Posted 23th April 2012 by Jorn Thulstrup
Mixed signals with a stagnating trend - majority of consumers still hesitant to buy durables!
Demand for non-durables is down from March, but significantly higher than in April last year. Demand for
durables is at the same low level as in April last year. The three-month moving average for durables is on a
downwards trend.
The overall picture is stagnation, hesitation, or call it stabilisation at a lower level than before the
crisis. There is however no sign of a double dip emerging.
Householders, 55 years or above, unsurprisingly have spending rates significantly below average.
Data for the April survey was collected April 18 - 22.
For comments please contact Dr. Roger Selbert at +1 (310) 721 6322 or
roger@rogerselbert.com
or Jorn Thulstrup at + 45 4026 8270 or
jt@consumerdemand.com
Posted 23th April 2012 by Jorn Thulstrup
Fulltime employment dramatically down in the US
According to IBCA (Institute for Business Cycle Analysis), the percentage of fulltime employed in the US is down to 41.5% in Q1 2012,
falling from 48.6% in Q1 2008 and 43.7% in Q1 2010. Unemployment in the IBCA consumer database was 4.2% in Q1 2008 (monthly average for
the three months), 8.2% in Q1 2010 and 6.8% in Q1 2012, seeming to indicate that the economy is improving. However the rosy picture is
distorted by the dramatic and significant decline in fulltime employment.
The percentage of households who earned less than 50,000 US pr. year in Q1 2008 went up from 53 % to 59 % in Q1 2012. No wonder that
private consumption expenditure in the US is still disappointing. (The survey data is collected for IBCA by Taylor Nelson Sofres,
TNS Global, USA. Each monthly survey includes at least 1,000 telephone interviews with private households in a representative national sample)
The April edition of our monthly survey will be published at 1400 hrs GMT - 0900 EST on Wednesday the 25th of April.
A note on forecasting!
On February 2nd 2012 - Professor Emeritus Charles Goodhart wrote a piece in Financial Times
about forecasting based on his many years of experience in Banking and Finance at the London School
of Economics and as a member of the Bank of England’s Monetary Policy Committee. He wrote: “But when
a break comes, central banks are as clueless to foresee it as anyone else.” and adds: “Neither central
bankers, nor anyone else, have a good way of predicting future fluctuations in either output, inflation
or interest rates more than a few quarters ahead.”
Having worked with business cycle forecasting for more than 30 years, and having spent fortunes
on developing macroeconomic models, my conclusion is the same: “In the long run only short term forecasting
is reliable!” However, using consumer surveys with the right questions and focusing on forecasting the
largest and strongest engine in the world economy - private consumption in the United States - it is possible
to forecast some of the major breaks. We did that in early 2008 when we forecast the dramatic drop in private
consumption that materialised in the following quarters. Another experience in the forecasting business is,
that if you are alone in forecasting breaks, the throng does not believe you before it is too late for them.
Jorn Thulstrup, Founder and CEO of Institute for Business Cycle Analysis.
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