Dear Friend of Parthenon:

I asked Roger to prepare a quick "flash" report. Bottom line, our March forecast of anemic U.S. GDP growth of 2% in 2012 and 2013 holds. Europe's situation has definitely taken a turn for the worst. Short of a "Grand Compromise", Europe will struggle as is evidenced by its retreat back to recession. The most recent U.S. jobs report indicated rising unemployment, which garnered much public attention. While both of these events would lead one to believe that our forecast would be revised downward, the reality is that Roger had already baked this into his March forecast.

We will provide a full debrief at the end of July.

As a valued friend of the firm, Roger and I welcome your feedback and encourage you to call us as events unfold.

Best Regards,

William F. Achtmeyer
Chairman and Managing Partner
The Parthenon Group
+1 617 478 2550 | www.parthenon.com

Pessimism is gaining the upper hand over optimism, but Parthenon analysis still points to tepid, positive growth in the U.S. and a modestly rising unemployment rate this year:

• The European financial crisis has become more worrisome
• U.S. economic data confirms a substantial housing rebound now occurring
• The Democrat/Republican extreme partisan gridlock continues to preclude even the passage of a current year federal budget, much less a blueprint for long-term budget balance
• Financial markets are continuing to react systematically, adversely to higher risk and slower growth, with equities nervous, the dollar strong, and commodity prices weakening