BUSINESS FORECASTING CENTER. January California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

BUSINESS FORECASTING CENTER January 2015 California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

BUSINESS FORECASTING CENTER SPONSORED BY Del Norte Siskiyou Modoc We would like to recognize the following organizations for their sponsorship of the Business Forecasting Center. Humboldt Trinity Shasta Lassen Tehama Plumas Mendocino Glenn Butte Sierra Nevada Lake Colusa Sutter Yuba Placer Sonoma San Francisco Marin San Mateo Napa Yolo Solano Contra Costa Alameda Santa Clara Sacramento San Joaquin El Dorado Amador Stanislaus Calaveras Merced Alpine Tuolumne Mariposa Madera Mono Santa Cruz San Benito Fresno Inyo California & Metro Forecast is published by the Business Forecasting Center University of the Pacific Eberhardt School of Business 3601 Pacific Avenue Stockton, California 95211 Monterey San Luis Obispo Kings Tulare Kern San Bernardino E-mail Web Voice Fax forecast@pacific.edu http://forecast.pacific.edu 209.946.7385 209.946.2088 Santa Barbara Ventura Los Angeles Staff Dr. Jeffrey A. Michael, Director Dr. Thomas Pogue, Associate Director Nahila Ahsan, Research Analyst Jesse Neumann, Economic Research Analyst Gilbert Perez, Research Associate Neriah Howard, Student Researcher Anjul Shingal, Student Researcher Sydney Stanfill, Student Researcher Santa Barbara Ventura Santa Barbara Los Angeles Orange San Diego Riverside Imperial UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

2015-2018 California & Metro January 2015 Published quarterly by the Business Forecasting Center at the University of the Pacific Eberhardt School of Business. Copyright 2015 Business Forecasting Center. All rights reserved. This forecast was prepared based upon assumptions reflecting the Center s judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Business Forecasting Center nor The Regents of the University of the Pacific shall be held responsible as a consequence of any such variance. Unless approved by the Business Forecasting Center, the publication or distribution of this forecast and the preparation, publication or distribution of any excerpts from this forecast are prohibited.

Contents California Highlights... 5 Forecast Summary...6-10 California Forecast Tables...11-19 California Forecast Charts...21-25 Fresno MSA...27-30 Merced MSA...31-34 Modesto MSA... 35-38 Oakland MSA...39-42 Sacramento MSA... 43-46 San Francisco MSA...47-50 San Jose MSA...51-54 Stockton MSA... 55-58

FORECAST HIGHLIGHTS Highlights of the January 2015 California Forecast California is forecast to experience 3.3% growth in real gross state product in 2015 and 3.1% growth in 2016. California unemployment rate has fallen to 7.0%. We expect the unemployment rate to decline more gradually reaching 6.6% by the end of the year, and stabilizing near 6% in 2017 as more people reenter the workforce. Nonfarm payroll jobs are projected to continue steady 2.3% growth in 2015, and gradually slow to 1.5% growth by 2017. State and local government employment is once again growing slowly, and should add 20,000 jobs statewide over the next year. By 2018, California will still have over 30,000 fewer state and local government workers than in 2008. Health Services has become the largest employment sector in the state. Consistent gains will continue, although the 50,000 additional jobs projected for the next several years is a slight decline from about 60,000 new jobs in 2013 and 2014. Professional Scientific & Technical Services is a high-paying sector that has fueled the recovery, having fully recovered pre-recession employment three years ago. This sector is projected to continue strong growth, adding 40,000 jobs over the next year. After a decade of large declines, the number of Manufacturing jobs has changed little in the past 4 years. A modest gain of 10,000 jobs is anticipated over the next year, but the overall pattern of flat Manufacturing employment is anticipated to continue through 2018. About 50,000 new Construction jobs are anticipated in each of the next four years, about a 7% annual growth rate. Despite this expected growth, there will still be fewer Construction jobs in 2018 than before the recession. Single-family housing starts have been extremely slow to respond to increased housing prices, remaining below 40,000 single family housing starts for the seventh consecutive year in 2014. We project an increase to 48,000 single-family units in 2015, 73,000 in 2016, and remaining just over 90,000 units in subsequent years. Multi-family housing starts have recovered pre-recession levels, and are projected to increase from about 40,000 new starts in 2014 to just above 60,000 units each year from 2016 to 2018. University of the Pacific Business Forecasting Center 5

FORECAST SUMMARY California Outlook The California economy has a strong outlook for 2015. The economic recovery had a strong second half of 2014, and we expect it will maintain that momentum through most of 2015 before slowing modestly in 2016. Consumers are confident, supported by surprisingly low gas prices, solid job growth and improving wages. The labor force is beginning to grow again, the tech engine continues to propel the state s economy forward, and the housing market is no longer a major deterrent to growth although homebuilding still remains well below historic norms and the pace of population growth. Overall, we project 3.3% growth in real Gross State Product (GSP), payrolls to grow 2.3% and overall employment growth of 2.7% in 2015. Overall, this means economic growth in California will be similar to the pace set since 2012. With unemployment dipping into the mid 6% range statewide by the end of 2015, and much lower in coastal regions, we expect job growth to fall below 2% from 2016-18, but for stronger growth in wages to help keep personal income growing at a healthy rate and overall GSP to maintain roughly 3% growth through the end of our forecast period in 2018. The most serious risks to this forecast remain global. Europe s economy has deteriorated prompting the European Central Bank to emulate the U.S. Federal Reserve s previous quantitative easing actions to stave off deflation. These actions abroad have led to appreciation of the U.S. dollar and lower interest rates, supporting the U.S. consumer and housing markets as we head into 2015. However, the weak European economy coupled with slower growth in China and emerging economies and a stronger dollar will dampen demand for California exports over time but have limited negative impacts on 2015. It does not appear that these financial developments abroad will affect the anticipated actions by the Federal Reserve to start slowly raising interest rates in mid-2015, nor do we believe these developments will spur a U.S. recession. However, six years into an expansion, we can t completely discount these risks, and the eyes of economists will be closely watching Europe and U.S. monetary policy throughout 2015. For California to maintain the recent trend of solid growth beyond 2015, it will be important to see a stronger recovery in the industry most battered by the Great Recession: homebuilding. The housing market s momentum slowed in late 2013 and continued through 2014. Slower home price appreciation was expected after huge, investor-driven increases in 2013. While home price appreciation did slow, the 10% annual gains seen in many markets still exceeded many expectations and historical averages. The slowing market was evidenced by declining sales volumes as many investors left the Table 1. California Annual Forecast Summary 2013 2014 2015 2016 2017 2018 Real Gross State Product (% change) 2.0 3.3 3.3 3.1 3.4 2.9 Non-Farm Payroll Employment (% change) 3.0 2.2 2.3 1.7 1.5 1.1 Unemployment Rate (%) 8.9 7.6 6.8 6.4 6.0 5.8 Housing Starts (thousands) 72.6 77.9 106.8 136.3 154.5 155.7 6 California & Metro Forecast - January 2015

FORECAST SUMMARY market once homes were no longer underpriced, and the surprisingly flat level of home building in 2014 rather than building on initial gains in 2013. We expect new home construction to resume growth again in 2015 as continued low mortgage rates, increasing consumer confidence and greater product availability in the form of new housing developments should spur a renewed increase in new homes in 2015. Overall, we expect housing unit construction to roughly double in California over the next three years bringing total housing unit growth over 150,000 per year. Finally, the forecast assumes no drought impacts in 2015, an increasingly tenuous assumption since it has not rained in over a month as this is written. As stated in previous forecasts, we estimate that the drought only caused about a 0.1% loss to California s economic output in 2014, although impacts were certainly higher in agricultural areas. Some continued losses in 2015 seem certain. But if the wet conditions seen in December do not return soon and severe drought persists into 2015, the impacts will be larger than 2014 as reservoirs and wells are drawn lower. Another year of severe drought in 2015 could reduce growth by as much as a quarter of a percent in 2015 with much larger impact in agricultural regions. In our May economic forecast, there should be enough data available to draw more definitive conclusions about the extent of 2014 drought impacts and make reasonable projections for 2015. THE REGIONAL OUTLOOK While Bay area continues to lead the State s economic growth and we anticipate that trend will continue into 2015. We have not detected any signs of slowing in the innovative, tech-driven economies of San Jose and San Francisco and project both areas will maintain job growth in the mid 3% range for 2015, outpacing the California average by at least a full percentage point for a fifth consecutive year. Income gains have been even more impressive than job gains, and have helped drive real estate prices to high levels. While the tech fueled growth appears immune to rising Bay Area costs, the high-paying industry s growth does squeeze other sectors of the Bay Area economy from Finance to Health Care and Manufacturing and a less diverse economy could become a problem should technology weaken in the future. The more economically diverse and commuteroriented East Bay has had somewhat slower and uneven growth than its neighbors, but has still seen unemployment drop below 6% which should drop even lower as we project solid 2.8% job growth in 2015. In the Central Valley, job growth decelerated by about a percentage point in 2014 from the strong growth experienced in 2013. Considering the drought and the weakness in homebuilding in 2014, the slight slowdown from 2013 is unsurprising, and the fact that job growth continued to be at or above the state average of 2.2% is particularly encouraging. The unemployment rates in Stockton, Modesto and Fresno are all projected to drop below 10% by the end of 2016. While extremely high by national standards, single digit unemployment is a historically good level for these economies characterized by large numbers of seasonal, agricultural jobs. For 2015, we project the strongest job growth in the Central Valley will occur in Modesto, while job growth in Fresno dips below 2% after two very strong year. We project slowing job growth across the Central Valley from 2016-18 as the economic recovery matures, similar to the rest of California although we expect the Valley job growth to surpass state averages due to somewhat stronger population growth and increased homebuilding after a long depression in this core industry. In Sacramento, economic optimism is at its highest level in a decade, fueled in large part by enthusiasm for the new downtown arena which will soon begin rising from the large hole that has been cleared a few blocks from the Capital as well as the potential of new higher education investment, most notably UC-Davis proposed World Food Center and expansion in the downtown Sacramento area. However, the growth in enthusiasm hasn t been equally matched by growth in activity at this point, and suburban south Placer County continues to lead the region s growth. Nevertheless, the exciting University of the Pacific Business Forecasting Center 7

FORECAST SUMMARY prospects of downtown revitalization, the anticipated removal of building restrictions in the Natomas region, and continued progress in the Railyards and West Sacramento areas near downtown are all encouraging signs. The Sacramento area has recently made incremental improvements towards diversifying its government-based economy with encouraging job growth in locally underdeveloped sectors such as manufacturing, and professional and technical services. Government is still the dominant force in the Sacramento economy, and renewed income growth for state workers following years of stagnation is helping to bolster retail, hospitality and the housing market. However, the Government sector s modest job growth potential will keep overall employment growth in Sacramento relatively steady in the 2% range in the years ahead. Table 2. Central Valley Metro Forecast Summary Metro Area Nonfarm Payroll Employment (% change) Unemployment Rate (%) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Sacramento 2.3 2.6 2.0 1.8 1.7 7.3 6.3 5.5 5.0 4.9 Stockton 2.4 2.3 1.8 1.6 1.4 11.3 10.2 9.3 8.7 8.5 Modesto 2.1 3.3 1.6 1.6 1.5 11.6 10.4 9.8 9.3 9.1 Merced 1.1 2.7 2.0 2.0 1.7 13.2 12.1 11.3 10.9 10.8 Fresno 3.1 1.6 1.8 1.7 1.5 11.5 10.5 10.1 9.6 9.4 California 2.2 2.3 1.7 1.5 1.1 7.6 6.8 6.4 6.0 5.8 NOTE: Sacramento MSA includes Sacramento, El Dorado, Placer, and Yolo counties. Stockton, Merced, Fresno and Modesto MSAs correspond to San Joaquin, Merced, Fresno and Stanislaus counties. Table 3. Bay Area Metro Forecast Summary Metro Area Nonfarm Payroll Employment (% change) Unemployment Rate (%) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 San Francisco 3.3 3.6 2.0 1.6 1.0 4.5 3.9 3.7 3.5 3.4 San Jose 3.6 3.5 2.3 1.8 1.3 5.6 4.9 4.5 4.1 3.9 Oakland 2.1 2.8 2.0 1.8 1.3 6.1 5.5 5.2 4.8 4.7 California 2.2 2.3 1.7 1.5 1.1 7.6 6.8 6.4 6.0 5.8 NOTE: San Francisco MSA includes San Francisco, Marin and San Mateo counties. Oakland MSA includes Contra Costa and Alameda counties. San Jose MSA includes Santa Clara and San Benito counties. 8 California & Metro Forecast - January 2015

FORECAST SUMMARY STOCKTON BANKRUPTCY UPDATE Stockton Will Soon Exit Bankruptcy as Judge Approves the City s Plan At the end of October, Judge Klein approved Stockton s Bankruptcy Plan of Adjustment over the objections of the lone significant creditor who did not reach a settlement from the City. Although the creditor, Franklin Investments, has appealed the ruling to another court, the Judge ruled against Franklin s request to put a stay on implementation of the plan and thus Stockton is poised to exit bankruptcy in February and renew making payments to creditors at reduced levels negotiated in the plan. The plan of adjustment treats Franklin far more severely than retirees and other bond creditors who settled with the City, offering repayment of less than 1% on unsecured debt and a little more than 10% on the overall debt. The City s total debt to Franklin is about $35 million, relatively small in light of the City s total liabilities. Thus, the Judge reasoned that there was no reason to delay Stockton s plan pending appeal since Franklin s repayment could be subsequently adjusted without unraveling the entire plan in the unlikely case that Franklin were to win on appeal. Thus, the appeal will be interesting to follow but will ultimately be little more than a footnote to Stockton s municipal bankruptcy story that now enters a new chapter. Many national observers of the Stockton bankruptcy case were looking for a monumental ruling on pensions and were partially satisfied. While the Judge ruled that Stockton could modify pensions in bankruptcy, the ruling was of little practical significance because the City did not want to impair pensions and was able to develop an approvable plan without taking that step. While leaving bankruptcy creates an opportunity for the City to move forward, there are still many financial and economic challenges ahead. Revenues from a recent sales tax increase may not be enough to deliver all of the enhanced public safety benefits promised to City voters, and other City services will remain at reduced levels for many years. University of the Pacific Business Forecasting Center 9

TABLES

CALIFORNIA TABLES Table 1. Annual Summary of the University of Pacific Forecast for California 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income and Gross State Product Personal Income (Bil. $) 1499.3 1564.3 1596.2 1537.1 1578.6 1685.6 1805.2 1856.6 1945.1 2034.4 2142.3 2270.0 2391.7 Calif. (%Ch) 7.4 4.3 2.1-3.7 2.7 6.8 7.1 2.9 4.8 4.6 5.3 6.0 5.4 Real Personal Income (Bil. 2009$) 1582.7 1611.0 1595.2 1537.2 1552.8 1618.5 1701.9 1729.7 1787.7 1849.7 1920.5 1999.2 2067.2 (%Ch) 4.6 1.8-1.0-3.6 1.0 4.2 5.2 1.7 3.4 3.5 3.8 4.1 3.4 Real Disposable Income (Bil. 2009$) 1377.0 1391.5 1396.6 1375.7 1382.7 1424.8 1490.3 1495.1 1547.2 1595.0 1652.6 1721.0 1781.0 (%Ch) 4.0 1.1 0.4-1.5 0.5 3.1 4.6 0.3 3.5 3.1 3.6 4.1 3.5 Gross State Product (Bil. $) 1866.3 1949.1 1978.1 1906.4 1953.4 2030.5 2125.7 2202.6 2311.6 2433.7 2552.4 2687.4 2818.7 Calif. (%Ch) 6.1 4.4 1.5-3.6 2.5 4.0 4.7 3.6 4.9 5.3 4.9 5.3 4.9 Real GSP (Bil. 2009$) 1963.5 1993.4 1987.6 1906.4 1924.4 1957.1 2009.9 2050.7 2118.0 2188.3 2255.8 2331.7 2400.1 Calif. (%Ch) 3.1 1.5-0.3-4.1 1.0 1.7 2.7 2.0 3.3 3.3 3.1 3.4 2.9 Employment and Labor Force (Household Survey % Change) Employment 1.4 0.9-0.4-4.3-0.6 1.1 2.1 2.1 1.9 2.7 1.6 1.6 1.1 Labor Force 0.8 1.3 1.6 0.1 0.6 0.5 0.6 0.4 0.4 1.8 1.2 1.1 1.0 CA Unemployment Rate (%) 4.9 5.3 7.2 11.3 12.3 11.8 10.4 8.9 7.6 6.8 6.4 6.0 5.8 Nonfarm Employment (Payroll Survey % Change) Total Nonfarm California 1.8 0.8-1.1-5.7-1.1 1.1 2.4 3.0 2.2 2.3 1.7 1.5 1.1 Mining 6.3 6.5 7.9-9.3 2.9 7.7 6.0 0.2 2.6 0.6 0.5 3.1 2.6 Construction 3.2-4.3-11.8-21.0-9.9 0.3 5.1 8.0 5.8 7.0 6.7 7.1 5.8 Manufacturing -1.0-1.7-2.6-10.1-3.0 0.5 0.3 0.0-0.2 0.8 0.3 0.2 0.2 Nondurable Goods -0.6-1.2-2.0-8.2-2.5-0.4 0.3 0.0-1.9-0.2 0.1 0.2 0.4 Durable Goods -1.2-2.1-3.0-11.2-3.4 1.0 0.3 0.0 0.8 1.3 0.4 0.2 0.2 Trans. Warehs. & Utility 1.8 2.3-0.6-6.0-1.7 1.7 2.7 3.3 2.1 2.2 3.0 2.9 2.0 Wholesale Trade 4.0 2.2-1.7-8.3-0.1 2.2 2.7 3.2 2.1 2.3 2.3 2.0 1.5 Retail Trade 1.3 0.5-2.9-7.2-0.2 1.9 1.6 2.0 1.4 1.4 0.2-0.3-0.4 Financial Activities 0.9-3.4-6.1-7.0-2.9 0.2 1.5 1.2-0.5 0.8 0.2-0.8-1.5 Prof. and Business Services 3.8 1.0-1.2-8.0 0.7 2.8 5.0 4.3 4.3 4.9 3.9 2.7 1.2 Edu & Health Services 2.3 3.8 4.0 2.7 0.6 1.4 4.3 6.2 3.4 2.6 1.8 1.5 1.2 Leisure & Hospitality 3.0 2.7 0.8-4.4-0.1 2.3 4.1 4.5 2.7 2.8 1.0 1.2 1.7 Information -1.6 1.1 1.1-7.3-2.7 0.4 1.0 3.5 4.2 2.5 1.0 0.8-0.6 Federal Gov't. -0.6-0.7 0.5 1.1 6.8-4.6-1.8-1.9-1.6-0.7-1.7-1.7-1.9 State & Local Gov't. 1.5 2.0 1.0-1.8-2.1-1.4-1.1 0.0 0.5 0.4 1.0 1.5 1.7 Population and Migration Population (thous) 36052.0 36302.1 36648.9 37012.0 37376.5 37709.7 38041.3 38374.5 38712.5 39061.4 39420.3 39788.8 40165.2 (%Ch) 0.6 0.7 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Net Migration (quarterly rate, thous.) -28.5-9.1 8.6 16.7 16.7 18.0 19.6 20.2 20.7 21.2 20.4 19.6 19.3 Housing Housing Starts Tot. Private (Annual Rate, Ths.) 154.0 102.1 61.0 36.1 39.1 45.7 55.9 72.6 77.9 106.8 136.3 154.5 155.7 Housing Starts Single Family 113.7 70.1 36.5 26.7 26.8 23.9 28.8 36.7 38.8 48.2 72.9 92.2 93.6 Housing Starts Multi-Family 40.3 32.0 24.4 9.4 12.3 21.8 27.1 35.9 39.1 58.6 63.4 62.3 62.1 Consumer Prices (%Ch) 3.4 3.1 3.3-0.4 1.1 2.8 2.2 1.6 1.8 1.0 1.5 2.1 2.2 University of the Pacific Business Forecasting Center 11

CALIFORNIA TABLES Table 2. Quarterly Summary of the University of Pacific Forecast for California 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income and Gross State Product Personal Income (Annual Rate, Bil. $) 1816.4 1848.3 1871.8 1889.9 1909.1 1937.4 1956.0 1978.1 2001.4 2022.3 2044.4 2069.7 Calif. (%Ch) 3.1 3.8 4.3 0.3 5.1 4.8 4.5 4.7 4.8 4.4 4.5 4.6 Real Personal Income (Bil. 2009$) 1698.4 1726.2 1740.9 1753.3 1765.1 1781.0 1792.6 1812.2 1830.2 1842.4 1854.5 1871.6 (%Ch) 1.8 2.6 3.0-0.7 3.9 3.2 3.0 3.4 3.7 3.4 3.5 3.3 Real Disposable Income (Bil. 2009$) 1468.5 1492.2 1504.9 1514.9 1525.2 1539.2 1555.0 1569.6 1580.8 1588.7 1598.6 1611.8 (%Ch) 0.5 1.3 1.6-2.0 3.9 3.1 3.3 3.6 3.6 3.2 2.8 2.7 Gross State Product (Bil. $) 2151.1 2171.1 2229.7 2258.6 2252.4 2294.0 2333.5 2366.5 2393.0 2419.3 2449.1 2473.6 Calif. (%Ch) 3.1 3.3 4.0 4.0 4.7 5.7 4.7 4.8 6.2 5.5 5.0 4.5 Real GSP (Bil. 2009$) 2008.2 2026.7 2075.7 2092.1 2079.8 2105.4 2134.7 2151.9 2166.3 2179.4 2196.8 2210.6 Calif. (%Ch) 1.1 1.9 2.6 2.4 3.6 3.9 2.8 2.9 4.2 3.5 2.9 2.7 Employment and Labor Force (Household Survey % Change) Employment 2.4 2.5 2.0 1.4 1.4 1.8 1.8 2.7 2.8 2.7 3.0 2.1 Labor Force 0.7 0.7 0.4-0.2 0.0 0.2 0.1 1.4 1.6 1.8 2.3 1.5 CA Unemployment Rate (%) 9.4 9.1 8.9 8.4 8.1 7.6 7.4 7.2 7.0 6.8 6.7 6.6 Nonfarm Employment (Payroll Survey % Change) Total Nonfarm California 3.1 3.2 3.3 2.6 2.2 2.3 2.0 2.3 2.6 2.4 2.4 2.0 Mining 1.9 1.9-1.5-1.4 0.2 1.4 4.0 4.9 3.1 1.0-0.2-1.5 Construction 8.2 9.1 7.8 6.9 5.6 5.7 5.4 6.4 6.3 6.4 8.0 7.1 Manufacturing -0.1-0.1-0.1 0.1 0.0-0.4-0.5 0.1 0.3 0.8 1.1 0.9 Nondurable Goods 0.4 0.2 0.3-1.1-1.5-2.1-2.8-1.1-1.0-0.2 0.3 0.2 Durable Goods -0.4-0.3-0.3 0.8 0.9 0.6 0.9 0.7 1.0 1.4 1.5 1.2 Trans. Warehs. & Utility 4.0 2.8 2.9 3.3 2.8 2.6 1.5 1.3 1.4 2.0 2.8 2.6 Wholesale Trade 3.4 3.4 3.4 2.7 2.6 2.2 1.2 2.3 2.0 2.1 3.0 2.2 Retail Trade 1.4 2.0 2.2 2.4 1.4 1.6 1.5 0.9 1.8 1.3 1.4 1.1 Financial Activities 1.6 1.8 1.2 0.1-0.1-1.0-0.9 0.2 0.8 0.9 0.9 0.5 Prof. and Business Services 4.4 4.5 4.2 4.0 4.0 4.0 4.2 5.0 5.1 5.0 5.0 4.4 Edu. & Health Services 6.8 6.6 7.5 3.7 3.1 4.0 3.2 3.2 3.2 2.8 2.5 2.0 Leisure & Hospitality 4.8 5.0 4.2 4.1 2.8 2.6 2.6 3.1 3.7 2.9 2.9 1.8 Information 3.2 3.3 3.8 3.8 3.4 4.4 5.0 4.1 6.8 3.5 0.6-0.9 Federal Gov't. -1.3-1.6-2.3-2.3-2.5-1.9-0.9-1.0-0.4-0.4-0.9-1.3 State & Local Gov't. -0.7-0.5 0.4 0.6 0.6 0.8 0.4 0.1 0.4 0.3 0.1 0.8 Population and Migration Population (Ths.) 38249.1 38332.5 38416.1 38500.1 38584.5 38669.4 38754.8 38841.3 38928.8 39016.8 39105.4 39194.6 (%Ch) 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Net Migration (Ths.) 20.0 20.2 20.3 20.4 20.4 20.5 20.6 21.1 21.4 21.3 21.2 21.0 Housing Housing Starts Tot. Private (Annual Rate, Ths.) 71.5 67.4 66.8 84.7 71.0 72.8 76.1 91.6 96.9 102.5 109.0 118.7 Housing Starts Single Family 35.8 35.2 35.9 39.8 39.3 40.5 37.8 37.7 41.0 45.4 50.1 56.2 Housing Starts Multi-Family 35.7 32.2 30.9 45.0 31.8 32.3 38.3 53.9 55.9 57.1 58.9 62.5 Consumer Prices (%Ch) 1.8 1.6 1.6 1.3 1.7 2.0 2.1 1.5 1.2 1.0 0.8 1.2 12 California & Metro Forecast - January 2015

CALIFORNIA TABLES Table 2. Quarterly Summary of the University of Pacific Forecast for California 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income and Gross State Product Personal Income (Annual Rate, Bil. $) 2098.7 2126.5 2156.4 2187.6 2222.4 2254.5 2286.1 2317.1 2349.1 2377.4 2405.6 2434.6 Calif. (%Ch) 4.9 5.2 5.5 5.7 5.9 6.0 6.0 5.9 5.7 5.4 5.2 5.1 Real Personal Income (Bil. 2009$) 1892.3 1910.8 1929.4 1949.4 1972.0 1989.8 2008.4 2026.4 2045.1 2060.2 2074.3 2089.2 (%Ch) 3.4 3.7 4.0 4.2 4.2 4.1 4.1 4.0 3.7 3.5 3.3 3.1 Real Disposable Income (Bil. 2009$) 1627.6 1643.7 1660.6 1678.5 1694.9 1711.6 1730.0 1747.5 1760.2 1774.4 1787.8 1801.6 (%Ch) 3.0 3.5 3.9 4.1 4.1 4.1 4.2 4.1 3.9 3.7 3.3 3.1 Gross State Product (Bil. $) 2500.5 2534.3 2570.1 2604.7 2638.0 2671.3 2703.7 2736.5 2768.5 2801.0 2835.5 2869.8 Calif. (%Ch) 4.5 4.8 4.9 5.3 5.5 5.4 5.2 5.1 4.9 4.9 4.9 4.9 Real GSP (Bil. 2009$) 2224.8 2245.1 2266.4 2286.9 2305.1 2322.8 2340.6 2358.4 2374.2 2391.1 2408.8 2426.4 Calif. (%Ch) 2.7 3.0 3.2 3.5 3.6 3.5 3.3 3.1 3.0 2.9 2.9 2.9 Employment and Labor Force (Household Survey % Change) Employment 1.7 1.6 1.6 1.7 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 Labor Force 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.0 1.0 1.0 1.0 0.9 CA Unemployment Rate (%) 6.6 6.5 6.3 6.2 6.1 6.0 5.9 5.8 5.8 5.8 5.8 5.8 Nonfarm Employment (Payroll Survey % Change) Total Nonfarm California 1.7 1.7 1.7 1.7 1.7 1.6 1.4 1.3 1.2 1.1 1.1 1.0 Mining -1.7-0.2 1.5 2.3 3.3 3.2 2.9 3.1 2.9 2.8 2.6 2.1 Construction 7.1 6.8 6.4 6.5 6.9 7.2 7.3 7.2 6.8 6.2 5.5 4.7 Manufacturing 0.8 0.4 0.1-0.1-0.1 0.2 0.3 0.3 0.2 0.2 0.2 0.3 Nondurable Goods 0.3 0.1 0.0-0.1 0.0 0.2 0.3 0.5 0.5 0.4 0.4 0.3 Durable Goods 1.0 0.5 0.2-0.2-0.1 0.3 0.3 0.2 0.1 0.1 0.1 0.3 Trans. Warehs. & Utility 2.8 3.1 3.1 3.2 3.3 3.1 2.9 2.5 2.4 2.2 1.8 1.4 Wholesale Trade 2.2 2.3 2.3 2.4 2.4 2.1 1.9 1.6 1.6 1.5 1.5 1.5 Retail Trade 0.7 0.3-0.1-0.2-0.2-0.2-0.3-0.3-0.4-0.4-0.5-0.5 Financial Activities 0.1 0.3 0.2 0.0-0.3-0.6-0.9-1.4-1.4-1.6-1.6-1.4 Prof. and Business Services 4.1 3.8 3.8 3.8 3.5 3.0 2.4 1.8 1.5 1.3 1.1 1.0 Edu. & Health Services 1.9 1.7 1.7 2.0 1.8 1.6 1.5 1.3 1.2 1.2 1.3 1.2 Leisure & Hospitality 1.5 1.1 0.8 0.6 0.6 1.1 1.5 1.8 1.9 1.8 1.7 1.6 Information -3.5 0.6 3.6 3.4 3.8 0.9-1.1-0.6-0.8-0.8-0.5-0.2 Federal Gov't. -1.5-1.7-1.8-1.9-1.8-1.6-1.7-1.7-1.9-1.9-1.9-1.8 State & Local Gov't. 0.8 1.0 1.2 1.1 1.3 1.5 1.6 1.7 1.7 1.7 1.7 1.6 Population and Migration Population (Ths.) 39284.3 39374.5 39465.4 39556.9 39649.0 39741.9 39835.2 39929.0 40023.2 40117.9 40212.5 40307.1 (%Ch) 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Net Migration (Ths.) 20.8 20.6 20.3 20.1 19.8 19.6 19.5 19.4 19.4 19.3 19.3 19.4 Housing Housing Starts Tot. Private (Annual Rate, Th 126.7 132.5 138.4 147.7 152.6 153.2 155.6 156.6 156.6 155.4 154.9 156.0 Housing Starts Single Family 62.2 68.7 76.2 84.5 89.4 92.2 93.2 94.0 94.1 94.1 93.5 92.8 Housing Starts Multi-Family 64.5 63.8 62.3 63.2 63.2 61.0 62.3 62.6 62.5 61.3 61.4 63.1 Consumer Prices (%Ch) 1.5 1.4 1.5 1.7 1.9 2.2 2.2 2.3 2.3 2.2 2.2 2.2 University of the Pacific Business Forecasting Center 13

CALIFORNIA TABLES Table 3. Employment Quarterly 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 California Payroll Employment (Thousands) Total Nonfarm 15008.9 15102.9 15209.4 15292.7 15337.9 15447.4 15520.0 15639.4 15737.4 15814.1 15887.7 15951.7 Manufacturing 1250.5 1251.5 1252.1 1251.6 1250.4 1246.0 1246.1 1252.3 1254.0 1256.4 1259.5 1263.2 Durable Goods 778.5 779.7 779.3 786.1 785.3 784.2 786.4 792.0 793.5 795.5 798.5 801.8 Wood Products 20.4 20.6 20.9 21.3 22.0 22.5 22.8 23.2 23.2 23.5 23.9 24.3 Computer & Electronics 263.4 262.6 262.2 263.8 263.4 262.7 263.0 264.0 263.5 262.9 262.3 262.0 Transportation Equipment 103.7 103.3 103.0 102.9 102.3 101.0 101.2 101.7 102.4 102.2 102.7 102.7 Nondurables 472.0 471.8 472.8 465.5 465.1 461.8 459.7 460.3 460.4 460.9 461.0 461.4 Foods 150.6 150.6 150.4 145.3 146.7 146.9 144.8 144.5 145.2 146.3 147.1 147.8 Non-Manufacturing 13758.4 13851.4 13957.3 14041.1 14087.5 14201.4 14273.9 14387.1 14483.4 14557.7 14628.2 14688.5 Mining 30.9 30.9 30.3 30.3 30.9 31.3 31.5 31.8 31.9 31.6 31.4 31.4 Construction 624.5 633.9 639.9 650.2 659.4 670.1 674.3 691.6 700.9 713.2 728.4 740.6 Transportation, Warehouse & Util. 498.5 499.0 505.1 510.1 512.6 512.2 512.4 517.0 519.8 522.6 526.7 530.6 Wholesale Trade 690.0 696.3 701.4 702.5 708.1 711.5 710.1 718.8 722.3 726.6 731.6 734.8 Retail Trade 1589.0 1598.5 1604.4 1620.1 1611.0 1624.6 1628.4 1634.6 1640.3 1646.2 1651.5 1652.3 Information 443.6 447.3 451.3 459.5 458.7 466.9 473.9 478.1 490.0 483.2 476.9 473.7 Prof. & Bus. Services 2298.6 2324.4 2346.9 2366.2 2390.3 2417.0 2444.3 2483.6 2511.1 2539.1 2565.6 2592.0 Admin. & Support 963.0 972.1 984.8 991.4 1003.7 1016.2 1030.9 1053.0 1067.9 1084.6 1101.7 1118.6 Prof. Sci. & Tech. 1121.8 1136.3 1144.4 1154.7 1164.2 1177.2 1188.0 1203.3 1214.7 1225.5 1234.3 1243.3 Mgmt. of Co. 213.8 216.0 217.6 220.1 222.3 223.6 225.3 227.3 228.5 229.0 229.6 230.1 Financial Activities 780.5 785.0 785.6 779.9 779.3 777.1 778.3 781.7 785.8 784.4 785.2 785.7 Real Estate & Rent 256.2 258.4 260.0 260.0 260.3 264.3 265.1 265.2 266.7 267.4 268.7 270.3 Finance & Insurance 524.2 526.5 525.6 519.9 519.0 512.8 513.2 516.5 519.1 517.0 516.5 515.4 Education & Health Service 2278.7 2288.2 2322.6 2335.2 2350.1 2380.0 2396.2 2410.7 2425.1 2446.1 2455.6 2459.4 Education Services 341.0 342.9 347.6 352.0 352.3 359.9 356.2 357.9 359.4 358.7 358.6 357.5 Health Services 1937.6 1945.4 1975.0 1983.2 1997.8 2020.1 2040.0 2052.8 2065.7 2087.5 2097.1 2101.9 Leisure & Hospitality 1646.6 1669.4 1676.5 1691.4 1692.0 1712.0 1719.4 1743.7 1755.0 1761.3 1768.5 1775.4 Other Services 512.1 514.7 516.5 518.4 522.3 522.4 521.6 518.5 521.5 521.9 522.9 522.9 Government 2365.5 2363.8 2376.9 2377.2 2372.9 2376.3 2383.5 2377.0 2379.9 2381.6 2384.0 2389.9 Federal Gov't. 248.4 246.4 244.2 244.4 242.2 241.7 242.0 242.0 241.4 240.7 239.9 238.8 State & Local Gov't. 2117.1 2117.4 2132.7 2132.7 2130.7 2134.6 2141.5 2134.9 2138.6 2140.9 2144.1 2151.1 14 California & Metro Forecast - January 2015

CALIFORNIA TABLES Table 3. Employment Quarterly 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 California Payroll Employment (Thousands) Total Nonfarm 16012.2 16086.6 16159.7 16227.6 16285.0 16341.1 16393.9 16443.2 16486.5 16526.9 16567.0 16605.7 Manufacturing 1263.5 1260.9 1261.2 1261.3 1262.3 1263.9 1265.0 1265.3 1265.3 1266.5 1267.6 1269.2 Durable Goods 801.8 799.4 800.2 800.5 800.8 801.6 802.5 802.1 801.6 802.3 803.3 804.6 Wood Products 24.7 25.0 25.3 25.6 25.9 26.0 25.9 25.8 25.7 25.8 25.8 25.9 Computer & Electronics 261.0 259.1 258.8 258.7 258.9 259.5 260.7 261.6 262.6 263.9 265.7 267.4 Transportation Equipment 101.8 101.3 100.9 100.2 99.3 98.3 97.5 96.6 96.2 95.5 94.9 94.4 Nondurables 461.7 461.5 461.0 460.9 461.5 462.3 462.6 463.2 463.7 464.1 464.3 464.7 Foods 148.4 148.7 148.7 149.0 149.6 150.4 150.9 151.6 152.1 152.6 153.0 153.4 Non-Manufacturing 14748.7 14825.7 14898.5 14966.2 15022.7 15077.2 15128.8 15177.9 15221.2 15260.4 15299.4 15336.4 Mining 31.3 31.6 31.9 32.1 32.4 32.6 32.8 33.1 33.3 33.5 33.7 33.8 Construction 750.7 761.9 774.7 788.5 802.3 816.7 831.2 845.0 857.0 867.6 877.0 884.7 Transportation, Warehouse & Util. 534.3 538.6 542.9 547.8 551.9 555.3 558.6 561.6 564.9 567.6 568.7 569.6 Wholesale Trade 738.5 743.4 748.1 752.7 756.1 759.2 762.3 765.1 768.1 770.8 773.9 776.4 Retail Trade 1651.7 1650.4 1649.7 1649.7 1647.6 1646.4 1645.4 1644.3 1641.7 1639.5 1637.7 1636.1 Information 472.7 486.1 494.0 489.7 490.9 490.4 488.4 486.7 487.0 486.6 486.1 485.7 Prof. & Bus. Services 2613.6 2636.8 2662.6 2689.7 2705.4 2716.3 2726.8 2738.0 2747.0 2750.8 2757.0 2765.2 Admin. & Support 1134.4 1152.3 1173.4 1194.8 1207.6 1216.1 1225.0 1234.9 1243.0 1247.2 1253.1 1260.9 Prof. Sci. & Tech. 1248.8 1253.9 1258.5 1263.9 1266.6 1269.1 1270.8 1272.4 1273.4 1273.6 1274.2 1274.8 Mgmt. of Co. 230.4 230.6 230.8 231.0 231.2 231.1 231.0 230.7 230.6 230.0 229.7 229.4 Financial Activities 786.5 787.1 786.5 785.8 784.0 782.3 779.5 775.2 772.7 769.5 766.8 764.4 Real Estate & Rent 272.2 273.7 274.8 276.3 277.6 278.4 278.7 279.0 279.5 279.6 279.7 279.6 Finance & Insurance 514.3 513.4 511.8 509.6 506.4 503.9 500.8 496.2 493.2 489.9 487.1 484.8 Education & Health Service 2471.4 2487.4 2496.9 2509.3 2516.8 2526.6 2533.1 2541.6 2546.7 2556.9 2565.5 2572.7 Education Services 357.5 357.0 356.9 357.5 357.6 357.6 358.0 358.3 359.3 359.8 360.5 360.7 Health Services 2113.9 2130.3 2139.9 2151.8 2159.2 2169.0 2175.1 2183.3 2187.3 2197.1 2204.9 2212.0 Leisure & Hospitality 1781.4 1780.7 1782.7 1786.1 1791.7 1799.8 1809.4 1818.3 1825.0 1832.0 1839.4 1846.5 Other Services 523.3 523.6 523.7 524.8 525.7 525.6 525.8 525.6 526.0 525.7 525.8 525.9 Government 2393.2 2398.3 2404.9 2410.1 2418.0 2426.1 2435.4 2443.6 2451.7 2459.9 2468.0 2475.4 Federal Gov't. 237.8 236.5 235.5 234.4 233.6 232.7 231.5 230.3 229.2 228.2 227.2 226.2 State & Local Gov't. 2155.4 2161.8 2169.4 2175.7 2184.4 2193.4 2204.0 2213.3 2222.5 2231.8 2240.8 2249.2 University of the Pacific Business Forecasting Center 15

CALIFORNIA TABLES Table 4. Employment Annual 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 California Payroll Employment (Thousands) Total Nonfarm 15282.9 15410.8 15241.3 14369.6 14210.0 14359.2 14706.1 15153.5 15486.2 15847.7 16121.5 16365.8 16546.5 Manufacturing 1489.9 1463.9 1425.4 1281.7 1242.0 1247.8 1252.0 1251.4 1248.7 1258.3 1261.7 1264.1 1267.2 Durable Goods 947.2 927.7 899.8 798.8 771.2 778.7 781.3 780.9 787.0 797.3 800.5 801.7 803.0 Wood Products 24.9 24.6 24.0 19.7 19.0 19.8 19.9 19.1 18.2 18.1 18.4 18.8 18.8 Computer & Electronics 308.1 304.0 300.0 278.5 271.9 275.2 270.0 263.0 263.3 262.7 259.4 260.2 264.9 Transportation Equipment 130.0 126.8 123.7 112.9 106.7 102.7 102.6 103.2 101.6 102.5 101.1 97.9 95.3 Nondurables 542.7 536.2 525.6 482.8 470.8 469.1 470.7 470.5 461.7 460.9 461.2 462.4 464.2 Foods 151.1 152.9 153.0 147.9 147.0 149.4 150.3 149.2 145.7 146.6 148.7 150.6 152.8 Non-Manufacturing 13793.0 13946.9 13815.9 13087.9 12968.0 13111.4 13454.1 13902.0 14237.5 14589.5 14859.8 15101.7 15279.3 Mining 25.0 26.6 28.7 26.1 26.8 28.8 30.5 30.6 31.4 31.6 31.7 32.7 33.6 Construction 933.5 893.1 788.3 622.8 559.6 561.3 590.1 637.2 673.9 720.8 769.0 823.8 871.6 Trans., Warehouse & Util. 496.3 507.7 504.7 474.6 466.3 474.2 487.3 503.2 513.5 524.9 540.9 556.8 567.7 Wholesale Trade 700.3 715.4 703.4 645.1 644.0 658.1 675.8 697.5 712.1 728.8 745.7 760.6 772.3 Retail Trade 1680.4 1689.5 1640.9 1522.5 1518.4 1547.0 1571.5 1603.0 1624.6 1647.6 1650.4 1645.9 1638.7 Information 466.0 471.0 476.0 441.3 429.0 430.6 435.0 450.4 469.4 480.9 485.6 489.1 486.4 Prof. & Bus. Services 2242.3 2265.6 2239.4 2060.9 2073.9 2131.4 2238.2 2334.0 2433.8 2551.9 2650.7 2721.6 2755.0 Admin. & Support 1003.9 998.3 952.7 850.4 863.4 882.8 932.5 977.9 1025.9 1093.2 1163.7 1220.9 1251.0 Prof. Sci. & Tech. 1025.8 1060.0 1079.4 1013.2 1015.1 1049.2 1100.4 1139.3 1183.2 1229.4 1256.3 1269.7 1274.0 Mgmt. of Co. 212.7 207.3 207.3 197.3 195.4 199.3 205.3 216.9 224.6 229.3 230.7 231.0 229.9 Financial Activities 927.9 896.7 841.9 782.9 760.1 761.9 773.5 782.7 779.1 785.3 786.5 780.3 768.4 Real Estate & Rent 288.5 283.6 275.9 254.8 248.2 247.1 250.9 258.7 263.7 268.3 274.2 278.4 279.6 Finance & Insurance 639.4 613.1 566.0 528.1 511.9 514.8 522.6 524.1 515.4 517.0 512.3 501.8 488.8 Education & Health Service 1843.0 1913.4 1990.1 2043.9 2055.4 2083.8 2172.7 2306.2 2384.2 2446.6 2491.2 2529.5 2560.4 Education Services 277.7 289.1 300.5 304.2 309.5 325.9 336.4 345.9 356.6 358.5 357.2 357.9 360.1 Health Services 1565.3 1624.3 1689.7 1739.7 1745.9 1758.0 1836.3 1960.3 2027.7 2088.0 2134.0 2171.6 2200.4 Leisure & Hospitality 1518.9 1560.2 1573.0 1503.3 1501.6 1535.8 1598.5 1671.0 1716.8 1765.0 1782.7 1804.8 1835.7 Other Services 506.9 512.5 511.6 485.8 484.6 493.5 504.9 515.4 521.2 522.3 523.9 525.7 525.9 Government 2452.6 2495.1 2518.0 2478.9 2448.4 2404.8 2376.1 2370.8 2377.4 2383.8 2401.6 2430.8 2463.8 Federal Gov't. 248.8 247.1 248.3 251.1 268.3 255.2 250.6 245.9 242.0 240.2 236.0 232.0 227.7 State & Local Gov't. 2203.8 2248.0 2269.6 2227.8 2180.1 2149.7 2125.5 2125.0 2135.4 2143.7 2165.6 2198.8 2236.1 16 California & Metro Forecast - January 2015

CALIFORNIA TABLES Table 5. Personal Income - Quarterly 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Billions Current Dollars Personal Income 1816.4 1848.3 1871.8 1889.9 1909.1 1937.4 1956.0 1978.1 2001.4 2022.3 2044.4 2069.7 Wages & Salaries 911.2 929.1 939.3 959.2 969.6 981.4 990.1 1002.6 1017.5 1030.3 1042.5 1055.3 Other Labor Income 221.9 225.9 230.1 233.6 235.1 236.9 238.6 241.0 242.9 244.2 246.0 248.5 Nonfarm 164.4 165.6 166.9 168.0 170.0 172.1 174.3 177.0 179.7 182.8 185.1 186.9 Farm 10.4 9.9 10.4 8.6 9.0 10.2 8.7 9.3 9.3 9.5 10.3 10.8 Property Income 367.7 376.7 382.4 382.4 383.6 391.1 394.5 396.8 398.0 401.0 405.3 412.6 Transfer Payments 277.7 280.8 283.9 282.3 288.9 294.4 299.7 303.2 309.7 311.6 313.7 315.8 Billions 2009 $ Personal Income 1698.4 1726.2 1740.9 1753.3 1765.1 1781.0 1792.6 1812.2 1830.2 1842.4 1854.5 1871.6 Wages & Salaries 852.0 867.7 873.6 889.9 896.5 902.2 907.4 918.5 930.5 938.6 945.7 954.3 Other Labor Income 207.5 211.0 214.0 216.7 217.4 217.8 218.7 220.8 222.1 222.4 223.2 224.7 Nonfarm 153.7 154.6 155.2 155.9 157.2 158.2 159.7 162.2 164.3 166.5 167.9 169.0 Farm 9.7 9.2 9.7 8.0 8.3 9.4 8.0 8.6 8.5 8.7 9.4 9.8 Property Income 343.8 351.8 355.7 354.8 354.7 359.5 361.6 363.5 364.0 365.3 367.7 373.1 Transfer Payments 259.6 262.3 264.0 261.9 267.1 270.7 274.6 277.8 283.2 283.9 284.6 285.6 New Passenger Car & Truck Reg. 1637.5 1701.4 1752.5 1755.8 1725.4 1853.1 1908.5 1904.9 1909.4 1924.3 1941.1 1956.7 Retail Sales (Billions $) 506.4 511.4 518.9 526.2 527.0 539.0 544.5 547.8 551.5 558.2 566.0 572.3 Real Retail Sales (Billions 2009$) 473.5 477.6 482.6 488.2 487.2 495.5 499.0 501.9 504.3 508.5 513.5 517.5 University of the Pacific Business Forecasting Center 17

CALIFORNIA TABLES Table 5. Personal Income - Quarterly 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Billions Current Dollars Personal Income 2098.7 2126.5 2156.4 2187.6 2222.4 2254.5 2286.1 2317.1 2349.1 2377.4 2405.6 2434.6 Wages & Salaries 1068.2 1082.6 1097.4 1111.4 1126.5 1141.3 1156.3 1171.5 1186.9 1201.7 1216.8 1232.4 Other Labor Income 251.6 254.0 256.9 260.0 264.3 266.9 269.9 272.9 277.7 280.2 283.0 285.8 Nonfarm 188.9 191.9 193.8 195.7 197.0 199.1 199.9 201.5 202.7 205.3 207.6 210.3 Farm 10.8 11.1 11.3 11.3 11.5 11.4 11.6 11.8 11.9 11.7 11.5 11.6 Property Income 420.0 427.1 436.4 448.0 460.1 471.6 482.3 492.0 500.6 507.5 514.1 520.5 Transfer Payments 323.5 325.4 327.6 330.3 337.3 340.4 343.7 346.9 354.1 357.4 360.7 364.2 Billions 2009 $ Personal Income 1892.3 1910.8 1929.4 1949.4 1972.0 1989.8 2008.4 2026.4 2045.1 2060.2 2074.3 2089.2 Wages & Salaries 963.1 972.8 981.9 990.3 999.6 1007.2 1015.9 1024.6 1033.3 1041.3 1049.3 1057.5 Other Labor Income 226.8 228.3 229.9 231.7 234.5 235.6 237.1 238.7 241.8 242.8 244.0 245.2 Nonfarm 170.3 172.4 173.4 174.4 174.8 175.7 175.6 176.2 176.5 177.9 179.0 180.5 Farm 9.7 10.0 10.1 10.1 10.2 10.1 10.2 10.3 10.3 10.1 10.0 9.9 Property Income 378.7 383.7 390.5 399.2 408.3 416.2 423.7 430.3 435.8 439.8 443.3 446.6 Transfer Payments 291.7 292.4 293.2 294.3 299.3 300.4 301.9 303.4 308.3 309.7 311.1 312.6 New Passenger Car & Truck Reg. 1975.9 1994.8 2006.8 2018.5 2031.5 2046.9 2059.6 2057.6 2051.0 2047.4 2043.6 2039.6 Retail Sales (Billions $) 577.8 584.8 593.1 600.8 607.3 616.3 624.4 631.6 637.1 643.7 651.1 657.8 Real Retail Sales (Billions 2009$) 520.9 525.5 530.7 535.4 538.9 543.9 548.5 552.4 554.6 557.8 561.4 564.4 18 California & Metro Forecast - January 2015

CALIFORNIA TABLES Table 6. Personal Income - Annual 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Billions Current Dollars Personal Income 1499.3 1564.3 1596.2 1537.1 1578.6 1685.6 1805.2 1856.6 1945.1 2034.4 2142.3 2270.0 2391.7 Wages & Salaries 791.5 834.4 842.9 799.5 814.5 848.7 900.5 934.7 985.9 1036.4 1089.9 1148.9 1209.4 Other Labor Income 194.5 200.6 204.8 197.1 203.3 218.9 219.2 227.9 237.9 245.4 255.6 268.5 281.7 Nonfarm 146.6 131.1 127.7 123.0 124.3 131.5 157.9 166.2 173.4 183.6 192.6 199.4 206.5 Farm 4.9 7.5 5.2 5.7 6.3 10.6 10.1 9.8 9.3 10.0 11.1 11.6 11.7 Property Income 301.3 321.5 330.3 292.9 291.2 329.0 367.2 377.3 391.5 404.2 432.9 476.5 510.7 Transfer Payments 181.6 192.1 210.3 239.9 261.0 261.8 269.7 281.2 296.5 312.7 326.7 342.1 359.1 Billions 2009 $ Personal Income 1582.7 1611.0 1595.2 1537.2 1552.8 1618.5 1701.9 1729.7 1787.7 1849.7 1920.5 1999.2 2067.2 Wages & Salaries 835.5 859.3 842.4 799.5 801.3 814.9 849.0 870.8 906.1 942.3 977.0 1011.8 1045.4 Other Labor Income 205.3 206.5 204.6 197.1 200.0 210.1 206.7 212.3 218.7 223.1 229.2 236.5 243.5 Nonfarm 154.8 135.0 127.6 123.0 122.3 126.2 148.8 154.9 159.3 166.9 172.6 175.6 178.5 Farm 5.1 7.7 5.2 5.7 6.2 10.1 9.5 9.1 8.6 9.1 10.0 10.2 10.1 Property Income 318.1 331.1 330.0 293.0 286.4 315.8 346.1 351.5 359.8 367.5 388.0 419.6 441.4 Transfer Payments 191.7 197.8 210.2 239.9 256.8 251.4 254.3 262.0 272.5 284.3 292.9 301.3 310.4 New Passenger Car & Truck Reg. 2086.8 1871.1 1401.3 1036.2 1105.8 1223.0 1529.2 1711.8 1848.0 1932.9 1999.0 2048.9 2045.4 Retail Sales (Billions $) 449.0 455.0 442.9 407.2 427.5 461.7 492.6 515.8 539.6 562.0 589.1 619.9 647.4 Real Retail Sales (Billions 2009$) 474.0 468.6 442.7 407.2 420.6 443.3 464.4 480.5 495.9 511.0 528.1 545.9 559.6 University of the Pacific Business Forecasting Center 19

CHARTS

CALIFORNIA CHARTS California Real Personal Income (percent change from one year ago) 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 10% California Real Gross State Product (percent change from one year ago) 8% 6% 4% 2% 0% -2% -4% -6% -8% 14% California Unemployment Rates (percent) 12% CA Unemployment Rate (%) 10% 8% 6% 4% 2% 0% University of the Pacific Business Forecasting Center 21

CALIFORNIA CHARTS 17,000 California Total Nonfarm Employment (Thousands) 16,500 16,000 15,500 15,000 14,500 14,000 13,500 13,000 12,500 12,000 1,100 California Construction Employment (Thouands) 1,000 900 800 700 600 500 400 300 2,000 California Manufacturing Employment (Thousands) 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 22 California & Metro Forecast - January 2015

CALIFORNIA CHARTS 700 California Trade, Transportation, and Utilities Employment (Thousands) 600 500 400 300 200 100 0 1,000 California Financial Activities Employment (Thouands) 950 900 850 800 750 700 2,900 California Professional and Business Employment (Thousands) 2,700 2,500 2,300 2,100 1,900 1,700 University of the Pacific Business Forecasting Center 23

CALIFORNIA CHARTS 2,800 California Education and Health Services Employment (Thousands) 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 650 California Information Employment (Thousands) 600 550 500 450 400 350 300 2,400 California State and Local Government Employment (Thousands) 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500 24 California & Metro Forecast - January 2015

CALIFORNIA CHARTS 300 California Federal Government Employment (Thousands) 290 280 270 260 250 240 230 220 210 200 250 California Housing Starts (Thousands) 200 150 100 50 0 2,500 California New Passenger & Light Truck Registrations (Thousands) 2,300 2,100 1,900 1,700 1,500 1,300 1,100 900 700 500 University of the Pacific Business Forecasting Center 25

METROS

Fresno MSA SHORT TERM OUTLOOK Nonfarm employment in the Fresno Metropolitan Statistical Area (MSA) will continue to grow at a steady rate of 1.8% for 2016. The first and second quarters of 2016 is expected to have a 1.9% increase in employment followed by 1.8% growth in the third and fourth quarters. The leading sectors in job growth for 2016 are predicted to be the Construction and Mining sector and the Professional and Business Services sector with 8.2% and 3.9% increases, respectively. Employment is expected to increase at a modest rate in all sectors with the exception of the Other Services sector and the Federal Government, which will suffer job losses or significantly low growth. Real personal income in Fresno is expected to grow 3.8% in 2016 to $35.3.0 Billion. 2017 is anticipated to bring additional 4.2% growth, increasing real personal income to $36.8 Billion. The Fresno MSA s population will increase 1.0% in 2016 and 0.9% in 2017. Along with the increase in employment comes an increase in the labor force in 2016 of 1.0%. The labor force is projected to maintain a 1.0% and 1.3% growth for 2017 and 2018. The unemployment rate in 2016 is expected to decrease to 10.1% from 11.5% in 2014. Unemployment is expected to continue decreasing every year for the foreseeable future, declining to an 9.4% in 2018. Fresno Real Personal Income (percent change from one year ago) Fresno Payroll Employment (Thousands) 10% 360 8% 340 6% 320 4% 300 2% 280 0% -2% 260 240-4% 220 20% 18% Fresno and California Unemployment Rates (percent) Unemployment Rate (%) CA Unemployment Rate (%) 200 180 Fresno Employment Mix Relative to California, 2012 (California = 100) 16% 160 14% 140 12% 120 10% 100 8% 80 6% 60 4% 40 2% 20 0% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 27

METRO SUMMARY - FRESNO Quarterly Outlook for Fresno January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 33.4 34.0 34.5 34.7 35.3 35.8 36.1 36.5 36.8 37.2 37.6 38.1 Pct Chg Year Ago 3.5 3.9 4.7 0.9 5.5 5.4 4.6 4.9 4.4 3.9 4.2 4.4 Wages and Salaries 14.1 14.3 14.5 14.8 15.1 15.3 15.4 15.5 15.7 15.9 16.1 16.3 Nonwage Income 19.3 19.7 20.0 19.9 20.1 20.5 20.7 20.9 21.1 21.3 21.5 21.8 Real Personal Income (2009$) 31.3 31.7 32.1 32.2 32.6 32.9 33.1 33.4 33.7 33.9 34.1 34.4 Pct Chg Year Ago 2.1 2.7 3.4-0.2 4.3 3.7 3.0 3.6 3.3 2.9 3.2 3.1 Per Capita Income (Ths.) 35.1 35.6 36.0 36.2 36.7 37.2 37.4 37.7 38.0 38.3 38.6 39.0 Real Per Capita Income (2009$) 32.8 33.2 33.5 33.6 33.9 34.2 34.3 34.5 34.8 34.9 35.1 35.3 Average Annual Wage (Ths.) 46.5 47.0 47.1 47.6 48.1 48.3 48.7 48.9 49.2 49.5 49.8 50.2 Pct Chg Year Ago -0.7 1.1 1.4-0.5 3.3 2.7 3.2 2.9 2.4 2.5 2.4 2.6 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 301.0 302.9 306.8 310.3 313.5 315.7 314.3 315.7 317.4 319.0 320.7 322.2 Pct Chg Year Ago 4.3 3.9 4.7 4.6 4.1 4.2 2.4 1.8 1.2 1.0 2.0 2.0 Manufacturing 23.3 22.7 22.9 22.8 22.7 22.5 22.6 22.7 22.7 22.8 22.9 22.9 Pct Chg Year Ago -1.6-5.7-3.0-1.8-2.3-0.5-1.2-0.5 0.0 1.1 1.0 1.0 Nonmanufacturing 277.7 280.2 283.9 287.4 290.7 293.1 291.7 293.0 294.6 296.2 297.8 299.2 Pct Chg Year Ago 4.8 4.8 5.4 5.1 4.7 4.6 2.7 1.9 1.3 1.0 2.1 2.1 Construction & Mining 13.1 13.4 13.4 13.7 14.3 14.5 14.1 14.7 15.0 15.4 15.8 16.2 Pct Chg Year Ago 9.2 9.6 7.1 6.9 9.6 8.1 5.0 7.3 4.9 6.3 12.4 9.8 Trade, Trans, & Utilities 60.1 60.8 61.5 61.8 63.5 64.0 62.9 63.4 63.6 63.9 64.2 64.4 Pct Chg Year Ago 5.0 5.2 5.5 4.9 5.7 5.3 2.3 2.5 0.3-0.2 2.1 1.6 Wholesale Trade 13.3 13.7 13.7 13.9 14.2 14.1 14.0 14.3 14.3 14.4 14.5 14.6 Retail Trade 34.8 35.1 35.5 35.5 36.3 37.1 36.3 36.4 36.5 36.6 36.7 36.8 Trans, Wrhsng, & Util 11.9 12.1 12.3 12.5 12.9 12.8 12.6 12.7 12.8 12.9 13.0 13.1 Information 3.8 3.8 3.8 3.8 3.9 3.9 3.9 3.9 4.0 4.0 3.9 3.9 Pct Chg Year Ago 1.8-1.0 0.9 0.1 2.5 2.4 0.7 2.4 1.4 1.4 1.6-0.3 Financial Activities 12.9 12.9 12.8 12.9 12.9 12.9 12.8 12.7 12.8 12.7 12.8 12.8 Pct Chg Year Ago 2.2 0.3-0.8-0.2-0.4-0.1-0.5-1.4-0.7-0.9-0.1 0.4 Prof & Business Services 29.7 30.5 32.2 33.1 33.0 33.4 33.0 33.2 33.4 33.5 33.9 34.3 Pct Chg Year Ago 8.0 11.0 15.8 13.5 11.0 9.4 2.5 0.4 1.2 0.4 2.7 3.3 Educ & Health Services 54.8 55.1 56.2 56.7 57.2 58.4 58.3 58.1 58.5 59.1 59.4 59.5 Pct Chg Year Ago 9.4 8.9 10.3 7.4 4.4 6.0 3.7 2.6 2.3 1.2 1.9 2.4 Leisure & Hospitality 28.4 28.7 29.1 29.6 29.6 29.6 30.0 30.8 31.0 31.1 31.2 31.4 Pct Chg Year Ago 3.1 2.5 2.8 4.9 4.4 3.2 3.2 4.1 4.5 5.0 4.2 1.9 Other Services 10.9 10.9 11.0 11.1 11.1 11.1 11.2 11.1 11.1 11.1 11.2 11.2 Pct Chg Year Ago 6.6 2.2 2.8 3.4 1.7 2.0 2.1-0.7-0.1 0.0-0.4 1.2 Federal Government 10.0 9.9 10.1 9.8 9.8 9.3 9.2 8.9 8.8 8.8 8.8 8.7 Pct Chg Year Ago -2.8-1.9-0.4-4.8-1.9-6.5-9.3-9.4-9.7-4.9-4.3-1.4 State & Local Government 54.1 54.2 53.8 55.0 55.4 56.0 56.4 56.3 56.4 56.5 56.7 56.9 Pct Chg Year Ago 0.6 0.5-0.3 2.1 2.5 3.3 4.9 2.4 1.8 0.9 0.4 1.1 Other Economic Indicators Population (Ths.) 953.3 955.3 957.1 958.7 960.5 962.5 964.6 966.6 968.8 970.9 973.1 975.5 Pct Chg Year Ago 0.8 0.8 0.8 0.8 0.7 0.8 0.8 0.8 0.9 0.9 0.9 0.9 Labor Force (Ths.) 449.0 448.8 447.2 446.9 449.6 450.5 448.4 451.7 453.4 454.2 455.2 456.0 Pct Chg Year Ago 0.9 0.6 0.1 0.0 0.1 0.4 0.3 1.1 0.8 0.8 1.5 1.0 Unemployment Rate (%) 13.6 13.0 12.6 12.2 12.1 11.7 11.0 11.1 10.7 10.5 10.4 10.4 Total Housing Starts (Annual Rate) 1973 1968 2168 3010 1648 1785 2411 1903 2285 2684 3037 3381 Single-Family 1768 1897 1925 2663 1469 1482 2086 1332 1622 1939 2205 2444 Multifamily 205 71 243 348 179 303 325 572 663 744 832 937 28 California & Metro Forecast - January 2015

METRO SUMMARY - FRESNO Quarterly Outlook for Fresno January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 38.6 39.1 39.6 40.2 40.9 41.5 42.1 42.7 43.2 43.8 44.3 44.8 Pct Chg Year Ago 4.9 5.1 5.4 5.7 5.9 6.1 6.1 6.0 5.8 5.5 5.3 5.1 Wages and Salaries 16.4 16.6 16.8 17.0 17.2 17.4 17.7 17.9 18.1 18.4 18.6 18.8 Nonwage Income 22.2 22.5 22.8 23.2 23.6 24.0 24.4 24.7 25.1 25.4 25.7 26.0 Real Personal Income (2009$) 34.8 35.1 35.5 35.8 36.3 36.6 36.9 37.3 37.6 37.9 38.2 38.5 Pct Chg Year Ago 3.4 3.7 3.9 4.1 4.2 4.2 4.2 4.1 3.8 3.6 3.3 3.1 Per Capita Income (Ths.) 39.5 39.9 40.3 40.8 41.3 41.8 42.3 42.7 43.2 43.6 44.0 44.4 Real Per Capita Income (2009$) 35.6 35.8 36.1 36.4 36.7 36.9 37.1 37.4 37.6 37.8 37.9 38.1 Average Annual Wage (Ths.) 50.5 50.9 51.2 51.6 52.1 52.5 53.0 53.5 54.0 54.4 54.9 55.5 Pct Chg Year Ago 2.7 2.7 2.8 2.9 3.1 3.2 3.4 3.6 3.6 3.7 3.7 3.7 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 323.5 324.9 326.4 327.9 329.2 330.5 331.9 333.2 334.4 335.6 336.9 338.0 Pct Chg Year Ago 1.9 1.9 1.8 1.8 1.7 1.7 1.7 1.6 1.6 1.6 1.5 1.4 Manufacturing 22.9 22.9 22.9 22.9 22.9 23.0 23.0 23.0 23.0 23.1 23.1 23.1 Pct Chg Year Ago 0.8 0.4 0.3 0.0 0.0 0.4 0.4 0.5 0.4 0.4 0.4 0.5 Nonmanufacturing 300.6 302.1 303.5 305.0 306.2 307.5 308.9 310.2 311.4 312.6 313.8 314.8 Pct Chg Year Ago 2.0 2.0 1.9 1.9 1.9 1.8 1.8 1.7 1.7 1.6 1.6 1.5 Construction & Mining 16.5 16.7 17.0 17.3 17.5 17.7 17.9 18.1 18.3 18.6 18.8 19.0 Pct Chg Year Ago 9.7 8.7 7.5 6.9 6.1 5.9 5.5 4.9 4.6 4.7 4.6 4.5 Trade, Trans, & Utilities 64.6 64.8 64.9 65.2 65.3 65.5 65.7 65.9 66.0 66.1 66.2 66.3 Pct Chg Year Ago 1.5 1.3 1.1 1.2 1.2 1.2 1.1 1.1 1.0 1.0 0.9 0.7 Wholesale Trade 14.7 14.8 14.9 15.0 15.1 15.1 15.2 15.3 15.4 15.4 15.5 15.6 Retail Trade 36.7 36.7 36.7 36.7 36.7 36.7 36.7 36.7 36.7 36.6 36.6 36.6 Trans, Wrhsng, & Util 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 14.0 14.1 14.1 14.2 Information 3.9 4.0 4.1 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Pct Chg Year Ago -1.8 1.0 3.8 3.6 3.9 1.3-1.0-0.5-0.7-0.7 0.2 0.2 Financial Activities 12.8 12.8 12.8 12.8 12.7 12.7 12.7 12.6 12.6 12.6 12.5 12.5 Pct Chg Year Ago 0.0 0.3 0.2 0.0-0.2-0.5-0.8-1.1-1.1-1.3-1.3-1.1 Prof & Business Services 34.6 34.9 35.2 35.7 35.9 36.2 36.4 36.7 37.0 37.1 37.3 37.5 Pct Chg Year Ago 3.6 4.1 4.0 3.9 4.0 3.7 3.3 3.0 2.9 2.6 2.3 2.0 Educ & Health Services 59.9 60.3 60.6 60.9 61.2 61.5 61.7 62.0 62.2 62.6 62.9 63.1 Pct Chg Year Ago 2.3 2.1 2.0 2.4 2.2 2.0 1.9 1.8 1.7 1.8 1.8 1.8 Leisure & Hospitality 31.5 31.5 31.6 31.6 31.7 31.9 32.1 32.3 32.4 32.6 32.7 32.9 Pct Chg Year Ago 1.7 1.3 1.0 0.7 0.6 1.2 1.6 2.1 2.2 2.2 2.1 2.0 Other Services 11.2 11.2 11.2 11.2 11.2 11.2 11.3 11.3 11.3 11.3 11.3 11.3 Pct Chg Year Ago 0.4 0.4 0.2 0.3 0.5 0.4 0.6 0.4 0.4 0.3 0.2 0.2 Federal Government 8.7 8.7 8.6 8.6 8.5 8.5 8.5 8.4 8.4 8.3 8.3 8.3 Pct Chg Year Ago -1.5-1.8-1.9-1.9-1.8-1.7-1.7-1.9-2.0-2.0-1.9-1.8 State & Local Government 57.1 57.3 57.5 57.7 58.0 58.3 58.6 58.9 59.2 59.5 59.7 60.0 Pct Chg Year Ago 1.1 1.3 1.5 1.5 1.7 1.8 1.9 2.0 2.0 2.0 1.9 1.9 Other Economic Indicators Population (Ths.) 978.0 980.6 983.2 985.9 988.7 991.7 994.7 997.8 1000.9 1004.0 1007.1 1010.2 Pct Chg Year Ago 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.2 1.2 1.2 1.2 Labor Force (Ths.) 457.3 458.6 459.8 461.0 462.6 464.1 465.7 467.1 468.5 470.1 471.6 472.8 Pct Chg Year Ago 0.9 1.0 1.0 1.1 1.2 1.2 1.3 1.3 1.3 1.3 1.3 1.2 Unemployment Rate (%) 10.3 10.2 10.0 9.8 9.7 9.7 9.6 9.5 9.5 9.5 9.4 9.4 Total Housing Starts (Annual Rate) 3600 3777 3979 4289 4372 4369 4371 4343 4334 4362 4387 4487 Single-Family 2593 2752 2956 3230 3294 3306 3258 3194 3109 3088 3051 3035 Multifamily 1008 1026 1023 1059 1078 1064 1113 1149 1226 1274 1336 1453 University of the Pacific Business Forecasting Center 29

METRO SUMMARY - FRESNO Annual Outlook for Fresno January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 26.1 27.5 28.4 28.5 29.2 31.2 33.1 34.2 35.9 37.4 39.4 41.8 44.0 Pct Chg Year Ago 5.9 5.4 3.5 0.1 2.8 6.9 6.0 3.3 5.1 4.2 5.3 6.0 5.4 Wages and Salaries 12.6 13.3 13.7 13.2 13.2 13.4 13.8 14.4 15.3 16.0 16.7 17.6 18.5 Nonwage Income 13.4 14.1 14.7 15.3 16.1 17.8 19.3 19.7 20.6 21.4 22.7 24.2 25.5 Real Personal Income (2009$) 27.5 28.3 28.4 28.5 28.8 30.0 31.2 31.8 33.0 34.0 35.3 36.8 38.0 Pct Chg Year Ago 3.2 2.8 0.5 0.2 1.1 4.3 4.0 2.0 3.7 3.1 3.8 4.2 3.4 Per Capita Income (Ths.) 29.4 30.6 31.2 30.8 31.3 33.2 34.9 35.7 37.3 38.5 40.1 42.0 43.8 Real Per Capita Income (2009$) 31.1 31.5 31.2 30.8 30.8 31.8 32.9 33.3 34.2 35.0 36.0 37.0 37.8 Average Annual Wage (Ths.) 40.5 42.3 43.8 44.3 45.4 46.3 46.9 47.1 48.5 49.7 51.1 52.8 54.7 Pct Chg Year Ago 3.8 4.5 3.6 1.2 2.5 1.9 1.4 0.3 3.0 2.5 2.8 3.3 3.7 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 310.0 314.0 311.3 295.5 288.2 288.7 292.5 305.3 314.8 319.8 325.7 331.2 336.2 Pct Chg Year Ago 2.7 1.3-0.9-5.1-2.5 0.2 1.3 4.4 3.1 1.6 1.8 1.7 1.5 Manufacturing 27.5 28.1 27.1 25.1 24.1 23.7 23.6 22.9 22.7 22.8 22.9 23.0 23.1 Pct Chg Year Ago 1.2 2.1-3.5-7.4-3.8-1.6-0.5-3.0-1.1 0.8 0.4 0.3 0.4 Nonmanufacturing 282.5 285.9 284.2 270.4 264.0 265.0 268.8 282.3 292.1 297.0 302.8 308.2 313.1 Pct Chg Year Ago 2.9 1.2-0.6-4.9-2.3 0.4 1.4 5.0 3.5 1.7 2.0 1.8 1.6 Construction & Mining 23.3 21.2 18.0 13.9 12.2 11.7 12.4 13.4 14.4 15.6 16.9 17.8 18.6 Pct Chg Year Ago 7.5-9.2-15.1-22.7-11.9-4.1 5.8 8.2 7.5 8.3 8.2 5.6 4.6 Trade, Trans, & Utilities 58.4 60.4 59.2 55.7 55.1 57.3 58.1 61.0 63.4 64.0 64.9 65.6 66.2 Pct Chg Year Ago 2.3 3.3-2.0-6.0-0.9 3.9 1.3 5.1 3.9 1.0 1.3 1.1 0.9 Wholesale Trade 13.2 13.5 12.9 11.9 11.5 12.5 12.8 13.7 14.1 14.5 14.8 15.2 15.5 Retail Trade 35.2 36.3 35.4 33.2 32.8 33.4 33.8 35.2 36.5 36.7 36.7 36.7 36.6 Trans, Wrhsng, & Util 10.0 10.6 11.0 10.6 10.8 11.4 11.5 12.2 12.8 12.9 13.3 13.8 14.1 Information 4.2 4.2 4.7 4.2 3.6 3.5 3.8 3.8 3.9 3.9 4.0 4.0 4.0 Pct Chg Year Ago -3.2-0.6 13.4-11.7-14.1-1.6 8.1 0.4 2.0 1.0 1.7 0.9-0.2 Financial Activities 15.5 15.3 14.8 13.8 13.4 13.0 12.8 12.9 12.8 12.8 12.8 12.7 12.5 Pct Chg Year Ago 5.5-1.4-3.5-6.6-2.9-3.2-0.9 0.4-0.6-0.3 0.1-0.7-1.2 Prof & Business Services 29.5 30.0 30.7 28.2 26.7 27.2 28.0 31.4 33.1 33.8 35.1 36.3 37.2 Pct Chg Year Ago 2.5 1.6 2.2-8.1-5.1 1.7 3.1 12.1 5.8 1.9 3.9 3.5 2.5 Educ & Health Services 45.0 46.6 48.4 49.1 49.2 49.4 51.1 55.7 58.0 59.1 60.4 61.6 62.7 Pct Chg Year Ago 1.7 3.7 3.7 1.6 0.1 0.5 3.4 9.0 4.2 1.9 2.2 2.0 1.8 Leisure & Hospitality 28.1 28.2 28.0 26.6 26.8 27.1 28.0 28.9 30.0 31.2 31.5 32.0 32.7 Pct Chg Year Ago 8.6 0.3-0.8-4.7 0.6 1.2 3.3 3.3 3.7 3.9 1.2 1.4 2.1 Other Services 10.9 11.0 10.6 10.2 10.0 10.1 10.6 11.0 11.1 11.2 11.2 11.3 11.3 Pct Chg Year Ago 0.5 0.7-3.0-4.4-1.9 1.4 4.9 3.7 1.3 0.2 0.3 0.5 0.2 Federal Government 9.8 9.5 9.7 9.8 10.7 10.2 10.2 9.9 9.3 8.8 8.6 8.5 8.3 Pct Chg Year Ago -0.6-2.1 2.1 0.9 8.7-4.8 0.3-2.5-6.8-5.0-1.8-1.8-1.9 State & Local Government 57.8 59.6 60.2 58.9 56.4 55.5 53.9 54.3 56.0 56.6 57.4 58.5 59.6 Pct Chg Year Ago 1.1 3.1 1.0-2.1-4.3-1.5-3.0 0.7 3.3 1.1 1.4 1.8 2.0 Other Economic Indicators Population (Ths.) 885.4 897.7 911.0 922.9 933.4 941.7 948.6 956.1 963.6 972.1 981.9 993.2 1005.6 Pct Chg Year Ago 1.3 1.4 1.5 1.3 1.1 0.9 0.7 0.8 0.8 0.9 1.0 0.9 1.2 Labor Force (Ths.) 411.6 419.5 430.2 435.5 444.4 447.5 446.3 448.0 450.1 454.7 459.2 464.9 470.7 Pct Chg Year Ago 1.0 1.9 2.6 1.2 2.1 0.7-0.3 0.4 0.5 1.0 1.0 1.2 1.3 Unemployment Rate (%) 8.0 8.5 10.5 15.0 16.7 16.4 15.0 12.9 11.5 10.5 10.1 9.6 9.4 Total Housing Starts 5290 4491 2697 2271 2179 1893 1899 2280 1937 2847 3912 4364 4393 Single-Family 4219 3649 2284 2169 1902 1665 1588 2063 1592 2053 2883 3263 3071 Multifamily 1071 842 413 102 278 228 311 217 345 794 1029 1101 1322 30 California & Metro Forecast - January 2015

Merced MSA SHORT TERM OUTLOOK Merced MSA s employment will increase by 2.7% in 2015 and is expected to decrease in 2016 to 2.0% growth. Job growth is expected to drop slightly in the fourth quarter of 2015 to a 2.1% increase, and is expected to increase with a 2.0% growth in the first quarter of 2017. The sectors with the strongest growth in jobs for 2016 are the Construction and Mining sector and the Professional and Business Services sector with job increases of 8.5% and 5.3%, respectively. Growth is expected in all sectors for Merced in 2015, with the exception of jobs in the Federal Government which is expected to decrease by 0.9%. Loss in growth is also seen in the Manufacturing sector which is predicted to see 5.8% growth in 2015 and is expected to see 0.5% in 2016. Real personal income in Merced is expected to increase to $8.6 billion dollars in 2016, a 3.5% increase from 2015 real personal income of $8.3 Billion. This increase in income is expected to continue until it reaches $9.3 Billion in 2018. The population in Merced is expected to raise 1.1% in 2015 and 1.2% in 2016. The labor force growth is expected to jump to a 1.5% growth in 2015 from a 0.3% growth in 2014 and is expected to maintain above 1.5% reaching 2.0% growth in 2018. Despite the increase in the labor force, the unemployment rate will still decrease to 12.1% from 13.2% in 2014. The unemployment rate will continue to decrease reaching 11.3% in 2016 and 10.8% in 2018. Merced Real Personal Income (percent change from one year ago) Merced Payroll Employment (Thousands) 20% 70 15% 65 10% 60 5% 55 0% 50-5% 45-10% 40 20% 18% Merced and California Unemployment Rates (percent) Unemployment Rate (%) CA Unemployment Rate (%) 200 180 Merced Employment Mix Relative to California, 2012 (California = 100) 16% 160 14% 140 12% 120 10% 100 8% 80 6% 60 4% 40 2% 0% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 31

METRO SUMMARY - MERCED Quarterly Outlook for Merced January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 8.2 8.4 8.5 8.5 8.6 8.7 8.8 8.9 9.0 9.1 9.2 9.3 Pct Chg Year Ago 1.6 2.5 3.0 0.5 4.3 4.2 4.4 4.8 5.2 4.5 4.3 4.0 Wages and Salaries 2.7 2.7 2.7 2.8 2.8 2.8 2.9 2.9 3.0 3.0 3.0 3.1 Nonwage Income 5.6 5.6 5.7 5.7 5.8 5.9 5.9 6.0 6.1 6.1 6.2 6.2 Real Personal Income (2009$) 7.7 7.8 7.9 7.9 7.9 8.0 8.1 8.2 8.3 8.3 8.4 8.4 Pct Chg Year Ago 0.2 1.3 1.7-0.6 3.1 2.6 2.9 3.5 4.0 3.6 3.3 2.7 Per Capita Income (Ths.) 31.3 31.8 32.1 32.3 32.4 32.8 33.1 33.4 33.6 33.8 34.1 34.3 Real Per Capita Income (2009$) 29.3 29.7 29.8 29.9 29.9 30.1 30.3 30.6 30.8 30.8 30.9 31.0 Average Annual Wage (Ths.) 44.4 45.1 45.0 45.6 46.0 46.5 47.0 47.4 47.6 47.8 48.1 48.4 Pct Chg Year Ago -1.4 1.1 0.8 0.3 3.6 3.0 4.3 3.8 3.5 2.9 2.4 2.2 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 59.7 60.0 60.2 61.3 60.6 60.6 61.0 61.8 62.1 62.4 62.8 63.1 Pct Chg Year Ago 2.5 2.6 2.1 3.3 1.5 1.0 1.3 0.8 2.6 3.1 3.0 2.2 Manufacturing 8.7 8.5 8.7 9.1 9.1 9.2 9.5 9.9 9.9 9.9 10.0 10.0 Pct Chg Year Ago 4.4 0.8 1.9 8.6 4.1 8.4 10.1 8.8 9.6 7.8 4.5 1.2 Nonmanufacturing 51.0 51.5 51.5 52.2 51.5 51.3 51.4 51.9 52.2 52.5 52.9 53.1 Pct Chg Year Ago 2.2 2.9 2.2 2.4 1.0-0.2-0.2-0.6 1.3 2.3 2.8 2.3 Construction & Mining 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.8 1.8 1.8 1.9 Pct Chg Year Ago -2.2-1.9 4.1 2.3-0.1-0.4 2.3 7.5 10.8 11.9 9.0 7.2 Trade, Trans, & Utilities 12.1 12.3 12.2 12.1 11.7 11.6 11.5 11.8 11.9 11.9 12.0 12.1 Pct Chg Year Ago 0.9 2.5-0.9 0.8-2.9-5.4-5.7-2.3 1.3 2.6 4.9 1.9 Wholesale Trade 2.1 2.2 2.1 2.3 2.3 2.2 2.1 2.3 2.3 2.3 2.3 2.3 Retail Trade 7.5 7.6 7.5 7.5 7.5 7.5 7.4 7.6 7.6 7.7 7.7 7.7 Trans, Wrhsng, & Util 2.4 2.5 2.5 2.3 2.0 2.0 1.9 2.0 2.0 2.0 2.0 2.0 Information 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Pct Chg Year Ago 0.4 0.0-0.1 0.1 0.2-0.5-8.8-5.2-2.0-5.7 1.9-0.4 Financial Activities 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Pct Chg Year Ago -0.1-6.2-6.3 0.3-0.1-0.4 0.1-1.0 0.5 2.2 1.7 1.2 Prof & Business Services 4.3 4.4 4.4 4.5 4.5 4.5 4.5 4.4 4.4 4.5 4.6 4.6 Pct Chg Year Ago 0.8 3.3 2.6 3.0 3.0 0.3 1.8-1.6-1.3 0.5 2.0 3.8 Educ & Health Services 8.3 8.4 8.3 8.3 8.3 8.4 8.5 8.6 8.6 8.7 8.8 8.8 Pct Chg Year Ago 8.2 9.9 6.3 0.6-0.6-0.4 2.2 3.3 4.3 4.1 3.5 2.9 Leisure & Hospitality 4.9 5.0 5.2 5.2 5.3 5.3 5.4 5.4 5.4 5.5 5.5 5.5 Pct Chg Year Ago 5.7 6.7 9.1 7.7 8.1 6.9 4.5 2.5 2.3 2.1 2.0 2.8 Other Services 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 Pct Chg Year Ago -2.4 0.4 0.0 0.1 4.9-0.3 0.1-0.9-1.8 1.2 1.4 2.2 Federal Government 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Pct Chg Year Ago -4.2-4.1-9.1-4.3 0.1-0.3-0.1-3.6-4.5-3.4 0.0-0.5 State & Local Government 15.8 15.7 15.9 16.4 16.1 15.9 16.0 16.0 16.1 16.1 16.2 16.3 Pct Chg Year Ago 1.1 0.5 1.8 3.4 2.0 1.6 0.5-2.5 0.0 1.1 1.1 1.5 Other Economic Indicators Population (Ths.) 262.8 263.2 263.7 264.4 265.2 265.6 266.2 267.0 267.9 268.3 269.1 269.9 Pct Chg Year Ago 0.7 0.6 0.7 0.8 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 Labor Force (Ths.) 112.0 112.2 112.7 113.4 113.6 112.7 112.4 112.9 113.7 114.3 114.9 115.4 Pct Chg Year Ago 0.3 0.6 0.8 1.4 1.5 0.5-0.3-0.4 0.1 1.4 2.2 2.2 Unemployment Rate (%) 15.6 14.9 14.3 13.8 13.6 13.4 13.1 12.8 12.6 12.2 12.0 11.8 Total Housing Starts (Annual Rate) 208 106 115 96 128 161 110 236 287 356 431 529 Single-Family 94 92 111 96 112 127 91 226 267 324 386 467 Multifamily 113 14 5 0 16 34 19 10 20 32 45 62 32 California & Metro Forecast - April 2011

METRO SUMMARY - MERCED Quarterly Outlook for Merced January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 9.4 9.6 9.7 9.8 10.0 10.1 10.3 10.4 10.5 10.7 10.8 10.9 Pct Chg Year Ago 4.5 4.9 5.1 5.4 5.6 5.8 6.0 5.8 5.7 5.5 5.3 5.3 Wages and Salaries 3.1 3.1 3.2 3.2 3.2 3.3 3.3 3.4 3.4 3.5 3.5 3.5 Nonwage Income 6.3 6.4 6.5 6.6 6.7 6.8 6.9 7.0 7.1 7.2 7.3 7.4 Real Personal Income (2009$) 8.5 8.6 8.7 8.7 8.8 8.9 9.0 9.1 9.2 9.2 9.3 9.4 Pct Chg Year Ago 3.0 3.4 3.6 3.9 3.9 3.9 4.1 3.9 3.7 3.6 3.4 3.3 Per Capita Income (Ths.) 34.7 35.0 35.3 35.7 36.1 36.5 36.9 37.2 37.6 38.0 38.3 38.7 Real Per Capita Income (2009$) 31.3 31.4 31.6 31.8 32.0 32.2 32.4 32.6 32.7 32.9 33.1 33.2 Average Annual Wage (Ths.) 48.7 49.0 49.3 49.6 49.9 50.3 50.7 51.0 51.4 51.9 52.4 52.8 Pct Chg Year Ago 2.2 2.4 2.4 2.4 2.5 2.7 3.0 3.0 3.1 3.1 3.2 3.5 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 63.4 63.7 64.0 64.3 64.6 65.0 65.3 65.6 65.8 66.1 66.4 66.6 Pct Chg Year Ago 2.1 2.0 1.9 1.9 2.0 2.0 2.0 2.0 1.8 1.7 1.6 1.6 Manufacturing 10.0 10.0 10.0 10.0 10.0 10.0 10.1 10.1 10.1 10.1 10.1 10.1 Pct Chg Year Ago 0.8 0.5 0.4 0.1 0.0 0.4 0.5 0.6 0.4 0.4 0.4 0.4 Nonmanufacturing 53.4 53.7 54.0 54.3 54.6 54.9 55.2 55.5 55.8 56.0 56.3 56.5 Pct Chg Year Ago 2.3 2.3 2.2 2.2 2.3 2.3 2.2 2.2 2.1 2.0 1.9 1.8 Construction & Mining 1.9 1.9 2.0 2.0 2.1 2.1 2.2 2.2 2.3 2.3 2.3 2.3 Pct Chg Year Ago 7.5 8.2 8.6 9.5 9.9 9.9 9.4 8.7 8.2 7.4 6.4 5.4 Trade, Trans, & Utilities 12.1 12.1 12.2 12.2 12.2 12.2 12.3 12.3 12.3 12.3 12.4 12.4 Pct Chg Year Ago 1.8 1.5 1.1 1.0 1.1 1.0 1.0 1.0 0.8 0.8 0.7 0.7 Wholesale Trade 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.4 2.4 2.4 2.4 Retail Trade 7.7 7.7 7.7 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 Trans, Wrhsng, & Util 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.2 2.2 2.2 2.2 2.2 Information 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Pct Chg Year Ago -2.9 1.4 4.4 4.2 5.0 1.5-0.5 0.1-0.2 0.0 0.1 0.4 Financial Activities 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Pct Chg Year Ago 0.8 1.2 1.2 0.9 0.4-0.4-1.1-1.9-2.0-2.1-1.9-1.5 Prof & Business Services 4.7 4.7 4.8 4.9 4.9 4.9 5.0 5.0 5.0 5.1 5.1 5.1 Pct Chg Year Ago 5.4 5.4 5.1 5.2 5.2 4.7 4.2 3.1 2.7 2.2 1.6 1.8 Educ & Health Services 8.9 9.0 9.0 9.1 9.1 9.2 9.2 9.3 9.3 9.3 9.4 9.4 Pct Chg Year Ago 2.6 2.5 2.4 2.7 2.7 2.3 2.2 2.3 2.0 2.0 2.1 2.0 Leisure & Hospitality 5.6 5.6 5.6 5.6 5.6 5.6 5.7 5.7 5.7 5.8 5.8 5.8 Pct Chg Year Ago 2.2 1.8 1.3 0.9 1.1 1.4 2.0 2.5 2.3 2.3 2.1 1.9 Other Services 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.5 1.5 1.5 Pct Chg Year Ago 1.7 1.6 1.3 1.0 1.2 1.1 1.1 0.9 0.8 0.7 0.6 1.1 Federal Government 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Pct Chg Year Ago -0.6-0.9-1.0-1.1-1.0-0.9-0.9-1.0-1.1-1.2-1.1-1.0 State & Local Government 16.3 16.4 16.5 16.6 16.7 16.8 16.9 17.0 17.1 17.2 17.3 17.4 Pct Chg Year Ago 1.5 1.7 1.9 2.0 2.2 2.3 2.5 2.6 2.7 2.7 2.6 2.5 Other Economic Indicators Population (Ths.) 270.9 271.5 272.3 273.3 274.3 275.0 275.9 277 278.18 278.94 279.96 281.15 Pct Chg Year Ago 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.5 1.5 Labor Force (Ths.) 115.9 116.4 116.9 117.3 117.9 118.5 119.1 119.6 120.2 120.8 121.4 122.0 Pct Chg Year Ago 2.0 1.8 1.7 1.7 1.7 1.8 1.9 2.0 2.0 2.0 2.0 2.0 Unemployment Rate (%) 11.6 11.4 11.2 11.1 11.0 11.0 10.9 10.9 10.8 10.8 10.7 10.7 Total Housing Starts (Annual Rate) 662 788 926 1023 1065 1069 1070 1073 1080 1078 1076 1075 Single-Family 585 701 828 924 966 975 973 975 984 986 985 982 Multifamily 77 88 97 99 99 94 97 98 96 92 91 93 University of the Pacific Business Forecasting Center 33

METRO SUMMARY - MERCED Annual Outlook for Merced January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 6.2 6.9 6.8 6.8 7.1 7.8 8.2 8.4 8.8 9.2 9.6 10.2 10.7 Pct Chg Year Ago 3.7 12.5-1.3-0.8 5.0 9.9 5.5 1.9 4.4 4.5 5.0 5.8 5.4 Wages and Salaries 2.4 2.5 2.6 2.5 2.5 2.5 2.7 2.7 2.9 3.0 3.2 3.3 3.5 Nonwage Income 3.8 4.4 4.3 4.2 4.6 5.3 5.6 5.7 5.9 6.1 6.5 6.9 7.3 Real Personal Income (2009$) 6.5 7.1 6.8 6.8 7.0 7.5 7.8 7.8 8.1 8.3 8.6 9.0 9.3 Pct Chg Year Ago 1.0 9.8-4.2-0.7 3.3 7.3 3.6 0.7 3.0 3.4 3.5 3.9 3.5 Per Capita Income (Ths.) 25.0 27.8 27.2 26.8 27.7 30.1 31.5 31.9 32.9 34.0 35.2 36.7 38.1 Real Per Capita Income (2009$) 26.4 28.6 27.2 26.8 27.3 28.9 29.7 29.7 30.3 30.9 31.5 32.3 33.0 Average Annual Wage (Ths.) 39.5 41.1 43.1 44.2 43.8 43.5 45.0 45.1 46.7 48.0 49.1 50.5 52.1 Pct Chg Year Ago 7.0 3.8 5.0 2.5-0.9-0.7 3.5 0.2 3.6 2.8 2.4 2.8 3.2 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 59.2 60.1 59.3 57.1 57.8 58.0 58.8 60.3 61.0 62.6 63.9 65.1 66.2 Pct Chg Year Ago -0.1 1.6-1.3-3.8 1.2 0.4 1.4 2.6 1.1 2.7 2.0 2.0 1.7 Manufacturing 9.7 9.3 9.3 8.6 8.3 8.2 8.4 8.7 9.4 10.0 10.0 10.0 10.1 Pct Chg Year Ago -11.8-4.4 0.3-8.0-3.0-1.0 2.2 3.9 7.8 5.8 0.5 0.4 0.4 Nonmanufacturing 49.5 50.8 50.0 48.5 49.4 49.7 50.3 51.6 51.5 52.7 53.9 55.1 56.1 Pct Chg Year Ago 2.7 2.8-1.6-3.0 1.9 0.6 1.2 2.4 0.0 2.2 2.2 2.3 1.9 Construction & Mining 3.6 3.2 2.4 1.6 1.6 1.5 1.6 1.6 1.7 1.8 2.0 2.2 2.3 Pct Chg Year Ago 1.4-12.1-24.9-32.0-2.6-2.2 4.7 0.6 2.3 9.7 8.5 9.5 6.8 Trade, Trans, & Utilities 11.3 11.9 11.7 11.5 11.4 11.8 12.1 12.2 11.7 12.0 12.1 12.3 12.4 Pct Chg Year Ago 4.2 5.4-2.2-1.5-1.1 3.4 2.5 0.8-4.1 2.7 1.3 1.0 0.8 Wholesale Trade 1.8 1.9 1.8 2.0 2.0 2.0 2.2 2.2 2.2 2.3 2.3 2.3 2.4 Retail Trade 7.5 7.8 7.6 7.3 7.2 7.4 7.4 7.5 7.5 7.7 7.7 7.8 7.8 Trans, Wrhsng, & Util 2.1 2.3 2.3 2.2 2.2 2.4 2.4 2.4 1.9 2.0 2.1 2.1 2.2 Information 0.8 0.7 0.7 0.6 0.6 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Pct Chg Year Ago -18.4-7.1-11.9-5.8 1.4-29.6-7.2 0.1-3.6-1.6 1.8 1.5 0.1 Financial Activities 1.9 1.9 1.8 1.6 1.6 1.5 1.6 1.5 1.5 1.5 1.5 1.5 1.5 Pct Chg Year Ago 5.0-2.8-4.6-12.5 1.4-3.7 0.7-3.1-0.4 1.4 1.0-0.7-1.9 Prof & Business Services 4.4 4.6 4.4 4.1 4.2 4.4 4.3 4.4 4.5 4.5 4.8 5.0 5.1 Pct Chg Year Ago 11.4 5.4-4.4-7.7 3.6 4.6-2.3 2.4 0.9 1.3 5.3 4.3 2.1 Educ & Health Services 6.4 6.8 7.0 7.2 7.5 7.6 7.9 8.3 8.4 8.7 9.0 9.2 9.4 Pct Chg Year Ago 0.0 5.5 4.1 2.6 3.8 1.6 3.3 6.3 1.1 3.7 2.6 2.4 2.0 Leisure & Hospitality 4.8 5.0 5.0 4.7 4.5 4.6 4.7 5.1 5.4 5.5 5.6 5.7 5.8 Pct Chg Year Ago 1.2 4.3 0.7-6.2-3.6 2.6 2.3 7.3 5.5 2.3 1.6 1.8 2.2 Other Services 1.5 1.6 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.5 Pct Chg Year Ago -10.4 2.2-6.2-6.8-0.2 1.3 0.8-0.5 1.0 0.8 1.4 1.1 0.8 Federal Government 0.7 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Pct Chg Year Ago -7.0 9.6 1.2-0.1 5.1-5.9-5.1-5.4-1.0-2.1-0.9-0.9-1.1 State & Local Government 14.0 14.4 14.8 15.1 15.9 15.6 15.7 15.9 16.0 16.2 16.4 16.8 17.3 Pct Chg Year Ago 4.9 3.1 2.6 2.0 5.2-1.3 0.3 1.7 0.4 0.9 1.8 2.4 2.6 Other Economic Indicators Population (Ths.) 245.8 248.7 250.7 253.0 256.7 259.8 261.8 263.6 266.0 268.8 272.0 275.6 279.6 Pct Chg Year Ago 1.2 1.2 0.8 0.9 1.5 1.2 0.8 0.7 0.9 1.1 1.2 1.3 1.4 Labor Force (Ths.) 98.3 100.0 102.3 105.7 110.0 111.0 111.7 112.6 112.9 114.6 116.6 118.8 121.1 Pct Chg Year Ago -0.7 1.8 2.3 3.3 4.1 1.0 0.6 0.8 0.3 1.5 1.8 1.8 2.0 Unemployment Rate (%) 9.5 10.1 12.7 16.9 18.7 18.3 16.9 14.7 13.2 12.1 11.3 10.9 10.8 Total Housing Starts 2450 855 363 120 119 126 180 131 159 401 850 1069 1077 Single-Family 2379 837 283 119 116 99 77 98 139 361 759 972 984 Multifamily 71 19 81 2 3 28 103 33 20 40 90 97 93 34 California & Metro Forecast - January 2015

Modesto MSA SHORT TERM OUTLOOK Employment in the Modesto MSA is expected to grow 1.6% in 2016, after a 3.3% positive growth in 2015. Job growth is expected to reach 2.1% growth the last quarter in 2015 and then see an average of 1.6% for all four quarters of 2016. Through 2014-2016 the Construction and Mining sector sees the most dramatic change, increasing from 1.2% in 2014 to 8.6% in 2015 and, finally, 6.6% in 2016. In 2015 the Professional and Business sector will see a high 7.1% growth in employment. Moderate growth is expected in all sectors with the exception of the Other Services sector and the Federal Government. Real personal income is expected to increase at a healthy rate of 3.9% in 2015 to $18.7 Billion. It is predicted that real personal income will increase 4.0% for 2017 and slightly decrease in 2018 with a growth of 3.4%. Throughout the foreseeable future the average annual wage will continue to grow to 3.0% in 2018. Population in Modesto will increase in 2016 by 1.1% and will continue to increase at a slight rate for the years to come. Modesto s labor force is expected to grow at a modest rate of 1.6% for 2016 and it is anticipated to steadily decline through the foreseeable forecast, reaching a 1.1% growth in 2018. Unemployment in Modesto will decline from 10.4% in 2015 to 9.8% in 2016. It is projected that unemployment will continue its steady decrease until it reaches 9.1% in 2018. Modesto Real Personal Income (percent change from one year ago) Modesto Payroll Employment (Thousands) 8% 180 170 6% 160 4% 150 2% 140 0% 130 120-2% 110-4% 100 19% 17% 15% Modesto and California Unemployment Rates (percent) Unemployment Rate (%) CA Unemployment Rate (%) 200 180 160 140 Modesto Employment Mix Relative to California, 2012 (California = 100) 13% 120 11% 100 9% 80 60 7% 40 5% 20 3% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 35

METRO SUMMARY - MODESTO Quarterly Outlook for Modesto January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 18.4 18.6 18.8 18.9 19.2 19.5 19.7 20.0 20.2 20.4 20.7 20.9 Pct Chg Year Ago 2.9 3.4 3.8 0.2 4.5 4.6 4.6 5.9 5.6 5.0 5.0 4.5 Wages and Salaries 7.2 7.3 7.4 7.5 7.6 7.7 7.8 8.0 8.1 8.2 8.3 8.4 Nonwage Income 11.1 11.3 11.5 11.4 11.6 11.8 11.9 12.0 12.1 12.2 12.4 12.5 Real Personal Income (2009$) 17.2 17.4 17.5 17.5 17.7 17.9 18.0 18.3 18.5 18.6 18.8 18.9 Pct Chg Year Ago 1.5 2.2 2.5-0.8 3.3 2.9 3.0 4.5 4.4 4.1 3.9 3.2 Per Capita Income (Ths.) 35.0 35.4 35.8 35.8 36.2 36.7 37.0 37.6 37.9 38.2 38.6 38.9 Real Per Capita Income (2009$) 32.7 33.1 33.3 33.2 33.5 33.7 34.0 34.4 34.7 34.8 35.0 35.2 Average Annual Wage (Ths.) 46.3 46.7 46.8 47.1 47.7 48.1 48.6 49.1 49.3 49.7 50.0 50.4 Pct Chg Year Ago -1.0 0.7 0.9-0.8 2.9 3.0 3.8 4.2 3.5 3.3 2.9 2.7 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 155.4 156.0 156.7 157.6 158.3 158.8 159.5 162.6 163.9 164.7 165.4 166.0 Pct Chg Year Ago 3.0 3.0 3.0 2.5 1.9 1.8 1.8 3.1 3.5 3.7 3.7 2.1 Manufacturing 20.8 20.7 20.7 20.3 20.3 20.8 20.8 21.1 21.3 21.4 21.4 21.5 Pct Chg Year Ago -0.5-0.8-0.1-0.7-2.6 0.3 0.7 3.7 5.1 2.7 2.8 1.8 Nonmanufacturing 134.6 135.3 136.1 137.3 138.0 138.0 138.7 141.5 142.6 143.3 144.0 144.6 Pct Chg Year Ago 3.6 3.6 3.5 3.0 2.6 2.0 1.9 3.1 3.3 3.9 3.8 2.2 Construction & Mining 7.1 6.9 7.1 6.7 6.8 6.9 7.0 7.3 7.4 7.6 7.7 7.8 Pct Chg Year Ago 19.2 13.1 9.5 1.1-3.7-0.3-0.2 8.9 9.0 9.5 9.4 6.7 Trade, Trans, & Utilities 34.3 34.6 34.7 35.6 35.9 35.8 35.8 36.2 36.3 36.4 36.6 36.7 Pct Chg Year Ago 4.4 4.2 3.0 4.6 4.5 3.6 3.2 1.7 1.1 1.7 2.1 1.5 Wholesale Trade 5.8 5.9 5.9 5.9 6.0 6.0 6.0 6.0 6.0 6.1 6.1 6.2 Retail Trade 21.5 21.7 21.7 22.1 22.1 22.1 22.0 22.3 22.3 22.4 22.4 22.5 Trans, Wrhsng, & Util 7.0 7.0 7.1 7.6 7.7 7.8 7.9 7.9 8.0 8.0 8.0 8.1 Information 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.9 0.9 0.9 0.9 0.9 Pct Chg Year Ago -13.0-3.1-3.7-0.4-3.8-10.9-7.4-4.1 0.6 6.9 2.2 0.5 Financial Activities 5.5 5.4 5.4 5.4 5.4 5.3 5.3 5.3 5.3 5.3 5.3 5.3 Pct Chg Year Ago 1.1 0.2-0.7-0.3-1.3-2.4-3.0-2.7-1.3 0.7 1.4 1.0 Prof & Business Services 13.0 13.2 13.3 13.4 13.4 13.4 13.6 14.1 14.3 14.5 14.7 14.8 Pct Chg Year Ago 2.9 2.9 4.0 3.9 2.5 1.8 2.9 4.7 7.2 8.1 7.6 5.5 Educ & Health Services 28.1 28.3 28.4 28.5 28.6 28.7 29.0 29.4 29.6 29.8 29.9 30.0 Pct Chg Year Ago 4.4 4.8 5.1 1.9 1.5 1.5 2.2 3.1 3.7 3.9 3.1 2.0 Leisure & Hospitality 15.3 15.7 15.8 16.0 16.1 16.1 16.3 16.7 16.9 17.0 17.0 17.1 Pct Chg Year Ago 3.3 5.8 6.1 6.6 5.5 2.6 2.9 3.8 4.9 5.3 4.7 2.6 Other Services 4.8 5.0 5.0 5.1 5.4 5.2 5.2 5.1 5.2 5.2 5.2 5.2 Pct Chg Year Ago 0.4 2.3 2.0 6.0 10.8 4.1 3.5-0.1-3.9-0.6-0.1 0.5 Federal Government 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 Pct Chg Year Ago -0.4-7.2-10.9-8.0-11.3-3.8 0.1 1.5 1.9 0.4-0.4-1.2 State & Local Government 24.6 24.5 24.7 24.7 24.9 24.9 24.8 25.8 25.8 25.9 25.9 26.0 Pct Chg Year Ago 0.4 0.0 1.2 0.5 1.1 1.8 0.5 4.3 3.9 3.9 4.4 0.8 Other Economic Indicators Population (Ths.) 524.5 525.5 526.6 527.8 529.1 530.4 531.5 532.6 533.7 534.7 535.9 537.2 Pct Chg Year Ago 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.9 Labor Force (Ths.) 239.6 239.0 237.5 236.8 237.5 236.8 234.7 238.2 239.4 240.2 241.2 242.1 Pct Chg Year Ago -0.2-0.4-0.9-1.1-0.9-0.9-1.2 0.6 0.8 1.4 2.8 1.7 Unemployment Rate (%) 13.7 13.1 12.8 12.4 12.1 11.8 11.0 10.8 10.5 10.3 10.2 10.2 Total Housing Starts (Annual Rate) 329 272 173 295 309 386 325 362 421 635 923 1282 Single-Family 258 247 165 263 294 379 321 353 395 577 781 1044 Multifamily 71 25 8 32 15 8 4 9 26 58 142 238 36 California & Metro Forecast - January 2015

METRO SUMMARY - MODESTO Quarterly Outlook for Modesto January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 21.2 21.5 21.8 22.1 22.4 22.8 23.1 23.4 23.7 24.0 24.3 24.6 Pct Chg Year Ago 4.9 5.1 5.3 5.6 5.7 5.9 6.0 5.9 5.7 5.5 5.2 5.1 Wages and Salaries 8.5 8.6 8.7 8.8 8.9 9.1 9.2 9.3 9.5 9.6 9.7 9.8 Nonwage Income 12.7 12.9 13.1 13.3 13.5 13.7 13.9 14.1 14.3 14.4 14.6 14.8 Real Personal Income (2009$) 19.1 19.3 19.5 19.7 19.9 20.1 20.3 20.5 20.7 20.8 21.0 21.1 Pct Chg Year Ago 3.4 3.7 3.9 4.1 4.1 4.0 4.1 3.9 3.7 3.6 3.3 3.1 Per Capita Income (Ths.) 39.4 39.8 40.2 40.6 41.2 41.6 42.1 42.5 43.0 43.4 43.8 44.2 Real Per Capita Income (2009$) 35.5 35.7 35.9 36.2 36.5 36.7 37.0 37.2 37.4 37.6 37.7 37.9 Average Annual Wage (Ths.) 50.8 51.2 51.6 52.0 52.6 53.0 53.6 54.1 54.7 55.2 55.7 56.2 Pct Chg Year Ago 3.0 3.0 3.1 3.2 3.4 3.6 3.9 4.1 4.1 4.1 3.9 3.9 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 166.7 167.3 168.0 168.7 169.4 170.0 170.8 171.4 172.0 172.6 173.2 173.7 Pct Chg Year Ago 1.7 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.4 1.3 Manufacturing 21.5 21.4 21.4 21.4 21.5 21.5 21.5 21.5 21.5 21.6 21.6 21.6 Pct Chg Year Ago 0.7 0.4 0.2-0.1 0.0 0.3 0.4 0.4 0.3 0.3 0.2 0.3 Nonmanufacturing 145.2 145.9 146.6 147.3 147.9 148.5 149.2 149.9 150.5 151.0 151.6 152.1 Pct Chg Year Ago 1.8 1.8 1.8 1.9 1.9 1.8 1.8 1.8 1.7 1.7 1.6 1.5 Construction & Mining 7.9 8.1 8.2 8.3 8.5 8.7 8.9 9.0 9.2 9.3 9.5 9.6 Pct Chg Year Ago 7.0 6.6 6.4 6.4 7.2 7.7 8.1 8.3 8.0 7.5 6.8 6.1 Trade, Trans, & Utilities 36.8 36.9 37.0 37.1 37.2 37.3 37.4 37.5 37.6 37.6 37.7 37.7 Pct Chg Year Ago 1.4 1.3 1.1 1.1 1.1 1.0 1.0 1.0 0.9 0.9 0.8 0.6 Wholesale Trade 6.2 6.2 6.3 6.3 6.3 6.4 6.4 6.4 6.5 6.5 6.5 6.6 Retail Trade 22.5 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.4 22.3 22.3 22.3 Trans, Wrhsng, & Util 8.2 8.2 8.3 8.4 8.5 8.5 8.6 8.7 8.7 8.8 8.8 8.9 Information 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Pct Chg Year Ago -2.1 2.2 5.3 5.0 5.5 2.1-0.1 0.3 0.1 0.4 0.6 1.1 Financial Activities 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.2 5.2 5.2 Pct Chg Year Ago 0.5 0.4 0.3 0.0-0.3-0.3-0.7-1.1-1.1-1.4-1.3-1.2 Prof & Business Services 15.0 15.1 15.3 15.5 15.6 15.6 15.7 15.8 15.9 15.9 16.0 16.0 Pct Chg Year Ago 4.5 4.3 4.2 4.1 3.9 3.4 2.8 2.2 2.0 1.8 1.7 1.6 Educ & Health Services 30.1 30.3 30.4 30.6 30.7 30.8 30.9 31.0 31.0 31.2 31.3 31.4 Pct Chg Year Ago 1.7 1.5 1.6 2.0 1.8 1.6 1.5 1.4 1.3 1.3 1.4 1.4 Leisure & Hospitality 17.2 17.2 17.2 17.3 17.3 17.4 17.5 17.6 17.7 17.7 17.8 17.9 Pct Chg Year Ago 1.3 1.2 1.0 0.9 0.9 1.3 1.7 1.9 1.9 2.0 1.8 1.8 Other Services 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Pct Chg Year Ago 0.1 0.2 0.2 0.5 0.6 0.6 0.5 0.3 0.2 0.1 0.2 0.1 Federal Government 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 Pct Chg Year Ago -1.3-1.6-1.7-1.7-1.7-1.5-1.5-1.6-1.7-1.8-1.7-1.6 State & Local Government 26.1 26.2 26.3 26.4 26.5 26.6 26.8 26.9 27.0 27.2 27.3 27.4 Pct Chg Year Ago 0.9 1.1 1.4 1.4 1.6 1.7 1.8 2.0 2.1 2.1 2.0 1.9 Other Economic Indicators Population (Ths.) 538.7 540.3 541.9 543.5 545.1 546.8 548.4 550.1 551.8 553.5 555.2 556.9 Pct Chg Year Ago 1.0 1.1 1.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 Labor Force (Ths.) 243.1 244.1 245.1 245.9 246.8 247.6 248.4 249.1 250.0 250.8 251.5 252.2 Pct Chg Year Ago 1.6 1.6 1.6 1.6 1.5 1.4 1.3 1.3 1.3 1.3 1.3 1.2 Unemployment Rate (%) 10.2 10.1 10.0 9.8 9.7 9.6 9.5 9.4 9.4 9.4 9.4 9.4 Total Housing Starts (Annual Rate) 1633 1962 2278 2615 2820 2913 2964 2982 2943 2952 2944 2966 Single-Family 1324 1607 1901 2203 2394 2500 2535 2543 2518 2546 2542 2553 Multifamily 309 354 378 412 427 413 429 439 425 407 402 414 University of the Pacific Business Forecasting Center 37

METRO SUMMARY - MODESTO Annual Outlook for Modesto January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 15.0 15.8 15.9 15.7 16.2 17.1 18.2 18.7 19.6 20.6 21.6 22.9 24.2 Pct Chg Year Ago 4.4 5.0 0.4-1.0 3.3 5.5 6.4 2.6 4.9 5.0 5.2 5.9 5.4 Wages and Salaries 6.6 6.9 7.0 6.8 6.8 6.9 7.2 7.4 7.8 8.3 8.7 9.1 9.6 Nonwage Income 8.4 8.9 8.8 8.9 9.4 10.3 11.1 11.3 11.8 12.3 13.0 13.8 14.5 Real Personal Income (2009$) 15.9 16.3 15.8 15.7 16.0 16.4 17.2 17.4 18.0 18.7 19.4 20.2 20.9 Pct Chg Year Ago 1.6 2.4-2.6-0.9 1.6 3.0 4.4 1.4 3.4 3.9 3.8 4.0 3.4 Per Capita Income (Ths.) 29.8 31.1 31.1 30.7 31.5 33.0 34.9 35.5 36.9 38.4 40.0 41.9 43.6 Real Per Capita Income (2009$) 31.5 32.0 31.1 30.7 30.9 31.7 32.9 33.1 33.9 34.9 35.9 36.9 37.7 Average Annual Wage (Ths.) 40.6 42.1 43.7 44.7 45.0 45.8 46.8 46.7 48.4 49.9 51.4 53.3 55.5 Pct Chg Year Ago 2.6 3.6 3.8 2.4 0.7 1.8 2.0-0.1 3.5 3.1 3.1 3.7 4.0 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 162.3 162.9 159.7 150.3 149.7 148.9 152.1 156.5 159.8 165.0 167.7 170.4 172.9 Pct Chg Year Ago 0.7 0.3-1.9-5.9-0.4-0.5 2.1 2.9 2.1 3.3 1.6 1.6 1.5 Manufacturing 22.2 22.9 22.6 20.9 20.7 20.7 20.7 20.6 20.7 21.4 21.4 21.5 21.6 Pct Chg Year Ago -1.8 3.3-1.3-7.7-1.0 0.0 0.5-0.5 0.5 3.1 0.3 0.3 0.3 Nonmanufacturing 140.2 140.0 137.1 129.4 129.0 128.2 131.3 135.8 139.0 143.6 146.2 148.9 151.3 Pct Chg Year Ago 1.0-0.1-2.0-5.6-0.3-0.6 2.4 3.4 2.4 3.3 1.8 1.8 1.6 Construction & Mining 13.2 11.2 9.1 6.6 5.9 5.8 6.3 6.9 7.0 7.6 8.1 8.8 9.4 Pct Chg Year Ago -0.5-15.2-18.8-27.4-10.8-1.7 8.8 10.7 1.2 8.6 6.6 7.8 7.1 Trade, Trans, & Utilities 33.6 33.8 32.9 31.4 31.6 32.1 33.5 34.8 35.9 36.5 37.0 37.3 37.6 Pct Chg Year Ago -0.2 0.5-2.6-4.5 0.6 1.8 4.1 4.0 3.2 1.6 1.2 1.0 0.8 Wholesale Trade 5.9 6.1 6.0 6.1 5.9 5.8 5.8 5.9 6.0 6.1 6.2 6.4 6.5 Retail Trade 22.5 22.1 21.2 19.5 19.5 19.9 20.8 21.7 22.1 22.4 22.4 22.4 22.3 Trans, Wrhsng, & Util 5.2 5.6 5.7 5.7 6.2 6.4 6.8 7.2 7.8 8.0 8.3 8.6 8.8 Information 2.4 2.3 1.8 1.3 1.2 1.1 1.0 0.9 0.8 0.9 0.9 0.9 0.9 Pct Chg Year Ago -3.9-5.5-19.2-30.1-4.6-8.3-13.5-5.1-6.5 2.6 2.6 2.0 0.5 Financial Activities 6.3 6.2 6.1 5.6 5.4 5.4 5.4 5.4 5.3 5.3 5.3 5.3 5.2 Pct Chg Year Ago 1.6-1.1-2.2-7.7-2.7-0.9 0.4 0.1-2.3 0.4 0.3-0.6-1.2 Prof & Business Services 14.8 14.8 14.3 13.2 12.5 12.2 12.8 13.2 13.6 14.6 15.2 15.7 16.0 Pct Chg Year Ago -0.4-0.1-3.2-7.9-5.2-2.0 4.8 3.4 3.0 7.1 4.3 3.1 1.8 Educ & Health Services 22.4 23.8 24.9 25.7 26.6 26.6 27.2 28.3 28.9 29.8 30.3 30.8 31.2 Pct Chg Year Ago 3.2 6.5 4.5 3.4 3.5 0.0 2.2 4.1 2.1 3.2 1.7 1.6 1.4 Leisure & Hospitality 15.3 15.4 15.5 14.7 14.5 14.5 14.9 15.7 16.3 17.0 17.2 17.4 17.8 Pct Chg Year Ago 3.7 0.8 1.0-5.7-0.7-0.7 3.1 5.5 3.7 4.4 1.1 1.4 1.9 Other Services 5.9 6.0 5.8 5.2 5.0 4.8 4.9 5.0 5.2 5.2 5.2 5.2 5.2 Pct Chg Year Ago -3.4 1.5-3.8-10.3-2.7-3.9 0.3 2.7 4.6-1.0 0.3 0.5 0.1 Federal Government 1.2 1.1 0.9 0.9 1.0 0.9 0.9 0.8 0.8 0.8 0.8 0.8 0.8 Pct Chg Year Ago -1.9-6.9-18.8-1.0 12.7-9.0-0.8-6.6-3.4 0.2-1.6-1.6-1.7 State & Local Government 25.1 25.4 25.8 24.9 25.2 24.7 24.5 24.6 25.1 25.9 26.2 26.7 27.2 Pct Chg Year Ago 2.8 1.2 1.6-3.3 1.2-1.8-1.0 0.5 1.9 3.3 1.2 1.8 2.0 Other Economic Indicators Population (Ths.) 505.0 507.9 509.4 512.2 515.8 518.4 522.0 526.1 530.9 535.4 541.1 547.7 554.4 Pct Chg Year Ago 0.9 0.6 0.3 0.5 0.7 0.5 0.7 0.8 0.9 0.8 1.1 1.2 1.2 Labor Force (Ths.) 225.1 227.3 232.1 235.1 240.7 239.8 239.8 238.2 236.3 239.2 243.0 246.2 248.8 Pct Chg Year Ago -0.9 1.0 2.1 1.3 2.4-0.4 0.0-0.7-0.8 1.2 1.6 1.3 1.1 Unemployment Rate (%) 8.0 8.7 11.0 15.8 17.2 16.7 15.1 13.0 11.6 10.4 9.8 9.3 9.1 Total Housing Starts 2660 1719 636 377 270 212 318 267 346 815 2122 2920 2951 Single-Family 2368 1395 534 289 169 132 192 233 336 699 1759 2493 2540 Multifamily 293 324 103 87 101 80 127 34 9 116 363 427 412 38 California & Metro Forecast - January 2015

Oakland MSA SHORT TERM OUTLOOK Nonfarm employment in the Oakland MSA is expected to increase in 2015 compared to 2014 with a growth of 2.8% from 2.1%, but will see a decrease in the growth rate in 2016 to 2.0%. The sector with the greatest increase in employment for 2016 is the Construction & Mining sector which is expected to grow 6.7%. The next leader in economic growth is the Professional & Business Services sector with an expected growth of 4.2% in 2016, but will see a decrease in the growth rate into 2018. In addition to the decreasing the Professional and Business Sector, the Financial Activities sector will also see a decrease in growth at 0.5% in 2016 and then -1.3% in 2018. Employment growth is in 2016 for all other sectors with the exception of the Federal Government, which is projected to see decreased growth at 2.0% respectively. Real personal income for 2016 is expected to increase to $165.5 Billion, which is a 3.8% increase from $159.5 Billion in 2015. For the years following, Oakland MSA will continue to have positive real personal income growth rate. The Oakland MSA s population is expected to have a 1.4% growth for 2015 and 1.3% growth for 2016, which will continue as the projected growth rate throughout the projected horizon. Unemployment in Oakland is expected to decrease to 5.5% in 2015 and will continue to decrease in the foreseeable future until it reaches 4.7% in 2018. As growth in employment continues, labor force will experience an increase of 2.6% and 1.6% for 2015 and 2016, respectively. 20% Oakland Real Personal Income (Percent change from one year ago) 1175 Oakland Payroll Employment (Thousands) 1150 15% 1125 10% 1100 1075 5% 1050 1025 0% 1000 975-5% 950 925-10% 900 14% 12% 10% 8% 6% 4% Oakland and California Unemployment Rates (percent) Unemployment Rate (%) CA Unemployment Rate (%) 200 180 160 140 120 100 80 60 40 Oakland Employment Mix Relative to California, 2012 (California = 100) 2% 0% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 39

METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 157.0 159.5 161.3 163.0 164.3 167.1 168.6 170.5 172.3 174.3 176.3 178.9 Pct Chg Year Ago 5.0 4.9 4.8 0.8 4.6 4.8 4.5 4.6 4.9 4.3 4.5 4.9 Wages and Salaries 67.6 68.8 69.4 70.4 71.3 72.4 72.9 73.9 75.0 76.0 77.0 78.1 Nonwage Income 89.4 90.7 91.9 92.5 93.0 94.8 95.8 96.7 97.4 98.2 99.3 100.7 Real Personal Income (2009$) 146.8 148.9 150.0 151.2 151.9 153.6 154.5 156.2 157.6 158.8 159.9 161.8 Pct Chg Year Ago 3.6 3.7 3.5-0.3 3.5 3.2 3.0 3.3 3.7 3.3 3.5 3.5 Per Capita Income (Ths.) 59.0 59.7 60.1 60.6 60.9 61.7 62.0 62.5 63.0 63.4 64.0 64.7 Real Per Capita Income (2009$) 55.1 55.7 55.9 56.2 56.3 56.7 56.8 57.3 57.6 57.8 58.0 58.5 Average Annual Wage (Ths.) 65.5 66.3 66.5 67.2 67.9 68.3 68.5 68.7 69.2 69.8 70.3 71.0 Pct Chg Year Ago -0.8 1.2 1.5-1.6 3.6 3.0 3.0 2.3 1.9 2.1 2.7 3.4 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1026.2 1030.8 1037.7 1043.1 1044.1 1053.3 1058.5 1070.2 1077.1 1083.6 1089.7 1094.8 Pct Chg Year Ago 4.1 3.5 3.6 2.8 1.7 2.2 2.0 2.6 3.2 2.9 2.9 2.3 Manufacturing 77.7 78.2 78.6 79.9 80.0 80.4 79.9 80.6 80.7 80.9 81.1 81.3 Pct Chg Year Ago -0.7-0.6 0.5 2.6 3.0 2.9 1.6 0.9 0.8 0.5 1.5 0.9 Nonmanufacturing 948.5 952.6 959.0 963.2 964.1 972.9 978.6 989.6 996.4 1002.7 1008.6 1013.5 Pct Chg Year Ago 4.5 3.9 3.8 2.8 1.6 2.1 2.0 2.7 3.4 3.1 3.1 2.4 Construction & Mining 57.6 57.6 57.1 57.1 57.4 60.0 60.2 61.6 62.5 63.6 65.0 66.0 Pct Chg Year Ago 12.2 9.6 6.7 3.5-0.4 4.2 5.5 7.9 9.0 6.0 7.8 7.2 Trade, Trans, & Utilities 184.4 184.8 185.6 187.0 187.1 188.5 189.9 192.3 192.8 193.8 194.9 195.5 Pct Chg Year Ago 3.5 2.8 2.7 2.7 1.5 2.0 2.3 2.8 3.0 2.8 2.6 1.7 Wholesale Trade 44.9 44.8 45.1 45.3 46.2 46.5 47.1 47.7 48.1 48.4 48.9 49.3 Retail Trade 106.4 106.8 107.1 107.3 106.4 107.1 107.6 109.1 108.9 109.3 109.6 109.6 Trans, Wrhsng, & Util 33.1 33.2 33.5 34.4 34.5 34.9 35.1 35.5 35.8 36.1 36.4 36.7 Information 21.3 21.5 21.4 21.5 21.3 21.4 21.5 21.7 22.2 21.9 21.6 21.5 Pct Chg Year Ago -3.7-3.1-1.8-2.5-0.2-0.4 0.2 0.9 4.3 2.3 0.7-0.7 Financial Activities 49.4 49.7 49.4 49.6 49.4 49.6 49.5 49.6 50.0 49.9 50.0 50.1 Pct Chg Year Ago 2.0 2.0 1.5 1.1-0.1-0.1 0.0 0.0 1.2 0.7 1.2 0.9 Prof & Business Services 172.1 172.2 173.2 172.3 173.2 174.6 175.7 178.8 181.1 183.4 185.5 187.4 Pct Chg Year Ago 6.3 4.4 3.8 1.1 0.7 1.4 1.5 3.8 4.5 5.0 5.5 4.8 Educ & Health Services 168.4 170.1 172.5 173.2 174.0 176.3 177.7 179.4 180.6 182.3 183.1 183.6 Pct Chg Year Ago 7.5 7.5 7.8 4.7 3.3 3.6 3.0 3.6 3.8 3.4 3.1 2.3 Leisure & Hospitality 95.9 97.6 98.6 100.0 99.9 99.7 100.8 102.5 103.2 103.7 104.2 104.6 Pct Chg Year Ago 6.1 6.3 6.5 6.8 4.1 2.1 2.2 2.5 3.3 4.0 3.3 2.1 Other Services 36.8 36.9 37.1 37.5 37.4 37.5 37.5 37.5 37.7 37.7 37.8 37.8 Pct Chg Year Ago 2.1 1.3 2.2 2.8 1.5 1.7 1.0 0.1 0.9 0.7 1.0 0.9 Federal Government 14.0 13.8 13.6 13.6 13.6 13.7 13.7 13.7 13.7 13.6 13.6 13.5 Pct Chg Year Ago -1.9-2.7-3.9-3.8-2.7-0.5 1.0 0.6 0.4-0.7-1.2-1.6 State & Local Government 148.5 148.5 150.4 151.4 150.8 151.6 152.2 152.5 152.7 152.8 153.0 153.4 Pct Chg Year Ago 0.3 0.1 0.9 1.9 1.5 2.1 1.2 0.7 1.3 0.8 0.5 0.6 Other Economic Indicators Population (Ths.) 2662.9 2673.1 2682.1 2690.4 2698.5 2707.4 2719.1 2727.5 2737.3 2747.0 2756.3 2765.4 Pct Chg Year Ago 1.5 1.6 1.5 1.4 1.3 1.3 1.4 1.4 1.4 1.5 1.4 1.4 Labor Force (Ths.) 1323.2 1323.3 1322.7 1318.7 1320.1 1321.4 1326.3 1344.3 1353.3 1359.6 1365.6 1370.5 Pct Chg Year Ago 1.3 0.9 0.4-0.2-0.2-0.1 0.3 1.9 2.5 2.9 3.0 1.9 Unemployment Rate (%) 8.0 7.5 7.2 6.9 6.7 6.2 5.8 5.8 5.6 5.5 5.4 5.4 Total Housing Starts (Annual Rate) 5678 3949 4066 5615 4232 4555 5063 6554 6921 7590 8219 9010 Single-Family 3137 3202 2818 3402 2934 3752 2921 2209 2666 3172 3630 4058 Multifamily 2541 747 1248 2213 1299 804 2142 4346 4255 4418 4589 4952 40 California & Metro Forecast - January 2015

METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 181.0 183.3 185.9 188.7 191.5 194.1 196.8 199.6 202.2 204.6 207.2 209.8 Pct Chg Year Ago 5.0 5.2 5.5 5.5 5.8 5.9 5.9 5.7 5.6 5.4 5.2 5.1 Wages and Salaries 79.1 80.2 81.3 82.3 83.5 84.6 85.8 87.0 88.2 89.4 90.6 91.8 Nonwage Income 101.8 103.1 104.7 106.4 108.0 109.5 111.0 112.6 113.9 115.3 116.6 118.0 Real Personal Income (2009$) 163.2 164.7 166.4 168.2 169.9 171.3 172.9 174.5 176.0 177.3 178.6 180.0 Pct Chg Year Ago 3.6 3.7 4.0 4.0 4.1 4.0 3.9 3.8 3.6 3.5 3.3 3.1 Per Capita Income (Ths.) 65.2 65.9 66.6 67.4 68.1 68.9 69.6 70.4 71.1 71.7 72.4 73.1 Real Per Capita Income (2009$) 58.8 59.2 59.6 60.0 60.5 60.8 61.1 61.5 61.9 62.1 62.4 62.7 Average Annual Wage (Ths.) 71.6 72.1 72.8 73.3 74.1 74.8 75.5 76.3 77.1 77.9 78.7 79.6 Pct Chg Year Ago 3.4 3.4 3.5 3.3 3.5 3.7 3.8 4.1 4.1 4.2 4.2 4.2 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1099.8 1105.5 1111.2 1116.8 1121.4 1125.9 1130.2 1134.3 1137.9 1141.4 1144.8 1148.1 Pct Chg Year Ago 2.1 2.0 2.0 2.0 2.0 1.9 1.7 1.6 1.5 1.4 1.3 1.2 Manufacturing 81.4 81.2 81.3 81.3 81.4 81.5 81.6 81.6 81.6 81.7 81.8 81.9 Pct Chg Year Ago 0.8 0.4 0.2-0.1 0.0 0.3 0.4 0.4 0.3 0.3 0.3 0.4 Nonmanufacturing 1018.4 1024.3 1029.9 1035.6 1040.0 1044.5 1048.7 1052.7 1056.3 1059.7 1063.1 1066.2 Pct Chg Year Ago 2.2 2.1 2.1 2.2 2.1 2.0 1.8 1.7 1.6 1.5 1.4 1.3 Construction & Mining 67.0 68.0 69.1 70.4 71.5 72.7 74.0 75.1 76.1 77.0 77.8 78.4 Pct Chg Year Ago 7.1 6.8 6.3 6.5 6.8 7.1 7.1 6.8 6.5 5.9 5.2 4.4 Trade, Trans, & Utilities 196.1 196.7 197.3 197.9 198.4 198.9 199.3 199.7 200.0 200.3 200.5 200.7 Pct Chg Year Ago 1.7 1.5 1.2 1.2 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 Wholesale Trade 49.6 50.0 50.4 50.8 51.1 51.4 51.7 51.9 52.2 52.4 52.7 52.9 Retail Trade 109.5 109.3 109.2 109.1 109.0 108.8 108.7 108.6 108.4 108.3 108.1 108.0 Trans, Wrhsng, & Util 37.0 37.4 37.7 38.0 38.4 38.7 38.9 39.2 39.4 39.7 39.8 39.9 Information 21.5 22.1 22.5 22.3 22.4 22.4 22.3 22.2 22.2 22.2 22.2 22.2 Pct Chg Year Ago -3.2 0.9 3.9 3.6 4.1 1.1-0.9-0.4-0.6-0.6-0.3 0.0 Financial Activities 50.2 50.3 50.3 50.3 50.2 50.1 49.9 49.7 49.6 49.4 49.3 49.2 Pct Chg Year Ago 0.5 0.7 0.5 0.3-0.1-0.4-0.6-1.1-1.2-1.4-1.4-1.1 Prof & Business Services 189.1 191.0 193.0 195.2 196.4 197.3 198.1 199.1 200.0 200.5 201.2 202.0 Pct Chg Year Ago 4.4 4.2 4.1 4.2 3.8 3.3 2.6 2.0 1.8 1.6 1.5 1.5 Educ & Health Services 184.6 185.9 186.8 187.7 188.4 189.2 189.8 190.6 191.0 191.9 192.7 193.3 Pct Chg Year Ago 2.2 2.0 2.0 2.3 2.0 1.8 1.6 1.5 1.4 1.4 1.5 1.5 Leisure & Hospitality 105.1 105.1 105.3 105.6 106.0 106.6 107.2 107.8 108.2 108.6 109.1 109.5 Pct Chg Year Ago 1.8 1.4 1.1 0.9 0.9 1.4 1.8 2.0 2.0 1.9 1.8 1.6 Other Services 37.9 37.9 37.9 38.1 38.2 38.2 38.2 38.2 38.2 38.2 38.3 38.3 Pct Chg Year Ago 0.5 0.5 0.3 0.6 0.7 0.6 0.7 0.4 0.2 0.2 0.2 0.2 Federal Government 13.4 13.4 13.3 13.2 13.2 13.1 13.0 12.9 12.9 12.8 12.7 12.7 Pct Chg Year Ago -1.8-2.0-2.1-2.2-2.1-1.9-2.0-2.0-2.1-2.2-2.1-2.0 State & Local Government 153.6 154.0 154.5 154.9 155.5 156.1 156.8 157.4 158.1 158.7 159.3 159.9 Pct Chg Year Ago 0.6 0.8 1.0 1.0 1.2 1.3 1.5 1.6 1.7 1.7 1.6 1.5 Other Economic Indicators Population (Ths.) 2774.4 2783.4 2792.4 2801.3 2810.2 2819.0 2827.8 2836.5 2845.4 2854.2 2863.0 2871.8 Pct Chg Year Ago 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.2 1.2 Labor Force (Ths.) 1375.7 1381.0 1386.4 1391.7 1396.3 1400.6 1404.8 1408.8 1412.0 1415.6 1418.8 1421.7 Pct Chg Year Ago 1.6 1.6 1.5 1.5 1.5 1.4 1.3 1.2 1.1 1.1 1.0 0.9 Unemployment Rate (%) 5.3 5.2 5.1 5.0 4.9 4.8 4.8 4.7 4.7 4.7 4.7 4.7 Total Housing Starts (Annual Rate) 9573 9871 10131 10612 10785 10667 10741 10682 10707 10704 10752 10993 Single-Family 4346 4654 5023 5422 5598 5644 5587 5500 5390 5367 5276 5223 Multifamily 5227 5217 5107 5190 5187 5024 5153 5182 5317 5338 5476 5770 University of the Pacific Business Forecasting Center 41

METRO SUMMARY - OAKLAND Annual Outlook for Oakland January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 124.9 130.4 133.4 127.2 131.2 141.7 154.3 160.2 167.7 175.4 184.7 195.5 205.9 Pct Chg Year Ago 7.3 4.3 2.3-4.6 3.2 8.0 8.9 3.9 4.7 4.6 5.3 5.8 5.3 Wages and Salaries 60.7 63.4 63.8 60.3 61.1 63.1 66.7 69.1 72.6 76.5 80.7 85.2 90.0 Nonwage Income 64.2 66.9 69.6 66.9 70.1 78.6 87.6 91.1 95.0 98.9 104.0 110.3 115.9 Real Personal Income (2009$) 131.9 134.2 133.3 127.2 129.1 136.1 145.4 149.2 154.1 159.5 165.6 172.2 178.0 Pct Chg Year Ago 4.5 1.8-0.7-4.6 1.5 5.4 6.9 2.7 3.2 3.5 3.8 4.0 3.4 Per Capita Income (Ths.) 51.0 52.8 53.2 50.1 51.1 54.5 58.5 59.8 61.8 63.8 66.3 69.2 72.0 Real Per Capita Income (2009$) 53.9 54.3 53.2 50.1 50.2 52.3 55.1 55.7 56.8 58.0 59.4 61.0 62.3 Average Annual Wage (Ths.) 57.2 59.6 60.7 61.0 63.1 64.6 66.4 66.4 68.3 70.1 72.5 75.2 78.3 Pct Chg Year Ago 4.4 4.1 1.9 0.4 3.5 2.3 2.7 0.1 3.0 2.5 3.4 3.8 4.2 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1055.3 1059.0 1044.8 983.6 962.9 971.0 999.7 1034.5 1056.5 1086.3 1108.3 1127.9 1143.1 Pct Chg Year Ago 1.3 0.3-1.3-5.9-2.1 0.8 3.0 3.5 2.1 2.8 2.0 1.8 1.3 Manufacturing 93.9 92.3 90.8 80.5 77.4 78.3 78.3 78.6 80.2 81.0 81.3 81.5 81.8 Pct Chg Year Ago 0.0-1.7-1.6-11.4-3.8 1.2-0.1 0.4 2.1 0.9 0.3 0.3 0.3 Nonmanufacturing 961.4 966.6 953.9 903.2 885.5 892.6 921.4 955.8 976.3 1005.3 1027.0 1046.5 1061.3 Pct Chg Year Ago 1.4 0.5-1.3-5.3-1.9 0.8 3.2 3.7 2.1 3.0 2.2 1.9 1.4 Construction & Mining 74.4 72.9 66.2 54.8 48.7 48.8 53.1 57.3 59.8 64.3 68.6 73.3 77.3 Pct Chg Year Ago 0.7-2.1-9.2-17.2-11.0 0.2 9.0 8.0 4.3 7.5 6.7 6.9 5.5 Trade, Trans, & Utilities 197.9 199.3 193.0 179.0 173.6 175.4 180.2 185.5 189.5 194.3 197.0 199.1 200.4 Pct Chg Year Ago 1.1 0.7-3.1-7.2-3.0 1.0 2.8 2.9 2.1 2.5 1.4 1.1 0.7 Wholesale Trade 48.8 48.7 47.6 43.7 41.8 42.1 43.6 45.0 46.9 48.7 50.2 51.5 52.5 Retail Trade 113.3 113.3 109.5 102.1 100.3 101.1 103.8 106.9 107.6 109.3 109.3 108.8 108.2 Trans, Wrhsng, & Util 35.8 37.3 35.9 33.2 31.5 32.2 32.9 33.5 35.0 36.3 37.5 38.8 39.7 Information 30.1 29.0 27.8 25.3 23.6 22.6 22.0 21.4 21.5 21.8 22.1 22.3 22.2 Pct Chg Year Ago -1.8-3.6-4.0-9.2-6.7-4.3-2.4-2.8 0.1 1.7 1.3 1.0-0.4 Financial Activities 63.6 58.1 52.7 48.0 48.2 47.7 48.7 49.5 49.5 50.0 50.3 50.0 49.4 Pct Chg Year Ago -3.2-8.8-9.3-8.9 0.4-0.9 2.1 1.6 0.0 1.0 0.5-0.5-1.3 Prof & Business Services 155.1 158.1 163.3 151.1 152.1 157.3 166.0 172.4 175.6 184.3 192.1 197.7 200.9 Pct Chg Year Ago 2.9 1.9 3.3-7.4 0.7 3.4 5.6 3.9 1.8 5.0 4.2 3.0 1.6 Educ & Health Services 136.8 141.3 148.6 152.7 153.4 153.2 160.1 171.1 176.8 182.4 186.2 189.5 192.2 Pct Chg Year Ago 3.0 3.3 5.2 2.8 0.5-0.1 4.5 6.9 3.4 3.1 2.1 1.7 1.5 Leisure & Hospitality 85.5 88.0 89.1 85.1 85.8 88.2 92.1 98.0 100.7 103.9 105.3 106.9 108.8 Pct Chg Year Ago 3.1 2.8 1.3-4.5 0.9 2.9 4.4 6.4 2.7 3.2 1.3 1.5 1.8 Other Services 35.9 36.2 36.1 34.6 34.9 35.7 36.3 37.1 37.4 37.8 37.9 38.2 38.3 Pct Chg Year Ago 0.9 0.7-0.2-4.0 0.9 2.1 1.7 2.1 1.1 0.9 0.5 0.6 0.2 Federal Government 17.3 17.1 17.1 16.7 15.7 14.6 14.2 13.8 13.7 13.6 13.3 13.1 12.8 Pct Chg Year Ago -0.2-1.2 0.2-2.3-5.8-7.1-2.6-3.1-0.4-0.8-2.0-2.0-2.1 State & Local Government 164.7 166.8 160.1 155.8 149.5 149.3 148.6 149.7 151.8 153.0 154.3 156.5 159.0 Pct Chg Year Ago 1.3 1.3-4.0-2.7-4.0-0.1-0.5 0.8 1.4 0.8 0.9 1.4 1.6 Other Economic Indicators Population (Ths.) 2448.7 2470.3 2505.0 2539.7 2569.3 2601.8 2637.7 2677.1 2713.1 2751.5 2787.9 2823.4 2858.6 Pct Chg Year Ago 0.3 0.9 1.4 1.4 1.2 1.3 1.4 1.5 1.3 1.4 1.3 1.3 1.2 Labor Force (Ths.) 1247.6 1261.6 1282.5 1286.9 1286.5 1294.9 1314.3 1322.0 1328.0 1362.3 1383.7 1402.6 1417.0 Pct Chg Year Ago 0.1 1.1 1.7 0.3 0.0 0.7 1.5 0.6 0.5 2.6 1.6 1.4 1.0 Unemployment Rate (%) 4.4 4.7 6.2 10.4 11.2 10.3 9.0 7.4 6.1 5.5 5.2 4.8 4.7 Total Housing Starts 9482 6243 4256 2838 3158 3077 4460 4827 5101 7935 10047 10719 10789 Single-Family 5267 4134 2114 1908 1921 1620 2728 3140 2954 3382 4861 5582 5314 Multifamily 4215 2109 2143 931 1238 1458 1732 1687 2148 4553 5185 5137 5475 42 California & Metro Forecast - January 2015

Sacramento MSA SHORT TERM OUTLOOK After experiencing negative employment growth 2008 2011, the Sacramento area will see its highest growth since at 2.6% in 2015. Following the 2015 growth, the rate will decrease to 1.7% by 2018. Employment growth is expected to be 3.1% for the third quarter of 2015 and will fall to 1.9% in the third quarter of 2016. Employment in Sacramento will be led by a 5.9% growth in the Construction and Mining sector followed by a 4.1% increase in the Professional and Business Services sector in 2016. Notably, the Information sector is expected to experience the most growth going from a rate of -0.8% in 2015 to 2.7% in 2016. Real personal income in the Sacramento MSA is projected to rise 3.6% in 2015 bringing real personal income to a total of $ 102.6 Billion. An average increase of 4.1% is anticipated for the next three years, bringing real personal income to $115.6 Billion in 2018. Population will increase 1.2% in 2015 and is expected to increase 1.3% for the following two years. The Sacramento labor force growth will grow to 1.7% in 2015 and decrease by 0.01% for the following three years.. Unemployment will continue to decrease as well with a 6.3% unemployment rate for this year, a full 1% less than 2014. It is expected to decline until it reaches 4.9% in 2018. 10% Sacramento Real Personal Income (percent change from one year ago) 1000 Sacramento Payroll Employment (Thousands) 8% 950 6% 900 4% 850 2% 800 0% -2% 750-4% 700 14% 12% Sacramento and California Unemployment Rate (percent) Unemployment Rate (%) CA Unemployment Rate (%) 200 180 160 Sacramento Employment Mix Relative to California, 2012 (California = 100) 10% 140 120 8% 100 80 6% 60 4% 40 20 2% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 43

METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Billions $) Total Personal Income 100.9 102.3 103.6 104.2 105.7 107.3 108.2 109.7 110.9 112.2 113.4 114.9 Pct Chg Year Ago 3.2 3.2 4.0-0.1 4.7 4.9 4.5 5.3 4.9 4.6 4.8 4.7 Wages and Salaries 49.2 49.7 50.3 51.0 51.9 52.5 52.7 53.5 54.2 55.0 55.7 56.5 Nonwage Income 51.7 52.5 53.3 53.2 53.8 54.7 55.5 56.2 56.7 57.2 57.7 58.4 Real Personal Income (09$) 94.3 95.5 96.3 96.7 97.7 98.6 99.2 100.5 101.4 102.2 102.9 103.9 Pct Chg Year Ago 1.8 2.1 2.7-1.2 3.6 3.2 2.9 4.0 3.8 3.6 3.8 3.4 Per Capita Income (Ths.) 45.7 46.2 46.6 46.8 47.3 47.9 48.2 48.7 49.1 49.5 49.9 50.4 Real Per Capita Income (09$) 42.7 43.1 43.4 43.4 43.8 44.0 44.2 44.6 44.9 45.1 45.3 45.6 Average Annual Wage (Ths) 56.9 57.5 57.7 58.2 58.9 59.2 59.4 59.6 60.0 60.4 60.9 61.4 Pct Chg Year Ago -0.6 1.3 1.8-1.0 3.6 2.9 2.9 2.3 1.8 2.2 2.6 3.1 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 860.5 860.9 866.9 871.4 877.0 884.0 883.5 893.9 898.7 905.5 910.5 915.1 Pct Chg Year Ago 3.7 2.3 2.7 2.4 1.9 2.7 1.9 2.6 2.5 2.4 3.1 2.4 Manufacturing 34.0 34.0 33.7 33.3 34.1 34.5 34.7 35.0 35.2 35.3 35.5 35.6 Pct Chg Year Ago 0.9 0.6-1.5-1.6 0.2 1.3 3.2 5.2 3.4 2.5 2.1 1.6 Nonmanufacturing 826.5 826.9 833.2 838.1 843.0 849.5 848.8 858.9 863.5 870.2 875.1 879.5 Pct Chg Year Ago 3.8 2.3 2.8 2.6 2.0 2.7 1.9 2.5 2.4 2.4 3.1 2.4 Construction & Mining 42.6 43.6 43.8 43.4 46.0 46.7 45.8 46.7 47.4 48.6 49.6 50.4 Pct Chg Year Ago 14.7 14.3 11.6 7.3 7.8 7.2 4.4 7.7 3.0 4.1 8.5 7.9 Trade, Trans, & Utilities 141.2 141.5 142.5 143.3 144.3 144.6 142.9 144.8 145.5 146.3 147.0 147.5 Pct Chg Year Ago 3.5 1.9 1.9 2.2 2.2 2.1 0.3 1.0 0.8 1.2 2.9 1.9 Wholesale Trade 25.0 24.9 25.2 24.9 25.6 25.1 25.2 25.4 25.6 25.7 25.9 26.1 Retail Trade 93.2 93.7 94.1 94.7 95.4 96.4 94.8 95.8 96.2 96.6 97.0 97.1 Trans, Wrhsng, & Util 23.0 22.9 23.2 23.8 23.4 23.1 23.0 23.6 23.8 23.9 24.1 24.3 Information 15.2 15.1 15.0 14.8 14.7 14.5 14.4 14.0 14.4 14.3 14.2 14.2 Pct Chg Year Ago -2.3-3.5-3.6-4.1-3.4-4.0-4.2-5.5-1.9-1.5-1.1 1.1 Financial Activities 49.3 49.4 49.7 49.8 49.8 49.9 49.8 50.5 50.8 50.7 50.8 50.9 Pct Chg Year Ago 4.2 3.5 2.9 1.5 1.0 0.9 0.2 1.5 2.0 1.7 2.1 0.8 Prof & Business Services 114.4 113.2 113.8 116.1 117.6 119.1 120.5 122.9 124.7 125.9 127.3 128.8 Pct Chg Year Ago 7.2 1.5 1.2 3.0 2.8 5.3 5.9 5.9 6.1 5.7 5.7 4.8 Educ & Health Services 126.2 126.4 128.4 130.1 130.5 132.8 133.7 134.2 135.1 136.4 137.1 137.4 Pct Chg Year Ago 5.2 4.6 6.5 4.9 3.5 5.1 4.2 3.1 3.5 2.7 2.6 2.4 Leisure & Hospitality 88.0 88.4 88.0 87.7 86.5 88.1 88.5 90.7 89.7 91.5 91.8 92.1 Pct Chg Year Ago 6.8 4.7 3.4 1.9-1.7-0.4 0.5 3.5 3.7 3.8 3.7 1.5 Other Services 28.8 28.7 28.9 29.1 28.9 29.1 29.0 29.4 29.5 29.6 29.6 29.7 Pct Chg Year Ago 1.3 0.1 2.0 1.8 0.2 1.4 0.2 1.0 2.3 1.6 2.2 1.1 Federal Government 13.6 13.4 13.4 13.5 13.5 13.4 13.3 13.3 13.3 13.3 13.2 13.2 Pct Chg Year Ago -1.6-2.9-2.6 0.0-1.3-0.2-1.1-1.8-1.3-0.9-0.4-0.9 State & Local Government 207.2 207.1 209.7 210.4 211.2 211.3 211.0 212.4 213.1 213.7 214.3 215.4 Pct Chg Year Ago -0.6-0.7 1.2 1.7 1.9 2.0 0.6 1.0 0.9 1.1 1.5 1.4 Other Economic Indicators Population (Ths) 2210.3 2215.8 2220.7 2226.8 2233.1 2239.0 2245.2 2251.3 2258.0 2265.0 2272.1 2279.2 Pct Chg Year Ago 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.2 Labor Force (Ths) 1050.1 1047.7 1046.1 1042.7 1040.5 1042.3 1041.3 1046.2 1052.7 1058.7 1063.8 1067.7 Pct Chg Year Ago 0.0-0.5-0.7-0.9-0.9-0.5-0.5 0.3 1.2 1.6 2.2 2.1 Unemployment Rate (%) 9.2 8.7 8.5 8.1 7.8 7.3 7.1 7.0 6.8 6.5 6.2 6.0 Total Housing Starts (Annual Rate) 4673 4219 4416 4058 3549 5113 4268 4236 5214 6492 7995 9707 Single-Family 3897 3817 3411 3723 3322 4369 3934 3902 4540 5359 6205 7162 Multifamily 776 403 1006 335 227 743 334 333 674 1133 1791 2545 44 California & Metro Forecast - January 2015

METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Billions $) Total Personal Income 116.6 118.2 119.9 121.7 123.7 125.6 127.4 129.2 131.2 132.9 134.6 136.3 Pct Chg Year Ago 5.2 5.3 5.7 5.9 6.1 6.3 6.3 6.2 6.0 5.8 5.6 5.5 Wages and Salaries 57.1 57.9 58.7 59.5 60.3 61.1 62.0 62.9 63.8 64.7 65.6 66.5 Nonwage Income 59.5 60.3 61.2 62.2 63.4 64.4 65.4 66.3 67.4 68.2 69.0 69.8 Real Personal Income (09$) 105.1 106.2 107.2 108.5 109.8 110.8 112.0 113.0 114.2 115.1 116.1 117.0 Pct Chg Year Ago 3.7 3.9 4.2 4.4 4.4 4.4 4.4 4.2 4.0 3.9 3.7 3.5 Per Capita Income (Ths.) 51.0 51.5 52.1 52.7 53.4 54.0 54.7 55.2 55.9 56.4 56.9 57.4 Real Per Capita Income (09$) 46.0 46.3 46.6 47.0 47.4 47.7 48.0 48.3 48.6 48.9 49.1 49.3 Average Annual Wage (Ths) 61.9 62.4 63.0 63.5 64.1 64.7 65.4 66.0 66.7 67.3 68.0 68.7 Pct Chg Year Ago 3.2 3.3 3.4 3.4 3.6 3.7 3.8 3.9 4.0 4.0 4.0 4.1 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 919.0 923.4 927.8 932.1 936.2 940.5 944.7 948.8 952.6 956.5 960.3 963.9 Pct Chg Year Ago 2.3 2.0 1.9 1.9 1.9 1.8 1.8 1.8 1.8 1.7 1.7 1.6 Manufacturing 35.6 35.6 35.7 35.7 35.7 35.8 35.9 35.9 36.0 36.0 36.1 36.2 Pct Chg Year Ago 1.2 0.8 0.6 0.3 0.3 0.6 0.7 0.6 0.6 0.6 0.5 0.7 Nonmanufacturing 883.4 887.8 892.1 896.4 900.5 904.7 908.9 912.9 916.7 920.4 924.3 927.7 Pct Chg Year Ago 2.3 2.0 1.9 1.9 1.9 1.9 1.9 1.8 1.8 1.7 1.7 1.6 Construction & Mining 51.0 51.6 52.2 52.8 53.8 54.9 56.0 57.1 58.1 59.0 59.8 60.5 Pct Chg Year Ago 7.6 6.1 5.1 4.7 5.4 6.3 7.2 8.1 8.0 7.5 6.8 6.0 Trade, Trans, & Utilities 147.9 148.3 148.7 149.4 149.7 150.0 150.4 150.7 151.0 151.2 151.4 151.6 Pct Chg Year Ago 1.6 1.4 1.2 1.3 1.2 1.2 1.1 0.9 0.8 0.8 0.7 0.6 Wholesale Trade 26.2 26.4 26.6 26.8 27.0 27.1 27.3 27.4 27.5 27.6 27.8 27.9 Retail Trade 97.2 97.2 97.2 97.4 97.4 97.4 97.5 97.5 97.4 97.4 97.4 97.5 Trans, Wrhsng, & Util 24.5 24.7 24.9 25.1 25.3 25.5 25.7 25.8 26.0 26.1 26.2 26.3 Information 14.2 14.7 15.0 14.8 14.9 14.9 14.9 14.9 14.9 14.9 15.0 14.9 Pct Chg Year Ago -1.6 2.5 5.4 4.5 4.9 1.9-0.2 0.4-0.1-0.1 0.5 0.5 Financial Activities 51.0 51.0 51.0 51.0 51.0 50.9 50.8 50.6 50.4 50.3 50.2 50.1 Pct Chg Year Ago 0.4 0.6 0.4 0.3 0.0-0.3-0.5-0.9-1.0-1.2-1.1-0.9 Prof & Business Services 129.9 131.2 132.5 133.9 134.7 135.3 135.8 136.4 137.0 137.4 137.9 138.5 Pct Chg Year Ago 4.2 4.2 4.1 4.0 3.6 3.1 2.5 1.9 1.8 1.6 1.6 1.5 Educ & Health Services 138.1 139.1 139.7 140.4 140.9 141.6 142.1 142.8 143.2 144.0 144.7 145.3 Pct Chg Year Ago 2.3 1.9 1.8 2.2 2.0 1.8 1.8 1.7 1.6 1.7 1.8 1.8 Leisure & Hospitality 92.3 92.2 92.3 92.4 92.7 93.1 93.6 94.1 94.5 94.9 95.3 95.7 Pct Chg Year Ago 2.9 0.8 0.5 0.4 0.4 1.0 1.5 1.8 1.9 1.8 1.8 1.7 Other Services 29.7 29.8 29.8 29.9 30.0 30.0 30.1 30.1 30.2 30.2 30.2 30.3 Pct Chg Year Ago 0.6 0.6 0.5 0.7 0.9 0.8 0.9 0.7 0.6 0.6 0.6 0.7 Federal Government 13.1 13.1 13.0 13.0 13.0 12.9 12.9 12.8 12.8 12.7 12.7 12.6 Pct Chg Year Ago -1.1-1.3-1.4-1.5-1.4-1.2-1.3-1.4-1.5-1.5-1.4-1.4 State & Local Government 216.1 217.0 217.9 218.8 219.9 221.1 222.3 223.5 224.7 225.9 227.1 228.2 Pct Chg Year Ago 1.4 1.5 1.7 1.6 1.8 1.9 2.0 2.2 2.2 2.2 2.1 2.1 Other Economic Indicators Population (Ths) 2286.3 2293.6 2301.0 2308.5 2316.2 2324.0 2332.0 2340.2 2348.5 2357.0 2365.4 2374.0 Pct Chg Year Ago 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.4 1.4 1.4 Labor Force (Ths) 1071.9 1076.0 1080.2 1084.6 1088.5 1092.3 1096.1 1099.9 1103.6 1107.4 1110.9 1114.4 Pct Chg Year Ago 1.8 1.6 1.5 1.6 1.5 1.5 1.5 1.4 1.4 1.4 1.3 1.3 Unemployment Rate (%) 5.8 5.6 5.4 5.3 5.1 5.0 5.0 5.0 4.9 4.9 4.9 5.0 Total Housing Starts (Annual Rate) 11065 12195 13275 14618 15391 15712 16051 16366 16611 16544 16420 16496 Single-Family 7995 8851 9809 10956 11679 12154 12418 12727 12884 12834 12633 12513 Multifamily 3070 3344 3466 3662 3712 3558 3633 3639 3727 3710 3787 3983 University of the Pacific Business Forecasting Center 45

METRO SUMMARY - SACRAMENTO Annual Outlook for Sacramento January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 82.0 85.7 88.5 86.8 88.5 93.9 100.2 102.7 107.7 112.9 119.1 126.5 133.7 Pct Chg Year Ago 6.5 4.6 3.3-1.9 1.9 6.2 6.7 2.6 4.8 4.8 5.5 6.2 5.7 Wages and Salaries 44.3 46.4 47.2 45.3 44.9 46.2 48.5 50.0 52.7 55.3 58.3 61.6 65.1 Nonwage Income 37.7 39.3 41.3 41.6 43.6 47.7 51.7 52.7 55.0 57.5 60.8 64.9 68.6 Real Personal Income (09$) 86.5 88.3 88.5 86.8 87.0 90.2 94.5 95.7 99.0 102.6 106.8 111.4 115.6 Pct Chg Year Ago 3.7 2.0 0.2-1.8 0.3 3.6 4.7 1.4 3.4 3.6 4.0 4.3 3.8 Per Capita Income (Ths.) 39.8 41.1 41.9 40.7 41.0 43.1 45.6 46.3 48.0 49.7 51.8 54.3 56.6 Real Per Capita Income (09$) 42.0 42.3 41.9 40.7 40.4 41.4 43.0 43.1 44.1 45.2 46.5 47.9 49.0 Average Annual Wage (Ths) 48.3 50.4 52.3 53.1 54.1 55.9 57.4 57.6 59.3 60.7 62.7 65.0 67.7 Pct Chg Year Ago 4.2 4.2 3.9 1.5 1.9 3.3 2.6 0.4 2.9 2.4 3.3 3.7 4.0 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 911.6 916.8 897.7 848.4 825.4 823.0 841.8 864.9 884.6 907.5 925.6 942.6 958.3 Pct Chg Year Ago 2.1 0.6-2.1-5.5-2.7-0.3 2.3 2.8 2.3 2.6 2.0 1.8 1.7 Manufacturing 42.8 40.8 38.7 34.4 32.8 33.2 33.9 33.7 34.6 35.4 35.6 35.8 36.1 Pct Chg Year Ago -0.6-4.5-5.2-11.1-4.8 1.3 2.0-0.4 2.5 2.4 0.7 0.6 0.6 Nonmanufacturing 868.8 875.9 859.0 813.9 792.6 789.8 807.9 831.2 850.0 872.1 889.9 906.7 922.3 Pct Chg Year Ago 2.3 0.8-1.9-5.3-2.6-0.4 2.3 2.9 2.3 2.6 2.0 1.9 1.7 Construction & Mining 71.4 67.6 56.9 44.1 38.8 37.4 38.8 43.4 46.3 49.0 51.9 55.4 59.3 Pct Chg Year Ago -3.7-5.3-15.9-22.6-11.6-3.7 3.7 12.0 6.8 5.9 5.9 6.8 7.1 Trade, Trans, & Utilities 153.6 153.1 146.7 134.9 132.5 134.0 138.8 142.1 144.2 146.6 148.6 150.2 151.3 Pct Chg Year Ago 3.1-0.3-4.2-8.0-1.8 1.2 3.6 2.4 1.4 1.7 1.4 1.1 0.7 Wholesale Trade 28.4 27.9 26.5 24.1 22.8 23.6 25.1 25.0 25.3 25.8 26.5 27.2 27.7 Retail Trade 100.7 99.8 95.2 87.6 88.0 89.3 91.8 93.9 95.6 96.7 97.3 97.4 97.4 Trans, Wrhsng, & Util 24.5 25.4 25.1 23.2 21.7 21.1 21.9 23.2 23.3 24.0 24.8 25.6 26.2 Information 20.0 20.1 19.2 18.3 17.2 16.3 15.6 15.0 14.4 14.3 14.7 14.9 14.9 Pct Chg Year Ago 0.5 0.4-4.1-4.8-6.1-5.1-4.6-3.4-4.3-0.8 2.7 1.7 0.2 Financial Activities 64.3 61.5 57.2 52.9 48.3 46.6 48.1 49.5 50.0 50.8 51.0 50.8 50.3 Pct Chg Year Ago 1.9-4.4-7.1-7.5-8.7-3.4 3.1 3.0 0.9 1.7 0.4-0.4-1.0 Prof & Business Services 112.5 112.1 110.1 101.1 102.2 104.2 110.8 114.3 120.0 126.7 131.9 135.5 137.7 Pct Chg Year Ago 3.7-0.4-1.8-8.1 1.1 2.0 6.4 3.2 5.0 5.6 4.1 2.8 1.6 Educ & Health Services 105.1 110.9 115.2 116.5 115.0 116.9 121.3 127.8 132.8 136.5 139.3 141.8 144.3 Pct Chg Year Ago 4.8 5.6 3.9 1.2-1.3 1.7 3.7 5.3 4.0 2.8 2.1 1.8 1.7 Leisure & Hospitality 85.3 86.6 85.9 81.9 80.2 81.7 84.5 88.0 88.5 91.3 92.3 93.4 95.1 Pct Chg Year Ago 3.9 1.6-0.9-4.6-2.1 1.8 3.4 4.2 0.5 3.2 1.2 1.2 1.8 Other Services 28.3 28.9 29.6 28.8 28.1 28.0 28.5 28.9 29.1 29.6 29.8 30.0 30.2 Pct Chg Year Ago -0.7 2.3 2.3-2.6-2.4-0.5 1.8 1.3 0.7 1.8 0.6 0.8 0.6 Federal Government 12.6 12.4 12.5 13.3 14.6 14.0 13.7 13.5 13.4 13.2 13.1 12.9 12.7 Pct Chg Year Ago -1.3-1.9 1.0 6.2 10.5-4.1-1.9-1.8-1.1-0.9-1.3-1.3-1.5 State & Local Government 215.8 222.7 225.8 222.0 215.6 210.6 207.8 208.6 211.5 214.1 217.4 221.7 226.5 Pct Chg Year Ago 2.1 3.2 1.4-1.7-2.9-2.3-1.3 0.4 1.4 1.2 1.6 2.0 2.1 Other Economic Indicators Population (Ths) 2061.0 2085.6 2111.2 2135.3 2156.6 2177.4 2196.8 2218.4 2242.2 2268.6 2297.4 2328.1 2361.2 Pct Chg Year Ago 1.2 1.2 1.2 1.1 1.0 1.0 0.9 1.0 1.1 1.2 1.3 1.3 1.4 Labor Force (Ths) 1025.5 1037.8 1046.4 1053.4 1052.2 1048.0 1052.3 1046.6 1042.6 1060.7 1078.2 1094.2 1109.1 Pct Chg Year Ago 1.1 1.2 0.8 0.7-0.1-0.4 0.4-0.5-0.4 1.7 1.6 1.5 1.4 Unemployment Rate (%) 4.7 5.3 7.1 11.1 12.4 11.9 10.3 8.6 7.3 6.3 5.5 5.0 4.9 Total Housing Starts 11771 8121 5536 2932 2565 2813 3421 4342 4291 7352 12788 15880 16518 Single-Family 9452 7054 4299 2727 2249 2071 2942 3712 3882 5816 9403 12245 12716 Multifamily 2319 1067 1237 204 317 742 479 630 409 1536 3385 3635 3802 46 California & Metro Forecast - January 2015

San Francisco MSA SHORT TERM OUTLOOK Non-farm employment in the San Francisco MSA is expected to have a growth of 3.6% in 2015 followed by a decrease in the growth rate of 2.0% in 2016. In the first quarter of 2015, job growth is expected to be 4.3% and then in last quarter of 2015 the growth rate decreases to 2.6%. In 2015, there is an expected high growth rate in the Construction and Mining sector of 6.5% and the Professional and Business Services sector of 4.0%. Between 2015 and 2018 two sectors will experience a declining growth rate. Manufacturing will experience a drop from 3.1% in 2015 and -0.4% in 2018 and Financial Activities will see a drop from 0.0% in 2015 to -1.3% in 2018. Despite the slight decrease in employment, the Real Personal Income is expected to maintain a sizable growth rate from 4.6% in 2015 to 4.7% in 2017. Over the next four years Real Personal Income is expected to see an average growth rate of 4.4%. Per Capita Income is expected to increase to an estimated $105,000 in 2018. San Francisco s population rate is expected experience a slight decrease of 0.9% in 2016 and the average population rate between 2015 and 2018 is 0.8%. Although the labor force growth rate will peak in 2015 at 3.0%, the rate will decline every year after reaching.7% in 2018. Possibly due to the decreasing population, the unemployment rate is expected to decrease to 3.7% in 2016 and will reach 3.4% in 2018. 20% San Francisco Real Personal Income (percent change from one year ago) 1250 San Francisco Payroll Employment (Thousands) 1200 15% 1150 10% 1100 1050 5% 1000 0% 950 900-5% 850-10% 800 13% San Francisco and California Unemployment Rates (percent) 200 San Francisco Employment Mix Relative to California, 2012 (California = 100) 11% Unemployment Rate (%) CA Unemployment Rate (%) 180 160 9% 140 120 7% 100 80 5% 60 3% 40 20 1% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 47

METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 146.9 150.3 152.5 155.2 156.6 159.0 161.1 163.5 166.0 168.0 170.2 172.6 Pct Chg Year Ago 0.6 2.7 4.4 0.9 6.7 5.8 5.6 5.3 6.0 5.7 5.6 5.5 Wages and Salaries 99.0 101.5 102.7 105.7 106.5 107.8 109.2 110.8 112.9 114.5 116.1 117.7 Nonwage Income 47.8 48.8 49.8 49.6 50.1 51.2 51.9 52.7 53.2 53.5 54.1 54.8 Real Personal Income (2009$) 137.3 140.4 141.9 144.0 144.8 146.2 147.7 149.8 151.8 153.1 154.4 156.1 Pct Chg Year Ago -0.8 1.5 3.1-0.2 5.5 4.1 4.1 4.0 4.8 4.7 4.5 4.2 Per Capita Income (Ths.) 79.9 81.5 82.5 83.8 84.3 85.4 86.2 87.3 88.4 89.2 90.1 91.2 Real Per Capita Income (2009$) 74.7 76.2 76.8 77.7 78.0 78.5 79.0 80.0 80.9 81.3 81.7 82.4 Average Annual Wage (Ths.) 93.3 94.9 95.3 97.2 97.5 97.9 98.0 98.2 99.2 100.0 100.8 101.7 Pct Chg Year Ago -0.1 2.2 2.6-0.8 4.5 3.2 2.8 1.0 1.7 2.1 2.9 3.6 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1057.5 1065.6 1073.9 1083.6 1088.3 1097.2 1111.1 1124.8 1135.0 1141.7 1148.3 1153.9 Pct Chg Year Ago 5.4 4.6 4.1 3.7 2.9 3.0 3.5 3.8 4.3 4.1 3.3 2.6 Manufacturing 36.6 36.9 37.5 38.0 37.7 37.3 37.4 39.0 39.0 39.0 39.0 39.1 Pct Chg Year Ago 3.3 2.7 3.0 4.5 2.9 1.1-0.1 2.8 3.5 4.5 4.3 0.1 Nonmanufacturing 1020.9 1028.7 1036.4 1045.6 1050.6 1059.8 1073.7 1085.8 1096.0 1102.7 1109.2 1114.8 Pct Chg Year Ago 5.5 4.6 4.1 3.7 2.9 3.0 3.6 3.8 4.3 4.0 3.3 2.7 Construction & Mining 36.9 37.9 37.9 39.3 41.2 41.8 41.9 42.6 43.3 44.0 44.8 45.6 Pct Chg Year Ago 7.8 8.1 4.3 6.9 11.6 10.3 10.4 8.5 5.0 5.1 7.1 7.0 Trade, Trans, & Utilities 157.6 158.6 160.5 161.4 161.3 161.9 164.0 164.0 164.9 166.0 167.2 167.8 Pct Chg Year Ago 5.0 4.3 4.4 3.4 2.3 2.1 2.2 1.6 2.3 2.5 1.9 2.3 Wholesale Trade 26.9 27.2 27.8 27.7 27.3 27.6 27.6 27.6 27.8 28.0 28.2 28.4 Retail Trade 91.3 91.6 92.4 93.3 92.9 92.8 94.2 94.2 94.5 95.1 95.6 95.7 Trans, Wrhsng, & Util 39.4 39.8 40.3 40.4 41.1 41.5 42.3 42.3 42.6 42.9 43.3 43.7 Information 51.0 51.7 52.1 52.3 53.0 54.1 55.0 55.6 57.0 56.7 56.4 56.5 Pct Chg Year Ago 7.9 6.4 4.5 3.2 3.8 4.7 5.6 6.4 7.6 4.8 2.6 1.6 Financial Activities 76.3 76.4 76.7 76.4 76.2 76.5 77.0 75.5 76.1 76.1 76.3 76.5 Pct Chg Year Ago 3.2 2.4 2.1 1.2-0.2 0.1 0.3-1.1-0.1-0.5-0.8 1.3 Prof & Business Services 239.4 242.8 245.8 250.4 251.9 254.3 259.9 268.0 271.9 275.0 278.0 280.9 Pct Chg Year Ago 6.4 5.0 5.0 6.0 5.2 4.7 5.7 7.1 8.0 8.1 7.0 4.8 Educ & Health Services 142.1 143.8 145.7 144.4 144.9 147.2 150.1 150.3 151.4 152.8 153.5 153.8 Pct Chg Year Ago 9.0 8.4 8.8 4.1 1.9 2.4 3.0 4.1 4.5 3.8 2.3 2.3 Leisure & Hospitality 140.7 140.6 141.5 144.1 145.1 146.7 147.5 150.6 151.9 152.8 153.6 154.2 Pct Chg Year Ago 7.1 5.2 3.6 3.9 3.1 4.3 4.2 4.5 4.7 4.1 4.1 2.4 Other Services 42.2 42.6 42.6 42.4 42.4 42.2 42.6 42.5 42.8 42.9 43.1 43.1 Pct Chg Year Ago 5.9 5.3 3.9 2.0 0.4-0.8-0.1 0.2 1.1 1.6 1.1 1.3 Federal Government 18.5 18.4 18.2 18.1 18.1 18.1 18.0 18.1 18.1 18.1 18.0 17.9 Pct Chg Year Ago -2.0-1.8-2.3-2.5-2.0-2.0-0.9-0.2-0.2 0.0-0.3-1.3 State & Local Government 116.2 115.8 115.5 116.9 116.7 116.9 117.8 118.5 118.5 118.4 118.4 118.6 Pct Chg Year Ago -0.4-0.1-0.9 0.9 0.4 0.9 2.0 1.3 1.5 1.3 0.5 0.1 Other Economic Indicators Population (Ths.) 1837.9 1843.2 1848.0 1852.7 1857.5 1863.0 1868.4 1873.3 1878.0 1883.1 1888.5 1892.8 Pct Chg Year Ago 1.2 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.0 Labor Force (Ths.) 1029.4 1032.3 1034.2 1034.8 1039.6 1040.6 1046.8 1065.3 1072.5 1077.2 1081.5 1084.7 Pct Chg Year Ago 2.1 1.6 1.1 0.7 1.0 0.8 1.2 2.9 3.2 3.5 3.3 1.8 Unemployment Rate (%) 5.9 5.6 5.4 5.1 4.9 4.6 4.3 4.1 4.0 3.9 3.8 3.8 Total Housing Starts (Annual Rate) 4718 5146 4212 7400 4170 3408 4686 5100 5307 5325 5142 5166 Single-Family 486 528 481 880 619 685 596 426 436 459 484 532 Multifamily 4232 4618 3731 6519 3550 2723 4091 4674 4871 4865 4658 4635 48 California & Metro Forecast - January 2015

METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 175.4 177.9 180.6 183.1 186.5 189.6 192.5 195.5 198.5 201.2 203.9 206.6 Pct Chg Year Ago 5.6 5.8 6.1 6.1 6.3 6.6 6.6 6.8 6.5 6.1 5.9 5.7 Wages and Salaries 119.4 121.2 123.0 124.6 126.5 128.3 130.1 131.9 133.7 135.4 137.1 138.9 Nonwage Income 56.0 56.7 57.6 58.5 60.0 61.3 62.4 63.6 64.9 65.8 66.8 67.8 Real Personal Income (2009$) 158.1 159.8 161.6 163.2 165.5 167.3 169.1 171.0 172.8 174.3 175.8 177.3 Pct Chg Year Ago 4.1 4.4 4.7 4.6 4.6 4.7 4.7 4.8 4.4 4.2 3.9 3.7 Per Capita Income (Ths.) 92.5 93.6 94.8 96.0 97.6 99.0 100.4 101.8 103.2 104.4 105.6 106.9 Real Per Capita Income (2009$) 83.4 84.1 84.9 85.5 86.6 87.4 88.2 89.0 89.9 90.5 91.1 91.7 Average Annual Wage (Ths.) 102.7 103.7 104.7 105.7 106.9 108.0 109.1 110.3 111.5 112.7 114.0 115.3 Pct Chg Year Ago 3.5 3.7 3.9 3.9 4.1 4.1 4.2 4.4 4.4 4.4 4.5 4.5 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1159.8 1165.2 1170.4 1175.3 1180.5 1184.5 1188.2 1191.7 1194.7 1196.9 1199.1 1201.1 Pct Chg Year Ago 2.2 2.1 1.9 1.9 1.8 1.7 1.5 1.4 1.2 1.0 0.9 0.8 Manufacturing 39.0 38.9 38.8 38.8 38.7 38.7 38.7 38.6 38.6 38.5 38.5 38.5 Pct Chg Year Ago 0.0-0.3-0.5-0.8-0.7-0.4-0.4-0.3-0.4-0.4-0.5-0.4 Nonmanufacturing 1120.8 1126.4 1131.6 1136.6 1141.7 1145.8 1149.5 1153.1 1156.1 1158.4 1160.6 1162.6 Pct Chg Year Ago 2.3 2.1 2.0 1.9 1.9 1.7 1.6 1.5 1.3 1.1 1.0 0.8 Construction & Mining 46.2 46.9 47.7 48.5 49.2 50.0 50.7 51.4 52.0 52.5 52.9 53.2 Pct Chg Year Ago 6.8 6.6 6.3 6.3 6.5 6.6 6.4 6.0 5.6 5.0 4.4 3.7 Trade, Trans, & Utilities 168.3 168.8 169.4 170.0 170.4 170.7 171.1 171.3 171.5 171.7 171.7 171.7 Pct Chg Year Ago 2.0 1.7 1.3 1.3 1.2 1.1 1.0 0.8 0.7 0.6 0.4 0.2 Wholesale Trade 28.5 28.7 28.9 29.1 29.3 29.4 29.5 29.6 29.8 29.9 30.0 30.1 Retail Trade 95.8 95.7 95.7 95.7 95.6 95.6 95.5 95.4 95.2 95.1 94.9 94.8 Trans, Wrhsng, & Util 44.0 44.4 44.7 45.1 45.5 45.8 46.1 46.3 46.6 46.8 46.8 46.9 Information 56.9 57.5 57.8 57.8 58.8 59.3 59.5 59.7 60.2 60.6 61.0 61.2 Pct Chg Year Ago -0.1 1.4 2.4 2.3 3.4 3.1 2.9 3.4 2.3 2.3 2.7 2.5 Financial Activities 76.7 76.8 76.8 76.8 76.7 76.7 76.5 76.1 75.9 75.6 75.4 75.1 Pct Chg Year Ago 0.7 0.9 0.6 0.4 0.1-0.2-0.5-1.0-1.1-1.4-1.5-1.3 Prof & Business Services 283.6 286.2 288.9 291.3 293.1 294.3 295.5 296.8 297.6 297.8 298.2 299.0 Pct Chg Year Ago 4.3 4.1 3.9 3.7 3.4 2.8 2.3 1.9 1.5 1.2 0.9 0.7 Educ & Health Services 154.6 155.6 156.2 156.8 157.3 157.8 158.2 158.6 158.9 159.4 159.8 160.1 Pct Chg Year Ago 2.1 1.8 1.7 2.0 1.7 1.4 1.3 1.1 1.0 1.0 1.0 0.9 Leisure & Hospitality 154.9 154.9 155.2 155.6 156.2 157.0 157.9 158.7 159.3 159.9 160.6 161.1 Pct Chg Year Ago 1.9 1.4 1.0 0.9 0.9 1.3 1.7 2.0 2.0 1.9 1.7 1.5 Other Services 43.2 43.2 43.2 43.3 43.4 43.4 43.4 43.4 43.4 43.4 43.4 43.4 Pct Chg Year Ago 0.8 0.6 0.4 0.6 0.6 0.4 0.4 0.1 0.0-0.1-0.1-0.1 Federal Government 17.8 17.6 17.5 17.4 17.3 17.3 17.1 17.0 16.9 16.8 16.7 16.6 Pct Chg Year Ago -1.7-2.3-2.4-2.5-2.4-2.2-2.2-2.3-2.4-2.5-2.4-2.3 State & Local Government 118.6 118.8 118.9 119.1 119.3 119.5 119.8 120.1 120.4 120.7 120.9 121.2 Pct Chg Year Ago 0.2 0.3 0.5 0.4 0.5 0.6 0.7 0.9 0.9 1.0 0.9 0.9 Other Economic Indicators Population (Ths.) 1896.7 1900.4 1903.9 1907.3 1910.6 1913.9 1917.2 1920.5 1923.6 1926.8 1929.8 1932.7 Pct Chg Year Ago 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.6 Labor Force (Ths.) 1088.0 1091.3 1094.5 1097.8 1100.7 1103.5 1106.0 1108.4 1109.9 1111.6 1112.9 1113.8 Pct Chg Year Ago 1.4 1.3 1.2 1.2 1.2 1.1 1.0 1.0 0.8 0.7 0.6 0.5 Unemployment Rate (%) 3.8 3.7 3.6 3.6 3.5 3.5 3.5 3.4 3.4 3.4 3.4 3.4 Total Housing Starts (Annual Rate) 5111 4919 4760 4815 4803 4650 4712 4706 4570 4412 4310 4307 Single-Family 557 591 639 688 707 712 704 691 671 672 657 651 Multifamily 4554 4328 4122 4128 4095 3938 4008 4015 3900 3740 3653 3656 University of the Pacific Business Forecasting Center 49

METRO SUMMARY - SAN FRANCISCO Annual Outlook for San Francisco January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 122.3 127.8 128.8 120.5 123.7 135.5 148.1 151.2 160.1 169.2 179.2 191.0 202.6 Pct Chg Year Ago 9.6 4.5 0.8-6.4 2.7 9.5 9.3 2.1 5.9 5.7 5.9 6.6 6.0 Wages and Salaries 71.2 77.2 78.6 75.5 75.9 81.5 97.0 102.2 108.6 115.3 122.1 129.2 136.2 Nonwage Income 51.1 50.6 50.2 45.0 47.8 54.0 51.1 49.0 51.5 53.9 57.2 61.8 66.3 Real Personal Income (2009$) 129.1 131.6 128.7 120.5 121.7 130.1 139.6 140.9 147.1 153.8 160.7 168.2 175.1 Pct Chg Year Ago 6.7 1.9-2.2-6.4 1.0 6.9 7.3 0.9 4.4 4.6 4.4 4.7 4.1 Per Capita Income (Ths.) 71.7 74.2 73.8 68.2 69.4 75.2 81.2 81.9 85.8 89.7 94.2 99.7 105.0 Real Per Capita Income (2009$) 75.7 76.4 73.7 68.2 68.3 72.2 76.5 76.3 78.9 81.6 84.5 87.8 90.8 Average Annual Wage (Ths.) 72.4 76.7 77.2 78.0 79.2 82.9 94.3 95.2 97.9 100.4 104.2 108.6 113.4 Pct Chg Year Ago 4.8 6.0 0.6 1.1 1.5 4.6 13.8 1.0 2.9 2.5 3.8 4.2 4.4 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 979.9 1002.1 1014.0 963.9 954.7 978.6 1024.8 1070.1 1105.3 1144.7 1167.7 1186.2 1197.9 Pct Chg Year Ago 2.1 2.3 1.2-4.9-0.9 2.5 4.7 4.4 3.3 3.6 2.0 1.6 1.0 Manufacturing 43.5 43.5 42.2 38.1 37.0 36.3 36.0 37.2 37.9 39.0 38.9 38.7 38.5 Pct Chg Year Ago 2.1 0.0-3.1-9.6-3.0-1.7-0.8 3.4 1.7 3.1-0.4-0.5-0.4 Nonmanufacturing 936.4 958.5 971.9 925.8 917.7 942.2 988.8 1032.9 1067.5 1105.7 1128.8 1147.5 1159.4 Pct Chg Year Ago 2.1 2.4 1.4-4.7-0.8 2.7 4.9 4.5 3.3 3.6 2.1 1.7 1.0 Construction & Mining 43.3 45.6 44.5 35.3 32.6 33.4 35.6 38.0 41.9 44.4 47.3 50.3 52.6 Pct Chg Year Ago 4.4 5.3-2.4-20.8-7.5 2.4 6.7 6.8 10.2 6.1 6.5 6.4 4.7 Trade, Trans, & Utilities 162.3 162.6 160.6 149.9 147.0 147.7 153.0 159.5 162.8 166.5 169.1 170.9 171.7 Pct Chg Year Ago -0.6 0.2-1.2-6.7-1.9 0.5 3.6 4.3 2.1 2.2 1.6 1.0 0.5 Wholesale Trade 26.7 27.1 26.8 24.5 23.9 24.6 26.0 27.4 27.5 28.1 28.8 29.5 29.9 Retail Trade 93.5 95.0 94.0 87.7 86.7 87.2 89.5 92.2 93.5 95.2 95.7 95.5 95.0 Trans, Wrhsng, & Util 42.1 40.6 39.8 37.8 36.4 36.0 37.6 40.0 41.8 43.1 44.6 45.9 46.8 Information 39.0 39.4 40.8 39.6 39.0 43.2 49.1 51.8 54.4 56.7 57.5 59.3 60.8 Pct Chg Year Ago -4.5 1.2 3.4-2.8-1.5 10.6 13.7 5.5 5.1 4.1 1.5 3.2 2.4 Financial Activities 87.0 86.8 84.4 76.8 73.9 73.3 74.8 76.4 76.3 76.3 76.8 76.5 75.5 Pct Chg Year Ago 0.6-0.2-2.8-9.0-3.7-0.9 2.1 2.2-0.2 0.0 0.7-0.4-1.3 Prof & Business Services 196.3 205.5 212.2 200.6 200.1 213.2 231.6 244.6 258.5 276.5 287.5 294.9 298.2 Pct Chg Year Ago 5.4 4.7 3.3-5.4-0.2 6.5 8.7 5.6 5.7 7.0 4.0 2.6 1.1 Educ & Health Services 115.9 118.6 124.8 127.8 128.4 128.8 133.9 144.0 148.1 152.9 155.8 158.0 159.5 Pct Chg Year Ago 2.6 2.4 5.2 2.4 0.4 0.3 4.0 7.6 2.9 3.2 1.9 1.4 1.0 Leisure & Hospitality 119.9 124.3 126.8 122.2 122.7 127.6 135.1 141.7 147.5 153.1 155.1 157.4 160.2 Pct Chg Year Ago 3.3 3.6 2.0-3.7 0.5 4.0 5.8 4.9 4.1 3.8 1.3 1.5 1.8 Other Services 37.3 38.6 39.4 38.0 37.8 38.8 40.7 42.5 42.4 43.0 43.2 43.4 43.4 Pct Chg Year Ago 1.1 3.6 2.0-3.5-0.5 2.8 4.9 4.3-0.1 1.3 0.6 0.4-0.1 Federal Government 19.9 19.4 19.3 18.9 20.2 19.1 18.7 18.3 18.1 18.0 17.6 17.2 16.8 Pct Chg Year Ago -2.6-2.7-0.5-1.8 6.7-5.2-2.1-2.1-1.3-0.5-2.2-2.3-2.4 State & Local Government 115.5 117.7 119.1 116.7 116.1 117.2 116.2 116.1 117.5 118.5 118.8 119.7 120.8 Pct Chg Year Ago 2.6 1.9 1.3-2.0-0.5 1.0-0.8-0.1 1.2 0.9 0.3 0.7 0.9 Other Economic Indicators Population (Ths.) 1705.9 1722.4 1746.1 1767.6 1782.7 1801.8 1824.5 1845.4 1865.6 1885.6 1902.1 1915.6 1928.2 Pct Chg Year Ago 0.4 1.0 1.4 1.2 0.9 1.1 1.3 1.2 1.1 1.1 0.9 0.7 0.7 Labor Force (Ths.) 912.6 935.5 963.2 966.3 972.0 989.1 1018.4 1032.7 1048.1 1079.0 1092.9 1104.6 1112.1 Pct Chg Year Ago 0.9 2.5 3.0 0.3 0.6 1.8 3.0 1.4 1.5 3.0 1.3 1.1 0.7 Unemployment Rate (%) 3.9 4.0 5.0 8.5 9.0 8.1 6.9 5.5 4.5 3.9 3.7 3.5 3.4 Total Housing Starts 3638 3159 2814 930 984 2771 3732 5369 4341 5235 4901 4718 4400 Single-Family 945 981 634 404 378 402 475 594 581 478 619 704 662 Multifamily 2692 2178 2180 526 606 2369 3257 4775 3760 4757 4283 4014 3737 50 California & Metro Forecast - January 2015

San Jose MSA SHORT TERM OUTLOOK After the non-farm employment in the San Jose MSA is expected to increase by 3.5% for the year 2015, it is expected to increase by a smaller 2.3% in 2016. Job growth will be 2.6% in the last quarter of 2015 and then will be 2.3% in the first quarter of 2016. Leading job growth will be seen in the Construction & Mining sector and the Information sector in 2016; this growth measures about 7.2% and 5.3%, respectively. There will be positive growth in all sectors with the exception of the Federal Government, which will decrease by -0.2% and -1.8% in 2016. In 2015 there is expected growth in real personal income of 5.4% which translates into $144, 200. Over the next four years Real Personal Income is expected to see growth reaching a high of 4.7% and a low of 4.1%. San Jose s population is expected to grow by 1.2% in both 2015 and in 2016. Population growth will decrease to 1.1% growth in 2017 and 2018. As the labor force increases by 2.8% in 2015 and the employment increases, the unemployment rate will decrease to 4.9% in 2015 and it s expected to drop to 3.9% in 2018. 35% San Jose Real Personal Income (percent change from one year ago) 1150 San Jose Payroll Employment (Thousands) 25% 1100 1050 15% 1000 5% 950-5% 900-15% 850-25% 800 13% San Jose and California Unemployment Rates (percent) 200 San Jose Employment Mix Relative to California, 2012 (California = 100) 11% Unemployment Rate (%) CA Unemployment Rate (%) 180 160 9% 140 120 7% 100 80 5% 60 3% 40 20 1% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 51

METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 129.0 132.0 134.5 137.7 139.0 140.6 142.6 146.2 148.4 150.4 152.4 154.6 Pct Chg Year Ago 6.0 6.5 6.6 2.7 7.8 6.5 6.0 6.2 6.7 7.0 6.9 5.7 Wages and Salaries 94.6 97.1 99.1 102.5 103.7 104.6 106.3 109.3 111.3 113.0 114.7 116.3 Nonwage Income 34.4 35.0 35.5 35.2 35.4 36.0 36.3 36.9 37.1 37.4 37.8 38.3 Real Personal Income (2009$) 120.6 123.3 125.1 127.7 128.5 129.3 130.7 133.9 135.7 137.1 138.3 139.8 Pct Chg Year Ago 4.5 5.3 5.3 1.6 6.6 4.8 4.5 4.8 5.6 6.0 5.8 4.4 Per Capita Income (Ths.) 67.4 68.8 69.9 71.2 71.7 72.3 73.1 74.7 75.6 76.4 77.2 78.0 Real Per Capita Income (2009$) 63.1 64.2 65.0 66.1 66.3 66.5 67.0 68.4 69.1 69.6 70.0 70.6 Average Annual Wage (Ths.) 99.6 101.2 101.8 104.5 104.6 105.3 106.3 107.4 108.5 109.5 110.4 111.4 Pct Chg Year Ago 0.1 2.3 2.5 1.1 5.0 4.1 4.4 2.8 3.7 4.0 3.8 3.7 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 946.4 956.1 969.8 977.5 987.7 990.7 996.7 1014.5 1022.8 1029.3 1035.3 1040.6 Pct Chg Year Ago 4.6 4.3 4.8 4.4 4.4 3.6 2.8 3.8 3.5 3.9 3.9 2.6 Manufacturing 154.6 155.0 156.3 158.7 160.8 159.9 159.0 161.8 162.0 162.3 162.8 163.2 Pct Chg Year Ago -0.5-0.7-0.1 2.1 4.1 3.2 1.7 1.9 0.7 1.5 2.4 0.9 Nonmanufacturing 791.8 801.1 813.4 818.8 826.9 830.8 837.7 852.7 860.8 867.0 872.6 877.3 Pct Chg Year Ago 5.7 5.3 5.8 4.8 4.4 3.7 3.0 4.1 4.1 4.4 4.2 2.9 Construction & Mining 36.7 37.2 38.1 39.1 39.9 39.2 39.6 40.0 40.6 41.3 42.2 42.9 Pct Chg Year Ago 9.5 6.0 9.1 9.4 8.8 5.4 4.0 2.3 1.7 5.4 6.5 7.4 Trade, Trans, & Utilities 134.6 134.8 136.4 137.0 138.0 138.5 138.3 139.9 140.7 141.5 142.3 142.8 Pct Chg Year Ago 3.6 2.6 2.9 2.5 2.5 2.7 1.4 2.2 2.0 2.2 2.9 2.0 Wholesale Trade 36.0 36.2 36.9 36.9 37.4 38.1 37.8 38.8 39.0 39.3 39.6 39.9 Retail Trade 84.9 84.8 85.3 85.8 86.2 85.9 86.2 86.7 87.1 87.5 87.9 88.0 Trans, Wrhsng, & Util 13.8 13.8 14.1 14.3 14.4 14.5 14.4 14.5 14.6 14.7 14.8 14.9 Information 57.0 57.9 59.3 60.7 62.0 63.4 65.9 68.4 70.5 70.7 71.0 71.7 Pct Chg Year Ago 7.8 7.2 8.7 9.5 8.7 9.5 11.0 12.7 13.7 11.5 7.7 4.8 Financial Activities 33.3 33.8 33.9 33.3 33.6 34.1 34.2 34.9 35.1 35.1 35.1 35.2 Pct Chg Year Ago 0.6 1.7 1.4-0.6 0.7 0.9 1.0 4.9 4.6 2.8 2.6 0.7 Prof & Business Services 188.0 190.0 193.8 193.5 195.1 194.7 195.4 202.6 205.1 207.8 210.3 212.2 Pct Chg Year Ago 9.1 7.2 7.2 4.9 3.8 2.5 0.8 4.7 5.2 6.7 7.6 4.7 Educ & Health Services 139.5 142.9 147.8 148.3 149.5 152.0 155.2 155.2 156.1 157.6 158.2 158.6 Pct Chg Year Ago 6.4 8.1 10.8 7.4 7.1 6.4 5.0 4.6 4.4 3.6 2.0 2.2 Leisure & Hospitality 85.8 87.6 87.6 88.4 89.4 89.3 90.3 91.8 92.5 92.9 93.3 93.7 Pct Chg Year Ago 6.4 7.3 5.0 4.8 4.3 1.9 3.1 3.9 3.4 4.0 3.4 2.1 Other Services 25.2 25.4 25.4 25.6 25.5 25.5 25.5 25.3 25.5 25.5 25.6 25.6 Pct Chg Year Ago 3.1 2.6 1.7 3.2 1.5 0.6 0.3-0.9-0.2-0.1 0.3 1.0 Federal Government 9.9 9.9 10.0 10.0 10.0 9.9 9.9 9.9 9.9 9.9 9.8 9.8 Pct Chg Year Ago 0.6 1.2 1.7 0.5 1.3 0.1-0.4-0.5-0.9-0.3-0.9-1.3 State & Local Government 81.9 81.6 81.2 83.1 83.9 84.1 83.4 84.7 84.7 84.7 84.8 84.9 Pct Chg Year Ago 0.2 0.0-0.3 1.9 2.5 3.1 2.7 1.9 0.9 0.7 1.6 0.3 Other Economic Indicators Population (Ths.) 1912.9 1919.6 1926.3 1932.5 1938.6 1944.8 1951.0 1957.2 1963.2 1969.3 1975.1 1981.0 Pct Chg Year Ago 1.4 1.4 1.4 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.2 1.2 Labor Force (Ths.) 945.9 949.0 952.0 952.2 957.9 959.6 961.6 977.8 984.6 989.2 993.6 996.8 Pct Chg Year Ago 1.6 1.5 1.4 0.9 1.3 1.1 1.0 2.7 2.8 3.1 3.3 1.9 Unemployment Rate (%) 7.5 7.1 6.8 6.4 6.1 5.7 5.4 5.3 5.1 4.9 4.8 4.8 Total Housing Starts (Annual Rate) 6446 6020 6099 7497 6271 6923 8762 11757 8599 8403 7959 7847 Single-Family 1817 1965 1963 2113 1794 2212 1837 1396 1385 1429 1486 1608 Multifamily 4629 4055 4136 5384 4478 4711 6926 10361 7214 6974 6473 6239 52 California & Metro Forecast - January 2015

METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 157.1 159.6 162.1 164.6 167.5 170.1 172.8 175.5 178.3 180.6 183.1 185.6 Pct Chg Year Ago 5.8 6.1 6.4 6.5 6.6 6.6 6.6 6.6 6.4 6.2 5.9 5.8 Wages and Salaries 118.1 120.0 122.1 123.8 125.8 127.6 129.6 131.6 133.6 135.5 137.4 139.4 Nonwage Income 39.0 39.5 40.1 40.8 41.7 42.5 43.3 44.0 44.7 45.2 45.7 46.2 Real Personal Income (2009$) 141.6 143.4 145.1 146.7 148.6 150.1 151.8 153.5 155.2 156.5 157.9 159.3 Pct Chg Year Ago 4.4 4.6 4.9 4.9 5.0 4.7 4.7 4.7 4.4 4.2 4.0 3.8 Per Capita Income (Ths.) 79.1 80.1 81.1 82.2 83.4 84.5 85.6 86.7 87.8 88.7 89.6 90.6 Real Per Capita Income (2009$) 71.3 72.0 72.6 73.2 74.0 74.5 75.2 75.8 76.4 76.8 77.3 77.7 Average Annual Wage (Ths.) 112.5 113.7 114.9 116.1 117.4 118.7 120.0 121.5 123.0 124.4 125.8 127.3 Pct Chg Year Ago 3.7 3.9 4.1 4.2 4.4 4.4 4.5 4.7 4.7 4.8 4.8 4.8 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 1046.2 1052.7 1058.8 1063.4 1067.9 1071.9 1075.8 1079.8 1082.9 1085.9 1088.9 1092.1 Pct Chg Year Ago 2.3 2.3 2.3 2.2 2.1 1.8 1.6 1.5 1.4 1.3 1.2 1.1 Manufacturing 163.3 163.1 163.2 163.2 163.4 163.6 163.8 163.9 163.9 164.0 164.2 164.4 Pct Chg Year Ago 0.8 0.5 0.2 0.0 0.0 0.3 0.4 0.4 0.3 0.3 0.2 0.3 Nonmanufacturing 882.9 889.7 895.7 900.2 904.5 908.3 912.0 915.9 919.1 921.9 924.7 927.7 Pct Chg Year Ago 2.6 2.6 2.6 2.6 2.4 2.1 1.8 1.7 1.6 1.5 1.4 1.3 Construction & Mining 43.6 44.3 45.1 46.0 46.8 47.6 48.3 49.1 49.7 50.3 50.8 51.2 Pct Chg Year Ago 7.4 7.3 7.0 7.0 7.3 7.3 7.1 6.8 6.4 5.7 5.0 4.2 Trade, Trans, & Utilities 143.2 143.6 144.1 144.5 144.8 145.0 145.3 145.5 145.7 145.9 146.2 146.4 Pct Chg Year Ago 1.7 1.5 1.2 1.2 1.1 1.0 0.8 0.7 0.7 0.6 0.6 0.6 Wholesale Trade 40.1 40.4 40.8 41.0 41.2 41.4 41.6 41.8 42.0 42.2 42.4 42.6 Retail Trade 88.0 88.0 88.1 88.1 88.0 88.0 88.0 87.9 87.8 87.8 87.7 87.7 Trans, Wrhsng, & Util 15.0 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 16.0 16.0 16.0 Information 72.6 74.7 75.9 75.5 75.8 75.9 76.0 76.2 76.6 76.9 77.1 77.5 Pct Chg Year Ago 3.0 5.6 7.0 5.4 4.4 1.7 0.1 0.9 1.0 1.2 1.5 1.7 Financial Activities 35.2 35.3 35.2 35.2 35.2 35.1 35.0 34.8 34.8 34.6 34.5 34.5 Pct Chg Year Ago 0.3 0.5 0.4 0.2-0.1-0.4-0.7-1.1-1.2-1.4-1.4-1.1 Prof & Business Services 214.3 216.6 218.9 221.4 223.2 224.5 225.8 227.2 228.1 228.5 229.1 229.9 Pct Chg Year Ago 4.5 4.2 4.1 4.4 4.1 3.6 3.1 2.6 2.2 1.8 1.5 1.2 Educ & Health Services 159.5 160.6 161.3 162.1 162.7 163.4 163.9 164.6 165.0 165.7 166.4 167.0 Pct Chg Year Ago 2.1 1.9 1.9 2.2 2.0 1.8 1.6 1.5 1.4 1.4 1.5 1.5 Leisure & Hospitality 94.1 94.1 94.2 94.4 94.7 95.2 95.8 96.3 96.7 97.1 97.6 98.0 Pct Chg Year Ago 1.7 1.3 0.9 0.7 0.7 1.2 1.6 2.0 2.0 2.0 1.9 1.8 Other Services 25.6 25.7 25.7 25.7 25.8 25.8 25.8 25.8 25.9 25.9 25.9 26.0 Pct Chg Year Ago 0.5 0.5 0.4 0.6 0.7 0.6 0.6 0.4 0.3 0.3 0.3 0.4 Federal Government 9.8 9.7 9.7 9.6 9.6 9.5 9.5 9.4 9.4 9.4 9.3 9.3 Pct Chg Year Ago -1.5-1.8-1.9-1.9-1.8-1.7-1.7-1.8-1.9-2.0-1.9-1.8 State & Local Government 85.1 85.3 85.5 85.7 86.0 86.3 86.6 87.0 87.3 87.6 87.9 88.1 Pct Chg Year Ago 0.4 0.6 0.9 0.9 1.1 1.2 1.3 1.4 1.5 1.5 1.4 1.4 Other Economic Indicators Population (Ths.) 1986.6 1992.4 1998.2 2003.6 2009.0 2014.5 2020.0 2025.5 2031.4 2037.3 2043.2 2049.1 Pct Chg Year Ago 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.2 Labor Force (Ths.) 999.7 1003.0 1006.2 1008.7 1010.4 1012.3 1013.8 1015.3 1017.3 1019.4 1021.4 1023.3 Pct Chg Year Ago 1.5 1.4 1.3 1.2 1.1 0.9 0.8 0.7 0.7 0.7 0.7 0.8 Unemployment Rate (%) 4.7 4.6 4.5 4.3 4.2 4.1 4.0 3.9 3.9 3.9 3.9 3.9 Total Housing Starts (Annual Rate) 7712 7530 7302 7394 7437 7379 7471 7485 7439 7379 7352 7450 Single-Family 1738 1896 2100 2330 2470 2560 2588 2608 2538 2504 2430 2371 Multifamily 5974 5634 5202 5065 4967 4819 4884 4877 4901 4875 4922 5079 University of the Pacific Business Forecasting Center 53

METRO SUMMARY - SAN JOSE Annual Outlook for San Jose January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 97.6 104.9 104.4 97.5 104.3 115.6 126.5 133.3 142.1 151.5 160.8 171.5 181.9 Pct Chg Year Ago 9.7 7.5-0.5-6.6 7.0 10.8 9.4 5.4 6.6 6.6 6.2 6.6 6.1 Wages and Salaries 72.4 79.2 78.1 72.9 80.5 87.9 92.7 98.3 106.0 113.8 121.0 128.6 136.5 Nonwage Income 25.3 25.7 26.3 24.6 23.8 27.7 33.8 35.0 36.1 37.6 39.8 42.9 45.4 Real Personal Income (2009$) 103.1 108.0 104.3 97.5 102.6 111.0 119.3 124.2 130.6 137.7 144.2 151.0 157.2 Pct Chg Year Ago 6.8 4.8-3.4-6.5 5.3 8.2 7.5 4.2 5.2 5.4 4.7 4.7 4.1 Per Capita Income (Ths.) 55.8 59.3 58.1 53.5 56.6 61.8 66.7 69.3 73.0 76.8 80.6 85.0 89.2 Real Per Capita Income (2009$) 58.9 61.0 58.0 53.5 55.6 59.3 62.9 64.6 67.1 69.8 72.3 74.9 77.1 Average Annual Wage (Ths.) 80.3 85.9 84.1 83.7 92.7 98.8 100.3 101.8 105.9 109.9 114.3 119.4 125.1 Pct Chg Year Ago 6.5 7.0-2.1-0.5 10.8 6.7 1.5 1.5 4.1 3.8 4.0 4.5 4.8 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 898.1 918.7 925.3 868.4 865.4 886.1 921.1 962.5 997.4 1032.0 1055.3 1073.8 1087.4 Pct Chg Year Ago 2.5 2.3 0.7-6.1-0.3 2.4 3.9 4.5 3.6 3.5 2.3 1.8 1.3 Manufacturing 162.8 165.5 166.7 153.9 151.4 155.3 155.9 156.2 160.4 162.6 163.2 163.7 164.1 Pct Chg Year Ago -0.8 1.7 0.7-7.7-1.5 2.5 0.4 0.2 2.7 1.4 0.4 0.3 0.3 Nonmanufacturing 735.3 753.2 758.6 714.5 714.0 730.8 765.2 806.3 837.0 869.4 892.1 910.2 923.3 Pct Chg Year Ago 3.2 2.4 0.7-5.8-0.1 2.4 4.7 5.4 3.8 3.9 2.6 2.0 1.4 Construction & Mining 47.1 47.5 44.5 34.7 32.4 31.8 34.8 37.8 39.7 41.8 44.8 47.9 50.5 Pct Chg Year Ago 5.3 1.0-6.4-22.1-6.3-1.8 9.5 8.5 5.1 5.2 7.2 7.1 5.3 Trade, Trans, & Utilities 137.0 139.7 137.7 126.4 125.7 127.7 131.9 135.7 138.7 141.9 143.9 145.2 146.0 Pct Chg Year Ago 3.2 2.0-1.4-8.2-0.5 1.6 3.3 2.9 2.2 2.3 1.4 0.9 0.6 Wholesale Trade 38.3 39.8 39.8 35.6 34.9 33.9 34.9 36.5 38.0 39.5 40.6 41.5 42.3 Retail Trade 85.8 86.4 84.4 78.8 78.8 81.8 84.1 85.2 86.3 87.6 88.0 88.0 87.8 Trans, Wrhsng, & Util 12.9 13.5 13.5 12.1 12.0 12.1 12.9 14.0 14.4 14.8 15.2 15.7 16.0 Information 38.4 40.7 43.6 43.9 46.4 51.3 54.2 58.7 64.9 70.9 74.7 76.0 77.0 Pct Chg Year Ago 6.5 6.1 7.1 0.5 5.9 10.5 5.7 8.3 10.5 9.4 5.3 1.8 1.3 Financial Activities 36.9 36.9 34.3 31.5 31.0 32.3 33.3 33.6 34.2 35.1 35.2 35.0 34.6 Pct Chg Year Ago 2.2-0.1-7.1-8.0-1.5 4.2 3.0 0.8 1.9 2.7 0.3-0.6-1.3 Prof & Business Services 171.8 178.1 178.6 161.1 161.4 167.3 178.7 191.3 196.9 208.8 217.8 225.2 228.9 Pct Chg Year Ago 3.7 3.7 0.3-9.8 0.3 3.6 6.8 7.1 2.9 6.1 4.3 3.4 1.7 Educ & Health Services 107.7 111.2 118.6 121.2 123.4 125.8 133.7 144.6 153.0 157.6 160.9 163.6 166.0 Pct Chg Year Ago 3.9 3.3 6.6 2.2 1.8 1.9 6.3 8.2 5.8 3.1 2.1 1.7 1.5 Leisure & Hospitality 75.1 76.8 78.1 74.9 74.9 77.4 82.5 87.3 90.2 93.1 94.2 95.5 97.3 Pct Chg Year Ago 3.2 2.2 1.7-4.1 0.0 3.4 6.6 5.9 3.3 3.2 1.2 1.4 1.9 Other Services 24.8 25.1 25.4 24.5 24.3 24.6 24.7 25.4 25.5 25.5 25.7 25.8 25.9 Pct Chg Year Ago 0.7 1.1 1.3-3.5-0.8 1.2 0.6 2.7 0.4 0.3 0.5 0.6 0.4 Federal Government 11.1 11.0 11.0 10.8 10.7 10.1 9.8 9.9 9.9 9.9 9.7 9.5 9.3 Pct Chg Year Ago -2.3-0.5-0.6-1.5-0.7-5.4-2.8 1.0 0.1-0.9-1.8-1.7-1.9 State & Local Government 85.4 86.2 86.9 85.6 83.7 82.5 81.6 82.0 84.0 84.8 85.4 86.5 87.7 Pct Chg Year Ago 0.9 0.9 0.8-1.4-2.3-1.4-1.1 0.4 2.5 0.9 0.7 1.3 1.4 Other Economic Indicators Population (Ths.) 1748.2 1770.2 1798.0 1822.2 1844.7 1870.5 1896.3 1922.8 1947.9 1972.1 1995.2 2017.2 2040.2 Pct Chg Year Ago 0.9 1.3 1.6 1.3 1.2 1.4 1.4 1.4 1.3 1.2 1.2 1.1 1.1 Labor Force (Ths.) 848.1 868.8 895.2 900.9 905.6 917.7 937.1 949.8 964.2 991.1 1004.4 1013.0 1020.3 Pct Chg Year Ago 0.8 2.4 3.0 0.6 0.5 1.3 2.1 1.4 1.5 2.8 1.4 0.8 0.7 Unemployment Rate (%) 4.6 4.7 6.1 10.9 11.2 10.0 8.6 7.0 5.6 4.9 4.5 4.1 3.9 Total Housing Starts 5161 3980 2693 1359 2323 3152 4966 6515 8428 8202 7484 7443 7405 Single-Family 2211 1969 1105 708 887 1077 1525 1964 1809 1477 2016 2557 2461 Multifamily 2950 2010 1588 651 1436 2075 3441 4551 6619 6725 5469 4887 4944 54 California & Metro Forecast - January 2015

Stockton MSA SHORT TERM OUTLOOK Non-farm employment in the Stockton MSA is expected to increase 2.3% for the year 2015 followed with a lesser increase of 1.8% for 2016. The first quarter of 2016 is expected to have a 1.8% increase in employment, which will stay the average through the last quarter. The Construction & Mining and Education and Health Services sectors will lead in job growth with 10.8% and 4.7% increases in 2015, respectively. The sector that will suffer from decreasing employment growth is the Federal Government sector that will see -1.0% growth, but this is substantially better than the -10% growth seen in 2014. With an overall increase in employment, real personal income will increase by a rate of 3.0% for 2015 equating to 24.1 Billion. Real personal income will continue to grow at a constant rate of 3.4% or higher for the upcoming years. Per capita income will also consistently increase in the foreseeable future, along with the average annual wage, which has a forecasted change of 2.1% in 2015 to 2.9% in 2016. Population in Stockton will increase 0.9% in 2015. It will continue to increase at the rate of 1.0% through 2016. The labor force will have its first increase in growth since 2010 to an increase of 1.5% in 2015. After the increase in 2015, the labor force rate will decrease until it reached 1.0% in 2018. With the growth in employment, the unemployment rate is expected to decrease from 11.3% in 2014 to 10.2% in 2015. This decrease in unemployment will continue through the projected forecast until it reaches 8.5% in 2018. 10% Stockton Real Personal Income (percent change from one year ago) 230 Stockton Payroll Employment (Thousands) 8% 220 6% 210 200 4% 190 2% 180 0% 170-2% 160-4% 150 Stockton and California Unemployment Rates (percent) Stockton Employment Mix Relative to California, 2012 (California = 100) 18% 200 16% Unemployment Rate (%) CA Unemployment Rate (%) 180 160 14% 140 120 12% 100 10% 80 60 8% 40 6% 4% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. University of the Pacific Business Forecasting Center 55

METRO SUMMARY - STOCKTON Quarterly Outlook for Stockton January 2015 Forecast 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 23.9 24.3 24.6 24.7 25.0 25.4 25.7 25.9 26.2 26.4 26.7 27.0 Pct Chg Year Ago 2.9 3.7 4.1 0.4 4.5 4.5 4.4 4.9 4.7 3.9 3.8 4.0 Wages and Salaries 9.2 9.4 9.5 9.6 9.7 9.9 10.0 10.1 10.2 10.3 10.4 10.5 Nonwage Income 14.7 14.9 15.1 15.1 15.3 15.5 15.7 15.8 16.0 16.1 16.3 16.4 Real Personal Income (2009$) 22.4 22.7 22.9 22.9 23.1 23.4 23.5 23.8 23.9 24.1 24.2 24.4 Pct Chg Year Ago 1.5 2.5 2.9-0.6 3.3 2.8 2.8 3.6 3.6 2.9 2.8 2.6 Per Capita Income (Ths.) 34.0 34.5 34.9 35.0 35.3 35.8 36.1 36.4 36.6 36.9 37.2 37.5 Real Per Capita Income (2009$) 31.8 32.3 32.4 32.5 32.6 32.9 33.1 33.3 33.5 33.6 33.7 33.9 Average Annual Wage (Ths.) 46.2 46.7 46.7 47.1 47.7 48.0 48.1 48.2 48.5 48.8 49.1 49.5 Pct Chg Year Ago -0.9 1.1 1.2-0.5 3.2 2.7 2.9 2.4 1.8 1.8 2.2 2.6 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 198.4 200.3 201.8 202.9 202.4 204.6 206.7 208.6 209.0 209.7 210.8 211.8 Pct Chg Year Ago 2.7 3.3 3.8 3.1 2.1 2.2 2.4 2.8 3.3 2.5 2.0 1.6 Manufacturing 17.7 17.8 18.0 17.9 17.7 17.5 17.6 17.8 17.5 17.2 17.3 17.4 Pct Chg Year Ago -2.3-0.8 2.1 1.9 0.4-1.5-2.1-0.6-1.3-1.9-1.7-1.9 Nonmanufacturing 180.7 182.5 183.8 185.1 184.7 187.1 189.1 190.8 191.5 192.5 193.5 194.4 Pct Chg Year Ago 3.2 3.7 3.9 3.2 2.2 2.5 2.9 3.1 3.7 2.9 2.3 1.9 Construction & Mining 8.6 9.1 8.8 8.8 8.4 8.4 8.8 9.3 9.4 9.6 9.8 9.9 Pct Chg Year Ago 11.7 20.9 14.7 11.5-2.4-6.7-0.5 5.5 12.2 13.4 11.4 6.3 Trade, Trans, & Utilities 51.6 51.9 52.0 52.7 52.8 53.3 52.9 53.3 53.5 53.8 54.0 54.2 Pct Chg Year Ago 3.6 2.8 2.3 3.2 2.3 2.7 1.7 1.1 1.5 0.9 2.1 1.7 Wholesale Trade 10.7 10.9 11.0 11.1 11.1 11.1 11.1 11.3 11.3 11.4 11.5 11.5 Retail Trade 25.7 25.7 25.7 25.8 25.8 26.1 26.1 26.2 26.3 26.4 26.4 26.4 Trans, Wrhsng, & Util 15.2 15.3 15.4 15.8 15.9 16.1 15.7 15.8 15.9 16.0 16.2 16.3 Information 1.9 2.0 1.9 1.9 1.9 2.0 2.0 2.0 2.1 2.1 2.0 2.0 Pct Chg Year Ago -9.4-6.7-8.0-7.5-0.9 1.6 5.9 7.7 9.2 4.0 1.3-0.6 Financial Activities 7.6 7.6 7.7 7.6 7.6 7.6 7.6 7.7 7.7 7.7 7.7 7.7 Pct Chg Year Ago 2.2 0.3 5.1 0.5-0.6-0.9-0.3 0.6 1.9 1.7 0.7 0.4 Prof & Business Services 16.8 17.7 17.3 17.5 18.0 18.2 18.3 18.4 18.4 18.4 18.6 18.8 Pct Chg Year Ago 6.5 7.1 3.4 2.4 7.0 2.7 6.1 4.9 2.1 1.5 1.6 2.3 Educ & Health Services 33.9 33.3 33.4 33.2 32.6 33.2 34.2 34.6 34.8 35.3 35.4 35.5 Pct Chg Year Ago 4.7 1.9 2.6-1.5-3.7-0.2 2.5 4.4 6.5 6.2 3.4 2.5 Leisure & Hospitality 17.5 17.9 18.3 18.6 18.9 19.0 19.2 19.3 19.4 19.4 19.5 19.5 Pct Chg Year Ago 3.3 5.9 7.6 8.4 8.2 6.3 4.7 3.4 2.4 1.9 1.5 1.5 Other Services 6.6 6.6 6.6 6.7 6.6 6.7 6.8 6.9 7.0 7.0 7.0 7.0 Pct Chg Year Ago 2.5 2.1 0.5 2.6-0.1 1.6 2.1 2.9 5.1 4.1 3.6 1.2 Federal Government 3.8 3.6 3.4 3.3 3.2 3.2 3.1 3.1 3.1 3.1 3.1 3.1 Pct Chg Year Ago -6.0-10.1-12.0-12.7-15.1-11.2-8.3-5.5-1.8-0.8-0.5-0.9 State & Local Government 32.4 32.9 34.3 34.5 34.7 35.6 36.1 36.0 36.2 36.2 36.3 36.5 Pct Chg Year Ago -0.1 3.7 6.6 6.9 7.1 8.0 5.1 4.3 4.2 1.8 0.7 1.3 Other Economic Indicators Population (Ths.) 703.6 704.4 705.5 707.0 708.7 710.2 711.4 712.7 714.2 715.9 717.6 719.4 Pct Chg Year Ago 0.6 0.5 0.5 0.6 0.7 0.8 0.8 0.8 0.8 0.8 0.9 0.9 Labor Force (Ths.) 300.3 300.2 299.3 297.5 297.6 296.8 295.3 297.8 299.2 300.2 301.3 302.1 Pct Chg Year Ago 0.1 0.0-0.3-1.0-0.9-1.1-1.3 0.1 0.6 1.1 2.0 1.4 Unemployment Rate (%) 13.5 12.9 12.6 12.2 11.9 11.5 10.7 10.5 10.2 9.9 9.8 9.8 Total Housing Starts (Annual Rate) 1662 1545 863 1022 1151 1560 1117 664 1014 1420 1746 2017 Single-Family 1507 1338 839 887 1110 1552 1110 628 947 1306 1568 1763 Multifamily 156 207 24 134 41 7 6 35 68 114 178 254 56 California & Metro Forecast - January 2015

METRO SUMMARY - STOCKTON Quarterly Outlook for Stockton January 2015 Forecast 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 Personal Income (Annual Rate, Billions $) Total Personal Income 27.4 27.7 28.0 28.4 28.9 29.3 29.7 30.1 30.5 30.9 31.3 31.6 Pct Chg Year Ago 4.5 4.8 5.1 5.4 5.6 5.8 5.9 5.7 5.6 5.5 5.3 5.1 Wages and Salaries 10.7 10.8 10.9 11.0 11.2 11.3 11.5 11.6 11.8 11.9 12.1 12.2 Nonwage Income 16.7 16.9 17.1 17.4 17.7 18.0 18.2 18.4 18.7 18.9 19.2 19.4 Real Personal Income (2009$) 24.7 24.9 25.1 25.3 25.6 25.8 26.1 26.3 26.6 26.8 27.0 27.1 Pct Chg Year Ago 3.1 3.4 3.7 3.9 3.9 3.9 4.0 3.8 3.6 3.5 3.3 3.2 Per Capita Income (Ths.) 37.9 38.3 38.7 39.2 39.7 40.1 40.6 41.0 41.5 41.9 42.2 42.6 Real Per Capita Income (2009$) 34.2 34.4 34.6 34.9 35.2 35.4 35.6 35.9 36.1 36.3 36.4 36.6 Average Annual Wage (Ths.) 49.9 50.2 50.6 51.0 51.5 51.9 52.4 52.9 53.4 53.9 54.4 54.9 Pct Chg Year Ago 2.8 2.8 3.0 3.0 3.2 3.3 3.5 3.7 3.8 3.9 3.9 3.9 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 212.7 213.6 214.5 215.5 216.3 217.1 218.0 218.7 219.5 220.3 221.0 221.7 Pct Chg Year Ago 1.8 1.9 1.8 1.7 1.7 1.6 1.6 1.5 1.5 1.5 1.4 1.3 Manufacturing 17.6 17.5 17.5 17.6 17.6 17.6 17.6 17.6 17.6 17.7 17.7 17.7 Pct Chg Year Ago 0.3 2.0 1.5 0.6 0.1 0.4 0.5 0.5 0.4 0.4 0.4 0.5 Nonmanufacturing 195.2 196.1 197.0 197.9 198.8 199.5 200.3 201.1 201.9 202.6 203.3 204.0 Pct Chg Year Ago 1.9 1.9 1.8 1.8 1.8 1.8 1.7 1.6 1.6 1.6 1.5 1.4 Construction & Mining 10.1 10.2 10.4 10.6 10.8 11.0 11.2 11.4 11.6 11.7 11.9 12.0 Pct Chg Year Ago 6.6 6.5 6.0 6.3 7.0 7.5 7.7 7.9 7.6 7.1 6.5 5.5 Trade, Trans, & Utilities 54.4 54.5 54.7 54.9 55.0 55.1 55.2 55.3 55.4 55.6 55.6 55.7 Pct Chg Year Ago 1.5 1.4 1.2 1.1 1.1 1.0 0.9 0.8 0.8 0.8 0.8 0.7 Wholesale Trade 11.6 11.7 11.7 11.8 11.8 11.9 11.9 12.0 12.0 12.0 12.1 12.1 Retail Trade 26.4 26.3 26.2 26.2 26.2 26.1 26.1 26.0 26.0 26.0 26.0 25.9 Trans, Wrhsng, & Util 16.4 16.6 16.7 16.9 17.0 17.1 17.2 17.3 17.4 17.6 17.6 17.6 Information 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 Pct Chg Year Ago -2.8 1.6 4.7 4.5 4.6 1.5-0.6 0.0 0.0-0.1 0.3 0.2 Financial Activities 7.7 7.7 7.7 7.7 7.7 7.6 7.6 7.6 7.5 7.5 7.5 7.4 Pct Chg Year Ago 0.0 0.2 0.0-0.2-0.5-0.7-1.1-1.5-1.7-1.9-1.8-1.5 Prof & Business Services 19.0 19.2 19.4 19.6 19.7 19.8 19.9 19.9 20.0 20.1 20.2 20.2 Pct Chg Year Ago 3.3 4.1 4.0 4.0 3.7 3.2 2.5 1.8 1.7 1.5 1.5 1.5 Educ & Health Services 35.7 35.9 36.1 36.3 36.4 36.6 36.7 36.9 37.0 37.2 37.4 37.5 Pct Chg Year Ago 2.7 1.9 1.9 2.3 2.1 1.8 1.7 1.6 1.6 1.6 1.7 1.7 Leisure & Hospitality 19.6 19.6 19.6 19.6 19.7 19.8 19.9 20.0 20.1 20.2 20.2 20.3 Pct Chg Year Ago 1.3 0.9 0.6 0.4 0.4 1.0 1.5 1.9 1.9 2.0 1.8 1.8 Other Services 7.0 7.0 7.0 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 Pct Chg Year Ago 0.7 0.7 0.4 0.7 0.7 0.6 0.9 0.4 0.6 0.7 0.6 0.6 Federal Government 3.1 3.1 3.1 3.1 3.1 3.1 3.0 3.0 3.0 3.0 3.0 3.0 Pct Chg Year Ago -1.0-1.3-1.4-1.4-1.3-1.2-1.3-1.3-1.4-1.5-1.4-1.4 State & Local Government 36.6 36.8 37.0 37.1 37.3 37.5 37.7 37.8 38.0 38.2 38.4 38.5 Pct Chg Year Ago 1.3 1.5 1.7 1.7 1.8 1.8 1.9 1.9 1.9 1.9 1.9 1.8 Other Economic Indicators Population (Ths.) 721.1 722.8 724.6 726.4 728.2 730.0 731.8 733.7 735.7 737.8 739.9 742.1 Pct Chg Year Ago 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1 1.1 Labor Force (Ths.) 303.0 304.0 304.9 305.6 306.5 307.4 308.3 309.1 309.9 310.9 311.8 312.6 Pct Chg Year Ago 1.3 1.3 1.2 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 Unemployment Rate (%) 9.7 9.6 9.4 9.3 9.2 9.1 9.1 9.0 9.0 9.1 9.2 9.2 Total Housing Starts (Annual Rate) 2245 2447 2659 2916 3072 3169 3198 3191 3179 3153 3125 3104 Single-Family 1928 2096 2292 2525 2676 2783 2812 2806 2793 2771 2740 2718 Multifamily 317 351 367 391 396 386 386 385 387 382 385 385 University of the Pacific Business Forecasting Center 57

METRO SUMMARY - STOCKTON Annual Outlook for Stockton January 2015 Forecast 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Personal Income (Billions $) Total Personal Income 19.7 20.8 21.0 20.8 21.2 22.4 23.7 24.4 25.5 26.6 27.9 29.5 31.1 Pct Chg Year Ago 5.9 5.8 1.0-1.3 2.2 5.7 5.9 2.8 4.6 4.1 5.0 5.8 5.4 Wages and Salaries 8.7 9.2 9.3 8.9 8.8 8.9 9.1 9.4 9.9 10.4 10.9 11.4 12.0 Nonwage Income 11.0 11.7 11.7 11.9 12.4 13.5 14.6 15.0 15.6 16.2 17.0 18.1 19.1 Real Personal Income (2009$) 20.8 21.4 21.0 20.8 20.9 21.5 22.4 22.7 23.4 24.1 25.0 26.0 26.9 Pct Chg Year Ago 3.2 3.2-2.0-1.2 0.5 3.1 4.0 1.6 3.1 3.0 3.5 3.9 3.4 Per Capita Income (Ths.) 29.7 31.1 31.3 30.6 30.8 32.2 33.8 34.6 35.9 37.0 38.5 40.3 42.0 Real Per Capita Income (2009$) 31.3 32.1 31.2 30.6 30.3 30.9 31.9 32.2 33.0 33.7 34.5 35.5 36.3 Average Annual Wage (Ths.) 40.8 42.5 44.2 44.7 45.6 46.2 46.6 46.7 48.0 49.0 50.4 52.1 54.2 Pct Chg Year Ago 3.7 4.1 4.0 1.3 1.8 1.5 0.7 0.2 2.8 2.1 2.9 3.4 3.9 Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment 211.9 214.7 209.4 197.7 191.2 190.6 194.6 200.8 205.6 210.3 214.1 217.5 220.6 Pct Chg Year Ago 1.6 1.3-2.5-5.6-3.3-0.3 2.1 3.2 2.4 2.3 1.8 1.6 1.4 Manufacturing 21.7 21.9 21.2 18.9 17.6 17.9 17.8 17.8 17.7 17.4 17.5 17.6 17.7 Pct Chg Year Ago 3.7 1.2-3.1-11.1-6.7 1.9-0.8 0.2-1.0-1.7 1.1 0.4 0.4 Nonmanufacturing 190.3 192.8 188.2 178.8 173.6 172.6 176.8 183.0 187.9 193.0 196.6 199.9 202.9 Pct Chg Year Ago 1.4 1.3-2.4-5.0-2.9-0.5 2.4 3.5 2.7 2.7 1.9 1.7 1.5 Construction & Mining 16.1 14.0 11.6 8.5 7.7 7.5 7.7 8.8 8.7 9.7 10.3 11.1 11.8 Pct Chg Year Ago -4.8-12.6-17.7-26.1-9.5-2.8 3.0 14.7-1.0 10.8 6.4 7.5 6.7 Trade, Trans, & Utilities 50.5 51.4 50.1 47.6 47.5 48.8 50.6 52.1 53.1 53.9 54.6 55.1 55.6 Pct Chg Year Ago 3.1 1.8-2.5-5.1-0.1 2.7 3.7 3.0 2.0 1.5 1.3 1.0 0.8 Wholesale Trade 9.8 10.5 10.4 9.9 10.0 10.2 10.7 10.9 11.1 11.4 11.7 11.9 12.0 Retail Trade 27.2 26.9 25.6 23.7 23.7 24.1 24.9 25.7 26.0 26.4 26.3 26.1 26.0 Trans, Wrhsng, & Util 13.5 13.9 14.1 13.9 13.8 14.5 14.9 15.4 15.9 16.1 16.6 17.2 17.6 Information 2.5 2.5 2.4 2.2 2.1 2.1 2.1 1.9 2.0 2.1 2.1 2.1 2.1 Pct Chg Year Ago -1.6-2.0-3.3-7.2-4.1-0.3-1.2-7.9 3.6 3.5 2.0 1.4 0.1 Financial Activities 9.9 9.9 9.4 8.9 7.7 7.4 7.5 7.6 7.6 7.7 7.7 7.6 7.5 Pct Chg Year Ago 1.9-0.1-5.3-5.8-12.9-3.4 0.5 2.0-0.3 1.2 0.0-1.0-1.7 Prof & Business Services 18.5 18.3 17.5 15.9 15.4 15.1 16.5 17.3 18.2 18.6 19.3 19.8 20.1 Pct Chg Year Ago 2.1-1.0-4.2-9.4-3.1-1.6 9.3 4.9 5.2 1.9 3.8 2.8 1.5 Educ & Health Services 29.1 30.9 32.0 32.2 32.3 32.5 32.8 33.4 33.7 35.2 36.0 36.7 37.3 Pct Chg Year Ago 2.6 6.3 3.6 0.5 0.3 0.6 1.0 2.0 0.7 4.7 2.2 1.8 1.6 Leisure & Hospitality 17.3 17.7 17.4 16.7 16.1 16.3 17.0 18.1 19.1 19.4 19.6 19.8 20.2 Pct Chg Year Ago 1.1 2.7-1.7-4.5-3.3 1.4 4.0 6.3 5.7 1.8 0.8 1.2 1.9 Other Services 6.8 7.7 7.4 7.0 6.5 6.3 6.5 6.6 6.8 7.0 7.0 7.1 7.1 Pct Chg Year Ago 6.7 13.6-4.1-5.2-6.2-3.0 3.0 1.9 1.6 3.5 0.6 0.6 0.6 Federal Government 3.9 3.9 3.9 4.1 4.3 4.0 3.9 3.5 3.2 3.1 3.1 3.0 3.0 Pct Chg Year Ago -1.2 0.3-0.6 4.7 5.6-7.1-2.5-10.2-10.0-1.0-1.3-1.3-1.4 State & Local Government 35.7 36.4 36.4 35.8 33.8 32.5 32.2 33.6 35.6 36.3 36.9 37.6 38.3 Pct Chg Year Ago 0.3 1.9 0.2-1.6-5.6-3.8-1.0 4.3 6.1 2.0 1.5 1.9 1.9 Other Economic Indicators Population (Ths.) 663.4 668.4 672.6 679.1 687.8 695.7 701.4 705.1 710.3 716.4 723.6 731.8 741.3 Pct Chg Year Ago 0.9 0.8 0.6 1.0 1.3 1.1 0.8 0.5 0.7 0.9 1.0 1.1 1.3 Labor Force (Ths.) 284.5 289.0 293.2 298.8 301.3 300.2 300.2 299.3 297.7 302.3 306.1 309.4 312.5 Pct Chg Year Ago 0.2 1.6 1.4 1.9 0.9-0.4 0.0-0.3-0.5 1.5 1.3 1.1 1.0 Unemployment Rate (%) 7.4 8.1 10.4 15.2 17.3 16.9 15.0 12.8 11.3 10.2 9.3 8.7 8.5 Total Housing Starts 3831 2432 1023 828 853 957 1058 1273 1123 1549 2567 3157 3140 Single-Family 3692 2318 900 828 847 826 1045 1143 1100 1396 2210 2769 2756 Multifamily 139 114 123 0 7 131 13 130 23 153 357 388 385 58 California & Metro Forecast - January 2015

BUSINESS FORECASTING CENTER University of the Pacific A national doctoral university, University of the Pacific is recognized for an education combining exceptional professional preparation in a student-centered tradition of close interactions between students and professors. With a core liberal arts college and eight professional schools, more than any university enrolling fewer than 10,000 students, Pacific offers professional opportunities associated with far larger institutions in the environment of a small learning community. Pacific is California s first chartered institution of higher learning, having received its articles of incorporation from the California Supreme Court on July 10, 1851. The University enrolls more than 5,600 students on three campuses situated in the Northern California cities of San Francisco, Stockton and Sacramento. President Pamela A. Eibeck www.pacific.edu Eberhardt School of Business The Eberhardt School of Business offers a Masters in Business Administration, a Bachelor of Science in Business Administration, and a Minor in Management to approximately 600 students. With an emphasis on small classes and close student-faculty relationships, the program is committed to developing successful future business leaders. In addition to developing well-rounded and highly skilled graduates, the Eberhardt School of Business has demonstrated its commitment to community service and regional economic development through a variety of outreach programs and activities including the Business Forecasting Center, Career Management Center, Center for Entrepreneurship, Institute for Family Business, Invention Evaluation Service, and Westgate Center for Management Development. Dean Lewis R. Gale www.business.pacific.edu Business Forecasting Center The Business Forecasting Center, founded in 2004 and housed in the Eberhardt School of Business, produces quarterly economic forecasts of the United States, California and 8 metropolitan areas from Sacramento to Fresno to the San Francisco Bay Area. In addition to its forecasting program, the Center conducts policy and planning studies on topics such as water, transportation, housing, and economic development for public and private clients throughout Northern California. Jeffrey A. Michael, Ph.D. Director, Business Forecasting Center Ph.D., North Carolina State University; M.S., University of Maine; B.A., Hamilton College (NY) Dr. Jeffrey Michael is Director of the Business Forecasting Center and Associate Professor in the Eberhardt School of Business at the University of the Pacific. Jeff s areas of expertise include regional economic forecasting and environmental economics including work on the economic impacts of the Endangered Species Act, climate change, and regulation on land use, property values and employment growth. His research has received numerous grants, been published in scholarly journals and received local and national press coverage including the Wall Street Journal, New York Times Magazine, San Francisco Chronicle, Washington Post, NPR, and PBS. Prior to joining Pacific in 2008, Jeff was faculty at Towson University in Maryland where he served as Director of the Center for Applied Business and Economic Research, Associate Dean, and faculty. Jeff received his Ph.D. from North Carolina State University, M.S. from the University of Maine, and B.A. from Hamilton College (NY). UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

EBERHARDT SCHOOL OF BUSINESS Business Forecasting Center