Transcript U.S. Economic Outlook Mark Vitner, Managing Director & Senior Economist February 1, 2013

U.S. Economic Outlook
Mark Vitner, Managing Director & Senior Economist
February 1, 2013
Economic Growth
U.S. Real GDP
Bars = CAGR
Line = Yr/Yr Percent Change
10%
10%
GDP - CAGR: Q3 @ 3.1%
8%
GDP - Yr/Yr Percent Change: Q3 @ 2.6%
6%
We are more than three years
into the economic recovery and
there is still a considerable
amount of uncertainty regarding
sovereign debt issues in Europe,
the federal budget deficit and
the willingness of businesses
and households to commit to
major capital purchases.
6%
Forecast
4%
4%
2%
2%
0%
0%
-2%
-2%
-4%
-4%
-6%
-6%
-8%
-8%
-10%
2000
-10%
2002
2004
2006
2008
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Economic Outlook
8%
2
2010
2012
2014
Financial Crises Are Becoming More Frequent
10-Year Treasury & Fed Funds Target
Yield
21%
21%
10-Year Treasury Yield: Jan @ 1.85%
Fed Funds Target: Jan @ 0.25%
18%
Treasury yields are currently
near record low levels. We
believe QE and fiscal policy
uncertainty are the primary
drivers of ultra-low interest
rates.
15%
15%
12%
12%
9%
9%
6%
6%
3%
3%
0%
1971
0%
1976
1981
1986
1991
Source: IHS Global Insight and Wells Fargo Securities, LLC
Economic Outlook
18%
3
1996
2002
2007
2012
The Timing of The First Fed Rate Hike
The timing for the Fed’s first tightening move has been pushed even further out.
Interest rates may rise sooner than currently expected.
Consensus Fed Funds Rate Hike
Individual FOMC Member Forecasts
Appropriate Pace of Policy Firming
Appropriate Timing of Policy Firming
Target Federal Funds Rate at Year-End
Number of Participants
14
14
5.0%
September Release
12
December Release
4.5%
12
10
10
8
8
6
6
4
4
2
2
0
0
2013
2014
2015
4
4.5%
December Projection
4.0%
4.0%
3.5%
3.5%
3.0%
3.0%
2.5%
2.5%
2.0%
2.0%
1.5%
1.5%
1.0%
1.0%
0.5%
0.5%
0.0%
2016
Source: Federal Reserve Board and Wells Fargo Securities, LLC
Economic Outlook
5.0%
September Projection
2013
2014
2015
Longer Run
0.0%
Unemployment Forecast
Unemployment Forecast
Fed Central Tendency Forecast vs. Wells Fargo Forecast
12%
12%
Q4 Average
9%
Further reductions in the
unemployment rate may lead to
an earlier tightening in
monetary policy.
8.1% 7.8%
9%
7.6%
6%
6%
3%
3%
Central Tendency Forecast Range
Historical Unemployment Rate
Wells Fargo Economics Forecast
0%
0%
2000
2002
2004
2006
2008
Source: Federal Reserve Board and Wells Fargo Securities, LLC
Economic Outlook
5
2010
2012
2014
Federal Reserve Balance Sheet
Federal Reserve Balance Sheet
Trillions
$3.5
$3.0
$2.5
The massive expansion of the
Fed’s balance sheet has lifted
asset prices and has also given
the economy a boost. But all
magic comes with a price!
$3.5
Other: Jan @ $221.1B
Foreign Swaps: Jan @ $8.9B
PDCF & TAF
Commercial Paper & Money Market
Repos & Dis. Window: Jan @ $0.1B
Agencies & MBS: Jan @ $1,003.4B
Treasuries: Jan @ $1,662.9B
$2.5
$2.0
$2.0
$1.5
$1.5
$1.0
$1.0
$0.5
$0.5
$0.0
2007
2008
2009
2010
Source: Federal Reserve Board and Wells Fargo Securities, LLC
Economic Outlook
$3.0
6
2011
2012
$0.0
2013
U.S. Budget Deficit
Federal Budget Surplus or Deficit
12-Month Moving Sum in Billions of Dollars
$400
$400
$200
$200
$0
The federal budget deficit has
come down somewhat but
remains problematic.
$0
-$200
-$200
-$400
-$400
-$600
-$600
-$800
-$800
-$1,000
-$1,000
-$1,200
-$1,200
-$1,400
-$1,400
Surplus or Deficit: Dec @ -$1,060 Billion
-$1,600
-$1,600
00
01
02
03
04
05
06
07
08
Source: U.S. Department of the Treasury and Wells Fargo Securities, LLC
Economic Outlook
7
09
10
11
12
Labor Market
Unemployment Rate - SA vs. NSA
Percent
12.0%
12.0%
12-Month Rolling Average (NSA): Dec @ 8.1%
Unemployment Rate (SA): Dec @ 7.8%
10.0%
Unemployment is gradually
trending down, although much
of the improvement has come
from unusual forces, including
extraordinary seasonal factors
and sluggish labor force growth.
10.0%
8.0%
8.0%
6.0%
6.0%
4.0%
4.0%
2.0%
1994
2.0%
1997
2000
2003
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
8
2006
2009
2012
Labor Market
Employment Cycles
Percent Change from Cycle Peak
20%
20%
1948-1949 Cycle
1981-1982 Cycle
1989-1991 Cycle
2001 Cycle
2007-To-Date
Forecast
16%
12%
Job losses exceeded every postWorld War II downturn, and the
modest recovery to date has
been extremely disappointing.
16%
12%
8%
8%
4%
4%
0%
0%
-4%
-4%
-8%
-8%
0
6
12
18
24
30
36
42
48
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
9
54
60
66
72
78
84
Consumer Related
This year’s improved stock market has helped bolster consumer spending at a time when real
incomes are barely growing, and consumer confidence remains historically low.
Household Wealth
Consumer Confidence
Household Assets
Confidence vs. Retail Sales and Income
Trillions of Dollars
$90
$90
Conference Board Consumer Confidence, Yr/Yr % Chg. 3-MMA
210
Financial Assets: Q3 @ $53.6 Trillion
Household Real Estate Holdings: Q3 @ $17.2 Trillion
$80
$80
180
Other Tangible Assets: Q3 @ $7.4 Trillion
$70
$70
$60
$60
$50
$50
$40
$40
$30
$30
$20
$20
$10
$10
$0
$0
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
10
12%
150
8%
120
4%
90
0%
60
-4%
30
-8%
0
12
-12%
93
Source: U.S. Department of Commerce, Conference Board and Wells Fargo Securities, LLC
Economic Outlook
16%
Confidence Yr/Yr % Chg: Dec @ 0.5%
Confidence: Dec @ 65.1 (Left Axis)
Retail Sales Ex-Auto: Dec @ 3.7% (Right Axis)
Real Disposible Per Cap Inc.: Nov @ 1.1% (Right Axis)
10
95
97
99
01
03
05
07
09
11
13
Consumer Confidence
Future expectations took a hit on worries about the fiscal cliff and upcoming deficit
negotiations. Consumers feel better about current economic conditions.
Consumer Confidence
Present vs. Future Expectations
Conference Board Consumer Confidence
Consumer Confidence Index
Present Situation and Expectations Index
Conference Board
160
250
160
250
Present Situation Yr/Yr % Chg: Dec @ 35.3%
140
Expectations Yr/Yr % Chg: Dec @ -13.6%
140
200
120
120
100
100
80
80
60
60
91
93
95
97
99
01
03
05
07
09
11
150
100
100
50
0
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
13
Source: Conference Board and Wells Fargo Securities, LLC
Economic Outlook
150
0
20
89
200
40
20
87
Expectations: Dec @ 66.5
50
Confidence Yr/Yr % Chg: Dec @ 0.5%
Confidence: Dec @ 65.1
12-Month Moving Average: Dec @ 66.9
40
Present Situation: Dec @ 62.8
11
Wells Fargo/Gallup Small Business Index
Wells Fargo Small Business Survey
Overall Situation
Small business confidence rose
20 points in early January,
swiftly rebounding from the 28
point plunge the previous
quarter.
120
120
100
100
80
80
60
60
40
40
20
20
0
0
-20
-20
Overall Situation: Q1 @ 9
-40
-40
2004
2005
2006
2007
2008
2009
Source: Gallup, Wells Fargo Bank and Wells Fargo Securities, LLC
Economic Outlook
12
2010
2011
2012
2013
Homebuilding
Housing Starts
2.4
Multifamily Starts
2.1
1.8
Multifamily Forecast
Single-family Forecast
1.8
Forecast
1.5
We believe housing starts have
bottomed and will increase
modestly over the next few
years.
2.1
Single-family Starts
1.2
1.2
0.9
0.9
0.6
0.6
0.3
0.3
0.0
0.0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Economic Outlook
1.5
13
Thousands
Millions of Units
2.4
Housing Starts
Apartment construction accounts for much of the recent improvement in homebuilding.
We believe multifamily housing will account for a larger proportion of future starts.
Single & Multifamily Housing Starts
Multifamily Housing Starts
Single & Multifamily Housing Starts
Multifamily Housing Starts
SAAR, In Thousands, 3-Month Moving Average
SAAR, In Thousands, 3-Month Moving Average
2,000
600
1,800
540
1,600
480
1,400
420
1,200
360
1,000
300
800
240
600
180
400
500
120
Single-family Housing Starts: Dec @ 592K (Left Axis)
200
0
0
89
91
93
95
97
99
01
03
05
07
09
11
160
300
120
200
80
100
40
0
13
0
87
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Economic Outlook
400
60
Multifamily Housing Starts: Dec @ 306K (Right Axis)
87
200
5+ Units: Dec @ 293.0 (Left Axis)
2-4 Units: Dec @ 13.3 (Right Axis)
14
89
91
93
95
97
99
01
03
05
07
09
11
13
Home Prices
Home Prices
Year-over-Year Percentage Change
24%
24%
16%
Home prices have firmed
recently as foreclosures have
become a smaller portion of
overall sales. Prices will likely
fluctuate along a low trajectory
until more foreclosures clear
through the pipeline.
16%
8%
8%
0%
0%
-8%
-8%
-16%
-16%
Median Sale Price: Dec @ $180,300
Median Sales Price 3-M Mov. Avg.: Dec @ 10.0%
FHFA (OFHEO) Purchase Only Index: Nov @ 5.6%
S&P Case-Shiller Composite 10: Oct @ 3.4%
-24%
-24%
-32%
-32%
96
98
00
02
04
06
08
10
12
Source: Federal Housing Finance Agency, National Association of Realtors, S&P Corp. and Wells Fargo Securities, LLC
Economic Outlook
15
NAHB/Wells Fargo Housing Market Index
NAHB/Wells Fargo Housing Market Index
Diffusion Index
Homebuilder sentiment has
risen significantly over the past
year, but it is still at a relatively
low level.
90
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
NAHB Housing Market Index: Jan @ 47.0
0
0
87
89
91
93
95
97
99
01
03
05
Source: National Association of Home Builders and Wells Fargo Securities, LLC
Economic Outlook
16
07
09
11
13
Supply & Demand
Apartments have seen the greatest improvement in operating fundamentals.
Apartment
Industrial
Apartment Supply & Demand
Industrial Supply & Demand
Percent, Thousands of Units
Percent, Millions of Square Feet
9%
100
14%
60
8%
75
12%
40
7%
50
10%
20
6%
25
8%
0
5%
0
6%
-20
4%
-25
4%
-40
-50
2%
-75
0%
Apartment Net Completions: Q3 @ 13,531 Units (Right Axis)
Apartment Net Absorption: Q3 @ 23,063 Units (Right Axis)
Apartment Vacancy Rate: Q3 @ 4.6% (Left Axis)
3%
2%
05
06
07
08
09
10
11
12
17
-60
-80
2005
Source: Reis, Inc., PPR and Wells Fargo Securities, LLC
Economic Outlook
Industrial Net Completions: Q3 @ -5.0M SF (Right Axis)
Industrial Net Absorption: Q3 @ 15.0M SF (Right Axis)
Industrial Vacancy Rate: Q3 @ 8.7% (Left Axis)
2006
2007
2008
2009
2010
2011
2012
Supply & Demand
Office vacancy rates have leveled off but absorption remains relatively weak.
Office
Retail
Office Supply & Demand
Retail Supply & Demand
Percent, Millions of Square Feet
Percent, Millions of Square Feet
21%
30
14%
20
Retail Net Completions: Q3 @ 0.6M SF (Right Axis)
Retail Net Absorption: Q3 @ 1.4M SF (Right Axis)
Retail Vacancy Rate: Q3 @ 10.8% (Left Axis)
18%
20
12%
15%
10
10%
12%
0
8%
8
9%
-10
6%
4
6%
-20
4%
0
-30
2%
-4
-40
0%
Office Net Completions: Q3 @ 2.8M SF (Right Axis)
Office Net Absorption: Q3 @ 5.0M SF (Right Axis)
Office Vacancy Rate: Q3 @ 17.1% (Left Axis)
3%
0%
2005
2006
2007
2008
2009
2010
2011
2012
Economic Outlook
12
-8
2005
Source: Reis, Inc. and Wells Fargo Securities, LLC
18
16
2006
2007
2008
2009
2010
2011
2012
Alabama & Birmingham
Alabama Employment Picture
Alabama Employment: Percent of Previous Peak
Percent
Nonfarm payrolls remain 6.8
percentage points below their
prerecession peak.
101%
101%
100%
100%
99%
99%
98%
98%
97%
97%
96%
96%
95%
95%
94%
94%
93%
93%
Percent of Previous Peak: Dec @ 93.2%
92%
92%
69
73
77
81
85
89
93
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
20
97
01
05
09
Alabama Employment Growth by Industry
Alabama Employment Growth by Industry
3-Month Moving Averages, December 2012
10%
Percent of Total Employees
10% to 20%
5 % to 10%
Less than 5%
8%
6%
3-Month Annualized Percent Change
Expanding
Recovering
Prof. & Bus. Svcs.
Other Services
4%
Construction
Manufacturing
Educ. & Health Svcs.
2%
Government
Financial Activities
0%
Trade, Trans. & Utilites
-2%
-4%
-6%
Leisure and Hospitality
-8%
Information
Decelerating
Contracting
-10%
-8%
-6%
-4%
-2%
0%
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
2%
Year-over-Year Percent Change
21
4%
6%
8%
Alabama – Labor Market
Employment growth may be slightly better than previously expected. The unemployment rate
is relatively low and continues to fall.
Unemployment Rate
Employment
Alabama Nonfarm Employment
Alabama Unemployment Rate
3-Month Moving Averages
Seasonally Adjusted
6%
6%
12%
12%
Unemployment Rate: Dec @ 7.1%
4%
4%
2%
2%
0%
0%
-2%
-2%
-4%
-4%
-6%
-6%
-8%
-8%
-10%
10%
-10%
Year-over-Year Percent Change: Dec @ 0.6%
QCEW: Year-over-Year Percent Change: Jun @ 0.8%
Household: Year-over-Year Percent Change: Dec @ 0.0%
3-Month Annual Rate: Dec @ 1.0%
-12%
12-Month Moving Average: Dec @ 7.7%
-14%
92
94
96
98
00
02
04
06
08
10
8%
6%
6%
4%
4%
2%
12
2%
90
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
8%
-12%
-14%
90
10%
22
92
94
96
98
00
02
04
06
08
10
12
Alabama – Housing Market
Home prices in Alabama remain well below the national average. Homebuilding remains slow.
Home Prices
Housing Permits
CoreLogic Home Price Index: AL vs. US
Alabama Housing Permits
Index, 2000=100, Not Seasonally Adjusted
200
200
Thousands of Permits, Seasonally Adjusted Annual Rate
40
United States: Nov @ 145.2
180
35
180
160
160
140
140
120
120
100
100
80
60
92
94
96
98
00
02
04
06
08
10
25
25
20
20
15
15
10
10
5
0
12
0
90
Source: CoreLogic, U.S. Department of Commerce and Wells Fargo Securities, LLC
Economic Outlook
30
5
60
90
35
Single-Family Average (1998 to 2003): 17,013
30
80
40
Single-Family: Nov @ 6,972
Single-Family, 12-Month Moving Avg.: Nov @ 8,129
Multi-Family, 12-Month Moving Avg.: Nov @ 3,302
Alabama: Nov @ 120.2
23
92
94
96
98
00
02
04
06
08
10
12
Birmingham – Labor Market
Employment growth has been weak recently, although the unemployment continues to decline.
Unemployment Rate
Employment
Birmingham MSA Nonfarm Employment
Birmingham MSA Unemployment Rate
3-Month Moving Averages
Seasonally Adjusted
6%
6%
12%
12%
Unemployment Rate: Nov @ 6.8%
12-Month Moving Average: Nov @ 7.0%
3%
3%
0%
0%
-3%
-3%
-6%
-6%
-9%
10%
-9%
3-Month Annual Rate: Nov @ 0.6%
Year-over-Year Percent Change: Nov @ 0.0%
Household: Yr/Yr Percent Change: Nov @ -0.2%
-12%
-12%
92
94
96
98
00
02
04
06
08
10
8%
8%
6%
6%
4%
4%
2%
12
2%
90
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Economic Outlook
10%
24
92
94
96
98
00
02
04
06
08
10
12
Birmingham – Housing Market
Birmingham’s home prices have weakened, homebuilding remains relatively slow.
Home Prices
Housing Permits
Birmingham MSA Housing Permits
CoreLogic Home Price Index: Birmingham, AL
Index, 2000=100, Not Seasonally Adjusted
Thousands of Permits, Seasonally Adjusted Annual Rate
200
200
12
12
Single-Family: Nov @ 1,476
Birmingham, AL: Nov @ 115.7
United States: Nov @ 145.2
180
Single-Family, 12-Month Mov. Avg.: Nov @ 1,800
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
90
92
94
96
98
00
02
04
06
08
10
10
8
8
6
6
4
4
2
2
0
12
0
90
Source: CoreLogic, U.S. Department of Commerce and Wells Fargo Securities, LLC
Economic Outlook
Multi-Family, 12-Month Mov. Avg.: Nov @ 1,424
10
25
92
94
96
98
00
02
04
06
08
10
12
Birmingham – Apartment CRE
Apartment vacancy rates continue to trend lower, and rent continues to rise.
Supply & Demand
Rent
Birmingham Apartment Supply & Demand
Birmingham Apartment Effective Rent
Percent, Thousands of Units
Quarter-over-Quarter Percent Change
11.0%
1.00
2.0%
2.0%
1.0%
1.0%
0.0%
0.0%
-1.0%
-1.0%
-2.0%
-2.0%
0.75
10.0%
0.50
9.0%
0.25
8.0%
0.00
7.0%
-0.25
-0.50
6.0%
-0.75
Apartment Completions: Q3 @ 108 Units (Right Axis)
5.0%
Apartment Net Absorption: Q3 @ 220 Units (Right Axis)
-1.00
Apartment Effective Rent Growth: Q3 @ 0.8%
Apartment Vacancy Rate: Q3 @ 6.0% (Left Axis)
4.0%
-1.25
2008
2009
2010
2011
-3.0%
2012
Source: Reis, Inc., and Wells Fargo Securities, LLC
Economic Outlook
-3.0%
2008
26
2009
2010
2011
2012
Birmingham – Retail CRE
The retail sector has not regained momentum. Vacancy rates have held steady around 15
percent.
Supply & Demand
Rent
Birmingham Retail Supply & Demand
Birmingham Retail Effective Rent
Percent, Thousands of Square Feet
Quarter-over-Quarter Percent Change
20%
200
1.5%
1.5%
Retail Effective Rent Growth: Q3 @ 0.0%
1.0%
1.0%
0.5%
0.5%
0.0%
0.0%
-0.5%
-0.5%
-1.0%
-1.0%
-1.5%
-1.5%
-2.0%
-2.0%
-150
-2.5%
-2.5%
-200
-3.0%
150
18%
100
16%
50
14%
0
-50
12%
-100
10%
Retail Completions: Q3 @ 0 SF (Right Axis)
Retail Net Absorption: Q3 @ 6,000 SF (Right Axis)
Retail Vacancy Rate: Q3 @ 15.3% (Left Axis)
8%
2008
2009
2010
2011
2012
Source: Reis, Inc., and Wells Fargo Securities, LLC
Economic Outlook
-3.0%
2008
27
2009
2010
2011
2012
Birmingham – Office CRE
The office sector has yet to see a recovery. All measures of growth remain weak.
Supply & Demand
Rent
Birmingham Office Supply & Demand
Birmingham Office Effective Rent
Percent, Thousands of Square Feet
Quarter-over-Quarter Percent Change
20%
750
2.0%
2.0%
16%
500
1.0%
1.0%
12%
250
0.0%
0.0%
0
-1.0%
-1.0%
-250
-2.0%
-2.0%
-500
-3.0%
8%
4%
Office Completions: Q3 @ 0 SF (Right Axis)
Office Net Absorption: Q3 @ -1,000 SF (Right Axis)
Office Vacancy Rate: Q3 @ 12.1% (Left Axis)
0%
2008
2009
2010
2011
Office Effective Rent Growth: Q3 @ 0.1%
2012
Source: Reis, Inc., and Wells Fargo Securities, LLC
Economic Outlook
-3.0%
2008
28
2009
2010
2011
2012
Birmingham – Warehouse CRE
Industrial vacancies have begun to trend lower, and effective rent has risen the past two
quarters.
Supply & Demand
Rent
Birmingham Warehouse Supply & Demand
Percent, Thousands of Square Feet
14%
Birmingham Warehouse Effective Rent
13%
1,000
12%
500
11%
0
10%
-500
9%
8%
Quarter-over-Quarter Percent Change
1,500
4.0%
4.0%
2.0%
2.0%
0.0%
0.0%
-2.0%
-2.0%
-1,000
Warehouse Completions: Q3 @ -403 SF (Right Axis)
-1,500
Warehouse Net Absorption: Q3 @ 112 SF (Right Axis)
Warehouse Effective Rent Growth: Q3 @ 0.5%
Warehouse Vacancy Rate: Q3 @ 10.8% (Left Axis)
7%
-2,000
2008
2009
2010
2011
-4.0%
2012
Source: PPR and Wells Fargo Securities, LLC
Economic Outlook
-4.0%
2008
29
2009
2010
2011
2012
Issues to Watch
European
Debt Crisis
Credit Availability
& Financial Reform
Fiscal Policy
Uncertainty
Deleveraging
China
Monetary Policy
Geopolitical
Tensions
Economic Outlook
Energy/Commodity
Price Swings
30
Our Forecast
Wells Fargo U.S. Economic Forecast
Actual
Forecast
2012
Real Gross Domestic Product
Personal Consumption
Inflation Indicators
PCE Deflator
1
2012
Forecast
2013
2014
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2.0
1.3
3.1
1.0
1.0
1.7
2.2
2.4
2.4
1.8
2.2
1.7
2.4
2.4
1.5
1.6
2.8
1.1
1.2
1.4
1.6
1.8
2.5
1.9
1.6
1.6
2.4
1.6
1.5
1.5
1.1
1.3
1.3
1.4
1.9
2.4
1.7
1.3
1.9
2.8
1.9
1.7
1.9
1.7
2.0
1.9
1.9
1.6
3.1
2.1
1.8
2.1
2
Consumer Price Index
Industrial Production
1
Corporate Profits Before Taxes
Trade Weighted Dollar Index
Unemployment Rate
Housing Starts
Actual
2010
2011
2013
3
4
Quarter-End Interest Rates 5
Federal Funds Target Rate
2
5.9
2.4
0.3
-0.5
2.1
3.5
4.1
4.1
5.4
4.1
3.6
2.0
3.8
10.3
6.7
7.5
5.0
4.8
5.2
5.4
5.8
26.8
7.3
7.3
5.3
6.5
72.7
74.5
72.7
73.3
74.0
75.0
76.0
77.0
75.4
70.9
73.5
75.5
74.5
8.3
8.2
8.0
7.8
7.7
7.8
7.8
7.8
9.6
8.9
8.1
7.8
7.6
0.71
0.74
0.77
0.87
0.90
0.96
1.02
1.08
0.59
0.61
0.78
0.99
1.17
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
Conventional Mortgage Rate
3.95
3.68
3.50
3.35
3.40
3.40
3.45
3.50
4.69
4.46
3.68
3.44
3.80
10 Year Note
2.23
1.67
1.65
1.78
1.80
1.90
2.00
2.10
3.22
2.78
1.80
1.95
2.50
Forecast as of: January 9, 2013
1
C ompound Annual Growth Rate Quarter-over-Quarter
2
Year-over-Year Percentage C hange
3
Federal Reserve Major C urrency Index, 1973=100 - Quarter End
4
Millions of Units
5
Annual Numbers Represent Averages
Economic Outlook
31
Appendix
Wells Fargo Economics Group Publications
A Sampling of Our Recent Special, Regional & Industry Commentary
Recent Special Commentary
Date
January-15
January-15
January-14
January-09
January-04
January-02
To view any of our past research
please visit:
http://www.wellsfargo.com/
economics
To join any of our research
distribution lists please visit:
http://www.wellsfargo.com/
economicsemail
Authors
Silvia
Vitner
Aleman
Silvia & Swankoski
Silvia & Watt
Silvia & Brown
December-19
December-19
December-18
December-17
December-13
December-11
December-03
Texas: Growth in a Weakening World Environment
Canada: Economic Rock Star Faces Big Challenges
Fiscal Cliff and True Reform
Housing Chartbook: November 2012
2013 Economic Outlook
Commercial Real Estate Chartbook: Quarter 3
Industrial Production and Business Spending Outlook
Aleman & Griffiths
Quinlan
Silvia
Vitner, Khan & Silverman
November-27
November-19
November-16
November-13
November-09
November-07
November-01
Georgia Economic Outlook: November 2012
The Economic Impact of the Fiscal Cliff: An Update
California's Economic Recovery Rolled On In October
Income Tax Analysis: Who Pays?
Global Chartbook: November 2012
The Fiscal Cliff Debate In A Post-Election World
North Carolina Economic Outlook
Vitner & Silverman
Silvia, Brown & Swankoski
Vitner
Silvia & Brown
Bryson, Aleman & Quinlan
Silvia & Brown
Vitner, Brown & Watt
October-29
October-24
October-18
October-18
October-12
October-08
October-02
Housing Data Wrap-Up: October 2012
2012 Holiday Sales Outlook
U.S. Fiscal Primer III: Federal Revenues
Retirement in America: Extending the Finish Line
The Great Unemployment Rate Debate
The Unemployment Rate: Seasonality and Sampling
Housing Chartbook: September 2012
Vitner & Khan
Aleman, Iqubal & Brown
Silvia, Bryson & Brown
Bryson, Iqbal & Watt
Silvia, Watt & Swankoski
Silvia, Iqbal & Watt
Vitner, Khan & Silverman
September-25
September-17
September-10
September-06
September-05
Local Budgets Under Pressure: A Fiscal Outlook
Global Chartbook: September 2012
U.S. Fiscal Primer II: Federal Government Spending
Commercial Real Estate Chartbook: Quarter 2
Brazilian Economy Slows Down; Better Times Ahead
Silvia & Brown
Bryson, Aleman & Quinlan
Silvia, Bryson & Brown
Vitner & Khan
Aleman
Mexico: Thanks to Auto Demand
California's Economy: Gaining Momentum
Real GDP in Eurozone Slumped in Q2
Rocky Mountain Summit: July 2012
Orders and Production: No Time for Complacency
Aleman
Vitner & Watt
Bryson
Silvia
Silvia, Quinlan & Watt
August-22
August-15
August-14
August-09
August-06
Economic Outlook
Title
A Decision Maker's View of Fiscal Cliff Policy
California's Broadening Economic Recovery
Peruvian Economy: Still Going Strong
National Health Spending: Secular Growth Cyclical Slowdown
Employment: So, Is This It?
A Fiscal Cliff Resolution? Not Really
33
Vitner, Khan & Silverman
Quinlan & Watt
Wells Fargo Securities, LLC Economics Group
Global Head of Research and Economics
Economists
Azhar Iqbal, Econometrician………………………………[email protected]
Diane Schumaker-Krieg
………………… …[email protected]
Global Head of Research & Economics
……
Tim Quinlan, Economist …………………………………[email protected]
Chief Economist
John Silvia
…
Michael A. Brown, Economist ………………… [email protected]
...................... …
Economic Analysts
[email protected]
.
Sarah Watt, Economic Analyst …………………………… [email protected]
Senior Economists
Mark Vitner, Senior Economist……………....………. .
Jay Bryson, Global Economist
Anika Khan, Senior Economist
.
[email protected]
Zachary Griffiths, Economic Analyst
…………………....………[email protected]
Eugenio Aleman, Senior Economist
Sam Bullard, Senior Economist
Kaylyn Swankoski, Economic Analyst
Sara Silverman, Economic Analyst
……………[email protected]
[email protected]
[email protected]
Administrative Assistants
Peg Gavin, Executive Assistant.
…………………………[email protected]
.…
[email protected]
Cyndi Flowe, Administrative Assistant
. [email protected]
[email protected]
[email protected]
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Economic Outlook
34