1. US Economic & Financial Perspectives
Mickey D. Levy
Chief Economist
Bank of America
Going Global:
Partnering for International Business Growth
Charlotte, North Carolina
January 25, 2012

2. Slower Global Growth in 2012
• Emerging nations (again) will significantly
outperform advanced nations
– Europe in mild recession
– Japan stabilizes after rebound from 2011 supply shock
– Latin America and Middle East generally healthy growth
– US moderate growth continues
• Europe: no financial calamity, but intermediate-term
economic prospects are dim
• International trade rising moderately amid global

3. US: Moderate Growth with High
Unemployment
• Moderate expansion, gaining traction
– Consumer spending growing, but household balance sheet repair
has further to go
– Housing beginning to rise from depressed levels
– Business investment remains healthy; exports are key
• Employment lagging well behind GDP, but beginning to
improve
– Higher returns to capital, lower returns to labor
• US vulnerable to European crisis

4. US: Real GDP and Employment
14.0 140
138
13.5
136
13.0
$ Trillions
134
Millions
12.5 132
130
12.0
Real GDP (left scale) 128
11.5
Nonfarm Payrolls (right scale) 126
11.0 124
Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Haver Analytics

5. Operating Profits and Cash Flows
2,500
2,000
$ Billions
1,500
1,000
500
Corporate Profits with IVA and CCadj
Corporate Net Cash Flow
0
88 90 92 94 96 98 00 02 04 06 08 10
Source: Bureau of Economic Analysis, Haver Analytics

6. Labor Share of GDP
66
64
62
percent
60
58
56
54
88 90 92 94 96 98 00 02 04 06 08 10
Source: Bureau of Labor Statistics, Haver Analytics

7. 1.0%
Consumer Spending Trend 4%
0.8% 3%
0.6%
2%
0.4%
0.2% 1%
0.0% 0%
-0.2% -1%
-0.4%
-2%
-0.6%
-0.8% -3%
-1.0% -4%
07 08 09 10 11
Monthly % Change Year-over-year % Change (right axis)
Source: Bureau of Economic Analysis

8. Real Consumption and Personal Income
10.0 2.2
Government Transfers (right axis)
9.5 Real Consumption (left axis) 2.0
9.0 1.8
$ Trillions
$ Trillions
8.5 1.6
8.0 1.4
7.5 1.2
7.0 1.0
00 01 02 03 04 05 06 07 08 09 10 11
Source: BEA/Haver Analytics

9. Mortgage Debt
as a Percent of Disposable Income
110%
100%
% of Disposable Income
90%
80%
70%
60%
50%
40%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Source: Federal Reserve Board , Haver Analytics

10. Home Sales
1600 7000
1400 6000
1200
5000
1000
Thousands
Thousands
4000
800
3000
600
New Home Sales (left) 2000
400
Existing Home Sales (right) 1000
200
0 0
00 01 02 03 04 05 06 07 08 09 10 11
Source: Census Bureau/National Association of Realtors, Haver Analytics

11. Housing Starts
2500
2000
Thousands
1500
1000
500
0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Source: Census Bureau

12. Business Fixed Investment
1400
1200
1000
Bil Chain 2005$
800
Equipment and Software
600
Structures
400
200
0
00 01 02 03 04 05 06 07 08 09 10 11
Source: Bureau of Economic Analysis, Haver Analytics

13. Imports and Exports
2500
2000
Bil Chain 2000$
Real Imports
1500
1000
Real Exports
500
0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Source: BEA/Haver Analytics

14. Distribution of US Exported Goods
(2011 H1 = $721.92b)*
Africa
Other Emerging
2.3%
5.4%
Canada
19.3%
Australia &
Other Asia
Japan 13.3%
4.5%
Latin America (Ex
Mexico)
India
11.2%
1.5%
China
6.9%
Mexico
13.1%
Eastern & Other Eurozone
Europe 13.5%
5.2%
UK
*NSA, Customs Basis
3.8%

15. Composition of US Exported Goods
(2011H1 = $725.38 Billion)*
Consumer Foods, feeds &
Other goods
goods (ex-food beverages
3.7%
and autos) 8.8%
11.9%
Motor vehicles
& parts
8.9%
Industrial
supplies &
materials
33.6%
Capital goods
ex-autos
33.1%
*SA, f.a.s.

16. Sources of US Imported Goods
Other
Emerging
7.2% (2011 H1 = $1,067.78b)*
Africa
4.5%
Canada
Australia & Other Asia
14.7%
8.7%
Latin America (Ex
Mexico)
7.9%
Japan
5.5%
India
Mexico
1.7%
12.1%
China
17.1%
Eurozone UK
13.1% 2.3%
Eastern & Other
Europe
*NSA, Customs Basis 5.2%

17. Composition of US Imported Goods
(2011H1 = $1093.39 Billion)* Foods, feeds &
Other beverages, 4.80
goods, 2.90
Consumer
goods (ex-food Industrial
and autos), supplies &
23.60 materials, 34.50
Motor
vehicles
& parts,
11.20
Capital goods
ex-autos, 23.00
*SA, Customs Value