increases to about 2200 in December 2008. In February 2009 it has decreased to about 1800 and then generally
increases to 3100 in April 2013. By May 2018, it has generally decreased to about 1650 and then generally
increases to about 2050 by December 2020. Alt B begins in January 2006 at about 750 and remains constant here
until October 2008. It generally increases to about 2200 in December 2008. In February 2009 it has decreased to
about 1800 and then generally increases to 2900 in March 2012. By August 2017, it has generally decreased to
about 1600 and then generally increases to about 2050 by December 2020. Alt C begins in January 2006 at about
750 and remains constant here until October 2008. It generally increases to about 2200 in December 2008. In
February 2009 it has decreased to about 1800 and then generally increases to 2900 in March 2012. By June 2016
it has generally decreased to about 1500 and then generally increased to 2050 by December 2020. Jan. Alt B
begins in January 2006 at about 750 and remains constant here until October 2008. It generally increases to about
2200 in December 2008. In February 2009 it has decreased to about 1800 and then generally increases to 2900 in
March 2012. By August 2017, it has generally decreased to about 1600 and then generally increases to about 2050
by December 2020.
Growth Rates for the Monetary Base
Date
Alternative B
Alternative A
Memo:
January
Tealbook
Alternative C
Percent, annual rate
Monthly
Jan-11
23.3
23.3
23.3
23.3
Feb-11
57.6
57.6
57.6
57.6
Mar-11
97.8
97.8
97.8
97.8
Apr-11
74.4
74.4
74.4
74.4
May-11
42.1
42.1
42.1
42.1
Jun-11
35.9
35.9
35.9
35.9
Jul-11
27.0
27.0
27.0
27.0
Aug-11
2.0
2.0
2.0
2.0
Sep-11
-10.6
-10.6
-10.6
-10.6
Oct-11
-4.5
-4.5
-4.5
-4.5
Nov-11
-8.0
-8.0
-8.0
-8.0
Dec-11
-4.5
-4.5
-4.5
-4.5
Jan-12
9.2
9.2
9.2
5.8
Feb-12
18.0
18.0
18.0
22.7
Mar-12
11.3
11.5
10.6
4.0
Apr-12
-31.7
-31.2
-33.9
-38.5
May-12
-13.7
-8.8
-16.9
-2.2
Jun-12
16.2
30.0
13.1
18.3
Quarterly
2011 Q1
36.8
36.8
36.8
36.8
2011 Q2
69.3
69.3
69.3
69.3
2011 Q3
21.0
21.0
21.0
21.0
2011 Q4
-5.9
-5.9
-5.9
-5.9
2012 Q1
6.4
6.5
6.4
5.5
2012 Q2
-7.4
-4.7
-9.4
-8.1
2012 Q3
6.0
22.4
-1.5
5.6
2012 Q4
-4.5
14.3
-16.3
5.5
Annual - Q4 to Q4
2010
0.9
0.9
0.9
0.9
2011
32.9
32.9
32.9
32.9
2012
0.1
9.9
-5.2
2.1
2013
-0.3
8.9
-7.3
0.9
2014
-2.0
-2.2
-13.8
-4.8
2015
-10.7
-11.4
-15.7
-11.4
2016
-19.8
-20.2
-15.0
-19.8
Note: Not seasonally adjusted.
Growth Rates for M2
(Percent, seasonally adjusted annual rate)
Tealbook Forecast *
Monthly Growth Rates
Jan-12
15.6
Feb-12
2.5
Mar-12
2.2
Apr-12
4.2
May-12
4.2
Jun-12
4.2
July-12
4.1
Aug-12
4.1
Sep-12
4.1
Oct-12
4.3
Nov-12
4.3
Dec-12
4.3
Quarterly Growth Rates
2012 Q1
7.9
2012 Q2
3.5
2012 Q3
4.2
2012 Q4
4.3
2013 Q1
1.8
2013 Q2
1.8
2013 Q3
2.6
2013 Q4
2.7
Annual Growth Rates
2012
5.1
2013
2.2
* This forecast is consistent with nominal GDP and interest rates in the Tealbook forecast. Actual data through January 2012; projections
thereafter. Return to table
[Note: In the March 2012 Directive Alternatives, emphasis (strike-through) indicates strike-through text in the
original document, and strong emphasis (bold) indicates bold red underlined text in the original document.]
March 2012 Directive--Alternative A
The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and
promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve
markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to
continue the maturity extension program it began in September to purchase, by the end of June 2012, Treasury
securities with remaining maturities of approximately 6 years to 30 years with a total face value of $400 billion, and
to sell Treasury securities with remaining maturities of 3 years or less with a total face value of $400 billion. [ The
Committee also directs the Desk to execute purchases of agency mortgage-backed securities by the end of
March 2013 in order to increase the total face value of domestic securities held in the System Open Market
Account to approximately $3.1 trillion. | The Committee also directs the Desk to execute purchases of
agency mortgage-backed securities in order to increase the total face value of domestic securities held in
the System Open Market Account by approximately $40 billion per month. ] The Committee also directs the
Desk to maintain its existing policies of rolling over maturing Treasury securities into new issues and of reinvesting
principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account
in agency mortgage-backed securities in order to maintain the total face value of domestic securities at
approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll and coupon swap transactions
as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions. The System Open Market
Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the
System's balance sheet that could affect the attainment over time of the Committee's objectives of maximum
employment and price stability.
March 2012 Directive--Alternative B
The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and
promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve
markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to
continue the maturity extension program it began in September to purchase, by the end of June 2012, Treasury
securities with remaining maturities of approximately 6 years to 30 years with a total face value of $400 billion, and
to sell Treasury securities with remaining maturities of 3 years or less with a total face value of $400 billion. The
Committee also directs the Desk to maintain its existing policies of rolling over maturing Treasury securities into new
issues and of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the
System Open Market Account in agency mortgage-backed securities in order to maintain the total face value of
domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll
transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions. The System
Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments
regarding the System's balance sheet that could affect the attainment over time of the Committee's objectives of
maximum employment and price stability.
March 2012 Directive--Alternative C
The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and
promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve
markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to
continue modify the maturity extension program it began in September so as to purchase, by the end of June
March 2012, Treasury securities with remaining maturities of approximately 6 years to 30 years with a total face
value of $400 $250 billion, and to sell Treasury securities with remaining maturities of 3 years or less with a total
face value of $400 $250 billion. The Committee also directs the Desk to maintain its existing policies of rolling over
maturing Treasury securities into new issues and of reinvesting principal payments on all agency debt and agency
mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities in order to
maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to
engage in dollar roll transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS
transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of
ongoing developments regarding the System's balance sheet that could affect the attainment over time of the
Committee's objectives of maximum employment and price stability.
Explanatory Notes
A. Policy Rules Used in "Monetary Policy Strategies"
The table below gives the expressions for the selected policy rules used in "Monetary Policy Strategies." In the
table, R t denotes the nominal federal funds rate for quarter t, while the right-hand-side variables include the staff's
projection of trailing four-quarter core PCE inflation for the current quarter and three quarters ahead (π t and π t + 3 | t ),
the output gap estimate for the current period as well as its one quarter ahead forecast (gapt and gapt + 1 | t ) and the
forecast of the three-quarter-ahead annual change in the output gap (i.e., Δ 4 gapt + 3 | t ). The value of policymakers'
long-run inflation objective, denoted π , is 2 percent. The nominal income targeting rule responds to the nominal
income gap, which is defined as 100 times the difference between nominal income ynt , (the log of the level of
nominal GDP) and a target value ynt , (the log of potential nominal GDP), where potential nominal GDP is defined
as potential real GDP multiplied by a price target equal to the actual GDP deflator in the fourth quarter of 2007 and
growing thereafter at a steady rate of 2 percent per year. 1
Rule
Specification
Taylor (1993) rule
R t = 2.25 + π t + 0.5(π t − π ) + 0.5gapt
Taylor (1999) rule
R t = 2.25 + π t + 0.5(π t − π ) + gapt
Outcome-based rule
R t = 1.2R t − 1 − 0.39R t − 2 + 0.19[0.79 + 1.73π t + 3.66gapt − 2.72gapt − 1]
First-difference rule
R t = R t − 1 + 0.5(π t + 3| t − π ) + 0.5Δ4gapt + 3| t
Nominal income targeting rule
R t = 0.75R t − 1 + 0.25(2.25 + π
+ ynt − ynt )
1. See Christopher Erceg, Michael T. Kiley, and J. David López-Salido (2011) for analysis of this rule. The nominal GDP targeting rule in "Monetary
Policy Strategies" differs slightly from the rule studied in that memo in setting the target equal to potential nominal GDP (rather than applying a
growth rate to actual nominal GDP for the final quarter of 2007) and in having an interest-rate smoothing coefficient of 0.75 (a more standard value
than the 0.9 value employed in the memo). Background on the relationship between simple interest-rate rules and nominal income targeting is
provided in Bennett T. McCallum and Edward Nelson (1999) and Athanasios Orphanides (2003). Return to text
D. Long-Run Projections of the Balance Sheet and Monetary Base
Federal Reserve Balance Sheet: End-of-Year Projections -- Alternative A
Billions of dollars
Feb 29, 2012
Total assets
2012
2014
2016
2018
2020
2,930
3,157
3,201
2,281
1,793
1,992
108
0
0
0
0
0
0
0
0
0
0
0
108
0
0
0
0
0
11
3
1
0
0
0
11
3
1
0
0
0
31
20
16
12
7
4
0
0
0
0
0
0
31
20
16
12
7
4
2,603
2,918
2,984
2,102
1,646
1,863
1,662
1,653
1,599
1,231
1,315
1,863
Agency debt securities
101
77
39
16
2
0
Agency mortgage-backed securities
841
1,189
1,346
855
329
0
1
1
1
0
0
0
177
215
199
166
140
125
2,876
3,096
3,119
2,173
1,649
1,802
1,050
1,113
1,241
1,382
1,530
1,683
77
70
70
70
70
70
1,727
1,893
1,789
702
30
30
1,620
1,808
1,784
697
25
25
U.S. Treasury, General Account
63
86
5
5
5
5
Other balances
45
0
0
0
0
0
2
0
0
0
0
0
55
62
82
108
143
189
Selected assets
Liquidity programs for financial firms
Primary, secondary, and seasonal credit
Central bank liquidity swaps
Lending through other credit facilities
Term Asset-Backed Securities Loan Facility (TALF)
Support for specific institutions
Credit extended to AIG
Net portfolio holdings of Maiden Lane LLC,
Maiden Lane II LLC, and Maiden Lane III LLC
Securities held outright
U.S. Treasury securities
Net portfolio holdings of TALF LLC
Total other assets
Total liabilities
Selected liabilities
Federal Reserve notes in circulation
Reverse repurchase agreements
Deposits with Federal Reserve Banks
Reserve balances held by depository institutions
Interest of Federal Reserve Notes due to U.S. Treasury
Total capital
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
Federal Reserve Balance Sheet: End-of-Year Projections -- Alternative B
Billions of dollars
Feb 29, 2012
Total assets
2012
2014
2016
2018
2020
2,930
2,836
2,703
1,963
1,793
1,992
108
0
0
0
0
0
0
0
0
0
0
0
108
0
0
0
0
0
11
3
1
0
0
0
11
3
1
0
0
0
31
20
16
12
7
4
0
0
0
0
0
0
31
20
16
12
7
4
2,603
2,613
2,507
1,798
1,654
1,867
1,662
1,653
1,599
1,231
1,439
1,867
Agency debt securities
101
77
39
16
2
0
Agency mortgage-backed securities
841
884
869
551
212
0
1
1
1
0
0
0
177
200
179
152
132
121
2,876
2,774
2,621
1,854
1,649
1,802
1,050
1,113
1,241
1,382
1,530
1,683
77
70
70
70
70
70
1,727
1,572
1,291
384
30
30
1,620
1,487
1,286
379
25
25
U.S. Treasury, General Account
63
86
5
5
5
5
Other balances
45
0
0
0
0
0
2
0
0
0
0
0
55
62
82
108
143
189
Selected assets
Liquidity programs for financial firms
Primary, secondary, and seasonal credit
Central bank liquidity swaps
Lending through other credit facilities
Term Asset-Backed Securities Loan Facility (TALF)
Support for specific institutions
Credit extended to AIG
Net portfolio holdings of Maiden Lane LLC,
Maiden Lane II LLC, and Maiden Lane III LLC
Securities held outright
U.S. Treasury securities
Net portfolio holdings of TALF LLC
Total other assets
Total liabilities
Selected liabilities
Federal Reserve notes in circulation
Reverse repurchase agreements
Deposits with Federal Reserve Banks
Reserve balances held by depository institutions
Interest of Federal Reserve Notes due to U.S. Treasury
Total capital
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
Federal Reserve Balance Sheet: End-of-Year Projections -- Alternative C
Billions of dollars
Feb 29, 2012
Total assets
2012
2014
2016
2018
2020
2,930
2,666
2,101
1,608
1,792
1,991
108
0
0
0
0
0
0
0
0
0
0
0
108
0
0
0
0
0
11
3
1
0
0
0
11
3
1
0
0
0
31
20
16
12
7
4
0
0
0
0
0
0
31
20
16
12
7
4
2,603
2,469
1,940
1,476
1,681
1,890
1,662
1,598
1,382
1,237
1,681
1,890
Agency debt securities
101
77
39
16
0
0
Agency mortgage-backed securities
841
795
518
222
0
0
1
1
1
0
0
0
177
173
144
120
104
97
2,876
2,604
2,019
1,500
1,649
1,802
1,050
1,112
1,240
1,381
1,529
1,682
77
70
70
70
70
70
1,727
1,402
690
30
30
30
1,620
1,316
685
25
25
25
U.S. Treasury, General Account
63
86
5
5
5
5
Other balances
45
0
0
0
0
0
2
0
0
0
0
0
55
62
82
108
143
189
Selected assets
Liquidity programs for financial firms
Primary, secondary, and seasonal credit
Central bank liquidity swaps
Lending through other credit facilities
Term Asset-Backed Securities Loan Facility (TALF)
Support for specific institutions
Credit extended to AIG
Net portfolio holdings of Maiden Lane LLC,
Maiden Lane II LLC, and Maiden Lane III LLC
Securities held outright
U.S. Treasury securities
Net portfolio holdings of TALF LLC
Total other assets
Total liabilities
Selected liabilities
Federal Reserve notes in circulation
Reverse repurchase agreements
Deposits with Federal Reserve Banks
Reserve balances held by depository institutions
Interest of Federal Reserve Notes due to U.S. Treasury
Total capital
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
† Note: Data values for figures are rounded and may not sum to totals. Return to text
Last update: January 5, 2018
BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM
20th Street and Constitution Avenue N.W., Washington, DC 20551
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