News Release
June 8, 2009
Solid Economic Growth Expected in 2010, According to Chicago Fed Automotive Outlook Symposium Participants
The sixteenth annual Automotive Outlook Symposium was
held in Detroit on Thursday and Friday, June 4–5, and drew
more than 90 participants from manufacturing, banking,
consulting and service firms, and academia. This year, 20
individuals provided a consensus outlook—forecasts for
major components of real gross domestic product (GDP), as
well as several key statistics for the U.S. economy. The median
forecast results are presented in the table. According to the
median forecast of Symposium participants, the nation’s
economic growth in 2009 will be substantially slower than in
2008, inflation will turn negative (because of lower energy
prices and the large amount of slack in the economy), and
the unemployment rate will rise substantially. Real GDP, after
having fallen 0.8% last year, is forecasted to decrease 1.8%
this year and then rise to an above-trend rate of 3.2% in 2010.
After rising 1.5% last year, inflation, as measured by the
Consumer Price Index, is expected decline 0.5% this year and
then rise at a moderate pace of 1.6% in 2010. The unemployment
rate, after having averaged 6.9% in the fourth quarter
of 2008, is forecasted to peak at 9.9% in the final quarter of
2009 and then edge down to 9.5% by the end of 2010.
Most of the major components of real GDP—particularly
business fixed investment—are expected to contribute to
the forecast for slow economic growth in 2009. Economic
growth is forecasted to improve in 2010, in large part because
of an expansion in spending in residential investment.
Industrial production is forecasted to decline at a fast pace
in 2009 and then increase at a much faster rate than the
overall economy in 2010. Net exports are predicted to improve
in 2009 and edge down in 2010. Car and light truck sales
are projected to be very weak in 2009, with sales at 9.7 million
units—the slowest selling rate in more than 40 years; and
they are expected to improve to 11.3 million units in 2010—the slowest rate since 1982. Interest rates (one- and ten-year
Treasury rates) are anticipated to fall this year and then rise
next year. Oil prices are expected average $56 per barrel by
the end of 2009 and then rise to just over $65 per barrel at
the end of 2010. The trade-weighted U.S. dollar is expected
to rise both this year and next.
A summary of the sixteenth annual Automotive Outlook
Symposium will be published in an upcoming special issue
of the Chicago Fed Letter.
—William A. Strauss, Senior Economist and
Economic Advisor, (312) 322-8151
|
Forecasts from the Sixteenth Annual Automotive Outlook Symposium |
| |
2008
(Actual) |
2009
(Forecast) |
2010
(Forecast) |
| Real gross domestic producta |
–0.8 |
–1.8 |
3.2 |
| Real personal consumption expendituresa |
–1.5 |
0.8 |
2.3 |
| Real business fixed investmenta |
–5.2 |
–18.8 |
2.0 |
| Real residential investmenta |
–19.4 |
–16.8 |
5.8 |
| Change in private inventoriesb |
–25.8 |
–10.0 |
28.1 |
| Net exports of goods and servicesb |
–364.5 |
–333.8 |
–339.2 |
| Real government consumption expenditures and gross investmenta |
3.2 |
1.7 |
2.9 |
| Industrial productiona |
–6.7 |
–7.5 |
5.4 |
| Car and light truck sales (millions of units) |
13.2 |
9.7 |
11.3 |
| Housing starts (millions of units) |
0.90 |
0.53 |
0.74 |
| Unemployment ratec |
6.9 |
9.9 |
9.5 |
| Consumer Price Indexa |
1.5 |
–0.5 |
–1.6 |
One-year Treasury rate (constant
maturity)c |
0.99 |
0.71 |
1.30 |
Ten-year Treasury rate (constant
maturity)c |
3.25 |
3.02 |
3.75 |
| JPMorgan Trade-Weighted Dollar Indexa |
9.2 |
3.9 |
0.9 |
| Oil price (dollars per barrel of West Texas Intermediate)c |
58.37 |
56.00 |
65.50 |
aPercentage change, fourth quarter over fourth quarter.
bBillions of chained (2000) dollars in the fourth quarter at a seasonally
adjusted annual rate.
cFourth quarter average.
|
