Home | Press Room | Press Release Archives | Economic Index January 2011

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For Immediate Release
February 3, 2011
Contact: Cristi Allen
callen@decisionanalyst.com
Phone: 817-640-6166

Arlington, Texas—The Decision Analyst U.S. Economic Index started 2011 with a January number of 95, a decrease of one point from December 2010. Throughout the past year, the Economic Index has muddled along, fluctuating between 94 and 96 most of the months. The January 2011 Index of 95 is just one point higher than the January 2010 Index (94). Since the U.S. Economic Index is a leading indicator (tending to foreshadow overall economic activity by 6 to 12 months), the Index is forecasting a “sideways” U.S. economy during 2011, a period of slow and fragile economic growth. The huge U.S. federal deficit this year will be a stimulus to the U.S. economy, but budget shortfalls at state and local levels will be a drag on the economy. If corporate spending trends up, and consumers continue to loosen their wallets, the net effect should be positive economic growth in 2011, albeit at a slow pace. Here is the U.S. Economic Index for the past three years.

“The Index and its component measures are predicting a slow-growth economy in 2011. Unemployment continues to be a major problem (our tracking data indicates an unemployment rate around 16%, similar to the Bureau of Labor Statistics’ U-6 measure of unemployment). The housing market continues to be a major risk factor as many homes are still in the foreclosure process. With weak tax revenues, state and local governments will be making tough choices (higher taxes and/or reduced services) in 2011 to balance their budgets. Rising commodity prices are major risks to the 2011 economy, especially increasing prices for food and energy,” according to Jerry W. Thomas, President/CEO of Decision Analyst.

"The world financial system appears to be moving forward—but on crutches. There is a high risk of financial meltdowns in 2011, especially in Europe, and these risks could dampen economic growth in 2011. Despite all of these headwinds, we think the U.S. economy will continue to slowly improve over the next 12 months. The European Union remains less than robust,” said Thomas. "The clouds of financial stress hang over Europe.”

International Index

The table on the next page compares the U.S. Economic Index to Decision Analyst’s Economic Indices in other countries. Brazil, China, and India have the highest scores (126, 125 and 119, respectively). France, Spain, and the United Kingdom have the lowest scores (79, 81 and 81, respectively). (See table below.)

 

Census Divisions

The West North Central and the West South Central Divisions have the highest scores (101 and 101, respectively), while the East South Central Division has the lowest score at 92. (See map below.) The center of the U.S. is benefiting from higher prices for farm commodities and higher prices for energy.

 

The Decision Analyst Economic Index is based on a monthly Internet survey of several thousand households balanced by gender, age, and geography. The online survey is conducted the last 10 days of each month. The Economic Index is calculated from nine different economic measurements using a sophisticated econometric model. The result is a snapshot of current economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries. Decision Analyst conducts its concurrent economic surveys each month in Argentina, Australia, Brazil, Canada, Chile, China, Colombia, France, Germany, India, Italy, Mexico, Netherlands, Peru, Russian Federation, Spain, United Kingdom, United States, and Venezuela.

Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 100 to 110 suggests a slow-growth economy, and near or below 100 generally indicates economic contraction. These guidelines vary by country, however.

About Decision Analyst

Decision Analyst (www.decisionanalyst.com) is a leading global marketing research and analytical consulting firm specializing in advertising testing, strategy research, new product development, and advanced modeling for marketing decision optimization. The 33-year-old firm delivers competitive advantage to clients throughout the world in the consumer packaged goods, telecommunications, retail, technology, medical, and pharmaceutical industries. In addition, Decision Analyst owns and operates American Consumer Opinion® Online—one of the largest consumer opinion panels in the world—with more than eight million members.

For additional information contact:
Cristi Allen
Publicity
Email: callen@decisionanalyst.com
Phone: 1-800-ANALYSIS (262-5974) or 1-817-640-6166
Address: 604 Avenue H East
Arlington, TX 76011

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