10 Questions For 2014

December 27, 2013
Issue No: 13/52
US Economics Analyst
Economics Research
10 Questions for 2014

Jan Hatzius
We wish all our readers a happy, healthy, and prosperous 2014. In the
last US Economics Analyst of the year, we tackle what we believe are
the 10 most important questions on the economic outlook for the next
year.
(212) 902-0394 jan.hatzius@gs.com

Goldman, Sachs & Co.
Alec Phillips
(202) 637-3746 alec.phillips@gs.com
We expect the US economy to accelerate to an above-trend growth

pace in 2014, as the fiscal drag diminishes sharply but the private
sector impulse remains positive. The acceleration is likely to be led by
faster growth in personal consumption and business capital spending,
with continued support from housing.
Jari Stehn
The unemployment rate is likely to fall about as fast as in 2013, with

faster job growth offset by a flattening in labor force participation. But
we expect the slack in the labor market to remain large enough in 2014
to keep wage growth subdued, profit margins high, and inflation well
below the Feds 2% target.
David Mericle
The Federal Reserve is likely to conclude its QE3 program in late 2014.
But we still see no hikes in short-term interest rates until early 2016,
and expect a larger number of FOMC participants to move their dots
in that direction over the next year. Reasons for a continued low-rate
policy include below-target inflation, significant labor market slack
beyond the headline unemployment rate, a lower neutral real
interest rate, and optimal control considerations.
Michael Cahill
(212) 357-6224 jari.stehn@gs.com

Kris Dawsey
(212) 902-3393 kris.dawsey@gs.com
(212) 357-2619 david.mericle@gs.com

Shuyan Wu
(212) 902-3053 shuyan.wu@gs.com
(801) 884-4621 michael.e.cahill@gs.com

Some of these factors are long-lasting, but we still view them as

ultimately cyclical. The US economys performance was decent prior
to 2008 and actually a bit better than the Reinhart-Rogoff norm since
then. If growth does pick up to a sustained above-trend pace next year
and the healing progress makes further visible progress, the view that
the recent weakness has been more cyclical than secular would likely
gain more adherents.
Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification
and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html.
The Goldman Sachs Group, Inc.
Global Investment Research
December 27, 2013
10 Questions for 2014

Here are the 10 most important questions for the US economy in 2014, and our answers.
1. Will the US economy accelerate to an above-trend growth pace?

Yes. In 2013, real GDP grew an estimated 1.9% despite a $200bn payroll and income tax
hike and a $60bn cut in real federal spending, which together shaved an estimated 1
percentage points from real GDP growth. In 2014, we expect only about - percentage
point of fiscal drag. If the underlying private sector impulse remains at its 2013 leveland
we believe this is a reasonable baseline expectationreal GDP growth should pick up to
about 3%, in line with our forecast.
We can be a bit more rigorous by revisiting our financial balances model, which predicts
the desired ex ante income/spending balances in the major sectors of the economy on
the basis of financial and other fundamental variables. When all sectors taken together aim
to save more, this results in a shortfall of desired spending relative to income, which
weakens aggregate demand, output, and employment. Conversely, when all sectors taken
together aim to reduce their balances, this results in an excess of desired spending over
income, which strengthens aggregate demand, output, and employment.
Exhibit 1: A Positive Impulse from the Private Sector
Percent of GDP
10
Percent of GDP
10
Percent of GDP
Personal Saving:
Net Household Investment:
Actual
Percent of GDP
Predicted
F'cast
6
0
84
88
92
96
00
04
08
Percent of GDP
4
12
16
0
97
99
01
03
05
07
09
11
Percent of GDP
0
13
15
17
Percent of GDP
0
Trade Balance:
-1
-1
Actual
Actual
Predicted
95
Percent of GDP
4
Nonfinancial Corporate Balance:
Forecast
80
Actual
Predicted
Predicted
-2
-2
Forecast
Forecast
1
-3
-3
-4
-4
-1
-1
-5
-5
-2
-2
-6
-6
-3
-3
-7
-7
-4
-8
-4
95
97
99
01
03
05
07
09
11
13
15
17
-8
95
97
99
01
03
05
07
09
11
13
15
17
Source: Department of Commerce. Goldman Sachs Global Investment Research.
Goldman Sachs Global Investment Research
December 27, 2013
Exhibit 1 shows the main building blocks of the private sector side of our model, namely
the equations for the personal saving rate, (net) residential investment, corporate sector
net saving, and the trade balance. The model predicts a positive impulse from lower
personal saving, higher residential investment, and lower corporate net saving, with net
trade acting as a small offset.
Exhibit 2: Private Boost on Course to Trump Public Drag
Percent of GDP
4
Percent of GDP
4
Private and Public Sector Impulse*
-2
-2
-4
-4
Forecast
Net Impulse
Private Sector
Public Sector
-6
-6
-8
-8
2009
2010
2011
2012
2013
2014
2015
2016
* Relative to trend growth. Impulses calculated from GS financial balances model.

Source: Goldman Sachs Global Investment Research.
Exhibit 2 aggregates the predicted changes across these four categories into an overall
private sector impulse and plots this private sector impulse against an overall public sector
impulse.1 It then defines the sum of the private and public sector impulse as the overall net
impulse to growth from changes in desired financial balances. The chart shows a mildly
positive net impulse in 2010-2012, a mildly negative net impulse in 2013, and a more
clearly positive net impulse in 2014-2015.
Exhibit 3: Net Impulse Points to Above-Trend Growth
Percent of GDP
2
Percent
4
-1
-2
-3
-1
Net Impulse from

Private/Public Sector* (left)
-4
Forecast
-2
Real GDP Growth (right)
-5
-3
2009
2010
2011
2012
2013
2014
2015
2016
* Relative to trend growth. Impulses calculated from GS financial balances model

The private sector impulse also includes a simple model for the statistical discrepancy between aggregate
income and spending, which is omitted from Exhibit 1.
December 27, 2013
Finally, Exhibit 3 shows that the ups and downs of the net impulse correspond quite closely
to the ups and downs of real GDP growth over the last few years. The chart suggests that
the positive net impulse predicted for 2014-2015 should translate into real GDP growth of
3%+, in line with our forecast.
2. Will consumer spending growth improve?

Yes. The case for optimism partly rests on our expectation that the personal saving rate
can decline a bit further. Our model in the top left hand corner of Exhibit 1 shows the
desired saving rate as a function of household wealth, credit availability, and labor market
conditions. The model says that the saving rate can fall a bit further as household wealth is
increasing, credit conditions are easing, and the labor market is improving.
Exhibit 4: Real Income Growth Likely to Accelerate
Percent change, year ago
8

8
F'cast
0
Real Consumer Spending
Real Disposable Income
-2
2013
Tax Hike
-2
-4
-4
90
92
94
96
98
00
02
04
06
08
10
12
14
Note: Shaded areas denote recessions.

But the more important swing factor in 2014 is likely to be real income growth. The biggest
component of the fiscal drag in 2013 was the increase in payroll and income taxes by about
$200bn, which kept the growth rate of real disposable income at an estimated 1% for the
year as a whole. In 2014, this drag will disappear and we consequently expect real income
growth to accelerate to around 3%, as shown in Exhibit 4. By our estimates, which are
based on both the Feds FRB/US model and our own consumption model, the 2013 income
hit shaved around percentage point off consumption growth in 2013 but this impact
should decline to less than point in 2014, as shown in Exhibit 5. The reduction in the tax
hit explains most of the acceleration in consumption growth in our forecast from 2% in
2013 to 2.9% in 2014.
It is important to note that our forecast for stronger real disposable income growth only
builds in a very modest acceleration in nominal hourly wage growth from its current 2%
pace to 2%-2%. The more important drivers are the reduction in fiscal drag and a
slightly faster increase in payroll employment growth. If wages were to rise more quickly,
this would be icing on the cake, and would probably imply a pickup in both real
disposable income and personal consumption growth to more than 3%.
December 27, 2013
Exhibit 5: As the 2013 Tax Hit Diminishes

Percentage points
0.0
Percentage points
0.0
-0.1
-0.1
-0.2
-0.2
-0.3
-0.3
-0.4
-0.4
-0.5
-0.5
Estimated Effect of Tax Increase on

Annual Consumption Growth:
-0.6
-0.6
FRB/US Model
-0.7
-0.7
GS Consumption Model
-0.8
-0.8
-0.9
-0.9
2013
2014
3. Will capital spending rebound?

Yes. The growth rate of nonresidential fixed investment (also known as capital spending)
has slowed from a cycle peak of around 10% in late 2011/early 2012 to just 3% in 2013, and
we expect a reacceleration to about 8% over the next year. This forecast is based on a
model, shown in Exhibit 6, which expresses capital spending as a function of returns on
capital, availability of credit, the starting point of capital spending, and the lagged growth
rate of consumer spending.
Exhibit 6: An Acceleration in Capital Spending
15

15
10
10
-5
-5
Capital Spending Growth:
-10
-10
Actual
-15
-15
Model Estimate
-20
-20
91
93
95
97
99
01
03
05
07
09
11
13
15
The predicted acceleration comes from two sources. First, the inputs into the model,
specifically consumer spending, look stronger in 2014 than in 2013. This is important
because the investment acceleratorthe lagged feedback from stronger growth in the
broader economy to capital spendingplays an important role in our model. Second, the
recent performance of capital spending has undershot our model, and we expect a reversal
of that undershooting in 2014.
December 27, 2013
One common reaction to this prediction is that capital spending has now lagged behind
economists forecasts for so long that it is likely futile to expect a reversal, and it would be
better to look for more structural reasons for why spending has been so weak. But while
model instability is always a potential concern, we think it is too early to draw this
conclusion. The reason is that the behavior of capital spending did not look very surprising
relative to the fundamentals through 2012. Exhibit 6 shows that in the first few years of the
current recovery capital spending grew at a pace that was not only similar to prior cycles
but also very much in line with the predictions of our model. It is only since early 2013
that capital spending has disappointed. In our view, this deviation is not sufficient to
conclude that the model has broken down. We therefore still expect faster capital spending
growth.
4. Will the housing market continue to recover?

Yes. We did see some weakness following the 100bp increase in mortgage rates over the
summer. New home sales, housing starts, and the homebuilder index all deteriorated, and
the bottom-up commentary from the major homebuilders in the third quarter was broadly
disappointing.
But recently, the housing sector has shown renewed signs of improvement. Exhibit 7 plots
our housing current activity indicator (CAI), a statistical summary of 8 different measures,
on a 3-month moving average basis. The recent upturn primarily reflects significant
improvements in new home sales, housing starts, and the homebuilders index, all of
which are coincident or leading indicators of housing activity.
Exhibit 7: Housing Activity Has Picked Up Recently
Percent change, annual rate
20

20
Housing CAI*
10
10
0
0
-10
-10
-20
-20
-30
-30
-40
-40
-50
2005
2006
2007
2008
2009
2010
2011
2012
2013
-50
2014
* 3-month moving average.

Barring another sharp increase in mortgage rates, we think that the upward trend should
continue in 2014 because the longer-term fundamentals for housing activity remain very
favorable. The excess supply of homes has largely been unwound via a long period of
subpar building activity, and housing starts remain well below our estimates of long-term
demographic fundamentals, as shown in Exhibit 8.
December 27, 2013
Exhibit 8: And the Longer-Term Fundamentals Remain Very Favorable

Thousands
2800
Thousands
2800
Housing Starts
Household Formation
Demolitions*
2400
2400
Fcst
2000
2000
1600
1600
1200
1200
800
800
400
400
0
0
86
88
90
92
94
96
98
00
02
04
06
08
10
12
14
16
* Assumed demolition rate of 300,000 per year.

We are a bit less optimistic about house prices. As shown in Exhibit 9, house prices are
quite close to the levels implied by our house price model, based on demographic factors
and the cost of capital. Given the valuation picture and the increase in mortgage rates, we
have been a little surprised by the lack of any deceleration in house prices this year. But
we would expect somewhat slower growth of 5%-6% in 2014still decent but no longer
nearly as rapid as the double-digit rates seen over the past 12-18 months.
Exhibit 9: But House Price Appreciation is Likely to Slow

Index
250
Index
250
366 City Weighted National HPI (2000Q1=100):
200
200
Actual
Estimated Equilibrium
150
150
Projected
100
2013Q2
50
0
1975
100
Forecast
50
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: Fiserv. Goldman Sachs Global Investment Research.
December 27, 2013
5. Will the labor force participation rate stabilize?

Yes, but we have (once again) revised down the level at which this stabilization is likely to
take place. A new Philadelphia Fed working paper uses household survey microdata to
estimate the sources of the decline in labor force participation since the start of the
recession in 2007Q4.2 The author breaks down the 2.7pp decline in the participation rate
since 2007Q4 into retirement (1.1pp), disability (0.6pp), discouragement (0.6pp), and other
reasons (0.4pp). Over the past year, retirement accounts for the entire 0.4pp decline, with
no significant changes in any of the other categories.
The Philadelphia Fed study suggests that the increase in retirement decisions currently
accounts for a bigger decline in labor force participation than one would expect on purely
demographic grounds. This is because the 0.4pp increase in retirement last year exceeds
the 0.2-0.3pp per year reduction in participation implied by changes in the age structure of
the population. Since it is quite rare for retired workers to re-enter the labor force, even in
a better labor demand environment, this observation hints at a participation hysteresis
effect, i.e. a transformation of cyclical into structural non-employment.
So how will overall participation evolve? Our working assumption is that nonparticipation
because of retirement and disability will stay on the 0.4pp trend of the last year. This
means that the post-crisis increase in nonparticipation because of discouragement or other
reasonswhich probably include a mixture of economic and non-economic motivations
would need to reverse over a 2-3 year period for the overall participation rate to stay flat
over this horizon. Although the uncertainty is considerable, we believe that this is a
reasonable set of assumptions, assuming the stronger growth pace of GDP that we
forecast translates into stronger labor demand growth.
Combined with our employment forecast, our participation view implies that the
unemployment rate will continue to decline at roughly the same pace of percentage
point per year as over the past two years, but the reasons for this decline will become more
unequivocally positive. If so, we would expect the unemployment rate to fall below the
Feds 6% threshold sometime in the second half of 2014.
6. Will profit margins contract?

No. As shown in Exhibit 10, the most important driver of profit margins is the gap
between price inflation and unit labor cost inflation. When prices grow faster than unit
labor costs, firms typically manage to raise their profit margins, and vice versa. In our view,
the price/ULC gap is likely to move back into slightly positive territory in 2014. Exhibit 11
shows that the underlying trend calculated from the three primary measures of hourly
wagesaverage hourly earnings, the employment cost index, and compensation per
houris still only growing 2%. Going forward, we expect only a modest acceleration to
perhaps 2.5%. Meanwhile, we expect productivity growth to reaccelerate to 1.5%-2%.
Together, these numbers imply unit labor cost growth of 0.5%-1%, which would be slightly
below the rate of price inflation of 1%-1.5%.
See Shigeru Fujita, On the Causes of the Decline in the Labor Force Participation Rate, Federal Reserve Bank
of Philadelphia, November 19, 2013.
December 27, 2013
Exhibit 10: The Price/Wage Inflation Gap Drives Profit Margins

6

60
40
20
-2
-20
Core PCE vs. Unit Labor Cost (left)
-4
-40
Corporate Profit Margins as Percent of GDP (right)

-6
1990 1992 1994 1996 1998 2000
Note: Shaded areas denote recessions.
2002
2004
2006
2008
2010
2012
-60
2014
Source: Department of Commerce. Department of Labor.
Exhibit 11: Wage Growth Remains Sluggish

16

16
AHE Production Workers
14
14
Nonfarm Business Compensation Per Hour
12
Employment Cost Index
10
12
10
Wage Tracker
-2
1965
-2
1970
1975
1980
1985
1990
1995
2000
2005
2010
Of course, the price/ULC gap is not the only driver of margins. But other factors are also
likely to look reasonably friendly. We expect foreign profits to improve in 2014 as the
global economy gathers some momentum, and see no major changes in corporate income
taxes or financial profits.
7. Will core inflation stay below the 2% target?

Yes. Core PCE inflation has fallen from 1.6% at the end of 2012 to 1.1% now. We do
expect it to rebound slightly to 1.4% at the end of 2014, for two reasons. First, inflation
expectations remain well anchored around 2%, despite a meaningful downside surprise to
actual headline and core inflation over the past year. Assuming this does not change, the
anchored level of expectations should exert some gravitational pull on actual inflation in
2014. Second, almost half of the slowdown in core PCE inflation in 2013 was due to the
slowdown in healthcare cost growth. Although a significant part of this slowdown is likely
to persist, some of itspecifically the Medicare reimbursement cut related to the federal
December 27, 2013
sequesteris likely to reverse in 2014 and this will likely add 0.1-0.2 percentage points to
core PCE inflation.
Exhibit 12: Pipeline Measures of Inflation Still Point Downward
60

12
9
40
6
20
0
-3
-20
-6
-40
Producer Prices Indexes:

Crude Materials for Further Processing (left)
Intermediate Materials less Foods and Energy (right)
-60
2004
2006
2008
2010
-9
2012
-12
2014
Source: Department of Labor.
That said, we think the pace of convergence back to the Feds 2% PCE target will be slow,
for two reasons. First, the profit margin discussion above also has important implications
for inflation. When unit labor cost inflation is below price inflation, this means that the
labor market is still exerting downward pressure on price inflation, or at a minimum
slowing down the convergence back to the target. Second, at least in our baseline outlook
we do not build in major upward price shocks from commodity prices, currency markets,
taxes, or other exogenous factors. In fact, most pipeline measures of inflation are still
pointing downward, as shown in Exhibit 12.
8. Will QE3 end in 2014?

Yes. In our view, the probability is high that the FOMC will remain on the $10bn-permeeting tapering pace signaled by Chairman Bernanke at the December 18 press
conference. This would imply an end to QE3 after either the October or December meeting,
depending on whether the committee decides to make the last move $15bn or to leave a
$5bn "stub."
Deviations from this path are possible, but we believe the hurdle is fairly high in practice.
At this point, Fed officials probably have little confidence that they can use small moves in
the QE pace to fine-tune their monetary impulse. After the events of last summer, they are
probably particularly reluctant to signal an increase in the pace of tapering, now that the
program is on a natural course toward expiration well before the point at which the FOMC
expects to hike the funds rate. The hurdle for interrupting the tapering process in response
to weaker growth or lower inflation might be a bit lower, but we believe that the surprise
would still need to be quite meaningful.
9. Will the dots shift toward a 2016 rate hike?

Yes. At present, the Summary of Economic Projections shows that 2 FOMC meeting
participants see 2014 as the appropriate year for the first rate hike, 12 participants see 2015
as appropriate, and 3 participants see 2016 as appropriate. Even under our relatively
10
December 27, 2013
optimistic forecasts for economic growth in 2014, we see four reasons why this distribution
is likely to shift further into 2016.
First, inflation is likely to remain low, as discussed in question 7. If core PCE inflation is just
1.4% at the end of 2014, as we expect, we believe many Fed officials would be reluctant to
signal a 2015 rate hike.
Second, the labor market still has plenty of slack when we consider not just the
unemployment gap but also the participation gap. Using an approach similar to that in
Erceg and Levin (2013), we have shown that explicit consideration of the participation gap
suggests that Fed officials should use a lower headline unemployment threshold for
determining when to hike for the first time.3
Third, the real neutral funds rate might be lower than normal due to structural
headwinds. The model estimated by Thomas Laubach and John Williams, for example,
shows how the real neutral funds rate varies over time based on how the economy has
actually performed. These estimates suggest that the real neutral funds rate has fallen
significantly with the onset of the crisis and now stands slightly below 0%.4
Fourth, optimal control considerations make a strong case for lasting stimulus. Our
update of Janet Yellens optimal control path with the latest Summary of Economic
Projections points to the first funds rate hike in 2016Q1, and the first hike in the English et
al. (2013) optimal control path occurs as late as 2017.5 To be sure, the optimal control
approach is only one input into the committees policy deliberations, but we believe that
some officialsespecially the new Fed Chairwill put a significant amount of weight on it.
10. Will the secular stagnation theme gain more adherents?

No. The bursting of the housing and credit bubble dealt a heavy blow to aggregate
demand, which was exacerbated by the premature turn to fiscal retrenchment. The interest
rate that would have been needed to achieve full employment has therefore been deeply
negative in recent years. In our view, policymakers would have achieved more desirable
results if they had steered a more expansionaryor in the case of fiscal policy, less
contractionarycourse.
But we do not believe that this weakness signals a secular stagnation.6 In our view, the
economys performance prior to the crisis was reasonably strong, even taking into account
the demand boost from the housing and credit bubble and especially if we broaden the
perspective from the US to the world as a whole. And the US economys performance
since the crisis is actually a bit better than the norm following major financial crises, as
shown in Exhibit 13.
See Sven Jari Stehn, Two Reasons for a Late Fed Exit, US Daily, October 8, 2013 and Christopher Erceg and
Andrew Levin, Labor Force Participation and Monetary Policy in the Wake of the Great Recession, Federal
Reserve Bank of Boston, April 9, 2013.
See Thomas Laubach and John Williams, Measuring the Natural Rate of Interest, Review of Economics and
Statistics,
November
2003.
The
link
to
the
latest
estimates
is:
http://www.frbsf.org/economics/economists/jwilliams/Laubach_Williams_updated_estimates.xls.
See William English, David Lopez-Salido, and Robert Tetlow, The Federal Reserves Framework for Monetary
PolicyRecent Changes and New Questions, FEDS Working Paper 2013-76 (November).
See Lawrence Summers IMF speech at http://www.fulcrumasset.com/files/summersstagnation.pdf as well as

More Cyclical than Secular, US Economics Analyst 13/49, December 6, 2013.
11
December 27, 2013
Exhibit 13: Recovery Actually a Bit Better than Reinhart-Rogoff Norm

Index
110
106
102
Index
110
Real Gross Domestic Product
Range, Big Five
Average, Big Five
United States, since crisis*
106
102
98
98
94
94
90
90
86
86
-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Quarters from Peak
*Includes GS forecast for 4Q 2013 through 4Q 2014.
In 2014, we expect this modest outperformance to continue. If our forecasts are on the
mark, the view that the recent weakness has indeed been more cyclical than secular would
likely gain more adherents.
Jan Hatzius
12
December 27, 2013
The US Economic and Financial Outlook

(% change on previous period, annualized, except where noted)
2012
2013
(f)
2014
(f)
2015
(f)
2016
(f)
Q1
2013
Q2
Q3
2.8
2.2
12.9
7.3
12.7
7.6
3.4
-1.4
-0.7
-431
58
3.9
1.9
2.0
12.5
2.7
1.3
2.9
3.3
-5.1
-0.1
-416
77
2.2
3.2
2.9
6.6
6.9
7.3
7.8
5.5
-2.8
1.4
-412
108
3.6
3.2
2.7
12.4
6.8
5.9
8.1
5.4
-1.4
1.8
-434
129
3.7
3.0
2.5
12.5
5.5
5.0
6.1
5.0
-1.3
2.0
-445
133
3.5
1.1
2.3
12.5
-4.6
-25.7
1.6
3.8
-8.4
-1.3
-422
42
4.9
2.5
1.8
14.2
4.7
17.6
3.2
-1.5
-1.6
0.4
-424
57
0.1
783
368
4,661
5.4
916
422
5,141
7.9
1,078
497
5,329
3.8
1,301
625
5,520
2.5
1,505
753
5,705
1.9
957
449
4,943
8.0
2.1
2.1
1.8
1.5
1.8
1.2
1.5
1.7
1.3
1.9
1.9
1.6
2.1
2.1
1.8
8.1
7.4
6.6
6.0
-1,087
-680
-600
-475
2014
Q2
Q3
Q4
Q1
Q4
4.1
2.0
10.3
4.8
13.4
0.2
5.7
-1.5
1.7
-420
116
1.3
2.4
4.0
-4.4
4.9
-0.4
6.9
6.0
-12.0
1.3
-397
94
5.5
3.0
2.5
5.0
8.2
7.5
10.0
6.0
0.0
1.5
-402
96
3.5
3.5
3.0
9.0
8.2
7.5
10.0
6.0
0.0
1.5
-407
104
4.0
3.5
3.0
13.0
8.2
7.5
10.0
6.0
0.0
1.5
-415
112
4.0
3.5
3.0
13.0
8.2
7.5
10.0
6.0
-3.0
1.5
-423
120
4.0
869
442
5,057
8.7
882
369
5,357
8.6
955
427
5,209
7.9
1,003
455
5,257
6.1
1,043
479
5,305
4.7
1,106
511
5,353
4.2
1,162
544
5,402
3.8
1.7
1.9
1.5
1.4
1.7
1.2
1.6
1.7
1.2
1.2
1.7
1.1
1.2
1.7
1.1
1.6
1.8
1.3
1.4
1.8
1.3
1.7
1.8
1.4
5.6
7.7
7.5
7.3
7.1
6.8
6.7
6.5
6.3
-550
--
--
--
--
--
--
--
--
OUTPUT AND SPENDING

Real GDP
Consumer Expenditure
Residential Fixed Investment
Business Fixed Investment
Structures
Equipment
Intellectual Property Products
Federal Government
State and Local Government
Net Exports ($bn, '09)
Inventory Investment ($bn, '09)
Industrial Production, Mfg
HOUSING MARKET
Housing Starts (units, thous)
New Home Sales (units, thous)
Existing Home Sales (units, thous)
Case-Shiller Home Prices (%yoy)*
INFLATION (% ch, yr/yr)

Consumer Price Index (CPI)
Core CPI
Core PCE**
LABOR MARKET
Unemployment Rate (%)
GOVERNMENT FINANCE
Federal Budget (FY, $ bn)
FINANCIAL INDICATORS
Federal Funds^ (%)
0.16
0.13
0.13
0.13
1.25
0.14
0.09
0.08
0.13
0.13
0.13
0.13
10-Year Note^
1.72
2.88
3.25
3.75
4.00
1.96
2.30
2.81
2.88
2.90
3.05
3.15
Euro ($/)^
1.31
1.38
1.39
1.35
1.25
1.30
1.32
1.34
1.38
1.40
1.40
1.40
Yen (/$)^
84
98
109
115
125
95
97
99
98
103
105
107
Brent Crude Oil ($/bbl)^
110
108
103
100
100
108
103
112
108
107
105
105
* Weighted avg of metro-level HPIs for 366 metro cities where the weights are dollar values of single-family housing stock reported in the 2000 Census.
** PCE = Personal consumption expenditures. ^ Denotes end of period.
NOTE: Published figures are in bold.
0.13
3.25
1.39
109
103
13
December 27, 2013
Economic Releases and Other Events

Estimate
Time
(EST)
Date
Mon
Tue
Dec 30
Dec 31
Indicator
Jan 02
+1.0%
-0.6%
17:00 GS Analyst Index (Dec)
n.a.
n.a.
57.2
9:00 S&P/Case Shiller Home Price Index (Oct)
n.a.
+0.9%
+1.0%
9:45 Chicago Purchasing Managers Index (Dec)
60.0
61.0
63.0
8:30 Initial Jobless Claims

8:30 Continuing Claims
10:00 ISM Manufacturing Index (Dec)

Jan 03
Last Report
n.a.
10:00 Construction Spending (Nov)
Fri
Consensus
10:00 Pending Home Sales (Nov)
10:00 Consumer Confidence (Dec)

Thu
GS
77.0
76.3
70.4
n.a.
345,000
338,000
n.a.
2,855,000
2,923,000
+0.8%
+0.6%
+0.8%
57.0
56.9
57.3
10:15 Philly Fed Pres Plosser spks on panel discussion at econ conf
14:30 Bernanke spks at American Economics Association; Philadelphia
Sat
Jan 04
17:00 Lightweight Motor Vehicle Sales (Dec)
16.0M
16.0M
16.3M
17:00 Domestic Motor Vehicle Sales (Dec)
12.5M
12.5M
12.6M
10:15 Fed's Dudley, Rosengren, Plosser & Kocherlakota spk on a panel

at American Economics Association Conference; Philadelphia
14
December 27, 2013
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