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For Immediate Release July 6, 2009
Contact: Cristi Allen
callen@decisionanalyst.com
Phone: 817-640-6166

Arlington, Texas—The Decision Analyst Economic Index has moved higher over the past four months, indicating that an economic upturn in the U.S. economy is likely before the end of 2009. The Index ticked down one point in June, but remained significantly higher than it was during its nadir in January and February 2009. The Decision Analyst Economic Index is a leading indicator, usually anticipating changes in gross domestic product by 10 to 12 months.

“Even though the economy is fragile, Decision Analyst continues to forecast that the U.S. recession is at or near the bottom, and will begin to turn upward by the fourth quarter of 2009. The upturn, however, is dependent on energy prices, interest rates, access to credit, and unemployment rates. Really bad news on any of these fronts could derail or delay the recovery,” said Jerry W. Thomas, President/CEO of Decision Analyst.

10-Year History

When Decision Analyst started the Economic Index in the late 1990s the U.S. economy was booming. The peak came in May and June 2000, with an Index reading of 132 . Since that peak, the Economic Index has trended downward, reaching its low point of 85 in January and February 2009.

“As the longer term perspective reveals, the U.S. economy never fully recovered from the recession of 2000-2001 and the adverse events of 9-11. Despite very low interest rates and an abundant money supply, the U.S. economy idled along in low gear from 2001 to 2007, before plunging much lower,” said Thomas. “The recovery will be slow and tedious. It will take years before the Index numbers return to 2000 levels. Growing unemployment will act as a drag on the economy, and will constrain sales of many consumer goods and services in coming months. Lack of credit at all levels (business and consumer) will be a significant burden on the economy. Consumer and commercial mortgage defaults will continue to pose problems for another 24 to 36 months,” according to Thomas. “All of these negative headwinds will mean slow and fragile economic growth for the foreseeable future.”

Census Divisions

The West North Central and the West South Central divisions appear to be weathering the recession better than the rest of the country. The East North Central division and the Middle Atlantic division (i.e., automotive production areas) appear to be suffering the greatest economic difficulties, as shown on the next page:

Decision Analyst U.S. Census Division Economic Index
(Three-Month Average*)

* The Index numbers for the census divisions are a three-month moving average to smooth out fluctuations due to smaller sample sizes.

International Index

The chart below compares the U.S. Economic Index to the Economic Indices in other countries. Canada is doing about the same as the U.S. , while China , Brazil , and India appear to be doing better than most countries. France , Spain , and the United Kingdom appear to be doing comparatively worse than other countries.

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 typically conducted in the last 10 days of each month. The Index is 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 Argentina, Australia, Brazil, Canada, Chile, China, Colombia, France, Germany, India, Italy, Mexico, Netherlands, Peru, Russian Federation, United Kingdom, 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 marketing consulting firm specializing in advertising testing, strategy research, new product development, and advanced modeling for marketing decision optimization. The 30-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 the American Consumer Opinion® Online panel—one of the largest consumer opinion panels in the world—with more than seven 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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