Unemployment Update

Kettle1 Research

Assumption and Data Sources: The 2008 employment projection was based on a 40/60 split between the growth phase and the recovery phase as detailed in the table below.

Recession

Duration (L)

High Point (H)

Decline (D)

Growth Phase (H/L)

Recovery Phase (D/L)

10 6 6 8 4 6 6 2 8 11 20

57.1% 62.5% 60.0% 50.0% 60.0% 33.3% 57.1% 60.0% 60.0% 35.3% 31.0%

35.7% 37.5% 40.0% 50.0% 40.0% 66.7% 42.9% 40.0% 40.0% 64.7% 69.0%

(Months)

1944 1949 1953 1957 1960 1970 1974 1980 1981 1990 2001

28 16 15 16 10 9 14 5 20 17 29

16 10 9 8 6 3 8 3 12 6 9

BLS Data: http://www.bls.gov/webapps/legacy/cesbtab1.htm 1)

2008j assumes Total Non-Farm Employment peak decline on a YOY basis as of July 2009 and assumes the rate of improvement results in 125,000 jobs added for Aug 2009

2) 2008p(1) assumes Total Non-Farm Employment peak decline on a YOY basis as of July 2009 3) 2008p(2) assumes Total Non-Farm Employment peak decline on a YOY basis as of Dec 2009 4) 2008p(3) assumes Total Non-Farm Employment peak decline on a YOY basis as of June 2010

Kettle1 Research

Recessionary Unemployment Trends 1970 to Present YOY % ∆ for Total Non-Farm Employment (CES)

Months

0.0% 0

2

4

6

8

10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

-3.0%

-3.5%

-4.0%

-4.5%

-5.0% 1970

•

1974

1981

1990

2001

2008

See page 1 for 2008j, 2008p(1), 2008p(2), and 2008p(3) assumptions.

2008p(1)

2008p(2)

2008j

2008p(3)

Kettle1 Research

2008 Recession YOY % ∆ Total Non-Farm Employment

-1.00% -1.50% -2.00% -2.50% -3.00% -3.50% -4.00% -4.50% -5.00% 2008 •

2008j

2008p(1)

See page 1 for 2008j, 2008p(1), 2008p(2), and 2008p(3) assumptions.

2008p(2)

2008p(3)

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

-0.50%

Apr-08

0.00%

Kettle1 Research

2008 Recession Cumulative jobs lost, Total Non Non-Farm Employment (CES)

20,000,000 18,000,000 Note: the sharp edge represents peak job losses and a net decline in job losses could be expected after this point

16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000

2008

2008j

2008p(1)

See page 1 for 2008j, 2008p(1), 2008p(2), and 2008p(3) assumptions.

2008p(2)

2008p(3)

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

0

Kettle1 Research

Months 0 2

Depth of Recession YOY % ∆ (Total Non-Farm Employment) 4

6

8

10

12

14

16

18

20

22

24

26

28

30

32

34

36

0%

-1% May 2011

-2%

-3% 20 months = Dec 2009 @ -5.5% YOY

-4%

-5%

14 months = Jul 2009 @ -4.55 YOY

-This This chart from Kettle1 Kettle May 2009 projections

-6% 1974 2001 2008 Best Case Projection

1981 2008 1974

1991 2008 Projection 1981

2008 Best Case Projection: assumes that April 2009 was the bottom of the growth in job losses and that the rate of job losses follows a typical parabolic recovery as has been seen in the last several recessions. 2008 Projection: assumes that an aaverage verage of 600,000 jobs per month (as reported by the BLS CPS data) are lost for the period of May 2009 - Dec 2009 and a typical parabolic recovery beings at the end of that period.

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