W-b Diamonds Shine In Debut Against Slamm

4 Players Hit Double Figures As Altoona Downs Hazleton

Sunday, January 11, 1998 &nbsp;&nbsp;&nbsp;&nbsp;Page: 1D 





Shift to service economy, not dog, wrecked forecast &nbsp;&nbsp;&nbsp; 
 The dog ate my homework. This might be the only excuse I have not yet
triedEvery year for the past decade or so I have been going public, presenting
my forecasts for Christmas retail sales. Up until this year, I have been
reasonably accurate. After all, it's just a matter of looking at several
indicators in the economy and factoring in the political and international
environments. &nbsp;&nbsp;&nbsp; Predicting retail sales for Christmas 1997 should have been a walk in the
park- or so I believed. The economy continues to grow at a blistering pace;
the stock market has been volatile but shows no signs of deflating;
unemployment is so low that even an increase in the minimum wage has created
no shortage of jobs; consumer confidence remains extremely high; and, despite
high interest rates on credit cards, consumers still show no hesitancy in
whipping out the plastic. &nbsp;&nbsp;&nbsp; 
 So, when I was asked how much 1997 Christmas retail sales would increase
over 1996's numbers, I came up with a whopping 7 percent. I was wrong. While
the numbers are still floating in, it would appear that this increase is more
in the 4 percent range. &nbsp;&nbsp;&nbsp; 
 I could blame the fact that I set about performing this forecasting task
during the month of October, when Halloween pumpkins were still decorating our
retail establishments. Or, I could argue that the stores themselves are to
blame, by making Christmas a three-month holiday, rather than waiting until
after Thanksgiving to set the Noel tone. &nbsp;&nbsp;&nbsp; 
 Or I could say that the retail giants dramatically overstocked, creating
surpluses that ultimately forced them to slash prices as the shopping season
wore down. &nbsp;&nbsp;&nbsp; 
 Or, when in doubt, I could even blame the weather, explaining that the
Northeast experienced mild temperatures until too late into the year. (Why
not? Everything else is blamed on El Nino.) &nbsp;&nbsp;&nbsp; 
 Now, after much soul-searching and self-doubt, questioning whether the time
has come for me to hang up my retail spikes, I think I finally figured out
what happened. &nbsp;&nbsp;&nbsp; 
 As a consuming society, we are moving away from goods and toward services.
Now this may seem obvious to some, and, indeed, during the early 1970s, when
this "demand shift" phenomenon first appeared, stagflation hit the United
States in a big way. &nbsp;&nbsp;&nbsp; 
 But, it's not so much the fact but the magnitude of the shift that I
believe has, does and will continue to affect our economy. Consumers are
richer than ever, either in reality or in perception (with their stock market
holdings so high in value at the current time). &nbsp;&nbsp;&nbsp; 
 However, they are not spending this increased wealth on "gift-like" retail
goods but are rather doing such things as travelling more frequently and to
more exotic locations, dining out, taking taxis and limousines and treating
themselves to pedicures. &nbsp;&nbsp;&nbsp; 
 Indeed, according to recent statistics, a full 60 percent of all consumer
purchases are made for services rather than for goods. &nbsp;&nbsp;&nbsp; 
 This may be somewhat problematic for the continued, longer-term well-being
for our economy, as increases in demand for these types of services have
historically led to the simultaneous impact of both inflation and
unemployment. &nbsp;&nbsp;&nbsp; 
 And, while I am not a forecaster of economic doom, I do contend that now,
more than ever, the Federal Reserve needs to keep a tight control over
interest rat

Shift To Service Economy, Not Dog, Wrecked Forecast The Dog Ate My Homework. This Might Be The Only Excuse I Have Not Yet Tried.