DOCSLIB.ORG

Some Rising Pressure Points in Global Debt January 2019 Introduction

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Some Rising Pressure Points in Global Debt January 2019 Introduction ANALYSIS Some Rising Pressure Points in Global Debt January 2019 Introduction Prepared by Global leverage has been rising as a share of GDP over the past decade. This is a growing Steven G. Cochrane concern, as questions around sustainability loom large in some pockets. Also, although global [email protected] Chief APAC Economist financial conditions remain largely accommodative, debt servicing costs will continue rising over the next year after an extended period of low borrowing costs, putting pressure on Katrina Ell balance sheets. [email protected] Economist Marc Korobkin [email protected] Associate Economist Contact Us Email [email protected] U.S./Canada +1.866.275.3266 EMEA +44.20.7772.5454 (London) +420.224.222.929 (Prague) Asia/Pacific +852.3551.3077 All Others +1.610.235.5299 Web www.economy.com www.moodysanalytics.com MOODY’S ANALYTICS Some Rising Pressure Points in Global Debt BY STEVEN G. COCHRANE, KATRINA ELL AND MARC KOROBKIN lobal leverage has been rising as a share of GDP over the past decade. This is a growing concern, as questions around sustainability loom large in some pockets. Also, although global financial conditions G remain largely accommodative, debt servicing costs will continue rising over the next year after an extended period of low borrowing costs, putting pressure on balance sheets. Global trends China’s total nonfinancial debt has risen over household debt (see Chart 2). The move- As the global business cycle has advanced the past 10 years from 141% of GDP in 2008 ments in the U.S. and China went in opposite over the 10 years since the financial crisis, to 261% in the first quarter of 2018. It has directions; household debt as a share of GDP the global economy has accumulated a risen above the ranks of other emerging mar- fell 25 percentage points to 75% in the U.S. record amount of outstanding debt when kets to exceed that of the U.S. and match the from 2007 to early 2018, while it rose in Chi- measured as a percentage of gross domestic euro zone’s. na by just more than 25 percentage points product. Data from the Bank for Interna- Although China’s debt has marched in- to end at 50% of GDP. Further, the shifts in tional Settlements trace global debt back exorably upward since the 2008-2009 global both countries have largely been related to to 2001 (individual country data go back financial crisis, when central banks world- mortgage debt, as housing markets in China further), when total global nonfinancial sec- wide went on a lending spree to stimulate have boomed and those in the U.S. struggled tor debt amounted to 191% of global GDP. their economies and avoid recession, total under a severe price correction and subse- It rose quickly following the dot-com bust debt relative to GDP in the U.S. and the euro quently tight mortgage-lending standards. of 2001 as governments increased spend- zone already peaked over the course of the The pullback or lack of growth among the ing to avoid recession. It reached 210% of past decade. The debt-to-GDP ratio in the advanced economies has offset emerging- GDP as the global economy entered the U.S. peaked in 2011 as mortgage foreclosures market household debt to maintain a fairly financial crisis in 2007. Fiscal stimulus caused were resolved and lending patterns tight- flat global pattern over the past decade. debt to rise again through to 2013, and the ened. The euro zone’s ratio peaked in 2014 as Corporate debt is a different story. In subsequent slow pace of economic growth it struggled to rein in sovereign debt. Further, China, corporate debt has soared from just combined with historically low interest rates the pattern of debt growth has varied greatly less than 100% of GDP to nearly 165% in allowed total debt to continue to rise, reach- when comparing ing a record 246% of GDP by the first quarter debt issued to house- Chart 1: Debt Rises Across the Globe of 2018. holds, corporations Total nonfinancial sector debt, % of GDP This paper examines patterns of debt or government. 300 through time and across countries as well as Household debt across the household, corporate and govern- has tended to con- 250 ment sectors to determine where there have verge over the past 10 been significant changes and implications years in the advanced 200 for the economic outlook. This research will economies, including 150 examine the global pattern but will focus on the euro zone and World Emerging markets the Asian economies. the U.S., reducing ex- 100 Euro zone Advanced economies Debt has accumulated across the globe, posure to household China U.S. but regional patterns vary (see Chart 1). A debt, while China and 50 07 08 09 10 11 12 13 14 15 16 17 18Q1 higher proportion of the debt has accumu- other emerging mar- lated in China and other emerging markets. kets have expanded Sources: BIS, Moody’s Analytics Presentation Title, Date 1 2 JANUARY 2019 MOODY’S ANALYTICS Chart 2: Household Debt Converges Chart 3: Surge of Corporate Debt in China Total household debt, % of GDP Total nonfinancial corporate debt, % of GDP 100 200 World Emerging markets 175 Euro zone 75 Advanced economies 150 China U.S. 50 125 100 25 World Emerging Markets 75 Euro Zone Advanced Economies China U.S. 0 50 07 08 09 10 11 12 13 14 15 16 17 18Q1 07 08 09 10 11 12 13 14 15 16 17 18Q1 Sources: BIS, Moody’s Analytics Sources: BIS, Moody’s Analytics Presentation Title, Date 2 Presentation Title, Date 3 the first quarter of 2018 (see Chart 3). Only zone, but with a lag of about two years. In past five years. But Ireland, Spain and Den- in 2017 did this figure fall by more than China, a sharp stimulatory rise in debt in mark are among the countries where debt a rounding error as policymakers worked 2009 has been followed by a very slow but has fallen significantly over this period. The to rein in credit and begin a long-awaited steady gain. The gap between emerging- data for Ireland, however, overstate the im- deleveraging process. market government debt and that of the provement because of revisions to GDP that In the U.S., the corporate debt cycle advanced economies has actually widened raised its value by 25% in 2015 as several had followed the early years of the busi- over this time. large foreign firms switched their operating ness cycle, peaking in 2008 and then falling base to Ireland via acquisitions of small, lo- through 2011. But historically low interest Recent trends cally based firms. Following their change of rates encouraged an uptick in lending as the Developed economies generally can domicile, their operations were incorporated economic recovery gained traction, so that manage higher levels of debt relative to into the corporate sector of Irish GDP. So corporate debt peaked at 73.6% of GDP in GDP, with a cluster of them ranging between although exposure to debt has improved in 2017, which held steady through the first 200% and 300% (see Chart 5). These coun- Ireland, the BIS data overstate the case. But quarter of 2018. tries, mostly in Europe and North America, Spain, Denmark and Portugal have seen real Sovereign debt is the only component have better regulatory control, more trans- improvements in recent years, while Greece that has been rising slowly but steadily parent loan origination standards, and has not. across the world (see Chart 4). Government stronger portfolio management methods. Most emerging markets have much debt rose sharply in the U.S. and other ad- Levels of debt in a few of these countries, lower debt-to-GDP ratios than developed vanced economies through 2012 because of however, have risen rather quickly in recent economies. But in some cases, total debt has stimulatory monetary policy. But as auster- years. Norway, France, Canada and Austria risen quickly; Chile, Brazil, Turkey and Saudi ity replaced stimulus, the debt-to-GDP ratio have each had an increase greater than 20 Arabia are examples. Some of the greatest leveled off. The same was true in the euro percentage points as a share of GDP over the increases, however, have been in Asia. Hong Chart 4: Government Debt Edging Upward Chart 5: Total Nonfinancial Debt Total government debt, % of GDP Total debt-to-GDP ratio, % (x-axis), 5-yr change, ppts, (y-axis) 125 60 2017 CHN HKG 40 SGP SA CHL NOR LUX 100 AUS FRA 20 TUR CAN MEX ARG BRA CHE BEL MYS KOR GBR IDN RUS ZAF FIN USA JPN 75 0 IND THA SWE POL ISR ITA GRC DEU NZL AUT NLD -20 DNK CZE HUN 50 -40 ESP PRT World Emerging markets -60 25 Developed economies Euro zone Advanced economies -80 Emerging markets China U.S. IRE 0 -100 07 08 09 10 11 12 13 14 15 16 17 18Q1 0 50 100 150 200 250 300 350 400 450 Sources: BIS, Moody’s Analytics Sources: BIS, Moody’s Analytics Presentation Title, Date 4 Presentation Title, Date 5 3 JANUARY 2019 MOODY’S ANALYTICS Chart 6: Chinese Stimulus Drove a Rebound Chart 7: Varied Household Debt Patterns China real GDP, % change yr ago Household debt-to-GDP ratio, % (x-axis), 5-yr chg, ppts, (y-axis) 20 16 CHN NOR KO AUS LUX HKG R CHE 10 SWE 14 SAU MEX CHL FRABEL FIN CAN IND CZE NZL 0 IDN ISR JPN TH ARG RUS POL SGP GBR 12 TUR BRA ITA DE MY NLD ZAF AUT GBR DEN -10 HUN 10 GR -20 ESP PRT 8 2017 -30 Fiscal stimulus announced Nov 8, 2008 Developed economies 6 -40 IRE Emerging markets 4 -50 00 02 04 06 08 10 12 14 16 18 0 20 40 60 80 100 120 140 Sources: National Bureau of Statistics, Moody’s Analytics Sources: BIS, Moody’s Analytics (classifications according to MSCI Index) Presentation Title, Date 6 Presentation Title, Date 7 Kong joins China as countries with the fast- the financial crisis began to wane.
Load more

Recommended publications
  • Income Distribution, Household Debt, and Aggregate Demand: a Critical Assessment
    Working Paper No. 901 Income Distribution, Household Debt, and Aggregate Demand: A Critical Assessment J. W. Mason* Department of Economics, John Jay College-CUNY and The Roosevelt Institute March 2018 * I thank David Alpert, Heather Boushey, Barry Cynamon, Sandy Darity, Steve Fazzari, Arjun Jayadev, Matthew Klein, and Suresh Naidu for helpful comments on earlier versions of this paper. The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. Levy Economics Institute P.O. Box 5000 Annandale-on-Hudson, NY 12504-5000 http://www.levyinstitute.org Copyright © Levy Economics Institute 2018 All rights reserved ISSN 1547-366X ABSTRACT During the period leading up to the recession of 2007–08, there was a large increase in household debt relative to income, a large increase in measured consumption as a fraction of GDP, and a shift toward more unequal income distribution. It is sometimes claimed that these three developments were closely linked. In these stories, the rise in household debt is largely due to increased borrowing by lower-income households who sought to maintain rising consumption in the face of stagnant incomes; this increased consumption in turn played an important role in maintaining aggregate demand.
    [Show full text]
  • What the United States Can Learn from the New French Law on Consumer Overindebtedness
    Michigan Journal of International Law Volume 26 Issue 2 2005 La Responsabilisation de L'economie: What the United States Can Learn from the New French Law on Consumer Overindebtedness Jason J. Kilborn Louisiana State University Paul M. Hebert Law Center Follow this and additional works at: https://repository.law.umich.edu/mjil Part of the Bankruptcy Law Commons, Comparative and Foreign Law Commons, Consumer Protection Law Commons, and the Legislation Commons Recommended Citation Jason J. Kilborn, La Responsabilisation de L'economie: What the United States Can Learn from the New French Law on Consumer Overindebtedness, 26 MICH. J. INT'L L. 619 (2005). Available at: https://repository.law.umich.edu/mjil/vol26/iss2/3 This Article is brought to you for free and open access by the Michigan Journal of International Law at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Journal of International Law by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. LA RESPONSABILISATION DE L'ECONOMIE:t WHAT THE UNITED STATES CAN LEARN FROM THE NEW FRENCH LAW ON CONSUMER OVERINDEBTEDNESS Jason J. Kilborn* I. THE DEMOCRATIZATION OF CREDIT IN A CREDITOR-FRIENDLY LEGAL SYSTEM ......................................623 A. Deregulationof Consumer Credit and the Road to O ver-indebtedness............................................................. 624 B. A Legal System Ill-Equipped to Deal with Overburdened Consumers .................................................627 1. Short-Term Payment Deferrals ...................................628 2. Restrictions on Asset Seizure ......................................629 3. Wage Exem ptions .......................................................630 II. THE BIRTH AND GROWTH OF THE FRENCH LAW ON CONSUMER OVER-INDEBTEDNESS ............................................632 A.
    [Show full text]
  • Box A: Household Sector Risks in China
    Box A Household Sector Risks in China The growth and level of corporate debt in decline in interest rates in China over the China has received significant attention, but 2010s have also raised households’ ability to household debt has also grown rapidly, albeit service debt. The increase in debt has also from a much lower base. The rise in been accompanied by a sharp rise in housing household debt over the past decade is prices. notable because it can negatively affect both Mortgage debt has been the biggest driver [1] financial stability and economic growth. of the increase in household debt over the This Box assesses the direct risk that past decade, and now accounts for around household debt poses to the financial system half of household debt in China (Graph A.2). in China. Credit card debt has also risen strongly. Household debt in China has grown at an Growth in personal business loans has been average annual rate of more than 20 per cent less pronounced, but these loans still account over the past decade. As a result, the ratio of for around 20 per cent of household debt. household debt to GDP has increased Growth in some riskier types of household sharply, from about 20 per cent in 2009 to debt not measured in official household debt around 55 per cent currently (Graph A.1). This statistics, such as peer-to-peer (P2P) and ratio is lower than in most advanced other online lending, has been particularly economies, but is higher than in many other strong in the past few years, although it has large emerging market economies.
    [Show full text]
  • Bankruptcy Futures: Hedging Against Credit Card Default
    CONSUMER LENDING Bankruptcy Futures: Hedging Against Credit Card Default by Russ Ray his article discusses the new bankruptcy futures contract to be launched by the Chicago Mercantile Exchange and examines the mechanics and contract specifications of this innovation, illus- trating its hedging potential in the process. ometime during the latter half of 1999 or early Credit-card debt is becoming particularly burden- 2000, the Chicago Mercantile Exchange intends some. The average credit-card balance is approximately to launch an innovative new futures contract that $2,500, with typical households having at least three dif- will offer consumer-lending institutions, particularly ferent bank cards. The average card holder also uses six credit-card issuers, a hedge against the bankruptcies additional cards at service stations, department stores, filed by their borrowers. Bankruptcy futures—contracts specialty stores, and other vendors issuing their own cred- to buy or sell a cash-valued index based upon the cur- it cards. rent number of actual bankruptcies—will enable con- Commensurate with such increases in consumer sumer lenders to transfer default risk to other lenders debt is an ever-growing rise in consumer bankruptcies, and/or speculators holding opposite expectations. which, in turn, represent an ever-increasing proportion Significantly, this new contract also constitutes a proxy of total bankruptcies. In 1998, 96.9% of all bankruptcy variable for banks' confidence in the value and liquidity filings were personal—not business—bankruptcies. (In of their own loan portfolios, just as other proxy vari- terms of dollar volume, however, businesses continue to ables now measure consumer and investor confidence.
    [Show full text]
  • Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data
    FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data Olivier Coibion UT Austin and NBER Yuriy Gorodnichenko UC Berkeley and NBER Marianna Kudlyak Federal Reserve Bank of San Francisco John Mondragon Northwestern University August 2016 Working Paper 2016-20 http://www.frbsf.org/economic-research/publications/working-papers/wp2016-20.pdf Suggested citation: Coibion, Olivier, Yuriy Gorodnichenko, Marianna Kudlyak, John Mondragon. 2016. “Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data” Federal Reserve Bank of San Francisco Working Paper 2016-20. http://www.frbsf.org/economic-research/publications/working-papers/wp2016-20.pdf The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data Olivier Coibion Yuriy Gorodnichenko UT Austin and NBER UC Berkeley and NBER [email protected] [email protected] Marianna Kudlyak John Mondragon Federal Reserve Bank of San Francisco Northwestern University [email protected] [email protected] First Draft: December, 2013 This Draft: August, 2016 Abstract: Using household-level debt data over 2000-2012 and local variation in inequality, we show that low-income households in high-inequality regions (zip-codes, counties, states) accumulated less debt (relative to their income) than low-income households in lower-inequality regions, contrary to the prevailing view.
    [Show full text]
  • Consumer Credit Access in France and America Working Paper
    Regulating for Legitimacy: Consumer Credit Access in France and America Gunnar Trumbull Working Paper 11-047 Copyright © 2010 by Gunnar Trumbull Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Regulating for Legitimacy: Consumer Credit Access in France and America Gunnar Trumbull November 2010 Abstract Theories of legitimate regulation have emphasized the role of governments either in fixing market failures to promote greater efficiency, or in restricting the efficient functioning of markets in order to pursue public welfare goals. In either case, features of markets serve to justify regulatory intervention. I argue that this causal logic must sometimes be reversed. For certain areas of regulation, its function must be understood as making markets legitimate. Based on a comparative historical analysis of consumer lending in the United States and France, I argue that national differences in the regulation of consumer credit had their roots in the historical conditions by which the small loan sector came to be legitimized. Americans have supported a liberal regulation of credit because they have been taught that access to credit is welfare promoting. This perception emerged from an historical coalition between commercial banks and NGOs that promoted credit as the solution to a range of social ills. The French regulate credit tightly because they came to see credit as both economically risky and a source of reduced purchasing power. This attitude has its roots in the early postwar lending environment, in which loans were seen to be beneficial only if they were accompanied by strong government protections.
    [Show full text]
  • Securitization Continues to Grow As a Funding Source for the Economy, with RMBS
    STRUCTURED FINANCE SECTOR IN-DEPTH Structured finance - China 25 March 2019 Securitization continues to grow as a funding source for the economy, with RMBS TABLE OF CONTENTS leading the way Summary 1 China's securitization market Summary continues to grow, providing an increasing share of debt funding for The share of debt funding for the Chinese economy provided by securitization continues the economy 2 to grow, driven in large part by the growing issuance of structured finance deals backed by Securitization market is evolving as consumer debt such as residential mortgages and auto loans. funding needs change, with consumer debt a growing focus 4 » China's securitization market continues to grow, providing an increasing share RMBS and auto ABS issuance of debt funding for the economy. Securitization accounted for 4.6% of total debt growing, but credit card, micro-loan and CLO deals in decline 5 capital market new issuance for the Chinese economy in 2018, up from 3.7% in 2017. Market developments support further At the end of 2018, the total value of outstanding securitization notes stood at RMB2.7 growth 10 trillion, making China the largest securitization market in Asia and the second largest in Moody’s related publications 12 the world behind the US. However, while it continues to grow, securitization still provides a relatively small share of total debt financing for the Chinese economy compared with Contacts what occurs in the US and other more developed markets. Gracie Zhou +86.21.2057.4088 » Securitization market is evolving as funding needs change, with consumer debt a VP-Senior Analyst growing focus.
    [Show full text]
  • Information Paper on Quarterly
    information paper on economic statistics QUARTERLY HOUSEHOLD SECTOR BALANCE SHEET Singapore Department of Statistics October 2012 Papers in this Information Paper Series are intended to inform and clarify conceptual and methodological changes and improvements in official statistics. The views expressed are based on the latest methodological developments in the international statistical community. Statistical estimates presented in the papers are based on new or revised official statistics compiled from the best available data. Comments and suggestions are welcome. © Singapore Department of Statistics. All rights reserved. Please direct enquiries on this information paper to: Institutional Sector Accounts Singapore Department of Statistics Tel : 6332 7096 Email : [email protected] Application for the copyright owner’s written permission to reproduce any part of this publication should be addressed to the Chief Statistician and emailed to the above address. QUARTERLY HOUSEHOLD SECTOR BALANCE SHEET I. Introduction 1. Since 2003, the Singapore Department of Statistics (DOS) has compiled the household balance sheet on an annual basis from reference year 2000. DOS has successfully developed and compiled the quarterly household sector balance sheet from reference quarter Q1 1995 (Annex A). DOS has not only improved the frequency and timeliness on the release of the household sector balance sheet, but has also incorporated methodological, conceptual and data refinements underlying the development of the quarterly series. 2. This paper is structured as follows: Section II provides the concepts and definitions. Section III highlights improvements in concepts, methodologies and data sources. Section IV analyses and identifies key trends underlying the quarterly household sector balance sheet. Section V compares the health of household sector balance sheets among selected countries.
    [Show full text]
  • Quarterly Consumer Debt Report: 2019 Update
    Hawaii Consumer Debt Report: 2019 Update October 2019 Department of Business, Economic Development & Tourism Research and Economic Analysis Division Acknowledgement This report is prepared by Wayne Liou, Ph. D., Economist, with research assistance from Andrew Wilson. Joseph Roos, Ph. D., Economic Research Program Manager, and Eugene Tian, Ph. D., Division Administrator, provided guidance on this report. Page | 2 Data Source and Terminology The primary debt and delinquency data was provided by Experian Information Solutions, Inc. The data is based on a 10 percent random sample drawn from a population of consumers with at least one credit line; Hawaii residents were identified as consumers with at least one credit line and a Hawaii address (in the 2nd quarter of 2019, data covered 124,000 Hawaii resident consumers and 29.7 million consumers nationwide). Total consumer debt includes all consumer debt product types included in Experian’s database. It does not include loans from family and friends and other non-commercial debt sources. The main part of the report includes tables with the following credit indicators, measured both for Hawaii and for the U.S.: the total amount of loans outstanding for a specific category (expressed in millions of dollars); the average balance per account (in dollars); number of accounts, percent of population using the specific category of debt (measured as a proportion of the number of accounts to the total population with at least one credit line), and the delinquency rate (measured as the percentage of total accounts in a specific category that are 90 days or more overdue). Per capita references, widely used in this report, are calculated based on the scored population of consumers with at least one credit line, not the overall population.
    [Show full text]
  • Debt, Delinquencies, and Consumer Spending Jonathan Mccarthy
    February 1997 Volume 3 Number 3 Debt, Delinquencies, and Consumer Spending Jonathan McCarthy The sharp rise in household debt and delinquency rates over the last year has led to speculation that consumers will soon revert to more cautious spending behavior. Yet an analysis of the past relationship between household liabilities and expenditures provides little support for this view. Analysts forecasting the course of the U.S. economy reflecting the fact that mounting delinquencies prompt pay close attention to consumer spending. Because per- lenders to tighten consumer credit. sonal consumption expenditures make up about two- thirds of the country’s gross domestic product, factors Interpreting Household Debt and Expenditures that could influence consumer spending can have sig- One can construct two very different hypotheses to nificant effects on the economy’s health. Among these explain the increased indebtedness of U.S. households factors, the sharp increase of household indebtedness and its effect on spending. The first hypothesis— and the rising share of income going to payments on which underlies current concerns about a retrench- credit cards, auto loans, mortgages, and other house- ment in spending—suggests that households have hold loans have recently caused some concern. Could taken on too much debt in recent years, placing them- rising debt burdens precipitate a significant cutback in selves in a precarious financial position. Over time, spending as apprehensive consumers take steps to sta- these households will recognize that their indebted- bilize their finances? ness has made them more susceptible to financial dis- tress in the event of a serious illness, job loss, or other To determine whether such concerns are justified, misfortune.
    [Show full text]
  • Will US Consumer Debt Reduction Cripple the Recovery?
    McKinsey Global Institute March 2009 Will US consumer debt reduction cripple the recovery? McKinsey Global Institute The McKinsey Global Institute (MGI), founded in 1990, is McKinsey & Company’s economics research arm. MGI’s mission is to help business and government leaders develop a deeper understanding of the evolution of the global economy and provide a fact base that contributes to decision making on critical management and policy issues. MGI’s research is a unique combination of two disciplines: economics and management. By integrating these two perspectives, MGI is able to gain insights into the microeconomic underpinnings of the broad trends shaping the global economy. MGI has utilized this “micro-to-macro” approach in research covering more than 15 countries and 28 industry sectors, on topics that include productivity, global economic integration, offshoring, capital markets, health care, energy, demographics, and consumer demand. Our research is conducted by a group of full-time MGI fellows based in of fices in San Francisco, Washington, DC, London, and Shanghai. MGI project teams also include consultants drawn from McKinsey’s offices around the world and are supported by McKinsey’s network of industry and management experts and worldwide partners. In addition, MGI teams work with leading economists, including Nobel laureates and policy experts, who act as advisers to MGI projects. MGI’s research is funded by the par tners of McKinsey & Company and not commissioned by any business, government, or other institution. Further information about MGI and copies of MGI’s published reports can be found at www.mckinsey.com/mgi. Copyright © McKinsey & Company 2009 McKinsey Global Institute March 2009 Will US consumer debt reduction cripple the recovery? Martin N.
    [Show full text]
  • U.S. Economic Outlook Federal Reserve Bank of New York, Research and Statistics Group
    U.S. Economic Outlook Federal Reserve Bank of New York, Research and Statistics Group April 13, 2012 Contents FRBNY Staff Outlook Overview 1 FRBNY Staff Risk Assessment 3 Inflation 4 Real Activity 6 Labor Market 7 Productivity and Costs 9 Consumption 10 Consumer Confidence 12 Household Financial Conditions 13 Housing 14 Investment and Inventories 16 Manufacturing 18 FRBNY Staff Foreign Outlook 19 Trade 20 Financial Markets 21 Bank Lending Standards 25 Corporate Profits 26 Government Spending 27 FRBNY Staff Federal Fiscal Outlook 27 Reference 28 This document reflects the views of the Research staff at the Federal Reserve Bank of New York and does not necessarily reflect the official views of the Federal Reserve Bank of New York, the Federal Open Market Committee, or the Federal Reserve System. Evolution of FRBNY Staff Forecast Growth, AR or 2012 2012 2012 2012 2013 2012 (Q4/Q4) 2013 (Q4/Q4) Q4/Q4 gth. rate Q1 Q2 Q3 Q4/Q4 Q4/Q4 2/10/12 4/13/12 2/10/12 4/13/12 Real GDP Real GDP 2.6 2.8 2.8 2.9 FRBNY Staff 2.7 2.2 3.2 2.8 2.9 PCE Deflator 1.5 1.9 1.7 1.8 Consensus** 2.2 2.3 2.4 2.4 2.7 Core PCE Deflator 1.4 1.8 1.6 1.8 PCE Deflator Unemp. Rate (Q4 Avg.) 7.6 7.5 7.1 6.7 FRBNY Staff 2.3 1.9 1.8 1.9 1.8 Core PCE Deflator FRBNY Staff 2.2 1.7 1.7 1.8 1.8 Unemp.
    [Show full text]