A Bloggish Scan Of Economic News Impacting Foodservice E&S
Except for the $100-million stimulus for school foodservice equipment, it was mostly another week of negative economic numbers. Because a lot of fourth-quarter reports are now just coming in, we can depress ourselves with the past as well as the present, if we so choose.

Jobless claims rose again, according to a Department of Labor report released Thursday. More than five million Americans are now collecting unemployment insurance benefits….The Producer Price Index and the Consumer Price Index both were up slightly, showing that the greatly feared deflation of prices was slowing or stopping. The overall Producer Price Index for finished goods, reported Thursday, was up 0.8% thanks to a rise in energy costs. Foods at the finished producer level, where foodservice operations buy them, fell 0.4% in January. Deflation rates also fell at the intermediate and crude goods level. The Consumer Price Index, released Friday, also rose thanks to increased energy costs; overall it was up 0.3%. The CPI was virtually unchanged from January 2008 to January ’09. Who would have thought, given the midyear spikes? The food component rose 0.1% after falling in December. Food-away-from-home prices continued to rise, up 0.3%, the same rate for the past three months. Menu prices are up 4.9% since January ’08.…We’ve seen a couple new forecasts of the general economy the past couple weeks. The Federal Reserve Open Market Committee released its forecast of gross domestic product and other key economic indicators last Wednesday. The new forecasts, the first since October from the Fed, were significantly lower than those of three months ago. The consensus of the 16 Fed governors was for real GDP declines of 0.5% to 1.3% in ’09, with the strong declines of the first half offsetting the “gradual recovery” of the second half. The Fed’s forecast for ’10 GDP is 2.5% to 3.3% real growth, which would be close to the longer term “trend” of 3%. The more than 50 leading economic forecasting groups polled monthly by Blue Chip Economic Indicators are more pessimistic. Their latest consensus for ’09 GDP, released Feb. 10, is for a 1.9% real decline this year and a 2.1% real gain next year. These forecasts are down 0.3 point each from the January forecasts. The consensus for personal consumption expenditures also fell 0.3 point to -1.4%, still the worst consumer spending environment since World War II. The economists do expect both GDP and PCE to turn positive in real terms in third-quarter ’09…Public and a few private restaurants chains are reporting their fourth quarter ’08 numbers. We’ll analyze them in more depth in the next issue of FER Fortnightly, but in broadest terms, most casual-dining companies got hammered, fast-casual numbers were mixed and most quick-service concepts continued to report positive numbers, led as usual by McDonald’s. We’ll call out only one other specific chain. Same-store sales at Buffalo Wild Wings rose nearly 5% in the fourth quarter, and its profit rose 27% over ’07. Even in the worst of times, Americans have to eat something. Seems it’s burgers, biscuit sandwiches and wings.