Economic Activity Index ( GDB-EAI ) For the month of January 2013

Transcription

1 Economic Activity Index ( GDB-EAI ) For the month of January 2013

2 Special Comment Payroll Employment Benchmark Revision March 2013 There was a major revision on the benchmark of the payroll employment for 2012 Every March, the Bureau of Labor Statistics ( BLS ) publishes the benchmark revision of payroll employment. Each revision changes the employment figures for the previous 21 months. The standard deviation of the previous six revisions was 4,400 employees. In other words, each revision implied changes of more or less 4,400 employees. The last revision (published in March 2013) increased the 2012 average level of payroll employment by 18,433 employees with respect the previous estimates of employment published until January This is the largest payroll revision of the past seven years. The benchmark payroll employment revisions not only impacted the average level of payroll employment: it also changed the average growth rate of employment for 2012, and therefore, for FY2012 and FY2013. From a slight decline of 0.2% during FY2012, the revised figures reflect now an increase of 0.8%; and from a cumulative (July-December) reduction of 1.1% in FY2013, the revised numbers show a cumulative (July-January) growth of 0.7% for FY2013. Being the total payroll employment one of the components of the GDB-EAI, a major change in payroll employment would imply a significant change in the Index. The level of the Index changed several years back, on average, by a little more than 2 points of the Index. The growth rates remained more or less equal. 2

3 General Commentary January 2013 GDB-EAI for the month of January registered a 1.8% year-over-year ( YOY ) reduction January 2013 GDB-EAI was 129.9, a 1.8% reduction when compared to for January Nevertheless, the cumulative value for FY2013 (July-January) is still increasing by 1.0% with respect the cumulative figure of FY2012. Gasoline consumption* was 81.0 million gallons. Average FY2013 year-to-date ( YTD ) consumption is 88.5 million gallons. Total non-farm payroll employment for January 2013 totaled 914,600, a YOY reduction of 1.2%. Electric power generation totaled 1,714.1 million kwh, reflecting a YOY reduction of 0.4%. Total electric power generation for FY2013 YTD is 0.8% above the same period for FY2012. Cement sales totaled 1.4 million bags, registering a year-over-year reduction of 9.7%. Total sales for FY2013 YTD are 4.4% below the same period during FY2012. * Estimated monthly gasoline consumption is derived from the Treasury Department s monthly gasoline excise tax collections. These monthly collections tend to have irregular patterns as major gasoline importers have significant fluctuations in their inventories and purchases. As a result, the estimate used by GDB does not necessarily reflect actual monthly consumption by individuals. 3

4 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 The GDB-EAI for the month of January 2013 reflected a year-overyear reduction of 1.8% GDB Economic Activity Index % % 1.1% 2.6% 2.0% 1.0% 3.0% 2.0% 1.0% % -1.4% -0.4% -1.8% 0.0% -1.0% -2.0% -3.0% -4.0% % -4.6% -5.0% -6.0% % Economic Activity Index GDB Year-over-year change of EAI (%) Data used for GDB-EAI is adjusted for seasonality and volatility. 4

5 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 GDB Economic Activity Index Components Total Non-Farm Payroll Employment* (Thousands of jobs) 1,100 1,050 1,048 Total non-farm payroll employment for January 2013 totaled 914,600. 1, When compared to January 2012, total non-farm employment registered a 1.2% reduction ,000 2,500 2,627 Cement Sales (Cement Bags sold, in thousands) Cement sales for the month of January 2013 totaled 1.4 million bags; a YOY reduction of 9.7%. 2,000 1,500 1,000 1,833 1,112 1,813 1,902 1,551 1,400 Sales for calendar year 2012 ended 3.0% above same period calendar year Sales for FY 2012 ended 7.3% above FY Sources: Dept. of Labor, GDB * Not seasonally adjusted. 5

6 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 GDB Economic Activity Index Components Gasoline Consumption (Millions of gallons) Gasoline consumption for January 2013 totaled 81.0 million gallons, a YOY reduction of 15.7% Estimated monthly gasoline consumption is derived from the Treasury Department s monthly gasoline excise tax collections. These monthly collections tend to have irregular patterns as major gasoline importers have significant fluctuations in their inventories and purchases. As a result, the estimate used by GDB does not necessarily reflect actual monthly consumption by individuals. Electric Power Generation (Millions of kwh) 2,500 2,000 2,075 1,979 1,990 Electric power generation for January 2013 was 1,714 million kwh, a 0.4% YOY reduction. 1,500 1, ,629 1,738 1,629 1,638 1,714 Electric power generation for fiscal year 2012 ended 1.9% below FY 2011, mainly as a result of higher oil prices. 0 Sources: DTOP, Treasury, PREPA. 6

7 Description of the GDB-Economic Activity Index 7

8 Real GNP (in 2011 millions $) Description of the GDB-EAI The GDB-EAI is a coincident index for the economy of Puerto Rico. It is a valuable tool that summarizes the behavior of four major monthly economic indicators. This index was developed following the methodology similar to that used by The Conference Board in their coincident index. This methodology follows a standard procedure to adjust the data for seasonality and volatility factors. High Correlation with Puerto Rico Real GNP 75,000 The GDB-EAI levels show a high degree of correlation (R² of 0.97) with respect to Real GNP levels 70,000 65,000 60,000 55,000 50,000 45,000 40,000 y = 503.6x R² = , Index (Electric Power Generation Computation) Source: GBD 8

9 GDB-EAI Highlights and Composition GDB Economic Activity Index Highlights Advantages of the GDB-EAI: Readily available Highly correlated to Puerto Rico s real GNP Reliable tool to monitor actual trend of Puerto Rico economy The GDB-EAI is made up of 4 indicators: Total Payroll Employment (Establishment Survey/ Thousand of employees) Total Electric Power Generation (Millions of KWH) Cement Sales (Millions of bags) Gas Consumption (Millions of gallons) 9

10 Disclaimer The GDB-EAI and its indicators are subject to revisions. While the information comprising the GDB EAI has been obtained from sources GDB believes to be reliable, GDB is not responsible for any errors or omissions, or for the results obtained from the use of this information. 10