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West Virginia Economic Outlook Conference October 3, 2018 The views and opinions expressed are those of the presenter and do not necessarily represent the views of the Federal Open Market Committee or the Federal Reserve System. Tom Barkin They might want to rename the index. 24 20 Misery Index (sum of inflation and unemployment rates) 16 12 8 4 0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 Source: BLS via Haver Analytics Business investment has lagged. Net Investment: Actual and Predicted Predicted Actual Chart from German Gutierrez and Thomas Philippon, “Investment-less Growth: An Empirical Investigation,” Brookings Papers on Economic Activity, Fall 2017. Productivity growth has been low. 5 Annual % Change 4 Productivity Growth (5-year moving average) 3 2 1 Trendline 0 Source: BLS via Haver Analytics Job stayers aren’t getting increases like they used to. 7 Median Wage Growth (3-month moving average) 6 Job Switchers 5 4 3 2 Job Stayers 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Atlanta Fed Durables have diverged. Consumer Price Index (1982-1984=100) 350 Services 300 250 Nondurables 200 150 100 50 Durables 0 Source: BLS via FRED Signals from the yield curve are mixed. 4 2 - 10 year spread 3 Percent 2 1 0 -1 0 - 6 quarters forward spread -2 -3 1972:Q1 1977:Q1 1982:Q1 1987:Q1 1992:Q1 1997:Q1 2002:Q1 2007:Q1 Source: Eric Engstrom and Steven Sharpe, “(Don't Fear) The Yield Curve,” FEDS Notes, June 28, 2018. 2012:Q1 2017:Q1 Thank You