1. 20 Indicators Everyone Should Know C2ER’s 52 nd Annual Conference Oklahoma City June 7, 2012 Jenny Hsu Manager of Economic Research 20 Indicators Everyone Should Know C2ER’s 52 nd Annual Conference Oklahoma City June 7, 2012 Jenny Hsu Manager of Economic Research

3. Measuring the Economy - GDP ConsumptionInvestments Government Spending Net Exports GDP Price Pressures

4. Indicators Tracking GDP Price Pressures (CPI) Customs District Trade Budget Balance Report Construction Spending PMI Building Permits Home Sales Employment Retail Sales Auto Sales Consumption Investments Net ExportsGovernment CI GN

5. Indicators Tracking GDP Price Pressures (CPI) Customs District Trade Budget Balance Report Construction Spending PMI Building Permits Home Sales Employment Retail Sales Auto Sales Consumption Investments Net ExportsGovernment CI GN

6. Houston Area Profile Employment U.S. Bureau of Labor Statistics IndicatorFrequency Nonfarm Payroll EmploymentMonthly Unemployment RateMonthly Quarterly Census of Employment & WagesQuarterly Occupational Employment StatisticsAnnually CI NG

7. Houston Area Profile – Establishment survey 300,000 establishments 400 metro areas 40% of total nonfarm population – Seasonal adjustments Nonfarm Payroll Employment CI NG Indicator #1

8. Houston Area Profile Nonfarm Payroll Employment Indicator #1

9. Houston Area Profile Unemployment Rate CI NG Source: U.S. Bureau of Labor Statistics U3 = Total unemployed in the labor force Indicator #2

10. Houston Area Profile Unemployment Rate CI NG Source: U.S. Bureau of Labor Statistics U4 = U3 + discouraged workers U3 = Total unemployed in the labor force U5 = U4 + marginally attached Indicator #2

11. Houston Area Profile Unemployment Rate CI NG Source: U.S. Bureau of Labor Statistics U6 = U5 + part time for economic reasons U4 = U3 + discouraged workers U3 = Total unemployed in the labor force U5 = U4 + marginally attached Indicator #2

12. Quarterly Census of Employment and Wages (QCEW) CI NG Indicator #3 Census of 9 million establishments Unemployment insurance taxes Released 6 months after the quarter Benchmark revisions

13. Using the QCEW CI NG Indicator #3

14. Occupational Employment Statistics Occupation Per 100,000 Workers United States Houston Petroleum Engineers 24443 Marine Engineers 426 Chemical Engineers 22119 Aerospace Engineers 62113 Health and Safety Engineers 1842 Civil Engineers 198350 Materials Engineers 1722 Engineering Managers 137246 Mechanical Engineers 186264 Engineers, All Others 98180 CI NG Indicator #4

15. Houston Area Profile Employment

16. Houston Area Profile Employment

17. Retail & Auto Sales Consumer spending makes up 70% of all economic activity Retail sales account for 30% of consumer spending Sign of consumer confidence and overall economic growth Not adjusted for inflation CI NG Indicators #5 & #6

18. Purchasing Managers Index First indicator available every month Leading indicator for regional production Range of 0-100 50 = neutral > 50 = likely increase in production over next 3-4 months < 50 = likely contraction in production over next 3-4 months CI NG Indicator #7

19. Purchasing Managers Index Source: National Association of Purchasing Management - Houston, Inc. Neutral = 50 March `09 39.0 April `12 59.1 Indicator #7

20. North American Rig Count (monthly average) June `09 895 Apr ’12 1,962 Source: Baker Hughes Sep `08 2,014

21. Housing Starts & Building Permits Reliable leading indicator Multiplier effects on other industries – 1,000 homes = 2,500 jobs = $100M wages Home construction = 5% of GDP CI NG Indicators #8 & #9

22. Home Sales 8 out of 10 are existing home sales Signals confidence in jobs and income growth Foreshadows future consumer purchases 1-3 months lag in data – Time of actual closing vs. Pending CI NG Indicator #10

23. Foreign Trade Trade Value vs. Weight/Units Top export, imports, & trade partners CI NG Indicator #11

24. Using Foreign Trade data Houston-China Total Trade CI NG Indicator #11

25. Inflation Price pressures on consumers and businesses Use CPI to adjust other indicators to “real” dollars CPI-W, CPI-U and Core CPI CI NG Indicator #12

26. Indicators Tracking GDP Price Pressures (CPI) Customs District Trade PMI Building Permits Home Sales Employment Retail Sales Auto Sales ConsumptionInvestments Net ExportsGovernment

27. GDP comparison Houston MSA GRP = $325.5 billion Austria = $379.1 billion Venezuela = $391.8 billion Houston = $395.4 billion Saudi Arabia = $434.7 billion Norway = $413.0 billion Houston Metro Area GDP = $395.4 Billion Source: World Bank

28. An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today. -Dr. Laurence J. Peter

29. 20 Indicators Everyone Should Know C2ER’s 52 nd Annual Conference Oklahoma City June 7, 2012 Jenny Hsu Manager of Economic Research 20 Indicators Everyone Should Know C2ER’s 52 nd Annual Conference Oklahoma City June 7, 2012 Jenny Hsu Manager of Economic Research