U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

Preliminary AEO2019 Macroeconomic Results

For

Macroeconomic Working Group

July 19, 2018 | Washington, DC

By

Macroeconomic Analysis Team
Key preliminary results

• Preliminary AEO2019 real GDP grows an average of 1.9% per year from 

2018-50, down 0.1 percentage points from AEO2018

• Preliminary AEO2019 manufacturing output grows 2.0% per year on average 

from 2018-50, up 0.2 percentage points; nonmanufacturing increases by an 

average of 1.3% per year, unchanged from AEO2018

• Preliminary AEO2019 employment growth is concentrated in services and 

construction

Macroeconomic Working Group, 

Washington, DC, July 19, 2018 Do NOT cite or distribute 2
Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Summary of the Macroeconomic Activity Module (MAM) in the 

National Energy Modeling System (NEMS)

3

NEMS

MAM

NEMS macro 

baseline variables

NEMS energy 

variables

Other NEMS modules

MAM variables used 

as inputs in NEMS

Macroeconomic submodule runs 

the New Scenario using new Energy 

Inputs from NEMS

Industrial submodule runs the New 

Scenario of values of shipments by 

industry sectors

Employment submodule runs the 

New Scenario of employment by 

sector

Commercial floorspace 

submodule

MAM applies the 

ratios of the 

New Scenario 

values more 

than the 

Baseline values 

onto the Macro 

Baseline 

variables to 

obtain solution

Regional submodule

Do NOT cite or distribute
Key changes from last AEO

• Updates to the U.S. macro, industrial output and employment by industry 

models

Macroeconomic Working Group, 

Washington, DC, July 19, 2018 Do NOT cite or distribute 4
Macroeconomic Working Group, 

Washington, DC, July 19, 2018

New Census projections point to slower population growth and less 

immigration—offsetting any positive impacts from the new tax cuts on 

potential GDP by 2027

Source: AEO2019 Preliminary run

Do NOT cite or distribute 5

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

300

320

340

360

380

400

420

2013 2018 2023 2028 2033 2038 2043 2048

Population, with Armed Forces Overseas

millions

AEO2018

AEO2019

2018-50 Growth

AEO2018 0.6%/yr

AEO2019 0.5%/yr

Change in Population

millions
population

millions

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

The share of the population aged 16 to 65 is projected to fall to 60% in 

2050

Source: AEO2019 Preliminary run

6

0

50

100

150

200

250

300

350

400

450

1970 1990 2010 2030 2050

aged

16-65

18%

22%

60%

19%

21%

61%

23%

13%

65%

30%

10%

60%

aged

over 65

aged

under 16

21%

13%

66%

Do NOT cite or distribute
2.4%

2.8%

3.8%

1.0%

4.8%

5.1%

1.9%

2.0%

2.5%

1.2%

3.6%

3.0%

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Real GDP

Consumption

Fixed Nonresidential Investment

Fixed Residential Investment

Exports

Imports

Projected 32 Year Growth (2018 to 2050)

average annual percent growth

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Growth in GDP and most of its components is slower in the 

preliminary AEO2019 projection than history

Source: AEO2019 Preliminary run

Do NOT cite or distribute 7

Previous 28 Year Growth (1989 to 2017)
1.9%

2.0%

2.5%

1.2%

3.6%

3.0%

2.0%

2.2%

2.9%

1.3%

3.5%

3.6%

2.1%

2.3%

3.0%

1.0%

4.3%

3.8%

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Real GDP

Consumption

Fixed Nonresidential Investment

Fixed Residential Investment

Exports

Imports

average annual percent growth

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

The preliminary AEO2019 projection for GDP and most of its 

components is slower than recent projections

Source: AEO2019 Preliminary run

Do NOT cite or distribute 8

AEO2019 (2018-50)

AEO2018 (2018-50)

AEO2017 (2018-40)
-2

0

2

4

6

8

10

12

-1

0

1

2

3

4

5

6

1990 2000 2010 2020 2030 2040 2050

2.3%

3.7%

CPI inflation

percent

10-year Treasury yield

percent

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Inflation remains moderate throughout the projection and bond yields 

gradually rise from historic lows

Source: AEO2019 Preliminary run

Do NOT cite or distribute 9
0.0

-4.3

1.0

0.3

-0.1

1.8

4.9

2.5

-4.4

1.1

0.3

0.2

3.0

3.3

-6 -4 -2 0 2 4 6

Consumption

Government

Nonresidential Investment

Residential Investment

Inventories

Import

Export AEO2018 (2018-50)

AEO2019 (2018-50)

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Consumption’s importance in the demand mix fades as exports 

becomes more important

Source: AEO2019 Preliminary run

change in GDP share between 2018 and 2050

percentage points

Do NOT cite or distribute 10
annual average growth in real GDP

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Preliminary AEO2019 real GDP growth is similar to other 

forecasts/projections

Sources: as listed

Do NOT cite or distribute 11

Projection 2018-50

AEO 2019 1.9

AEO 2018 2.0

IHSM (May 2018) 1.9

CBO (June 2018) 1.9

OASDI (2018) 2.2

Oxford (May 2018) 1.9

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Percent Change

OASDI

CBO

AEO2019

IHSM AEO2018

Oxford
0

10,000

20,000

30,000

40,000

50,000

60,000

2007 2017 2030 2050

billion 2009 dollars

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Services are the largest sector, metal-based durables grow the fastest

Source: AEO2019 Preliminary run

12

other man.

EI man.

MBD

agriculture

mining

construction

services

CAGR

2018-50

1.8%

1.4%

2.6%

1.2%

0.8%

1.5%

2.3%

industrial

sector

Do NOT cite or distribute
4,000

6,000

8,000

10,000

12,000

14,000

16,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

History Projection

AEO2019 Prelim

AEO2018

IHSM2019

IHSM2018

billion 2009 dollar

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Overall industrial sector gross output is higher relative to last year in 

the later years of the projection on higher exports of industrial supplies

Source: IHS Markit, AEO2018, AEO2019 Preliminary run; bulk chemicals includes NAICS 3251-3

Do NOT cite or distribute 13
billion 2009 dollar

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Industrial sector shipments grow fastest in nonenergy-intensive 

manufacturing, primarily due to share loss in energy-intensives

Source: AEO2019 Preliminary run

Do NOT cite or distribute 14

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

2018

2030

2050

mining

agriculture

other man.

EI man.

MBD

construction

28% 27% 17% 5% 6% 17%

31% 26% 17% 5% 6% 17%

34% 25% 17% 4% 5% 16%
0

100

200

300

400

500

600

700

800

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

History Projection

AEO2019 Prelim

AEO2018

IHSM2018

IHSM2017

billion 2009 dollar

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Bulk chemicals output is lower than last year but awaiting updates, 

major changes expected

Source: IHS Markit, AEO2018, AEO2019 Preliminary run; bulk chemicals includes NAICS 3251-3

Do NOT cite or distribute 15
0

50

100

150

200

250

300

350

400

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

History Projection AEO2019 Prelim

AEO2018

IHSM2019

IHSM2018

billion 2009 dollar

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Primary metals output is higher after 2040 but some revision possible 

with other updates

Source: IHS Markit, AEO2018, AEO2019 Preliminary run; primary metals includes all NAICS 331

Do NOT cite or distribute 16
0

1,000

2,000

3,000

4,000

5,000

6,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

History Projection

AEO2019 Prelim

AEO2018

IHSM2018

IHSM2017

billion 2009 dollar

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Metal-based durables output relatively insensitive to price so less 

change expected

Source: IHS Markit, AEO2018, AEO2019 Preliminary run; metal-based durables includes NAICS 332-6

Do NOT cite or distribute 17
million jobs

Macroeconomic Working Group, 

Washington, DC, July 19, 2018

Employment increases most in services and construction

Source: AEO Preliminary run; MBD = metal-based durables, EI = energy-intensive, man. = manufacturing

Do NOT cite or distribute 18

110

120

130

140

150

160

170

180

190
Thank you

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Macroeconomic Working Group, 

Washington, DC, July 19, 2018 19