Secrets of the Catalog Master
Vol. MMVII No. 1 January 2007
(Continued--page 2)
The First Quarter 2007 Economic Outlook
On average, the economists see an investor-friendly 2007 economy, with growth cooling to 2.6% through the end of 2007. That's lower than the 3.1% pace expected for 2006, but projections are for a slight pickup in the pace as the year progresses. The slowdown will cause the unemployment rate to drift up, probably from 4.5% to 4.8%. The drop in new home construction is expected to end by midyear, yet by the end of the year, home prices are projected to drop nationally by an average of 1.7%.
The offsetting outlook is that slower growth would cause core inflation, which excludes energy and food, to moderate. The consumer price index is projected to rise 2.5%, while the core CPI is expected to drop to 2.4%. A softer look for inflation will give the Federal Reserve leeway to trim its target interest rate to just below 5%, from 5.25% at the end of 2006. Fed policy easing will restore a flatter yield curve, with the return on a 10-year Treasury note expected to drift up by the end of the year to just under 5%. Profits will continue to grow but at a slower single-digit pace, compared with high double-digits in 2006. Overall, this is a reasonable outlook and, of course, can be influenced by the growing problems in almost all of the Middle-east.
Signs of Regional Stability or Status Quo
Region One (CT, ME, MA, NH, RI, VT)
Region Two (NY, NJ, CT, PR, VI)
Region Three (PA, NJ, DE)
Region Four (OH, KY, PA, WV)
Region Five (KY, MD, TN, VA, NC, SC)
Region Six (GA, AL, FL, LA, MS, TN)
Region Seven (IL, IN, MI, WI, IA)
Region Eight (MO, IL, IN, KY, TN, LA, AR)
Region Nine (MN, WI, ND, SD, MT, MI)
Region Ten (KS, CO, MO, NE, NM, OK, WY)
Region Eleven (TX, LA, NM)
Region Twelve (CA, UT, AZ, NM, OR, WA)
Slower (Individual states)
Louisiana
Mississippi
The First Quarter 2007
Circulation and Prospecting Outlook and Recommendations
Synopsis
The short-term economic outlook for the catalog industry remains positive. The intermediate-term outlook remains positive for the first and second quarters of 2007 and the long-term outlook through 2007 remains positive. This has been almost three years of sustained positive outlooks and this is reflected in the near-universal growth of the industry sectors.
Prospect as an Investment
For the first half planning in 2007, continue with normal to increased strategies for circulation and investment prospecting plans. There continue to be no compelling economic reasons for reductions in either prospecting or customer circulation. We would be comfortable with increases of ten to twelve percent in prospecting levels.
Nation At A Glance
We have raised mailing recommendations in several states for the first and second quarter planning in 2007.
