The Economic Outlook

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
Consumer and Business Confidence
Consumer Sentiment National Federation of Independent
110 Businesses (NFIB) Optimism Index
115
100
110
105
90
100
80 95
90
70
85
80
60
75
50 70

Sentiment Low from Great Recession 55.8 Optimism Low from Great Recession 81.0

URC May 2020 2

US Real GDP: Annualized Quarterly Growth
20%

12.2%
9.4% 9.4%
10%
6.1% 5.8%
3.9% 3.8% 4.4% 4.6% 4.2%
3.1% 2.0% 2.1% 2.1%
0%

-4.8%
-10%

-20%

-30%

-40% -36.5%
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 3

US Real GDP
$20,000

$19,500

$19,000
Billions of Chained 2012 Dollars

$18,500

$18,000

$17,500

$17,000

$16,500

$16,000

$15,500
2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 4

 Comparing Recessions, 2008 vs. 2020
Quarterly Real GDP Indexed to Last Quarter of Growth
102

100

98

96

94

92

90

88

86

84

82
Q -2 Q -1 Q0 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 5
 -5%

-10%
10%
15%
20%
25%

0%
5%
1931
1933

-15% -12.9%
1935
1937
1939
1941
1943
1945
1947

-11.6%
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
URC May 2020 1979
1981
1983
1985
US Real GDP: Annual Growth

1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
-2.5%

2011
2013
2015
2017
2019
-7.3%

2021
2023
6
Monthly Change in Non-farm Employment
400,000

200,000

-200,000

-400,000

-600,000

-800,000
The # of jobs fell by over 20 million in April
-881,000
-1,000,000
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20

URC May 2020 7

Employment: Annualized Quarterly Growth
30%

19.3%
20% 15.4%
12.4%
10.2%
10% 7.1% 6.1% 6.2% 6.0% 5.2%
1.3% 1.1% 1.5% 1.7% 0.8%
0%

-10%
-9.8%
-20%

-30%

-40%

-50%

-60% -55.3%
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 8

Unemployment Rate
25%

20%
19.6%
18.1% 18.2%

15.8%
15% 13.8%
12.6%
11.7%
10.8%
9.9%
10% 9.0%
8.2%

5% 3.9% 3.6% 3.6% 3.8%

3.5%

0%
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 9

 $120
$140

$100

$20
$40
$60
$80

$0
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
URC May 2020
2018Q1
2018Q3
2019Q1
2019Q3
2020Q1
$63.38

2020Q3
$20.06

2021Q1
2021Q3
Brent Oil Spot Price Per Barrel

2022Q1
2022Q3
2023Q1
2023Q3
2024Q1
2024Q3
10
MS Real GDP: Annualized Quarterly Growth
20%

9.0% 8.3%
10% 6.7%
5.0% 3.7%
2.3% 1.8% 2.1% 2.2% 2.0% 2.2% 2.6% 2.7%
1.0%
0%

-10% -5.3%

-20%

-30%

-40%

-43.6%
-50%
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 11

MS Real GDP
$106,000

$104,000
Millions of Chained 2012 Dollars

$102,000

$100,000

$98,000

$96,000

$94,000

$92,000

$90,000
2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 12

Historical GDP in MS
120000

100000
Millions of Chained 2012 Dollars

80000

60000

40000

20000

URC May 2020 13

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%

-8.0%
-7.6%

-10.0%

URC May 2020 14

MS Nonfarm Employment
1,400

Preliminary Data show a decline of

1,200
117 thousand jobs in April
1,000
Thousands of Jobs

800

600

400

200

0
2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

URC May 2020 15

Weekly Unemployment Claims in 2020
50,000 250,000

45,000

40,000 200,000
Highest Initial Claims from “Great Recession” was 9,420
35,000 Highest Continued Claims from “Great Recession was 49,935

Continued Claims
Initial Claims

30,000 150,000

25,000

20,000 100,000

15,000

10,000 50,000

5,000

- 0

Initial Claims Continued Claims

URC May 2020 16

MS Unemployment Rate
$0

19.8%
$0 18.7% 18.7%
16.9%
15.4%
$0 14.3%
13.5%
12.7%
11.6%

$0

5.6% 5.4%
$0

$0
2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2

URC May 2020 17

MS General Fund
with Current URC Projections
$7,000

$6,000
$5,598.4
$5,131.8
$5,000

$4,000
Millions

$3,000

$2,000
FY 2020 Estimate represents a decline of $864.4 Million below November Estimate.
FY 2021 Estimate represents a decline of $367.1 Million below November Estimate.
$1,000 These estimates reflect a shift of $436 million from FY 2020 to FY 2021 due to change in filing dates.

$0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

URC May 2020 18

Final Comments
• Income supported by unprecedented federal transfer payments
(stimulus and additional unemployment claims)
• Projections always include assumptions about unknowns
Current level of unknowns are elevated
Assumptions for current situation can change dramatically with new information
Useful revenue data is limited – April Revenue report reveals very little
• Expect basic story to remain the same – Short Recession, Long Recovery
• deepest hit in 2020Q2
• conditions begin to improve in Q3 as economy restarts; a relative short recession
• Recovery continues into Q4 and through 2021-22
• Depth of recession means prolonged period before full recovery
• MS follows similar pattern but is slower to fully recover; possibly 2023

URC May 2020 19