Regional President Speech

i . . \ \ Overview • We Have a Recovery - The recovery began in earnest last year - But we still have concerns about job growth • GDP growth in 2003:H2 was quite strong - Led by strong consumption, especially autos and durable goods - Business and residential investment strong • The keystone to the recovery • Strength should continue into 2004 - Profit growth and tax policy should support business spending and hiring -· Hiring should continue to support consumption • Jobs Still a Concern - Higher productivity has hurt in short run - But we expect 2004 to show more vigorous job growth. 2 ■ Annualized Growth Rate disposable ;"'come ,'f- \ (°lb , v }· - Real income ., \ , ' ' before taxes - Residential Spending (4-qtr. % chg.) - Existing Home Sales ■ 1-qtr. Growth in Equipment & Software Investment - S&P operating earnings - BEA after-tax profits w/ IVA and CCAdj - Dow Jones Industrial Average - S&P 500 I I Up 23.0% since 12/31/02 I I Up 21.3% since 12/31/02 -Nondefense Capital Goods Orders (12-mth. growth) - ISM New Orders Index -Real Federal Funds Rate ■ Total federal spending ~ Blue Chip Forecast 2003:Ql 2003:Q2 2003:Q3 ■ Key Trading Partners ■ U.S. Average of Previous Recoveries ,, ,, ,, ,, ,, ,, ,, ,, ,, ,, ,, ,, ,, ,, Expected ,, ,, Employment ,, ,, Growth, Given --- ,, --- GDP Growth In &#45;&#45;&#45; This Recovery ---------- ---- ------ ---- ----- ---- 2002 Recovery • Jan. '04 - Nonfarm Productivity Growth - 4-qtr Moving Average 11 T - - 1999:Q] 2000:Ql - Core CPI inflation - Core PCE inflation i Unemployment usually rising Unemployment usually stable l Unemployment usually falling United States Massachusetts ------------------------------------- (including projected revisions) -------------- ~~~~------------------------- ~~~ United States Highest paying industries, ranked by # of jobs at job job number of jobs lost, 200t1 -2003 ~ employment change change 1 3 11 oY peak (#) (%) ✓ ~~~A/: ~¢ Semiconductor and electronic .• component manufacturing ~~~•-_ 712,800 -238,200 Computer systems design and relatedV services __ 1,344,700 -206,600 Wired telecommunications carriers i\ 747,500 -140,800 Computer and peripheral equipment ;. ~d0o manufacturing 304,500 -87 ,200 -# -29% Total, top 10°/o of industries by pay ~- 10,087,200 -1,048,5001 -10% {bi<) I 132,560,000 -2,436,000 -2% Includes hospitals, reside!al construction 1.2% - _j_ - _-:·:~ - -1.4% Includes restaurants, -5.2% household help i -6.3% -8.3% -8.5% Includes travel agencies, - l _ % i 0i2 many manufacturing ~~~~s Most of the decrease Includes communications equipment due to temp help agencies and electronic equipment manufacturing Not Confident Very Confident Responses to "How confident are you that the region's technology sector can positively grow over the next 12 months?" Summary Self-sustaining private recovery in train • Capital spending is recovering - Relatively good news for tech sector • Consumer spending and housing continue to support the economy • Employment growth, for both the nation and the region, is still meager, but there are signs that it has turned around 22

Cathy E. Minehan (2004, February 9). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20040210_cathy_e_minehan

@misc{wtfs_regional_speeche_20040210_cathy_e_minehan,
  author = {Cathy E. Minehan},
  title = {Regional President Speech},
  year = {2004},
  month = {Feb},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20040210_cathy_e_minehan},
  note = {Retrieved via When the Fed Speaks corpus}
}