Economic Update

05/10/2010

1st Quarter GDP: 3.2% (Initial Estimate)

Summary, Videos & GDP

Source: CNBC, Bureau of Economic Analysis, Bureau of Labor Statistics (BLS), Wall Street Journal

Chart 3: Temp Penetration Rate Traditionally, an increasing number of temporary workers is the first indication that the employment market is beginning to recover as employers are reluctant to hire full time employees.

Chart 2: Non Farm Pay RollThis metric typically turns positive 3-6 months after the temporary job growth begins. Temp employment has been positive for the past 6 months.

Chart 1: Unemployment RateUnemployment Rate is the last number to decrease (and takes years to move dramatically).

Please note:The US needs to increase by ~125,000 jobs per month (on average) to keep the unemployment rate from decreasing (because the population of the United States typically increased by ~1.5 million workers every year due to population growth and immigration).

This normal workforce growth has not occurred and has been distorted during the recession as many people have left the workforce. These numbers are not intended to be followed or scrutinized monthly. Example: There are ~154 Million people in the US work force. A margin of error of slightly less than 1% on the survey (a normal margin of error) is equal to ~100,000/month. These metrics are a great indicator of if things are getting better or worse over time.

Video & Economic Summary

Economic Summary & GDP

Employment Situation

Projections

2010 GDP Growth Estimate: 2.9% – 3.2% (Up 0.1% - .02% from April‘s Forecast)Unemployment Rate: 9.3% in Dec 2010 (unchanged from April ‗s Forecast)

GDP was 3.2% in the 1th quarter on the initial estimate. 48.46% of the growth came from businesses increasing their inventory and consumers increased their spending. Net Exports shifted negative as imports increased.

Videos start with 15 sec commercial

48.46% of 1th Qtr. GDP Growth

was a result of businesses

increasing inventories

Steve Leisman, CNBC & Carl Camden, CEO Kelly Services (May 7, 2010) (4 min 10 sec) Click to Play

2009 2010

Main Components of GDP 1st 2nd 3rd 4th 1st

Consumers

0.44% -0.62% 1.96% 1.16% 2.55%(Personal Consumption)

*Businesses

-8.98% -3.10% 0.54% 4.39% 1.67%(Gross Private Domestic Investment)

Net Exports (Exports-Imports) 2.64% 1.65% -0.81% 0.27% -0.61%

Government -0.52% 1.33% 0.55% -0.26% -0.37%

Total GDP -6.42% -0.74% 2.24% 5.56% 3.24%

*Inventories

-2.36% -1.42% 0.69% 3.79% 1.57%(Component of Businesses)

Number of people employed as a temporary employee

divided by total non farm payroll employment

Temp Employment Turns PositiveTemporary help services added 26,200 jobs in April. Since reaching a low point in September 2009, temporary help services employment has risen by 330,000. Temp employment is a component of Professional and Business Services.

Why is this Important?―Temporary Help Employment is a Leading Indicator for Nonfarm Employment—Staffing job trends lead nonfarm employment by three months when the economy is emerging from a recession and by six months during periods of normal economic growth.‖ American Staffing Association

US Employment Situation

Temp Penetration Rate: 1.58% .02%

Job LosesChange from

Previous Month

Transportation &

Warehousing -19.500

Job GainsChange from

Previous Month

Professional &

Business Services 80,000

Government 59,000

Leisure & Hospitality 45,000

Manufacturing 44,000

Construction 14,000

Retail Trade 12,400

Financial Activities 3,000

Education &

Health Services 35,000

- Education 8,900

- Healthcare 20,100

- Social Assistance 6,300

Job Loss: 290,000 Jobs Unemployment Rate: 9.9% .2%

Unemployment Rate: Bachelor’s Degree or higher

US Census Hiring:66,000 new Census temp jobs were added in April (a lower number than many economists expected).

Additional Details: Total nonfrarm employment for Feb & March was revised positively. February was revised from -14,000 to +39,000, and the change for March was revised from 162,000 to 230,000 for a total of 121,000 additional jobs than previously reported.

Payroll Survey Shows: 573,000 Jobs Added Year-to-DateHousehold Survey Shows: 1,656,000 Jobs Added Year-to Date

Dec 09 Jan 2010 Feb 2010 March 2010 April 2010

5.0% 4.9% 5.0% 4.9% 4.9%

Source: Bureau of Labor Statistics, American Staffing Association

Why Did the Unemployment Rate Rise?

GDP ProjectionsSurvey of Economists (Wall Street Journal)

Unemployment Rate ProjectionsSurvey of Economists (Wall Street Journal)

Economic Projections &

Unemployment Rate Details

Source: Wall Street Journal Please note: WSJ Projections were released prior to the BLS report

Job Gains Speed Up And More Seek Work, Wall Street Journal May 8, 2010

Why Did The Unemployment Rate Rise?

“In April, the civilian labor force rose 805,000 as more people joined the work force.

That was the fourth straight monthly increase, amounting to a gain of almost 1.7

million people since the beginning of the year. Of the people added to the labor force

in April, according to the household survey, 550,000 found jobs and 255,000 didn’t.

So, the rise in the unemployment rate was due to more people feeling that the

economy is good enough to restart their job searches. That’s a good sign, even

though it means more active competition for job-seekers.”Wall Street Journal, May 7, 2010