October2011

Forecast Review

Doug MacdonaldUtah League of Cities and Towns

Led by China, nominal GDP will average 5.1% in 2012 (down 1% from 2011)

Source: The Economist, October 8, 2011

The U.S. economy (real GDP) appears to be moving upward

The Fed’s U.S. leading economic indicators are improving too

But the ECRI leading index is pointing

down

And a European Crisis Looms

Joe Brusuelas, Bloomberg, “Hard default in Greece will require recapitalizations in U.S. (JP Morgan, Citi, Wells, BofA, HSBC, GS)

Mohamed El-Erian, PIMCO, “French banks are under pressure”

Neil Barofsky, NYU, “The parallels with 2008 are remarkable, low capital held against assets.”

Nouriel Roubini, NYU, “We are running out of policy bullets. At this point, the issue is not whether there is going to be a recession, but whether it’s going to be severe recession and a global financial crisis.”

And a European Crisis Looms

U.S. Business Equipment & Software will in improve in 2012, but at a slower pace

Utah employment still headed up, while U.S. job growth stalls

Unemployment claims rose a bit in last three months, but are now below 2002 levels

Consumer sentiment up 4 points in September after plummeting in July & August

Utah Residential Construction up 2% in 2011 thru July, may improve up to 15% in 2012

Source: Univ. of Utah, BEBR

Last three months increased 4.3%

Salt Lake County 2nd Quarter Sales Stats

Sales in Million $ % Change from 2010

Manufacturing $ 203 - 0.8%Wholesale durable goods

458 10.9

Retail – General merchandise

551 5.5

Retail – Motor Vehicles

575 25.3

Retail – Apparel 156 11.4Retail – Eating and drinking

400 8.1

Retail – Food stores 360 - 7.4Services – Business 236 24.8Services – Auto Rentals & Repair

176 7.6

Total Taxable Sales $5,035 6.2Source: Utah State

Tax Commission

U.S. consumers continue to spend despite volatile job and

stock market conditions

1 month, ytd -1.2%