National Economic Conditions

John Weinberg

August 11, 2010

2

Real Gross Domestic Product

Source: Bureau of Economic Analysis/Haver Analytics

Q2 Q3 Q4 Q1 Q2

CHANGE FROM PREVIOUS QUARTER AT COMPOUND ANNUAL RATE [Percent]:

Gross Domestic Product -0.7 1.6 5.0 3.7 2.4

Personal Consumption Expenditures -1.6 2.0 0.9 1.9 1.6

Nonresidential Fixed Investment -7.5 -1.7 -1.4 7.8 17.0Structures -20.2 -12.4 -29.2 -17.8 5.2Equipment & Software 0.2 4.2 14.6 20.4 21.9

Residential Fixed Investment -19.7 10.6 -0.8 -12.3 27.9

Exports of Goods & Services -1.0 12.2 24.4 11.4 10.3Imports of Goods & Services -10.6 21.9 4.9 11.2 28.8

Final Sales to Domestic Purchasers -1.2 1.8 0.2 1.3 4.1

LEVEL IN QUARTER AT SEASONALLY ADJUSTED ANNUAL RATE [Billions of Chained (2005) Dollars]:

Change in Private Inventories -161.8 -128.2 -36.7 44.1 75.7

Net Exports of Goods & Services -342.0 -390.8 -330.1 -338.4 -425.9

-1.6

2009

Government Consumption Expenditures & Gross Investment

2010

6.1 1.6 -1.4 4.4

3

-4

-3

-2

-1

0

1

2

3

4

5

6

-4

-3

-2

-1

0

1

2

3

4

5

6

2004 2005 2006 2007 2008 2009 2010 2011

Month over Month % Change

Income

Expenditures

Year over Year % Change

Real PersonalIncome

Real Personal Consumption Expenditures

June

Personal Income & Expenditures

Source: Bureau of Economic Analysis/Haver Analytics

Notes: December 2004 real personal income figure excludes the Microsoft dividend.

Apr May June

0.4 0.4 0.2

-0.1 0.2 0.1

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

2004 2005 2006 2007 2008 2009 2010 2011

4

Quarterly average of monthly changes, Thousands of persons

Q2 Avg.

Nonfarm Payroll Employment

Source: Bureau of Labor Statistics/Haver Analytics

July -131June -221May 432Apr. 313Mar. 208

Monthly Change

5

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010

% Change from previous quarter at annual rate

Q221.9%

Real Investment in Equipment & Software

Source: Bureau of Economic Analysis/Haver Analytics

6

80

85

90

95

100

105

80

85

90

95

100

105

2004 2005 2006 2007 2008 2009 2010 2011

2007 = 100

June89.63

Industrial Production Index: Manufacturing

Source: Board of Governors/Haver Analytics

7

DIFFUSION INDEXES: Numbers above 50 percent indicate a preponderance of expanding firm activity.

ISM: Business Survey Indexes

Source: Institute for Supply Management/Haver Analytics

MANUFACTURING BUSINESS: NONMANUFACTURING BUSINESS:

June July June July

Purchasing Managers Index 56.2 55.5 NonManufacturing Index 53.8 54.3

Production 61.4 57.0 Business Activity 58.1 57.4

New Orders 58.5 53.5 New Orders 54.4 56.7

Employment 57.8 58.6 Employment 49.7 50.9

Supplier Deliveries 57.3 58.3 Supplier Deliveries 53.0 52.0

Inventories 45.8 50.2 Inventories 58.5 55.5

Prices 57.0 57.5 Prices 53.8 52.7

Backlog of Orders 57.0 54.5 Backlog of Orders 55.5 52.0

New Export Orders 56.0 56.5 New Export Orders 48.0 52.0

Imports 56.5 52.5 Imports 48.0 48.0

8

Overall and Core Consumer Expenditure Price Indices

Source: Bureau of Economic Analysis, Board of Governors, Haver Analytics

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Year over Year % Change

June 1.4%1.4%

9

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2003 2004 2005 2006 2007 2008 2009 2010 2011

Aug. 6

5-Year

5-Year5 Years Ahead

TIPS Inflation Compensation

Source: Board of Governors/Haver Analytics

Percent

10

3.5

4.0

4.5

5.0

5.5

6.0

6.5

3.5

4.0

4.5

5.0

5.5

6.0

6.5

2004 2005 2006 2007 2008 2009 2010 2011

June4.7 mil.

Existing Single-Family Home Sales

Source: National Association of Realtors/Haver Analytics

Millions of Homes

Average Annual Existing Home Sales: 1990 through 1999

11

Residential Investment

Source: Haver Analytics

12

Industrial Production

Source: Haver Analytics

13

Total Nonfarm Payroll Employment

Source: Bureau of Labor Statistics/Haver Analytics

95

100

105

110

115

120

95

100

105

110

115

120

t-8 t-7 t-6 t-5 t-4 t-3 t-2 t-1 t t+1 t+2 t+3 t+4 t+5 t+6 t+7 t+8

Quarters Before/After NBER Business Cycle Trough (Recessions end at t)

1973:Q4 - 1975:Q1

1981:Q3 - 1982:Q4

1990:Q3 - 1991:Q1

2001:Q1 - 2001:Q4

2007:Q4 - 2009:Q2

Index, Trough=100

Short and Long Term Unemployment Rates

14Source: Bureau of Labor Statistics/Haver Analytics

15

Labor Participation Rate

Source: Bureau of Labor Statistics/Haver Analytics

56

58

60

62

64

66

68

70

56

58

60

62

64

66

68

70

1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Q264.7%

Percentage

16

Federal Debt Held by Public as Percentage to GDP

Source: Office/ of Management and Budget/Haver Analytics

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Percentage