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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FRB Agricultural Advisory Council CHICAGO Federal Reserve Bank of Chicago September 11 , 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Economic Outlook for the United States A-1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Forecast Highlights -Trade improvement - Slower consumption growth - Investment improves - Smaller government spending increases - Further employment gains - Continuing output growth A-2 Total Output of Goods and Services Percent change in real GNP 8 6 4 2 0 -2 -4 82 83 84 85 A-3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 87 88 Prices Percent change GNP deflator 8 6 4 2 82 83 84 85 A-4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 87 88 Unemployment Rate Percent 12 10 8 ••••••••••·•••••••••••············ 6 41..-----..-----r----..----......----~---,---------r 82 83 84 85 86 A-5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 87 88 89 Real GNP Changes Average 85/86 vs. 87 /88 Personal Consumption Investment Gov't purchases Net Exports Total -50 -25 25 0 Billion$ A-6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 50 75 100 125 Net Export Impact on GNP Increase, billions $82 350 300 250 200 GNP less Net Exports 150 100 50 OLr----------r--------,.---------r----------------83 84 85 86 A-7 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 87 88 Personal Consumption Expenditures and GNP Increase, billions $82 250 200 150 100 Consumption 50 01...--------,-------.------.-------~------,86 85 87 88 84 83 A-8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Personal Consumption Expenditures Percent change 8 6 4 2 82 83 84 85 A-9 86 87 88 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Real Consumption Expenditures Percent Change 15 Durables 12 9 n 6 rabies • s 3 - 3 _ J _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 1983 1984 1986 1985 A-10 1987 1988 Disposable Personal Income and the Savings Rate https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Percent 12 10 8 6 Income 4 2 Savings rate 0 ..,___----~-------.------------r-------r 83 84 85 A-11 86 87 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Household Financial Position Trillion$ 20 15 Net worth 1O Financial assets Tangible .::::: assets 5 0 ~ 1983 ~ ~ 1984 ~ ~ 1985 ~ A-12 ~ 1986 ~ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis International Considerations - Foreign exchange value of the dollar - Economic growth abroad - Traded goods prices A-13 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Prices Index, 1982= 100 140 130 120 •••·••' ... ... •••••• ... ... •••• GNP deflator 110 100 / / / / 90 / Import prices 80 ' , - - - - - . - - - - - r - - - - - - - - . - - - - - i - - - - - . - - - - - - - - - . - - - - - - - . - - - - . - - - - - - . 80 81 82 83 85 84 A-14 86 87 88 89 Export and Import Activity Billions of $82 600 Imports •••••••••••••••••••••••··••••••••••···· 500 400 Exports 300 200 100 0 -100 -200 l,------,-----,-----..-----,--N-e_t_ex_p_o_rts~----,-----.------,82 83 84 85 A-15 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 87 88 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Changes in New Plant and Equipment Billions of current dollars 15 10 5 0 -5 -10 All Industries -15 -20...___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 1985-86 1986-87 A-16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Changes in New Plant and Equipment Billions of current dollars 15 Other 10 Commercial 5 0 -5 -10 Petroleum All Mining Industries Public Utilities -15 Machinery -20...__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 1985-86 1986-87 A-17 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Changes in New Plant and Equipment Billions of current dollars 15 Other 10 Commercial 5 -5 -10 Petroleum All Industries Mining -15 Public Utilities Machinery -20-'-------------------------------- 1985-86 1986-87 A-18 Capacity Utilization: Manufacturing Percent 59 64 69 74 A-19 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 79 84 89 Corporate Profits Billions of current dollars 400 300 200 100 59 64 69 74 A-20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 79 84 89 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Real Investment as a Percent of Real GNP Percent 10 Equipment 8 6 4 Non-residential Structures 2 OLr------~------r----...-------------r-------r 59 64 69 74 A-21 79 84 89 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Private Domestic Investment Percent change 30 20 10 0 -10 82 83 84 85 A-22 86 87 88 Government Purchases of Goods and Services Percent change 15 10 5 ...•••••••••• Total ••••••··· ............ ............ ...... _____ •••···························· ...... ____ ·········· ••••••••········· •• o+------------------------_...=:..~--Federal ••••••••••········· -5 L , - - - - - - - - . - - - - - - ~ - - - - - r - - - - - - - r - - - - - - - . 83 84 86 85 A-23 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 87 88 Forecast Summary 1987 1988 Real GNP 2¾ 3 Prices 3¼ 4¼ Unemployment Rate ( 4th Quarter) 6.2 6.0 A-24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Prices and Output 1982=100 140 120 Real GNP 100 80 Deflater 60 40 20 0 '-r-------.----,----,----r------r-------.,-------,---------,-----,- 70 72 74 76 78 80 A-25 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 82 84 86 88