PURCHASING FORECASTS

By Staff -- Purchasing, 11/2/2000

CCI rallies in September

Consumer confidence edged up to 141.9 in September from 140.8 in August. While that's off the peak set last May (144.7), it's still very high, suggesting that consumers remain indifferent to economists' rising fears around intransigently high energy prices, higher short-term interest rates, a sinking stock market, and lurking inflation. Reason: Anyone who wants a new job feels quite capable of obtaining one. Forecast: A post-election lift will give way to eroding confidence as economic growth slows from around 5% (lately) to 3%-3.5% in 2001.

Jobs remain plentiful

Civilian unemployment rate fell in September back to its cyclical thirty-year low of 3.9%. Big job growth on the services side of the economy offset a second month of job losses in manufacturing. Outlook: While the majority of analysts think economic growth will slow over the next year, few anticipate any big effects on the jobless rate as companies continue to report trouble hiring sufficient numbers of qualified people for work they already have. Upshot: By end-2001, the civilian jobless rate will have risen only two- or three-tenths of a point.

No relief at the gas pump

For the 12 months ending September, the PPI tracking prices for gasoline from U.S. refiners had gained nearly 49%. But that represents deceleration from the peak PPI growth rate of 57% reached in June. Part of the slowing is probably seasonal as the driving season is now over. But after falling abruptly between August and September, the PPI should resume its climb as refiners concentrate on making sufficient quantities of heating oil. Forecast: Prices rise 41% this year. In 2001-if all goes according to plan-they'll stabilize, then fall a bit.