TRENDING & SPENDING Continued from page 19 warned Chow. Sales at electronics retailers advanced 4.5%, but some analysts attributed that to record sales of Apple's new iPhone 5. If so, then that strength might show up in October also and then fade, said Michael Feroli, an economist at JPMorgan in New York. Sales at food and beverage stores climbed 1.2%, which reflected mainly the increase in food prices due to the recent drought, said Chow. Also, gas station receipts rose 2.5%, mostly due to an increase in prices at the pump, he noted. In October, the University of Michigan/ Reuters Consumer Sentiment Index jumped to 83.1, its highest level since the recession started, thanks to a big increase in the expectations component. “There has been steady progress in the index since last year's scare from the S&P's downgrade of the U.S. credit rating,” said Chow. “However, no one seemed more surprised than the folks at the University of Michigan and Reuters, who expected the index to top out at 78.5.” Most economists see growth staying at or below 2% in the second half of the year. A new Outlook by the National Association for Business Economics, suggests unemployment is likely to remain the same, stalling at the current 7.8% through Q4 of 2013, and expects GDP growth to rise a paltry 1.9% this year. The retail business community seems to reflect the consumer sentiment figure. Wal-Mart is expecting a big boost this holiday season after U.S. layaway sales rose to $400 million in less than a month — that's about half the amount for all of 2011. Wal- Mart is predicting sales to rise 5% to 7%. The big-box retailer is also ordering twice as many iPads for the holidays as last year. The National Retail Federation's predicts this year's holiday sales for its more than 9,000 retailers will increase 4.1% to $586.1 billion, higher than the 10-year average of 3.5% but less than last year's 4.6%. Market research firm NPD Group found that 77% of Americans plan to spend equal or more this holiday season than last year, up from 73% before the 2011 holiday season. The percentage of consumers who plan to spend less decreased from 27% last year to 23% this year. Housing is Now the Fair-Haired Child “It's all a bit optimistic given the strong economic headwinds we outlined in last month’s column,” said Chow. “However, it could be that consumers are starting to feel more confident about their net worth due to the improving housing and stock markets.” Existing and new home sales, building permits, and the national median home price have all gone up steadily in <strong>2012</strong>, according to the National Association of Realtors and the S&P/Case-Shiller Index of Home Values. The S&P 500 Index is up more than 13.9% for the year, and in mid-September, reached its highest level since December 2007. However, so far in October, the stock market has retreated modestly. Economists Still Expect GDP Growth to Hover at 2% — at Best In general, most economists see growth staying at or below 2% in the second half of the year. A new Outlook released in October by the National Association for Business Economics, suggests unemployment is likely to remain the same, stalling at the current 7.8% through the Fourth Quarter of 2013. The widely watched Outlook expects GDP growth to rise a paltry 1.9% this year and add only 2.4% next year. Job growth is expected to average 155,000 a month, a figure that just keeps pace with population growth. Since the economists were looking at long-term trends, the forecast provides further evidence that the recent improvement may be a temporary anomaly suggesting dramatic job gains are not imminent, Chow warned. <strong>Show</strong> organizers should plan for the economy to chug along slowly in the near term. TSE Sector Performance BEST PERFORMING SECTORS • Apparel • Automotive • Security • Business Services MIXED PERFORMANCE • Communications • Manufacturing • Medical SECTORS UNDER PRESSURE • Government • Housing • Technology • Hospitality • Transportation • Retail • Food Economic Indicators • Construction • Home Furnishings Consumer Confidence reversed course in September and jumped a dramatic nine points to 71.3 after hitting the lowest level in nearly a year in August, according to The Conference Board. Consumers were more optimistic about the short-term outlook for business conditions and jobs. Core Inflation, which omits volatile food and energy prices, remained low in September, rising1.98%, compared to 1.97% last year. This is much lower than the long-term average of 3.88%. Corporate Earnings for the S&P 500 companies are expected to be a mere 0.06% in Q3. This will be the lowest since Q3 of 2009 and refl ects a continued slowdown. In Q2, the country’s largest publicly traded companies reported their earnings rose 8.4% over 2011 levels. Job Growth reached 114,000 in September [total nonfarm payroll], according to the U.S. Bureau of Labor Statistics. Employment increased in health care, transportation and warehousing, but changed little in most other major industries and remained well below the 252,000 average from December to February. Gross Domestic Product grew at an annual rate of 1.7% in the Second Quarter, down signifi cantly from 2% in Q1, according to the Commerce Department. Housing Starts for single-family homes, which account for more than 70% of new residential construction, surged 15% in September to the highest level in four years, showing signs of a recovery in the very industry at the heart of the fi nancial crisis. Industrial Production rose 0.4% in September after falling (1.4)% in August. Interest Rates (short term) remained near 0% in September, maintaining the ultra-low level set in December 2008. The Fed repeated its vow to keep rates near zero until mid-2015. The Leading Economic Index, a weighted gauge of 10 economic indicators that helps predict the future direction of the economy, continued its zigzag pattern, this time increasing 0.6%. It had dropped (0.1)% in August, following a 0.4% hike in July, after a (0.4)% drop in June and a 0.4% increase in May that came after a (0.1)% decline in April. Manufacturing in the U.S. expanded in Sep. following three consecutive months of slight contraction, according to The Institute for Supply Management’s ISM Index. The PMI registered 51.5%, an increase of 1.9 percentage points from August's reading of 49.6%. Retail Sales in the U.S. increased in September by 1.1%, the most in seven months, boosted by demand for automobiles along with higher gasoline prices. The Unemployment rate dropped to 7.8% in Sep., the fi rst time it was below 8% in 44 months. By comparison, the all-time high was 10.8% in November 1982 and the record low was 2.5% in May 1953. 20 November <strong>2012</strong> | <strong>Trade</strong> <strong>Show</strong> <strong>Executive</strong>
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