1. Karl Smith Economic Update Summer 2011: Desperately Seeking Employment

2. The Economic Picture 1.Tax Bases 2.Overall Economy a.Credit b.Balance Sheet c.Construction d.Manufacturing e.Government 2

3. Retail Sales – Year over Year 3

4. 4

5. 5

6. Retail Sales – Trend 6

7. 7

8. 8

9. Home Prices – Trend 9

10. 10

11. Home Prices – Trend 11

12. Home Prices – Trend 12

13. Revenue Summary Retail Sales growing well –Long time until a return to trend but regular growth should proceed from here on out Home Prices –Still Very Weak –Most revals will show falling values for the next few years –I expect strong home price growth for NC over the 5+ year horizon 13

14. The Overall Economy Actually Doing Decent Except for One Little Detail... No Jobs –Corporate Profits Back –Government Revenues Healing –Stock Market Rebounded –Home Prices (relatively) stable 14

15. Gross Domestic Product 15

16. Gross Domestic Product 16

17. Nonfinancial Corporate Profits 17

18. Financial Corporate Profits 18

19. Stock Prices 19

20. Unemployment 20

21. Employment - Trend 21

22. Employment - Trend 22

23. Employment – Monthly Gain/Loss 23

24. Credit Crisis 24

25. Balance Sheet 25

26. Manufacturing Employment 26

27. Trade Deficit 27

28. Construction Employment 28

29. Housing Starts 29

30. Housing Starts Per New Resident 30

31. Local Government Employment 31

32. State Government Employment 32

33. Federal Government Employment 33

34. Private Non-Goods Employment 34

35. Private Non-Goods Employment 35

36. Goods and Government Employment 36

37. Economic Summary Economy Recovering Slow but Steady –Employment lagging because of Construction, Manufacturing and Government –Manufacturing: should level out for a bit but downward trend likely –Construction: there is a boom out there somewhere. When? –Government: Revenues have stabilized but political climate may be for more downsizing 37

38. Gas Prices 38

39. Inflation 39