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Livingston Survey Forecasters Predict Steady Growth and Lower Unemployment (June 2020)


The latest Livingston Survey from the Federal Reserve Bank of Philadelphia shows sharply negative growth in real GDP and high unemployment for the first half of 2020 with the economy expected to start recovering in the second half of 2020.  Participants in the June Livingston Survey—surveyed by the Philadelphia Federal Reserve Bank twice a year—predict that the nation’s output (real GDP) will fall at an annual rate of -20.2 percent during the first half of 2020 with a rebound with growth increasing to 9.6 percent in the second half of 2020.  Growth is predicted to average an annual rate of 7.2 percent in the first half of 2021. 

Forecasters predict that the unemployment rate will be 17.4 percent in June 2020, recovering to 10.6 percent in December 2020.  The unemployment rate is expected to fall further to 8.3 percent by June 2021. 

Forecasters also cut their projections for inflation in 2020 and 2021.  Consumer price index (CPI) inflation was revised downward to 0.8 percent in 2020 and 1.6 percent in 2021.  Producer price index (PPI) inflation for finished goods is expected to be -2.1 percent this year and rise to 2.2 percent in 2021. 

The survey panelists lowered their forecasts for interest rates on the three month Treasury bills—by the end of June 2020; the T-bill interest rate is predicted to be 0.13 percent.  The 10-year Treasury bond interest rate is predicted to reach 0.70 percent by the end of June 2020; and the T-bond interest rate to rise to 0.81 percent at the end of December 2020. 

The Philadelphia Fed’s Livingston Survey is the oldest survey of economists’ expectations. The survey was started in 1946 by the late columnist Joseph A. Livingston. It summarizes the forecast of economists from industry, government, banking and academia. It is published twice a year, in June and December.  One of the twenty forecasters in the survey is EPR’s Senior Economist, Robert Chase. 

For the full survey report, please see pdf below. 


BEA Releases First Quarter, Third Estimate GDP (June 2020)


Coronavirus (COVID-19) Impact on the First-Quarter 2020 GDP Estimate, BEA Technical Note:

The decline in first quarter GDP reflected the response to the spread of COVID-19, as governments issued "stay-at-home" orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.

Real gross domestic product (GDP) decreased at an annual rate of 5.0 percent in the first quarter of 2020, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the decrease in real GDP was also 5.0 percent. With the third estimate, an upward revision to nonresidential fixed investment was offset by downward revisions to private inventory investment, personal consumption expenditures (PCE), and exports.

The decrease in real GDP in the first quarter reflected negative contributions from PCE, private inventory investment, exports, and nonresidential fixed investment that were partly offset by positive contributions from residential fixed investment, federal government spending, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

The decrease in PCE reflected a decrease in services, led by health care as well as food services and accommodations. The decrease in private inventory investment was mainly in manufacturing, led by petroleum and coal products. The decrease in exports primarily reflected a decrease in services, led by travel. The decrease in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment.

The BEA release can be found at the pdf below.


Edible Seaweed Market Analysis (June 2020)


The Island Institute of Rockport, Maine identified edible seaweed aquaculture as a growth industry presenting Maine participants with the potential to expand within a profitable domestic marketplace.  To explore and evaluate this opportunity, the Island Institute engaged Pentallect Inc. and Economic & Policy Resources Inc. to complete a comprehensive market analysis report on the edible seaweed opportunity in Maine.  

Maine’s edible seaweed aquaculture industry is in its relative infancy, with a limited set of harvesters and processors investing to build capacity, develop products, establish distribution channels, and create consumer demand. There is significant interest among existing and potential new entrants to expand Maine’s farmed edible seaweed industry infrastructure and scale. This report documents the size and nature of the opportunity over a fifteen-year planning horizon, identifies the requirements for success, and estimates the potential economic impact of the farmed edible seaweed industry on Maine participants and the state’s overall economy.  

For a full copy of the report, contact Island Institute.

BLS Releases May 2020 Consumer Price Index (June 2020)


The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in May on a seasonally adjusted basis after falling 0.8 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 0.1 percent before seasonal adjustment.

Declines in the indexes for motor vehicle insurance, energy, and apparel more than offset increases in food and shelter indexes to result in the monthly decrease in the seasonally adjusted all items index. The gasoline index declined 3.5 percent in May, leading to a 1.8-percent decline in the energy index. The food index, in contrast, increased 0.7 percent in May as the index for food at home rose 1.0 percent.

The index for all items less food and energy fell 0.1 percent in May, its third consecutive monthly decline. This is the first time this index has ever declined in three consecutive months. Along with motor vehicle insurance and apparel, the indexes for airline fares and used cars and trucks declined in May. The indexes for shelter, recreation, medical care, household furnishings and operations, and new vehicles all increased.

The all items index increased 0.1 percent for the 12 months ending May. The index for all items less food and energy increased 1.2 percent over the last 12 months; this compares to a 2.4-percent increase a few months ago (the period ending February). The energy index fell 18.9 percent over the last year. The food index increased 4.0 percent over the last 12 months, with the index for food at home rising 4.8 percent.

Next release is Tuesday, July 14, 2020, for the June 2020 Consumer Price Index.


BLS Releases May 2020 Employment Situation (June 2020)


Total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate declined to 13.3 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it. In May, employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade. By contrast, employment in government continued to decline sharply.

The unemployment rate declined by 1.4 percentage points to 13.3 percent in May, and the number of unemployed persons fell by 2.1 million to 21.0 million. Reflecting the effects of the coronavirus pandemic and efforts to contain it, the unemployment rate and the number of unemployed persons are up by 9.8 percentage points and 15.2 million, respectively, since February.

In May, employment in leisure and hospitality increased by 1.2 million, following losses of 7.5 million in April and 743,000 in March. Over the month, employment in food services and drinking places rose by 1.4 million, accounting for about half of the gain in total nonfarm employment. May’s gain in food services and drinking places followed steep declines in April and March (-6.1 million combined). In contrast, employment in the accommodation industry fell in May (-148,000) and has declined by 1.1 million since February.

Construction employment increased by 464,000 in May, gaining back almost half of April’s decline (-995,000). Much of the gain occurred in specialty trade contractors (+325,000), with growth about equally split between the residential and nonresidential components. Job gains also occurred in construction of buildings (+105,000), largely in residential building. Employment increased by 424,000 in education and health services in May, after a decrease of 2.6 million in April. Health care employment increased by 312,000 over the month, with gains in offices of dentists (+245,000), offices of other health practitioners (+73,000), and offices of physicians (+51,000). Elsewhere in health care, job losses continued in nursing and residential care facilities (-37,000) and hospitals (-27,000). Employment increased in the social assistance industry (+78,000), reflecting increases in child day care services (+44,000) and individual and family services (+29,000). Employment in private education rose by 33,000 over the month.

In May, employment in retail trade rose by 368,000, after a loss of 2.3 million in April. Over-the-month job gains occurred in clothing and clothing accessories stores (+95,000), automobile dealers (+85,000), and general merchandise stores (+84,000). By contrast, job losses continued in electronics and appliance stores (-95,000) and in auto parts, accessories, and tire stores (-36,000). Employment increased in the other services industry in May (+272,000), following a decline of 1.3 million in April. About two-thirds of the May increase occurred in personal and laundry services (+182,000). In May, manufacturing employment rose by 225,000, with gains about evenly split between the durable and nondurable goods components. In April, manufacturing employment declined by 1.3 million, with about two-thirds of the loss occurring in the durable goods component. Within durable goods, employment gains in May were led by motor vehicles and parts (+28,000), fabricated metal products (+25,000), and machinery (+23,000). Within nondurable goods, job gains occurred in plastics and rubber products (+30,000) and food manufacturing (+25,000).

Professional and business services added 127,000 jobs in May, after shedding 2.2 million jobs in April. Over the month, employment rose in services to buildings and dwellings (+68,000) and temporary help services (+39,000), while employment declined in management of companies and enterprises (-22,000). Financial activities added 33,000 jobs over the month, following a loss of 264,000 jobs in April. In May, employment gains occurred in real estate and rental and leasing (+24,000) and in credit intermediation and related activities (+7,000). Wholesale trade employment was up by 21,000 in May, largely reflecting job gains in its nondurable goods component (+13,000). In April, wholesale trade employment declined by 383,000. In May, employment continued to decline in government (-585,000), following a drop of 963,000 in April. Employment in local government was down by 487,000 in May. Local government education accounted for almost two-thirds of the decrease (-310,000), reflecting school closures. Employment also continued to decline in state government (-84,000), particularly in state education (-63,000). Employment in information fell by 38,000 in May, following a decline of 272,000 in April. Mining continued to lose jobs in May (-20,000), with most of the decline occurring in support activities for mining (-16,000). Mining employment has declined by 77,000 over the past 3 months. Employment in transportation and warehousing decreased in May (-19,000), after an April decline of 553,000. Air transportation lost 50,000 jobs over the month, following a loss of 79,000 jobs in April. In May, employment rose by 12,000 in couriers and messengers and 10,000 in transit and ground passenger transportation.

In May, average hourly earnings for all employees on private nonfarm payrolls fell by 29 cents to $29.75, following a gain of $1.35 in April. Average hourly earnings of private-sector production and nonsupervisory employees decreased by 14 cents to $25.00 in May. The decreases in average hourly earnings largely reflect job gains among lower-paid workers; this change put downward pressure on the average hourly earnings estimates.

The average workweek for all employees on private nonfarm payrolls increased by 0.5 hour to 34.7 hours in May. In manufacturing, the workweek rose by 0.8 hour to 38.9 hours, and overtime increased by 0.3 hour to 2.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.6 hour to 34.1 hours. While employees in most industries saw an increase in their workweeks in May, the employment changes, especially in industries with shorter workweeks, complicate monthly comparisons of the average weekly hours estimates.

The full BLS press release on the May 2020 employment situation can be accessed in the link below:

The next employment situation report for June 2020 is scheduled to be released on Friday, July 2, 2020. 


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