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NATIONAL ECONOMIC OUTLOOK <br /> It has been roughly a year and a half since the while the prognosis for the precise juncture <br /> onset of the full-blown credit crisis buffeting when the economy starts a meaningful <br /> our financial markets, fueled by the housing recovery is somewhat fluid, major job gains <br /> meltdown and the subsequent seizures in the may be absent at least until the first half of <br /> money markets. While the list of headline 2010. Real economic growth, which typically <br /> economic news events, both globally as well leads job growth, is anemic until the final <br /> as nationally, has been unparalleled stretching quarter of 2009, mimicking both weaknesses <br /> back the past 30-40 years, some of the leading in consumer spending and weak business <br /> ones this far into the new year span a sobering fixed investment spending -largely industrial <br /> range: equipment and commercial structures. <br /> Residential fixed investment (aka "housing" <br /> • The economy has been officially in and the Achilles heel of our economy in the <br /> recession since December, 2007; albeit present cycle) stays quite weak nationwide <br /> real economic growth only began to overall and is sub-par into nearly 2011 before <br /> significantly decline in the fourth quarter housing markets get back to some semblance <br /> of 2008. of vitality. <br /> • Precipitous drops in commodity prices Not only is the timing of the downturn, its <br /> around the globe from record levels, depth and duration somewhat uncertain at <br /> particularly for crude petroleum and present, the risks in the macro outlook for the <br /> petroleum products. pace of a rebound are complicated further by <br /> Federal Reserve monetary policy going <br /> • Big 3 automakers hemorrhaging money forward. <br /> and in need of major restructuring, <br /> coupled with federal bailout assistance. The major sources of uncertainty surrounding <br /> the path to sustained economic growth are: <br /> • Housing markets have yet to bottom. <br /> • End of collapsing housing markets <br /> • Banks continue to be plagued with <br /> liquidity and toxic asset problems' • Stabilization of money and capital <br /> markets, coupled with sounder <br /> • Unprecedented, for recent times, footings for financial institutions. <br /> government intervention into financial <br /> markets and federal economic stimulus • Degree of global monetary <br /> legislation. coordination, and the strength of the <br /> dollar in foreign exchange markets. <br /> So, instead of the worst of the economic <br /> slowdown being largely behind us by now (as • Net effects of both federal and state- <br /> anticipated in the prior macro outlook), it level fiscal initiatives to stimulate the <br /> looks presently like it may well be ahead of economy <br /> us, stretching out well into the late 2009-2010 . <br /> <br /> time frame. The effect on travel demands The markets for crude oil and transportation <br /> nationwide and on user tax revenues across fuels continue to be very perplexing, <br /> <br /> the states will be for similar weakness. notwithstanding the considerable price drops <br /> 1 <br /> <br />