Listed below are my notes from the Oct. 8th FTR webinar on 2016 economic outlook that I attended, moderated by Ryan Beall of FTR with Bill Witte FTR’s Economy Expert:
- Bill is not confident in the overall economy because of the slow growth we have seen since 2009. From mid 2009 to mid 2013, GDP growth was 1.9%. During the next 5 quarters, growth was 2.9%. The past 3 quarters 2.2% and the full period, quarter 3 2009 to quarter 2 2015 was 2.2%. Economists refer to this tepid growth as the “new normal“.
- New Normal Economic Behavior: GDP growth of around 2%;Labor market creating < 200,000 jobs per month; Labor Participation rate decreasing; shift to more part time work; slow wage growth, < 2%.
- Labor Market grew by 187,000 jobs per month from 2011 to 2013 compared to 260,000 jobs per month in 2014. YTD, Sept 2015, growth has been below 200k jobs per month at only 198,000. Forecast for 2016, 170,000 jobs per month.
- Bill’s estimates for GDP growth for Q3 2015, 2.1%; Q4 2.0%; average for 2016 2.4%. We are not seeing the robust growth( 4% range) in GDP that has happened after prior recessions.
- Crude Oil Price Assumption: Q4 2015,$ 43.50 per BBL.; Q4 2016, $ 51.50 per BBL.;Q4 2017,$ 53.60 per BBL.;Bill sees a ceiling of $60.00 per BBL which will bring back the the frackers in force and apply downward pressure on prices.
- Potential Downside Risks:
1) The International Situation: slow growth in China; Geo-political chaos in Middle East; and the slow growth economies in Europe.
2) The Financial Sector: i.e., The Federal Reserve, Bill is not very confident in the Fed’s responses and models in managing the economy to date.
3) Fiscal Deadlock: the “disgraceful” tax code and threatened government shutdown.
4) Regulatory Overreach: the over-regulation by the EPA, HHS, NLRB and other agencies may have lead to positive social effects but have lead to negative economic results during the past 6 to 7 years.
- Potential Upside Factors: 0 None Bill cannot identify any.
I would encourage everyone to go to tour FTR’s web site, request samples of their reports, and subscribe. I find their insights and reporting are some of the best transportation intelligence in the marketplace. www.ftrintel.com
Joe Lombardo, NGNF (nice guy, no freight)