1. Healthcare

National Economic Indicators
February 2, 2015
Table of Contents
Release Date
Latest Period
Page
GDP
Table: Real Gross Domestic Product
Jan-30-2015 08:30
Real Gross Domestic Product
Jan-30-2015 08:30
Decomposition of Real Gross Domestic Product Jan-30-2015 08:30
Q4-2014
Q4-2014
Q4-2014
4
5
6
Jan-14-2015 08:31
Feb-02-2015 08:31
Jan-06-2015 09:31
Feb-02-2015 08:31
Dec-11-2014 12:13
Jan-23-2015 10:00
Jan-27-2015 10:00
Jan-21-2015 08:31
Jan-21-2015 08:31
Dec-2014
Dec-2014
Dec-2014
Dec-2014
Q3-2014
Dec-2014
Dec-2014
Dec-2014
Dec-2014
7
8
9
10
11
12
13
14
15
Real Investment in Nonresidential Structures
Real Private Construction Put in Place
Real Nonresidential Fixed Investment
Real Investment in Equipment
Real Investment in Intellectual Property
Jan-30-2015 08:30
Feb-02-2015 10:00
Jan-30-2015 08:30
Jan-30-2015 08:30
Jan-30-2015 08:30
Q4-2014
Dec-2014
Q4-2014
Q4-2014
Q4-2014
16
17
18
19
20
Balance of International Trade
Exchange Value of the USD
Jan-07-2015 08:30
Feb-02-2015 10:09
Nov-2014
Jan-2015
21
22
Jan-16-2015 09:15
Jan-16-2015 09:15
Feb-02-2015 10:03
Jan-29-2015 10:33
Feb-02-2015 10:03
Jan-27-2015 08:31
Jan-27-2015 08:30
Jan-14-2015 10:01
Dec-2014
Dec-2014
Jan-2015
Dec-2014
Jan-2015
Nov-2014
Dec-2014
Nov-2014
23
24
25
26
27
28
29
30
Households
Retail Sales
Disposable Personal Income & Expenditures
Sales of Automobiles and Light Trucks
Personal Saving Rate
Household Net Worth
Existing Single-Family Home Sales
New Single-Family Home Sales
Private Single-Family Housing Starts & Permits
Private Multi-Family Housing Starts & Permits
Business Investment
Trade
Manufacturing
Industrial Production
Capacity Utilization Rate: Manufacturing
Indexes of Manufacturing Activity
Indexes of Non-Manufacturing Activity
Table: ISM Business Survey Indexes
Manufacturers' New Orders
Core Capital Goods
Business Inventory/Sales Ratios
Table of Contents (continued)
Release Date
Latest Period
Page
Nonfarm Payroll Employment
Unemployment Rate Measures
Labor Market Flows
Labor Force Participation
Aggregate Weekly Hours Index
Average Hourly Earnings
Employment Cost Index
Business Labor Productivity
Unit Labor Cost, Nonfarm Business
Jan-09-2015 08:37
Jan-09-2015 08:37
Jan-13-2015 10:01
Jan-09-2015 08:37
Jan-09-2015 08:37
Jan-09-2015 08:37
Jan-30-2015 08:31
Dec-03-2014 10:06
Dec-03-2014 10:06
Dec-2014
Dec-2014
Nov-2014
Dec-2014
Dec-2014
Dec-2014
Q4-2014
Q3-2014
Q3-2014
31, 32
33, 34
35
36
37
38
39
40
41
Table: Gauges of Inflation
Expenditure Price Indexes
Consumer Price Indexes
Producer Price Indexes
Commodity Price Indexes
Crude Oil Prices
TIPS Inflation Compensation
Jan-16-2015 08:32
Dec-23-2014 10:00
Jan-16-2015 08:32
Jan-15-2015 08:37
Jan-15-2015 08:37
Feb-02-2015
Jan-30-2015 17:00
Dec-2014
Nov-2014
Dec-2014
Dec-2014
Dec-2014
02-Feb-2015
23-Jan-2015W [
42
43, 44
45
46
47
48
49
Jan-29-2015 16:34
Jan-30-2015 16:18
Jan-02-2015 16:45
Dec-17-2014
Feb-02-2015
Dec-17-2014 14:04
Jan-22-2015 16:32
Jan-29-2015 16:35
Jan-30-2015 16:23
Jan-30-2015 16:23
Jan-30-2015 16:23
Jan-30-2015 16:23
28-Jan-2015W
28-Jan-2015W
Dec-2014
52
50
51
53, 54
55
56
57
58
59
60
61
62
Labor Market
Inflation
Monetary Policy & Financial Markets
Federal Reserve System Assets
Monetary Policy Instruments
Real Federal Funds Rate
FOMC Statement
Eurodollar Futures
SEP: Federal Funds Rate
Monetary Base
M2
Money Market Rates
Capital Market Rates
Treasury Yield Curve
Risk Premium
02-Feb-2015
21-Jan-2015W
Dec-2014
21-Jan-2015W
30-Jan-2015W [
30-Jan-2015W [
30-Jan-2015W [
Real Gross Domestic Product
2014
2013
Change from previous quarter at compound annual rate, %
Gross Domestic Product
Q4
Q1
Q2
Q3
Q4
3.5
-2.1
4.6
5.0
2.6
3.7
1.2
2.5
3.2
4.3
Nonresidential Fixed Investment
Structures
Equipment
Intellectual Property Products
10.4
12.8
14.1
3.6
1.6
2.9
-1.0
4.6
9.7
12.6
11.2
5.5
8.9
4.8
11.0
8.8
1.9
2.6
-1.9
7.1
Residential Fixed Investment
-8.5
-5.3
8.8
3.2
4.1
Exports of Goods & Services
Imports of Goods & Services
10.0
1.3
-9.2
2.2
11.1
11.3
4.5
-0.9
2.8
8.9
Government Consumption Expenditures & Gross
Investment
-3.8
-0.8
1.7
4.4
-2.2
2.7
0.7
3.4
4.1
2.8
81.8
35.2
84.8
82.2
113.1
-384.0
-447.2
-460.4
-431.4
-471.5
Personal Consumption Expenditures
Final Sales to Domestic Purchasers
Billions of chained (2009) dollars
Change in Private Inventories
Net Exports of Goods & Services
Source: Bureau of Economic Analysis via Haver Analytics 4
Real Gross Domestic Product
6
Percent change from previous quarter at annual rate
6
5
5
4
4
FOMC Projection
Q4
2.6%
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
-9
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Note: Projection is the central tendency and range from the December 2014 Summary of Economic Projections.
Projections of change in real gross domestic product (GDP) are from the fourth quarter of the previous year to the
fourth quarter of the year indicated.
Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
5
Decomposition of Real GDP
5
10-year annual growth rates
5
4.5
4.5
4
GDP
4
3.5
3.5
3
3
2.5
2.5
Productivity
2
2
1.5
1.5
1
1
HH Employment
0.5
0.5
0
0
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
Source: Bureau of Economic Analysis via Haver Analytics 6
Retail Sales
16
12 Month % Change
16
14
14
3 Month
Annualized
% Change
12
12
10
10
8
8
6
December
3.2%
4
6
4
2
2
0
0
-2
-2
-4
-4
-6
-6
Month over Month % Change
-8
-10
Total
x Gasoline
-12
-14
2007
2008
2009
2010
2011
2012
2013
2014
Oct.
0.3
0.6
Nov. Dec.
0.4 -0.9
0.8 -0.4
2015
-8
-10
-12
-14
2016
Note: Retail sales includes food services.
Source: Census Bureau via Haver Analytics 7
Disposable Personal Income & Expenditures
6 12 Month % Change
6
5
5
4
4
Real Disposable Personal
Income
3
3
December
2
2
1
1
0
0
-1
-1
Month over Month % Change
-2
-3
-4
2007
Income
Expenditures
Real Personal
Consumption Expenditure
2008
2009
2010
2011
2012
2013
October
0.3
0.3
-2
November December
0.4
0.5
0.7
-0.1
2014
2015
-3
-4
2016
Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012.
Source: Bureau of Economic Analysis via Haver Analytics
8
Sales of Automobiles & Light Trucks
20
Millions of Vehicles
20
18
18
December
16.9 mil.
16
16
Autos and Light Trucks
14
14
12
12
10
10
Light Trucks
8
8
6
6
Autos
4
2007
2008
2009
2010
2011
2012
2013
2014
2015
4
2016
Source: Autodata Corporation via Haver Analytics
9
Personal Saving Rate
10
Percent of disposable personal income
10
9
9
8
8
7
7
6
6
December
4.9%
5
5
4
4
3
3
2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2
2016
Note: The personal saving rate was adjusted to remove tax-induced income shifting near the end of 2012.
Source: Bureau of Economic Analysis via Haver Analytics10
Household Net Worth
700 Percent of disposable personal income
700
650
650
Q3.
600
600
550
550
500
500
450
450
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: Z.1 Financial Accounts of the United States via Haver Analytics 11
Existing Single-Family Home Sales
6.5
Millions of Homes
6.5
6
6
5.5
5.5
5
5
December
4.5 mil.
4.5
4.5
4
4
Average Annual Existing Home Sales:
1990 through 1999
3.5
3
3.5
3
2.5
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: National Association of Realtors via Haver Analytics12
New Single-Family Home Sales
1.4
Millions of Homes
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
Average Annual New Home Sales:1990 through 1999
0.7
0.6
0.6
0.5
December
0.48 mil.
0.5
0.4
0.4
0.3
0.3
0.2
0.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Census Bureau via Haver Analytics 13
Private Single-Family Housing Starts & Permits
2.0
Millions of Starts & Permits
2.0
1.8
1.8
1.6
1.6
1.4
1.4
1.2
1.2
1990 - 1999 Average Housing Starts
1.0
1.0
Starts
0.8
December
0.6
0.8
0.6
Permits
0.4
0.4
0.2
0.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Census Bureau via Haver Analytics
14
Private Multi-Family Housing Starts & Permits
0.7
Millions of Starts & Permits
0.7
0.6
0.6
Permits
0.5
December
0.5
0.4
0.4
0.3
0.3
1990 – 1999 Average Multi-Family Starts
0.2
0.2
Starts
0.1
0.1
0.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Census Bureau via Haver Analytics 15
Real Investment in Nonresidential Structures
40
Percent change from previous quarter at annual rate
40
35
35
30
30
25
25
20
20
15
15
10
10
Q4
2.6%
5
5
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
-35
-35
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics 16
Real Private Construction Put In Place
670
620
570
2009$, Billions
670
620
Real Private
Residential
Construction
570
520
520
470
470
420
Real Private
Nonresidential
Construction
420
370
370
December
320
320
270
270
220
220
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Notes: Private nonresidential construction deflated using the price index for private fixed investment in nonresidential
structures and private residential construction deflated using the private residential investment chain price index.
Source: Census Bureau via Haver Analytics 17
Real Nonresidential Fixed Investment
20
Percent change from previous quarter at annual rate
20
15
15
10
10
5
5
Q4
1.9%
0
0
-5
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics 18
Real Investment in Equipment
40
Percent change from previous quarter at annual rate
40
30
30
20
20
10
10
0
0
Q4
-1.9%
-10
-10
-20
-20
-30
-30
-40
-40
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics
19
Real Investment in Intellectual Property
10
Percent change from previous quarter at annual rate
10
Q4
7.1%
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics 20
Balance of International Trade
0
Current $, Billions
0
Petroleum Balance
-10
-10
-20
-20
-30
-30
-40
-40
-50
-50
-60
Non-Petroleum
Balance
-60
November
-57.1 Bil.
-70
-70
Trade Balance
-80
-80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note: Customs Value of Trade Balance
Source: Census Bureau via Haver Analytics
21
Exchange Value of the USD
135
Index, March 1973 = 100
135
125
125
115
115
105
105
95
January
85
85
75
1980
95
1984
1988
1992
1996
2000
2004
2008
2012
75
2016
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.
Source: Board of Governors via Haver Analytics 22
Industrial Production
140
2007 = 100
140
135
135
130
130
125
125
120
120
Mining
115
115
110
December
110
Overall
105
105
100
100
95
95
Manufacturing
90
90
85
85
80
80
75
2007
2008
2009
2010
2011
2012
2013
2014
2015
75
2016
Source: Board of Governors via Haver Analytics 23
Capacity Utilization Rate: Manufacturing
82
Percent
82
80
December
78.4
80
78
78
76
76
74
74
72
72
70
70
68
68
66
66
64
64
62
2007
2008
2009
2010
2011
2012
2013
2014
2015
62
2016
Source: Board of Governors via Haver Analytics 24
Indexes of Manufacturing Activity
65
Diffusion Index, percent
40
30
60
ISM (Left Axis)
20
January
53.5
55
10
0
50
-10
45
Richmond Fed
(Right Axis)
-20
40
-30
35
2007
2008
2009
2010
2011
2012
2013
2014
2015
-40
2016
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 25
Indexes of Non-Manufacturing Activity
65
Diffusion Index, percent
40
December
56.5
60
30
ISM (Left Axis)
20
55
10
50
0
-10
45
Richmond Fed
Service Sector
Index: Revenues
(Right Axis)
-20
40
-30
35
2007
2008
2009
2010
2011
2012
2013
2014
2015
-40
2016
Source: Institute for Supply Management & Richmond Fed via Haver Analytics 26
ISM: Business Survey Indexes
MANUFACTURING BUSINESS:
NON-MANUFACTURING BUSINESS:
Dec.
Jan.
Nov.
Dec.
Purchasing Managers Index
55.1
53.5
Non-Manufacturing Index
58.8
56.5
Production
57.7
56.5
Business Activity
63.4
58.6
New Orders
57.8
52.9
New Orders
61.0
59.2
Employment
56.0
54.1
Employment
56.3
55.7
Supplier Deliveries
58.6
52.9
Supplier Deliveries
54.5
52.5
Inventories
45.5
51.0
Inventories
55.5
50.0
Prices
38.5
35.0
Prices
55.0
49.8
Backlog of Orders
52.5
46.0
Backlog of Orders
55.5
49.5
New Export Orders
52.0
49.5
New Export Orders
57.0
53.5
Imports
55.0
55.5
Imports
53.5
50.0
DIFFUSION INDEXES: Numbers above 50 percent indicate more favorable responses towards economic activity.
Source: Institute for Supply Management via Haver Analytics 27
Manufacturers’ New Orders
600
Current $, Billions
600
550
550
500
500
December
450
450
400
400
Twelve-Month
Moving Average
350
300
2007
350
2008
2009
2010
2011
2012
2013
2014
2015
300
2016
Source: Census Bureau via Haver Analytics
28
Core Capital Goods
75
Current $, Billions
75
December
New Orders
70
70
65
65
Shipments
60
60
55
55
50
50
45
2007
2008
2009
2010
2011
2012
2013
2014
2015
45
2016
Notes: Core capital goods are nondefense capital goods excluding aircraft.
Source: Census Bureau via Haver Analytics
29
Business Inventory/Sales Ratio
1.7
Percent
1.7
1.6
1.6
Retailers
1.5
1.5
November
1.4
1.4
1.3
Total Business
Manufacturers
1.2
1.1
2007
1.3
2008
2009
1.2
2010
2011
2012
2013
2014
2015
1.1
2016
Source: Census Bureau via Haver Analytics
30
Nonfarm Payroll Employment
142
Millions of Persons
142
December
140.4 mil.
140
140
138
138
136
136
134
134
132
132
130
130
128
2007
2008
2009
2010
2011
2012
2013
2014
2015
128
2016
Source: Bureau of Labor Statistics via Haver Analytics
31
Nonfarm Payroll Employment
400
Quarterly average of monthly changes, thousands of persons
400
Q4.
Avg.
300
300
200
200
100
100
0
0
-100
-100
-200
-200
-300
-300
Monthly Change
Dec.
252
Nov.
353
Oct.
261
Sep.
271
Aug.
203
-400
-500
-600
-400
-500
-600
-700
-700
-800
-800
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Labor Statistics via Haver Analytics
32
Unemployment Rate
11
Percent
11
10.5
10.5
10
10
9.5
9.5
9
9
8.5
8.5
8
8
7.5
7.5
7
7
6.5
December
5.6%
6
FOMC Projection
6
5.5
5.5
5
5
4.5
4
2007
6.5
4.5
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
4
2018
Notes: FOMC projection is the range and central tendency for the Q4 levels, from the December 2014 meeting.
Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics
33
Measures of Labor Utilization
19
Percent
19
17
17
15
15
13
13
U6: U5 + Involuntarily Part-Time
11
December
11
9
9
U5: U3 + Discouraged + Marginally Attached
7
7
5
5
U3: Official Unemployment Rate
3
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
3
2016
Source: Bureau of Labor Statistics via Haver Analytics
34
Labor Market Flows
4.5
Percent
4.5
Hires Rate*
4
4
November
3.5
3.5
3
3
2.5
2.5
2
1.5
2
Job Openings Rate**
Quits Rate*
1.5
1
1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note: *Percent of total employment. **Percent of total employment plus job openings.
Source: JOLTS via Haver Analytics
35
Labor Force Participation
68
Percent of Population
68
67
67
66
66
65
65
64
64
63
63
December
62
62
61
61
60
60
59
59
58
58
57
57
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: Bureau of Labor Statistics via Haver Analytics
36
Aggregate Weekly Hours Index
104
Index, 2007 = 100
104
December
102
102
100
100
98
98
96
96
94
94
92
92
90
90
88
2007
2008
2009
2010
2011
2012
2013
2014
2015
88
2016
Source: Bureau of Labor Statistics via Haver Analytics
37
Average Hourly Earnings
4
12 Month % Change
4
Monthly % Change
Dec.
-0.2%
Nov.
0.2%
Oct.
0.1%
Sep.
0.0%
3.5
3
3
2.5
2.5
2
2
December
1.7%
1.5
1
2007
3.5
2008
2009
2010
2011
2012
2013
2014
2015
1.5
1
2016
Source: Bureau of Labor Statistics via Haver Analytics
38
Employment Cost Index
4
Year over Year % Change
4
3.5
3.5
Benefits Cost
3
3
Q4
2.5
2.5
Total Compensation
2
2
1.5
1
2007
Q4.2014 YoY % Change
Total Comp.
2.2
Benefits Cost
2.6
Wages & Salaries 2.1
2008
2009
1.5
Wages and Salaries
2010
2011
2012
2013
2014
2015
1
2016
Source: Bureau of Labor Statistics via Haver Analytics
39
Business Labor Productivity
6
Year over Year % Change
Quarterly Change
at Annual Rate
Q3 14
1.8%
Q2 14
2.9%
Q1 14 -5.0%
Q4 13
3.1%
5
6
5
4
4
3
3
Post-War Average
2
2
1
1
Q3
0.7%
0
-1
-1
-2
2007
0
2008
2009
2010
2011
2012
2013
2014
2015
-2
2016
Source: Bureau of Labor Statistics via Haver Analytics
40
Unit Labor Cost, Nonfarm Business
6
Year over Year % Change
6
5
5
4
4
3
3
2
Q3
1.2%
2
1
1
0
0
-1
-1
-2
-2
-3
-4
-5
-6
2007
Quarterly Change
at Annual Rate
Q3 14
Q2 14
Q1 14
Q4 13
2008
-3
Alternate Series
-1.0%
-3.7%
11.6%
-1.3%
-4
-5
2009
2010
2011
2012
2013
2014
2015
-6
2016
Notes: Alternate series is derived from the Employment Cost Index.
Source: Bureau of Labor Statistics via Haver Analytics
41
Gauges of Inflation
Expenditure Price Indexes
Personal Consumption Expenditures
Core (excludes Food and Energy)
Consumer Price Indexes
All Items
Core (excludes Food and Energy)
Producer Price Indexes
Finished Goods
Core (excludes Food and Energy)
Core Intermediate Goods
Crude Goods
Spot Commodity Price Index
CRB Spot Commodity Price Index
[Percent Change from Previous Month at Annual Rate]:
Nov.
-2.0
0.2
Dec.
-2.8
0.1
YoY %
0.7
1.3
[Percent Change from Previous Month at Annual Rate]:
Nov.
-3.0
0.9
Dec.
-4.4
0.0
YoY %
0.8
1.6
[Percent Change from Previous Month at Annual Rate]:
Nov.
-7.5
0.6
-5.4
-14.9
Dec.
-14.1
3.9
-6.6
-45.6
YoY %
-0.7
1.8
0.3
-8.5
[Percent Change from Previous Month]:
Dec.
-2.2
Jan.
-3.7
YoY %
-6.2
Notes: Core PCE Price Index includes expenditures on food services.
Source: BEA, BLS, & Commodity Research Bureau via Haver Analytics
42
Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
FOMC Projection
2.5
2.5
2% Longer-run Target
2
2
1.5
1.5
1
1
December
0.7%
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
2007
3
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
-1.5
2018
Notes: FOMC projection is the range and central tendency for Q4/Q4 percent changes, from the December
2014 meeting.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 43
Core Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
3
FOMC Projection
2.5
2% Longer-run Target
2
2
1.5
1.5
December
1.3%
1
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1.5
2007
2.5
-1
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
-1.5
2018
Notes: FOMC projection is the range and central tendency for Q4/Q4 percent changes, from the December 2014 meeting.
Core PCE Price Index excludes expenditures on gasoline and food services.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 44
Consumer Price Indexes
6
12 Month % Change
6
5
5
All Items
4
4
3
3
2
December
2
Core CPI
1
1
0
0
-1
-1
-2
-3
2007
CPI: All Items
Core CPI
2008
2009
2010
2011
2012
2013
November
1.3%
1.7%
2014
December
0.7%
1.6%
2015
-2
-3
2016
Source: Bureau of Labor Statistics via Haver Analytics
45
Producer Price Indexes
12
12 Month % Change
12
10
10
8
8
Core Finished
Goods
6
6
4
4
December
2
2
0
0
-2
-2
-4
All Finished
Goods
-4
December (percent)
All Finished Goods
-0.7%
Core Finished Goods 1.8%
-6
-8
2007
2008
2009
2010
2011
2012
2013
2014
2015
-6
-8
2016
Source: Bureau of Labor Statistics via Haver Analytics
46
Commodity Price Indexes
30
12 Month % Change
12 Month % Change
45
27
40
24
35
PPI Core
Intermediate
Goods
(Left Axis)
21
18
15
30
25
20
12
15
9
10
6
5
January
3
0
0
-3
-6
-9
-5
Commodity
Research Bureau
Spot Commodity
Price Index
(Right Axis)
-10
-15
-12
Price Indexes
PPI Core Intermed. Goods
CRBS Spot Commodities
-15
-18
-21
2007
2008
2009
2010
2011
2012
2013
2014
December
0.3%
-4.0%
2015
January
---7.8%
-20
-25
-30
-35
2016
Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics 47
Crude Oil Prices
150
Current $/ Barrel
150
140
140
130
130
120
120
110
110
100
100
90
90
80
80
70
70
60
60
50
50
40
February
2nd
Spot Price
30
Futures
Price
40
30
20
20
10
10
0
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
0
2018
Notes: Spot and Futures Prices are for Brent Crude Oil.
Source: Financial Times & New York Mercantile Exchange via Haver Analytics & Bloomberg
48
TIPS Inflation Compensation
4
Percent
3.5
4
3.5
5-Year
5 Years Ahead
3
3
2.5
2.5
2
2
1.5
1.5
5-Year
January
23rd
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
2009
1
2010
2011
2012
2013
2014
2015
-1.5
2016
Source: Board of Governors Research Series via Haver Analytics 49
Federal Reserve System Assets
4750
$, Billions
Total: $4,552
4500
Agency
Debt: $38
4250
Miscellaneous: $308
4000
3750
3500
3250
Agency MBS: $1,746
3000
Total: $2,865
2750
2500
Miscellaneous: $282
Agency
Debt: $87
2250
2000
Agency MBS: $844
Treasury Securities:
$2,461
2461
1750
1500
Treasury Securities:
1652
$1,652
1250
9/12/2012
1/28/2015
Note: Numbers may not add up due to rounding.
Source: Board of Governors via Haver Analytics
50
Monetary Policy Instruments
7
Percent
7
6.5
6.5
6
6
5.5
5.5
5
5
4.5
4.5
4
4
3.5
3
3.5
Federal Funds Target Rate
3
2.5
2.5
2
2
1.5
1.5
Primary Credit Rate
1
0.5
0
2005
January 28th
Interest Rate Paid on
Reserves
Federal Funds Rate
Target Range
2006
2007
2008
1
0.5
2009
2010
2011
2012
2013
2014
2015
0
2016
Source: Board of Governors via Haver Analytics
51
Real Federal Funds Rate
6
Percent, effective Fed funds rate - lagged year over year change in core PCE price index
6
5
5
4
4
3
3
2
2
1
1
0
0
-1
-2
January
-1
-2
-3
-3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 52
FOMC Statement
January 28, 2015
Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a
solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. On balance, a range of
labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately;
recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the
housing sector remains slow. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy
prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term
inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that,
with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move
toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic
activity and the labor market as nearly balanced. Inflation is anticipated to decline further in the near term, but the Committee expects
inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower
energy prices and other factors dissipate. The Committee continues to monitor inflation developments closely.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to
1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee
will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will
take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation
expectations, and readings on financial and international developments. Based on its current assessment, the Committee judges that it can be
patient in beginning to normalize the stance of monetary policy. However, if incoming information indicates faster progress toward the
Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate
are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range
are likely to occur later than currently anticipated.
Source: Board of Governors
53
Continued…
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and
agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities
at auction. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help
maintain accommodative financial conditions.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its
longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after
employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the
target federal funds rate below levels the Committee views as normal in the longer run.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael
Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo;
and John C. Williams.
January 28, 2015
Source: Board of Governors
54
Eurodollar Futures
3.75
Percent
3.75
3.5
3.5
3.25
3.25
3
3
October 30, 2014
2.75
2.75
2.5
2.5
2.25
2.25
2
2
1.75
1.75
February 2, 2015
1.5
1.5
1.25
1.25
1
1
0.75
0.75
0.5
0.5
0.25
0.25
0
2014
2015
2016
2017
2018
0
2019
Source: CME Group via Bloomberg
55
Summary of Economic Projections: Federal Funds Rate
4.5
Percent
4
3.5
3
2.5
2
1.5
1
0.5
0
2015
2016
2017
Longer Run
Note: Each dot in the chart represents the value of an FOMC participant’s judgment of the midpoint of the appropriate
target range (or the appropriate target level) for the federal funds rate at the end of the calendar year.
Projections made for the December 2014 meeting.
Source: Board of Governors
56
Monetary Base
4400
Current $, Billions
4400
January 21st
4000
4000
3600
3600
3200
3200
2800
2800
2400
2400
2000
2000
1600
1600
1200
2009
2010
2011
2012
2013
2014
2015
1200
2016
Source: Board of Governors via Haver Analytics 57
M2
12
12 Month % Change
12
11
11
10
10
9
9
8
8
7
December
5.8%
7
6
6
5
5
4
4
3
3
2
2
1
1
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
2016
Source: Board of Governors via Haver Analytics 58
Money Market Rates
1.25
Percent
1.25
1
1
Primary Credit Rate
January 28th
0.75
0.5
0.75
0.5
3-Month LIBOR
IOER
0.25
0.25
Federal Funds Rate
0
0
3-Month T-Bill
-0.25
2009
2010
2011
2012
2013
Fed Reverse Repo Rate
on Treasuries
2014
2015
-0.25
2016
Source: Board of Governors & Financial Times via Haver Analytics & Bloomberg
59
Capital Market Rates
10.5
Percent
10.5
9.5
9.5
8.5
Corporate BBB
Bond Rate
8.5
7.5
7.5
30 Year
Conventional
Mortgage Rate
6.5
6.5
5.5
5.5
January 28th
4.5
3.5
3.5
2.5
2.5
10-Yr. Treasury
Bond Rate
1.5
0.5
2009
4.5
1.5
Corporate AAA
Bond Rate
2010
2011
2012
2013
2014
2015
0.5
2016
Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 60
Treasury Yield Curve
3.5
Percent
3.5
3.25
3.25
3
3
June 20, 2013
2.75
2.75
January 30, 2015
2.5
2.5
2.25
2.25
2
2
1.75
1.75
1.5
1.5
1.25
1.25
1
1
0.75
0.75
0.5
0.5
0.25
0.25
0
0
6M
2 Yrs 3 Yrs
5 Yrs
7 Yrs
10 Yrs
Time to Maturity
Source: Board of Governors via Haver Analytics
61
Risk Premium
8
Percent, BofA Merrill Lynch Corporate BBB - 10 Yr. Treasury Yield
8
7
7
6
6
5
5
4
4
3
3
January 30th
2
2
1
1
10 Year Rolling Average Risk Premium
0
2009
2010
2011
2012
2013
2014
2015
0
2016
Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 62