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Article: National Economic Conditions - 3rd Quarter 2010
For the fifth consecutive quarter the U.S. Economy showed positive growth. In September, however, the Federal Open Market Committee ("FOMC") cited a number of factors that were responsible for the slow rate of growth experienced during the third quarter, including:
Despite this, the FOMC said that the recovery from the recent recession is moving forward slowly and will pick up speed gradually during the next year, due in large part to the recovery in economic activity over the medium-term outlook period as a result of supportive monetary policy, further improvements in financial conditions, and greater household and business confidence. 1 GROSS DOMESTIC PRODUCT The most commonly cited measure of general economic conditions is growth in real GDP. Real GDP is the real (adjusted for inflation) dollar value of all goods and services produced within the country in a given period. The Bureau of Economic Analysis ("BEA") quarterly measure of real GDP is seasonally adjusted at annual rates (SAAR), which means that the figure has been annualized with seasonal effects removed. Real GDP increased 2.0% (SAAR) in the third quarter of 2010 from $13,194.9 billion to $13,260.7 billion after changes of 5.0%, 3.7%, and 1.7% during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. Real GDP decreased 2.6% in 2009, after increasing 2.7%, 1.9%, and 0.0% in 2006, 2007, and 2008, respectively.2 In June, the FOMC predicted that real GDP growth would have a central tendency between 3.0% and 3.5%, between 3.5% and 4.2%, and between 3.5% and 4.5% during 2010, 2011, and 2012, respectively. In its long-run projection,3 the FOMC expected real GDP growth would have central tendencies between 2.5% and 2.8%.4 The third quarter Philadelphia Federal Reserve Survey of Professional Forecasters (the "Philly Survey") predicted real GDP growth of 2.8%, 2.3%, and 3.1% during the fourth quarter of 2010 and first and second quarters of 2011, respectively. The Philly Survey further predicted growth of 2.9%, 2.7%, 3.6%, and 2.6% during 2010, 2011, 2012, and 2013, respectively.5 The October Wall Street Journal survey of economic forecasters (the "WSJ Survey") predicted real GDP growth of 2.3%, 2.4%, and 2.7% in the fourth quarter of 2010 and first and second quarters of 2011, respectively. The WSJ Survey further predicted growth of 2.5% during 2010 and 2.8% during 2011.6
PRICES AND INFLATION Inflation is the ongoing increase in the general level of prices of goods and services in an economy. The Consumer Price Index (CPI) is the most commonly cited measure of inflation. The CPI measures the price of a standard market basket of goods designed to be representative of the items purchased by a typical urban consumer. The CPI increased approximately 0.7% during the third quarter of 2010 from 216.9 to 218.4 (1982-1984=100, seasonally adjusted) after increases of 0.6% and 0.1%, and a decrease of 0.4%, in the fourth quarter of 2009 and first and second quarters of 2010, respectively. The third quarter increase put the CPI at an increase of 1.1% during the last twelve months, compared to growth during 2006, 2007, 2008, and 2009 of 3.2%, 2.8%, 3.8%, and -0.4% respectively.8 The Philly Survey anticipates growth in the CPI between 1.6% and 1.9% (SAAR) for each quarter from the fourth quarter of 2010 to the third quarter of 2011. The Philly Survey predicted CPI growth of 0.9%, 1.8%, and 2.1% in 2010, 2011, and 2012 respectively.9 The WSJ Survey predicted the CPI would grow 1.2%, 1.7%, and 1.8% during the last twelve months ended December 2010, June 2011, and December 2011, respectively.10 Economists at Bank of America/Merrill Lynch ("BAC economists") expected the CPI to increase 1.6% (SAAR) and 1.0% during 2010 and 2011, respectively.11 The CPI for food increased 0.4% during the third quarter of 2010 from 219.4 to 220.3 (1982-1984=100) after changes of 0.2%, 0.6%, and 0.2% in the fourth quarter of 2009 and first and second quarters of 2010, respectively. The CPI for food increased 1.4% during the last twelve months, after changes of 2.4%, 4.0%, 5.5%, and 1.8% in 2006, 2007, 2008, and 2009, respectively.12 The CPI for energy increased 5.6% during the third quarter of 2010 from 199.1 to 210.3 (1982-1984=100) after changes of 3.6%, 2.2%, and -7.1% during the fourth quarter of 2009 and first and second quarters of 2010, respectively. The third quarter increase put growth in the CPI for energy at 3.9% during the last twelve months. The CPI for energy had changes of 11.2%, 5.5%, 13.9%, and -18.4% in 2006, 2007, 2008, and 2009, respectively.13
During the September meeting, the FOMC projected that inflation would continue to be restrained, with the staff's previous projections (which resulted in a wide range of projections) for headline and core Personal Consumption Expenditure ("PCE") inflation remaining relatively unchanged.15 The Producer Price Index (PPI) is another commonly cited measure of inflation. The PPI measures the price of a standard market basket of goods designed to be representative of the items purchased by a typical producer. The PPI for all finished goods increased 1.0% during the third quarter of 2010 from 178.4 to 180.2 (1982=100), after changes of 2.2%, 1.6%, and -0.9% in the fourth quarter of 2009 and first and second quarters of 2010, respectively. The PPI for all finished goods increased 4.0% during the last twelve months, while the index had changes of 3.0%, 3.9%, 6.3%, and -2.6% during 2006, 2007, 2008, and 2009, respectively.16
The average price per barrel of oil decreased during the third quarter of 2010 from an average of $75.34 in June 2010 to an average of $75.24 in September 2010. The price increased 8.4% during the last twelve months (average of September 2009 compared to average of September 2010).18 The WSJ Survey predicted the price per barrel of oil would be $79.78, $81.20, and $83.18 by December 31, 2010, June 30, 2011, and December 31, 2011, respectively.19 IBISWorld predicted that the price of oil would increase 31.3% in 2010 followed by an average annual rate of 3.7% between 2010 and 2016.20
TRADE DEFICIT Real net exports decreased from -$449.0 billion (SAAR) to -$514.9 billion during the third quarter of 2010. The second quarter level of net exports was preceded by real net exports of -$390.8 billion, -$330.1 billion, and -$338.4 billion in the third and fourth quarters of 2009 and first quarter in 2010, respectively. Historically, real net exports had increased (become less negative) with levels of -$729.2 billion, -$654.9 billion, -$504.1 billion, and -$363.0 billion during 2006, 2007, 2008, and 2009, respectively.22 The Philly Survey predicted real net exports would increase from -$424.4 billion in the third quarter to -$409.7 billion in the fourth quarter of 2010, then steadily decrease to -$428.3 billion in the third quarter of 2011. The Philly Survey further forecasted real net exports to be -$400.8 billion and -$421.2 billion during 2010 and 2011, respectively.23 BAC economists predicted that real net exports would reach -$417.5 billion and -$438.5 billion during 2010 and 2011, respectively.24
INTEREST RATES Interest rates remained stable or decreased during the third quarter of 2010. The discount window rate remained constant at 0.75%. The 0.75% rate was an increase from the rate during 2009 of 0.50%, a historically low rate that was the result of a downward trend that began in July 2007 (6.25%).26 The federal funds rate increased 1 basis point during the third quarter from 0.18% to 0.19%. The rate had increased 4 basis points during the last twelve months.27 The FOMC announced in September it would keep its target for the federal funds rate between 0.00% and 0.25% because it:
According to the WSJ Survey,
Some economists believe the FOMC will increase its target for the federal funds rate at a later date than previously expected. The WSJ Survey, which predicted in June that the federal funds rate would increase to 0.34% by December 31, 2010 (down from the 0.59% projected for December 31, 2010 in May), predicted in September that the federal funds rate would reach only 0.16%, and would reach 0.35% by June 30, 2011 and 0.93% by December 31, 2011. Approximately 56% of the survey's participants predicted that the FOMC would not raise rates until the first quarter of 2011 or later.30 BAC economists predicted that the first federal funds rate target increase would not occur until the second of third quarter of 2012.31 The yield to maturity on 20-year U.S. Treasury bonds decreased 48 basis points in the third quarter of 2010 from 3.95% to 3.47%. The yield decreased 67 basis points during the last twelve months.32 The average yield to maturity on Aaa rated (Moody's) corporate bonds decreased 35 basis points in the third quarter from 4.88% to 4.53%. The yield decreased 60 basis points during the last twelve months.33
FINANCIAL MARKETS The Dow Jones Industrial Average (DJIA) increased 10.4% in the third quarter of 2010 from 9,774.02 to 10,788.05 after changes of 7.4%, 4.1%, and -10.0% during the fourth quarter of 2009 and first and second quarter of 2010, respectively. The DJIA increased 11.1% during the last twelve months relative to changes of 16.3%, 6.4%, -33.8%, and 18.8% during 2006, 2007, 2008, and 2009, respectively. The DJIA peaked on October 11, 2007 at 14,279.96 and reached a low of 6,440.08 on March 9, 2009.35 The S&P 500 closed the third quarter at 1,141.20, a 10.7% increase from the second quarter close of 1,030.71. The third quarter close came after changes of 5.5%, 4.9%, and -11.9% during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The index increased 8.0% during the last twelve months. Historically, the index had changes of 13.6%, 3.5%, -38.5%, and 23.5% in 2006, 2007, 2008, and 2009, respectively. The S&P 500 hit a high of 1,576.09 on October 11, 2007, and a recent low of 666.79 on March 6, 2009.36 The NASDAQ Composite Index increased 12.3% in the third quarter of 2010 from 2,109.24 to 2,368.62. The third quarter increase came after changes of 6.9%, 5.7%, and -12.0%, during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The index increased 11.6% during last twelve months. The NASDAQ had changes of 9.5%, 9.8%, -40.5%, and 43.9% in 2006, 2007, 2008, and 2009, respectively. The NASDAQ reached its recent high of 2,861.51 on October 31, 2007 and a recent low of 1,265.52 on March 9, 2009.37
HOUSING, CONSTRUCTION, AND REAL ESTATE Average mortgage rates for 30 year fixed mortgages decreased 39 basis points in the third quarter of 2010 from 4.74% to 4.35%, its lowest rate recorded to date for a given month by the Federal Reserve (records date back to April 1971). The average rate decreased 71 basis points during the last twelve months.39 IBISWorld predicted that the average mortgage rate would be 4.90%, 5.24%, 5.59%, 5.92%, 5.97%, and 6.39% from 2010 through 2015, respectively.40
Despite the low cost of financing, the housing market remained relatively depressed. Housing starts increased 13.2% during the third quarter of 2010 from 539,000 (SAAR) to 610,000. This increase came after changes of --1.7%, 10.1%, and -15.0% during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. Housing starts increased 4.1% during the last twelve months. However, housing starts decreased 17.3%, 37.1%, 46.0% during 2006, 2007, and 2008, respectively, but increased 2.9% during 2009.42 The Philly Survey predicted 650,000 housing starts in the fourth quarter of 2010 with an increase to 760,000 starts by the third quarter of 2011. The Philly Survey went on to predict annual figures for housing starts of 620,000 and 760,000 houses for 2010 and 2011, respectively. Housing starts hit its recent peak at 2.3 million in January 2006.43 The WSJ Survey predicted housing starts would reach 660,000 and 771,000 in 2010 and 2011, respectively.44 BAC economists predicted that housing starts would reach 597,000 by 2010 and 640,000 by 2011.45 Houses sold decreased by 1.0% from 310,000 (SAAR) to 307,000 during the third quarter. This decrease came after changes of -9.0%, 7.9%, and -19.3% during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The May 2010 figure of 267,000 was the lowest in recorded history (data dates back to January 1959). Houses sold decreased 21.5% during the last twelve months compared to decreases of 18.1%, 26.2%, 37.5%, and 22.7% during 2006, 2007, 2008, and 2009, respectively.46 Houses for sale decreased 3.3% from 211,000 (SAAR) to 204,000 during the third quarter of 2010 after 8.3%, 1.3%, and 7.5% decreases in the fourth quarter of 2009 and the first and second quarters of 2010, respectively. Third quarter totals of 204,000 houses for sale was the lowest since July 1968 (203,000). Houses for sale decreased 19.0% during the last twelve months, compared to changes of 4.3%, -7.6%, -29.0%, and -34.1% in 2006, 2007, 2008, and 2009, respectively.47 The months of supply for houses represents the number of months it would take to sell all of the houses currently for sale at the current sales rate (seasonally adjusted). The months of supply decreased during the third quarter of 2010 from 8.2 to 8.0.48 The months of supply increased 3.9% during the last twelve months,49 compared to changes of 32.7%, 47.7%, 16.7%, and -30.4% from December to December of the years from 2005 to 2009, respectively.50
UNEMPLOYMENT The unemployment rate decreased ten basis points to 9.6% during the third quarter of 2010. This decrease came after 30, -30, and 0 basis point changes during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The rate also dropped ten basis points during the last twelve months and had annual changes of -50, 0, 120, and 350 basis points during the years from 2006 to 2009, respectively.52 In June, the FOMC predicted that the rate would have central tendencies between 9.2% and 9.5%, between 8.3% and 8.7%, and between 7.1% and 7.5% during 2010, 2011, and 2012, respectively. The long-run projection of the FOMC predicted the central tendency of unemployment between 5.0% and 5.3%.53 The Philly Survey predicted unemployment rates of 9.6%, 8.9%, 8.0%, and 7.1% during 2010, 2011, 2012, and 2013, respectively.54 The WSJ Survey predicted the unemployment rate would be 9.6%, 9.3%, and 9.0% by December 2010, June 2011, and December 2011, respectively.55 BAC economists predicted the unemployment rate to be 9.7% and 10.0% in 2010 and 2011, respectively.56
FORWARD LOOKING INDICATORS The Index of Consumer Sentiment (ICS) is a measure of overall consumer expectations and a predictor of consumer spending and economic conditions. A higher ICS indicates that consumers have higher confidence in the economy and are consequently more likely to spend. The ICS was 68.2 (1966=100) in September 2010, a 10.3% decrease from June 2010 (76.0). This decrease followed changes of -1.4%, 1.5%, and 3.3% during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. During the last twelve months, the ICS decreased 7.2%. The ICS had changes of 0.2%, -17.7%, -20.4%, and 20.6% in 2006, 2007, 2008, and 2009, respectively.58
The ICS's Chief Economist said about the September 2010 results:
The Associated Press noted that a lack of consumer confidence has led to less consumer borrowing:
The Conference Board Leading Economic Index (LEI) is a signalling measure of the business cycle in which cyclical turning points of the LEI have historically taken place "before those in aggregate economic activity." The LEI is an average of ten "leading" indicators.62 The LEI increased 0.5% in the third quarter of 2010 from 109.8 to 110.4 (2004=100). This increase follows changes of 2.8%, 2.2%, and 0.3% in the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The index increased 6.7% during the last twelve months.63
The Conference Board opined about the economic conditions specific to the near future by adding:
According to the Wall Street Journal,
INDUSTRIAL PRODUCTION The Total Industrial Production Index, a measure of total output from industrial companies, increased 1.17% during the third quarter of 2010 from 92.2 to 93.3 (2007=100, seasonally adjusted), after changes of 1.70%, 1.73%, and 1.70% in the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The index increased 6.5% during the last twelve months. The index changed 2.2%, 2.7%, -3.3%, and -9.3% in 2006, 2007, 2008, and 2009, respectively.67 The Philly Survey predicted the index would increase 5.5% and 4.3% during 2010 and 2011, respectively.68 BAC economists predicted that the index would have changes of 5.5% and 4.1% in 2010 and 2011, respectively.69 The Capacity Utilization Rate measures the usage of the total production capacity of select U.S. industries (71 in manufacturing, 16 in mining, and 2 in utilities). The capacity utilization rate is calculated by dividing the seasonally adjusted output index by the capacity index of these industries.70 The capacity utilization rate increased approximately 90 basis points from 73.8% to 74.7% during the third quarter of 2010 after 129, 135, and 136 basis point increases during the fourth quarter of 2009 and the first and second quarters of 2010, respectively. The capacity utilization rate increased 498 basis points during the last twelve months. Historically, the rate had changed 62, 54, -337, and -789 basis points during 2006, 2007, 2008, and 2009, respectively.71 BAC economists predicted that the rate would reach 75.3% in the fourth quarter of 2010 and would slowly increase to 78.2% by the fourth quarter of 2011. BAC economists further predicted that capacity utilization would reach 74.1%, and 77.0% during 2010 and 2011, respectively.72
DISCLAIMER STATEMENT: This Decosimo Advisory Services National Economic Conditions report summarizes general economic conditions as of September 30, 2010. It was prepared as of October 31, 2010. Information was gathered from sources we believed to be reliable using data available as of the date shown in the respective footnote. DAS accepts no responsibility for the accuracy of information provided in this summary. No statement in this report is to be considered advice for any purpose. It is the responsibility of the user of this report to verify the accuracy of the information herein and to relate the information contained herein to the particular application of its use. Tables of Data referenced in footnotes are available on request from Decosimo Advisory Services. 1 Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, September 21, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100921.pdf, accessed 11/1/10. 2 U.S. Department of Commerce Bureau of Economic Analysis. Historical Table 1.1.1. Percent Change from Preceding Period in Real Gross Domestic Product and Historical Table 1.1.6. Real Gross Domestic Product, Chained Dollars. http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y, accessed 11/1/10. See Table NEC-1, available on request from DAS. 3 According to: Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100623.pdf, accessed 11/1/10: Longer-run projections represent each participant's assessment of the rate to which each variable would be expected to converge over time under appropriate monetary policy and in the absence of further shocks...Participants generally anticipated that, in light of the severity of the economic downturn, it would take some time for the economy to converge fully to its longer-run path as characterized by sustainable rates of output growth, unemployment, and inflation consistent with participants' interpretation of the Federal Reserve's dual objectives; most expected the convergence process to take no more than five to six years. Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100623.pdf, accessed 11/1/10. 4 Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100623.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 5 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1//10. See Table NEC-2, available on request from DAS. 6 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/10. See Table NEC-2, available on request from DAS. 7 U.S. Department of Commerce Bureau of Economic Analysis. Historical Table 1.1.1. Percent Change from Preceding Period in Real Gross Domestic Product and Historical Table 1.1.6. Real Gross Domestic Product, Chained Dollars. http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y, accessed 11/1/10. Asterisk (*) denotes projection from: Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes201006.pdf, accessed 11/1/10. Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/spfq210.pdf, accessed 11/1/10. The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/wsjecon1209.xls, accessed 11/1/10. See Tables NEC-1 and NEC-2, available on request from DAS. 8 U.S. Department of Labor Bureau of Labor Statistics Database. Consumer Price Index - All Urban Consumers. http://data.bls.gov/PDQ/servlet/SurveyOutputServlet, accessed 11/1/10. See Table NEC-3, available on request from DAS. 9 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. See Table NEC-2, available on request from DAS. 10 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/2010. See Table NEC-2, available on request from DAS. 11 Bank of America/Merrill Lynch. US Economic Weekly, 22 October, 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/2010. See Table NEC-2, available on request from DAS. 12 U.S. Department of Labor Bureau of Labor Statistics Database. Consumer Price Index - All Urban Consumers. http://www.bls.gov/cpi/home.htm, accessed 11/1/10. See Table NEC-3, available on request from DAS. 13 U.S. Department of Labor Bureau of Labor Statistics Database. Consumer Price Index - All Urban Consumers. http://www.bls.gov/cpi/home.htm, accessed 11/1/10. See Table NEC-3, available on request from DAS. 14 U.S. Department of Labor Bureau of Labor Statistics Database. Consumer Price Index - All Urban Consumers. http://www.bls.gov/cpi/home.htm, accessed 11/1/10.See Table NEC-3, available on request from DAS. 15 Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, September 21, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100921.pdf, accessed 11/1/10. 16 U.S. Department of Labor Bureau of Labor Statistics Database. Producer Price Index-Commodities. http://www.bls.gov/ppi/, accessed 11/1/10. See Table NEC-3, available on request from DAS. 17 U.S. Department of Labor Bureau of Labor Statistics Database. Producer Price Index-Commodities. http://www.bls.gov/ppi/, accessed 11/1/10. See Table NEC-3, available on request from DAS. 18 Energy Information Administration, Official Energy Statistics from the U.S. Government. Cushing, OK WTI Spot Price FOB (Dollars per Barrel). Monthly data: http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=M, accessed 11/1/10. Annual data: http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=A, accessed 11/1/10. See NEC-3, available on request from DAS. 19 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/10. See Table NEC-2, available on request from DAS. 20 IBISWorld Business Environment Report. "World Price of Crude Oil: A5211, July 31, 2010." http://www.ibisworld.com/, accessed 11/1/10. See Table NEC-2, available on request from DAS. 21 Energy Information Administration, Official Energy Statistics from the U.S. Government. Cushing, OK WTI Spot Price FOB (Dollars per Barrel). Annual data: http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=A, accessed 11/1/10. Asterisk (*) denotes projection from IBISWorld Business Environment Report. "World Price of Crude Oil: A5211, July 31, 2010." http://www.ibisworld.com/, accessed 11/1/10. See Tables NEC-2 and NEC-3, available on request from DAS. 22 U.S. Department of Commerce Bureau of Economic Analysis. Historical Table 1.1.1. Percent Change from Preceding Period in Real Gross Domestic Product and Historical Table 1.1.6. Real Gross Domestic Product, Chained Dollars. http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y, accessed 11/1/10. See Table NEC-1, available on request from DAS. 23 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. See Table NEC-2, available on request from DAS. 24 Bank of America/Merrill Lynch. US Economic Weekly, 22 October 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 25 U.S. Department of Commerce Bureau of Economic Analysis. Historical Table 1.1.1. Percent Change from Preceding Period in Real Gross Domestic Product and Historical Table 1.1.6. Real Gross Domestic Product, Chained Dollars. http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y, accessed 11/1/10. Asterisk (*) denotes projection from Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. Bank of America/Merrill Lynch. US Economic Weekly, 22 October 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. See Tables NEC-1 and NEC-2, available on request from DAS. 26 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_DWPC_NA.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 27 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_FF_O.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 28 Board of Governors of the Federal Reserve System. "Federal Reserve Press Release, September 21, 2010." http://www.federalreserve.gov/newsevents/press/monetary/20100623a.htm, accessed 11/1/10. 29 The Wall Street Journal. "Economists Want Policy Makers to Back off Now." Izzo, Phil, August 13, 2010. 30 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/10. See Table NEC-2, available on request from DAS. 31 Bank of America/Merrill Lynch. US Economic Weekly, 22 October, 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 32 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_TCMNOM_Y20.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 33 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_AAA_NA.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 34 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data.htm, accessed 11/1/10. See Table NEC-4, available on request from DAS. 35 Yahoo! Finance. Historical Prices - Ticker: ^DJI. http://finance.yahoo.com/, accessed 11/1/10. See Table NEC-5, available on request from DAS. 36 Yahoo! Finance. Historical Prices - Ticker: ^GSPC. http://finance.yahoo.com/, accessed 11/1/10. See Table NEC-5, available on request from DAS. 37 Yahoo! Finance. Historical Prices - Ticker: ^IXIC. http://finance.yahoo.com/, accessed 11/1/10. See Table NEC-5, available on request from DAS. 38 Yahoo! Finance. Historical Prices - Tickers: ^DJI, ^GSPC, and ^IXIC. http://finance.yahoo.com/, accessed 11/1/10. See Table NEC-5, available on request from DAS. 39 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_MORTG_NA.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 40 IBISWorld Business Environment Report. "30-Year Conventional Mortgage Rate: E104, August 26, 2010." http://www.ibisworld.com/, accessed 11/1/10. See Table NEC-2, available on request from DAS. 41 Federal Reserve Board Statistical Release Historical H.15 Selected Interest Rates. http://www.federalreserve.gov/releases/h15/data/Monthly/H15_MORTG_NA.txt, accessed 11/1/10. See Table NEC-4, available on request from DAS. 42 U.S. Department of Commerce U.S. Census Bureau and the US Department of Housing and Urban Development. New Residential Construction. www.census.gov/pub/const/newresconst.xls, accessed 11/1/10. See Table NEC-6, available on request from DAS. 43 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. See Table NEC-2, available on request from DAS. 44 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/10. See Table NEC-2, available on request from DAS. 45 Bank of America/Merrill Lynch. US Economic Weekly, 22 October, 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 46 U.S. Department of Commerce U.S. Census Bureau Houses Sold by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. See Table NEC-6, available on request from DAS. 47 U.S. Department of Commerce U.S. Census Bureau. Houses for Sale by Region. accessed 11/1/10. See Table NEC-6, available on request from DAS. 48 U.S. Department of Commerce U.S. Census Bureau. Houses for Sale by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. See Table NEC-6, available on request from DAS. 49 U.S. Department of Commerce U.S. Census Bureau. Houses for Sale by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. See Table NEC-6, available on request from DAS. 50 DAS Calculations using: U.S. Department of Commerce U.S. Census Bureau Houses Sold by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. U.S. Department of Commerce U.S. Census Bureau. Houses for Sale by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. See Table NEC-6, available on request from DAS. DAS Calculation. 51 U.S. Department of Commerce U.S. Census Bureau. New Privately Owned Housing Units Started. http://www.census.gov/const/www/newresconstindex_excel.html, accessed on 11/1/10. Houses Sold by Region. http://www.census.gov/ftp/pub/const/sold_cust.xls, accessed 11/1/10. Houses for Sale by Region. http://www.census.gov/const/www/newressalesindex_excel.html, accessed 11/1/10. See Table NEC-6, available on request from DAS. 52 U.S. Department of Labor Bureau of Labor Statistics Database. Labor Force Statistics including the National Unemployment Rate. http://www.bls.gov/cps/, accessed 11/1/10. See Table NEC-7, available on request from DAS. 53 Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100623.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 54 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. See Table NEC-2, available on request from DAS. 55 The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07, accessed 11/1/10. See Table NEC-2, available on request from DAS. 56 Bank of America/Merrill Lynch. US Economic Weekly, 22 October 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 57 U.S. Department of Labor Bureau of Labor Statistics Database. Labor Force Statistics including the National Unemployment Rate. http://www.bls.gov/cps/, accessed 11/1/10. Asterisk (*) denotes projections from Board of Governors of the Federal Reserve System. Minutes of the Board of Governors of the Federal Reserve System. Minutes of the Federal Open Market Committee: Summary of Economic Projections, June 22-23, 2010. http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20100623.pdf, accessed 11/1/10. Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/spfq210.pdf, accessed 11/1/10. The Wall Street Journal. The Wall Street Journal Economic Forecasting Survey - October 2010. http://online.wsj.com/public/resources/documents/wsjecon0610.xls, accessed 11/1/10. Note that the figures in the graph indicate the unemployment rate or projection thereof for the fourth quarter of the respective year given. See Table NEC-2, available on request from DAS. See Tables NEC-2 and NEC-7, available on request from DAS. 58 The Reuters/University of Michigan Surveys of Consumers. Historical Table 1. The Index of Consumer Sentiment. http://www.sca.isr.umich.edu/documents.php?c=tr, accessed 11/1/10. Monthly data for the Index of Consumer Sentiment from the following: https://customers.reuters.com/community/university/default.aspx, accessed 11/1/10. See Table NEC-8, available on request from DAS. 59 The Reuters/University of Michigan Surveys of Consumers. Historical Table 1. The Index of Consumer Sentiment. http://www.sca.isr.umich.edu/documents.php?c=tr, accessed 11/1/10. Monthly data for the Index of Consumer Sentiment from the following: https://customers.reuters.com/community/university/default.aspx, accessed 11/1/10. See Table NEC-8, available on request from DAS. 60 The Reuters/University of Michigan Surveys of Consumers. "Consumers Expect Very Slow Growth." October 1, 2010. https://customers.reuters.com/community/university/default.aspx, accessed 11/1/10. 61 Wagner, Daniel. The Associated Press. "Consumers Cut Credit Card Borrowing for 24th Month." October 7, 2010. http://hosted2.ap.org/txdam/dd315e533cad4d7baa5fc2a29c49568a/Article_2010-10-07-US-Consumer-Credit/id-3951d71f0d4e43e09f30523d8328a694, accessed 11/1/10. 62 The Conference Board. Global Business Cycle Indicators. "The Conference Board Leading Economic Index (LEI) for the U.S. Increases." http://www.conference-board.org/pdf_free/economics/bci/tcb20.pdf, accessed 11/1/10. 63 The Conference Board. Global Business Cycle Indicators. "The Conference Board Leading Economic Index (LEI) for the U.S. Increases." http://www.conference-board.org/pdf_free/economics/bci/tcb20.pdf, accessed 11/1/10. See Table NEC-8 for precise notes on data sources for the Leading Economic Index, available on request from DAS. 64 The Conference Board. Global Business Cycle Indicators. "The Conference Board Leading Economic Index (LEI) for the United States and Related Composite Indexes for September 2010." http://www.conference-board.org/data/bci.cfm, accessed 11/1/10. See Table NEC-13 for precise notes on data sources for the Leading Economic Index, available on request from DAS. 65 The Conference Board Global Business Cycle Indicators. "The Conference Board Leading Economic Index (LEI) for the US Increases" http://www.conference-board.org/pdf_free/economics/bci/tcb20.pdf, accessed 11/1/10. 66 The Wall Street Journal. U.S. GDP Grows 2%. Leo, Luca Di and Jeffrey Sparshott, October 29, 2010. 67 Federal Reserve Board. G.17 - Industrial Production and Capacity Utilization. http://www.federalreserve.gov/datadownload/default.htm, accessed 11/1/10. See Table NEC-9, available on request form DAS. Industrial production index levels are seasonally adjusted. 68 Survey of Professional Forecasters, Third Quarter 2010. Federal Reserve Bank of Philadelphia. Released August 13, 2010. http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2010/survq310.cfm, accessed 11/1/10. See Table NEC-2, available on request from DAS. 69 Bank of America/Merrill Lynch. US Economic Weekly, 22 October, 2010. http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 70 Federal Reserve Board. "Capacity Utilization Explanatory Notes." http://www.federalreserve.gov/releases/G17/cap_notes.htm, accessed 11/1/10. This Capacity Utilization used is a total index. 71 Federal Reserve Board. G.17 - Industrial Production and Capacity Utilization. http://www.federalreserve.gov/datadownload/default.htm, accessed 11/1/10. See Table NEC-9, available on request form DAS. Capacity utilization levels are seasonally adjusted. 72 Bank of America/Merrill Lynch. US Economic Weekly, 22 October 2010. http://corp.bankofamerica.com//publicpdf/products/abf/economic_weekly.pdf, accessed 11/1/10. See Table NEC-2, available on request from DAS. 73 Federal Reserve Board. G.17 - Industrial Production and Capacity Utilization. http://www.federalreserve.gov/datadownload/Choose.aspx?rel=G17, accessed 11/1/10. See Table NEC-9, available on request from DAS. 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