Macro economic presentation prepared for partners of KPMG in Dallas, May, 2014

1. Macro-
Economics for
KPMG
Presentation prepared for Audit
Partners of the Consumer Markets
Group: Retail, Food and Beverages,
Consumer Goods, and Life Sciences
Dallas, Tx, May 20th, 2014

2. 2014 US Economic Forecast
 Real GDP: 2.5-3%
 Real PCE:
 Real PCE Deflator:
 CPI-U:
 Residential Investment:
 Non-Residential Investment:
 US Govt Budget Deficit:
 Fed Funds: 0
 10-yr Notes: 2.5%

3. The Economic Cycle
Early Expansion:
Duration:17 months
Inflation:Continuing to fall
Interest Rates: Bottoming Out
Investments: Tech, Transportation
Middle Expansion:
Duration: 17 months
Inflation: Bottoming out
Interest Rates: Rising modestly
Investments: Services, Capital Goods
Late Expansion:
Duration: 17 months
Inflation: Rising
Interest Rates: Rising rapidly
Investments: Basic Materials, Energy
Early Contraction:
Duration: About 6 months
Inflation: Rising
Interest Rates: Peaking
Investments: Health, Consumer Staples
Late Contraction:
Duration: About 6 months
Inflation: Flat to declining
Interest Rates: Falling
Investments: Financials, Utilities,
Consumer Cyclicals