HOUSE_OVERSIGHT_021022.jpg
1.95 MB
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People
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Organizations
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Quotes
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Type:
Presentation slides / financial analysis
File Size:
1.95 MB
Summary
This document consists of two presentation slides (pages 361 and 362) from a KPCB report titled 'USA Inc. | What Might a Turnaround Expert Consider?'. The slides provide a macroeconomic analysis of the US consumer's role in GDP growth, highlighting a shift after 2007 where wealth destruction (real estate and equity decline) and high unemployment (rising to 10%) forced consumers to increase savings and decrease spending. The document bears a 'HOUSE_OVERSIGHT' bates stamp, indicating it was part of a Congressional investigation.
Organizations (6)
| Name | Type | Context |
|---|---|---|
| KPCB |
Kleiner Perkins Caufield & Byers, venture capital firm whose logo appears on the slides.
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| BEA |
Bureau of Economic Analysis, cited as source for GDP data.
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| BLS |
Bureau of Labor Statistics, cited as source for unemployment data.
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| USA Inc. |
Title of the presentation series noted in the footer.
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| S&P |
Referenced regarding the S&P 500 decline and Case-Shiller Home Price Index.
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| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT_021022'.
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Timeline (1 events)
Locations (1)
| Location | Context |
|---|---|
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The analysis focuses entirely on the US economy, consumers, and GDP.
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Key Quotes (3)
"USA Consumers = Biggest Demand Driver For GDP Growth, Until 2007"Source
HOUSE_OVERSIGHT_021022.jpg
Quote #1
"Beginning in 2007, Wealth Destruction + High Unemployment Forced Consumers to Save Again, Potentially Reducing Short-Term Demand for Goods & Services"Source
HOUSE_OVERSIGHT_021022.jpg
Quote #2
"All in, the key driver of US GDP growth – the US consumer’s ability to spend – is severely constrained in the short term as he / she aims to rebuild savings and contain spending."Source
HOUSE_OVERSIGHT_021022.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (2,123 characters)
USA Consumers = Biggest Demand Driver For GDP Growth, Until 2007
Personal Consumption’s Contribution to Real GDP Growth, 1950 - 2009
[Chart displaying Real GDP Y/Y Growth vs Personal Consumption Contribution]
Y-Axis: Real GDP Y/Y Growth (%)
X-Axis: 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Y-Axis: Real GDP Y/Y Growth (%)
X-Axis: 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Legend:
Blue: Real GDP Y/Y Growth
Gold: Personal Consumption Expenditure’s Contribution to Real GDP Growth
Blue: Real GDP Y/Y Growth
Gold: Personal Consumption Expenditure’s Contribution to Real GDP Growth
KPCB
www.kpcb.com
www.kpcb.com
Source: BEA.
USA Inc. | What Might a Turnaround Expert Consider? 361
USA Inc. | What Might a Turnaround Expert Consider? 361
Beginning in 2007, Wealth Destruction + High Unemployment Forced Consumers to Save Again, Potentially Reducing Short-Term Demand for Goods & Services
3% average annual GDP growth (1981 - 2007) was helped as the average USA consumer:
1) Increased personal consumption as percent of GDP to 71% from 62%;
2) Decreased personal savings rate to 2% of disposable income from 11%;
1) Increased personal consumption as percent of GDP to 71% from 62%;
2) Decreased personal savings rate to 2% of disposable income from 11%;
Beginning in 2007, things changed as:
1) The average US consumer experienced a material decline in the value of his / her largest investment assets (real estate and equities) from 2007 to 2009 when peak-to-trough valuations for USA residential real estate declined 30% and the S&P 500 declined 56%;
2) Unemployment rose to 10% in 2009 / 2010 from 30-year trough of 4% in 1999, creating uncertainty regarding future personal income levels;
3) Personal savings rate increased to 6% in 2009 / 2010 of disposable income from 2% in 2007, as uncertainty grows and appetite for consumption ebbs;
1) The average US consumer experienced a material decline in the value of his / her largest investment assets (real estate and equities) from 2007 to 2009 when peak-to-trough valuations for USA residential real estate declined 30% and the S&P 500 declined 56%;
2) Unemployment rose to 10% in 2009 / 2010 from 30-year trough of 4% in 1999, creating uncertainty regarding future personal income levels;
3) Personal savings rate increased to 6% in 2009 / 2010 of disposable income from 2% in 2007, as uncertainty grows and appetite for consumption ebbs;
All in, the key driver of US GDP growth – the US consumer’s ability to spend – is severely constrained in the short term as he / she aims to rebuild savings and contain spending. This raises the question – ‘How fast can US GDP grow annually over the next ten years?’ Determining ways to drive GDP (and related job growth) is crucial...
Source: Residential real estate decline based on CQ1:07 to CQ1:09 changes in S&P Case-Shiller Home Price Index. GDP growth & composition / personal savings rate per BEA. Unemployment rate per BLS.
KPCB
www.kpcb.com
www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 362
HOUSE_OVERSIGHT_021022
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