SECOND QUARTER 2013

Russell Quarterly Economic and Market ReviewUnwinding the extraordinary: transitioning from recovery to expansion

Important information and disclosures

Please remember that all investments carry some level of risk, including the potential loss of Principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Diversification does not assure a profit and does not protect against loss in declining markets.

Risks of asset classes discussed in this presentation:

Non-U.S. markets entail different risks than those typically associated with U.S. markets, including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Securities may be less liquid and more volatile. If applicable, please see a Prospectus for further detail.

Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than U.S. and longer-established non-U.S. markets. If applicable, please see the Prospectus for further detail.

Real Asset risks:

Investments in infrastructure-related companies have greater exposure to adverse economic, financial, regulatory, and political risks, including, governmental regulations. Global securities may be significantly affected by political or economic conditions and regulatory requirements in a particular country.

Commodities may have greater volatility than traditional securities. The value of commodities may be affected by changes in overall market movements, changes in interest rates or sectors affecting a particular industry or commodity, and international economic, political and regulatory developments.

Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks. Investments in international markets can involve risks of currency fluctuation, political and economic instability, different accounting standards, and foreign taxation.

Small capitalization (small cap) investments involve stocks of companies with smaller levels of market capitalization (generally less than $2 billion) than larger company stocks (large cap). Small cap investments are subject to considerable price fluctuations and are more volatile than large company stocks. Investors should consider the additional risks involved in small cap investments.

Large capitalization (large cap) investments involve stocks of companies generally having a market capitalization between $10 billion and $200 billion. The value of securities will rise and fall in response to the activities of the company that issued them, general market conditions and/or economic conditions.

Defensive style emphasizes investments in equity securities of companies that are believed to have lower than average stock price volatility, characteristics indicating high financial quality, (which may include lower financial leverage) and/or stable business fundamentals.

Dynamic style emphasizes investments in equity securities of companies that are believed to be currently undergoing or are expected to undergo positive change that will lead to stock price appreciation. Dynamic stocks typically have higher than average stock price volatility, characteristics indicating lower financial quality, (which may include greater financial leverage) and/or less business stability.

Although stocks have historically outperformed bonds, they also have historically been more volatile. Investors should carefully consider their ability to invest during volatile periods in the market.

An Investment Grade is a system of gradation for measuring the relative investment qualities of bonds by the usage of rating symbols, which range from the highest investment quality (least investment risk) to the lowest investment quality (greatest investment risk).

Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country's standard of living.

Russell Investment Group, is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Copyright © Russell Investments 2013. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.

Russell Financial Services, Inc., member FINRA, part of Russell Investments.

First Used: July 2013

RFS 13-10848

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Not FDIC InsuredMay Lose ValueNo Bank Guarantee

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Table of contents

Topic Page

Economic dashboard 4

Capital markets 5

Equities 7

Commodities 14

Fixed Income 16

Summary 18

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http://www.russell.com

Current state as of May 31, 2013.

See appendix for category definitions.

Russell’s Economic Indicators Dashboard charts several key indicators to help investors assess the current “health” of the economic and market trends. Dashboard is updated on the 22 nd of each month.

Economic dashboard

Below long-term trend inflation

Small rise in interest rates

Slight increase in market volatility

Positive economic expansion

Source: Russell, Barclays, Dow Jones, and FTSE NAREIT. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

U.S. Equity: (Russell 3000® Index) U.S. stock index which includes the 3,000 largest U.S. stocks as measured by market capitalizationNon-U.S. Developed Equity: (Russell Developed ex-U.S. Large Cap Index) International market index that includes Western Europe, Japan, Australia and CanadaEmerging Markets: (Russell Emerging Markets Index) Emerging markets index that includes S. Korea, Brazil, Russia, India and ChinaU.S. Bonds: (Barclays Agg Bond Index) Broad index for U.S. Fixed Income marketGlobal REITs: (FTSE EPRA/NAREIT Index) Index for global publicly traded real estate securitiesCommodities: (Dow Jones-UBS Commodity Index) Broad index of common commodities

Capital Markets:

› U.S. equity was the only major asset class to finish second quarter with a positive return and led all asset classes over five years

› Ongoing economic sluggishness in Europe and the Pacific Basin created a difficult environment for Non-U.S. developed stocks during the quarter

› Double digit negative returns in Brazil and Turkey highlighted growing concerns for some of the key emerging economies

› Fixed income markets slumped as interest rates rose 1% over the course of May and June

› Global REITs posted their first negative quarter since 2011, feeling the pinch of rising interest rates

› Commodities posted the worst asset class return reflecting muted global economic expectations

Capital marketsPeriods ending June 30, 2013

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Annualized

2.7

14.1

21.5

18.6

7.2 7.8

-1.5

3.1

17.5

9.7

-0.6

8.0

-7.4 -8.0

4.9 4.1

0.5

13.9

-2.3 -2.4-0.7

3.55.2 4.5

-3.8

2.0

13.515.2

3.85.1

-9.5 -10.5-8.0

-0.3

-11.6

2.4

-15

-10

-5

0

5

10

15

20

25 U.S. Equity

Non-U.S. Developed Equity

Emerging Markets

U.S. Bonds

Global REITs

Commodities

Capital Market Returns

2Q 1-Year 3-Years 5-Years 10-Years

Rat

e o

f R

etu

rn (

%)

YTD

What worked and what didn’t in 2Q 2013Russell Tax-Managed U.S. Large Cap Equity

Fund:

$0 in capital gain

distributions since 2000

Index Legend: Cons Disc– Russell 3000® U.S. Consumer Discretionary; Financials– Russell 3000® U.S. Financial Services; Microcap– Russell Microcap Index; France– Russell Global France Index; Ireland– Russell Global Ireland Index; Materials – Russell 3000® Materials & Processing Index; Energy– Russell 3000® Energy Index; Brazil– Russell Global Brazil Index; Turkey-Russell Global Turkey Index; Australia-Russell Global Australia Index; European HY-Barclays European High Yield Index; 1-3yr Aggregate– Barclays 1-3 Year Aggregate Index; Long U.S. Treasury– Barclays Long U.S. Treasury Year Index; Emerging Markets Debt– Barclays Emerging Markets Debt Index; U.S. Corporate Credits– Barclays U.S. Corporate Index; Lean Hogs and Silver represent the sub-index of the Dow Jones UBS Commodity Sub-index Series; European REITs– FTSE/EPRA NAREIT Developed Europe Sector; Asian REITs – FTSE/EPRA NAREIT Developed Asia Sector.

What didn’t work

Equities› Materials -2% / Energy -1%

› Brazil -18% / Turkey -14%

› Australia -15%

Fixed Income› Long U.S. Treasuries -6%

› Emerging Markets Debt -5%

› U.S. Corporate Credits -3%

Alternatives / Real Assets› Silver -32%

› Asian REITs -8%

What worked

Equities› Cons Disc +6% / Financials +5%

› Micro cap +5%

› France +4% / Ireland +4%

Fixed Income› European high yield +2%

› 1-3 Year Aggregate 0%

Alternatives / Real Assets› European REITs +2%

› Lean Hogs +9%

U.S. Equity held on to early gains, other asset classes did not fare as well:APRIL YTD JUNE YTD

› U.S. Equity 12.9% 14.1%› International Equity 9.4% 3.1%› U.S. Fixed Income 0.9% -2.4%

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Overreaction to rising ratesHerd selling on high-yielding assets

Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Yield on 10-Year U.S. Treasury – Yahoo Finance; Global REITs – FTSE EPRA/NAREIT Developed Real Estate Index.

› REITs, utilities and other historically high-yielding assets were relatively attractive in low rate environment

2,700

2,900

3,100

3,300

3,500

3,700

3,900

1.3%

1.5%

1.7%

1.9%

2.1%

2.3%

2.5%

2.7%

Glo

bal

RE

ITs

Ind

ex V

alu

e

Yie

ld o

n 1

0-Y

ear

U.S

. Tre

asu

ry B

on

d

Yield on 10-Year Treasury Global REITs

› As the yield increased on U.S. Treasury bonds, this stretch for yield left investors vulnerable to a pullback

May 2 – June 25: Yield increased from 1.6% to 2.6%

May 8 – June 24:Global REITs down 15%

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Tapering, not tightening

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1 FOMC Press release, June 19, 2013 / 2 Represented by Russell 3000® IndexSources: U.S. Equities: Russell 3000® Index with dividends reinvested, Russell Investments; Housing: New residential construction, seasonally adjusted, U.S. Census Bureau; Employment: Total nonfarm payroll, seasonally adjusted, U.S. Bureau of Labor Statistics

› Improvements in the economy’s health are leading the Fed to consider tapering Quantitative Easing, so long as “the outlook for the labor market has improved substantially in a context of price stability”1

80

100

120

140

160

180

200

220

240

Russell 3000 Index rebased to 100 New housing starts, rebased to 100, in thousands Total nonfarm payroll, in millions

U.S. Equities2, Housing and Employment(March 2009 – June 2013)

QE1, Equities +53%

Russell 3000® Index up 127% cumulatively

since start of QE

QE2, Equities +13%

Operation Twist, Equities +28%

Operation Twist cont’d + QE3, Equities +14%

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Inflation outrunning cash as Federal Reserve keeps rates low: If so, negative real returns for cash are likely into 2015

* Federal Reserve Bank of Atlanta

Federal Reserve keeping short-term rates low until unemployment nears 6.5%

350,000

228,000

188,000 168,000 155,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Dec 2013 June 2014 Dec 2014 June 2015 Dec 2015

Mo

nth

ly N

um

ber

of

Job

s

Average Monthly Job Growth Needed to Achieve 6.5% Unemployment*

170,000/monthRussell forecast

The economy would need to add 168,000 jobs/month through

June 2015 to achieve 6.5% unemployment

Short-term pullbacks are common…And should not distract a long-term investor

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Source: Russell. Returns calculated with dividends included. Maximum peak-to-trough represents the return difference between the largest peak-to-trough of the calendar year. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly.

0%

5%

10%

15%

20%

Ru

ssel

l 10

00®

Ind

ex

% C

han

ge

32

-5

20 22

5

32

18

3

17

30

-4

33

9 10

0

38

22

3327

21

-8-12

-22

30

116

15

6

-38

28

16

2

16

-18 -16 -15

-7-12

-7 -9

-33

-7 -7

-20

-10-6 -5

-8-3

-8 -10

-20

-12-18

-30-33

-13-8 -7 -8 -10

-49

-27

-16-20

-10

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

Ret

urn

(%

)

Russell 1000® Index Maximum peak-to-trough during the year

Calendar-year U.S. Equity Returnsand Intra-year Declines

2013 YTD Pullback IllustrationRussell 1000® Index up 14% for year

Despite annual pullbacks, in 27 of the last 33 years U.S. equity

markets finished in positive territory

The average annual pullback (peak-to-trough)

from 1980-2012 was 14.5%

May 21–June 24: Down 6%

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Sources: U.S. Equity data (1926 – 1Q 2013) from Robert Schiller’s U.S. Equity Market Data and Russell 3000® Index; Price/Earning Ratios based upon 12-month trailing earnings; International Equity data from MSCI EAFE and Russell Index series (1978 – 1Q 2013).*Earnings not reported yet for 2Q 2013

Future returns depend on starting point pricesCurrent equity valuations suggest fair long-term equity results

14.6

11.8

6.97.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

7.7 - 11.2 11.2 - 15.8 15.8 - 18.7 18.7 - 28.5

Ave

rag

e A

nn

ual

ized

Ten

-Yea

r R

etu

rn (

%)

Historical P/E Quartile Ranges 1926 – 1Q 2013

U.S. Equity MarketP/E Quartiles and

10-Year Annualized Return

18.0

9.17.5

5.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

9.1 - 15.5 15.5 - 20.2 20.2 - 24.7 24.7 - 28.3

Ave

rag

e A

nn

ual

ized

Ten

-Yea

r R

etu

rn (

%)

Historical P/E Quartile Ranges 1978 – 1Q 2013

Non-U.S. Developed Equity MarketP/E Quartiles and

10-Year Annualized Return

16.8 P/E on

3/31/13

Higher P/E – Lower ReturnLower P/E – Higher Return

17.8 P/E on

3/31/13

Improving outlook for Europe

Investing in Europe› European equities returned 2.6% YTD vs. 14.1% for U.S.,

reflecting economic challenges

› Recent European P/E ratio of 14.6 showed modest undervaluation relative to U.S. P/E ratio of 15.8

Sentiment in Europe› In first quarter,

economic data was better than expected. In second quarter, still weak economic results trailed rising expectations. June saw expectations align with reality.

› Challenges remain, but Europe appears to have reached an important inflection point that heralds an improving outlook.

p.12

Source: Factset, Bloomberg, and Wall Street Journal. Europe P/E and return data based on MSCI Europe Index. U.S. P/E and return data based on Russell 3000 ® Index.

-100

-50

0

50

100

January February March April May June

Citigroup Eurozone Economic Surprise Index (YTD 2013)

Merkel reaffirmed need for EU austerity

Political deadlock

in Italy

Cyprus bailout

Greek riots on national

independence day

Corruption scandal in Spain

Merkel shifted from austerity towards more stimulus

Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly.

Reaffirming the growth story in emerging markets

Emerging Markets

› The Russell Emerging Markets Index was down -7.3% for the quarter

› BRIC countries made up 36.8% of the index and had a significant impact on performance

› Economic growth slowed in the BRIC countries but are still strong relative to developed economies

› Opportunities remain given strong growth rates

Source: International Monetary Fund (IMF)

Brazil Russia India ChinaEmerging Markets

United States

Europe Japan

2013 3.5% 3.7% 5.9% 8.1% 5.3% 1.9% -0.3% 1.6%

2014 3.0% 3.4% 5.7% 8.0% 5.7% 3.0% 1.1% 1.4%

-1%0%1%2%3%4%5%6%7%8%9%

April 2013: Revised IMF GDP Growth Projections

2013

2014

Brazil Russia India China

Return -17.5 -9.6 -6.7 -4.8

-20-18-16-14-12-10-8-6-4-20

Russell Emerging Markets Index Country Performance 2Q 2013

Source: Russell, total return as of 6/28/2013.

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Long-term benefits:

›Diversification: Low historical and forecasted correlation with equities and bonds

›Historical offset to inflation

Short-term challenges:

›Supply and demand factors driving prices

›Supply: Higher inventories

›Demand: Decline in demand for metals

Commodities: long-term benefits, short-term challenges

-30

-25

-20

-15

-10

-5

0

5

10

15

20

DJ-UBS Agriculture

DJ-UBS Energy

DJ-UBS Industrial

Metals

DJ-UBS Livestock

DJ-UBS Precious

Metals

DJ-UBS Commodity

Index

Commodity Index Performance (%) Annualized data as of June 30, 2013

1-Year 5-Year 10-Year

-60%

-40%

-20%

0%

20%

40%

60%

-6

-4

-2

0

2

4

6Relationship Between Commodity Prices and Inflation

Consumer Price Index all items YOY change (%)

DJ-UBS Commodity Index YOY change (%)

Gold loses its luster as economy improves and real interest rates climb

p.15

› When real rates are low, the opportunity costs of holding gold tend also to be low1

› Strong, negative relationship between real interest rates and gold prices demonstrates demand for capital

› In the past six months, capital has found its way to more productive uses

› Gold’s decline is a positive portend for less defensive investments

Real interest rates as reflected by Treasury inflation-indexed long-term average yields. Data source: Federal Reserve Bank of St. Louis (FRED). Gold spot prices from Bloomberg.1 The relationship between low real interest rates and equity returns is described here (http://www.economist.com/news/finance-and-economics/21564845-low-real-interest-rates-are-usually-bad-news-equity-markets) and here (http://www.economist.com/blogs/buttonwood/2013/02/investing). The theoretical relationship between low real interest rates and gold prices is described in a paper by Barsky and Summers that can be downloaded here: http://ideas.repec.org/p/nbr/nberwo/1680.html

Go

ld S

po

t P

rice

Rea

l In

tere

st R

ates

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jul-

03

Dec

-03

May

-04

Oct

-04

Mar

-05

Aug

-05

Jan-

06

Jun-

06

Nov

-06

Apr

-07

Sep

-07

Feb

-08

Jul-

08

Dec

-08

May

-09

Oct

-09

Mar

-10

Aug

-10

Jan-

11

Jun-

11

Nov

-11

Apr

-12

Sep

-12

Feb

-13

Gold Spot

Real Interest Rates

The unnecessary stampedeRising rates don’t undermine the role of bonds

p.16

Worst: The lowest 12-month, 36-month, 60-month, and 120-month return horizon for these markets from 1926–2012.Sources: U.S. Equities– Ibbottson & Associates S&P 500® Composite 1926–1978, Russell 3000® Index 1979–2012, Bonds– Ibbottson & Associates Intermediate Government Bond Index 1926–1976, Barclays Intermediate Government Bond Index 1977–2012, Cash– Ibbottson & Associates U.S. 30-day Treasury Bill Index.

-4.6-0.4

0.7 1.2

-0.1

0.0 0.1 0.1

33.6

20.6

15.513.7

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Worst 1-Year Worst 3-Years Worst 5-Years Worst 10-Years

An

nu

aliz

ed R

etu

rn (

%)

Bonds Cash Equity return during "worst" bond period

10-Year Treasury Yield

Increased 0.58%6/43 – 5/53

10-Year Treasury Yield

Increased 0.66%6/48 – 5/53

10-Year Treasury Yield

Increased 1.63%8/54 – 7/57

10-Year Treasury YieldIncreased 1.4%

7/58 – 6/59

Return to the ordinaryLow single digit bond returns are normal

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Sources: 10-Year Treasury Yield: U.S. Treasury; Intermediate Gov Bonds: Ibbottson & Associates Intermediate Government Bond Index 1926–1976, Barclays Intermediate Government Bond Index 1977–2012.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1926 1931 1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

10-Y

ear

Tre

asu

ry Y

ield

% /

10-

Yea

r In

tG

ov

Bo

nd

Ret

urn

(%

)

U.S. 10-Year Treasury Yield and Rolling Ten-Year Bond Returns

10 Yr Treasury Yield Intermediate Gov Bonds (Ten-Year Return)

Future bond returns have historically tracked closely to yield levels at time of purchase

The June 30, 2013 market yield was ~2.5% suggesting modest single-digit returns for the 10-year horizon

10-Year Treasury Yield Intermediate Gov Bonds (10-Year Return)

Balanced Index Portfolio: 25% Russell 3000® Index / 20% Russell Developed Large Cap ex-U.S. Index / 10% Russell Emerging Markets Index / 35% Barclays Capital Aggregate Index / 5% FTSE EPRA Developed REIT Index / 5% Dow Jones UBS Commodity Index; U.S. Equity: Russell 3000® Index; Non-U.S. Equity: Russell Developed Large Cap ex-U.S. Index; EM Equity: Russell Emerging Markets Index; U.S. Bonds: Barclays Capital Aggregate Index; REITs: FTSE EPRA REIT Index; Commodities: Dow Jones UBS Commodity Index.Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

p.18

Diversification: slow and steady to your goalDon’t let short-term returns potentially dictate long-term investment decisions

2.1

6.9

14.1

7.8

3.1

8.0

-8.0

13.9

-2.4

4.52.0

5.1

-10.5

2.4

-15

-10

-5

0

5

10

15

20

Balanced Index Portfolio U.S. Equity Non-U.S. Equity EM Equity U.S. Bonds REITs Commodities

Market Returns as of June 30, 2013

YTD 10-Year (Annualized)

Short-term performance does not reflect long-term results

Important information and disclosuresInternational/Global:International/Global investing value may be significantly affected by political or economic conditions and regulatory requirements in a particular country.

Investments in non-U.S. markets can involve risks of currency fluctuation, political and economic instability, different accounting standards and foreign taxation. Such securities may be less liquid and more volatile. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and political systems with less stability than those in more developed countries.

Bonds: Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction risks. Greater risk, such as increased

volatility, limited liquidity, prepayment, nonpayment and increased default risk, is inherent in portfolios that invest in high-yield ("junk") bonds or mortgage backed-securities, especially mortgage-backed securities with exposure to subprime mortgages. Investment in non-U.S. and emerging market securities is subject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries.

Growth:Growth investments focus on stocks of companies whose earnings/profitability are accelerating in the short-term or have grown consistently over the long-term.

Such investments may provide minimal dividends which could otherwise cushion stock prices in a market decline. A stock’s value may rise and fall significantly based, in part, on investors' perceptions of the company, rather than on fundamental analysis of the stocks. Investors should carefully consider the additional risks involved in growth investments.

Value:Value investments focus on stocks of income-producing companies whose price is low relative to one or more valuation factors, such as earnings or book value.

Such investments are subject to risks that the stocks’ intrinsic values may never be realized by the market, or, that the stocks may turn out not to have been undervalued. Investors should carefully consider the additional risks involved in value investments.

p.19

Index definitions

p.20

Market IndicatorsCORPORATE DEBT (OAS) – Option Adjusted Spread is a measurement tool for evaluating yield differences between similar-maturity fixed-income products with different embedded options. The OAS employed in the dashboard measures the difference between interest rates for similar-maturity investment-grade corporate bonds and treasury bonds and is viewed as a gauge of credit spreads.

MARKET VOLATILITY(VIX) – CBOE VIX (Chicago Board Options Exchange Volatility Index) measures annualized implied volatility as conveyed by S&P 500 stock index option prices and is quoted in percentage points per annum. For instance, a VIX value of 15 represents an annualized implied volatility of 15% over the next 30 day period. The VIX measures implied volatility, which is a barometer of investor sentiment and market risk.

INTEREST RATES – The spread between 3 month Treasury bill yields and 10 year Treasury note yields measures the market outlook for future interest rates. A normal or upward-sloping yield curve, can imply that investors expect the economy to grow and inflation to eat into asset returns. They thus demand a higher yield for long-term Treasuries. An inverted yield curve has often been an indicator of coming recessions, but not always. For example, reduced inflation expectations could cause the yield curve to flatten.

MORTGAGE DELINQUENCIES – Residential Mortgage Delinquencies measure delinquency percentages for residential real estate loans secured by one- to four-family properties. It includes home-equity lines of credit. Delinquent loans represent those loans that are past due 30 days or more and are still accruing interest, as well as loans in non-accrual status.

Economic IndicatorsCORE INFLATION (PCE PI) – The core Personal Consumption Expenditures Price Index (PCE PI) measures the average price increase for American consumers on an annualized basis. It excludes food and energy prices, which tend to be volatile from month-to-month. It also allows for consumer substitution of more expensive goods for cheaper goods, which the Consumer Price Index (CPI) does not. It is the preferred lagging inflation measure of the Federal Reserve.

EMPLOYMENT GROWTH (NF PAY) – The NF PAY (Non-Farm Payroll) measures the number of jobs added or lost in the economy over the previous month, not including jobs related to the farming industry due to its seasonal hiring.

CONSUMER SPENDING (PCE) – PCE (Personal Consumption Expenditures) measures the value of goods and services purchased by individual consumers, families and the nonprofit institutions serving them. It consists mostly of new goods and services purchased by individuals from businesses. It excludes purchases of residential structures by individuals and buildings or equipment used by nonprofit institutions serving individuals.

ECONOMIC EXPANSION (GDP) – GDP (Gross Domestic Product) measures the total market value of a nation’s output of goods and services during a specific time period. It is usually measured on a quarterly basis. Current GDP is based on the current prices of the period being measured. Nominal GDP growth refers to GDP growth in nominal prices (unadjusted for price changes). Real GDP growth refers to GDP growth adjusted for price changes. Calculating Real GDP growth allows economists to determine if production increased or decreased, regardless of changes in the purchasing power of the currency.

p.21

Economic recovery dashboard definitions

www.russell.com“Russell,” “Russell Investments,” “Russell 1000,” “Russell 2000,” and “Russell 3000” are registered trademarks of the Frank Russell Company.

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