Where to From Here

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Where to From Here?

• Dr. Steven P. Lanza
• Executive Editor
• The Connecticut Economy, Fall 2009
• Fairfield County Economic Summit and Outlook
• September 11, 2009

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RISK PREMIUMS A RETURN TO NORMALCY
TED Spread 3-month LIBOR minus 3-month Treasury
Bill Rate
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Existing home sales on the rise
NAR Indexed Sales 2006 100
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Cutting the overhang of Supply
Months Supply
2009
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Stocks regain some lost ground
40
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New unemployment claims drop sharply
Normal
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GDP poised for growth
Contributions to GDP Growth
Percentage Points at Annual Rates
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Factories start humming again
PMI Manufacturing Index
12
V RECOVERY IS HISTORY DESTINY?
This Recession, at Historical Average
Average Quarterly Growth During Equivalent
Period of Expansion
Average Quarterly Contraction During Recession
13
Employers pared workforces aggressively
Total Recession Job Losses, in Thousands 2007-Q4
through 2009-Q2
1 Million
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CONSUMER CONFIDENCE IS RETURNING
Future 169
Index 1985 100
Overall 114
Current 14
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BUSINESSES ARE GEARING UP TO SPEND
Percent of SP 500 Firms Increasing Capital
Expenditures
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MOST STIMULUS SPENDING IS YET TO COME
Spent 150 Billion
20
80
Unspent 650 Billion
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RETURNING TO LATEST TREND WILL TAKE TIME
18 16 15 13 12 11 10 9
Annual Growth
Quarters to Trend
11.8
5
7.1
9
1.9
n.a.
U.S. GDP, in Trillions
3.4
Trend 2.9 since 2001, 3.4
1947-present
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HOUSEHOLDS ARE SOCKING AWAY MORE INCOME
Avg
Personal Saving as a Percent of Disposable
1970
1950
1990
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DESPITE REBOUND, CONFIDENCE SUBDUED
Index 1985 100
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LENDERS TIGHTEN STANDARDS AT SLOWER PACE, BUT
LOANS REMAIN HARD TO GET
Consumer
Net Percent of Banks Tightening Standards
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AND LOAN DEMAND IS STILL WEAK
Consumer
Business
Net Percent of Banks with Stronger Loan Demand
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TRILLIONS IN HOME EQUITY HAS DISAPPEARED
Billions of Dollars
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CT JOBS UNDER DIFFERENT RECOVERY PATHS
GDP Growth
7
5
Thousands
3
2
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PATHS FOR CT INCOME COULD BE SMOOTHER
GDP Growth
7
5
3
2
Billions of 2005 Dollars
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BUT JOBLESS RATE WILL BE HARD TO TAME
GDP Growth
2
3
5
7
Percent Unemployed in Connecticut
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FAIRFIELD COUNTY WILL STRUGGLE FOR JOBS
GDP Growth
7
5
Thousands
3
2
Fairfield County Bridgeport-Stamford Danbury
LMAs
27
AND TO KEEP UNEMPLOYMENT IN CHECK, TOO
GDP Growth
2
3
5
7
Percent Unemployed in Fairfield County
28
BRIDGEPORT-STAMFORD INCOMES COULD FARE BETTER
GDP Growth
7
5
3
2
Personal Income, Billions of 2005 Dollars