Economic Outlook in Light of COVID19

Madison County Business League & Foundation Please be aware that you will be muted upon entry (audio/video) You will have the opportunity to ask Dr. Webb questions via the chat function, you will find under the More tab Thanks for Joining!

Madison County Business League & Foundation Business League Briefings Volume 5:What Happens Now? The Economic Outlook in Light of COVID19

Business League Briefings Moderator Barney Daly Chairman Madison County Business League & Foundation

Business League Briefings Dr. Darrin Webb MS State Economist Director of University Research Center

What Happens Now? The Economic Outlook in light of COVID19 Mississippi University Research Center Mississippi Institutions of Higher Learning Darrin Webb, State Economist dwebb@mississippi.edu (601) 432-6556 To subscribe to our publications, email Janna Weller at jweller@mississippi.edu Visit our website for state and county level economic data www.mississippi.edu/urc Follow URC on Twitter @MississippiURC

US Real GDP: Annualized Quarterly Growth 20% 14.3%12.5% 15% 7.5%4.9% 10% 5.9% 3.1%2.0% 2.1% 2.1% 2.0% 2.4% 2.2% 2.0% 5% 0% -0.4% -5% -3.6% -10% -15% -20% -25% -30% -29.7% -35% URC May 2020 6

US Real GDP $20,500 $20,000 Billions of Chained 2012 Dollars $19,500 $19,000 $18,500 $18,000 $17,500 $17,000 $16,500 $16,000 2019Q42020Q12020Q22020Q32020Q42021Q12021Q22021Q32021Q42022Q12022Q22022Q32022Q4 URC May 2020 7

Comparing Recessions, 2008 vs. 2020 Quarterly Real GDP Indexed to Last Quarter of Growth 102 100 98 96 94 92 90 88 86 Q -2 Q -1 Q 0 Q +1 Q +2 Q +3 Q +4 Q +5 Q +6 Q +7 Q +8 Q +9 Q +10 "Great Recession" COVID19 Recession Q-0 is last quarter of growth before recession URC May 2020 8

US Real GDP: Annual Growth 25% 20% 15% 10% 5% 0% -5% -10% -15% 1967 2006 1931 1934 1937 1940 1943 1946 1949 1952 1955 1958 1961 1964 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2009 2012 2015 2018 1921 URC May 2020 9

Monthly Change in Non-farm Employment 400,000 200,000 0 -200,000 -400,000 -600,000 -701,000 -800,000 URC May 2020 10

Employment: Annualized Quarterly Growth 10% 6.0%7.5% 7.3%5.9%4.6%3.6%2.7% 5% 1.3% 1.1% 1.5% 1.7% 2.0% 1.7% 0% -5% -4.6% -10% -15% -13.3% -20% -19.8% -25% URC May 2020 11

Unemployment Rate 12% 9.9%10.3%9.8% 10% 8.6% 8.4% 7.2% 8% 6.0% 6% 5.1% 4.4%4.0%3.7% 3.9%3.6% 3.6% 3.5% 3.6% 4% 2% 0% URC May 2020 12

Brent Oil Spot Price Per Barrel $140 $120 $100 $80 $63.38 $60 $40 $20 $11.33 $0 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2021Q1 2021Q3 2022Q1 2022Q3 URC May 2020 13

MS Real GDP: Annualized Quarterly Growth 15% 8.1% 8.2%5.8%3.5%2.2%1.3% 0.9% 1.2% 10% 3.0% 1.0%2.3% 1.8% 2.1% 5% 0% -0.5% -5% -4.0% -10% -15% -20% -25% -30% -30.4% -35% URC May 2020 14

MS Real GDP $106,000 Millions of Chained 2012 Dollars $104,000 $102,000 $100,000 $98,000 $96,000 $94,000 $92,000 $90,000 2019Q42020Q12020Q22020Q32020Q42021Q12021Q22021Q32021Q42022Q12022Q22022Q32022Q4 URC May 2020 15

Historical GDP in MS 120000 Millions of Chained 2012 Dollars 100000 80000 60000 40000 20000 0 2002 2017 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2018 2019 2020 2021 2022 URC May 2020 16

Historical Annual Growth of MS Real GDP 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -4.7% -6.0% -5.6% -8.0% 1997 2014 1991 1992 1993 1994 1995 1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 URC May 2020 17

MS Nonfarm Employment 1,180 1,160 1,140 Thousands of Jobs 1,120 1,100 1,080 1,060 1,040 1,020 1,000 980 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 URC May 2020 18

Initial Unemployment Claims Weekly Average by Month 45,000 42,838 40,000 35,000 30,000 25,000 20,000 15,000 10,000 7,100 5,000 - Jul-10 Jul-12 Jul-14 Jul-16 Jul-18 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jan-11 Jul-11 Jan-12 Jan-13 Jul-13 Jan-14 Jan-15 Jul-15 Jan-16 Jan-17 Jul-17 Jan-18 Jan-19 Jul-19 Jan-20 URC May 2020 19

Continued Unemployment Claims Weekly Average by Month 70,000 61,038 60,000 48,393 50,000 40,000 30,000 20,000 10,000 - Jul-10 Jul-12 Jul-14 Jul-16 Jul-18 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jan-11 Jul-11 Jan-12 Jan-13 Jul-13 Jan-14 Jan-15 Jul-15 Jan-16 Jan-17 Jul-17 Jan-18 Jan-19 Jul-19 Jan-20 URC May 2020 20

MS Unemployment Rate $0 12.8% 12.6% 12.2% 11.4% $0 11.0% 9.9% $0 8.3% $0 6.2% 5.7% 5.6% 5.6% $0 $0 $0 $0 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 URC May 2020 21

Final Comments Income supported by unprecedented federal transfer payments (stimulus and additional unemployment claims) Projections are always based on assumptions; Assumptions for current situation can change dramatically with new information Is there another hit in the fall??? Expect the basic story to remain the same: deepest hit in 2020Q2 conditions moderate in Q3 as more of the economy restarts Recovery begins in Q4 and continues into 2021 Depth plus global recession prolongs full recovery MS follows similar pattern but is slower to fully recover URC May 2020 22

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Business League Briefings: Contact Info Dr. Darrin Webb: dwebb@Mississippi.edu To subscribe to our publications, email Janna Weller at jweller@mississippi.edu Visit our website for state and county level economic data www.mississippi.edu/urc Follow URC on Twitter @MississippiURC Follow MCBL&F Social Media for Updates & Resources: Website: http://madisoncountybusinessleague.com/index.html Facebook: https://www.facebook.com/Madison-County-Business-League-and-Foundation-745934742265760/ Link d In: https://www.linkedin.com/company/madison-county-business-league-foundation