2019 American Samoa Economic Forecast

American Samoa
Economic Forecast
2019
Average Annual Wage vs. Unemployment Rate
Features
Baseline and Alternative Forecasts for 2018 – 2022

FRBSF Article: Nonmanufacturing as an Engine of Growth by Huiyu Li
Lolo Matalasi Moliga, Governor Keniseli Lafaele, Director

American Samoa Government American Samoa Department of Commerce
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American Samoa
Economic
Forecast
2018-2022
Territory of American Samoa

LOLO MATALASI MOLIGA, Governor
LEMANU PALEPOI SIALEGA MAUGA, Lieutenant Governor
KENISELI LAFAELE, Director, Department of Commerce
VAI FILIGA, Chief of Statistics, Department of Commerce
NATHANIEL CLAYVILLE, Senior Economist, Department of Commerce
Table of Contents
Introduction ........................................................................................................................... 1
Executive Summary ................................................................................................................ 3
Pacific Region Economic Forecast Analysis .............................................................................. 6
Pacific Region Economic Summary .......................................................................................................... 6

Pacific Region Economic Forecast Tables............................................................................................... 11
United States of America Economic Forecast Analysis ........................................................... 13
US Economic Summary .......................................................................................................................... 13

US Economic Forecast Tables................................................................................................................. 19
American Samoa Economic Forecast Analysis ....................................................................... 21
American Samoa Economic Summary ................................................................................................... 21

American Samoa Economic Forecast Tables .......................................................................................... 28
Alternative Forecasts ............................................................................................................ 32
Low Economic Growth and High Oil Price Scenario ............................................................................... 32

High Economic Growth and Low Oil Price Scenario ............................................................................... 37
Feature Article: Nonmanufacturing as an Engine of Growth by Huiyu Li ................................ 42
ASEM: The American Samoa Economic Model ...................................................................... 48

Figures and Tables
Figures:
Figure I: Samoa Real GDP and Inflation Forecast ........................................................................... 7

Figure II: Tonga Real GDP and Inflation Forecast ........................................................................... 8
Figure III: Fiji Real GDP and Inflation Forecast................................................................................ 9
Figure IV: New Zealand Real GDP and Inflation Forecast ............................................................... 9
Figure V: Australia Real GDP and Inflation Forecast ..................................................................... 10
Figure VI: US Employment and Unemployment ........................................................................... 14
Figure VII: US Inflation .................................................................................................................. 15
Figure VIII: US Real Consumer Spending ...................................................................................... 16
Figure IX: US Real Government Spending..................................................................................... 17
Figure XI: Real US Imports ............................................................................................................ 18
Figure X: Real US Exports.............................................................................................................. 18
Figure XII: American Samoa Employment and Unemployment ................................................... 22
Figure XIII: American Samoa Wages and Income ......................................................................... 23
Figure XIV: American Samoa Inflation .......................................................................................... 24
Figure XV: American Samoa Consumer Spending ........................................................................ 25
Figure XVI: American Samoa Business Investment ...................................................................... 26
Figure XVII: American Samoa Government Spending .................................................................. 26
Figure XVIII: American Samoa Gross Domestic Product ............................................................... 27
Tables:
Table 1: American Samoa Economic Forecast Executive Summary Details ................................... 4

Table 2: US Economic Forecast Executive Summary Details .......................................................... 5
Table 3: Pacific Region Countries Real GDP Forecast ................................................................... 11
Table 4: Pacific Region Countries Inflation Forecast .................................................................... 12
Table 5: US Economic Forecast Details ......................................................................................... 19
Table 6: Other Economic Indicators Forecast Details ................................................................... 20
Table 7: American Samoa Economic Forecast Summary Details .................................................. 28
Table 8: American Samoa Nominal GDP Forecast Details ............................................................ 29
Table 9: American Samoa Real GDP Forecast Details ................................................................... 30
Table 10: American Samoa Employment Characteristics Forecast Details .................................. 31
Table 11: American Samoa Low Economic Growth Scenario Details ........................................... 33
Table 12: US Low Economic Growth Scenario Details .................................................................. 34
Table 13: American Samoa Low Economic Growth Scenario versus Baseline Scenario Details ... 35
Table 14: US Low Economic Growth Scenario versus Baseline Scenario Details .......................... 36
Table 15: American Samoa High Economic Growth Scenario Details .......................................... 38
Table 16: US High Economic Growth Scenario Details ................................................................. 39
Table 17: American Samoa High Economic Growth Scenario versus Baseline Scenario Details .. 40
Table 18: US High Economic Growth Scenario versus Baseline Scenario Details ......................... 41
ii
List of Acronyms and Abbreviations
AEO – Annual Energy Outlook

ASCA – American Samoa Code Annotated
ASEF – American Samoa Economic Forecast
ASEM – American Samoa Economic Model
BEA – US Bureau of Economic Analysis
CBO – US Congressional Budget Office
CPI – Consumer Price Index
EIA – Energy Information Administration
FEMA – US Federal Emergency Management Agency
GDP – Nominal Gross Domestic Product (Current Values)
IMF – International Monetary Fund
NIPA - National Income and Product Accounts
OLS – Ordinary Least Squares Statistical Method
OMB – US White House Office of Management and Budget
PICs – Pacific Island Countries
PPI – Producer Price Index
Real GDP – Real Gross Domestic Product (Inflation-adjusted Values)
STP – Samoa Tuna Processors
US – United States
iii
Introduction
The national forecast presented in this publication is from the Annual Energy Outlook 2019
reference case forecast of the US economy and of select energy prices, produced by the US
Energy Information Administration (EIA)1.
Forecast
Projections in the 2019 American Samoa Economic Forecast (ASEF) are not predictions of future
events, but rather modeled estimates of what may occur, based on historic observations and
certain assumptions. ASEF is developed using the American Samoa Economic Model (ASEM), a
series of simultaneous multilinear regression equations that represent the statistical
relationships between territorial, regional, national, and international economic variables.
Whenever feasible, these statistical constructs were based upon the latest National Income and
Product Accounts (NIPA) data and approved methodology, as outlined in the Bureau of
Economic Analysis (BEA) 2017 NIPA Handbook2 and as prescribed in the American Samoa
Statistical Act of 2003 (A.S.C.A. § 13.2104).
For more information about ASEM, see the section of this publication titled “ASEM: The
American Samoa Economic Model”.
Cover
The cover graph shows the average annual wage in American Samoa and the calculated
unemployment rate for the territory. These two variables are implicitly related and tend to
drive consumption, which accounts for approximately 70% of Nominal Gross Domestic Product
in the territory. When the unemployment rate is low, employers have to increase wages to
compete for qualified workers. If wages rise too quickly, some employers may invest more in
equipment and software, shifting some costs from labor to capital, leading to higher
unemployment. An elevated unemployment rate gives employees and job-seekers less power
to bargain and can lead to lower wages.
The average annual wage in American Samoa is expected to increase over the next few years,
largely due to higher government spending on disaster relief and the 2020 decennial census.
Once the census is complete, there will be a reduction in Census Bureau employment, which is
predicted to result in higher unemployment and lower wages in the two years that follow.
1
United States, Department of Energy, Energy Information Administration. “Annual Energy Outlook 2019”.
www.eia.gov/outlooks/aeo/.
2
United States, Bureau of Economic Analysis. “Concepts and Methods of the U.S. National Income and Product
Accounts.”, Nov. 2017. www.bea.gov/sites/default/files/methodologies/nipa-handbook-all-chapters.pdf.
1
Feature
The feature article chosen for this publication comes from Huiyu Li, an economist in the
Economic Research Department of the Federal Reserve Bank of San Francisco.
In official statistics, manufacturing is the top contributor to U.S. productivity growth despite its
shrinking share of nonfarm employment. However, official numbers tend to understate growth
among new producers that improve on existing producers, which is more prevalent outside of
manufacturing. Accounting for such missing productivity growth shows that it plays a larger role
in sectors such as retail trade and services.
Manufacturing employment is also an ever-shrinking portion of total employment in American
Samoa, yet overall output per worker has remained strong. Spending on services has increased
at an average annual rate of 2.8% since 2008, making it the fastest growing consumption
category in the territory. The findings in the article suggest that nonmanufacturing may be an
increasingly important engine of US growth. It will likely be an essential player in American
Samoa’s economic future, as well.
Scaling on Figures
Please note that the chart figures contained in this publication have axes that feature custom
scaling, which may appear to over-emphasize fluctuations in the underlying data. This data
visualization method was utilized to highlight the annual changes that are described in
accompanying analysis sections. Readers should also evaluate fluctuations in presented data
sets in proportion to the total values of the individual data points.
Updates and Changes
The latest available data was utilized in the estimates contained in this publication.
Readers with any questions should contact Nathaniel Clayville and nathaniel.clayville@doc.as.
American Samoa Department of Commerce Statistics Division

Keniseli Lafaele, Director Vai Filiga, Chief of Statistics
Executive Office Building Nathaniel Clayville, Senior Economist
Utulei, American Samoa 96799 (684) 633-5155
nathaniel.clayville@doc.as
2
Executive Summary
A deceleration in global economic growth has occurred over the past two years, and the Asia-
Pacific region has been no exception to this trend. A series of destructive natural disasters have
left many Pacific Island Countries and Territories with hundreds of millions of dollars in
damages, some of which have unlocked levels of disaster aid and private capital investment
funds rarely seen in small, insular countries. American Samoa is a prime example of this trend.
The territory experienced a modest economic expansion in 2014 and 2015, which was spurred,
in part, by a large capital investment by Tri Marine International for the purchase and
construction of facilities for the processing and packaging of locally harvested tuna. The facility
opened early in 2016, but regional competition forced the company to permanently halt
operations by the end of that same year. Nominal GDP in American Samoa fell by 0.2% in 2016,
although the contraction was closer to 2.5%, when adjusted for inflation.
The cannery closure contributed to a spike in the territory’s unemployment rate in 2017, from
10.5% to 14.3%. Both private and public sector consumption languished that year, and the
economy contracted by an estimated 3.7%. The territory is expected to have experienced
modest deflation in the same year. As a result, Real Gross Domestic Product (Real GDP) is
projected to have contracted by a more subdued rate of 1.9% in 2017.
This contraction may have extended into 2018, if not for a devastating tropical storm that
impacted much of American Samoa in February of that year. By some estimates, Tropical Storm
Gita caused as much as $186 million in direct and indirect damages across the territory. Federal
disaster agencies and international relief organizations poured millions of dollars into the local
economy in the weeks and months after the tropical storm, which helped to lift employment,
income, and spending throughout the first half of the year.
American Samoa also benefited from recent strength in the broader US economy in 2018,
driven primarily by strength in labor markets. With relatively low domestic unemployment rates
and consumer inflation, wage growth seems to have finally taken hold in the US during 2018,
which appears to have translated to accelerated spending by both households and private
businesses. Real government consumption grew by its fastest rate in nearly a decade in 2018,
even though nominal federal government receipts were hampered by a series of tax cuts. US
real GDP increased by an estimated 2.8% in 2018 and is predicted to continue to grow in each
year of the forecast period, through 2022.
Ongoing disaster relief funding is expected to contribute to modest consumer and government
spending increases in American Samoa in 2018. The GDP growth in the territory was calculated
at 3.9% in 2018, or 0.7% when adjusted for inflation. Once the immediate fiscal effects of the
tropical storm have diminished, so will much of the economic stimulus. Accordingly, real GDP is
forecast to decrease by 3.5% in 2019, 1.0% in 2020, 2.3% in 2021, an 2.0% in 2022. This
anticipated multi-year contraction is partially driven by higher inflation and is best viewed as a
return to a more sustainable long-term trend, following multiple years of energy price
decreases and stronger-than-usual capital investments.
3
American Samoa Economic Forecast 2019 Executive Summary Tables
TABLE 1: AMERICAN SAMOA ECONOMIC FORECAST EXECUTIVE SUMMARY DETAILS
American Samoa Economic Forecast

American Samoa Economic Forecast Summary
Category History Forecast
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
AS Nominal Gross Domestic Product ($ Million) 643.0 661.0 653.0 634.0 658.5 639.0 646.2 639.3 641.1
Annual Growth (%) 0.3 2.8 -1.2 -2.9 3.9 -3.0 1.1 -1.1 0.3
AS Real Gross Domestic Product (2009$ Million) 641.0 649.0 632.0 598.0 602.0 581.0 575.2 561.9 550.8
Annual Growth (%) 0.9 1.2 -2.6 -5.4 0.7 -3.5 -1.0 -2.3 -2.0
AS Average Annual Wage ($/yr) 13,474 13,348 13,850 13,929 14,282 14,329 14,360 14,249 14,158
Annual Growth (%) 0.8 -0.9 3.8 0.6 2.5 0.3 0.2 -0.8 -0.6
AS Personal Income ($ Million) 341.7 335.9 354.7 354.9 364.9 379.4 384.3 370.3 372.9
Annual Growth (%) 6.9 -1.7 5.6 0.0 2.8 4.0 1.3 -3.7 0.7
ASG Revenues ($ Million) 98.9 98.0 90.9 87.9 93.5 95.6 97.2 96.6 96.3
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.2 1.7 -0.6 -0.3
Population 61,811 60,863 60,200 60,300 60,599 61,068 60,891 60,547 59,856
Annual Growth (%) -1.3 -1.5 -1.1 0.2 0.5 0.8 -0.3 -0.6 -1.1
AS Consumer Price Index 98.5 97.7 98.7 101.9 105.4 107.3 109.1 110.3 110.5
Annual Growth (%) 0.0 -0.8 1.0 3.2 3.5 1.8 1.6 1.1 0.2
AS GDP Deflator 100.3 101.8 103.4 106.1 109.4 110.0 112.4 113.8 116.4
Annual Growth (%) -0.7 1.5 1.6 2.6 3.1 0.5 2.2 1.3 2.3
AS Government Revenues ($Million) 98.9 98.0 90.9 87.9 93.5 95.6 97.2 96.6 96.3
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.2 1.7 -0.6 -0.3
4
TABLE 2: US ECONOMIC FORECAST EXECUTIVE SUMMARY DETAILS

US Economic Forecast Summary
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Real US Gross Domestic Product (2009$ Million) 16,013.3 16,471.5 16,716.2 17,096.2 17,581.6 18,098.7 18,486.9 18,791.9 19,102.1
Annual Growth (%) 2.6 2.9 1.5 2.3 2.8 2.9 2.1 1.6 1.7
Real US Consumption (2009$ Million) 10,868.4 11,264.3 11,572.1 11,890.7 12,179.5 12,461.8 12,755.6 13,036.5 13,295.1
Annual Growth (%) 2.9 3.6 2.7 2.8 2.4 2.3 2.4 2.2 2.0
Real US Business Spending (2009$ Million) 2,762 2,905 2,210 2,314 2,450 2,615 2,754 2,835 2,884
Annual Growth (%) 5.5 5.2 -23.9 4.7 5.9 6.7 5.3 3.0 1.7
Real US Government Spending (2009$ Million) 2,839.1 2,878.5 2,900.1 2,903.3 2,958.3 3,028.2 3,056.6 3,065.9 3,069.4
Annual Growth (%) -0.6 1.4 0.8 0.1 1.9 2.4 0.9 0.3 0.1
Real US Net Exports (2009$ Million) -427.7 -545.3 -586.3 -621.8 -663.5 -707.5 -795.8 -846.0 -858.1
Annual Growth (%) -5.6 -27.5 -7.5 -6.1 -6.7 -6.6 -12.5 -6.3 -1.4
US Employment, Nonfarm (Millions) 138.9 141.8 144.3 146.5 148.8 150.3 151.7 152.5 153.2
Annual Growth (%) 1.9 2.1 1.8 1.5 1.6 1.0 0.9 0.5 0.4
US Unemployment Rate (percent) 6.2 5.3 4.9 4.4 3.9 3.5 3.7 3.9 4.1
Annual Growth (%) -16.1 -14.7 -7.6 -10.6 -11.0 -9.6 4.4 5.8 6.0
US Real GDP per Capita (2009$) 50,221.5 51,277.3 51,661.4 52,455.8 53,542.8 54,727.7 55,507.4 56,030.0 56,563.3
Annual Growth (%) 1.8 2.1 0.7 1.5 2.1 2.2 1.4 0.9 1.0
5
Pacific Region Economic Forecast Analysis
Pacific Region Economic Summary
A deceleration in global economic growth has occurred over the past few years, and the Pacific
region has been no exception to this trend. According to the International Monetary Fund
(IMF), economic expansion became less homogeneous across countries in 2018, with most
emerging markets growing at a faster rate while many advanced economies showed moderate
deceleration. One notable exception was China, with Real GDP growth of 6.9% in 2017. It is
estimated that China’s economy continued to expand at a similar pace throughout the first half
of 2018 but is now also beginning to show signs of slowing.
Many of the developed countries in the Pacific region, specifically New Zealand and Australia,
have managed to find sustained economic growth through exports to many Asian markets, and
through profitable industries, such as mining. Both countries maintain robust aid programs that
funnel money into many of the developing Pacific Island Countries (PICs). Foreign aid programs
in these countries don’t appear to be at risk in the near-term, especially considering New
Zealand’s recently-announced “Pacific Reset” plan, in which the Kiwi government has funded a
broad-based set of initiatives to lead the region in identity, security, and prosperity.
Meanwhile, the last two years have been a mixed basket for other nations in the Pacific, with a
series of destructive cyclones and typhoons wreaking havoc on many PICs, along with historic
levels of tourism from developed countries in Asia, Oceania, and North America. In some
emerging markets, the storms have worked against other drivers of economic expansion, as
was observed in the years after Cyclone Pam clashed with Tuvalu in 2015. Tonga experienced
similar constraints following damages from Tropical Storm Gita in early-2018. In some
instances, foreign aid from developed countries has provided essential liquidity to affected
PICs, supporting efforts to repair or construct critical infrastructure, allowing many island
nations that depend on tourism to begin attracting visitors again.
Moving forward, it is likely that the region will experience some additional hindrances to
unbridled economic growth, such as indirect impacts of global trade feuds or the offshoring of
manufacturing operations, which may lead to the erosion of key industries in some countries.
Samoa experienced this in 2017, when the country’s largest private employer closed, relocating
operations offshore and displacing nearly 700 workers.
Notwithstanding downside risks, the Pacific region’s economy is still relatively well positioned
to grow over the coming year. IMF estimates that real GDP in the region increased by 1.4% in
2018, which is high in comparison to IMF’s forecast for world-wide economic growth of -2.3%
over the same period. Regional Real GDP is anticipated to expand by 4.1% in 2019, versus 0.2%,
globally3.
3
October 2018 Regional Economic Outlook: Asia Pacific . October 2018 Regional Economic Outlook: Asia Pacific ,
www.imf.org/en/Publications/REO/APAC/Issues/2018/10/05/areo1012.
6
Samoa
Coming off of several consecutive

years of relatively strong
economic growth, Samoa is Samoa
expected to report a more 2,500.0 Historical Forecast 4.0
subdued Real GDP increase of 3.0
2,000.0
only 1.8% in 2018, down from
2.5% in 2017. The slowdown was 2.0
1,500.0
2,173.0
primarily due to the lingering
2,126.0
2,080.0
1.0
1,982.0
1,921.0
1,887.0
1,841.0
1,691.0
1,719.0
effects of the closure of the 1,000.0
0.0
Yazaki Samoa factory4, the 500.0
country’s largest private -1.0
employer which had produced 0.0 -2.0
automotive parts in the country 2014 2015 2016 2017 2018 2019 2020 2021 2022
for 25 years before closing their Samoa Real GDP (Tala Million)
doors in late-2017. The closure
Samoa Consumer Inflation Annual Growth (%)
left as many as 700 workers
without jobs. Further FIGURE I: SAMOA REAL GDP AND INFLATION FORECAST
exacerbating the loss of the
country’s largest durable goods manufacturer was the damage caused by Tropical Storm Gita in
February of 2018. The combined impact of these events led to a reduction in output in sectors
such as fishing, financial services, and agriculture. Following the tropical storm, there was also a
notable increase in prices of petroleum products, which led to elevated prices on other goods
and services throughout the country. By mid-2018, the headline inflation rate was as high as
3.7%, ultimately settling at 3.4% for the year. IMF estimates that consumer price inflation will
level off and ease to 3.0% in 2019. IMF is also forecasting that Samoa’s Real GDP will grow by
3.2% in 20195, driven by strength in remittances and visitor receipts.
4
September Quarterly Bulletin 2018. September Quarterly Bulletin 2018,
www.cbs.gov.ws/index.php/dmsdocument/6748.
5
“Samoa.” International Monetary Fund, Countries, www.imf.org/en/Countries/WSM.
7
Tonga
The Kingdom of Tonga, which is comprised of 169 islands spread over 270,000 square miles, is
especially susceptible to shocks from natural disasters, climate change, and commodity prices.
With a relatively large portion of the Kingdom’s population dependent on subsistence
agriculture, Tonga is heavily reliant on external support, mainly through foreign aid, direct
foreign investment, and tourism. The Kingdom has been plagued by a series of inflationary
spikes over the last few decades,
Tonga with consumer inflation growth
calculated at 7.4% in 2017, 5.2% in
1,200.0 Historical Forecast 8.0 2018, and is forecast to be 5.3% in
1,000.0 6.0 2019. After sustaining extensive
800.0 damage during Tropical Storm Gita
4.0 in early-2018, a flood of foreign
1,056.0
1,026.0
600.0
989.0
aid eclipsed a falloff in tourism. As
945.0
895.0
870.0
849.0
2.0
815.0
788.0
400.0 a result, real GDP grew by an

200.0 0.0 estimated 2.9%. A projected
0.0 -2.0 increase in tourism from Australia
2014 2015 2016 2017 2018 2019 2020 2021 2022 and New Zealand in the coming
years, along with a steady stream
Tonga Real GDP (Pa'anga Million)
of foreign aid during the ongoing
Tonga Consumer Inflation Annual Growth (%) efforts to rebuild, is likely to
FIGURE II: TONGA REAL GDP AND INFLATION FORECAST contribute to real GDP growth of
5.6% in 20196.
Fiji
Fiji is home to one of the largest and most diversified PIC economies, supporting several goods
producing and service sectors. According to the Reserve Bank of Fiji’s December 2018 Economic
Review7, robust domestic consumption, along with strong public and private investment
spending, has kept the domestic economy in positive territory since the height of the global
financial recession in 2009. One of the country’s largest manufacturing sectors, sugar
production, lagged in late-2018, due to low quality of domestically harvested sugar cane. As a
result, industrial production declined by 1.2% that same year. Excluding sugar, industrial
production increase at an annual rate of 2.5% over the same period. Domestic consumption
also remained firm during 2018, with double-digit annualized growth in categories such as
6
“Tonga.” International Monetary Fund, Countries, www.imf.org/en/Countries/TON.
7
Economic Review - Month Ended December 2018. Economic Review - Month Ended December 2018,
www.rbf.gov.fj/getattachment/86333b1f-d47b-45d2-9546-9766ff4282bb/Economic-Review-December-2018-
(1).pdf?lang=en-US.
8
lending and vehicle registrations.
As might be expected, strength in Fiji
household spending has been 10,000.0 Historical Forecast 5.0
accompanied by a rise in 8,000.0 4.0
consumer prices, with the headline
price level indicator growing at a 6,000.0 3.0
8,146.0
7,893.0
7,641.0
7,397.0
7,154.0
5.2% annualized rate of inflation in
6,932.0
6,684.0
6,728.0
6,437.0
4,000.0 2.0
late-2018. IMF has predicted an
2,000.0 1.0
easing of inflationary pressures in
Fiji over the coming year, with an 0.0 0.0
anticipated increase in overall 2014 2015 2016 2017 2018 2019 2020 2021 2022
consumer prices of 3.9% in 2019. Fiji Real GDP (FJD Million)
IMF calculated Real GDP growth of Fiji Consumer Inflation Annual Growth (%)
3.2% in 2018, which is forecast to
FIGURE III: FIJI REAL GDP AND INFLATION FORECAST
rise to a rate of 3.4% in 2019.8
New Zealand
As one of the largest contributors to foreign aid in the Pacific, and a major trade partner to
many PICs, the state of New Zealand’s economy is often an important driver of economic
fluctuations for the entire region. The economy of New Zealand has been growing consistently
since 2008, bolstered by strong domestic demand, a favorable exchange rate, and high levels of
government spending. Real GDP
New Zealand exceeded 4.0% in 2016—the highest
annual increase since before the
300.0 Historical Forecast 2.5
global financial crisis. The country’s
250.0 2.0 economy has since moderated to
200.0 annualized real GDP growth of just
1.5
over 3.0%. Like many other
279.8
272.6
150.0
264.5
256.4
248.9
241.5
234.3
225.0
developed economies, New Zealand

216.0
1.0
100.0
is near, or has possibly already
50.0 0.5
surpassed, the point of full
0.0 0.0 employment. According to the
2014 2015 2016 2017 2018 2019 2020 2021 2022 Reserve Bank of New Zealand’s
New Zealand Real GDP (NZD Billion) November 2018 Monetary Policy
New Zealand Consumer Inflation Annual Growth (%) Statement9, employment at or
above this maximum sustainable
FIGURE IV: NEW ZEALAND REAL GDP AND INFLATION FORECAST level will likely lead to increases to
input costs for firms, which is likely
8
“Fiji.” International Monetary Fund, Countries, www.imf.org/en/Countries/FJI.
9
Monetary Policy Statement November 2018. Monetary Policy Statement November 2018, www.rbnz.govt.nz/-
/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2018/mpsnov2018.pdf.
9
to put moderate upward pressure on consumer prices. IMF estimates that headline inflation
growth rate, which has been contained below 2.0% since 2012, was 1.4% in 2018, and is
forecast to increase to 1.7% in 2019. 2018 real GDP expanded by a calculated 3.1% in 2018 and
is expected to grow by an additional 3.0% in 2019.10
Australia
Australia is another major contributor to foreign aid and capital improvement projects in the
Pacific. This country has maintained year-over-year real economic growth since the early 1990s,
including throughout the global economic recession and the decade since. According to the
Reserve Bank of Australia’s November 2018 Statement on Monetary Policy11, the Australian
economy has drawn strength from low interest rates, a strong global economy, and high levels
of spending on public infrastructure projects. Australia also benefitted from strong exports to
China and a mining boom that began sometime around 2003, and never fully exhausted itself.
These comparative benefits have helped to maintain moderate, yet broad-based increases in
domestic consumer spending, even in spite of the relatively slow growth in household income,
implying the possibility that spare capacity may still exist in the Australian labor market. There
is some evidence to suggest that Australia’s surging housing market is near its peak, with
private residential building
approvals showing signs of waning Australia
in the second half of 2018. 2,500.0 Historical Forecast 3.0
Consumer prices have been quite
2,000.0 2.5
stable, holding between 1.0% and
2.5% over the last five years. This 2.0
1,500.0
trend is anticipated to continue 1.5
1,967.5
1,917.5
1,868.5
1,819.9
1,771.0
1,715.4
1,678.1
1,635.5
1,595.8
into the foreseeable future, with 1,000.0

1.0
the headline inflation rate 500.0 0.5
calculated at 2.2% in 2019, and
2.3% in 2019. Real GDP is 0.0 0.0
2014 2015 2016 2017 2018 2019 2020 2021 2022
estimated to have grown by 3.2%
in 2018, which is forecast to Australia Real GDP (AUD Billion)
decelerate to 2.8% in 2019, Australia Consumer Inflation Annual Growth (%)
potentially as a result of the
sluggishness in the housing FIGURE V: AUSTRALIA REAL GDP AND INFLATION FORECAST
market. 12
Additional details can be found in the following data tables.
10
“New Zealand.” International Monetary Fund, Countries, www.imf.org/en/Countries/NZL.
11
Statement on Monetary Policy November 2018. Statement on Monetary Policy November 2018,
www.rba.gov.au/publications/smp/2018/nov/pdf/statement-on-monetary-policy-2018-11.pdf.
12
“Australia.” International Monetary Fund, Countries, www.imf.org/en/Countries/AUS.
10
Pacific Region Economic Forecast Tables
TABLE 3: PACIFIC REGION COUNTRIES REAL GDP FORECAST
American Samoa Economic Forecast - Regional Economic Forecast

Real GDP
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Samoa Real GDP (Tala Million) 1,691.0 1,719.0 1,841.0 1,887.0 1,921.0 1,982.0 2,080.0 2,126.0 2,173.0
Annual Growth (%) 1.2 1.7 7.1 2.5 1.8 3.2 4.9 2.2 2.2
Tonga Real GDP (Pa'anga Million) 788.0 815.0 849.0 870.0 895.0 945.0 989.0 1,026.0 1,056.0
Annual Growth (%) 3.0 3.4 4.2 2.5 2.9 5.6 4.7 3.7 2.9
Fiji Real GDP (FJD Million) 6,437.0 6,684.0 6,728.0 6,932.0 7,154.0 7,397.0 7,641.0 7,893.0 8,146.0
Annual Growth (%) 5.6 3.8 0.7 3.0 3.2 3.4 3.3 3.3 3.2
New Zealand Real GDP (NZD Billion) 216.0 225.0 234.3 241.5 248.9 256.4 264.5 272.6 279.8
Annual Growth (%) 3.2 4.2 4.1 3.0 3.1 3.0 3.1 3.1 2.6
Australia Real GDP (AUD Billion) 1,595.8 1,635.5 1,678.1 1,715.4 1,771.0 1,819.9 1,868.5 1,917.5 1,967.5
Annual Growth (%) -2.6 -2.5 -2.6 -2.2 -3.2 -2.8 -2.7 -2.6 -2.6
11
TABLE 4: PACIFIC REGION COUNTRIES INFLATION FORECAST
American Samoa Economic Forecast - Regional Economic Forecast

Consumer Inflation
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Samoa Consumer Inflation Annual Growth (%) -1.2 1.9 0.1 1.3 3.4 3.0 2.9 2.8 3.0
Tonga Consumer Inflation Annual Growth (%) 1.2 -1.1 2.6 7.4 5.2 5.3 1.9 2.5 2.6
Fiji Consumer Inflation Annual Growth (%) 0.5 1.4 3.9 3.4 3.9 3.2 3.0 3.0 3.0
New Zealand Consumer Inflation Annual Growth (%) 1.2 0.3 0.6 1.9 1.4 1.7 1.9 2.0 2.0
Australia Consumer Inflation Annual Growth (%) 2.5 1.5 1.3 2.0 2.2 2.3 2.5 2.5 2.5
12
United States of America Economic Forecast Analysis
US Economic Summary
The US economy expanded for the 9th consecutive year in 2018, driven primarily by strength in
the labor markets. With relatively low unemployment rates and inflation, wage growth seems
to have finally taken hold in the US during 2018, which seems to have translated to increased
spending by both households and private businesses. Real government spending grew by its
fastest pace in nearly a decade in 2018, even though nominal federal government receipts were
hampered by a series of tax cuts. US real GDP increased by an estimated 2.8% in 2018 and is
expected to continue to grow in each year of the forecast period, through 2022.
The US labor markets saw some of the lowest unemployment rates in recent history in 2018.
Total nonfarm payrolls increased by an average of 254,000 per month during the fourth quarter
of 2018 and the seasonally adjusted unemployment rate ended the year at 3.9%. US nominal
disposable personal income grew at an average annual pace of 3.7% from 2014 through 2017
before expansion slowed to 1.2% in 2018. EIA’s 2019 Annual Energy Outlook estimates that this
income growth will average 2.7% over the remainder of the forecast period. This more modest
rate suggests the possibility that the US is at or near the level of full employment.
Between 2014 and 2018 consumer spending grew at an average yearly rate of 2.9%, driven in
part by falling oil prices and the associated timid inflation. With employment approaching the
natural rate of unemployment, wage growth is anticipated to level off, which should bring
household spending back to a more sustainable level. Specifically, real US personal
consumption is projected to increase by 2.3% in 2019, 2.4% in 2020, 2.2% in 2021, and 2.0% in
2022.
Capital investments by private businesses on residential and nonresidential structures,
equipment, intellectual property products, and other business inputs have been growing since
2016. Real business investments fell by 23.9% in 2016, which was primarily a result of falling oil
prices disincentivizing spending on new energy structures and associated equipment. Spending
in this category bounced back in 2017, increasing by 4.7% that year and 5.9% the following
year. Real business investments are expected to grow by 6.7% in 2019, 5.3% in 2020, 3.0% in
2021, and 1.7% in 2022.
Recent news about government spending has primarily focused on the effects of the federal
government shutdown that started on December 22, 2018 and ended on January 25, 2019. The
Congressional Budget Office (CBO) estimated that the five-week shutdown led to a delay in
federal discretionary spending of approximately $1.8 billion, reduced fourth quarter 2018 real
GDP by $3 billion, and decreased first quarter 2019 real GDP by $8 billion (versus what it was
forecast to be without the effects of the shutdown). Federal government outlays were
calculated to have grown by 4.8% in 2018, while tax receipts rose by a relatively sluggish 0.7%,
primarily due to the lower corporate tax rate and higher standard deductions that were
13
enacted in the Tax Cuts and Jobs Act of 2017. The act was passed and signed into law in late-
2017, with many of the provisions taking effect in 2018. Adjusted for inflation, 2018 US
government spending was estimated to have climbed at a rate of 1.9% in 2018, and is forecast
to grow by 2.4% in 2019, 0.9% in 2020, 0.3% in 2021, and 0.1% in 2022.
2018 was a volatile year for US trade as the trade-weighted value of the US dollar fell for the
second consecutive year after the US imposed new tariffs on approximately 12% of all goods
imported into the country. In response, US trade partners retaliated, collectively, with new
tariffs on around 9% of all goods exported by the US. According to the CBO, the impact of the
new tariffs is expected to reduce real US GDP by an average of 0.1% through 2029. The most
recent BEA monthly trade report showed an 11.4% increase in the year-to-date deficit, versus
the same period in 2017. Adjusted for inflation, net exports are projected to be -$663 billion in
2018, -$708 billion in 2019, -$796 billion in 2020, -$846 in 2021, and -$858 in 2022.
Continued momentum in the leading consumption categories is anticipated to continue the
trend of real GDP growth through 2022. Specifically, inflation-adjusted GDP is estimated to
have increased by 2.8% in 2018, and is forecast to expand by 2.9% in 2019, 2.1% in 2020, 1.6%
in 2021, and 1.7% in 2022.
Additional analysis on specific US economic indicators can be found in the following sections.
US Labor Markets
The US labor markets saw History Forecast

$160.0 10.0%
some of the lowest
$155.0
unemployment rates in recent 8.0%
history in 2018. Total nonfarm $150.0
payrolls increased by an $145.0 6.0%
average of 254,000 per month $140.0
during the fourth quarter of $135.0 4.0%
2018 and the seasonally $130.0
adjusted unemployment rate 2.0%
$125.0
ended the year at 3.9%.13
Wage growth had been $120.0 0.0%
anemic from 2010, following the
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global economic recession, and

remained subdued through US Employment, Nonfarm (Millions)
mid-2014, during which time
US Unemployment Rate (percent)
annualized wage increases
FIGURE VI: US EMPLOYMENT AND UNEMPLOYMENT
13
United States, Department of Labor, Bureau of Labor Statistics. “The Employment Situation - December 2018.”
The Employment Situation - December 2018. www.bls.gov/news.release/pdf/empsit.pdf.
14
never exceeded 2.5%.14 US wages broke that threshold in September of 2016, and have grown
at an annualized rate of at least 2.8% in each month since, with the most recent data suggesting
that wages are currently rising at a 3.9% annualized pace. US nominal disposable personal
income grew at an average rate of 3.7% from 2014 through 2017 before slowing to 1.2% in
2018. EIA’s 2019 Annual Energy Outlook estimates that this rate will average 2.7% through
2022, suggesting the possibility that the US is at or near the level of full employment. Total
nonfarm payrolls in the US increased by 1.6% in 2018, from 146 million to 149 million, and are
expected to grow to approximately 153 million nonfarm workers in the US by 2022. The flagship
unemployment rate averaged 3.9% in 2018 and is forecast to be 3.5% in 2019, 3.7% in 2020,
3.9% in 2021, and 4.1% in 2022.
US Inflation
US inflation has been subdued since the Great Recession, when the Consumer Price Index (CPI)
surpassed an annualized growth rate of 5% for a handful of months in 2008. Tepid aggregate
demand kept pressure on prices through 2014. It was that year in which personal consumption
in the US surged, yet most inflation indicators increased only moderately, and the CPI even fell
into deflationary territory for the first two months of 2015. The reason for this counterintuitive
inflationary response to higher aggregate demand was an erosion in the price of crude oil,
which helped to stimulate the economy by decreasing freight and transportation costs. By the
time oil prices had begun to rise more rapidly in 2016, many supply chain systems in the US had
established economies of scale and were able to absorb a certain amount of growth in freight
costs. Prices began to rise, but slower than anticipated, given the increase in oil prices.
Consumer price growth nearly reached
3.0% History Forecast 3% by the beginning of 2017, and then
again in mid-2018, before oil prices
2.5% began to fall again. The Producer Price
2.0%
Index (PPI), which measures the prices
that domestic producers pay for input
1.5% goods and services, is typically a
leading indicator of movements in
1.0% consumer prices, increased by 4.3% in
0.5% 2018, and is forecast to grow by 2.2%
in 2019, 2.7% in 2020, and 1.6% in
0.0% both 2021 and 2022. The CPI for all
urban consumers in the US rose by
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21
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2.4% in 2018 and is projected to

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20
20
20
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US CPI All Items (% Growth) increase by 2.1% in 2019, 2.6% in

2020, and 2.4% in both 2021 and 2022.
FIGURE VII: US INFLATION
14
The Federal Reserve Bank of Atlanta, Wage Growth Tracker, www.frbatlanta.org/chcs/wage-growth-
tracker.aspx.
15
US Consumer Spending
Personal consumption
expenditures account for $13,280 History Forecast
approximately 70% of US GDP,
$12,780
and includes household
spending on durable goods, $12,280
nondurable goods, and
$11,780
services. Real consumer
spending in the US declined in $11,280
the years leading up to the
$10,780
prior recession, but has been
on the rise ever since, growing $10,280
at an average annual rate of
$9,780
2.4% from 2009 through 2018.
Spending was lackluster in the
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years immediately following
the recession, increasing at an US Real Consumption (2009 CW $ Billion)
average annual pace of only
1.8% from 2009 to 2013. It FIGURE VIII: US REAL CONSUMER SPENDING
wasn’t until 2014 that US
households finally began to believe that the economic recovery could be sustained. Between
2014 and 2018 consumer spending rose at an average yearly rate of 2.9%, driven in part by
falling oil prices and the associated timid inflation. By 2015, wage growth was beginning to pick
up again and year-over-year inflation-adjusted consumer expenditures rose by 3.6%, followed
by 2.7% in 2016, 2.8% in 2017, and 2.4% in 2018. With employment approaching the natural
rate of unemployment, wage growth is expected to level off, which should bring household
spending back in line with a more sustainable, long-term trend. Specifically, real US personal
consumption is forecast to increase by 2.3% in 2019, 2.4% in 2020, 2.2% in 2021, and 2.0% in
2022.
US Private Fixed Investment
Capital investments by private businesses on residential and nonresidential structures,

equipment, intellectual property products, and other business inputs have been growing since
2016. Real business investments fell by 23.9% in 2016, which was primarily a result of falling oil
prices disincentivizing spending on new energy structures and associated equipment. Spending
in this category bounced back in 2017, increasing at a rate of 4.7% that year, followed by 5.9%
in the following year. Real business investments are projected to grow by 6.7% in 2019, 5.3% in
2020, 3.0% in 2021, and 1.7% in 2022.
16
US Government Spending
Federal government spending has increased at an average rate of 3.9% each year from 2013. It
was that year that Congress approved a budget deal raising taxes and postponing automatic
spending cuts, known as “sequestration”, and avoiding the so-called “fiscal cliff”. As a result,
total tax receipts grew by 13.3% that year and total outlays shrunk by 2.3%. Each year since
then, both receipts and spending have grown by 3.8% and 3.9%, respectively15. More recently,
government spending news has revolved around the federal government shutdown that
started on December 22, 2018 and ended on January 25, 2019. The Congressional Budget Office
(CBO) estimated that the five-week shutdown led to a delay in federal discretionary spending of
approximately $1.8 billion, reduced fourth quarter 2018 real GDP by $3 billion, and decreased
first quarter 2019 real GDP by $8 billion (versus what it was expected to be without the effects
of the shutdown)16. Federal
$3,070 History Forecast
government outlays were estimated to
have grown by 4.8% in 2018, while tax
$2,970
receipts increased by a relatively
$2,870 sluggish 0.7%, primarily due to the
$2,770 lower corporate tax rate and higher
$2,670 standard deductions that were
enacted in the Tax Cuts and Jobs Act of
$2,570
2017. The act was passed and signed
$2,470 into law in late-2017, with many of the
$2,370 provisions taking effect in 2018.
$2,270 Adjusted for inflation, 2018 US
government spending was calculated
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to have increased by 1.9% in 2018, and

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US Real Government Spending (2009 CW $ Billion) is forecast to grow by 2.4% in 2019,

0.9% in 2020, 0.3% in 2021, and 0.1%
FIGURE IX: US REAL GOVERNMENT SPENDING in 2022.
15
United States, White House Office of Management and Budget. “Table 1.1—Summary of Receipts, Outlays, and
Surpluses or Deficits (-): 1789–2023.” Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–
2023. www.whitehouse.gov/wp-content/uploads/2018/02/hist01z1-fy2019.xlsx.
16
United States, Congress, Congressional Budget Office. “The Effects of the Partial Shutdown Ending in January
2019.” The Effects of the Partial Shutdown Ending in January 2019. www.cbo.gov/system/files?file=2019-
01/54937-PartialShutdownEffects.pdf.
17
US Net Exports
2018 was a volatile year for US trade as the

trade-weighted value of the US dollar fell $3,630 History Forecast
for the second consecutive year after the US $3,430
imposed new tariffs on approximately 12% $3,230
of all goods imported into the country. $3,030
Some of these new tariffs were broadly $2,830
applied to certain products from all US $2,630
trade partners, including the tariffs on $2,430
washing machines, solar panels, and steel $2,230
and aluminum products, while others were
$2,030
targeted at specific countries (namely,
China). In response, US trade partners
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retaliated, collectively, with new tariffs on US Real Imports (2009 CW $ Billion)
around 9% of all goods exported by the US.
The immediate impact of the tariffs was a FIGURE X: REAL US IMPORTS
surge in trade activity, boosting real
annualized GDP growth to 4.5% in the second quarter of 2018 international buyers placed large
orders that would fill before the new tariff schedule took effect. However, the surge in exports
is widely anticipated to have been a one-time phenomenon. According to the CBO, the impact
of the new tariffs is expected to reduce real US GDP by an average of 0.1% through 202917. The
most recent data shows that the seasonally-adjusted goods and services US trade deficit
widened over the last half of 2018. The
History Forecast
most recent BEA monthly trade report
$2,690
showed an 11.4% increase in the year-to-
$2,490 date deficit, versus the same period in
201718. Still, real US exports are estimated
$2,290
to have grown by 5.4% in 2018 and are
$2,090 projected to rise at an average annual rate
of 5.2% through 2022. Real US imports
$1,890
climbed by an estimated 5.7% in 2018 and
$1,690 are expected to grow at an average annual
rate of 5.6% over the same period. Adjusted
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for inflation, net exports are forecast to by -

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US Real Exports (2009 CW $ Billion) $663 billion in 2018, -$708 billion in 2019, -
$796 billion in 2020, -$846 in 2021, and -
FIGURE XI: REAL US EXPORTS $858 in 2022.
17
United States, Congress, Congressional Budget Office. “The Budget and Economic Outlook: 2019 to 2029.” The
Budget and Economic Outlook: 2019 to 2029. www.cbo.gov/system/files?file=2019-01/54918-Outlook.pdf.
18
United States, Congress, Bureau of Economic Analysis. “U.S. International Trade in Goods and Services, October
2018.” U.S. International Trade in Goods and Services, October 2018. www.bea.gov/system/files/2018-
12/trad1018.pdf.
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US Economic Forecast Tables
TABLE 5: US ECONOMIC FORECAST DETAILS

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual Growth (%) 2.6 2.9 1.5 2.3 2.8 2.9 2.1 1.6 1.7
Annual Growth (%) 2.9 3.6 2.7 2.8 2.4 2.3 2.4 2.2 2.0
Annual Growth (%) 5.5 5.2 -23.9 4.7 5.9 6.7 5.3 3.0 1.7
Annual Growth (%) -0.6 1.4 0.8 0.1 1.9 2.4 0.9 0.3 0.1
Annual Growth (%) -5.6 -27.5 -7.5 -6.1 -6.7 -6.6 -12.5 -6.3 -1.4
Annual Growth (%) 1.9 2.1 1.8 1.5 1.6 1.0 0.9 0.5 0.4
Annual Growth (%) -16.1 -14.7 -7.6 -10.6 -11.0 -9.6 4.4 5.8 6.0
Annual Growth (%) 1.8 2.1 0.7 1.5 2.1 2.2 1.4 0.9 1.0
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TABLE 6: OTHER ECONOMIC INDICATORS FORECAST DETAILS

Other Economic Indicators Summary
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
US CPI All Items (Index, 1982-84=100) 236.7 237.0 240.0 245.1 251.3 256.6 263.4 269.7 276.1
Annual Growth (%) 1.6 0.1 1.3 2.1 2.5 2.1 2.6 2.4 2.4
US PPI All Items (Index, 1982=100) 205.3 190.4 185.4 193.6 202.3 206.8 212.5 215.8 219.4
Annual Growth (%) 0.9 -7.2 -2.7 4.4 4.5 2.2 2.7 1.6 1.6
US GDP Deflator (Index, 2009=100) 108.8 110.0 111.4 113.4 115.7 118.5 121.8 125.0 128.2
Annual Growth (%) 1.8 1.1 1.3 1.8 2.0 2.5 2.8 2.7 2.5
US Federal Funds Rate (Average %) 0.1 0.1 0.4 1.0 1.8 2.8 3.4 3.5 3.5
Annual Growth (%) -17.1 48.6 198.1 153.6 82.9 54.9 19.7 1.9 0.3
US 10yr Treasury Note (Average %) 2.3 2.9 2.9 2.3 3.1 3.6 3.7 3.8 3.7
Annual Growth (%) 15.9 -23.8 -0.3 18.8 -32.0 -16.1 -5.0 -0.9 1.3
US Industrial Production (Index 2007=100) 105.2 104.1 102.1 103.7 107.8 111.3 113.6 115.2 115.2
Annual Growth (%) 3.1 -1.0 -1.9 1.6 3.9 3.3 2.1 1.5 0.0
Broad Trade Weighted Dollar Index 87.2 97.5 107.0 105.8 102.2 101.7 102.9 103.8 110.2
Annual Growth (%) 2.1 11.8 9.7 -1.1 -3.4 -0.4 1.2 0.9 6.1
Brent Crude Oil Average Nominal Price (USD) 99.0 52.3 43.7 55.2 74.4 73.3 73.3 74.4 74.4
Annual Growth (%) -8.8 -47.1 -16.4 26.2 34.8 -1.6 0.0 1.6 0.0
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American Samoa Economic Forecast Analysis
American Samoa Economic Summary
The economy of American Samoa has been in a state of flux over the last few years. The
territory experienced modest economic growth in 2014 and 2015, which was spurred, in part,
by a large capital investment by Tri Marine International on the purchase and construction of
facilities for processing and packaging locally harvested tuna. The cannery opened early in
2016, under the name Samoa Tuna Processors (STP). Competition from Asian-based canneries
immediately put the company in a precarious position and processing operations permanently
halted in late-2016. Nominal GDP in American Samoa fell by 0.2% that year, although the
inflation-adjusted contraction was closer to 2.5%.
STP laid off at least 400 employees during the closure, which led to hundreds of additional job
losses in related and support industries over the following year. Starkist Samoa Co., American
Samoa’s last remaining tuna processor, also faced setbacks in 2017. Availability of landed fish,
along with a number of federally-mandated equipment upgrades, forced the company to
temporarily halt operations for five weeks in the fourth quarter of 2017. The shutdown left
thousands of employees without salaries to cover basic expenses and cost the local government
more than half-a-million dollars in income tax revenues.
The combined impact of the cannery closures contributed to a spike in the unemployment rate
in the territory in 2017, from 10.5% in 2016 to 14.3%, and led to stagnant spending in both the
private and public sectors. The economy contracted by 3.7% in 2017. The territory also
experienced modest inflation in the same year and Real GDP contracted by 5.3%.
The recession may have extended into the following year, if not for a devastating storm that
impacted much of American Samoa in February of 2018. By some estimates, Tropical Storm
Gita caused as much as $125 million in direct and indirect damages across the territory.19 At
least 50% of all individuals in the territory were faced with significant damage to real and/or
personal property during the storm. Food, water, and other basic necessities were in high
demand throughout the days and weeks that followed. During that time, automated teller
machines were persistently low on cash supplies as the people of the territory scrambled to
draw enough to cover immediate repair and replacement costs. Additionally, international
relief agencies distributed pre-loaded gift cards to families and individuals that were most
affected by the storm.
Disaster relief funding is expected to contribute to consumer and government spending in
2018. Specifically, real GDP in American Samoa is forecast to have grown by 0.7% in 2018. Once
the immediate effects of the tropical storm have diminished, so will many of the economic
stimulus benefits. Real GDP is predicted to decrease by 3.5% in 2019, 1.0% in 2020, 2.3% in
19
Clayville, Nathaniel. “Impact of Cyclone Gita on the Economy of American Samoa.” American Samoa, Pago Pago,
12 Apr. 2018.
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2021, and 2.0% in 2022. This anticipated multi-year contraction is partially driven by higher
inflation and is best viewed as a return to a more sustainable long-term trend, following
multiple years of energy price decreases and stronger-than-usual capital investment.
Additional analysis on specific American Samoa economic indicators can be found in the
following sections.
Employment
The economy of American

Samoa benefitted from a History Forecast 20.0%
number of government and 18,100
18.0%
private capital investment 17,600
16.0%
projects for most of the 17,100
years since 2009, including 16,600 14.0%
a $60 million investment in 12.0%
the STP tuna cannery and 16,100 10.0%
more than $100 million in 15,600 8.0%
combined funds from 15,100 6.0%
Federal Emergency 14,600 4.0%
Management Agency
14,100 2.0%
(FEMA), from US
Department of Labor, and 13,600 0.0%
from grants awarded
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21
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through the American
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Recovery and Reinvestment 20 AS Employed Forecast

Act of 2009 (ARRA). As a AS Unemployment Rate Forecast
result, total nonfarm
payrolls in the territory had FIGURE XII: AMERICAN SAMOA EMPLOYMENT AND UNEMPLOYMENT
grown to more than 18,000
by 2016. Following the closure of the STP cannery in late-2016, cannery employment in the
territory fell by 400 in 2017. The impact to the rest of the economy led to an additional loss of
approximately 500 workers from other private sectors in the territory, and 100 government
employees. Subsequently, the unemployment rate in the territory rose from 10.5% in 2016 to
an estimated 14.3% in 2017.
This trend was temporarily bucked in early-2018, when Tropical Storm Gita impacted many of
the islands of American Samoa. The storm left hundreds of millions of dollars of damage to
public and private structures, property, and infrastructure. There was an immediate response
from the federal government, and a wave of disaster relief funds from FEMA and international
relief organizations soon followed. Initial support from FEMA funded emergency management
operations, helping to bankroll the expensive tasks of debris removal and restoration of public
utilities, while the Red Cross injected as much as a million dollars into the local economy
22
through direct donations to affected households. The flood of new consumer and government
spending contributed to a calculated 3.1% increase in total nonfarm payrolls in 2018, from
around 17,200 to over 17,700, and reduced the unemployment rate from 14.3% to 11.4%.
The majority of the employment impacts from the tropical storm were contained in the six
months immediately following the disaster. As such, federal and territorial government payroll
impacts have likely already occurred and are forecast to remain near 7,900 through 2019
before swelling to more than 8,100 in 2020, when the decennial census survey is carried out.
Following the completion of the 2020 Census, the Census workforce will be reduced and
government payrolls in American Samoa are anticipated to decrease to approximately 7,500 in
2021, and 7,600 in 2022.
Private nonfarm payrolls are likely to follow a similar trajectory. However, the post-census dip
in the outer years of the forecast period will likely be cushioned by modest growth in cannery
employment, as Starkist Samoa Co. is expected to increase production of pouch tuna products.
Total nonfarm payrolls are projected to rise by 1.9% (18,100) in 2019, and 0.9% (18,200) in
2020, before contracting by 6.7% (17,000) in 2021, and then growing by 0.8% (17,100) in 2022.
Accordingly, the unemployment rate is forecast to be 11.4% in 2019, 11.0% in 2020, 12.5% in
2021, and 11.6% in 2022.
Wages and Income
Strong government and business spending in the territory since the 2009 tsunami has
contributed to average annualized wage growth of 2.8% over the last decade. Personal income,
which is the sum of all wages and incomes earned in American Samoa, climbed by 5.4% in 2016,
which was the final year of
History Forecast construction on the STP cannery.
$5,740 Disposable personal income,
$14,000 which excludes tax and debt
$5,540
payments and essentially
$5,340
$13,500 represents household buying
$5,140 power, rose by 5.1% in the same
$4,940 year. In 2017, after the cannery
$13,000
closure, personal income and
$4,740
disposable personal income
$4,540 $12,500 growth slowed to 0.1% and
$4,340 0.7%, respectively. Each of these
$4,140 $12,000 income variables would have
contracted that year, if not for a
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20
payments from government

AS Disposable Personal Income per Capita (USD) Forecast
AS Average Annual Wage - All Sectors
entities to individuals, namely
pension distributions, social
FIGURE XIII: AMERICAN SAMOA WAGES AND INCOME security benefits, and
23
supplemental nutrition program benefits. Wage growth is expected to accelerate modestly for
the next two years, primarily as a result of the federal disaster relief funds and the federally
mandated minimum wage increase that took effect in September of 2018. The average annual
wage in American Samoa is forecast to be $14,300 in 2018 and 2019, $14,400 in 2020, and
$14,200 in 2021 and 2022. Disposable personal income per capita was estimated to be $5,700
in 2018, and is projected to grow to $5,800 in 2019, $5,900 in 2020, $5,800 in 2021, and $5,900
in 2022.
Inflation
Due to American Samoa’s remote

location and dependence on US $120 History Forecast $100.0
federal government funds, the $115
$90.0
greatest contributors to price level $110
fluctuations in the territory tend to $105 $80.0
be transportation costs (especially $100 $70.0
fuel costs), along with various US $95
inflation indices. Between 2013 and $90 $60.0
2016, the average nominal price $85 $50.0
per barrel of Brent crude oil $80
decreased by roughly 60%, which $75
$40.0
put downward pressure on prices, $70 $30.0
both in American Samoa and in the
US. Crude oil prices began to
14
15
16
17
18
19
20
21
22
20
20
20
20
20
20
20
20
20
increase at a faster pace in 2017
AS CPI All Items (Index, 1982-84=100) Forecast
and during the first half of 2018 Brent Crude Oil Average Nominal Price
before falling in the second half of
the year as global oil stocks FIGURE XIV: AMERICAN SAMOA INFLATION
expanded. The American Samoa
Consumer Price Index (CPI) indicated that price levels in the territory had risen by 1.0% in 2016,
followed by 3.2% in 2017, which is roughly in line with observed growth in crude oil prices. The
upsurge in the price of many petroleum products during the first half of 2018, paired with the
effects of a newly increased excise tax rate in the territory, contributed to estimated consumer
inflation growth of 3.5% in American Samoa in 2018. It is predicted that the glut in global oil will
begin to wane in 2019, which will likely drive crude oil prices higher throughout the remainder
of the forecast period. The average nominal price per barrel of Brent crude oil was $52.40 in
2017, and is expected to be $52.90 in 2018, $56.30 in 2019, $70.00 in 2020, $77.40 in 2021, and
$80.50 in 2022. The rising cost of fuel will likely lead to higher transportation costs, which tends
to put upward pressure on nearly every other inflation category in American Samoa. Consumer
prices are projected to grow by 1.8% in 2019, 1.6% in 2020, 1.1% in 2021, and 0.2% in 2022. The
GDP Deflator, which accounts for growth in aggregate prices paid by consumers, producers, and
government entities in American Samoa, is forecast to rise by 3.1% in 2018, 0.5% in 2019, 2.2%
in 2020, 1.3% in 2121, and then decrease by 2.3% in 2022.
24
Consumer Spending
Consumer spending is equal to the total value of all final goods and services purchased by
households and private citizens for personal consumption. This is typically the largest economic
category, accounting for approximately 70% of annual GDP. As such, it tends to closely reflect
the broader economy, and is particularly sensitive to economic fluctuations, such as tuna
cannery closures and inflationary spikes. Despite a contraction in population, consumer
spending in American Samoa has increased over most of the last decade. Most of this growth
has come in the form of increased spending on services, which has expanded at an average rate
of 2.8% since 2008. Over the same period, durable goods spending has grown at an average
annual increment of only 0.6%, while nondurable goods spending rose at an anemic 0.1%,
annually. Total consumption grew at an average yearly rate of 1.4% over that period, which
might have been higher if not for a sharp decrease in all household consumption categories in
2015, which was likely a
result of the completion of a
$380 History Forecast number of federally funded
$370 projects. Consumer spending
$360 has continued to expand
$350 each year since and is
estimated to have risen by
$340
1.3% in 2018, due in-part to
$330
the disaster spending in the
$320 first half of the year. Higher
$310 inflation, spurred by
$300 increased transportation
$290 costs, is expected to put
$280 pressure on spending in this
category in the later years of
the forecast. Real household
14
15
16
17
18
19
20
21
22
20
20
20
20
20
20
20
20
20
consumption is projected to
Real AS Personal Consumption Expenditures ($ Million) grow by 0.4% in 2019 before
Forecast contracting by 0.4% in 2020
FIGURE XV: AMERICAN SAMOA CONSUMER SPENDING and 2.0% in 2021, and then
increasing by 0.2% in 2022.
25
Private Fixed Investment
Business investments in American

Samoa decreased by an estimated $90 History Forecast
14.5% in 2018, or by 14.8% when
$80
adjusted for inflation. This
contraction represents the end of $70
the Samoa Tuna Processors
investment. The steepest drop $60
isn’t expected to occur until 2019, $50
when the last of the STP
equipment and construction $40
materials are counted from the
$30
previous year and real business
investment in the territory is
14
15
16
17
18
19
20
21
22
20
20
20
20
20
20
20
20
20
projected to contract by 27.0%.
Inflation-adjusted business Real AS Investment ($ Million) Forecast
spending is forecast to decrease
FIGURE XVI: AMERICAN SAMOA BUSINESS INVESTMENT
for two more years before
bottoming out, falling by 5.5% and 2.1% in 2020 and 2021, respectively. Most of the contraction
in local business spending should be complete by 2022, when real private fixed investment is
predicted to grow by 9.3% in 2022.
Government Spending
Local and federal government spending

History Forecast is estimated to have grown by 11.0% in
$260 2018, following disaster relief spending
in the wake of Tropical Storm Gita. Soon
$210 after the storm had passed, emergency
supplies were procured, additional staff
$297.0
$276.0
$160
$252.9
$252.0
was hired, and debris removal efforts

$244.1
$239.9
$236.0
$228.4
$219.9
$110 were ramped up. Damage to private

and public property was evaluated over
$60 the following months, and more than
$20 million was distributed to
$10
individuals and families through the
FEMA Individual Assistance programs.
14
15
16
17
18
19
20
21
22
20
20
20
20
20
20
20
20
20
Real AS Federal Government Spending ($ Million) Forecast At least $12 million more is expected to
Real AS Territorial Government Spending ($ Million) Forecast be approved to assist in rebuilding and
repairing public property and
FIGURE XVII: AMERICAN SAMOA GOVERNMENT SPENDING
infrastructure through FEMA’s Public
26
Assistance programs. An additional $40 million was funneled into the territory from US Small
Business Administration loans, intergovernmental service agreements, miscellaneous disaster-
related grants, related federal programs, and from private insurance distributions. Combined
real territorial and federal government spending in American Samoa is projected to decrease by
5.2% in 2019, 1.9% in 2020, 4.7% in 2021, and by 3.7% in 2022.
Gross Domestic Product
Increased household and

government spending are 670 History Forecast
expected to eclipse
650
decreases in business
$649.0
investments in 2018, while 630 $641.0
$632.0
net export growth was 610
anticipated to have been 590
$602.0
$598.0
largely flat. Nominal GDP
570
$581.0
was estimated to have
$575.2
expanded by 3.9% in 2018, 550
$561.9
$550.8
and is forecast to decrease 530
by 3.0% in 2019 before
510
increasing by 1.1% in 2020,
contracting by 1.1% in 490
2021, and then growing by
14
15
16
17
18
19
20
21
22
0.3% in 2022. Adjusted for
20
20
20
20
20
20
20
20
20
inflation, 2018 Real GDP AS GDP ($ Million) Forecast
grew at an estimated rate AS Real GDP (2009 CW $ Million) Forecast
of 0.7%, and is expected to
FIGURE XVIII: AMERICAN SAMOA GROSS DOMESTIC PRODUCT
decrease by 3.5% in 2019,
1.0% in 2020, 2.3% in
2021, an 2.0% in 2022.
Additional details can be found in the following data tables.
27
American Samoa Economic Forecast Tables
TABLE 7: AMERICAN SAMOA ECONOMIC FORECAST SUMMARY DETAILS
American Samoa Economic Forecast - Reference Case

Summary
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Nominal Gross Domestic Product ($ Million) 643.0 661.0 653.0 634.0 658.5 639.0 646.2 639.3 641.1
Annual Growth (%) 0.3 2.8 -1.2 -2.9 3.9 -3.0 1.1 -1.1 0.3
Real Gross Domestic Product (2009$ Million) 641.0 649.0 632.0 598.0 602.0 581.0 575.2 561.9 550.8
Annual Growth (%) 0.9 1.2 -2.6 -5.4 0.7 -3.5 -1.0 -2.3 -2.0
Average Annual Wage ($/yr) 13,474 13,348 13,850 13,929 14,282 14,329 14,360 14,249 14,158
Annual Growth (%) 0.8 -0.9 3.8 0.6 2.5 0.3 0.2 -0.8 -0.6
Personal Income ($ Million) 341.7 335.9 354.7 354.9 364.9 379.4 384.3 370.3 372.9
Annual Growth (%) 6.9 -1.7 5.6 0.0 2.8 4.0 1.3 -3.7 0.7
Annual Growth (%) -7.8 1.0 7.2 3.3 -6.4 -2.2 -1.7 0.6 0.3
Population 61,811 60,863 60,200 60,300 60,599 61,068 60,891 60,547 59,856
Annual Growth (%) -1.3 -1.5 -1.1 0.2 0.5 0.8 -0.3 -0.6 -1.1
American Samoa Consumer Price Index 98.5 97.7 98.7 101.9 105.4 107.3 109.1 110.3 110.5
Annual Growth (%) 0.0 -0.8 1.0 3.2 3.5 1.8 1.6 1.1 0.2
AS GDP Deflator 100.3 101.8 103.4 106.1 109.4 110.0 112.4 113.8 116.4
Annual Growth (%) -0.7 1.5 1.6 2.6 3.1 0.5 2.2 1.3 2.3
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.2 1.7 -0.6 -0.3
28
TABLE 8: AMERICAN SAMOA NOMINAL GDP FORECAST DETAILS

Current Dollars
Category Forecast
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Nominal Gross Domestic Product ($ Million) 643.0 661.0 653.0 634.0 658.5 639.0 646.2 639.3 641.1
Annual Growth (%) 0.3 2.8 -1.2 -2.9 3.9 -3.0 1.1 -1.1 0.3
Personal Consumption ($ Million) 455.0 444.0 446.0 460.0 465.0 471.8 473.7 464.5 464.9
Annual Growth (%) 1.8 -2.4 0.5 3.1 1.1 1.4 0.4 -1.9 0.1
Business Investments ($ Million) 97.0 77.0 95.0 92.0 78.7 58.5 55.6 55.8 61.5
Annual Growth (%) 49.2 -20.6 23.4 -3.2 -14.5 -25.6 -5.0 0.4 10.2
Government Spending ($ Million) 344.0 370.0 320.0 306.0 340.7 331.3 334.0 326.8 322.7
Annual Growth (%) 9.9 7.6 -13.5 -4.4 11.3 -2.8 0.8 -2.1 -1.3
Net Exports ($ Million) -252.0 -230.0 -208.0 -224.0 -225.9 -222.6 -217.0 -207.8 -208.1
Annual Growth (%) -37.0 8.7 9.6 -7.7 -0.9 1.5 2.5 4.2 -0.1
29
TABLE 9: AMERICAN SAMOA REAL GDP FORECAST DETAILS

Chained 2009 Dollars
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Real Gross Domestic Product (2009$ Million) 641.0 649.0 632.0 598.0 602.0 581.0 575.2 561.9 550.8
Annual Growth (%) 0.9 1.2 -2.6 -5.4 0.7 -3.5 -1.0 -2.3 -2.0
Real Personal Consumption (2009$ Million) 372.0 371.0 375.0 374.0 367.4 369.0 367.5 360.0 360.9
Annual Growth (%) 0.8 -0.3 1.1 -0.3 -1.8 0.4 -0.4 -2.0 0.2
Real Business Investments (2009$ Million) 84.0 70.0 87.0 81.0 69.1 50.4 47.6 46.6 51.0
Annual Growth (%) 42.4 -16.7 24.3 -6.9 -14.8 -27.0 -5.5 -2.1 9.3
Real Government Spending (2009$ Million) 299.0 321.0 275.0 258.0 280.7 266.1 261.0 248.7 239.4
Annual Growth (%) 7.6 7.4 -14.3 -6.2 8.8 -5.2 -1.9 -4.7 -3.7
Real Net Exports (2009$ Million) -121.0 -114.0 -104.0 -128.0 -126.2 -115.5 -112.0 -104.5 -111.4
Annual Growth (%) -44.0 5.8 8.8 -23.1 1.4 8.5 3.0 6.7 -6.7
30
TABLE 10: AMERICAN SAMOA EMPLOYMENT CHARACTERISTICS FORECAST DETAILS

Employment
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Government Employment 7,756 7,659 7,607 7,570 7,892 7,915 8,105 7,479 7,597
Annual Growth (%) 4.4 -1.3 -0.7 -0.5 4.3 0.3 2.4 -7.7 1.6
Cannery Employment 2,502 2,759 2,843 2,449 2,455 2,688 2,690 2,610 2,601
Annual Growth (%) 18.7 10.3 3.0 -13.9 0.2 9.5 0.1 -3.0 -0.3
Other Private Sector Employment 7,482 7,192 7,720 7,199 7,363 7,446 7,421 6,914 6,940
Annual Growth (%) 9.6 -3.9 7.3 -6.7 2.3 1.1 -0.3 -6.8 0.4
Total Employment 17,740 17,610 18,170 17,218 17,710 18,050 18,215 17,002 17,138
Annual Growth (%) 8.4 -0.7 3.2 -5.2 2.9 1.9 0.9 -6.7 0.8
Labor Force 20,156 19,867 20,294 20,098 19,997 20,372 20,476 19,439 19,387
Annual Growth (%) 1.7 1.4 -2.1 1.0 0.5 -1.9 -0.5 5.1 0.3
Unemployed 2,416 2,257 2,124 2,880 2,287 2,322 2,261 2,437 2,250
Annual Growth (%) 41.5 6.6 5.9 -35.6 20.6 -1.6 2.6 -7.8 7.7
Unemployment Rate 12.1% 11.2% 10.5% 14.3% 11.4% 11.4% 11.0% 12.5% 11.6%
Annual Growth (%) -40.7 -7.4 -6.2 36.2 -20.0 -0.3 -3.1 13.5 -7.4
31
Alternative Forecasts
The baseline American Samoa Economic Forecast is based on the reference case, or baseline
scenario, from the US Energy Information Administration’s Annual Energy Outlook 2019. The
Annual Energy Outlook 2019 also contains a number of side cases, or alternative scenarios,
including a high oil and gas resource and technology case, a low oil and gas resource and
technology case, a high oil price case, a low oil price case, a high economic growth case, and a
low economic growth case. For the purposes of this publication, the low economic growth case
is analyzed in combination with the high oil price case, to create a single scenario in which the
downside risks of each case are simultaneously represented. Additionally, the high economic
growth case is analyzed in combination with the low oil price case, to create a single scenario in
which the upside risks of each case are simultaneously represented.
The output from each of these alternative scenarios is expressed as the difference between the
alternative forecast and the baseline forecast.
For details on the reference case forecast, or baseline scenario forecast, please refer to the
Pacific Region Economic Forecast Analysis section, the United States of America Economic
Forecast Analysis section, and the American Samoa Economic Forecast Analysis section of this
publication.
Low Economic Growth and High Oil Price Scenario
In the low economic growth and high oil price growth scenario, the US economy loses some
momentum in 2019 and real GDP growth slows from 2.9% in the baseline to 2.5% in this
scenario. Real GDP is a full percentage point lower by 2021. Nonfarm payrolls decrease in the
US, with nearly 4 million fewer jobs in the US by 2022, and a civilian unemployment rate that is
0.9 percentage points higher by the end of the forecast period than in the baseline scenario.
In American Samoa, wage growth slows faster than in the baseline scenario, and begins to
contract in 2020 –a year earlier in this scenario. Nearly every inflation-adjusted GDP category is
lower in each year of the forecast period and real GDP ends 2022 4.8% lower in this scenario
than in the baseline.
Additional details for the low economic growth and high oil price growth scenario can be found
in the tables on the following pages.
32
Low Economic Growth and High Oil Price Growth Scenario Tables
TABLE 11: AMERICAN SAMOA LOW ECONOMIC GROWTH SCENARIO DETAILS
American Samoa Economic Forecast - Low Economic Growth Scenario

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual Growth (%) 0.3 2.8 -1.2 -2.9 3.9 -3.1 1.0 -1.2 0.1
Annual Growth (%) 0.9 1.2 -2.6 -5.4 0.7 -3.9 -2.1 -3.6 -3.9
Annual Growth (%) 0.8 -0.9 3.8 0.6 2.5 0.2 -0.2 -1.2 -1.0
Annual Growth (%) 6.9 -1.7 5.6 0.0 2.8 3.9 1.0 -4.0 0.4
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.1 1.5 -0.7 -0.3
Population 61,811 60,863 60,200 60,300 60,599 61,067 60,877 60,514 59,807
Annual Growth (%) -1.3 -1.5 -1.1 0.2 0.5 0.8 -0.3 -0.6 -1.2
Annual Growth (%) 0.0 -0.8 1.0 3.2 3.5 1.9 2.1 1.6 1.1
AS GDP Deflator 100.3 101.8 103.4 106.1 109.4 110.3 113.8 116.6 121.5
Annual Growth (%) -0.7 1.5 1.6 2.6 3.1 0.8 3.2 2.5 4.1
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.1 1.5 -0.7 -0.3
33
TABLE 12: US LOW ECONOMIC GROWTH SCENARIO DETAILS
American Samoa Economic Forecast - Low Economic Growth Scenario

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual Growth (%) 2.6 2.9 1.5 2.3 2.8 2.5 1.0 0.6 0.8
Annual Growth (%) 2.9 3.6 2.7 2.8 2.4 2.0 1.3 1.1 1.0
Annual Growth (%) 5.5 5.2 -23.9 4.7 5.8 6.1 3.8 1.7 0.9
Annual Growth (%) -0.6 1.4 0.8 0.1 1.9 2.5 0.7 -0.1 -0.3
Annual Growth (%) -5.6 -27.5 -7.5 -6.1 -6.6 -5.5 -9.4 -3.0 -0.6
Annual Growth (%) 1.9 2.1 1.8 1.5 1.6 0.8 0.3 -0.3 -0.3
Annual Growth (%) -16.1 -14.7 -7.6 -10.6 -10.9 -7.4 11.6 13.1 9.5
Annual Growth (%) 1.8 2.1 0.7 1.5 2.1 1.9 0.4 0.0 0.2
34
Low Economic Growth and High Oil Price Growth Scenario versus Baseline Scenario Tables
TABLE 13: AMERICAN SAMOA LOW ECONOMIC GROWTH SCENARIO VERSUS BASELINE SCENARIO DETAILS
American Samoa Economic Forecast - Low Economic Growth Scenario versus Baseline Scenario
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
AS Nominal Gross Domestic Product ($ Million) 0.0 0.0 0.0 0.0 0.0 -0.6 -1.7 -2.7 -3.9
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.3 -0.4 -0.6
AS Real Gross Domestic Product (2009$ Million) 0.0 0.0 0.0 0.0 0.0 -2.4 -8.7 -16.1 -26.2
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.4 -1.5 -2.9 -4.8
AS Average Annual Wage ($/yr) 0 0 0 0 -1 -24 -89 -156 -208
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.2 -0.6 -1.1 -1.5
AS Personal Income ($ Million) 0.0 0.0 0.0 0.0 0.0 -0.3 -1.5 -2.8 -4.0
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.4 -0.8 -1.1
ASG Revenues ($ Million) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.3 -0.4 -0.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.3 -0.4 -0.4
Population 0 0 0 0 0 -1 -14 -33 -50
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.1 0.5 1.1 2.0
AS GDP Deflator 0.0 0.0 0.0 0.0 0.0 0.3 1.4 2.9 5.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.3 1.3 2.5 4.4
AS Government Revenues ($Million) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.3 -0.4 -0.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.3 -0.4 -0.4
35
TABLE 14: US LOW ECONOMIC GROWTH SCENARIO VERSUS BASELINE SCENARIO DETAILS
American Samoa Economic Forecast - Low Economic Growth Scenario versus Baseline Scenario
US Economic Forecast Summary Difference
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Real US Gross Domestic Product (2009$ Million) 0.0 0.0 0.0 0.0 -1.6 -74.4 -284.7 -477.0 -638.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.4 -1.5 -2.5 -3.3
Real US Consumption (2009$ Million) 0.0 0.0 0.0 0.0 -0.3 -42.7 -169.0 -307.9 -437.3
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.3 -1.3 -2.4 -3.3
Real US Business Spending (2009$ Million) 0 0 0 0 -1 -17 -57 -94 -119
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.6 -2.1 -3.3 -4.1
Real US Government Spending (2009$ Million) 0.0 0.0 0.0 0.0 -0.1 3.0 -3.6 -16.5 -28.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.1 -0.1 -0.5 -0.9
Real US Net Exports (2009$ Million) 0.0 0.0 0.0 0.0 0.4 8.2 30.7 57.9 65.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.1 1.2 3.9 6.8 7.6
US Employment, Nonfarm (Millions) 0.0 0.0 0.0 0.0 0.0 -0.3 -1.3 -2.6 -3.6
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.2 -0.9 -1.7 -2.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.1 2.5 9.6 17.3 21.1
US Real GDP per Capita (2009$) 0.0 0.0 0.0 0.0 -4.9 -190.7 -763.5 -1,271.6 -1,678.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.3 -1.4 -2.3 -3.0
36
High Economic Growth and Low Oil Price Scenario
In the high economic growth and low oil price growth scenario, the US economy expands at a
slightly accelerated pace in 2019, and a marginally faster pace in the later years of the forecast
period. The civilian unemployment rate remains subdued and nonfarm payrolls are 2.3% higher
by 2022. Private and public consumption find some additional room to grow and real US GDP is
2.4% in 2022 in this scenario, versus the baseline.
The higher economic growth in the US is less impactful in American Samoa. Employment,
wages, consumption, and government revenues are all slightly higher in this scenario than in
the baseline, but the aggregate impact is de minimis. Real GDP in the territory is approximately
1.1% higher by 2022 in this scenario than in its baseline estimate.
Additional details for the high economic growth and low oil price growth scenario can be found
in the tables on the following pages.
37
High Economic Growth and Low Oil Price Growth Scenario Tables
TABLE 15: AMERICAN SAMOA HIGH ECONOMIC GROWTH SCENARIO DETAILS
American Samoa Economic Forecast - High Economic Growth Scenario

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual Growth (%) 0.3 2.8 -1.2 -2.9 3.9 -3.0 1.2 -1.1 0.4
Annual Growth (%) 0.9 1.2 -2.6 -5.4 0.7 -3.3 -0.8 -2.0 -1.6
Annual Growth (%) 0.8 -0.9 3.8 0.6 2.5 0.4 0.5 -0.7 -0.7
Annual Growth (%) 6.9 -1.7 5.6 0.0 2.8 4.0 1.5 -3.6 0.7
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.2 1.8 -0.5 -0.4
Population 61,811 60,863 60,200 60,300 60,599 61,068 60,894 60,553 59,848
Annual Growth (%) -1.3 -1.5 -1.1 0.2 0.5 0.8 -0.3 -0.6 -1.2
Annual Growth (%) 0.0 -0.8 1.0 3.2 3.5 1.7 1.5 0.9 0.0
AS GDP Deflator 100.3 101.8 103.4 106.1 109.4 109.8 112.0 113.0 115.3
Annual Growth (%) -0.7 1.5 1.6 2.6 3.1 0.4 2.0 0.9 2.0
Annual Growth (%) 7.8 -1.0 -7.2 -3.3 6.4 2.2 1.8 -0.5 -0.4
38
TABLE 16: US HIGH ECONOMIC GROWTH SCENARIO DETAILS
American Samoa Economic Forecast - High Economic Growth Scenario

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Annual Growth (%) 2.6 2.9 1.5 2.3 2.8 3.4 3.1 2.2 2.1
Annual Growth (%) 2.9 3.6 2.7 2.8 2.4 2.6 3.1 2.9 2.5
Annual Growth (%) 5.5 5.2 -23.9 4.7 5.8 7.5 6.8 3.7 2.0
Annual Growth (%) -0.6 1.4 0.8 0.1 1.9 2.6 1.2 0.7 0.4
Annual Growth (%) -5.6 -27.5 -7.5 -6.1 -6.6 -6.8 -15.4 -7.5 -1.6
Annual Growth (%) 1.9 2.1 1.8 1.5 1.6 1.4 1.8 1.2 0.8
Annual Growth (%) -16.1 -14.7 -7.6 -10.6 -10.9 -10.3 0.0 4.4 7.3
Annual Growth (%) 1.8 2.1 0.7 1.5 2.1 2.6 2.3 1.5 1.3
39
High Economic Growth and Low Oil Price Growth Scenario versus Baseline Scenario Tables
TABLE 17: AMERICAN SAMOA HIGH ECONOMIC GROWTH SCENARIO VERSUS BASELINE SCENARIO DETAILS
American Samoa Economic Forecast - High Economic Growth Scenario versus Baseline Scenario
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
AS Nominal Gross Domestic Product ($ Million) 0.0 0.0 0.0 0.0 0.0 -0.2 0.2 0.0 0.7
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.1 0.4 0.7 1.1
AS Average Annual Wage ($/yr) 0 0 0 0 -1 4 39 45 41
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.3
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.3 0.3
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.1
Population 0 0 0 0 0 0 3 6 -8
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
AS Consumer Price Index 0.0 0.0 0.0 0.0 0.0 -0.1 -0.2 -0.4 -0.6
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.1 -0.2 -0.3 -0.6
AS GDP Deflator 0.0 0.0 0.0 0.0 0.0 -0.2 -0.4 -0.8 -1.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 -0.2 -0.3 -0.7 -0.9
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.1
40
TABLE 18: US HIGH ECONOMIC GROWTH SCENARIO VERSUS BASELINE SCENARIO DETAILS
American Samoa Economic Forecast - High Economic Growth Scenario versus Baseline Scenario
US Economic Forecast Summary Difference
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022
Real US Gross Domestic Product (2009$ Million) 0.0 0.0 0.0 0.0 -1.6 78.9 256.3 371.0 458.7
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.4 1.4 2.0 2.4
Real US Consumption (2009$ Million) 0.0 0.0 0.0 0.0 -0.3 34.8 127.9 217.1 289.4
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.3 1.0 1.7 2.2
Real US Business Spending (2009$ Million) 0 0 0 0 -1 17 58 81 90
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.7 2.1 2.9 3.1
Real US Government Spending (2009$ Million) 0.0 0.0 0.0 0.0 -0.1 7.4 16.5 29.2 37.5
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.2 0.5 1.0 1.2
Real US Net Exports (2009$ Million) 0.0 0.0 0.0 0.0 0.4 -0.7 -21.5 -33.1 -35.2
Annual Growth (%) 0.0 0.0 0.0 0.0 0.1 -0.1 -2.7 -3.9 -4.1
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.4 1.3 2.0 2.3
US Unemployment Rate (percent) 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 -0.2 -0.2
Annual Growth (%) 0.0 0.0 0.0 0.0 0.1 -0.7 -4.8 -6.1 -4.9
US Real GDP per Capita (2009$) 0.0 0.0 0.0 0.0 -4.9 223.4 723.7 1,023.4 1,232.2
Annual Growth (%) 0.0 0.0 0.0 0.0 0.0 0.4 1.3 1.8 2.2
41
Feature Article: Nonmanufacturing as an Engine of Growth by
Huiyu Li
Summary
In official statistics, manufacturing is the top contributor to U.S. productivity growth despite its
shrinking share of employment. However, official numbers tend to understate growth among
new producers that improve on existing producers, which is more prevalent outside of
manufacturing. Accounting for such missing productivity growth shows that it plays a larger role
in sectors such as retail trade and services. Also, the relative contribution of manufacturing to
productivity growth has dropped significantly. These findings suggest that nonmanufacturing
may be an increasingly important engine of U.S. growth.
Recent debates surrounding trade policies raise questions about the consequences for the U.S.
economy, particularly for manufacturers. Manufacturing is widely believed to be the main
engine of aggregate productivity growth (see, for example, Sharma 2018). This belief is driven in
part by studies using official statistics that show manufacturing has played an outsized role in
driving productivity growth, even as its share of employment has steadily shrunk in advanced
economies since 2000 (see Santacreu and Zhu 2018).
However, official statistics may not fully capture productivity growth stemming from creative
destruction, as an earlier Economic Letter by Klenow and Li (2017) argued. This source of
missing growth is likely to be larger for sectors outside of manufacturing, as shown by Aghion et
al. (2019). I apply this analysis to reevaluate the contribution of nonmanufacturing to U.S.
productivity growth in recent years in this Letter. I find, indeed, that official statistics may have
drastically understated the contribution of nonmanufacturing to U.S. economic growth.
Measuring productivity growth
To evaluate official measures of productivity growth for different sectors, I use Bureau of Labor
Statistics (BLS) data. I compare the contribution of nonmanufacturing over 1996–2005, when
the United States had high aggregate productivity growth, to 2006–2013, when productivity
growth was lower. The data end in 2013 to match the availability of data for calculating missing
growth in Aghion et al. (2019).
The BLS classifies economic activities into 11 sectors: manufacturing, agriculture, mining,
utilities, construction, wholesale trade, retail trade, transportation and warehousing,
information, FIRE (finance, insurance, and real estate), and services, which contains producers
not classified in the other sectors. For example, restaurants and hotels are in services, but
banks are in FIRE, and Amazon is in retail trade.
42
I report growth individually for the three sectors with the largest employment shares—
manufacturing, retail trade, and services, and combine the remaining sectors except for
agriculture, which is not reported in Aghion et al. (2019). The three largest sectors accounted
for almost 80% of private-sector nonfarm employment on average between 1989 and 2013.
Growth in a sector is calculated as the difference between output growth and input growth in a
sector adjusted for inflation; inputs are goods, capital, and labor used for production.
The light blue and green bars in Figure 1 display the measured productivity growth within
manufacturing, retail trade, services, and other combined sectors for the two periods. The light
blue and green bars in Figure 2 display the contribution of each of those sectors to productivity
growth in percentage points, defined as the productivity growth in the sector multiplied by its
employment share. Total U.S. productivity growth equals the average productivity growth over
all sectors of the economy, weighting each sector by its employment share.
Figure 1: Measured vs. estimates of true productivity growth
Figure 2: Measured vs estimates of true contributions to total growth
According to the BLS data, manufacturing productivity grew 7.1% per year during the earlier
period and only 1.6% per year during the later period. Accounting for its share of the economy,
43
manufacturing contributed 1.1 percentage points out of the 2.6% overall growth in the high-
growth period and 0.2 percentage point of the 0.5% growth during the low-growth period. That
is, even though manufacturing’s employment share shrank from 16% to 11% between the two
periods and its productivity growth declined significantly, manufacturing still accounted for
slightly over 40% of the overall productivity growth in the later period, just as it did in the
earlier period.
According to the BLS data, manufacturing productivity grew 7.1% per year during the earlier
period and only 1.6% per year during the later period. Accounting for its share of the economy,
manufacturing contributed 1.1 percentage points out of the 2.6% overall growth in the high-
growth period and 0.2 percentage point of the 0.5% growth during the low-growth period. That
is, even though manufacturing’s employment share shrank from 16% to 11% between the two
periods and its productivity growth declined significantly, manufacturing still accounted for
slightly over 40% of the overall productivity growth in the later period, just as it did in the
earlier period.
The persistently outsized role of manufacturing in the official statistics is due to the lackluster
measured growth in other major sectors. For example, while the services sector has a 49%
share of employment in the early period and 54% later, its productivity growth was less than
1% in the early period and practically zero later. As a result, manufacturing contributed more to
productivity growth than its share of employment and sustained its contribution even as its
productivity growth and employment share fell.
Accounting for creative destruction
The findings based on official BLS data are in line with the conventional thinking that
manufacturing is the main engine of U.S. productivity growth today as it was in the past.
However, Aghion et al. (2019) found that official statistics understate growth in sectors outside
of manufacturing.
They consider two types of innovation: creative destruction and in-house. Creative destruction
involves new producers taking part of the market share from existing producers by creating
products that are either of higher quality at a similar price or similar quality at a lower price. For
example, new retail stores and restaurants enter the market by adding establishments. This is
an example of creative destruction in that new stores capture market share from existing local
stores. In contrast, the second type involves existing producers improving their own products
through research and development. For example, Intel rolls out faster CPUs (central processing
units) every year.
44
In manufacturing, new innovative products often emerge in-house from existing firms and are
produced by existing production plants. On the other hand, in nonmanufacturing sectors,
innovation tends to occur more frequently through creative destruction. Official statistics can
measure in-house innovation with various methods, but it is more difficult to evaluate
productivity improvement from creative destruction because the creatively destroyed products
often disappear. As a result, official statistics may miss more growth from nonmanufacturing
sectors and understate their contribution to total growth.
To adjust for missing growth, I use the results from Aghion et al. (2019), who calculated missing
growth using the change in the market share of incumbent producers based on employment
share. The idea behind this approach is that changes in market share reflect how innovative
incumbents are relative to new producers. Standard measurement assumes they are equally
innovative, which implies stable incumbent market share. A shrinking incumbent market share
is a sign that these existing producers are not as innovative as new ones, which in turn would
imply that standard measurement understates growth from creative destruction. For a
summary of the method I use, see Klenow and Li (2017).
The darker blue and green “true” bars in Figure 1 display the sum of measured growth and the
missing growth in each sector as reported in Aghion et al. (2019). The true manufacturing bars
are very close to the measured bars. That is, manufacturing has very little missing growth in
both periods. On the other hand, the retail trade and services sectors have significant missing
growth. For example, the early period shows that 0.5 percentage point of growth is missed in
the services sector. According to Aghion et al. (2019), much of this missing growth comes from
accommodations and restaurants, where the net entry of establishments tends to be quite
rapid and contributes to high levels of creative destruction. There is a similar gap between the
measured and true numbers for services, suggesting that missing growth in services has
persisted into the low-growth period.
Turning to retail trade, Figure 1 shows there was more than 1 percentage point of missing
growth in both the high- and low-growth periods; this sector is also characterized by high levels
of creative destruction via entry and exit. In total, correcting for missing growth increases U.S.
productivity growth from 2.6 to 3.1% in the high-growth period and from 0.5 to 1.2% in the
low-growth period.
The darker blue and green bars in Figure 2 display the contribution of each sector to overall
productivity growth after accounting for missing growth. The differences between the heights
of the true and measured bars capture each sector’s contribution to total missing growth. The
figure shows very little missing growth from manufacturing but considerable missing growth
from retail trade, services, and the remaining sectors, with the services sector contributing the
most. In fact, in the official statistics, productivity growth in retail and services together is
45
negative in the post-2006 period, while the missing growth analysis suggests that retail and
services contributed positively to aggregate productivity growth in the later period.
To highlight the contrast between manufacturing and nonmanufacturing, I combine the

nonmanufacturing sectors in Figure 3. The figure shows that essentially all of the missing
growth can be attributed to the nonmanufacturing sectors. Accounting for creative destruction
boosts the contribution of the nonmanufacturing sectors to overall productivity growth from
58% to 65% in the earlier period and from 59% to 82% in the later period. Unlike the official
statistics, I find a larger and increasing contribution to productivity growth from
nonmanufacturing activities.
Figure 3: Manufacturing, nonmanufacturing contribution to total growth
What if the nonmanufacturing share of employment did not increase?
I calculate the contribution of a sector to productivity growth by multiplying the sector’s

productivity growth by its employment share. Hence, an increase in nonmanufacturing’s
contribution to productivity growth can come from both an increasing share of workers in
nonmanufacturing and an increase in nonmanufacturing productivity growth relative to
manufacturing. To distinguish between these two channels, I calculate what the productivity
contribution from the nonmanufacturing sectors would have been had this group’s
employment share stayed at its average over 1996–2005. This means moving 5% of workers to
manufacturing.
Using only BLS data, nonmanufacturing’s contribution to productivity growth decreases 0.015
percentage point while manufacturing contribution increases 0.084 percentage point. On net,
aggregate productivity growth is 0.07 percentage point or 13% higher. The contribution of
nonmanufacturing to aggregate productivity growth changes from 59% to 50%.
After accounting for missing growth from creative destruction, however, nonmanufacturing
contribution declines 0.049 percentage point. On net, aggregate productivity growth increases
46
0.03 percentage point or only 3%. The contribution of nonmanufacturing falls from 83% to 76%,
which is still significantly higher than the 65% in the high-growth period. Thus, using our
corrected productivity figures, an employment shift back to manufacturing would have virtually
no effect on aggregate productivity growth.
Conclusion
This Letter shows that, when one accounts for the productivity growth from creative
destruction that is missed by official statistics, the contribution of nonmanufacturing sectors to
aggregate productivity growth rises substantially, particularly after 2006. This increase is mostly
due to the increase in nonmanufacturing productivity growth relative to manufacturing, not its
expanding share of total employment. Contrary to much economic commentary, continued
expansion of the nonmanufacturing sector’s share of the U.S. economy could actually boost
true U.S. productivity growth if this process of creative destruction continues. Sectors such as
services may have overtaken manufacturing as the engine of growth.
Huiyu Li is an economist in the Economic Research Department of the Federal Reserve Bank of
San Francisco.
References
Aghion, Philippe, Antonin Bergeaud, Timo Boppart, Peter J. Klenow, and Huiyu Li. 2019.
“Missing Growth from Creative Destruction.” Forthcoming, the American Economic Review.
Klenow, Peter J., and Huiyu Li. 2017. “Missing Growth from Creative Destruction.” FRBSF
Economic Letter 2017-31 (October 23).
Santacreu, Ana Maria, and Heting Zhu. 2018. “Manufacturing and Service Sector Roles in the
Evolution of Innovation and Productivity.” FRB St Louis Economic Synopses 2018(2).
Sharma, Prerna. 2018. “Manufacturing Jobs: Implications for Productivity and Inequality.”
Brookings Blog, Up Front, May 1.
Reprinted from the Federal Reserve Bank of San Francisco’s FRBSF Economist Letter, 2019-03, January
22, 2019. The opinions expressed in this article do not necessarily reflect the views of the management of
the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.
The original article is freely accessible at: https://www.frbsf.org/economic-

research/publications/economic-letter/2019/january/nonmanufacturing-as-engine-of-growth-via-
creative-destruction/
47
ASEM: The American Samoa Economic Model
The American Samoa Economic Model (ASEM) is an income, employment, population, tourism,
trade, and government finance-based, seasonally-adjusted model of American Samoa's
economy. The model consists of a simultaneous system of linear equations, using the ordinary
least squares method (OLS). Projections developed in ASEM are not predictions of future
events, but rather modeled estimates of what may occur, based on historic observations and
certain assumptions.
Sources of Exogenous and Endogenous Variables
The primary exogenous variables were obtained from the US Energy Information
Administration’s (EIA) Long-Term Energy and Macroeconomic outlook tables, the White House
Office of Management and Budget, and from the Central Bank of Samoa.
Endogenous variables are forecast at the territory-wide level of aggregation. Historic
endogenous variables were obtained from the US Bureau of Economic Analysis, the US Federal
Procurement Data System, the US Office of Personnel Management, the US Government
Accountability Office, the US Federal Emergency Management Agency, the US Census Bureau,
the US Congressional Budget Office, the Pacific Islands Forum Fisheries Agency, the American
Samoa Department of Treasury, and from the 2017 American Samoa Statistical Yearbook.
Modules in ASEM
The focal point in ASEM is personal income, which includes wage and salary payments, other
labor income, farm and nonfarm proprietor’s income, dividend and interest income, rental
income, and government transfer payments. Personal tax payments and imputed rent variables
are also accounted for. Finally, social insurance contributions are removed.
Closely related to personal income is employment. Utilizing historic payroll and business survey
data, the model calculates potential future labor force characteristics, such as unemployment,
participation rates, and employment in each of American Samoa’s predominant labor sectors.
The territorial government is the largest single employer in American Samoa, and an important
driver of activity in the territory. As such, local revenues, and federal funds from grants,
programs, contracts, and direct payments to individuals are estimated within the model.
As an insular economy, American Samoa is highly influenced by domestic and international
trade parameters. ASEM utilizes historic exchange rates and territorial customs data to
estimate trade accounts by commodity type. Territory-level demand variables are the primary
48
drivers within the import equations, while export equations are influenced more by exogenous
variables.
Population data is an important driver of aggregate demand in the territory, especially for
inelastic goods and services. To account for this, ASEM estimates both vital statistics and
migration variables in order to forecast total population characteristics.
In addition to these bedrock economic components, ASEM also estimates variables that are
more specific to the unique characteristics of American Samoa, such as spot rates for Tuna,
annual visitor data, and local price level indices.
Model Considerations
The output of ASEM is determined by the parameters of the equations and the values of
exogenous variables over the forecast period. The values of equation parameters are also
determined by the historic values of certain exogenous and/or endogenous variables. ASEM
equation parameters are estimated using the OLS method. Model equations are occasionally
re-specified in response to the dynamic nature of local, national, and international economies.
Parameter values for a particular equation (given the same specification) may change as a
result of revisions in the historic data or a change in the time interval of the estimation. In
general, parameter values should remain relatively constant over time, with changes reflecting
evolutions in structural relationships.
While the equation parameters remain relatively fixed, the forecast period exogenous variable
values are more volatile determinants of the projected values of endogenous variables. They
are more often subject to change as expectations regarding future economic behavior change,
and they are more likely to give rise to debate over appropriate values. As mentioned above,
the forecast period values of exogenous variables are primarily obtained from the US Energy
Information Administration’s Long-Term Energy and Macroeconomic Outlook tables.
Additionally, ASEM is periodically updated with new variables and equations, which may lead to
fluctuations in recent historic values. Occurrences of such events should be limited to the short-
term, while the long-term equations are being tested and updated.
Readers with any questions should contact Nathaniel Clayville at nathaniel.clayville@doc.as, or
the American Samoa Department of Commerce at +1 (684) 633-5155.
49

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American Samoa

Baseline and Alternative Forecasts for 2018 – 2022

Lolo Matalasi Moliga, Governor Keniseli Lafaele, Director

Territory of American Samoa

Executive Summary ................................................................................................................ 3

Pacific Region Economic Forecast Analysis .............................................................................. 6

Pacific Region Economic Summary .......................................................................................................... 6

United States of America Economic Forecast Analysis ........................................................... 13

US Economic Summary .......................................................................................................................... 13

American Samoa Economic Forecast Analysis ....................................................................... 21

American Samoa Economic Summary ................................................................................................... 21

Alternative Forecasts ............................................................................................................ 32

Low Economic Growth and High Oil Price Scenario ............................................................................... 32

Feature Article: Nonmanufacturing as an Engine of Growth by Huiyu Li ................................ 42

ASEM: The American Samoa Economic Model ...................................................................... 48

Figure I: Samoa Real GDP and Inflation Forecast ........................................................................... 7

Table 1: American Samoa Economic Forecast Executive Summary Details ................................... 4

AEO – Annual Energy Outlook

Updates and Changes

American Samoa Department of Commerce Statistics Division

TABLE 1: AMERICAN SAMOA ECONOMIC FORECAST EXECUTIVE SUMMARY DETAILS

American Samoa Economic Forecast

American Samoa Economic Forecast

Pacific Region Economic Summary

Coming off of several consecutive

400.0 a result, real GDP grew by an

developed economies, New Zealand

into the foreseeable future, with 1,000.0

TABLE 3: PACIFIC REGION COUNTRIES REAL GDP FORECAST

American Samoa Economic Forecast - Regional Economic Forecast

American Samoa Economic Forecast - Regional Economic Forecast

The US labor markets saw History Forecast

global economic recession, and

2.4% in 2018 and is projected to

US CPI All Items (% Growth) increase by 2.1% in 2019, 2.6% in

US Private Fixed Investment

Capital investments by private businesses on residential and nonresidential structures,

to have increased by 1.9% in 2018, and

US Real Government Spending (2009 CW $ Billion) is forecast to grow by 2.4% in 2019,

2018 was a volatile year for US trade as the

for inflation, net exports are forecast to by -

TABLE 5: US ECONOMIC FORECAST DETAILS

American Samoa Economic Forecast

American Samoa Economic Forecast

American Samoa Economic Summary

The economy of American

Recovery and Reinvestment 20 AS Employed Forecast

Wages and Income

steep increase in transfer

payments from government

Due to American Samoa’s remote

Business investments in American

Local and federal government spending

was hired, and debris removal efforts

$110 were ramped up. Damage to private

Gross Domestic Product

Increased household and

Additional details can be found in the following data tables.

TABLE 7: AMERICAN SAMOA ECONOMIC FORECAST SUMMARY DETAILS

American Samoa Economic Forecast - Reference Case

American Samoa Economic Forecast - Reference Case

American Samoa Economic Forecast