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John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

National & California Economies. John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP. After Losing 8.71 Million Jobs … Now At A Record Level of Jobs U.S. Jobs Long Slow Growth - Not Over-Heating. Gross Domestic Product Very Slow Growth.

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John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

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  1. National & California Economies John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

  2. After Losing 8.71 Million Jobs … Now At A Record Level of JobsU.S. Jobs Long Slow Growth - Not Over-Heating

  3. Gross Domestic ProductVery Slow Growth

  4. Current Consumer ConfidenceVery High! 128.5

  5. Oil Prices: Low But Roughly Stable $45.00

  6. Consumer Quite Aggressive

  7. Residential Construction SpendingGaining Speed

  8. Value of the Dollar:Helps Imports & Hurts Exports 100.0 2012-2016 22.1%

  9. Looking Six Month Ahead Consumer Confidence Lagging 87.8

  10. Business Investment SpendingWeak

  11. Orders, Non-Defense Capital GoodsSlowly Declining

  12. Mfg. Purchasing Manager’s IndexWeakening!

  13. Industrial Capacity Utilization: Slack Full Capacity 82.5% 75.5%

  14. U.S. Unemployment History Prime Rate: 21% Cold War Ends Great Recession

  15. Consumer Price Stable: Below 2.0% Fed Target 1.1%

  16. Interest Rate Environment 3.46% 1.62%

  17. Required FICO Scores – 30 Year FixedFannie Mae Share of Income: 36% or less … 680 if LTV 75% … 620 if Less Share of Income: 45% or less … 700 if LTV 75% … 640 if Less Issue: Maximum Allowable Confirming Loan Levels 68.1% 55.1%

  18. U.S. Home Sales Remain Relatively Weak

  19. U.S. Median Home PricesSoaring!

  20. California Job Gains/Losses Up 1,074,272 6.8% Up 2007 15,844,325 2016 16,918,587 Recovery 2,253,330 Great Recession -1,179,058

  21. U.S. & CA Unemployment History Prime Rate: 21% Cold War Ends Great Recession

  22. CA’s East-West Split in Prosperity

  23. Job Quality & Income Split2011-2016e Growth Period

  24. Gold Mine Theory Secondary Tier Primary Tier

  25. Science, Technology, Math, Engineering

  26. STEM - Strong Job Growth! 15.3%

  27. Office Vacancy/SF Absorption Bay Area – Rest of CA Split! 2016Q2 Sacramento 15.8% 421,000 Inland Empire 14.1% 64,000 Central Valley 14.0% 24,000 L.A. Co. 13.8% 1,200,000 San Diego 12.5% -119,000 Orange Co. 10.0% -464,000 Contra Costa 8.7% 515,000 SF Peninsula 8.0% -149,000 Silicon Valley 7.9% 360,000 Alameda Co. 7.2% 16,000 San Francisco 6.3% 348,000

  28. Health Care

  29. Physician Availability, CA Regions, 2013

  30. Share of Adults, 18-64, No Health InsuranceBy California Region, 2012 vs. 2015

  31. Health Care - Strong Job Growth! 9.4%

  32. Construction: Slowly Coming Back

  33. Housing Permits, Single Family ResidentialSeasonally Adjusted Annual Rate

  34. Change In Sales Demand vs. Supply of Active Listings August 2015-2016 Sales: Demand Active Listings: Supply 8% 7% 6% -2% -4% -9% Bay Area Southern California Central Valley

  35. Months of Housing Supply Available By California Region Bay Area So. CA Central Valley 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 3.6 3.2 2.4

  36. CA: State Prices Almost All The Way Back Median Price Existing Detached Homes, 2005-2016 $594,530 $526,580 5.8% $497,520 -11.4% $245,230 -59%

  37. High Priced Bay Area & Central Coast U.S. = $307,454

  38. Mix Priced So. CaliforniaModestly Priced Central Valley U.S. = $307,454

  39. Construction - Strong Job Growth! 9.2%

  40. Logistics Flow of Goods

  41. Port Container VolumesOn Pace For Import Record

  42. Fulfillment Centers

  43. E-Commerce Growth RatesYear Over Year by Quarter

  44. Logistics - Strong Job Growth! 8.7%

  45. Manufacturing: Should Be A Major Growth Source

  46. California Manufacturing Job GrowthJust 5.4% of U.S. Growth

  47. CA Is Not Loved By Executives & Entrepreneurs

  48. Manufacturing Poor Job Growth! 1.9%

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