For Immediate Release June 3, 2004
Contact: Cristi Allen
callen@decisionanalyst.com
Phone: 817-640-6166

Slumping Consumer Confidence Drives
Decision Analyst's Economic Index Lower

Arlington, Texas (June 03, 2004) – The economic recovery is facing a major crisis of confidence; so indicates the latest data from Decision Analyst, Inc.’s U.S. Economic Index. The overall Index fell five points to 106 in May, the biggest single month drop since December 2000. Consumer confidence fell to levels not seen since the fall of 2001, while faith in stock market performance hit a 12-month low.

“The substantial fall in confidence is a great cause for concern,” said Jerry W. Thomas, President and CEO of Decision Analyst, a marketing research and marketing consulting firm. “If the decline in consumer optimism results in a curtailing of their spending plans, that’s going to be a big problem for manufacturing output in the months to come. The near-term outlook for the stock markets isn’t too positive either, given that the Dow Jones Industrial Average is currently trading more than five percent off the highs seen earlier this year.”

he May Economic Index saw a fall in reported business activity, although job security and corporate hiring remain stable. Almost the only trend on the rise is worry over prices. The pricing component of the Index hit a scaled level of 132, the worst level ever recorded by the Index, representing a 23 percent shift in the last two months.

“It’s pretty clear what’s hitting consumer optimism the hardest: price rises, especially at the gas pump,” Thomas says. “As crude oil continues to hit record price levels, the American public can see the consequences every time they drive past a gas station. The price rises are confidence-sapping, and that risks severely limiting the rate of growth the economy will enjoy this year.”

Methodology

The Decision Analyst Economic Index is based on a monthly Internet survey of several thousand households balanced by gender, age, and geography. The survey is conducted during the last 10 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. Decision Analyst also conducts concurrent economic surveys in Canada, the U.K., Germany, France, Italy, Netherlands, Mexico and Australia. 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 stagnant economy, and below 100 generally indicates economic contraction. These guidelines vary by country, however.

About Decision Analyst

Decision Analyst, Inc. is a leading marketing research and marketing consulting firm specializing in advertising testing, strategy research, new product development, and advanced modeling for marketing decision optimization. The firm delivers competitive advantage to clients throughout the world in the consumer packaged goods, telecommunications, retail, high technology, medical and pharmaceutical, utilities, and e-commerce industries. Decision Analyst operates American Consumer Opinion® Online, one of the world's largest Internet consumer opinion panels, with more than 3.5 million participants.

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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