1. AFTER THE STORM (s): Average sustained growth, with risks Ken Goldstein WWW.CONFERENCE-BOARD.ORG

2. Page:2 Overview: Global economy edging lower (3.7% in ’06 after 4.4% in ’05 and 5.1% in ’04). Longer-term prospect is closer to 3%, only partly related to oil shock. US economy remains the linchpin. Euro strength could be recovering; Japan finally on board; China cooling off Higher energy costs plus storms weaken domestic growth. Recovery by mid ‘06. Back to trend by 2nd half of ‘06.

3. Page:3 A HEALTHY GLOBAL ECONOMY CONTINUES 200420052006 US4.23.32.6 Euro Zone2.02.31.5 Japan2.61.61.0 Other*3.83.13.0 Developing Asia (ex. India and China)5.95.64.0 India7.36.76.4 China9.59.07.0 Latin America5.74.13.7 Middle East5.55.04.9 Africa5.15.05.4 Central and Eastern Europe6.14.5 Other**8.26.56.0 World total5.14.43.7

4. Page:4 TREND PRODUCTIVITY GROWTH IS SLOWER NOW 90-0090-9595-0000-04 WORLD PRODUCTIVITY1.6%1.1%2.2%1.8% USA1.8%1.3%2.3%2.1% EURO ZONE1.7%2.0%1.3%0.8% JAPAN1.1%0.9%1.4%1.5% OECD (Other)1.8%1.0%2.5%1.6% NON-OECD2.1%1.5%2.7%3.7% Source: The Conference Board GDP PER EMPLOYEE

5. Page:5 HOURS WORKED SLOWER NOW, BUT? 90-0090-9595-0000-04 WORLD1.4%1.3%1.5%1.4% USA1.6%1.3%1.9%-0.4% EUROPE0.1%-0.8%1.1%0.4% JAPAN-0.6%-0.4%-0.9% OECD OTHERS1.9%2.1%1.8%0.8% NON – OECD (workers)1.5% 1.6% Source: The Conference Board HOURS WORKED

6. Page:6 It’s not just the domestic trend Global growth is slowing Source: The Conference Board Note: Shaded areas represent U.S. recessions

7. Page:7 All regions are weakening simultaneously Source: The Conference Board Note: Shaded areas represent U.S. recessions

8. Page:8 Moderate Growth Even in Germany THE CONFERENCE BOARD’S LEADING ECONOMIC INDEXES

9. Page:9 The industrial core takes the hit Note: Shaded areas represent U.S. recessions Sources: FRB, The Conference Board

10. Page:10 Slower Growth and Inflation (not oil or Katrina) Make Consumers Worry About Jobs

11. Page:11 Environment Weakened And Expectations Eroded

12. Page:12 Home Values Still Rising

13. Page:13 Whacky Oil Will Come Back to Balance Note; Shaded areas represent U.S. recessions Sources; EAI, The Conference Board

14. Page:14 Risk: Financial Imbalances

15. Page:15 Dollar on strengthening trend…

16. Page:16 …as well as against the yen

17. Page:17 Katrina and Energy prices shocks weaken consumer spending Sources: BEA, The Conference Board

18. Page:18 Shocks weaken consumer spending, Investment ? Sources: BEA, The Conference Board

19. Page:19 After the storm(s)

20. Page:20 WHAT IF WAGES RISE AS PRODUCTIVITY SLOWS

21. Page:21 COSTS WOULD RISE BUT STILL NOT MUCH PRICING POWER

22. Page:22 RECIPE FOR LESS PROFIT (AND LESS GROWTH?)

23. Page:23 LABOR FORCE GROWTH HUGE IN EMERGING WORLD

24. Page:24 AND IT WILL CONTINUE TO DO SO