Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
March 21, 2006








Regulatory Report:
Sponsored by:
Hotelex Shanghai,
April 4-7, 2006
ASHRAE, IESNA To Set New 'Green' Standards
U.S. House Passes Food Labeling Uniformity Act
Austin Restaurant Patios Go To The Dogs
Bridgeport Restaurant Restrooms On The Hook
Where There's Smoke, There's Lawyers

Industry Report:
Sponsored by:
Power Soak
Nerbonne Takes Reins At Enodis' Americas Operations
Dormont Releases Guide To Gas Appliance Standards
CFESA Announces 2006 Spring Conference Agenda
MAFSI Offers Customer Roadshows
Foodservice Companies Among Fortune's 'Most Admired'
Culver's, Famous Dave's Make IFMA 2006 Silver Plate List



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In This Section:
Blue Chip Economists Forecast First Quarter Bounce, Then Continued GDP Growth Around 3%
Jobs Growth In February Bodes Well For Foodservice
And Now For The Long View, Or Real GDP To Grow 3% in 2012

This issue's Regulatory ReportSponsor: Hotelex Shanghai, April 4-7, 2006 Industry ReportSponsor: Power Soak

Economic Report Atlas Metal Industries Inc.

Blue Chip Economists Forecast First Quarter Bounce, Then Continued GDP Growth Around 3%
The pronounced fourth-quarter slowdown of the American economy has a temporary silver lining. Real growth of U.S. gross domestic product is projected to soar in first quarter, in a rebound from the hurricane-suppressed growth late last year.

The latest consensus forecast of GDP growth, based on economists polled by Blue Chip Economic Indicators, has growth rising to 4.7% real in the first quarter, driven by a warm January and a surge in vehicle sales. This follows paltry growth of 1.6% in the fourth quarter of 2005. That figure was revised upward from the original estimate of only 1.1%

But the surge will not last. The economists predict GDP growth will slow to 3.3% in the second quarter, 3% in the third and 2.9% in the fourth. Annualized, GDP growth is now expected to be 3.4% for '06, just down from 3.5% last year. The forecast is 0.1% higher than last month's.

The economists do see inflation moderating, so long as their assumptions about declines in energy prices come true. The Consumer Price Index is forecast to decline to 2.9% this year, versus 3.4% in '05. But the core rate, less food and energy, is predicted to remain at 2.2%, the same level as the past two years.

 

Section sponsored by Atlas Metal Industries Inc.

Jobs Growth In February Bodes Well For Foodservice
Hudson Riehle always likes two macroeconomic numbers best: jobs growth and real disposable income. The senior v.p. of research and information services for the National Restaurant Association believes these two numbers best reflect the future prospects of foodservice.

He must be a happy man as both indicators are doing well through the first two months.

The U.S. Labor Department reported nonfarm payrolls grew by 243,000 in February and revised January payrolls growth up to 170,000. The unemployment rate crept up 0.1 point to 4.8%, but only because more Americans entered the market. The report showed gains across all industry segments and a 0.3% gain in average hourly wages.

While some economists worry about how a slowdown in housing construction might impact jobs, most economists see the numbers overall being positive without being so strong that they trigger inflation. Meanwhile, the consensus forecast by Blue Chip Economic Indicators pegs real disposable personal income growth at 4.1% in the first quarter of 2006 and 3.5% for the year. This compares with a paltry 1.5% growth in real disposable income last year.

Many economists also believe the strength in employment and moderating inflation means the Federal Reserve Board under new Chairman Ben Bernanke will continue to raise short term interest rates during its next two meetings in late March and early May. This would raise its short-term rate to 5% from the current 4.5%


Section sponsored by Atlas Metal Industries Inc.

And Now For The Long View, Or Real GDP To Grow 3% in 2012
One of the fun things about Blue Chip Economic Indicators is that it produces more different economic forecasts than just about any amateur could use.

The latest edition is a case in point. The newsletter's forecasts, based on predictions from more than 50 leading economists from all segments of the financial, industrial and government worlds, published its long range consensus projections for the U.S economy in the March 10 issue.

The current forecast for real growth of gross domestic product in 2007 is 3%. This is down from the forecast 3.4% for '06.

The future looks much the same. The forecast five-year average real GDP growth for the years '13-'17 is 3%. In the nearer term, growth will range from a high of 3.1% in the years '08 through '10 to a low of 2.9% in '11. The five-year average for '08-'12: 3.1%

Inflation, based on the Consumer Price Index, is forecast to remain in a range of 2.3% to 2.4% during '08 through '17 period. Corporate profits are forecast to range from a low of 3.9% real growth in '08 to 6.0% in '12.

Now, we have a feeling some of this will come true, some won't. Let's just hope the economy is indeed this stable.



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