For Immediate Release November 5, 2001
Contact: Cristi Allen
callen@decisionanalyst.com
Phone: 817-640-6166

Dallas-Fort Worth – The Decision Analyst U.S. Economic Index for October, based on a nationwide Internet survey conducted the last 10 days of October, indicates that U.S. economic activity is bouncing back from the downturn triggered by the Sept. 11 terrorist attacks. The U.S. Economic Index fell four points in September to 109, but rebounded to 112 in late October. In contrast, Decision Analyst’s Canadian Economic Index fell from its September number of 105 down to 103, and most of the company’s European indexes rose a point or two from September to October.

Despite all of the gloomy news about falling profits and corporate layoffs, the vast majority of consumers remain confident about the security of their jobs, and are reasonably confident about the state of the job market itself. Consumers are also keenly aware that many prices are falling, and that falling prices tend to stimulate the economy. Also, consumers report that "business activity" where they work began to pick up in late October, and their optimism about future growth in the value of stock market investments moved higher. These positive signs, combined with continuing interest-rate reductions, suggest that the U.S. economy will begin to grow again by the first quarter of 2002.

Greatest Economic Threat: More Terrorist Activity

"The greatest threat to a general economic upturn is the possibility of some other major terrorist event that would disrupt the normal flow of economic activity and diminish consumer confidence," said Jerry W. Thomas, President/CEO of Decision Analyst. "Barring any additional major shocks to the U.S. economy, we remain confident that an economic upturn is imminent, no later than the first quarter of 2002.

"Unemployment is likely to continue to trend upward, but unemployment is a lagging indicator. That is, unemployment tends to continue upwards after a recession has ended. The U.S. economy is massive, diverse, and resilient," said Thomas, "and will rebound soon."

The Decision Analyst U.S. Economic Index peaked in the spring of 2000, declined to a slightly lower level in the fall of 2000, and then dropped dramatically to a lower level during the first nine months of 2001, as shown in the chart above.

Canada: No Bounce Yet

Interestingly, the Decision Analyst Economic Index for Canada suggests that the Sept. 11 disaster impacted the Canadian economy just as it did the U.S. economy. However, unlike the U.S., Canada’s Index did not bounce back in October. The Economic Index for Canada stood at 108 in August, fell to 105 in September, and then to 103 in October.

Europe: Slight Rebound Underway

The United Kingdom was also greatly impacted by the September 11 terrorist attacks in the U.S. Decision Analyst’s Economic Index for the U.K. fell from 122 in August to 103 in September, but bounced back to 109 in October. The German Economic Index fell from 112 in August to 103 in September and 104 in October. The French Economic Index fell from 102 in August to 100 in September, but rose to 104 in October.

"It is clear," said Thomas, "that the September tragedy in the U.S. dampened economic activity in much of Western Europe."

The Decision Analyst Economic Index is based on an Internet survey of several thousand households balanced by gender, age, and geography. It is conducted in the U.S., Canada, the U.K., Germany, France, Italy, and Australia monthly. The survey is conducted over the Internet during the last ten days of each month, and the index is immediately calculated from nine different economic measurements, using a sophisticated econometric model.

The result is a snapshot of current U.S. economic activity, as seen through the eyes of representative consumers. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy in the U.S. An index in the 100 to 110 range suggests a stagnant economy, and an index below 100 generally indicates economic contraction. These guidelines vary by country, however.

If you would like to be the first to receive the Decision Analyst Economic Index each month, please contact Cristi Allen by email to get on the advanced-release list.

For additional information contact:
Cristi Allen
Publicity
Email: callen@decisionanalyst.com
Phone: 1.800.ANALYSIS (262.5974)
Address: 604 Avenue H East
Arlington, TX 76011

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