2012 Gold Rush - Trade Show Executive

TRENDING & SPENDING
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Economic Progress May Be Fleeting
BY DARLENE GUDEA, president
Darlene Gudea,
PRESIDENT
Frank Chow,
CHIEF ECONOMIST
Oceanside, CA – Last month, a slew
of surprisingly good economic reports
pointed to an upturn in the U.S. economic
recovery. The Commerce Department
reported a 1.1% gain in September retail
sales and The Conference Board reported
a rise in consumer confidence. The unemployment
rate slid to 7.8% from 8.1% in
September and the number of unemployment
claims plummeted by more than
30,000 in early October. Some analysts,
such as Jack Welch, former CEO of General
Electric, lambasted the unexpected
statistic as government manipulation
due to the election. Others heralded it
as a change to more dynamic job growth.
“If this is indeed a harbinger of a positive
shift from the anemic economic trends
of late, then show managers can breathe
a sigh of relief as the recent slowdown
in some shows may be transitory,” said
Frank Chow, chief economist for Trade
Show Executive Media Group.
A Closer Look at Economic Reports
The September unemployment rate fell
to the lowest level since January 2009, the
Labor Department said in October. The
Bureau of Labor Statistics Current Population
Survey, also known as The Household
Survey, found an inordinate increase in
the number of people who found jobs:
873,000, the highest number in more than
nine years. Meanwhile, The Bureau of Labor
Statistics Payroll Survey of companies found
only 114,000 jobs were added in September.
What explains the huge divergence
in the two job surveys? Chow’s research
found that most of the difference was
due to part-time workers and a confluence
of unusual seasonal adjustments:
• The unemployment rate showed a surprise
rise of 582,000 part-time workers.
• There were large seasonal adjustments
in self-employed and agricultural workers.
These two employment sectors are
not in the scope of the Payroll Survey.
• The steep recession in 2008 may be
distorting the seasonal factors. On September
27, the Bureau of Labor Statistics
announced that a re-benchmarking
exercise showed 400,000 jobs were
missed as of March 2012.
“It should be noted the unemployment
rate is very volatile and historically subject
Employment in Q3 was a
little stronger than expected,
but manufacturing continues
to feel the squeeze. Hiring
at factories is still fizzling
this year amid weak global
growth and a slowdown
in business investments.
Roughly 100,000 new jobs
a month are needed just
to keep up with the rising
working-age population.
Frank Chow, TSE CHIEF ECONOMIST
to much criticism,” Chow said. He feels a
more accurate statistic is U-6 unemployment
which includes unemployed, discouraged
workers and part-time workers
who want a full-time job. U-6 unemployment
remained at 14.7%, he pointed out.
Chow noted that weekly claims for
unemployment benefits plunged in
early October, soon after the surprising
unemployment rate was published.
Though raising suspicions, the Labor
Department explained that California
failed to report the number of workers
reapplying for benefits. The situation was
quickly rectified the following week when
unemployment claims jumped 46,000 to
a seasonally adjusted 388,000, the highest
in four months. The Labor Department
says the four-week average, a less volatile
measure, fell slightly to 365,500, a level
consistent with continued modest hiring.
Better Employment Numbers but
Not as Dramatic as Figures Imply
Bottom line, employment in the Third
Quarter was a little stronger than expected,
but not nearly as dramatic as the
September numbers indicated. “Unfortunately,
most of the improvement was due
to the hire of more part-time workers,”
Chow said. “On the other hand, at least
the unemployment rate didn't fall due to
more people dropping out of the labor
force, as in previous months,” he said.
Manufacturing continues to feel the
squeeze. Hiring at factories is still fizzling
this year amid weak global growth and
a slowdown in business investments.
Roughly 100,000 new jobs a month are
needed just to keep up with the rising
working-age population, Chow noted.
Consumer Spending Perks Up
Consumer spending has a dramatic impact
on the overall economy, so when September
retail sales grew 1.1%, far exceeding analysts’
forecasts, expectations for economic
growth began to build, said Chow. Auto
sales led the charge, increasing 12.8%.
Macroeconomic Advisers, a forecasting
firm, raised its outlook for the pace of Third
Quarter economic growth to 1.9%, up three
tenths of a point from its previous view.
Retail sales, excluding autos, gasoline and
building materials — a closely followed
barometer of consumer spending, climbed
0.9%, a sign of broad strength. “This is
a good end of the Third Quarter and we
have some good momentum going into
the Fourth Quarter,” said Craig Dismuke,
an economic strategist at Vining Sparks
in Memphis, TN.
Still, there were signs that some of the
boost in spending could prove fleeting,
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