Full text of National Economic Trends : July 2006
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NationalEconomicTrends July 2006 The Seasonal Cycle and the Business Cycle S ince 1984, the variance of U.S. output growth has decreased about 75 percent compared with the postwar period ending in 1983. This change and its potential causes have received an enormous amount of attention, and several hypotheses have been proposed. One major hypothesis is that a fundamental structural change took place in the U.S. economy in the 1980s. A leading example of the structuralchange hypothesis, proposed by Kahn, McConnell, and PerezQuiros (2001), argues that improvements in information technology and inventory management are the chief source of the volatility reduction. Key pieces of evidence in support of this argument are the sharp decline in the inventory-to-sales ratio since 1984 and the corresponding sharp decline in the variance of production relative to the variance of sales. Stock and Watson (2002), however, challenge this IT revolution hypothesis. They conclude, on the basis of detailed analysis of a broad set of variables, that there is no strong evidence to show that the inventoryto-sales ratio has declined since 1984 at the business-cycle frequency. Stock and Watson instead attribute most of the reduction in GDP volatility to “good luck”—that is, reductions in the variance of shocks hitting the U.S. economy. Macroeconomists typically use seasonally adjusted data, under the assumption that the business cycle and the seasonal cycle are unrelated, or that seasonal fluctuations are fully anticipated.1 Hence the volatility reduction in the U.S. economy since the early 1980s has so far been confirmed only by the use of seasonally adjusted data. However, about 99 percent of the variance in quarterly GDP growth comes from seasonal fluctuations. Aggregate output can grow rapidly in the fourth quarter at an annual rate of more than 19 percent and decline sharply in the first quarter at an annual rate of –32 percent. These quarterly growth rates vary tremendously from one year to another and are largely driven by Christmas spending. In sharp contrast to seasonal fluctuations, the average drop in GDP during a business cycle is only about 3 percent since World War II. It is therefore intriguing to consider whether output volatility has also changed at the seasonal frequency in seasonally unadjusted data. The result could shed new light on the underlying causes of the reduction of output volatility in the U.S. economy. The attached chart, which shows the seasonal component of U.S. GDP growth for the period between 1947:Q1 and 2005:Q4, clearly indicates a volatility reduction in output growth at the seasonal frequency since 1979. The seasonal component is extracted by a band-pass filter. The variance of output growth at the seasonal frequency has decreased about 67 percent com- pared with that over the previous period ending in 1979, suggesting that the output volatility reduction found at the businesscycle frequency may be closely related to the volatility reduction at the seasonal-cycle frequency. However, the break point for the structural change is about 4 to 5 years earlier than the break point found at the business-cycle frequency. Also, the seasonal cycle becomes much more uniform after 1979, suggesting less unpredictability in the magnitude of the seasonal cycle. In my view, the marked reduction in seasonal variation is consistent with “structural” hypotheses; it would be consistent with the “good luck” hypothesis only if one believes that we just happened to experience a marked and persistent reduction in seasonal shocks, as well as in business cycle shocks.2 —Yi Wen Kahn, James A.; McConnell, Margaret M. and Perez-Quiros, Gabriel. “Inventories and the Information Revolution: Implications for Output Volatility.” Unpublished manuscript, Federal Reserve Bank of New York, 2001. Stock, James H. and Watson, Mark W. “Has the Business Cycle Changed and Why?” Working Paper 9127, National Bureau of Economic Research, 2002. 1 In fact, the magnitude of the seasonal cycle is as unpredictable as the business cycle, although the timing of the seasonal cycle is perfectly predictable. 2 Given that movements at the business-cycle frequency account for only about 1 percent of total variance in output growth, a lack of large business-cycle shocks, even if it could completely eliminate the variance of output at the business-cycle frequency, can hardly cause a significant change in the variance of output at the seasonal frequency. Seasonal Component of Output Growth Rate Percent per Quarter 8 6 4 2 0 –2 –4 –6 –8 1940 1950 1960 1970 1980 1990 Views expressed do not necessarily reflect official positions of the Federal Reserve System. research.stlouisfed.org 2000 2010 Contents Page 3 4 7 8 10 12 14 16 18 20 22 27 Economy at a Glance Output and Growth Interest Rates Inflation and Prices Labor Markets Consumer Spending Investment Spending Government Revenues, Spending, and Debt International Trade Productivity and Profits Quick Reference Tables Notes and Sources Conventions used in this publication: 1. Shaded areas indicate recessions, as determined by the National Bureau of Economic Research. 2. Percent change refers to simple percent changes. Percent change from year ago refers to the percent change from the same month or quarter during the previous year. Compounded annual rate of change shows what the growth rate would be over an entire year if the same simple percent change continued for four quarters or twelve months. The compounded annual rate of change of x between the previous quarter t –1 and the current quarter t is: [(xt /x t – 1 )4 –1] × 100. For monthly data replace 4 with 12. 3. All data with significant seasonal patterns are adjusted accordingly, unless labeled NSA. We welcome your comments addressed to: Editor, National Economic Trends Research Division Federal Reserve Bank of St. Louis P.O. Box 442 St. Louis, MO 63166-0442 or to: stlsFRED@stls.frb.org National Economic Trends is published by the Research Division of the Federal Reserve Bank of St. Louis. Visit the Research Division’s website at research.stlouisfed.org/publications/net to download the current version of this publication or register for e-mail notification updates. For more information on data in this publication, please visit research.stlouisfed.org/fred2 or call (314) 444-8573. updated through 07/03/06 National Economic Trends Real GDP Growth Consumer Price Index Compounded annual rates of change Percent change 10 1.6 8 1.2 6 0.8 4 0.4 2 0.0 0 -0.4 -0.8 -2 15706 2003 16071 2004 16437 2005 16802 2006 17167 15706 2003 16071 Industrial Production Interest Rates Percent change Percent 1.5 2004 16437 2005 16802 2006 17167 6 1.0 5 10-Year Treasury 0.5 4 0.0 3 -0.5 2 3-Month Treasury -1.0 1 -1.5 -2.0 0 15706 2003 16071 2004 16437 2005 16802 2006 17167 Change in Nonfarm Payrolls 15706 2003 16071 2004 16437 2005 16802 2006 17167 Unemployment Rate Thousands Percent of labor force 400 6.5 300 6.0 200 100 5.5 0 -100 5.0 -200 -300 4.5 15706 2003 16071 2004 16437 2005 16802 2006 17167 15706 2003 16071 2004 16437 2005 16802 2006 17167 Research Division Federal Reserve Bank of St. Louis 3 updated through 07/03/06 National Economic Trends Real Gross Domestic Product Percent change from year ago 10 5 0 -5 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Industrial Production and Institute for Supply Management (ISM) Indexes Percent change from year ago Index 18 74 Industrial Production (left scale) 12 66 6 58 0 50 ISM (right scale) -6 42 34 -12 -18 26 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Aggregate Private Nonfarm Hours Percent change from year ago 12 8 4 0 -4 -8 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Real Change in Private Inventories Percent of GDP 2 1 0 -1 -2 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 4 Federal Reserve Bank of St. Louis updated through 07/03/06 National Economic Trends Real Final Sales and GDP Real GDP Revisions Compounded annual rates of change Compounded annual rates of change 8 7 Advance Preliminary Final Annual Revision 6 6 Final Sales 4 5 4 3 2 2 0 1 GDP (bar) 0 -2 16071 2004 2005 16437 2006 16802 Industrial Production and ISM Index Percent change 2005:1 17167 62 10 0.6 56 8 0.0 50 6 44 4 38 2 32 0 -0.6 Industrial Production (bar) (left scale) -1.2 -1.8 16071 2004 16437 2005 16802 2006 2005:4 2006:1 Compounded annual rates of change 12 ISM (right scale) 1.2 2005:3 Nominal Gross Domestic Product Index 68 1.8 2005:2 16071 17167 2004 16437 2005 16802 2006 Aggregate Private Nonfarm Hours Average Weekly Private Nonfarm Hours Percent change Hours 1.00 17167 34.00 0.75 0.50 33.75 0.25 0.00 33.50 -0.25 -0.50 -0.75 33.25 16071 2004 16437 2005 16802 2006 17167 Real Change in Private Inventories 16071 2004 16437 2005 16802 2006 17167 Inventory-Sales Ratio Billions of 2000 dollars Manufacturing and trade 75 1.34 60 1.32 45 1.30 30 1.28 15 1.26 0 1.24 -15 -30 1.22 16071 2004 16437 2005 16802 2006 17167 16071 2004 16437 2005 16802 2006 17167 Research Division Federal Reserve Bank of St. Louis 5 updated through 06/29/06 National Economic Trends Contribution of Components to Real GDP Growth Percentage points at compounded annual rates 10 8 6 4 2 0 -2 -4 -6 04Q2 04Q3 04Q4 05Q1 05Q2 05Q3 05Q4 Consumption Exports Government Imports Inventories Investment 06Q1 Contributions to Real GDP Growth Rate 2004 2005 2006 2nd 3rd 4th 1st 2nd 3rd 4th 1st Final Sales 2.63 4.53 3.33 3.51 5.45 4.57 -0.24 5.88 Consumption 1.33 3.05 3.01 2.44 2.35 2.85 0.62 3.53 Fixed Investment 2.22 1.31 1.13 1.12 1.51 1.31 0.65 1.68 1.29 1.15 1.04 0.58 0.90 0.88 0.48 1.47 0.93 0.15 0.09 0.54 0.62 0.43 0.17 0.21 0.43 0.35 0.17 0.35 0.47 0.54 -0.15 0.91 0.22 0.25 -0.04 0.17 0.17 0.52 -0.18 0.72 0.31 0.03 0.03 0.19 -0.24 Nonresidential Residential Government Federal State and Local 0.21 0.10 0.21 0.19 Net Exports -1.37 -0.17 -0.98 -0.40 1.11 -0.12 -1.36 Exports Imports 0.67 0.53 0.70 0.74 1.07 0.26 0.52 1.47 -2.03 -0.70 -1.68 -1.14 0.04 -0.38 -1.88 -1.70 Change in Inventory 0.87 -0.56 -0.03 0.29 -2.14 -0.43 1.89 -0.24 Residual 0.05 -0.07 -0.08 0.00 -0.01 -0.05 0.02 -0.07 Real GDP Growth 3.50 3.97 3.30 3.80 3.31 4.14 1.65 5.64 Research Division 6 Federal Reserve Bank of St. Louis updated through 07/03/06 National Economic Trends Interest Rates Percent 18 15 12 9 10-Year Treasury 6 3-Month Treasury 3 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Treasury Yield Curve Percent 5.75 Week Ending: 06/30/2006 5.25 Jun 2006 4.75 4.25 3.75 Jun 2005 3.25 2.75 2.25 3m 1y . 2y 5y 7y 10y Standard and Poor's 500 Index with Reinvested Dividends Percent change from year ago 75 50 25 0 -25 -50 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division Federal Reserve Bank of St. Louis 7 updated through 06/29/06 National Economic Trends NIPA Chain Price Indexes Percent change from year ago 12 10 8 6 4 GDP 2 Gross Domestic Purchases 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Consumer Price Index Percent change from year ago 15 12 9 6 Excl. Food and Energy 3 All Items 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Producer Price Index, Finished Goods Percent change from year ago 20 15 10 Excl. Food and Energy 5 0 PPI -5 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Employment Cost Index and Compensation per Hour Percent change from year ago 15 12 9 Comp. per Hour 6 3 ECI 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 8 Federal Reserve Bank of St. Louis updated through 07/03/06 National Economic Trends NIPA Chain Price Indexes Oil & Natural Gas Prices: Spot & Futures Compounded annual rates of change Dollars per barrel Dollars per million btu 84 5 Gross Domestic Purchases 4 24 72 3 60 2 48 1 36 0 Spot Oil (left scale) 16 12 8 24 Gas Futures (right scale) Spot Gas (right scale) GDP (bar) -1 20 Oil Futures (left scale) 4 0 12 2004 16071 2005 16437 2006 16802 17167 2002 2003 2004 2002 2003 2004 2005 Note: Futures prices as of 06/30/2006. 2005 2006 2006 Consumer Price Index Consumption Chain Price Index Compounded annual rates of change Compounded annual rates of change 16 16 12 2007 2007 2008 12 CPI (bar) 8 PCE (bar) 8 4 4 0 0 Excl. Food & Energy -4 Excl. Food & Energy -4 -8 -8 2004 16071 2005 16437 2006 16802 17167 16071 2004 16437 2005 Producer Price Index, Finished Goods Unit Labor Cost Compounded annual rates of change Compounded annual rates of change 30 15 16802 2006 17167 10 20 Nonfarm PPI (bar) 5 10 0 0 -5 Excl. Food & Energy -10 Manufacturing (bar) -10 -20 -15 2004 16071 2005 16437 2006 16802 17167 16071 2004 16437 2005 Employment Cost Index Compensation per Hour Percent change from year ago Compounded annual rates of change 8 16802 2006 17167 12 10 6 8 Benefits Compensation 6 4 4 Wages and Salaries 2 2 0 0 -2 14976 2001 15341 2002 15706 2003 16071 2004 16437 2005 16802 2006 17167 16071 2004 16437 2005 16802 2006 17167 Research Division Federal Reserve Bank of St. Louis 9 updated through 06/02/06 National Economic Trends Employment Percent change from year ago 8 6 4 Payroll Survey 2 Household Survey 0 -2 -4 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Unemployment, Labor Force Participation, and Employment Rates Percent of labor force Percent of population 15 70 Labor Force/Population (right scale) 67 12 Employment/Population (right scale) 9 64 6 61 Unemployment Rate (left scale) 3 58 0 55 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Duration of Unemployment Percent of labor force Weeks 4.50 16 3.75 14 3.00 12 Unemployed < 5 Weeks (left scale) 2.25 10 Unemployed > 15 Weeks (left scale) 1.50 8 Median (right scale) 0.75 6 0.00 4 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 10 Federal Reserve Bank of St. Louis updated through 06/29/06 National Economic Trends Change in Nonfarm Payrolls Change in Manufacturing Payrolls Thousands Thousands 450 40 375 30 300 20 225 10 150 0 75 -10 0 -20 -75 -30 2004 16071 2005 16437 2006 16802 17167 Change in Household Employment 2004 16071 2005 16437 2006 16802 17167 Labor Force and Population Thousands Percent change from year ago 800 90% Confidence 2.0 600 400 1.5 Pop. 1.0 200 0.5 0 Labor Force 0.0 -200 -400 -0.5 2004 16071 2005 16437 2006 16802 17167 Available Labor Supply and Components 14976 2001 15341 2002 15706 2003 16071 2004 16437 2005 16802 2006 17167 Unemployment Rate & Help-Wanted Index Percent of labor force Percent 10 7.0 85 6.5 80 6.0 75 9 5.5 Available Labor Supply Unemployment Rate (left scale) 5.0 7 4.5 6 4.0 Unemployed 5 4 70 90% Confidence 8 Index 65 60 55 3.5 50 3.0 45 2.5 3 40 Help-Wanted (right scale) 2.0 Want to Work 35 1.5 2 14976 2001 15341 2002 15706 2003 16071 2004 16437 2005 16802 2006 17167 30 2001 14976 2002 15341 2003 15706 2004 16071 2005 16437 2006 16802 2007 17167 17532 Research Division Federal Reserve Bank of St. Louis 11 updated through 06/29/06 National Economic Trends Real Disposable Personal Income Percent change from year ago, quarterly data 12 8 4 0 -4 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Real Consumption Percent change from year ago, quarterly data Percent change from year ago, quarterly data 24 12 Durables (left scale) 16 8 8 4 Total (right scale) 0 0 -8 -4 -16 -8 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Retail and Food Services Sales Percent change from year ago, quarterly average 16 12 8 4 0 -4 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 *Data from Jan. 1992 to the present are on a NAICS basis; data prior to Jan. 1992 are on an SIC basis and are not strictly comparable (see End Note). Debt Service Payments and Household Debt Outstanding Percent change from year ago, quarterly data Percent of disposable personal income 18 15 15 14 Debt Service Payments (right scale) 12 13 9 12 6 11 Household Debt Outstanding (left scale) 3 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 10 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 12 Federal Reserve Bank of St. Louis updated through 06/30/06 National Economic Trends Real Disposable Personal Income Personal Saving Rate Percent change Percent 5 6 4 4 3 2 2 1 0 0 -1 -2 -2 -3 -4 -4 2004 16071 2005 16437 2006 16802 17167 14976 2001 15341 2002 15706 2003 Real Consumption Real Consumption Compounded annual rates of change Percent change 8 1.6 6 0.8 4 0.0 2 -0.8 0 16071 2004 16437 2005 16802 2006 17167 -1.6 2004 16071 2005 16437 2006 16802 17167 16071 2004 16437 2005 16802 2006 17167 Retail & Food Services Real Durables Consumption & Vehicle Sales Percent change Percent change Millions of vehicles, annual rate 15 4 Ex. Autos 3 22 Autos and Light Trucks (right scale) 10 2 1 0 -1 Total (bar) 5 18 0 16 -5 14 -2 -3 Durables (bar) (left scale) -10 2004 16071 2005 16437 20 2006 16802 17167 16071 2004 16437 2005 12 16802 Consumer Sentiment (U. of Michigan) Real Durables Consumption Index Compounded annual rates of change 110 30 100 15 90 0 80 -15 70 2006 17167 -30 14976 2001 15341 2002 15706 2003 16071 2004 16437 2005 16802 2006 17167 16071 2004 16437 2005 16802 2006 17167 Research Division Federal Reserve Bank of St. Louis 13 updated through 06/29/06 National Economic Trends Investment Percent of nominal GDP 24 22 Total 20 18 16 Private 14 12 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Private Fixed Investment Percent change from year ago 30 24 18 Nominal 12 6 Real 0 -6 -12 -18 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Real Nonresidential Fixed and Equipment & Software Investment Percent change from year ago 25 20 Equipment & Software 15 10 5 Nonresidential 0 -5 -10 -15 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Real Residential Fixed Investment Percent change from year ago 60 40 20 0 -20 -40 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 14 Federal Reserve Bank of St. Louis updated through 06/29/06 National Economic Trends Gross Saving Rates and Balance on Current Account (NIPA) Percent of GDP 25 20 Gross Private Saving 15 10 Gross Govt. Saving 5 0 BOCA -5 -10 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 Real Private Fixed Investment Nondefense Capital Goods Orders Compounded annual rates of change Percent change from year ago, excluding aircraft 18 30 15 20 12 10 9 0 05 05 06 06 07 Equipment & Software Investment 6 -10 3 Orders -20 0 -3 -30 16071 2004 16437 2005 16802 2006 17167 14976 2001 15341 2002 15706 2003 16071 2004 16437 2005 16802 Real Equipment & Software Investment Real Nonresidential Fixed Investment Compounded annual rates of change Compounded annual rates of change 20 20 15 15 10 10 5 5 0 0 -5 2006 17167 -5 16071 2004 16437 2005 16802 2006 17167 Real Residential Fixed Investment 16071 2004 2005 16437 16802 2006 17167 Housing Starts and New Home Sales Compounded annual rates of change Millions, annual rate 25 3.1 2.9 20 15 10 5 Millions, annual rate 1.48 New Home Sales (right scale) 1.40 2.7 1.32 2.5 1.24 2.3 1.16 2.1 1.08 1.9 1.00 0.92 1.7 0 Housing Starts (left scale) 1.5 -5 0.84 1.3 16071 2004 16437 2005 16802 2006 17167 16071 0.76 2004 16437 2005 16802 2006 17167 Research Division Federal Reserve Bank of St. Louis 15 updated through 06/29/06 National Economic Trends Govt. Consumption and Investment Govt. Current Receipts and Expenditures Billions of 2000 dollars Percent of GDP 2100 35 Total Expenditures 1800 Total 30 1500 Total Receipts 1200 25 State & Local Fed. Expenditures 900 20 600 Federal Fed. Receipts 300 15 82 84 86 88 90 92 94 96 98 00 02 04 06 08 82 84 86 88 90 92 94 96 98 00 02 04 06 08 Government Budgets Billions of dollars National Income Accounts Unified Budget Calendar Years Fiscal Years State and Local 1991 Federal Federal Receipts Expenditures Surplus or Deficit (-) 789.2 793.3 -4.1 1101.3 1315.0 -213.7 1055.1 1324.3 -269.2 -290.3 Receipts Expenditures Surplus or Deficit (-) Receipts Outlays Surplus or Deficit (-) 1992 845.7 845.0 0.7 1147.2 1444.6 -297.4 1091.3 1381.6 1993 886.9 886.0 0.9 1222.5 1496.0 -273.5 1154.5 1409.5 -255.1 1994 942.9 932.4 10.5 1320.8 1533.1 -212.3 1258.7 1461.9 -203.2 1995 990.2 978.2 12.0 1406.5 1603.5 -197.0 1351.9 1515.9 -164.0 1996 1043.3 1017.5 25.8 1524.0 1665.8 -141.8 1453.2 1560.6 -107.4 1997 1097.4 1058.3 39.1 1653.1 1708.9 -55.8 1579.4 1601.3 -21.9 1998 1163.2 1111.2 52.0 1773.8 1734.9 38.9 1722.0 1652.7 69.3 1999 1236.7 1186.3 50.4 1891.2 1787.6 103.6 1827.6 1702.0 125.6 2000 1319.5 1269.5 50.0 2053.8 1864.4 189.4 2025.5 1789.2 236.2 2001 1373.0 1368.2 4.8 2016.2 1969.5 46.7 1991.4 1863.2 128.2 2002 1410.1 1444.3 -34.2 1853.2 2101.1 -247.9 1853.4 2011.2 -157.8 2003 1488.6 1512.4 -23.8 1868.6 2251.4 -382.8 1782.5 2160.1 -377.6 2004 1581.7 1587.5 -5.8 1974.8 2381.3 -406.5 1880.3 2293.0 -412.7 2005 1689.4 1686.4 3.0 2221.9 2548.4 -326.5 2153.9 2472.2 -318.3 -170.8 2004Q1 1546.8 1553.2 -6.4 1917.8 2347.2 -429.4 409.6 580.4 2004Q2 1579.7 1581.3 -1.6 1951.4 2364.9 -413.5 549.9 575.6 -25.7 2004Q3 1574.5 1593.8 -19.3 1975.4 2387.0 -411.6 479.5 565.4 -85.9 2004Q4 1625.7 1621.7 4.0 2054.6 2426.2 -371.6 487.2 605.2 -118.1 2005Q1 1656.7 1649.4 7.3 2196.6 2494.9 -298.3 451.8 628.4 -176.6 2005Q2 1694.9 1673.7 21.2 2227.9 2525.2 -297.3 665.2 619.9 45.2 2005Q3 1684.3 1690.8 -6.5 2155.8 2563.7 -407.9 549.2 618.2 -69.0 2005Q4 1721.5 1731.7 -10.2 2307.3 2610.0 -302.7 530.2 649.5 -119.3 2006Q1 1750.5 1729.1 21.4 2407.0 2638.1 -231.1 507.4 691.1 -183.7 Research Division 16 Federal Reserve Bank of St. Louis updated through 06/29/06 National Economic Trends Federal Debt Federal Surplus (+) / Deficit (-) Percent of GDP Percent of GDP 70 4 Total 60 2 0 50 NIPA -2 40 Held by Public -4 30 Unified Budget -6 20 -8 82 84 86 88 90 92 94 96 98 00 02 04 06 82 84 86 88 90 92 94 96 98 00 02 04 06 NIPA: Net government saving. Change in Federal Debt Federal Surplus (+) / Deficit (-), Unified Basis Percent of GDP Billions of dollars, fiscal years 8 750 6 500 4 250 Total Excl. interest payments 0 2 0 -250 Held by Public Total -500 -2 -750 -4 82 84 86 88 90 92 94 96 98 00 02 04 06 82 84 86 88 90 92 94 96 98 00 02 04 06 Federal Government Debt Billions of dollars, end of month or fiscal year Excludes Agency-issued debt Held by Public Federal Total Reserve Banks Held by Private Investors Foreign and Total International Total Public Debt Held by Agencies and Trusts 2003 6783.2 2859.3 3923.9 656.1 3268.0 1454.2 2004 7379.1 3075.7 4303.4 700.3 3607.0 1798.7 2005 7932.7 3331.3 4601.4 733.4 3864.9 1933.4 March 6460.8 2750.0 3710.8 641.5 3069.9 1286.5 June 6670.1 2853.8 3816.3 652.1 3164.7 1382.8 September 6783.2 2859.3 3923.9 656.1 3268.0 1454.2 December 6998.0 2954.5 4044.1 666.7 3377.9 1533.0 March 7131.1 2954.4 4176.7 674.1 3502.8 1677.1 June 7274.3 3055.6 4218.7 687.4 3531.5 1739.6 September 7379.1 3075.7 4303.4 700.3 3607.0 1798.7 December 7596.1 3189.8 4406.4 717.8 3667.1 1863.4 March 7776.9 3204.5 4572.4 715.0 3855.4 1956.9 June 7836.5 3308.9 4527.6 721.9 3803.0 1879.6 September 7932.7 3331.3 4601.4 733.4 3864.9 1933.4 December 8170.4 3455.8 4714.6 732.9 3970.6 2041.1 March 8371.1 3198.4 4872.8 755.2 4114.0 2089.2 2003 2004 2005 2006 Research Division Federal Reserve Bank of St. Louis 17 updated through 07/03/06 National Economic Trends Current Account, Trade and Investment Income Balances Billions of dollars, quarterly rate Percent of GDP 20 4 Investment Income (left scale) 0 2 -20 0 -40 -2 Current Account (right scale) -60 -4 -80 -6 Goods and Services (left scale) -100 -8 -120 -10 -140 -12 -160 -14 -180 -16 -200 -18 -220 -20 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 Exchange Rates 03 04 04 05 05 06 06 07 Yen/US$ 100 x (Ecu or Euro/US$) Index, March 1973 = 100 160 375 140 300 120 225 Major Currency Index (left scale) Yen (right scale) 100 150 Euro Ecu (right scale) (right scale) 80 75 60 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 Goods Export Shares, 2005 UK 4.31% 92 92 93 93 94 94 95 95 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Goods Import Shares, 2005 Mexico 10.14% Mexico 13.45% All Other 24.15% 96 96 UK 3.04% China 14.51% China 4.69% Japan 8.23% Japan 6.20% All Other 26.79% Germany 3.82% France 2.50% Other OECD 17.18% Canada 23.69% Germany 5.05% France 2.02% Canada 17.31% Other OECD 12.90% Research Division 18 Federal Reserve Bank of St. Louis updated through 06/16/06 National Economic Trends Trade Balance Goods Trade Billions of dollars Percent change from year ago 0 30 -12 25 20 -24 Goods and Services -36 -48 10 -60 5 Goods -72 Imports 15 Exports 0 -84 -5 16071 2004 2005 16437 16802 2006 17167 16071 2004 16437 Current Account Balance Services Trade Billions of dollars Percent change from year ago 0 25 -40 20 -80 15 -120 10 -160 5 -200 0 2005 16802 2006 17167 Imports -240 Exports -5 16071 2004 2005 16437 16802 2006 17167 16071 2004 16437 2005 16802 2006 17167 Real GDP Growth of Major Trading Partners Compounded annual rates of change United Kingdom Germany 6 4 4 2 2 0 0 -2 -2 -4 04 2004 05 2005 06 2006 07 04 2004 05 Canada 2005 06 2006 07 06 2006 07 06 2006 07 France 6 6 4 4 2 2 0 0 -2 -2 04 2004 05 2005 06 2006 07 04 2004 05 Japan 2005 Mexico 30 12 20 6 10 0 0 -10 -6 -20 04 2004 05 2005 06 2006 07 04 2004 05 2005 Research Division Federal Reserve Bank of St. Louis 19 updated through 06/15/06 National Economic Trends Output per Hour and Capacity Utilization, Manufacturing Percent change from year ago Percent 15 90 Utilization Rate (level) (right scale) 10 80 5 70 Output/Hour (left scale) 0 60 -5 50 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 *Data from 1987 to the present are on a NAICS basis; data prior to 1987 are on an SIC basis and are not strictly comparable (see End Note). 05 06 06 07 Nonfarm Compensation per Hour Percent change from year ago 15 10 Nominal 5 Real 0 -5 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Output per Hour, Nonfarm Business and Nonfinancial Corporations Percent change from year ago 9 6 Nonfinancial Corporations 3 Nonfarm Business Sector 0 -3 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division 20 Federal Reserve Bank of St. Louis updated through 06/29/06 National Economic Trends Nonfarm Output per Hour Manufacturing Output per Hour Compounded annual rates of change Compounded annual rates of change 10 8 8 6 6 4 4 2 2 0 0 -2 -2 2004 16071 2005 16437 2006 16802 17167 2004 16071 2005 16437 2006 16802 17167 Selected Component Shares of National Income Percent Percent 75 15 13 73 Corporate Profits (left scale) 71 11 Proprietors' Income (left scale) 9 69 67 7 65 5 Compensation (right scale) 3 63 61 1 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Corporate Profits Percent of GDP 14 12 Profits (Before Tax) 10 8 6 Profits (After Tax) 4 2 0 81 81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 Research Division Federal Reserve Bank of St. Louis 21 updated through 06/29/06 National Economic Trends Nominal GDP Billions of $ 2002. 2003. 10469.6 2004. 2005. 11734.3 Real GDP Percent change Annual Year rate ago Billions of 2000 $ . 3.4 10048.846 . 4.8 10320.580 . 7.0 10755.668 12487.1 . 6.4 2003 1 10717.0 4.8 . 2 10844.6 . 3 11087.4 . 4 Final Sales Percent change Annual Year rate ago Billions of 2000 $ . 1.6 10036.504 . 2.7 10303.551 . 4.2 10702.364 11134.774 . 3.5 3.7 10138.573 1.7 4.8 4.0 10230.362 9.3 5.3 10410.896 11236.0 5.5 6.1 2004 1 11457.1 8.1 . 2 11666.1 7.5 . 3 11818.8 . 4 Percent change Annual Year rate ago Change in Private Inventories Billions of 2000 $ Last qtr Year/Year ago . 1.2 . 12.482 . 2.7 . 15.481 . 3.9 . 51.983 11112.841 . 3.8 . 20.283 1.6 10114.686 1.9 1.3 24.039 21.045 3.7 2.0 10228.200 4.6 2.0 -0.447 20.271 7.2 3.2 10399.496 6.9 3.3 9.330 15.601 10502.586 3.6 4.0 10471.822 2.8 4.0 29.000 15.481 6.9 10612.536 4.3 4.7 10568.938 3.8 4.5 41.895 19.945 7.6 10704.128 3.5 4.6 10637.359 2.6 4.0 65.588 36.453 5.3 6.6 10808.876 4.0 3.8 10757.120 4.6 3.4 50.362 46.711 11995.2 6.1 6.8 10897.130 3.3 3.8 10846.038 3.3 3.6 50.087 51.983 2005 1 12198.8 7.0 6.5 10999.325 3.8 3.6 10940.325 3.5 3.5 58.165 56.051 . 2 12378.0 6.0 6.1 11089.150 3.3 3.6 11089.172 5.6 4.2 -1.687 39.232 . 3 12605.7 7.6 6.7 11202.340 4.1 3.6 11214.399 4.6 4.3 -13.291 23.319 . 4 12766.1 5.2 6.4 11248.283 1.7 3.2 11207.469 -0.2 3.3 37.944 20.283 2006 1 13042.3 8.9 6.9 11403.588 5.6 3.7 11369.688 5.9 3.9 29.476 13.111 10971.2 Consumption Billions of 2000 $ 2002. 2003. Durables Consumption Percent change Annual Year rate ago Billions of 2000 $ Private Fixed Investment Percent change Annual Year rate ago Billions of 2000 $ Nonresidential Fixed Investment Percent change Annual Year rate ago Billions of 2000 $ Percent change Annual Year rate ago 7099.261 . 2.7 964.784 . 7.1 1544.608 . -5.2 1071.522 . -9.2 7306.564 . 2.9 1028.515 . 6.6 1600.014 . 3.6 1085.001 . 1.3 1089.906 . 6.0 1755.101 . 9.7 1186.660 . 9.4 1138.421 . 4.5 1897.079 . 8.1 1289.027 . 8.6 2004. 2005. 7588.607 . 3.9 7856.919 . 3.5 2003 1 7192.197 2.5 2.1 979.072 3.6 3.2 1540.947 0.8 -0.7 1051.612 -1.1 -3.5 2 7256.827 3.6 2.4 1014.028 15.1 6.0 1573.738 8.8 1.8 1072.915 8.4 -0.0 . . 3 7360.681 5.8 3.3 1060.950 19.8 7.9 1628.993 14.8 5.6 1101.758 11.2 3.2 . 4 7416.416 3.1 3.8 1060.026 -0.3 9.2 1656.343 6.9 7.7 1113.721 4.4 5.6 2004 1 7501.399 4.7 4.3 1071.552 4.4 9.4 1684.399 6.9 9.3 1135.060 7.9 7.9 . 2 7536.579 1.9 3.9 1072.519 0.4 5.8 1744.540 15.1 10.9 1171.641 13.5 9.2 . 3 7617.519 4.4 3.5 1100.421 10.8 3.7 1780.168 8.4 9.3 1204.845 11.8 9.4 . 4 7698.796 4.3 3.8 1115.124 5.5 5.2 1811.279 7.2 9.4 1235.105 10.4 10.9 2005 1 7764.909 3.5 3.5 1122.315 2.6 4.7 1842.206 7.0 9.4 1252.194 5.7 10.3 . 2 7829.540 3.4 3.9 1143.898 7.9 6.7 1884.684 9.5 8.0 1278.967 8.8 9.2 . 3 7907.851 4.1 3.8 1169.738 9.3 6.3 1921.471 8.0 7.9 1305.198 8.5 8.3 . 4 7925.374 0.9 2.9 1117.731 -16.6 0.2 1939.956 3.9 7.1 1319.748 4.5 6.9 2006 1 8023.634 5.1 3.3 1170.644 20.3 4.3 1987.236 10.1 7.9 1364.177 14.2 8.9 Research Division 22 Federal Reserve Bank of St. Louis updated through 06/29/06 National Economic Trends GDP Chain Price Index Index 2002. 2003. 104.193 2004. 2005. 109.102 Percent change Annual Year rate ago Employment Cost Index Index ECI: Wages Percent change Annual Year rate ago Index . 3.5 91.6 94.2 . 1.7 89.3 . 2.0 92.7 . 3.8 . 2.6 96.2 . 3.8 96.8 112.176 . 2.8 99.2 . 3.1 2003 1 105.724 3.1 2.1 91.4 5.4 . 2 106.019 1.1 2.0 92.2 . 3 106.500 1.8 2.1 93.2 . 4 106.996 1.9 2.0 93.8 2004 1 107.951 3.6 2.1 94.9 4.8 3.8 95.7 2.5 . 2 108.976 3.9 2.8 95.8 3.8 3.9 96.4 3.0 . 3 109.371 1.5 2.7 96.7 3.8 3.8 97.2 3.4 . 4 110.111 2.7 2.9 97.3 2.5 3.7 97.7 2005 1 110.950 3.1 2.8 98.2 3.8 3.5 98.3 106.310 ECI: Benefits Percent change Annual Year rate ago Index Percent change Annual Year rate ago . 3.2 83.7 . 4.5 . 2.8 88.8 . 6.1 . 2.7 94.8 . 6.8 99.2 . 2.5 99.2 . 4.6 3.6 93.2 4.0 2.8 87.0 9.7 5.7 3.5 3.5 93.8 2.6 2.5 88.1 5.2 5.8 4.4 4.0 94.7 3.9 2.9 89.4 6.0 6.3 2.6 4.0 95.1 1.7 3.0 90.5 5.0 6.5 2.7 92.9 11.0 6.8 2.8 94.4 6.6 7.2 2.6 95.4 4.3 6.7 2.1 2.7 96.5 4.7 6.6 2.5 2.7 98.0 6.4 5.5 4.7 . 2 111.655 2.6 2.5 98.8 2.5 3.1 98.8 2.1 2.5 98.8 3.3 . 3 112.567 3.3 2.9 99.5 2.9 2.9 99.4 2.5 2.3 99.6 3.3 4.4 . 4 113.532 3.5 3.1 100.2 2.8 3.0 100.1 2.8 2.5 100.4 3.3 4.0 2006 1 114.409 3.1 3.1 100.8 2.4 2.6 100.8 2.8 2.5 100.8 1.6 2.9 Exports Billions of 2000 $ 2002. 1013.293 2003. 1031.207 Percent change Annual Year rate ago Billions of 2000 $ -2.3 1484.629 . . Nonfarm Output per Hour Imports Percent change Annual Year rate ago Index Percent change Year Annual rate ago 3.4 123.134 . 4.1 Nonfarm Compensation per Hour Index Percent change Year Annual rate ago 144.160 . 3.6 . 1.8 1552.573 . 4.6 127.960 . 3.9 149.869 . 4.0 . 8.4 1719.187 . 10.7 132.357 . 3.4 156.692 . 4.6 . 6.9 1828.341 . 6.3 135.988 . 2.7 164.717 . 5.1 1.7 1520.372 -2.5 6.0 124.976 3.8 2.2 147.021 5.9 3.1 -1.3 1532.901 3.3 3.8 126.903 6.3 3.5 149.243 6.2 3.5 2004. 1117.879 2005. 1195.254 2003 1 1009.709 -2.9 . 2 1004.457 -2.1 . 3 1032.248 11.5 0.7 1548.412 4.1 3.4 129.893 9.8 4.9 151.088 5.0 4.3 . 4 1078.445 19.1 6.0 1608.623 16.5 5.1 130.062 0.5 5.0 152.123 2.8 5.0 2004 1 1091.798 5.0 8.1 1654.829 12.0 8.8 130.828 2.4 4.7 153.416 3.4 4.3 . 2 1110.194 6.9 10.5 1711.867 14.5 11.7 132.280 4.5 4.2 154.927 4.0 3.8 . 3 1125.027 5.5 9.0 1731.480 4.7 11.8 132.829 1.7 2.3 157.285 6.2 4.1 . 4 1144.496 7.1 6.1 1778.556 11.3 10.6 133.472 2.0 2.6 161.096 10.0 5.9 2005 1 1165.293 7.5 6.7 1810.728 7.4 9.4 134.715 3.8 3.0 163.307 5.6 6.4 . 2 1195.353 10.7 7.7 1809.577 -0.3 5.7 135.500 2.4 2.4 163.843 1.3 5.8 . 3 1202.731 2.5 6.9 1820.202 2.4 5.1 136.915 4.2 3.1 166.040 5.5 5.6 . 4 1217.640 5.1 6.4 1872.858 12.1 5.3 136.814 -0.3 2.5 165.666 -0.9 2.8 2006 1 1260.209 14.7 8.1 1921.071 10.7 6.1 138.062 3.7 2.5 167.837 5.3 2.8 Research Division Federal Reserve Bank of St. Louis 23 updated through 06/02/06 National Economic Trends Household Survey Employment Thousands Change 2001 . 2002 . 136939 39 136480 -459 2003 . 2004 . 137731 1251 139244 1513 2005 . 141719 2475 1 138473 193 2 138894 2004 . 421 Percent change Annual Year rate ago Nonfarm Payroll Employment Nonfarm Aggregate Hours Percent change Annual Year rate ago Index Percent change Monthly Annual Year rate rate ago . 0.0 102.0 . . -1.4 . -1.1 100.0 . . -2.0 . -0.3 98.6 . . -1.4 100.2 Thousands Change . 0.0 131832 40 . -0.3 130342 -1490 . 0.9 129993 -349 . 1.1 131424 1431 . 1.1 . . 1.6 . 1.8 133459 2035 . 1.5 102.6 . . 2.4 0.6 0.7 130572 382 1.2 0.4 99.2 0.4 1.6 0.2 1.2 0.9 131277 705 2.2 1.1 99.9 0.7 2.7 1.6 . 3 139548 654 1.9 1.5 131602 325 1.0 1.4 100.5 0.6 2.6 2.3 . 4 140059 511 1.5 1.3 132244 642 2.0 1.6 101.1 0.6 2.4 2.3 2005 1 140373 314 0.9 1.4 132694 450 1.4 1.6 101.6 0.4 1.7 2.4 . 2 141506 1132 3.3 1.9 133230 536 1.6 1.5 102.3 0.8 3.1 2.4 . 3 142324 818 2.3 2.0 133750 520 1.6 1.6 102.9 0.6 2.2 2.4 . 4 142672 348 1.0 1.9 134161 412 1.2 1.4 103.4 0.5 2.1 2.3 2006 1 143324 652 1.8 2.1 134722 560 1.7 1.5 104.2 0.7 3.0 2.6 2004 May 138843 184 1.6 0.9 131340 267 2.5 1.2 100.3 0.7 8.8 1.8 . Jun 139181 338 3.0 1.0 131418 78 0.7 1.2 99.8 -0.5 -5.8 1.6 . 139591 410 3.6 1.5 131456 38 0.3 1.3 100.3 0.5 6.2 2.1 . Jul Aug 139558 -33 -0.3 1.5 131587 131 1.2 1.4 100.4 0.1 1.2 2.2 . Sep 139495 -63 -0.5 1.4 131764 177 1.6 1.4 100.9 0.5 6.1 2.5 . Oct 139768 273 2.4 1.3 132102 338 3.1 1.5 100.9 0.0 0.0 2.1 . Nov 140276 508 4.4 1.3 132235 133 1.2 1.6 101.0 0.1 1.2 1.9 . Dec 140133 -143 -1.2 1.3 132395 160 1.5 1.6 101.5 0.5 6.1 2.9 2005 Jan 140234 101 0.9 1.3 132471 76 0.7 1.6 101.3 -0.2 -2.3 2.3 . Feb 140285 51 0.4 1.3 132736 265 2.4 1.7 101.6 0.3 3.6 2.2 . Mar 140601 316 2.7 1.6 132876 140 1.3 1.6 101.8 0.2 2.4 2.5 . Apr 141196 595 5.2 1.8 133104 228 2.1 1.5 102.4 0.6 7.3 2.8 . May 141571 375 3.2 2.0 133210 106 1.0 1.4 102.2 -0.2 -2.3 1.9 . Jun 141750 179 1.5 1.8 133376 166 1.5 1.5 102.4 0.2 2.4 2.6 . 142111 361 3.1 1.8 133617 241 2.2 1.6 102.9 0.5 6.0 2.6 . Jul Aug 142425 314 2.7 2.1 133792 175 1.6 1.7 102.7 -0.2 -2.3 2.3 . Sep 142435 10 0.1 2.1 133840 48 0.4 1.6 103.1 0.4 4.8 2.2 . Oct 142625 190 1.6 2.0 133877 37 0.3 1.3 103.1 0.0 0.0 2.2 . Nov 142611 -14 -0.1 1.7 134231 354 3.2 1.5 103.5 0.4 4.8 2.5 . Dec 142779 168 1.4 1.9 134376 145 1.3 1.5 103.7 0.2 2.3 2.2 2006 Jan 143074 295 2.5 2.0 134530 154 1.4 1.6 104.0 0.3 3.5 2.7 . Feb 143257 183 1.5 2.1 134730 200 1.8 1.5 104.2 0.2 2.3 2.6 . Mar 143641 384 3.3 2.2 134905 175 1.6 1.5 104.4 0.2 2.3 2.6 . Apr 143688 47 0.4 1.8 135031 126 1.1 1.4 104.8 0.4 4.7 2.3 . May 143976 288 2.4 1.7 135106 75 0.7 1.4 104.6 -0.2 -2.3 2.3 Research Division 24 Federal Reserve Bank of St. Louis updated through 07/03/06 National Economic Trends Retail and Food Services Sales Unempl. Rate 2001 . 2002 . 2003 . 2004 . 2005 . 2004 Billions of dollars 4.7 3385.830 5.8 3467.083 6.0 3614.287 5.5 3836.987 5.1 4111.595 Percent change Monthly/ Annual Year quarterly rate ago Industrial Production Percent change Monthly/ Annual Year quarterly rate ago Index . 2.9 99.8784 . . 2.4 100.0000 . . 4.2 100.6244 . 6.2 104.7252 . 7.2 108.0621 . . . Treasury Yields (Percent) 3-mo 10-yr . -3.5 3.39 5.02 . . 0.1 1.60 4.61 . . 0.6 1.01 4.02 . 4.1 1.37 4.27 . 3.2 3.15 4.29 . . . 1 5.7 938.788 2.0 8.3 6.1 103.1294 1.3 5.3 2.6 0.92 4.02 5.6 947.407 0.9 3.7 6.2 104.4460 1.3 5.2 4.8 1.08 4.60 . 2 . 3 5.4 964.134 1.8 7.3 5.1 105.1248 0.6 2.6 4.6 1.49 4.30 . 4 5.4 986.658 2.3 9.7 7.2 106.2005 1.0 4.2 4.3 2.01 4.17 2005 1 5.2 998.909 1.2 5.1 6.4 107.2067 0.9 3.8 4.0 2.54 4.30 . 2 5.1 1021.427 2.3 9.3 7.8 107.6359 0.4 1.6 3.1 2.86 4.16 . 3 5.0 1043.116 2.1 8.8 8.2 108.0066 0.3 1.4 2.7 3.36 4.21 . 4 4.9 1048.143 0.5 1.9 6.2 109.3991 1.3 5.3 3.0 3.83 4.49 2006 1 4.7 1081.608 3.2 13.4 8.3 110.8076 1.3 5.3 3.4 4.39 4.57 . 2 . . . . . . . . . 4.70 5.07 2004 Jun 5.6 313.578 -2.0 -21.2 4.9 104.3773 -0.6 -6.4 4.6 1.27 4.73 . 5.5 319.699 2.0 26.1 5.3 104.9954 0.6 7.3 4.7 1.33 4.50 . Jul Aug 5.4 319.188 -0.2 -1.9 3.5 105.3165 0.3 3.7 4.9 1.48 4.28 . Sep 5.4 325.247 1.9 25.3 6.4 105.0624 -0.2 -2.9 4.0 1.65 4.13 . Oct 5.4 327.054 0.6 6.9 7.4 105.8234 0.7 9.0 4.7 1.76 4.10 . Nov 5.4 327.663 0.2 2.3 6.2 106.0348 0.2 2.4 3.9 2.07 4.19 . Dec 5.4 331.941 1.3 16.8 8.1 106.7432 0.7 8.3 4.4 2.19 4.23 2005 Jan 5.2 330.643 -0.4 -4.6 6.9 106.9478 0.2 2.3 4.2 2.33 4.22 . Feb 5.4 333.908 1.0 12.5 7.0 107.3608 0.4 4.7 3.7 2.54 4.17 . Mar 5.1 334.358 0.1 1.6 5.3 107.3115 -0.0 -0.5 4.0 2.74 4.50 . Apr 5.1 339.841 1.6 21.6 8.2 107.1838 -0.1 -1.4 3.1 2.78 4.34 . May 5.1 338.604 -0.4 -4.3 5.9 107.4337 0.2 2.8 2.4 2.84 4.14 . Jun 5.0 342.982 1.3 16.7 9.4 108.2903 0.8 10.0 3.7 2.97 4.00 . 5.0 351.454 2.5 34.0 9.9 108.2725 -0.0 -0.2 3.1 3.22 4.18 . Jul Aug 4.9 345.111 -1.8 -19.6 8.1 108.5868 0.3 3.5 3.1 3.44 4.26 . Sep 5.1 346.551 0.4 5.1 6.6 107.1604 -1.3 -14.7 2.0 3.42 4.20 . Oct 4.9 347.443 0.3 3.1 6.2 108.3814 1.1 14.6 2.4 3.71 4.46 . Nov 5.0 349.630 0.6 7.8 6.7 109.3877 0.9 11.7 3.2 3.88 4.54 . Dec 4.9 351.070 0.4 5.1 5.8 110.4282 1.0 12.0 3.5 3.89 4.47 2006 Jan 4.7 361.743 3.0 43.2 9.4 110.3486 -0.1 -0.9 3.2 4.24 4.42 . Feb 4.8 358.675 -0.8 -9.7 7.4 110.7354 0.4 4.3 3.1 4.43 4.57 . Mar 4.7 361.190 0.7 8.7 8.0 111.3389 0.5 6.7 3.8 4.51 4.72 . Apr 4.7 363.943 0.8 9.5 7.1 112.1919 0.8 9.6 4.7 4.60 4.99 . May 4.6 364.198 0.1 0.8 7.6 112.0991 -0.1 -1.0 4.3 4.72 5.11 . Jun . 4.79 5.11 . . . . . . . . Research Division Federal Reserve Bank of St. Louis 25 updated through 06/14/06 National Economic Trends Consumer Price Index less Food and Energy Consumer Price Index Index 2001 . 2002 . 177.0 179.9 2003 . 2004 . 184.0 2005 . 195.3 2004 188.9 Monthly/ quarterly Percent change Annual Year rate ago Year to date Index . 2.8 . 186.1 . . 1.6 . 190.5 . . 2.3 . 193.2 . 2.7 . 196.6 . . 3.4 . 200.9 . . Monthly/ quarterly Percent change Annual Year rate ago Producer Price Index Finished Goods Year to date Index . 2.7 . 140.7 . . 2.3 . 138.9 . . 1.4 . 143.3 . 1.8 . 148.5 . . 2.2 . 155.7 . . Percent change Monthly/ Annual Year quarterly rate ago . 1.9 . . -1.3 . . 3.2 . . 3.6 . . 4.9 2.3 . 1 186.6 0.9 3.7 1.8 3.7 194.9 0.4 1.8 1.3 1.8 145.9 0.7 2.9 . 2 188.4 1.0 4.1 2.8 3.9 196.2 0.7 2.7 1.8 2.2 148.2 1.6 6.5 4.1 . 3 189.4 0.5 2.1 2.7 3.3 197.1 0.5 1.8 1.8 2.1 148.5 0.2 0.9 3.5 . 4 191.1 0.9 3.5 3.3 3.3 198.2 0.6 2.3 2.1 2.1 151.5 2.0 8.3 4.6 2005 1 192.2 0.6 2.5 3.0 2.5 199.5 0.6 2.5 2.3 2.5 152.6 0.7 2.8 4.6 . 2 194.0 0.9 3.7 3.0 3.1 200.4 0.5 2.0 2.1 2.2 154.2 1.1 4.4 4.1 . 3 196.6 1.4 5.5 3.8 3.9 201.2 0.4 1.6 2.1 2.0 156.7 1.6 6.5 5.5 . 4 198.2 0.8 3.2 3.7 3.7 202.4 0.6 2.4 2.1 2.1 159.4 1.8 7.3 5.2 2006 1 199.3 0.6 2.2 3.7 2.2 203.6 0.6 2.4 2.1 2.4 159.2 -0.2 -0.7 4.3 2004 May 188.6 0.6 7.3 2.9 4.6 196.2 0.2 1.9 1.7 2.5 148.6 0.8 10.2 4.7 . Jun 189.2 0.3 3.9 3.2 4.5 196.6 0.2 2.5 1.9 2.5 148.5 -0.1 -0.8 4.1 . 189.2 0.0 0.0 2.9 3.8 196.8 0.1 1.2 1.8 2.3 148.4 -0.1 -0.8 3.9 . Jul Aug 189.4 0.1 1.3 2.7 3.5 197.0 0.1 1.2 1.8 2.2 148.5 0.1 0.8 3.4 . Sep 189.7 0.2 1.9 2.5 3.3 197.6 0.3 3.7 2.0 2.3 148.6 0.1 0.8 3.3 . Oct 190.8 0.6 7.2 3.2 3.7 197.9 0.2 1.8 2.0 2.3 150.8 1.5 19.3 4.3 . Nov 191.2 0.2 2.5 3.5 3.6 198.3 0.2 2.5 2.2 2.3 152.2 0.9 11.7 5.2 . Dec 191.2 0.0 0.0 3.3 3.3 198.5 0.1 1.2 2.2 2.2 151.5 -0.5 -5.4 4.3 2005 Jan 191.4 0.1 1.3 3.0 1.3 199.0 0.3 3.1 2.3 3.1 151.7 0.1 1.6 4.1 . Feb 192.1 0.4 4.5 3.0 2.9 199.4 0.2 2.4 2.4 2.8 152.4 0.5 5.7 4.7 . Mar 193.2 0.6 7.1 3.2 4.3 200.0 0.3 3.7 2.4 3.1 153.6 0.8 9.9 5.0 . Apr 194.1 0.5 5.7 3.5 4.6 200.2 0.1 1.2 2.2 2.6 154.4 0.5 6.4 4.7 . May 194.0 -0.1 -0.6 2.9 3.6 200.5 0.1 1.8 2.2 2.4 154.1 -0.2 -2.3 3.7 . Jun 193.9 -0.1 -0.6 2.5 2.8 200.6 0.0 0.6 2.0 2.1 154.2 0.1 0.8 3.8 . 195.1 0.6 7.7 3.1 3.5 201.0 0.2 2.4 2.1 2.2 155.4 0.8 9.7 4.7 . Jul Aug 196.2 0.6 7.0 3.6 3.9 201.2 0.1 1.2 2.1 2.0 156.2 0.5 6.4 5.2 . Sep 198.6 1.2 15.7 4.7 5.2 201.5 0.1 1.8 2.0 2.0 158.4 1.4 18.3 6.6 . Oct 199.1 0.3 3.1 4.4 5.0 202.0 0.2 3.0 2.1 2.1 159.6 0.8 9.5 5.8 . Nov 197.8 -0.7 -7.6 3.5 3.8 202.5 0.2 3.0 2.1 2.2 158.8 -0.5 -5.9 4.3 . Dec 197.7 -0.1 -0.6 3.4 3.4 202.8 0.1 1.8 2.2 2.2 159.9 0.7 8.6 5.5 2006 Jan 199.0 0.7 8.2 4.0 8.2 203.2 0.2 2.4 2.1 2.4 160.3 0.3 3.0 5.7 . Feb 199.1 0.1 0.6 3.6 4.3 203.5 0.1 1.8 2.1 2.1 158.2 -1.3 -14.6 3.8 . Mar 199.8 0.4 4.3 3.4 4.3 204.2 0.3 4.2 2.1 2.8 159.0 0.5 6.2 3.5 . Apr 201.0 0.6 7.5 3.6 5.1 204.8 0.3 3.6 2.3 3.0 160.5 0.9 11.9 4.0 . May 201.9 0.4 5.5 4.1 5.2 205.4 0.3 3.6 2.4 3.1 160.8 0.2 2.3 4.3 Research Division 26 Federal Reserve Bank of St. Louis National Economic Trends Notes Pages 4, 5: Final Sales is gross domestic product (GDP) minus change in private inventories. Advance, Preliminary, and Final GDP Growth Rates are released during the first, second, and third months of the following quarter. Changes result from incorporation of more complete information. Real GDP is measured in 2000 dollars. The ISM (formerly Purchasing Managers’) Index is a weighted average of diffusion indexes for new orders, production, supplier deliveries, inventories, and employment. Aggregate and Average Weekly Hours are paid hours of production and nonsupervisory employees. The Inventory-Sales Ratio uses nominal (current-dollar) inventory and sales data. Page 6: For information on how to calculate the Contribution of a component to the overall GDP growth rate, see the October 1999 issue of the Survey of Current Business, p. 16. The sign is changed for Imports. Page 7: Ten-year Treasury Yields are adjusted to constant maturity; threemonth yields are secondary market averages. All rates used in the yield curves are adjusted to constant maturity. The 30-year constant maturity series was discontinued by the Treasury Department as of Feb. 18, 2002. Standard and Poor’s 500 Index with Reinvested Dividends shows the total return: capital gains plus dividends. Pages 8, 9: Oil (West Texas intermediate) and Natural Gas (Henry Hub) spot and futures prices are listed in the Wall Street Journal. Spot prices are monthly averages of daily prices; futures prices are usually taken from the last trading day of the month. Consumer Price Index is for all urban consumers. The Consumption Chain Price Index is the index associated with the personal consumption expenditures component of GDP. The Employment Cost Index (ECI) covers private nonfarm employers. ECI Compensation refers to a fixed sample of jobs, while Compensation per Hour covers all workers in the nonfarm business sector in a given quarter. In both cases, compensation is wages and salaries plus benefits. Pages 10, 11: Effective with the May 2003 Employment Situation, the establishment survey data for employment, hours, and earnings have been converted from the 1987 SIC system to the 2002 NAICS system. All published NAICS-based labor series have been revised back to at least 1990. For more information see http://www.bls.gov/ces/. Nonfarm Payroll Employment is counted in a survey of about 400,000 establishments (Current Employment Survey). It excludes self-employed individuals and workers in private households, but double-counts individuals with more than one job. The Household Survey (Current Population Survey) of about 60,000 households provides estimates of civilian employment, unemployment rate, labor force participation rate, and employment-population ratio. Population is civilian, noninstitutional, 16 years and over. The 90 percent confidence intervals for the unemployment rate (± 0.2 percentage points) and change in household survey employment (± 290,000) measure uncertainty due to sample size. Because the household survey was changed in January 1994, data prior to this date are not strictly comparable. The Bureau of Labor Statistics announced several revisions to the Household Survey on Feb. 7, 2003, with the release of the January 2003 data. For more information, see <www.bls.gov/cps/>. Page 13: The Michigan Consumer Sentiment Index shows changes in a summary measure of consumers’ answers to five questions about their current and expected financial situation, expectations about future economic conditions, and attitudes about making large purchases. The survey is based on a representative sample of U.S. households. Page 15: Gross Private Saving is the sum of personal saving, undistributed corporate profits with IVA and CCAdj (see notes for pp. 18-19), and private wage accruals less disbursements. Gross Government Saving is net government saving (surplus/deficit) plus consumption of fixed capital. Balance on Current Account (NIPA) is net capital transfer payments to the rest of the world plus net lending or net borrowing (international trade and income flows). Pages 16, 17: Government Consumption and Investment is current expenditures on goods and services, including capital consumption (depreciation) and gross investment, as reported in the NIPAs. The Unified Federal Budget Surplus/Deficit differs from NIPA Basis in four main ways: (1) NIPA excludes Research Division Federal Reserve Bank of St. Louis transactions involving existing assets; (2) NIPA outlays exclude government investment and include consumption of government capital, while unified budget outlays do the reverse; (3) NIPA accounts exclude Puerto Rico and U.S. territories; and (4) various timing issues are handled differently. Outlays and Receipts are from the NIPAs, except as noted. Since 1977, the federal Fiscal Year starts on October 1. Excluded agency debt was 0.6 percent of federal debt at the end of fiscal 1997. Federal Debt Held by the Public includes holdings of the Federal Reserve System and excludes holdings of the social security and other federal trust funds. Federal grants in aid to state and local governments appear in both state and local receipts and federal outlays. Pages 18, 19: The Trade Balance (shown on a balance of payments basis) is the difference between exports and imports of goods (merchandise) and services. It is nearly identical in concept to the Net Exports component of GDP, but differs slightly in accounting details. The Investment Income Balance equals income received from U.S.-owned assets in other countries minus income paid on foreign-owned assets in the U.S. The investment income balance is nearly identical in concept to the difference between gross national product and gross domestic product, but differs in accounting details. The Current Account Balance is the trade balance plus the balance on investment income plus net unilateral transfers to the U.S. from other countries. Pages 20, 21: Output per Hour (Y/H), Unit Labor Cost (C/Y), and Compensation per Hour (C/H) are indexes which approximately obey the following relationship: %(Y/H) + %(C/Y) = %(C/H) with %() meaning percent changes. Unit labor cost is shown on page 9. Real Compensation per Hour uses the CPI to adjust for the effects of inflation. Nonfarm business accounted for about 76 percent of the value of GDP in 1996, while nonfinancial corporations accounted for about 54 percent. Inventory Valuation Adjustments (IVA) remove the effect of changes in the value of existing inventories from corporate profits and proprietors’ income. (This change in value does not correspond to current production and therefore is not part of GDP). Capital Consumption Adjustments (CCAdj) increase profits and proprietors’ income by the difference between estimates of economic depreciation and depreciation allowed by the tax code. Components of national income not shown are rental income of persons and net interest. NOTE: Most measures of economic activity are now based on the 2002 North American Industry Classification System (NAICS), which replaces the 1987 Standard Industry Classification (SIC) system. Sources Bureau of Economic Analysis (BEA), U.S. Dept. of Commerce National income and product accounts, international trade and investment data (except by country), auto and light truck sales. Census Bureau, U.S. Dept. of Commerce Inventory-sales ratios, retail sales, capital goods orders, housing starts, exports and imports by country. Bureau of Labor Statistics (BLS), U.S. Dept. of Labor All employment-related data, employment cost index, consumer and producer price indexes, unit labor cost, output per hour, compensation per hour, multifactor productivity. United States Department of Treasury Unified budget receipts, outlays, deficit, debt. Federal Reserve Board Index of industrial production, treasury yields, exchange rates, capacity utilization, household debt. The Survey Research Center, The University of Michigan Consumer sentiment index. The Conference Board Help-wanted advertising index. Organization for Economic Cooperation and Development (OECD) GDP for major trading partners (not available on FRED). 27
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