1 Looking Better... but Still Not Great Steven A. Wood Lecturer University of California, Berkeley March 26, 2014 Rudney Associates Presents
2 The Economy is Growing …
3 and Jobs are Being Created
4 Unemployment is Retreating …
5 and Wages are Picking Up
6 The Fed is Highly Accommodative
7 Keeping Interest Rates Low
8 Banks are Lending Again
9 Housing Starts are Climbing
10 and Car Sales have Rebounded
11 Exports are Growing
12 But …
13 But Growth is Still Sluggish …
14 and Job Creation is Still Soft
15 The Output Gap Remains Wide
16 Leaving Employment Depressed
17 with Lots of Part-Time Workers
18 Unemployment is Still High
19 Government Spending is Fading
20 Government Spending is Fading
21 Government Jobs Disappear
22 Budget Deficit Rapidly Shrinks
23 Money Supply Grows Slowly
24 Banks Are Not Lending Much
25 Banks Continue to Deleverage
26 Consumers Also Deleverage
27 Inflation Stays Low
28 Below the Fed’s Target
29 What about financial markets?
30 Interest Rates to Stay Low
31 Corporate Profits at Record Levels
32 Stock Market at Record Levels
33 Stocks Appear “Fairly” Valued
34 But Profit Growth has Slowed
35 The Major Known Risks 1.Confrontation with Russia/oil price shock 2.Weaker European growth/new recession 3.European sovereign debt problems 4.Political stalemate in Washington 5.The Chinese “bubble” economy 6.Slower emerging market growth
36 Looking Better … but Still Not Great Questions?