1. ECONOMIC OUTLOOK: IS GROWTH BACK? Dr. Michael Walden Reynolds Distinguished Professor North Carolina State University 1

2. Nation’s Economic Report Card: Real GDP (annualized % change in real GDP) 2

3. MEANING OF “END TO THE RECESSION” 3

4. Job Growth Has Turned Positive 4

5. BUT THE JOB RECOVERY WILL BE SLOW (NONFARM EMP AND UNEMP RATE) 5

6. CONSUMER WEALTH AND INCOME HAVE REBOUNDED (billions of 2005 $) 6

7. CONSUMER FINANCIAL BEHAVIOR HAS DRAMATICALLY CHANGED (INDICES) 7

8. BUT CONSUMER SPENDING AT RETAIL STORES IS INCREASING (billions of 2005 $, seasonally-adjusted, excl. vehicles & parts) 8

9. CORPORATE PROFITABILITY HAS ALSO IMPROVED (PRE-TAX, % OF GDP) 9

10. HOUSING MARKET HAS NOT IMPROVED CONSISTENTLY 10

11. HAVE HOUSING PRICES STOPPED FALLING? (ANNUALIZED % CHANGE) 11

12. INFLATION IS CURRENTLY NOT A PROBLEM (CPI, total and core) 12

13. ARE INTEREST RATES POISED TO RISE? (YIELDS ON TRESURY SECURITIES) 13

14. GOVERNMENT POLICY 14

15. The Fed’s Monetary Policy 15

16. FISCAL POLICY – RISING DEBT 16

17. Social Security, Medicare, and Medicaid are Driving Federal Spending 17

18. NORTH CAROLINA ECONOMIY 18

19. NC JOBS HAVE BEGUN TO COME BACK 19

20. N.C. Major Sector Job Changes ( thousands, manuf and prof. serv on left, const and fin. on right) 20

21. Unemployment Rate Forecasts 21

22. Goldsboro Metro Job Market Trends (Index, December 2007 = 100, seas. adj.) 22

23. Goldsboro and N.C.: May Unemployment Rate (seasonally unadjusted) 23

24. WRAP UP: WHAT’S AHEAD? No “double dip”, but slow growth Household debt reduction is the key Keen competition for growth – NC well positioned 24