Jack Kyser presented at the Contract Cities Association 51st Annual Municipal Seminar on forecasting the economic future. He noted some positive economic signs but ongoing concerns around high unemployment rates. While growth is expected to slowly accelerate in 2010-2011, unemployment will gradually decline. Key tax sectors like real estate and retailing will lag the overall economy. Challenges for California and local areas include the business perception that government is unresponsive to their needs and the amount of regulation and competitive courting from other states.

1. “Forecasting our Economic Future”Contract Cities Association51st Annual Municipal Seminar Jack KyserFounding EconomistThe Kyser Center for Economic ResearchMay 14, 2010

2. 2010“A Measured Economic Recovery”

3. More Positive Signs…

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

5. U.S. Retail SalesSource: U.S. Census Bureau

7. Nondefense Capital Goods ShipmentsSource: U.S. Census Bureau

8. Car & Light Truck SalesSource: Bureau of Economic Analysis

9. But There Are Concerns

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

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

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

13. U.S. Personal Savings RateSource: Bureau of Economic Analysis

14. U.S. Equity Prices

15. COMMERCIAL BANK LOANSSource: Federal Reserve

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

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

18. Risks for the EconomyFinancial Fragility

19. Credit Crunch

20. Can the Housing Sector “Fly Solo”?

21. Consumer/Business Confidence Still WeakCalifornia FundamentalsChange in Nonfarm Jobs, SA, thousandsChange in Nonfarm Jobs Year/Year (Thousands)Unemployment RateMarch 2010Source: California Employment Development Dept. (EDD)

22. JOB TRENDS BY METRO AREA12-Month % Change to March 2010Sources: CA EDD, Labor Market Information Division

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

24. Characteristics of California’s UnemployedEmployees, thousandsSource: California Employment Development Department (EDD)

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

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

27. California FundamentalsYr/Yr Annual Employment % ChangeSource: EDD Labor Market Information Division; forecast by LAEDC

28. Risks for the California EconomyOn-going state budget problems. Impact on local governments & redevelopment agencies

29. Unfriendly business environment – business recruiters are busy

30. Water

31. Transportation

32. Environmental RegulationsRegional Review

33. Los Angeles County FundamentalsChange in Nonfarm Jobs Year/Year (Thousands)Unemployment RateMarch 2010Source: California Employment Development Dept. (EDD)

34. Orange County FundamentalsUnemployment RateChange in Nonfarm Jobs Year/Year (000s)March 2010Source: California Employment Development Dept.

35. Inland Empire FundamentalsChange in Nonfarm Jobs Year/Year (000s)Unemployment RateMarch 2010Source: California Employment Development Dept.

36. San Francisco Metro Area FundamentalsChange in Nonfarm Jobs Year/Year Unemployment RateMarch 2010Source: California Employment Development Dept. (EDD)

37. Oakland Metro Area FundamentalsChange in Nonfarm Jobs Year/Year Unemployment RateMarch 2010Source: California Employment Development Dept. (EDD)

38. Trends in Key Industries

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

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

41. TECHNOLOGY JOB TRENDS IN CALIFORNIAThousands of JobsSource: California Employment Development Department

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

43. Hotel Room RatesSource: PKF Consulting

44. Trends in Trailing Industries

45. California Personal Income & Taxable SalesYear/Year % ChangeSources: BEA, CA BOE