@NickatFP

State of the U.S. Economy

August 14, 2015

@NickatFP

Overview Employment

(3) The Return to Employment (4) Job Openings Abound (5) But the Jobs Growth Data is Conflicting (6) The Industrial Employment Imbalance (7) Shifting to a Services Economy (8) The Part-Time Employment Puzzle (9) The Unemployed (10) Few Claiming Unemployment Insurance (11) Jobless Claims Leading the Economy (12) The Bigger Unemployment Picture (13) Dispersion Across States (14) Extended Vacations and Early Retirement (15) Wages and Working Hours

The American Consumer (16) The Consumer’s Wallet (17) Expanding Household Net Worth (18) Home Mortgages Down, Credit Up (19) Credit Rising on the Back of Student Loans (20) Federal Government, Neighborhood Lender (21) Consumer Optimism Has Returned (22) Empty Roads Finding Traffic

August 14, 2015 2

Housing Market (23) Construction Activity Grinding Forth (24) A Long Road Ahead For Housing Starts (25) Which Means Meager Home Sales (26) House Price Growth Decelerating (27) House Prices Still Around 2005 Levels (28) Renter Nation

Business Activity (29) Industrial Production Slowing

(30) Manufacturing and Trade Sales Slipping

(31) Soft Data Trailing Hard Data

(32) Trends in Retail

(33) Where the Retail Money Goes

Money (34) The Disinflationary Environment

(35) Surging Healthcare Costs

(36) Interest Rates: Lower For Longer

(37) Plenty of Money, Not Enough Velocity

(38) Ballooning Fed Balance Sheet

Gross Domestic Product (39) Consumption Rolls Onward

(40) Private Investment Crawling Back

(41) The Government Drag

(42) Improving Trade Balance, Until Recently

(43) Putting it All Together

@NickatFP

The Return to Employment

-800k

-600k

-400k

-200k

0k

200k

400k

600k

800k

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Monthly Growth in Nonfarm Payrolls 2011-2015 Average: 205k

August 14, 2015 3

The Economy Has Emerged From The Recession With Slow But Steady Job Gains

-7.0%

-3.5%

0.0%

3.5%

7.0%

10.5%

14.0%

-4%

-2%

0%

2%

4%

6%

8%

'49 '54 '59 '64 '69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Y/Y Nonfarm Employment Growth

Y/Y Real GDP Growth

Remarkably Steady Actually, Essentially the Most Stable Employment Growth Has Ever Been

50M60M70M80M90M

100M110M120M130M140M150M160M

'49 '54 '59 '64 '69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Total Employed

2007 Peak

Which Eventually Led to Surpassing the Prior Peak Employment Level in Late 2014

Supporting a Recovery in Real GDP, Albeit at a Gradual Pace

0k

50k

100k

150k

200k

250k

300k

350k

400k

'49 '54 '59 '64 '69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Rolling 24-Month StDev in Monthly Nonfarm Employment Change

Sources: U.S. Bureau of Labor Statistics - Employment Situation, U.S. Bureau of Economic Analysis - GDP

@NickatFP

Job Openings Abound

2.0M

2.5M

3.0M

3.5M

4.0M

4.5M

5.0M

5.5M

6.0M

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Hires

Job Openings

August 14, 2015 4

The Number of Job Openings Have Been Reaching New All-Time Highs

0

1

2

3

4

5

6

7

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Unemployed Workers per Job Opening

Causing Unemployed Workers per Job Opening to Fall Below 1.6, Near Pre-Crisis Lows

0.0M

0.5M

1.0M

1.5M

2.0M

2.5M

3.0M

3.5M

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Quits

Layoffs and Discharges

Other Separations

Job Separations Have Also Been Rising, Driven by a Growing Number of Quits

The Quits Ratio Has Improved to 1.5, Signaling Worker Choice and a Tighter Labor Market

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Ratio of Quits to Layoffs and Discharges

Sources: U.S. Bureau of Labor Statistics - JOLTS

@NickatFP

But the Jobs Growth Data is Conflicting

August 14, 2015 5

Subtracting Monthly Separations from Hires Yields the Labor Turnover for the Month

Labor Turnover Data Typically Agrees With the Nonfarm Payrolls Report

But NFP Has Been Deviating Higher, And Something Will Have to Give

June Was the First Month in 2015 That the NFP First Release Was Not Revised Down

-1M

0M

1M

2M

3M

4M

5M

6M

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Hires

Monthly Net Labor Turnover

Separations

-1.0M

-0.8M

-0.6M

-0.4M

-0.2M

0.0M

0.2M

0.4M

0.6M

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Nonfarm Payrolls Added per Employment Situation Release

Net Labor Turnover per JOLTS

-350k-300k-250k-200k-150k-100k

-50k0k

50k100k150k200k250k300k350k

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

NFP Higher

JOLTS Higher Rolling 12-Month Difference

0k50k

100k150k200k250k300k350k400k450k

'13 '14 '15

Revised NFP NFP on First Release

NFP Down Revisions

y = 0.9744x - 0.8767 R² = 0.955

-1.0M

-0.5M

0.0M

0.5M

1.0M

-1.0M-0.5M 0.0M 0.5M 1.0MNFP

JOLTS

Sources: U.S. Bureau of Labor Statistics – Employment Situation, U.S. Bureau of Labor Statistics - JOLTS

@NickatFP

The Industrial Employment Imbalance

August 14, 2015 6

Not All Industries Have Recovered To Their Pre-Crisis Employment Levels, Particularly Goods Industries

-3M

-2M

-1M

0M

1M

2M

3M

4M

'07 '08 '09 '10 '11 '12 '13 '14 '15

Government

Mining & Logging Other Services

Wholesale Trade

Education and Health Services

Leisure and Hospitality

Utilities

Transportation Retail Trade

Professional Services

Financial Activities

Change in Employment by Industry Since January 2007

Construction Manufacturing

Info Services

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

Shifting to a Services Economy

August 14, 2015 7

But Manufacturing, Construction, and Mining Employment Share Were Trending Down Since Before the GFC

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

'72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Government

Mining & Logging

Other Services

Construction

Manufacturing

Wholesale Trade

Education and Health Services

Leisure and Hospitality

Transportation

Retail Trade

Professional Services

Financial Activities Info Services

18.3%

5.4% 0.9%

23.9%

4.8%

2.6% 6.9%

6.6%

7.5%

5.1% 2.8%

0.8% 3.6%

10.9%

15.5%

15.6%

10.7%

3.4%

11.0%

4.2%

8.7%

4.0%

0.6% 4.5%

13.9%

5.7% 2.0% 0.4%

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

The Part-Time Employment Puzzle

August 14, 2015 8

The Recession Provoked an Unprecedented Drop in Full-Time and Spike in Part-Time Employment

Leading the Part-Time Share of Employed Persons to Peak at 20.0% in 2010

However, Part-Time Employment is Now Once Again Becoming a Preference Rather Than a Mandate

Full-Time Employment is Still 286k Below it’s Late 2007 Level, But is Nearing Recovery

-8M

-6M

-4M

-2M

0M

2M

4M

6M

8M

'69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Full-Time

Part-Time

Rolling 12-Month Change in Employment

14%

15%

16%

17%

18%

19%

20%

21%

'69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Part-Time Share of Total Employed

In 1994, the BLS questionnaire began asking all employees how many hours they worked rather than just “Full-time” or “Part-time”

15%20%25%30%35%40%45%50%55%60%

'69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Employed Part-Time for Economic Reasons as a Share of Employed Part-Time for Noneconomic Reasons

-12M-10M

-8M-6M-4M-2M0M2M4M6M

'07 '08 '09 '10 '11 '12 '13 '14 '15

Full-Time

Part-Time

Change in Employment Since Total Employment Peaked In Nov 2007

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

The Unemployed

August 14, 2015 9

The Unemployment Rate is Back at a Healthy 5.3%, But the Broader U-6 Rate Has Room to Improve

The Underemployment Spread, at 5.1%, Captures the Discouraged and Marginally Attached Workforce

Unemployment Has Decreased Across Age Groups, Although Among Youths is Still Above Average

And Unemployment in All Education Brackets Has More or Less Returned to Form

0%2%4%6%8%

10%12%14%16%18%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Unemployment Rate (U-3)

Broader Unemployment Rate (U-6)

2.5%3.0%3.5%4.0%4.5%5.0%5.5%6.0%6.5%7.0%7.5%

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

U-6 Unemployment Rate less U-3 Unemployment Rate

0%

5%

10%

15%

20%

25%

30%

35%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

16 to 1718 to 1920 to 2425 to 3435 to 4445 to 5455+

Unemployment Rates by Age Group

0%2%4%6%8%

10%12%14%16%18%

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Less Than a High School Diploma

Unemployment Rates by Educational Attainment

Bachelor’s Degree and Higher

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

Few Claiming Unemployment Insurance

August 14, 2015 10

Weekly Initial Jobless Claims, a Timely Leading Indicator, Have Stabilized Below 300k

Fewer Are Filing Claims Now Than at Nearly Any Point in History

The Number of Unemployment Insurance Recipients, or Continuing Claims, is Also Close to Lows

And the Insured Unemployment Rate Has Decreased To Only 1.7%

200k250k300k350k400k450k500k550k600k650k700k

'07 '08 '09 '10 '11 '12 '13 '14 '15

Seasonally Adjusted

Not Seasonally Adjusted

Weekly Initial Claims

200k250k300k350k400k450k500k550k600k650k700k

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Weekly Initial Jobless Claims, 4-Week Moving Average (sa)

1M

2M

3M

4M

5M

6M

7M

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Unemployment Insurance Recipients

1%

2%

3%

4%

5%

6%

7%

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Unemployment Insurance Recipients as a Share of Total Covered Employment

Sources: U.S. Department of Labor – Unemployment Insurance Weekly Claims

@NickatFP

Jobless Claims Leading the Economy

August 14, 2015 11

A Falling Number of Jobless Claims Coincides With Accelerating Employment Growth

And a Corresponding Decline in the Unemployment Rate

But Has Not Been as Connected in Recent Years With Housing Starts

Nor Has Jobless Claims as a Share of the Population With Real Annual GDP Growth

-8M

-6M

-4M

-2M

0M

2M

4M

6M200k250k300k350k400k450k500k550k600k650k700k

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Jobless Claims 4W MA

Rolling 12M Change in Nonfarm Employment

3%4%5%6%7%8%9%10%11%12%

200k250k300k350k400k450k500k550k600k650k700k

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Jobless Claims 4W MA

Unemployment Rate (U-3)

0.0M

0.5M

1.0M

1.5M

2.0M

2.5M200k250k300k350k400k450k500k550k600k650k700k

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Jobless Claims 4W MA

Housing Starts, Annual Rate

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%

0.45%

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Jobless Claims 4W MA as % of Civilian Noninstitutional Population

Real Year Over Year GDP Growth

Sources: U.S. Department of Labor – Unemployment Insurance Weekly Claims, U.S. Bureau of Labor Statistics – Employment Situation, U.S. Census Bureau – New Residential Construction, U.S. Bureau of Economic Analysis - GDP

@NickatFP

The Bigger Unemployment Picture

August 14, 2015 12

The Number of People Filing Initial and Continuing Jobless Claims Each Week is ~30.6% of the Total Unemployed

Civilian Noninstitutional

Population

Not in Labor Force

100%

Labor Force

250.7M

157.0M 62.6%

37.4% 93.6M

Employed 148.7M 94.7%

Unemployed 8.3M 5.3%

Have Not or Cannot File for

Unemployment Benefits

Continuing Unemployment

Claims

Initial Claims

5.8M

0.3M

2.3M 27.4%

69.4%

3.2%

Sources: U.S. Department of Labor – Unemployment Insurance Weekly Claims, U.S. Bureau of Labor Statistics – Employment Situation

@NickatFP

Dispersion Across States

August 14, 2015 13

Unemployment in Most States is Well Below Its Recession Peak and is Only Higher Than a Year Ago in 5 States

Sources: U.S. Bureau of Labor Statistics – Regional and State Employment and Unemployment

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

Neb

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Flor

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Recession Peak (2005-2015) June 2014 June 2015

State Unemployment Rates The unemployment rate in Detroit, Michigan peaked at 17.2% in 2009

@NickatFP

Extended Vacations and Early Retirement

August 14, 2015 14

While The Composition of the Unemployed Continues to Shorten in Duration,

The Average Duration of Unemployment is Still Significantly Elevated by Historical Standards

Causing Discouraged Workers To Give Up Searching for Employment and Just Leave the Labor Force

This Isn’t Just a Demographic Shift, as Prime Aged Workers and Youth Have Both Reduced Participation

0%10%20%30%40%50%60%70%80%90%

100%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

5 to 14 Weeks

Less Than 5 Weeks

27 Weeks and Longer

05

1015202530354045

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Average Number of Weeks the Unemployed Have Been So

Historical Average

56%

58%

60%

62%

64%

66%

68%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Labor Force Participation Rate

25%

35%

45%

55%

65%

75%

85%

95%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

All Citizens

Aged 16 to 19

Aged 55+

Aged 25 to 54

Aged 20 to 24

Labor Force Participation Rates

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

Wages and Working Hours

August 14, 2015 15

Hourly Earnings Growth Has Been Positive and Relatively Stable

Yet Only in the Recent Disinflationary Environment Have Real Hourly Earnings Picked Up

The Average Hourly Workweek Has Been Decreasing For Decades But Has Stabilized Around 34 Hours

0%1%2%3%4%5%6%7%8%9%

10%

'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Private Sector Production and Nonsupervisory Employees

All Private Sector Employees

Year Over Year Change in Average Hourly Earnings

32

33

34

35

36

37

38

39

'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Average Weekly Hours Worked

Private Sector Production and Nonsupervisory Employees

All Private Sector Employees

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Private Sector Production and Nonsupervisory Employees

All Private Sector Employees

Year Over Year Change in Average Hourly Earnings Less Year Over Year Change in CPI

Sources: U.S. Bureau of Labor Statistics - Employment Situation

@NickatFP

The Consumer’s Wallet

August 14, 2015 16

Americans’ Collective Disposable Personal Income Rose to $13.35 Trillion in June

Which is Up 3.4% From a Year Ago, a Steady Pace Similar to That of the Past Several Years

The Personal Savings Rate, Currently at 4.8%, is Below Average But Above Pre-Crisis Levels

Low Interest Rates Have Reduced Consumers’ Debt Service, Freeing Up Room For Consumption

$10.0T

$10.5T

$11.0T

$11.5T

$12.0T

$12.5T

$13.0T

$13.5T

'09 '10 '11 '12 '13 '14 '15

Disposable Personal Income

Personal Outlays

(Personal Income Less Taxes)

-5%

0%

5%

10%

15%

20%

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Disposable Personal Income Year Over Year Change

Personal Outlays Year Over Year Change

0%2%4%6%8%

10%12%14%16%18%

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Personal Savings as a Share of Disposable Personal Income

Historical Average

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

'80 '85 '90 '95 '00 '05 '10 '15

Household Debt Service Payments as a Share of Disposable Personal Income

Historical Average

Sources: U.S. Bureau of Economic Analysis – Personal Income and Outlays

@NickatFP

Expanding Household Net Worth

August 14, 2015 17

Total Household Net Worth Reached $84.9 Trillion in the First Quarter of 2015

-$20T

$0T

$20T

$40T

$60T

$80T

$100T

'52 '57 '62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Other Assets Equity in Noncorporate Business

Pension Fund Reserves

Mutual Fund Shares Corporate Equities Credit Market Instruments Deposits

Durable Goods, Equipment, & IP

Real Estate

Home Mortgages

Consumer Credit Other Liabilities

NET WORTH

Financial Assets

Nonfinancial

Assets Liabilities

Sources: U.S. Federal Reserve – Z.1 Financial Accounts of the United States – “Flow of Funds”

@NickatFP

Home Mortgages Down, Credit Up

August 14, 2015 18

Household Net Worth Increased 5.7% Year Over Year in the First Quarter

Financial Assets as a Share of Total Assets Were at 70.0%, Near Record Highs

Real Estate, the Largest Household Asset, Represented 24.3% of Total Assets

Home Mortgages as a Share of Total Liabilities Has Declined to 66.2% From a High of 75.0% in 2009

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

'53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Year Over Year Change in Household Net Worth

Historical Average

28%

30%

32%

34%

36%

38%

40%

60%

62%

64%

66%

68%

70%

72%

'52 '57 '62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Nonfinancial Assets Financial Assets

0%10%20%30%40%50%60%70%80%90%

100%

'52 '57 '62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Other Assets Equity in Noncorporate Business

Pension Fund Reserves

Mutual Fund Shares Corporate Equities

Credit Market Instruments

Durable Goods, Equipment, & IP

Real Estate

Deposits

0%

10%

20%

30%

40%

50%

60%

70%

80%

'52 '57 '62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Consumer Credit

Home Mortgages

Other Liabilities

Home Mortgages Historical Average

Sources: U.S. Federal Reserve – Z.1 Financial Accounts of the United States – “Flow of Funds”

@NickatFP

Credit Rising on the Back of Student Loans

August 14, 2015 19

Consumer Credit Outstanding Has Been Increasing by About 6% Year Over Year Since 2012

Total Consumer Credit Outstanding Grew to Over $3.4 Trillion in June

But Post-Crisis Credit Growth Has Come Entirely From Student and Auto Loans

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

'50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Nonrevolving

Revolving Total

Total Credit Historical Average

$0.0T

$0.5T

$1.0T

$1.5T

$2.0T

$2.5T

$3.0T

$3.5T

'50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Revolving -$0.4T

-$0.2T

$0.0T

$0.2T

$0.4T

$0.6T

$0.8T

$1.0T

'08 '09 '10 '11 '12 '13 '14 '15

Nonrevolving

Revolving

Total

Change in Consumer Credit Outstanding Since January 2008

Sources: U.S. Federal Reserve – Consumer Credit

@NickatFP

Federal Government, Neighborhood Lender

August 14, 2015 20

The Federal Government Has Been the Enabler of Effectively All of the Post-Crisis Credit Expansion

$0.0T

$0.5T

$1.0T

$1.5T

$2.0T

$2.5T

$3.0T

$3.5T

'44 '49 '54 '59 '64 '69 '74 '79 '84 '89 '94 '99 '04 '09 '14

Pools of Securitized Assets

Federal Government

Nonfinancial Business Nonprofit and Education Institutions

Credit Unions

Finance Companies

Depository Institutions

Consumer Credit Holders

0%

5%

10%

15%

20%

25%

30%

'77 '82 '87 '92 '97 '02 '07 '12

Federal Government Share of Consumer Credit

-$0.4T

-$0.2T

$0.0T

$0.2T

$0.4T

$0.6T

$0.8T

'08 '09 '10 '11 '12 '13 '14 '15

Federal Government

All Others

Change in Consumer Credit Held Since January 2008

Sources: U.S. Federal Reserve – Consumer Credit

@NickatFP

Consumer Optimism Has Returned

August 14, 2015 21

Both Major Indexes of Consumer Confidence Are at Healthy Levels

Restaurant Spending is Rising, and Restaurant Operators Maintain a Positive Outlook

Consumers Are Back to Buying Autos, Which Have Benefitted From Low Rates and Longer Financing Terms

0

20

40

60

80

100

120

140

160

40

50

60

70

80

90

100

110

120

'97 '99 '01 '03 '05 '07 '09 '11 '13 '15

Conference Board Consumer Confidence

University of Michigan Consumer Sentiment

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

96

97

98

99

100

101

102

103

104

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Retail Sales – Food Services and

Drinking Places, Y/Y Change, 3M MA

National Restaurant Association – Restaurant Performance Index, 3M MA

8M

10M

12M

14M

16M

18M

20M

'76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Light Vehicle Sales, Annual Rate, 3M MA

Sources: The Conference Board – Consumer Confidence, The University of Michigan – Consumer Sentiment, National Restaurant Association, U.S. Census Bureau – Monthly Sales for Retail and Food Services, U.S. Bureau of Economic Analysis – Light Weight Vehicle Sales

@NickatFP

Empty Roads Finding Traffic

August 14, 2015 22

It Wasn’t Until January of This Year That Road Traffic Surpassed its Prior Peak

Post-Crisis Auto Travel Growth Had Been Relatively Stagnant Until Speeding Up in 2014 and 2015

If Oil Prices Don’t Materially Increase From Current Levels, Gas Prices Should Come Down Further

However, Road Travel Was Trending Lower on a per Capita Basis Since Before the Recession Began

1.0T

1.5T

2.0T

2.5T

3.0T

3.5T

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

2007 Peak Vehicle Miles Driven on All Roads and Streets, Rolling 12-Month Total

-5%-4%-3%-2%-1%0%1%2%3%4%5%6%

'07 '08 '09 '10 '11 '12 '13 '14 '15

Vehicle Miles Driven, Year Over Year Change

3-Month Moving Average

$1.8$2.0$2.2$2.4$2.6$2.8$3.0$3.2$3.4$3.6$3.8$4.0$4.2

$40$50$60$70$80$90

$100$110$120$130

'11 '12 '13 '14 '15

WTI/Brent Average $ per Barrel

Gasoline Price per Gallon, All Formulations Regular

8k

9k

10k

11k

12k

13k

14k

'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

Vehicle Miles Driven, Rolling 12-Month Total, per Civilian Noninstitutional Population

2005 Peak

2.92T2.94T2.96T2.98T3.00T3.02T3.04T3.06T3.08T3.10T

'07 '08 '09 '10 '11 '12 '13 '14 '15

2007 Peak

Sources: U.S. Department of Transportation – Traffic Volume Trends, U.S. Energy Information Administration – Petroleum and Other Liquids

@NickatFP

Construction Activity Grinding Forth

August 14, 2015 23

Total Construction Spending is Still Well Below Pre-Crisis Levels

But Has Been Growing Since 2011, And Accelerating Further in 2015

Private Nonresidential Spending is Back Near Pre-Crisis Pace, While Private Residential Has Far to Go

But, After Slumping in 2014, Residential Spending is Growing Again

$500B

$600B

$700B

$800B

$900B

$1,000B

$1,100B

$1,200B

$1,300B

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Total

Construction Spending, Annual Rate

$100B

$200B

$300B

$400B

$500B

$600B

$700B

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Private Residential Private Nonresidential

Public

Construction Spending, Annual Rate

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Construction Spending, Annual Rate, Year Over Year Change

Total

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Construction Spending, Annual Rate, Year Over Year Change

Private Residential

Public Private Nonresidential

Sources: U.S. Census Bureau – Construction Spending

@NickatFP

A Long Road Ahead For Housing Starts

August 14, 2015 24

On an Annual Basis, Housing Starts Have Decelerated But Are Still Up Year Over Year

At a Rate Similar to Private Residential Construction Spending

Multi-Unit Home Starts Tend to be More Volatile and Are Now Growing Slower Than Single-Family Units

Despite Post-Recession Expansion, Housing Starts Remain Far Below Their Pre-Crisis Level

-50%-40%-30%-20%-10%

0%10%20%30%40%50%

'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Private Residential Construction Spending, Annual Rate, Year Over Year Change

Housing Starts, Annual Rate, Year Over Year Change,

6-Month Moving Average -60%

-40%

-20%

0%

20%

40%

60%

80%

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Year Over Year Change, 6-Month Moving Average

Housing Starts, Annual Rate

Year Over Year Change

-80%-60%-40%-20%

0%20%40%60%80%

100%

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Housing Starts, Annual Rate, Y/Y Change, 6M MA

Multi-Unit Total

Single-Family

0.0M

0.4M

0.8M

1.2M

1.6M

2.0M

2.4M

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

Total

Single-Family

Multi-Unit

Housing Starts, Annual Rate

Sources: U.S. Census Bureau – Construction Spending, U.S. Census Bureau – New Residential Construction

@NickatFP

Which Means Meager Home Sales

August 14, 2015 25

Housing Sales Peaked at an Annual Rate of 8.5 Million in 2004, But Today Remain Below 6 Million

While Existing Sales Have Declined Further Nominally, New Sales Are Relatively More Depressed

House Prices Sunk in 2007 and 2008, Slowing New Builds’ Contribution to the Market

After a Growth Slump in 2014, Both New and Existing Home Sales Are Once Again Accelerating

0.0M

0.3M

0.6M

0.9M

1.2M

1.5M

0M

1M

2M

3M

4M

5M

6M

7M

8M

'99 '01 '03 '05 '07 '09 '11 '13 '15

New

Existing

Home Sales, Annual Rate

0M1M2M3M4M5M6M7M8M9M

'99 '01 '03 '05 '07 '09 '11 '13 '15

New

Home Sales, Annual Rate

Existing

4%

6%

8%

10%

12%

14%

16%

18%

82%

84%

86%

88%

90%

92%

94%

96%

'99 '01 '03 '05 '07 '09 '11 '13 '15

New

Existing

Share of Homes Sold

-50%-40%-30%-20%-10%

0%10%20%30%40%50%

'99 '01 '03 '05 '07 '09 '11 '13 '15

New

Existing

Home Sales, Annual Rate, Year Over Year Change

Sources: U.S. Census Bureau – New Residential Sales, National Association of Realtors – Existing-Home Sales

@NickatFP

House Price Growth Decelerating

August 14, 2015 26

House Prices Are Still Rising, But The Pace is Leveling Out

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Los Angeles

Composite 20-City

Miami

Charlotte

Washington D.C.

Portland

San Francisco

Las Vegas Tampa

Seattle

Denver

Atlanta

S&P Case-Shiller House Prices Indices, Year Over Year Change

Dallas

San Diego Detroit Phoenix Minneapolis New York Chicago Boston Cleveland

Sources: S&P Dow Jones – S&P/Case-Shiller Home Prices Indices

@NickatFP

House Prices Still Below Pre-Crisis Levels

August 14, 2015 27

House Prices Remain Around the Level They Were in 2005

50

100

150

200

250

300

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Los Angeles

Composite 20-City

Miami

Charlotte

Washington D.C.

Portland

San Francisco

Las Vegas

Tampa

Seattle

Denver

Atlanta

S&P Case-Shiller House Prices (2000=100)

Dallas

San Diego

Detroit

Phoenix

Minneapolis

New York

Chicago

Boston

Cleveland

Sources: S&P Dow Jones – S&P/Case-Shiller Home Prices Indices

@NickatFP

Renter Nation

August 14, 2015 28

The Homeownership Rate Has Not Stopped Falling Since the Housing Bubble Popped in 2005

55%

57%

59%

61%

63%

65%

67%

69%

71%

73%

75%

'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

National

Owner-Occupied Housing Units as a Share of Total Occupied Housing Units

Northeast

West

South

Midwest

National Historical Average

Sources: U.S. Census Bureau – Homeownership Rate

@NickatFP

Industrial Production Slowing

August 14, 2015 29

Total Production From the Industrial Sector Has Decelerated Since the End of 2014

The Total IP Index Has Rebounded From the Recession and is at 107.5% of its 2007 Average

Capacity Utilization Had Been Rising Since Mid-2009 But Reversed at the Start of the Year

Slowing in the Industrial Sector Bodes Poorly for Employment Growth

-40%-30%-20%-10%

0%10%20%30%40%50%60%

'19 '29 '39 '49 '59 '69 '79 '89 '99 '09

Year Over Year Change in Total Industrial Production

Historical Average

0102030405060708090

100110

'19 '29 '39 '49 '59 '69 '79 '89 '99 '09

Total Industrial Production (2007=100)

64%

68%

72%

76%

80%

84%

88%

92%

'67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Industrial Sector Capacity Utilization Rate

Historical Average

-6%

-4%

-2%

0%

2%

4%

6%

-15%

-10%

-5%

0%

5%

10%

15%

'67 '72 '77 '82 '87 '92 '97 '02 '07 '12

Year Over Year Change in Total Industrial Production

Year Over Year Change in Nonfarm Employment

Sources: U.S. Federal Reserve – Industrial Production and Capacity Utilization, U.S. Bureau of Labor Statistics – Employment Situation

@NickatFP

Manufacturing and Trade Sales Slipping

August 14, 2015 30

Total Manufacturing and Trade Sales Had Recovered by 2011, But Have Fallen Since Mid-2014

Manufacturing and Wholesales Both Turned Negative Year Over Year at the Start of 2015

Inventories Have Continued to Grow Despite a Decline in Sales

Since 2011, Inventories Had Been Slowly Accumulating

$0.0T

$0.2T

$0.4T

$0.6T

$0.8T

$1.0T

$1.2T

$1.4T

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Manufacturing

Manufacturing and Trade Monthly Sales

Wholesale Retail

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Wholesale

Manufacturing

Retail

Total

Manufacturing and Trade Inventories-to-Sales Ratio

-25%-20%-15%-10%

-5%0%5%

10%15%20%25%

'93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15

Manufacturing

Year Over Year Change in Manufacturing and Trade Sales Wholesale

Retail

-25%-20%-15%-10%

-5%0%5%

10%15%20%25%

'93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15

Sales

Year Over Year Change in Total Manufacturing and Trade Inventories and Sales

Inventories

Sources: U.S. Census Bureau – Manufacturing and Trade Inventories and Sales

@NickatFP

Soft Data Conflicting With Hard Data

August 14, 2015 31

Contra the Hard Data, Business Surveys Continue to Indicate an Expansionary Environment

Including New Orders, Which Government Data Suggest Should be Contracting

The Current Deviation is Unusual, and the Soft and Hard Data Will Have to Converge Eventually

Sinking Retail Sales Would Create Downward Pressure On Equity Markets

30

35

40

45

50

55

60

65

70

'08 '09 '10 '11 '12 '13 '14 '15

ISM Business Surveys – Composite Indexes

Manufacturing PMI

Non-Manufacturing NMI

-35%-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%35%

20

30

40

50

60

70

80

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

ISM Manufacturing Survey New Orders

Manufacturers’ New Orders, Year Over Year Change

20

30

40

50

60

70

80

'08 '09 '10 '11 '12 '13 '14 '15

ISM Business Surveys – New Orders

Manufacturing Non-Manufacturing

-50%-40%-30%-20%-10%0%10%20%30%40%50%60%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

'93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15

Retail Sales ex-Autos ex-Gas, Y/Y Change

S&P 500, Year Over

Year Change

Sources: Institute for Supply Management – Reports on Business, U.S. Census Bureau – Monthly Sales for Retail and Food Services, CBOE

@NickatFP

Trends in Retail

August 14, 2015 32

In December, For the First Time Ever, Americans Spent More Dining Out Than on Groceries

For Many Items, People Are Increasingly Preferring to Shop From Home

Organic Food Has Gained Favor as More Shoppers Become Health Conscious

$15B

$20B

$25B

$30B

$35B

$40B

$45B

$50B

$55B

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Retail Sales Monthly

Food Services & Drinking Places

Food & Beverage Stores - Grocery Stores Only

$5B

$10B

$15B

$20B

$25B

$30B

$35B

$40B

$45B

3%

4%

5%

6%

7%

8%

9%

10%

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Online Shopping Share of Total Retail Sales

Retail Sales Monthly - Online Shopping

$0B

$5B

$10B

$15B

$20B

$25B

$30B

$35B

$40B

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14

CondimentsMeat, Fish, PoultrySnack FoodsBreads and GrainsPackaged FoodsBeveragesDairyFruits and Vegetables

Annual Organic Food Sales

Sources: U.S. Census Bureau – Monthly Sales for Retail and Food Services, U.S. Department of Agriculture – Organic Market Overview

@NickatFP

Where the Retail Money Goes

August 14, 2015 33

Autos Continue to Make Up the Greatest Share of Retail Sales and are Little Changed Over the Past Two Decades

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Food Services and Drinking Places

Autos & Auto Parts

Online Shopping

Furniture Electronic and Appliances Building Materials and Equipment

Sporting Goods, Hobby, Books, and Music

General Merchandise

Food & Beverage Stores

Clothing and Clothing Accessories Gas

Health and Personal Care

Miscellaneous Retailers

10.5%

20.4%

2.1% 2.6%

6.6%

4.0%

12.1%

2.4%

7.8%

4.5%

2.6%

18.5%

11.7%

2.2%

12.6%

4.8%

6.2% 1.9%

8.6%

9.1%

20.8%

5.9%

12.7%

1.7%

1.9%

5.9%

Sources: U.S. Census Bureau – Monthly Sales for Retail and Food Services

@NickatFP

The Disinflationary Environment

August 14, 2015 34

Both the Consumer Price Index and the Fed’s Preferred Personal Consumption Expenditure Price Index Are Flat

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

'58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15

Core PCE

Year Over Year Change in Price Inflation Indexes

PCE

Core CPI

CPI

*Core Measures Exclude Food and Energy

Sources: U.S. Bureau of Labor Statistics – Consumer Price Index, U.S. Bureau of Economic Analysis – Personal Income and Outlays

@NickatFP

Surging Healthcare Costs

August 14, 2015 35

Medical Care Costs Have Risen at a Faster Rate Than Other Price Index Components

50

100

150

200

250

300

350

400

450

500

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Apparel

Consumer Price Index Levels of Components (1982-1984=100)

New Vehicles

Core CPI

Used Vehicles

Medical Care Services

Medical Care Commodities

Transportation Services Shelter

Energy Services

Energy Commodities

CPI

All Energy

All Food

Sources: U.S. Bureau of Labor Statistics – Consumer Price Index

@NickatFP

Interest Rates: Lower For Longer

August 14, 2015 36

Interest Rates are at Historical Lows and Have Been There Since the Fed Moved to ZIRP in 2008

The Slope of the Yield Curve Has Increased on Both the Short and Long End Since the Start of the Year

Market-Implied Inflation Expectations Are Just Under 2% For The Next 10 Years

0%2%4%6%8%

10%12%14%16%18%20%

'62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

10-Year Treasury Yield

Effective Federal Funds Rate

-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%

'77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13

30y-10y

10y-2y

Treasury Yield Spreads

Did not issue 30y Treasuries from Feb 2002 to Feb 2006

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

'10 '11 '12 '13 '14 '15

5y

5y5y Forward Treasury Nominal Yields Less TIPS Yields

10y

Sources: U.S. Federal Reserve – Selected Interest Rates

@NickatFP

Plenty of Money, Not Enough Velocity

August 14, 2015 37

Money Stock Has Been Expanding at a Healthy Rate

But Sparse Demand Has Kept Money Velocity Declining, Explaining the Lack of Inflation Despite Supply Growth

-10%

-5%

0%

5%

10%

15%

20%

25%

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

M1 M2

Money Supply, Year Over Year Growth

0

2

4

6

8

10

12

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

M1

M2

Velocity of Money Stock

M1 Historical Average The Fisher Equation Money Supply * Velocity (# of times money changes hands) = Price Level * Volume of Transactions

Sources: U.S. Federal Reserve – Money Stock Measures

@NickatFP

Ballooning Fed Balance Sheet

August 14, 2015 38

Several Rounds of Quantitative Easing Have Left the Fed Holding a $4.5 Trillion Balance Sheet

$0.0T

$0.5T

$1.0T

$1.5T

$2.0T

$2.5T

$3.0T

$3.5T

$4.0T

$4.5T

$5.0T

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

U.S. Treasuries

Federal Reserve Balances

Federal Agency Debt Securities

Mortgage-Backed Securities

Other Assets Currency/Gold/FX

Sources: U.S. Federal Reserve – Factors Affecting Reserve Balances

@NickatFP

Consumption Rolls Onward

August 14, 2015 39

Consumption Has Contributed Positively to GDP Growth For 24 Consecutive Quarters

And Recovered Relatively Quickly From the Recession

The Share of GDP That Consumption Represents is Near Historical Highs

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Personal Consumption Expenditures Quarterly Contribution to GDP Growth 4-Quarter Moving Average

8.6% 13.4%

$0T

$2T

$4T

$6T

$8T

$10T

$12T

$14T

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Nominal PCE

Real (2009-Chained) PCE

58%

60%

62%

64%

66%

68%

70%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

PCE Share of GDP

Historical Average

Sources: U.S. Bureau of Economic Analysis - GDP

@NickatFP

Private Investment Crawling Back

August 14, 2015 40

Investment Has Bounced Back, But Not Nearly at the Rate It Decelerated

It Took 30 Quarters For Real Private Investment to Return to its Prior Level

Unlike PCE, Investment Share of GDP Plummeted During the Recession and is Still Below Average

-10%-8%-6%-4%-2%0%2%4%6%8%

10%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Gross Private Domestic Investment Quarterly Contribution to GDP Growth

4-Quarter Moving Average

-11.6%

14.1%

$0.0T

$0.5T

$1.0T

$1.5T

$2.0T

$2.5T

$3.0T

$3.5T

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Nominal Investment

Real (2009-Chained) Investment

12%

14%

16%

18%

20%

22%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Investment Share of GDP

Historical Average

Sources: U.S. Bureau of Economic Analysis - GDP

@NickatFP

The Government Drag

August 14, 2015 41

Government Consumption Has Been a Mostly Negative Contributor to GDP Growth Since Q4 2009

Nominal Government Consumption Has Basically Been Flat, While Real Consumption Has Sunk

Government’s Share of GDP is Approaching Historical Lows, and Still Rapidly Declining

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Government Consumption Expenditures Quarterly Contribution to GDP Growth

4-Quarter Moving Average

4.1% Q4 ’50: 4.8% Q1 ’51: 7.3% Q2 ’51: 10.0% Q3 ’51: 9.2% Q4 ’51: 4.8%

$0.0T

$0.5T

$1.0T

$1.5T

$2.0T

$2.5T

$3.0T

$3.5T

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Nominal Government Consumption

Real (2009-Chained) Government Consumption

15%16%17%18%19%20%21%22%23%24%25%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Government Consumption Share of GDP

Historical Average

Sources: U.S. Bureau of Economic Analysis - GDP

@NickatFP

Improving Trade Balance, Until Recently

August 14, 2015 42

Net Exports Were Briefly a Positive Contributor to GDP Growth Before Turning Back Negative in 2014

The Annual Trade Deficit Has Lately Been Around $0.5 Trillion

Annual Imports Have Been Greater Than Exports Since 1976

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Net Exports Quarterly Contribution to GDP Growth

4-Quarter Moving Average

-$0.9T-$0.8T-$0.7T-$0.6T-$0.5T-$0.4T-$0.3T-$0.2T-$0.1T$0.0T$0.1T

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Nominal Net Exports

Real (2009-Chained) Net Exports

-6%-5%-4%-3%-2%-1%0%1%2%3%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Net Exports Share of GDP

Historical Average

Sources: U.S. Bureau of Economic Analysis - GDP

@NickatFP

Putting It All Together

August 14, 2015 43

Real Gross Domestic Product Continues Gradually Chugging Along, For Now

Real GDP Recovered Faster Than Employment, Taking Only 14 Quarters To Reach It’s Prior Peak

Year Over Year, Real GDP is Up 2.3%, a Positive Yet Tepid Pace Compared to History

-10%-8%-6%-4%-2%0%2%4%6%8%

10%

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Government Consumption ExpendituresNet ExportsGross Private Domestic InvestmentPersonal Consumption ExpendituresReal GDP (SAAR)

Contributions by GDP Component to the Quarterly Seasonally Adjusted Annual Rate of Growth

$0T$2T$4T$6T$8T

$10T$12T$14T$16T$18T

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Nominal GDP

Real (2009 Chained) GDP

-4%-2%0%2%4%6%8%

10%12%14%

'48 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13

Real GDP Y/Y Change

Historical Average

Sources: U.S. Bureau of Economic Analysis - GDP