U.S. Economic Outlook

For various reasons that will be discussed below, we are lowering our 2010 real gross domestic product (GDP) forecast. At the same time, we are publicly unveiling our 2011
forecast – admittedly not nearly as anxiously awaited as LeBron’s revelation. Potholes in the Recovery Road – Reduce Speed Ahead

For various reasons that will be discussed below, we are lowering our 2010 real gross domestic product (GDP) forecast. At the same time, we are publicly unveiling our 2011
forecast – admittedly not nearly as anxiously awaited as LeBron’s revelation. For the second half of 2010, we now are projecting annualized real GDP growth of 1.8% versus our May
forecast of 2.5%. This lower second-half projection and the Commerce Department’s revised lower first quarter growth reduces our Q4/Q4 2010 real GDP growth forecast to 2.2% versus
May’s forecast of 2.7%. As a result of our reduced 2010 real GDP growth projection, the forecast for the unemployment rate has been increased. For Q4:2010, we now place the
average unemployment rate at 10.3% versus the May forecast of 10.0%. Our Q4/Q4 2011 forecast for real GDP growth is 3.2%.

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