Bernard L. Weinstein, Ph.D.

1
A Falling Dollar, 100 Oil, and the Sub-Prime
Mess Is a Recession Inevitable?

• Bernard L. Weinstein, Ph.D.
• Presentation to North Dallas Chamber of Commerce
  Economic Outlook Breakfast
  
• January 8, 2008

2
Real Economic Growth
Gross domestic product
3Q 2007 4.9
2003 2004
2005 2006
2007
Source Commerce Department
3
Nonfarm Payrolls
Monthly change, in thousands
Dec. 07 18,000
05 2006
2007
Source Labor Department
4
U. S. Jobless Rate
In percent, seasonally adjusted
06
2007
Source U.S. Department of Labor
5
Personal Income
Total personal income in trillions of dollars,
before taxes, at seasonally adjusted annual rate
s
Nov. 2007 11.87 trillion
2006
2007
Source U.S. Department of Commerce Bureau of
Economic Analysis
6
Retail Sales
Total retail sales in billions of dollars,
seasonally adjusted.
Nov. 2007 385.8 billion
06
2007
Source U.S. Commerce Department
7
Construction Spending
In billions of dollars, seasonally adjusted
Nov. 2007 1.17 trillion
2006
2007
Source Commerce Department
8
Productivity
Nonfarm business productivity, percent change
from previous quarter at annual rate, seasonally
adjusted
03 2004
2005 2006
2007
Source U.S. Department of Labor
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Oiloholics
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Twin Concerns
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History Lesson
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Deficit in International Goods Services Trade
Billions of dollars, seasonally adjusted. Import
figures exclude shipping and insurance.
Oct. 2007 57.8 billion
2006
2007
Source U.S. Department of Commerce
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Industrial Production
Index, 2002100, seasonally adjusted
Nov. 2007 113.9
Source Federal Reserve Board
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Bigger Role in Economy
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Falling Dollar, Smaller Deficits
Source U.S. Census Bureau, JPMorgan Chase
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Housing Starts
New private housing starts during the month, in
millions, at seasonally adjusted annual rates.
Nov. Starts 1.19
2006
2007
Source Dept. of Commerce Dept. of H.U.D.
Census Bureau
18
New-Home Sales
Single-family homes (in thousands)
Nov. 2007 647,000
Source Commerce Department
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Existing-Home Sales
Annual rate, in millions of dwelling units.
Nov. 2007 5.0 million
Source The National Association of Realtors
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Source Wall Street Journal, Oct. 11, 2007
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Source Wall Street Journal, Oct. 11, 2007
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Highest Subprime Exposure
Source Wall Street Journal, Oct. 11, 2007
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Subprime Loans in 2006
Source Wall Street Journal, Oct. 11, 2007
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Dip in Household Ownership
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Home Value Decline
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Construction Lending And Sub Prime Loans
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Producer Prices
Percentage change from previous month, seasonally
adjusted.
05 2006

2007
Source Labor Department
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Consumer Prices
Percentage change, month to month (seasonally
adjusted)
0
2006
2007
Source Bureau of Labor Statistics
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Consumer Confidence Index
From a monthly survey of 5,000 U. S. households,
1987 100
Nov. 2007 87.3
2006
2007
Source The Conference Board
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Leading Indicators
Index of 10 indicators designed to lead, or
predict overall economic activity 1996 100.
Nov. 2007 136.3
05 2006
2007
Source The Conference Board
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Unemployment Rate, U. S., Texas, D/FW
U. S. Texas Seasonally Adjusted
D/FW not Seasonally Adjusted
U. S. Dec. 2007 5.0 Texas Nov. 2007 4.1 D/
FW Nov. 2007 4.0
Source Texas Workforce Commission
35
Payroll Employment in Dallas-Plano-Irving
Metropolitan Division1999-2006 (annual averages)
Through October 2007 Source Texas Workforce Co
mmission
36
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