Lynn Reaser NABE Vice President Bank of America Richard DeKaser Woodley Park Research Charles Steindel Federal Reserve Bank of New York William Strauss Federal Reserve Bank of Chicago Embargoed until Monday, February 23, 2009 at 12:01 AM EST. Survey conducted Jan 29-Feb 12, 2009 and released February 23, Disclaimer: the views expressed in this report are those of the analysts and do not necessarily represent the views of their affiliated companies or institutions. The February 2009 NABE Outlook Parul Jain MacroFin Analytics

2 Most respondents see recession ending this year Percent of respondents (0)

3 Real GDP forecast to fall in 2009, rebound in 2010 Percent change, Q4/Q4

4 Forecast has “V”-shaped form Real gross domestic product, percent change over prior quarter, annualized rate

5 GDP components (% Chg. over year ago except inventories) 2008 Actual 2009 Forecast 2010 Forecast Real GDP Consumption Business Fixed Investment Structures Equipment & Software Residential Investment Inventory Change (Bils.) Government Exports Imports Based on annual totals, 2000 chained dollars

6 Fiscal stimulus effects seen in both 2009 and 2010 Percent of respondents, impact on real GDP in percentage points (0)

7 Job losses expected through 2009 Nonfarm employment,. average monthly change, thousands

8 Jobless rate expected to peak at 9.0% Percent, quarterly averages

9 Economists see prolonged period before payrolls surpass their 2007Q4 peak Percent of respondents (0)

10 Consumer prices expected to fall in 2009, rise in 2010 Percent change, annual averages

11 Motor vehicle sales forecast to fall further in 2009 with some recovery in 2010 Millions of units

12 Home sales and housing starts forecast to bottom in 2009, with some lag in prices Percent of respondents

13 Far West 27.8% Southwest 2.8% Great Lakes and Far West expected to be most affected by recession Measured by unemployment rates, percent of respondents Rocky Mountain 1.4% Plains 1.4% Southeast 12.5% Great Lakes 31.9% New England 6.9% Mideast 15.3%

14 Fed funds and 10-year Treasury rates forecast to rise in 2010 Percent, quarter-end 10-year Treasury Fed Funds

15 Forecast Summary Forecast panel sees economy turning higher in second half 2010 GDP rebound expected to be above-trend Housing and autos predicted to reach their lows in 2009 Job recovery forecast to be slow Both deflation and inflation risks are contained Higher interest rates forecast in 2010