Federal Reserve Bank of Chicago held its 20th annual Automotive Outlook Symposium (AOS) on May 30–31, 2013, at its Detroit Branch. More than 70 economists and analysts from business, academia, and government attended the AOS. This Chicago Fed
Letter analyzes the forecasts for 2013 and 2014 and summarizes the presentations from this year’s AOS.1 The U.S. economy continued to expand from the longest and deepest drop in economic activity since the Great Depression. During the 15 quarters following the end of the “Great Recession,” the annualized rate of real gross domestic product (GDP) growth was 2.1%—near what is considered the historical trend rate of growth for the U.S. economy. This GDP growth rate is very disappointing given that real GDP fell from its peak by nearly 5% during the Great Recession, which lasted for six quarters beginning with the first quarter of 2008.
Generally, the pace of economic recovery is quite sharp following a deep recession. The sluggish growth following the Great Recession would
suggest that large output gaps in the economy remain prevalent. The labor market highlights the persistent slack in the economy. Even with tepid growth, the economy continued to add jobs, but the number of jobs added from March 2010 through May 2013 was just over 6.3 million— around 72% of the more than 8.7 million jobs lost from February 2008 through February 2010. Also, the U.S. employment level is still more than 2.4 million workers below the previous peak. In addition to making up for the lost jobs, the U.S. economy needs to generate jobs to accommodate all the new entrants into the labor force. During the ten years before the Great Recession, the labor
force in the U.S. economy increased by an average of 1.7 million individuals each year, according to the U.S. Bureau of Labor Statistics. Even if the labor force had grown at half this rate, over 4 million additional workers would have been added since the start of the recession. All of these factors are reflected in the very high unemployment rate:
Source: Chicago Federal Reserve Symposium Report
Letter analyzes the forecasts for 2013 and 2014 and summarizes the presentations from this year’s AOS.1 The U.S. economy continued to expand from the longest and deepest drop in economic activity since the Great Depression. During the 15 quarters following the end of the “Great Recession,” the annualized rate of real gross domestic product (GDP) growth was 2.1%—near what is considered the historical trend rate of growth for the U.S. economy. This GDP growth rate is very disappointing given that real GDP fell from its peak by nearly 5% during the Great Recession, which lasted for six quarters beginning with the first quarter of 2008.
Generally, the pace of economic recovery is quite sharp following a deep recession. The sluggish growth following the Great Recession would
suggest that large output gaps in the economy remain prevalent. The labor market highlights the persistent slack in the economy. Even with tepid growth, the economy continued to add jobs, but the number of jobs added from March 2010 through May 2013 was just over 6.3 million— around 72% of the more than 8.7 million jobs lost from February 2008 through February 2010. Also, the U.S. employment level is still more than 2.4 million workers below the previous peak. In addition to making up for the lost jobs, the U.S. economy needs to generate jobs to accommodate all the new entrants into the labor force. During the ten years before the Great Recession, the labor
force in the U.S. economy increased by an average of 1.7 million individuals each year, according to the U.S. Bureau of Labor Statistics. Even if the labor force had grown at half this rate, over 4 million additional workers would have been added since the start of the recession. All of these factors are reflected in the very high unemployment rate:
Source: Chicago Federal Reserve Symposium Report
