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Short-Term Energy and Summer Fuels Outlook

Release Date: April 8, 2014  |  Next Release Date: May 6, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures

U.S. Economic Assumptions

The U.S. Bureau of Economic Analysis (BEA) revised the fourth quarter 2013 gross domestic product estimate upwards, now showing growth at an annual rate of 2.6%, compared to the 2.4% growth of the previous estimate. Consumption expenditures (primarily due to increases in health care spending and utilities) and corporate profits came in higher than the previous fourth quarter 2013 estimate. BEA also reported that real personal consumption expenditures rose 0.2% from January to February, exceeding the 0.1% rise from December to January. Real disposable personal income rose 0.3% from January to February. New orders for durable goods rose 2.2% over the same time period, reversing declines in the two previous months according to the U.S. Census Bureau. The gain was driven primarily by transportation goods, with a more modest a 0.2% monthly gain for other orders. Finally, the U.S. Department of Housing and Urban Development reported that sales of new single-family houses in February were 3.3% below the January level, and 1.1% below the February 2013 estimate.

EIA uses the IHS/Global Insight macroeconomic model with EIA's energy price forecasts as model inputs to develop the economic projections in the STEO.

U.S. Production and Income

Forecast real GDP grows by 2.5% in 2014 and 3.2% in 2015. Even though forecast real GDP growth accelerates over the next two years, it is only in 2015 that GDP growth exceeds the economy's average annual growth of 3% from 1990 through 2007. Forecast real disposable income increases 2.2% in 2014 and 3.6% in 2015. Total industrial production grows at 2.7% in 2014 and is projected to grow 4.0% in 2015.

U.S. Expenditures

Private real fixed investment growth averages 6.1% and 9.7% over 2014 and 2015, respectively, with equipment spending accounting for most of investment's growth. Real consumption expenditures grow at the same rate as real GDP in 2014, at 2.5%, and are below the rate of real GDP growth in 2015, at 2.9%. Durable goods expenditures drive the consumption spending. Export growth is 4.2% and 4.1% over the same two years, while import growth is 2.4% in 2014 and 6.5% in 2015. Total government expenditures fall 0.6% in 2014, but increase by 0.4% in 2015.

U.S. Employment, Housing, and Prices

Projected growth in nonfarm employment averages 1.6% in 2014 and 2.1% in 2015. This is accompanied by a gradually declining unemployment rate that reaches 6.2% by the end 2014 and 5.7% at the end of 2015, the same as projected last month. Housing starts grow an average of 17.2% and 33.9% in 2014 and 2015, respectively. Both consumer and producer price indexes continue to increase at a moderate pace, as wages continue to show modest gains.

U.S. Economic Assumptions
  2012 2013 2014 2015
Economic Output, Income, and Expenditures (billion chained 2009 dollars)
Real Gross Domestic Product 15471 15759 16151 16663
percent change from prior year 2.8 1.9 2.5 3.2
Real Disposable Personal Income 11552 11637 11889 12313
percent change from prior year 2.0 0.7 2.2 3.6
Real Personal Consumption Expenditures 10518 10723 10987 11308
Real Fixed Investment 2365 2472 2622 2875
Business Inventory Change 66.08 107.93 58.78 70.64
Employment (millions)
Non-Farm Employment 134.1 136.4 138.6 141.5
Commercial Employment 91.8 93.8 95.5 97.5
Production and Price Indexes
Manufacturing Production Index (2007=100) 95.0 97.4 99.9 104.2
percent change from prior year 4.2 2.5 2.6 4.4
Consumer Price Index (1982-1984=1.00) 2.30 2.33 2.37 2.41
Producer Price Index: All Commodities (1982=1.00) 2.02 2.03 2.07 2.09
Producer Price Index: Petroleum (1982=1.00) 3.07 2.95 2.92 2.84
GDP Implicit Price Deflator (2005=100) 105.0 106.5 108.3 110.3

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