Quoted – Consumer confidence index reaches high, signaling economic recovery

Consumer confidence has reached its highest level since September 2008, another sign that the economic recovery is underway.

The Conference Board Inc.’s Consumer Confidence Index rose  5.6 points in April to 57.9 from 52.3 in March. The survey uses 1985 as a base year of 100.

It’s good news for everyone from homebuilders to store owners because higher confidence should result in more sales and consumer spending accounts for about 70 percent of gross domestic product.

The persons polled who said business conditions are “good” rose to 9.1 percent from 8.5 percent a month  earlier, while those who said business conditions are “bad” declined only slightly to 40.2 percent from 42.1 percent.

The economy has been helped by tax relief legislation, said Scott Testa, an economics professor of Cabrini College in Philadelphia. “This is the first time home-buyers assistance from the federal government has driven the economy.”

Psychologically, people feel the economy is at the tail end of this recession, Testa said. “We’ve seen other numbers in check such as inflation and the sentiment is certainly more positive than it was a year and a half ago. People are less afraid of losing their jobs,” he said.

Consumers’ outlook improved from March. Those anticipating improved business conditions over the next six months increased to 19.8 percent from 18.0 percent.

The rising Consumer Confidence Index runs counter to a preliminary report on consumer sentiment released by the University of Michigan, based on a survey conducted in  mid-April, showing that sentiment declined from March to April.

While the two surveys ask similar questions, the sentiment survey is conducted via phone, while the confidence survey is conducted with written questionnaires given to more people. The full consumer sentiment report will be released Friday.

“There may not be a very statistically significant difference between last month and this month, there’s a lot of noise from month to month,” Barsky said.

The survey also suggests that while consumers are more optimistic about the job outlook, the proportion of consumers expecting an increase in incomes declined to 10.3 from 10.8 percent.

“I don’t know anyone who has received a pay increase,” Compall said.

People are still nervous, Testa said. “The big lagging indicator in any economy is usually the unemployment rate and it still hasn’t moved that much. Those indicators make people generally hesitant in some ways.”

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Quoted – Rising energy prices lead to slight bump in January consumer prices

Historical chart of the U.S. federal funds rat...
Image via Wikipedia

Rising energy prices lead to slight bump in January consumer prices

“I think what you’re seeing is a natural, gradual number, nothing dramatic and nothing very surprising. It was right around what most people expected,” said Scott Testa, an economics professor at Cabrini College in Philadelphia.

As the economy climbs out of a recession and short-term interest rates remain at historic lows, much attention is being paid to indicators of inflation.

Testa said the CPI “shows that the typical consumer was not being squeezed. Seventy percent of the economy is based on consumer spending, so numbers like this, that would give consumers an advantage for spending, I think are encouraging.”

Friday’s CPI increase was minimal as compared to the 1.4 percent jump in the Producer Price Index, another inflation measure focused on prices at the wholesale level. According to Testa, the divergence isn’t very significant.

“I’d be more concerned if both numbers are dramatically up. I take it with a grain of salt when looking at one specific set of numbers over a short period of time.”

http://news.medill.northwestern.edu/chicago/news.aspx?id=157639

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Quoted – Confidence rises, inventories return to normal, but retail sales fall – Medill Reports

Quoted – Confidence rises, inventories return to normal, but retail sales fall – Medill Reports

Consumer confidence rose, inventories returned to normal, but retail sales fell, according to various reports released Thursday.

Despite the importance of retail sales figures in measuring recovery from the recession, the modest seasonally-adjusted drop of 0.3 percent in December won’t necessarily have a negative effect on the public’s perception of the economy, said economics professor Scott Testa of Cabrini College in Philadelphia. “One or two reports will not have a marked effect on people’s perception. Consumers are seeing a series of positive signals and because they make up 70 percent of the economy, consumer confidence is invariably good for all of us.”

http://news.medill.northwestern.edu/chicago/news.aspx?id=153713

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Quoted – Pet Age Retailers Report 2009-2010 – Pet Age Magazine

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Quoted – Pet Age Retailers Report 2009-2010 – Pet Age Magazine

Pet retailing certainly has
withstood the recession better than
auto manufacturing and home building.
“People have not stopped buying things
for their pets,” said Dr. Scott Testa,
assistant professor of business at Cabrini
College (Philadelphia). “What they’ve
done, because of the recession, is change
the way they buy things for their pets.”

But as impressive as these two categories
were, the real star in 2008 was ancillary
services. In 2007, services accounted
for 11 percent of gross dollar volume. In
2008, that total almost doubled. The top
services in 2008 were grooming, boarding
and delivery, in that order. All told, 62
percent of respondents said they offered
some kind of ancillary service in 2008,
versus 60 percent in 2007.
Pet retailers say services will continue
to play an increasingly important role in
how they run their businesses. That makes
sense to experts like Testa: “Services are
becoming a point of differentiation, of
uniqueness. When you can’t compete on
price with the national retailers, you have
to find something to offer that they don’t.
And services do that. Target and Wal-
Mart aren’t going to be able to offer the
same kinds of services that independent
retailers can offer.”

http://www.petage.com/pdf/0910retreport.pdf

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More cell phone users dropping landlines

Mobile Phone
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http://news.yahoo.com/s/ap/20090506/ap_on_go_ot/us_cell_phones_only;_ylt=ArgTH1S1CPZatxb6.KR0tArv5rEF

In a high-tech shift accelerated by the recession, the number of U.S. households opting for only cell phones has for the first time surpassed those that just have traditional landlines

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