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Year-End Economic Briefing 2005

Treasury Secretary John W. Snow Commerce Secretary Carlos M. Gutierrez Labor Secretary Elaine L. Chao

December 14, 2005

Year-End Economic Briefing 2005

Overview
Treasury Secretary John W. Snow
December 14, 2005

December 14, 2005

GDP On a Path of Sustained Growth GDP On a Path of Sustained Growth
11300 11300 11100 11100 RR ealG DD P(in bb illio n s) eal G P (in illio n s) 10900 10900 10700 10700 10500 10500 10300 10300 10100 10100 9900 9900 9700 9700 2001- 2002- 2002- 2002- 2002- 2003- 2003- 2003- 2003- 2004- 2004- 2004- 2004- 2005- 2005- 20052001- 2002- 2002- 2002- 2002- 2003- 2003- 2003- 2003- 2004- 2004- 2004- 2004- 2005- 2005- 2005IV II II II IIIIII IV II II II IIIIII IV II II II IIIIII IV II II II IIIIII IV IV IV IV
President Bush Signs President Bush Signs Jobs and Growth Act Jobs and Growth Act (May 2003) (May 2003) 4.3 % GDP Growth for 4.3 % GDP Growth for the 3rd Quarter of 2005 the 3rd Quarter of 2005

December 14, 2005

December 14, 2005

Federal Revenues Rising Federal Revenues Rising
2,400,000 2,400,000 2,300,000 2,300,000 2,200,000 2,200,000 2,100,000 2,100,000 2,000,000 2,000,000 1,900,000 1,900,000 1,800,000 1,800,000 1,700,000 1,700,000 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005

FY2005 --$2.15 Trillion FY2005 $2.15 Trillion
Highest Level of Federal Highest Level of Federal Receipts in History Receipts in History

Federal Revenues (in millions) Federal Revenues (in millions)

President Bush Signs President Bush Signs Jobs and Growth Act Jobs and Growth Act (May 2003) (May 2003)

Year-End Economic Briefing 2005

Business Report
Commerce Secretary Carlos M. Gutierrez
December 14, 2005

December 14, 2005

Real Average Annual GDP Growth 2001-2005
3.5
3.0

3 2.5 Percent 2 1.5 1 0.5 0

2.7 2.4

1.4

1.4

0.6

0.5

United States

Canada

France

Germany

Italy

Japan

United Kingdom

Source: World Economic Outlook, International Monetary Fund

December 14, 2005

Real Personal Consumption Expenditures
8.0 7.8 Trillions of Dollars 7.6 7.4 7.2 7.0 6.8
Prior May 2003, Real PCE growing by 2.3% per year

Following the Enactment of the Jobs and Growth Act, Real PCE growing by 3.8% per year

Source: Bureau of Economic Analysis, US Department of Commerce

20 01 -IV 20 02 20 -I 02 20 -II 02 20 -III 02 -IV 20 03 20 -I 03 20 -II 03 20 -III 03 -IV 20 04 20 -I 04 20 -II 04 20 -III 04 20 IV 05 2 20 -I 05 20 -II 05 -II I

December 14, 2005

Household Net Worth
55 50 45 40 35 30
Household Net Worth Exceeds $50 Trillion in Third Quarter 2005 President Bush Signs Jobs and Growth Act (May 2003)

Trillions of Dollars

Source: Federal Reserve Board

20 01 -IV 20 02 20 - I 02 20 -II 02 20 III 02 -IV 20 03 20 -I 03 20 -II 03 20 III 03 -IV 20 04 20 - I 04 20 -II 04 2 0 III 04 20 IV 05 2 2 0 -I 05 20 -II 05 -II I

December 14, 2005

Real Business Investment
1,400 1,350 Billions of Dollars 1,300 1,250 1,200 1,150 1,100 1,050 1,000
Prior May 2003, Real Nonresidental Fixed Investment was Falling Since the Enactment of the Jobs and Growth Act, Real Investment Increased by 22%

Source: Bureau of Economic Analysis, US Department of Coummerce

20 01 -IV 20 02 20 -I 02 20 -II 02 20 -III 02 -IV 20 03 20 -I 03 20 -II 03 20 -III 03 -IV 20 04 20 -I 04 20 -II 04 20 -III 04 20 IV 05 2 20 -I 05 20 -II 05 -II I

December 14, 2005

Real Exports
1,300 1,250

Billions of Dollars

1,200 1,150 1,100 1,050 1,000 950 900 Since Enactment of the Jobs and Growth Act, Export Growth has been averaging over 8% per year

Source: Bureau of the Census, US Department of Coummerce

20 01 -IV 20 02 20 -I 02 20 -II 02 20 -III 02 -IV 20 03 20 -I 03 20 -II 03 20 -III 03 -IV 20 04 20 -I 04 20 -II 04 20 -III 04 20 IV 05 2 20 -I 05 20 -II 05 -II I

U.S. Department of Labor

Year-End Economic Briefing 2005

Employment Report
Labor Secretary Elaine L. Chao
December 14, 2005

U.S. Department of Labor

December 14, 2005

More Americans are Working than Ever Before
145

142.6
140

138.4 137.3 136.2 136.5

140.3

135

134.3 132.3 130.6

130

127.8 125.2
125

120 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Number of Americans Working as Measured by the Household Survey, Nov. 1995-Nov. 2005 (in millions, seasonally adjusted)

U.S. Department of Labor

December 14, 2005

Widespread Jobs Recovery in Key Growth Sectors
1400 1200 1000 800 600 400

1,153

777 660

320 199

200 0

Transportation and Utilities

Financial Activities

Construction

Health Services

Prof. and Business Serv.

Industry Sector Employment Change Since Jobs Recovery Began as Measured by the Establishment Survey, May 2003 to Nov. 2005 (in thousands, seasonally adjusted)

U.S. Department of Labor

December 14, 2005

Strong Recovery in High Paying Jobs
3,000 2.5 Million 2,500 2,000 1.4 Million 1,500 1,000 500 0

Jobs Paying Below Average Compensation

Jobs Paying Above Average Compensation

Change in Average Employment by Occupation Based on Household Survey, Average for 12 Months Ending November 2005 to Average for 12 Months Ending November 2003 (in Thousands). Occupations Ranked by September 2005 Compensation.

U.S. Department of Labor

December 14, 2005

Smaller Firms Have Led the Recovery
2000

1865

1500

1000
725

500

349 189 223

341

249

319 195

0
1 to 4 5 to 9 10 to 19 20 to 49 50 to 99 0 10 to 24 9 0 25 to 49 9 1 al to 49 9 50 0 or M e or

t To

Cumulative Quarterly Net Employment Change, 2nd Quarter 2003 to 1st Quarter 2005 by Firm Size Based on BLS BEDS Data (in thousands, seasonally adjusted)

Year-End Economic Briefing 2005
Treasury Secretary John W. Snow Commerce Secretary Carlos M. Gutierrez Labor Secretary Elaine L. Chao

December 14, 2005