Family Dollar Shareholders Approve Dollar Tree Deal

January 22, 2015

After months of delay and a failed bid by Dollar General, Family Dololar shareholders agreed to be acquired by Dollar Tree in a deal that creates a combined company with more than 14,000 locations, estimated annual sales of $19 billion and compelling growth opportunities.

Approval of the deal creates a new competitive dynamic in the world of extreme value retailing with the combination of Dollar Tree and Family Dollar making for a more formidable competitor to Dollar General and its nearly 12,000 stores.

Family Dollar operated 8,101 stores, which averaged about 7,200 square feet and were supported by 11 distribution centers at the end of the company's first quarter on November 29, 2014.  More than three-fourths of the company's sales are derived from food and consumable categories.  By comparison, Dollar Tree operated 5,077 stores, including 205 locations in Canada, which averaged about 9,000 square feet and were supported by 10 distribution centers at the end of the company's third quarter on November 1, 2014.  About half of Dollar Tree's sales come from food and consumable categories and the company also operates a format called "Deal$," where it sells merchandise for more than $1.

The deal is expected to close in March.  About 74% of the shares were voted in favor of the deal.

"Today's vote of approval by Family Dollar shareholders represents a crucial step toward combining Dollar Tree, North America's leading fixed price point discount retailer, with Family Dollar, a leading multi-price point retailer with a 50 plus year history of serving low and middle income customers," said Bob Sasser, Dollar Tree's CEO.  "By adding Family Dollar to our portfolio of brands, Dollar Tree will soon operate more than 13,000 stores in 48 states and five Canadian provinces with annual sales exceeding $18 billion.  This merger enhances our geographic footprint and diversifies our business model.  We intend to operate and grow both banners."

Family Dollar chairman and CEO Howard Levine said he was pleased with the outcome of the vote.

"The Family Dollar Board of Directors and management team have worked diligently to advance the best interests of all of the company's stockholders, and we are grateful for the support we received for the merger proposal," Levine said.  "We are also very appreciative of Family Dollar's talented and committed team members, who have remained focused on serving our customers throughout this process.  We look forward to completing the transaction with Dollar Tree and remain excited about the opportunity that this combination will create for our stockholders, team members, customers and other stakeholders."

Dollar General emerged as a bidder for Family Dollar after Family Dollar and Dollar Tree announced their acquisition deal on July 27, 2014.  Dollar General's all-cash offer for $80 a share appeared superior on the surface to Dollar Tree's cash and stock offer valued at $76.85 a share, but concerns quickly emerged about the number of store divestitures that would be required to secure regulatory approval because of the extensive overlap between the Dollar General and Family Dollar footprint.  Family Dollar indicated that between 3,500 and 4,000 stores were "problematic" based on Federal Trade Commission feedback while Dollar General indicated regulatory approval could be secured with the divestiture of no more than 1,500 stores.

In the end, Family Dollar shareholders voted for the certainty of the tie-up with Dollar Tree over the richer but potentially problematic offer from Dollar General.

Source: Retailing Today 

Residential Remodeling Market Set For Modest Growth In 2015

January 20, 2015

Residential remodeling is set for modest growth in 2015, according to experts at a press conference hosted by the National Association of Home Builders (NAHB) Remodelers at the International Builders' Show (IBS) in Las Vegas.  Remodelers appearing on the panel agreed with the forecast, citing home owners' changing demographics and increased financial security.

NAHB projects that residential remodeling spending on owner-occupied single-family homes will increase a modest 3 percent in 2015 over 2014, and another 1.5 percent in 2016.

"Remodelers are responding to calls from home owners on steadier financial footing than recent years," said NAHB Remodelers Chairman Robert Criner, GMR, GMB, CAPS, CGP, a remodeler from Newport News, Virginia.  "From major kitchen remodels and bath facelifts to room additions, the members of NAHB Remodelers look forward to providing professional remodeling services in 2015."

"Among our clientele, a demographic shift towards remodeling urban homes is taking place," said Mike Nagel, CGR, CAPS, a remodeler from Chicago.  "Our recent jobs tend to be in the city and the projects have increased in size."

"Existing homes sales and house prices both hit soft spots in 2014 that dealt a glancing blow to residential remodeling businesses," said Paul Emrath, NAHB's vice president for survey and housing policy research.  "We expect those drags are behind us in 2015, an outlook consistent with the optimism expressed by remodeler members in our recent Remodeling Market Index (RMI) survey."

Source: National Association of Home Builders

Growth Slowing In Home Remodeling In 2015

January 15, 2015

As the broader housing market continues its sluggish recovery, growth in home improvement spending is also expected to soften throughout the coming year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.  The LIRA projects annual growth in home improvement spending will decelerate from 6.3% in the first quarter of 2015 to 1.6% by the third quarter.

"Due in part to weakening home sales last year, growth in remodeling spending is expected to deflate somewhat in 2015," says Chris Herbert, Managing Director of the Joint Center.  "Homeownership rates continue to slide as lending remains tight and first-time homebuyers are not yet returning to the market."

"Although contractor sentiment has cooled in recent quarters, it remains favorable overall," says Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center.  "House price gains are moderating but still strong and home sales appear to be turning a corner now, all of which bodes well for continued, if more moderate, home improvement gains for 2015."

Source: Joint Center for Housing Studies

Remodelers Optimistic About Market Improvement

January 15, 2015

The National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) posted a record high result of 60 in the final quarter of 2014.  A reading of 60 indicates remodelers' confidence in the quarter-over-quarter improvement in the remodeling market.

An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.  The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.

"The recent pace and volume of business has been a boon to our remodeler members' confidence in the recovery of the housing market," said NAHB Remodelers Chair Paul Sillivan, CAPS, CGR, CGP, of Waterville Valley, New Hampshire.  "The upward trajectory of the RMI results over the past year has shown that home owners are ready, willing and deciding to remodel."

The RMI's future market conditions index rose to 60 from 58 in the previous quarter.  All four of its subcomponents - calls for bids, amount of work committed for the next three months, backlog of jobs and appointments for proposals - increased from the previous quarter's reading.

The current market conditions component of the RMI also increased to 60 from 57 in the previous quarter.  The readings for all subcomponents, including large additions and small remodels as well as maintenance and repair, also saw increases.

"Even with some weakness in existing homes sales and house prices earlier in the year, remodelers are upbeat as 2014 closes," said NAHB Chief Economist David Crowe.  "The consistent improvement in RMI results throughout 2014 are a sign of the gradual recovery of the remodeling market."

Source: National Association of Home Builders

Target To Exit Canada

January 15, 2015

Just six months after being named chairman and CEO of Target, Brian Cornell is pulling the plug on the retailer's 133 unit Canadian operation and will incur a $5.4 billion pre-tax loss in the fourth quarter to do so.

Target said it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. and that it had filed an application for protection under the Companie's Creditors Arrangement Act (CCAA) with the Ontario Superior of Justice in Toronto.

"After a thorough review of our Canadian performance and careful consideration of the implcations of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021," Cornell said.  "Personally, this was a very difficult decision, but it was the right decision for our company.  With the full support of Target Corporation's Board of Directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business."

Target currently operates 133 stores and employs 17,600 people throughout Canada.  The company is seeking court approval to make a voluntary $59 million cash contribution into an employee trust that would allow employees to receive a minimum of 16 weeks compensation.

"The Target Canada team has worked tirelessly to improve the fundamentals, fix operations and build a deeper relationship with our guests.  We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance," said Cornell.  "There is no doubt that the next several weeks will be difficult, but we will make every effort to handle our exit in an appropriate and orderly way."

Source: Retailing Today

Retailers Announce Store Closures for 2015

Many retailers have followed up their holiday 2014 sales results with announcements of store closings. Analysts believe these announcements are just the beginning of a “retail earthquake hitting America”. “Because of the changes in buying habits of U.S. consumers, as a result of the continuing hesitancy to spend, the 2014 holiday season was not sufficiently successful for many retailers that have either over expanded, fell out of favor or had insufficient capital and merchandise.”, said bankruptcy expert Chuck Tatelbaum. Online sales account for 13% of all retail sales.

J.C. Penney is closing 39 of its stores, laying off 2,250 workers. Macy’s is closing 14 of its 790 stores across the country. “Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones,” explained Terry Lundren, Macy’s chief executive officer. “We must continue to invest in our business to focus on where the customer is headed – to prepare for what’s next.”

Sears Holdings, which has over 1,830 Sears and Kmart stores, closed 200 stores in 2014 and will close 235 underperforming stores, explaining that they “expect to migrate the shopping activity of highly engaged members who previously shopped closed stores to alternative channels”.

• Wet Seal closing 338 retail sotres, laying off 3,700 employees.
•  Aeropostale closed 175 stores in 2014 and have asked investors to apporove closing 1,100 stores in 2015.
• RadioShack closed175 stores in 2014 and have asked investors to apporve closing 1,100 stores in 2015.

Source: WND.com

Shoppers Push Holiday Sales Up 4%

January 14, 2015

Confident consumers stocked up on gifts and other merchandise over the 2014 holiday season, helping boost overall holiday retail sales to their highest level since 2011.

According to the National Retail Federation, December retail sales, which exclude automobiles, gas stations and restaurants, decreased 0.9% seasonally adjusted month-to-month, and 4.6% unadjusted year-over-year.  The significant drop in gasoline prices in the month of December brought down much of the month-to-month growth.

Total holiday retail sales, which include November and December sales, increased 4% to $616.1 billion, which was in line with NRF's projected forecast of 4.1% growth.  In addition, non-store holiday sales, which is an indicator of online and e-commerce sales, grew 6.8% to $101.9 billion.

The U.S. Commerce Department, which does include gasoline, said that December retail sales decreased 0.9% seasonally adjusted month-to-month and 3.2 percent unadjusted year-over-year. 

"Today's holiday retail sales results are welcome news for our industry and for our economy.  There is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up," said NRF President and CEO Matthew Shay.  "We are fortunate to represent a resilient industry with business leaders who are committed to providing the best value to their customers.  A successful holiday for retail sales is extremely important, but the work to build upon and grow that success never ends."

"Preliminary holiday results affirm our initial belief that consumers going into the holiday season had the spending power necessary to give retail the shot in the arm it needed," said NRF Chief Economist Jack Kleinhenz.  "While December's figures are disappointing, holiday sales in 2014 are the best we've seen since 2011.  We remain positive about the future and expect to see consumers continue to benefit from the extra income gained from an improved job market and the dramatic fall in gas prices.  It is important to recognize that December is a very difficult month to adjust for seasonal forces because of holiday spending and this could explain in part this month's volatility."

Source: Retailing Today

Stage Stores Reports Positive Holiday Sales

Stage Stores, who operate under store banners such a Beall’s, Goody’s, Palais Royal, Peebles and Stage, offers moderately priced brand name apparel, accessories, cosmetics and footwear. They are reporting a strong holiday sales season for 2014. Official fourth quarter and full year 2014 results will be reported March 3, but Stage is reporting same store sales for the nine week period ending January 3, 2015 at an increase of 6.5%.

“We are very pleased with our holiday sales and margin performance. Footwear, women’s and cosmetics categories were especially strong. Our customers responded well to our holiday assortment, marketing, promotions and strategic initiatives in store and in our direct-to-consumer business, “ said Michael Glazer, President and CEO at Stage Stores, Inc.

Source: Retailing Today

Retailers Added 2,000 Jobs In December, Bringing Total To 176,000 In 2014

January 9, 2015

Retail industry employment increased by 2,000 jobs in December as healthy hiring gains in general merchandise and sporting goods stores were offset by declines in clothing and furniture stores, the National Retail Federation said today.  Retail employment for 2014 climbed by 176,000 jobs over the year before, according to NRF's calculations, which do not include automobile dealerships, gasoline stations or restaurants.

"Once again, today's jobs report was very strong and shows that the labor market is maturing and the economy is performing soundly," NRF Chief Economist Jack Kleinhenz said.  "It is the largest annual increase in overall employment since 1999.  While retail employment witnessed large swings in December, it was wholly consistent with seasonal patterns."

"However, data on average hourly earnings was very disappointing," Kleinhenz said.  "While the labor market has recovered from recessionary lows, it's still not strong enough to generate or pressure wage increases."

"While labor slack is diminishing, the recent and notable drop in energy prices combined with anemic wage growth may provide the Federal Reserve more leeway to lift short-term interest rates," Kleinhenz said.  "We continue to expect further revisions into the New Year."

Source: National Retail Federation

The Conference Board Employment Trends Index Increases In December

January 12, 2015

The Conference Board Employment Trends Index (ETI) increased in December.  The index now stands at 128.43, up from 127.83 in November.  This represents a 7.5 percent gain in the ETI compared to a year ago.

"The Employment Trends Index increased in every single month of 2014, capping the year off with strong growth, 2.3 percent, in the final quarter," said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board.  "The strengthening in the ETI suggests that rapid job growth is likely to continue throughout the first half of 2015.  And as the labor market tightens further, acceleration in wage growth is soon to follow."

December's increase in the ETI was driven by positive contributions from six of the eight components.  In order from the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find "Jobs Hard to Get", Initial Claims for Unemployment Insurance, Industrial Production, Percentage of Firms with Positions Not Able to Fill Right Now, Number of Temporary Employees, and Real Manufacturing and Trade Sales.

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area.  Aggregating individual indicators into a composite index filters out "noise" to show underlying trends more clearly.

• Percentage of Respondents Who Say They Find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey)
• Initial Claims for Unemployment Insurance (U.S. Department of Labor)
• Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
• Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
• Job Openings (BLS)
• Industrial Production (Federal Reserve Board)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)
• Statistical imputation for the recent month
• Statistical imputation for two recent months

Source: The Conference Board

Costco Comps Surge 8% In U.S.

January 8, 2015

Costco showed again in December why it's the cream of the crop among warehouse club stores.

The Washington based retailer reported an increase of 8% in same store sales in the United States, excluding gasoline sales and foreign exchange.  Same-store sales at international stores rose by 1%.

Net sales for the retailer rose 5% to $12.2 billion in December from $11.53 billion a year earlier.

For the 18 weeks ended January 4, sales at stores open at least a year rose 4%.  They climbed 6% in the United States, but were flat overseas.  Total revenue for the 18-week period climbed 7 percent to $40.85 billion.

Costco Wholesale Corp., based in Issaquah, Washington, runs 671 warehouses, including 474 in the U.S. and Puerto Rico, 88 in Canada, 34 in Mexico, 26 in the U.K., 20 in Japan, 11 in Korea, 10 in Taiwan, seven in Australia and one in Spain.

Source: Retailing Today

Best Job Year In More Than A Decade Ends On High Note

January 9, 2015

The economy generated 252,000 new jobs in December, and the gains for November and October were revised up.  These strong gains are likely to continue to boost consumer spending in 2015.  The continued drop in the unemployment rate, to 5.6 percent in December, puts us within striking distance of the natural rate of 5.5 percent.  All the more reason to expect that the Fed will start raising rates in the first half of 2015.  In such an environment we should expect to see acceleration in wage growth, but there is no evidence of that, yet, in the establishment survey.

Source: The Conference Board

Macy’s Reports 2014 Holiday Sales Results and Big Changes for 2015

Macy’s reported a 2.7% year over year increase in sales for November and December. This was in line with their projected 2-3% sales increase prediction.  "We feel very good about our performance in the November/December period as we reversed trend from a soft third quarter and set the stage for continued progress going forward,” Terry J. Lundgren, Macy’s chairman and CEO, said.

That continued progress includes the announcement of major changes at Macy’s for 2015. These changes include a restructuring of merchandising and marketing functions at both Macy’s and Bloomingdale’s, focusing on the company’s omnichannel approach as well as a series of adjustments to its field and store operations to increase productivity and efficiency that include closing 14 of its 790 stores and some related layoffs. Macy’s also announced opening two new locations and reconfirmed plans for seven others.

The company will change its merchandising-related functions in local districts to improve the ability to localize assortments by size, color, fabric weight, style, fit, category and brand. Among the changes, the company is eliminating positions known as “district planners” and reinvesting in new regional teams devoted to specific themes of merchandise localization. Plans call for these teams to intensify Macy’s warm-weather strategies, as well as address topics such as meeting the needs of more traditional customers who live in northern climate zones, and better understand and support the diverse needs of multicultural customers. Macy’s contends its field team will continue to represent a significant competitive advantage in reacting quickly to changes in customer demand.

Macy’s will expand its existing fulfillment center network in Arizona, California, Connecticut, Tennessee and West Virginia with a new 1.3 million square foot fulfillment center opening this year in Tulsa.

“Going forward, Macy’s and Bloomingdale’s will be better able to move more quickly and nimbly to select merchandise, assort inventories and serve total customer demand, no matter how, when or where the customer shops,” Lundgren said. “Some redundant activity also can be avoided to accelerate speed to market, partner more effectively with vendor resources and ensure the merchandising organizations are more responsive to the marketplace in making and implementing decisions.”

Source: Retailing Today

2014 Holiday Online Sales Break Records

Holiday online sales in 2014 exceeded an already optimistic forecast. Total desktop online sales for November through December grew 15% to $53.3 billion, $2 billion of that total coming from Cyber Monday, making 2014 the 5^th consecutive year this day had the highest amount of spending.

The day after Cyber Monday came in second with $1.7 billion. Over the entire season, 15 days exceeded $1 billion in online desktop spending. In 2013 only 10 days exceeded $1 billion during the same period.

"Despite a shortened holiday calendar between Thanksgiving and Christmas and erroneous reports of flagging holiday sales, the American consumer proved resilient and flexed their spending muscle online this year, “ quoted comScore chairman emeritus Gian Fulgoni. “In the end, we saw growth rates in the mid-double digits as the online channel continued to gain meaningful share from brick-and-mortar."

Source: Retailing Today

Rite Aid Sales Surge 5.3%

January 5, 2015

Rite Aid Corp. says sales at stores open at least a year grew 5.3% in December, boosted again by strengthening pharmacy sales.

Same-store sales at the Camp Hill, Pennsylvania-based retailer grew 5.3% to $2.2 billion, beating analyst consensus of 4.5% and reflecting a 1.7% increase in front-end same-store sales and a 7.3% increase in pharmacy same-store sales.

"The front-end comp of 1.7% outpaced consensus of 1.2% and represents the strongest two-year trend since last January," noted Ed Kelly, Credit Suisse research analyst.  "Flu-related OTC helped and Wellness remodels are likely a tailwind impact could ramp over time as a higher proportion of the store base is remodeled.  The pharmacy comp beat as wellk, as sales rose 7.3% vs. consensus of 6.3%, although generic impact markedly decelerated sequentially due to the lapping of Cymbalta."

Prescription count at comparable stores increased 5.1% over the prior year period.  Prescription sales accounted for 64.8% of drug store sales, and third party prescription sales represented 97.6% of pharmacy sales.

Same-store sales for the 43 week period ended December 27, 2014 increased 4.3% over the prior-year period.  Front-end same-store sales increased 1% while pharmacy same-store sales increased 5.9%.  Prescription count at comparable stores increased 3.6% over the prior-year period.

Total drug store sales for the 43 week period increased 3.9% with sales of $21.8 billion.  Prescription sales represented 68.6% of total drug store sales, and third party prescription sales represented 97.5% of pharmacy sales.

Source: Retailing Today 

December 2014 Manufacturing ISM Report On Business - PMI At 55.5%

January 2, 2015

Economic activity in the manufacturing sector expanded in December for the 19th consecutive month, and the overall economy grew for the 67th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

The report was issued by Bradley J. Holcomb, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.  "The December PMI registered 55.5 percent, a decrease of 3.2 percentage points from November's reading of 58.7 percent.  The New Orders Index registered 57.3 percent, a decrease of 8.7 percentage points from the reading of 66 percent in November.  The Production Index registered 58.8 percent, 5.6 percentage points below the November reading of 64.4 percent.  The Employment Index registered 56.8 percent, an increase of 1.9 percentage points from the November reading of 51.5 percent.  The Prices Index registered 38.5 percent, down 6 percentage points from the November reading of 44.5 percent, indicating lower raw materials prices in December relative to November.  Comments mention the negative impact on imported materials shipment due to the West Coast dock slowdown."

Manufacturing expanded in December as the PMI registered 55.5 percent, a decrease of 3.2 percentage points when compared to November's reading of 58.7 percent, indicating growth in manufacturing for the 19th consecutive month.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the December PMI indicates growth for the 67th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 19th consecutive month.  Holcomb stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (55.8 percent) corresponds to a 4.2 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for December (55.5 percent) is annualized, it corresponds to a 4.1 percent increase in real GDP annually."

Of the 18 manufacturing industries, 11 are reporting growth in December.

Source: Institute for Supply Management

J.C. Penney Stock Soars 20% with High Year-End Sales Growth

Although analysts had projected retail growth in December to average 2.7%, J.C. Penney reports that sales rose 3.7% for the last 9 weeks leading up to the end of December. That compares to 3.1% growth for the same time period last year.

Last year at this time, Penney did not disclose sales results, which drove the stock down and raised investors’ concerns about the company’s turnaround efforts after failed changes in sales strategy. This included removing discounts and popular house brands.

“Our highest priority over the last year has been to restore profitable sales growth at J.C. Penney,” Chief Executive Myron E. Ullman said. “This holiday season was instrumental in that effort.”

The National Retail Federation (NRF) projects this holiday season to boast the strongest sales growth since 2011. J.C. Penney is the first large retailer to report holiday season sales.

New Home Sales Fall 1.6 Percent In November

December 23, 2014

Sales of newly built, single-family homes dropped 1.6 percent in November to a seasonally adjusted annual rate of 438,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"Though home sales have edged slightly lower, builders are reporting confidence in the market and are increasing their inventory in anticipation of future business," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Delaware.

"Sales have held in a relatively stable range during the past four months," said NAHB Chief Economist David Crowe.  "As the labor market and broader economy continue to strengthen, we can expect the housing sector to gain momentum heading into next year."

The inventory of new homes for sale rose to 213,000 in November, which is a 5.8 month supply at the current sales pace.

Regionally, new home sales rose 14.8 percent in the West.  Sales dropped 12 percent in the Northeast, 6.3 percent in the Midwest and 6.4 percent in the South.

Source: National Association of Home Builders

The Conference Board Consumer Confidence Index Bounces Back

December 30, 2014

The Conference Board Consumer Confidence Index, which had declined in November, improved in December.  The Index now stands at 92.6, up from 91.0 in November.  The Present Situation Index rose to 98.6 from 93.7, while the Expectations Index decreased to 88.5 from 89.3 in November.

Says Lynn Franco, Director of Economic Indicators at The Conference Board, "Consumer confidence rebounded modestly in December, propelled by a considerably more favorable assessment of current economic and labor market conditions.  As a result, the Present Situation Index is now at its highest level since February 2008.  Consumers were moderately less optimistic about the short-term outlook in December, but even so, they are more confident at year-end than they were at the beginning of the year."

Consumers' appraisal of current conditions was considerably more favorable in December.  Those saying business conditions are "good" was unchanged at 24.8 percent, while those claiming business conditions are "bad" decreased from 21.8 percent to 19.6 percent.  Consumers were also more positive in their assessment of the job market, with the proportion stating jobs are "plentiful" increasing from 16.2 percent to 17.1 percent, and those claiming jobs are "hard to get" decreasing from 28.7 percent to 27.7 percent.

Consumers' optimism about the short-term outlook eased moderately in December.  The percentage of consumers expecting business conditions to improve over the next six months edged down from 18.3 percent to 18.0 percent, but those expecting business conditions to worsen declined slightly from 10.4 percent to 10.1 percent.  Consumers' outlook for the labor market was marginally less optimistic.  Those anticipating fewer jobs rose from 16.1 percent to 16.9 percent.  The proportion of consumers expecting growth in their incomes declined moderately from 16.9 percent to 16.4 percent; however the proportion expecting a decrease also declined, from 11.0 percent to 10.0 percent.

Source: The Conference Board

The Conference Board Leading Economic Index For The U.S. Increased Again

December 18, 2014

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.6 percent in November to 105.5, following a 0.6 percent increase in October, and a 0.8 percent increase in September.

"The increase in the LEI signals continued moderate growth through the winter season," said Ken Goldstein, Economist at The Conference Board.  "The biggest challenge has been, and remains, more income growth.  However, with labor market conditions tightening, we are seeing the first signs of wage growth starting to pick up."

"Widespread and persistent gains in the LEI point to strong underlying conditions in the U.S. economic expansion," said Ataman Ozyildrim, Economist at The Conference Board.  "The current situation, measured by the coincident economic index, has been improving steadily, with employment and industrial production making the largest contributions in November."

The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.4 percent in November to 110.7, following a 0.2 percent increase in October, and a 0.3 percent increase in September.

The Conference Board Lagging Economic Index (LAG) for the U.S. increased 0.3 percent in November to 125.4, following no change in October, and a 0.1 percent increase in September.

Source: The Conference Board