1. “Forecasting our Economic Future” Contract Cities Association51st Annual Municipal Seminar Jack Kyser Founding Economist The Kyser Center for Economic Research May 14, 2010

2. 2010 “A Measured Economic Recovery”

3. More Positive Signs…

4. JOB COUNTS “READY TO TURN UP?” Most Recent Sources: Bureau of Labor Statistics, CA EDD

5. U.S. Retail Sales Source: U.S. Census Bureau

7. Nondefense Capital Goods Shipments Source: U.S. Census Bureau

8. Car & Light Truck Sales Source: Bureau of Economic Analysis

9. But There Are Concerns

10. JOBLESS RATES AT HIGH LEVELS Percent Unemployed (SA) Sources: BLS, CA EDD

11. Characteristics of the Unemployed Unemployed persons by duration of unemployment, seasonally adjusted Sources: Bureau of Labor Statistics

12. Spot Energy Prices $/Barrel $/Mcf Source: Federal Reserve, St. Louis

13. U.S. Personal Savings Rate Source: Bureau of Economic Analysis

14. U.S. Equity Prices

15. COMMERCIAL BANK LOANS Source: Federal Reserve

16. U.S. ECONOMIC GROWTH Q/Q Change (at Annual Rate) Sources: Bureau of Economic Analysis, forecast by LAEDC

17. U.S. Labor Market Source: Bureau of Labor Statistics, forecasts by LAEDC

19. Credit Crunch

20. Can the Housing Sector “Fly Solo”?

22. JOB TRENDS BY METRO AREA 12-Month % Change to March 2010 Sources: CA EDD, Labor Market Information Division

23. California Industry Winners and Losers Monthly Mar ’09 to Mar ’10 % Change in Average Employment (000s) Source: California Employment Development Dept. (EDD)

24. Characteristics of California’s Unemployed Employees, thousands Source: California Employment Development Department (EDD)

25. California Housing Market Sources: U.S. Census Bureau, California Association of Realtors

26. Unsold Inventory By Price Range California - Existing Homes March 2010 vs. March 2009 SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

27. California Fundamentals Yr/Yr Annual Employment % Change Source: EDD Labor Market Information Division; forecast by LAEDC

29. Unfriendly business environment – business recruiters are busy

30. Water

31. Transportation

33. Los Angeles County Fundamentals Change in Nonfarm Jobs Year/Year (Thousands) Unemployment Rate March 2010 Source: California Employment Development Dept. (EDD)

34. Orange County Fundamentals Unemployment Rate Change in Nonfarm Jobs Year/Year (000s) March 2010 Source: California Employment Development Dept.

35. Inland Empire Fundamentals Change in Nonfarm Jobs Year/Year (000s) Unemployment Rate March 2010 Source: California Employment Development Dept.

36. San Francisco Metro Area Fundamentals Change in Nonfarm Jobs Year/Year Unemployment Rate March 2010 Source: California Employment Development Dept. (EDD)

37. Oakland Metro Area Fundamentals Change in Nonfarm Jobs Year/Year Unemployment Rate March 2010 Source: California Employment Development Dept. (EDD)

38. Trends in Key Industries

39. TOTAL CARGO HANDLED at LA/ LB Ports Thousands of TEUs April 2010 Total TEUs: 1,080,343 Annual % Change: +14.8% Sources: Ports of Los Angeles & Long Beach

40. TOTAL CARGO HANDLED at Oakland Port Thousands of TEUs March 2010 Total TEUs: 186,956 Annual % Change: + 10.5% Source: Port of Oakland

41. TECHNOLOGY JOB TRENDS IN CALIFORNIA Thousands of Jobs Source: California Employment Development Department

42. HOTEL OCCUPANCY RATES Occupancy Rates (%) Source: PKF Consulting

43. Hotel Room Rates Source: PKF Consulting

44. Trends in Trailing Industries

45. California Personal Income & Taxable Sales Year/Year % Change Sources: BEA, CA BOE

46. California New Home Permits SAAR, thousands of units Source: California Construction Industry Research Board

48. Orange County 26.9%

49. Inland Empire 24.0%

50. San Francisco 17.6%

51. San Jose/Silicon Valley 18.6%

52. Sacramento 20.6%Source: Grubb & Ellis

54. Orange County 6.7%

55. Inland Empire 11.9%

56. Oakland 4.7%

57. San Jose/Silicon Valley 15.2%

58. Sacramento 12.8%Source: Grubb & Ellis

60. However, Unemployment will only Gradually Decline

61. Key Tax Generating Sectors – Real Estate & Retailing – Will Lag the Overall Economy

62. Challenges for California & Local Metro Areas:

63. Business Feels Government is Unresponsive to Their Needs

64. Business is Confused by all the Regulation