Latest Economic Trends

U.S. ECONOMY

(information dated October 18, 2006)

GDP: Over the first half of 2006, the economy grew at a 4.2 percent annual rate, faster than any other major industrialized country.

Job Growth: More than 6.6 million jobs have been created since August 2003, including 1.7 million new jobs over the past 12 months and 37 consecutive months of job gains.

Unemployment Rate: The U.S. unemployment rate is 4.6 percent, below the average of each of the past four decades.

Budget Deficit: The FY 2006 budget deficit was $248 billion (1.9 percent of GDP) down from an original projection of $423 billion (3.2 percent of GDP) and significantly below the 40-year historical average of 2.3 percent of GDP.

Productivity: Productivity has grown 2.4 percent over the past four quarters, well ahead of average productivity growth in the last three decades. Strong productivity growth helps lead to GDP growth, higher real wages, and stronger corporate profits.

Income: Per capita disposable income has risen 9 percent in real terms since the beginning of 2001. Disposable personal income has risen at an annual rate in 2006 of 6.3 percent, compared with 4.1 percent in 2005.

Manufacturing: Manufacturing production has increased 5.6 percent over the past 12 months. Manufacturing productivity has grown 3.8 percent over the past four quarters.

Stock Market: The stock market is at record levels. The Dow Jones Industrial Average has closed at a record high on four occasions in October 2006.

Housing: The housing market remains strong compared to historical levels. Housing starts are still at a very high level of 1.7 million starts per year, well above the 1.4 million average per year during the 1990s. Homeownership among all Americans, including minorities, is still near record levels.

Net Farm Income: In 2005, net farm income reached the second highest level on record, despite multiple hurricanes that shut down the central marketing infrastructure of the country; continued loss of Asian beef markets, and avian flu concerns.

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