Not Just Having a Job, But the Type of Job(s) Ma:er. Richard Yamarone, TEL:

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1 Not Just Having a Job, But the Type of Job(s) Ma:er

2 The Top Concern for Businesses

3 Employment To Be a Slow Train Coming If at All peak-to-trough % jobs lost Recession Date (months) total jobs lost (millions) months to job restoration peak-to-trough Period AVG: Period AVG: Period (current) ? 6.03

4 Highest Paying Jobs, Lowest Job CreaHon March 2014: Average Hourly Earnings ($) by Industry Other Services Lesiure & Hospitality EducaHon & Health Professional business svcs. Financial AcHviHes InformaHon UHliHes TransportaHon & Warehousing Retail Trade Wholesale Trade Manufacturing ConstrucHon Mining & Logging $0.00 $10.00 $20.00 $30.00 $40.00 Source: Bureau of Labor Sta/s/cs

5 Hiring not Exactly Brisk Jobs Created Since Depression Jobs Trough*, in thousands Government Others Services Leisure/Hospitality Healthcare EducaHon Temporary Professional Financial InformaHon UHliHes TransportaHon Retail Trade Wholesale Trade Manufacturing Mining & Logging ConstrucHon ,300 1,585 2, ,000 1,300 1,600 1,900 2,200 2,500 Source: BLS *February 2010

6 Strongest Growing Jobs, Lowest Earnings Growth March 2014: Average Hourly Earnings (Y/Y%) by Industry Other Services Lesiure & Hospitality EducaHon & Health Professional business svcs. Financial AcHviHes InformaHon UHliHes TransportaHon & Warehousing Retail Trade Wholesale Trade Manufacturing ConstrucHon Mining & Logging Source: Bureau of Labor Sta/s/cs

7 If GDP Dips to 2.0% - - It s Recession Time 14 Real GDP (Y/Y %) Source: NBER, BEA, Bloomberg GDP CYOY <Index>

8 Real Final Sales Below 2.0% Real Final Sales of Domes\c Product (Y/Y%) Source: BEA FLSLCHAN <Index>

9 Real Retail Sales Below 2.0% Real* Retail Sales, Y/Y% Source: Federal Reserve Bank of St. Louis

10 Real Personal Incomes Below 2.0% Real Disposable Personal Incomes (Y/Y%) Source: BEA, Bloomberg PIDSDCWT <Index>

11 Heavy Dependency on Government Transfer Payments as a % of Disposable Personal Incomes PIOCTRAN <Index, PIDSDI <Index>

12 Manufacturing Gains SHll Not GeneraHng Jobs Industrial Produc\on MFG vs. Manufacturing Jobs ('000) 19, , , , , , , , ,000 MFG Payrolls (lhs) MFG IP (rhs) 65 10, Source: Federal Reserve, BLS USMMMANU <Index>, IP <Index> 60

13 Retailers Headed Out of the Malls Regional & Strip Mall Vacancies 12.0% 11.0% 10.0% 9.0% Strip Mall Regional & Superregional Malls 8.0% 7.0% 6.0% 5.0% 4.0% Source: Reis Inc.

14 Earnings/Analyst Conference Calls

15 Bloomberg Orange Book Summary of Commentary on Current Economic Condi\ons By Corpora\on ORANGE <GO> from earning statements commencing July 1, 2010

16 What is Being Said And so we're s/ll seeing that midnight shopping in our stores when that EBT card, it's like a debit card, when it is ready and it is funded, there are people who are in the store at midnight because they know it turns on. And they have shopped from like 10:45 to midnight and they're wai/ng for that card and then our lines open up. And we've had some of our busiest ours at midnight. Rosalind Brewer, EVP, Wal- Mart April 12, 2011 I think the most telling indicator for us that economic weakness and employment is the key issue driving sou volumes, is the fact that we con/nue to see, as in contrast to the historical norms, we con/nue to see volume pick up heavily at the beginning of each month, and then steadily erode through the month, being par/cularly sou in the last week to 10 days of the month. That just tells us that people are running out of money. Gregg Engles, CEO Dean Foods May 10, 2011 Now clearly when it gets to the end of the month and they've run out of dollars and the first of month gets there, you'll see some pick- up in sales. I would say it's not as dramahc as it was two years ago due mostly to the fact that not 100% of those benefits are geing loaded on to people's cards.. J. Michael Schlotman, CFO, SVP Kroger May 17, 2011

17 Bloomberg Orange Book SenHment Index Below 50 Bloomberg Orange Book Sen\ment Index June 15, 2012 December 15, 2012 June 15, 2013 December 15, 2013 Source: Bloomberg ORBOTOTL <Index>

18 No Typo, Over 47 Million People at or Below Poverty! 50,000,000 Supplemental Nutri\on Assistance Program Number of Par\cipants 45,000,000 40,000,000 35,000,000 30,000,000 25,000, Source: U.S.D.A, Bloomberg FDSPNUM <Index>

19 Poverty Growing Faster than Payrolls Growth in Food Stamps vs. Nonfarm Payroll Jobs Food Stamps Job CreaHon /1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 Source: USDA, BLS

20 There is No Holy Grail of Economic Indicators

21 Fab Five Dining Out Spending: Meals at Other Ea\ng Places (Y/Y%) '00 '03 '06 '09 '12 Source: BEA, NBER RPCEDPMB <Index> <GO>

22 Fab Five Dining Out Retail Sales: Food Services & Drinking Places Source: U.S. Department of Commerce RSBAFDSV <Index>

23 Fab Five Casino Gambling Spending: Casino Gambling Y/Y% '00 '03 '06 '09 '12 Source: Bureau Economic Analysis, NBER RPCEDCAS <Index> <GO>

24 Fab Five Jewelry & Watches Spending: Jewelry & Watches Y/Y% '00 '03 '06 '09 '12 Source: Bureau Economic Analysis, NBER RPCEDJRY <Index> <GO>

25 Fab Five CosmeHcs & Perfumes Spending: Cosme\cs & Perfumes (Y/Y%) '00 '03 '06 '09 '12 Source: Bureau Economic Analysis, NBER RPCEDCOS <Index> <GO>

26

27 Fab Five Women s Dresses Spending: Women's & Girls' Clothing (Y/Y%) '00 '03 '06 '09 '12 Source: Bureau Economic Analysis, NBER RPCEDWGC <Index> <GO>

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