Survey: Consumer Spending Index Improves in Dec.
New York City The Deloitte Research Leading Index of Consumer Spending improved in December, primarily due to a sharp decline in energy prices that in turn is giving a boost to real wages.
The Index tracks consumer cash flow as an indicator of future consumer spending.
“Falling energy and food prices are giving a boost to consumer purchasing power, and are offsetting some of the decline in house prices,” said Carl Steidtmann, chief economist, Deloitte Research, a subsidiary of Deloitte Services LP. “In addition, if the new administration’s stimulus plan includes a tax reduction, as expected, that would improve our outlook for consumer cash flow and spending. At the same time, the deterioration in the labor market continues to be a key concern, and clearly there are still many economic issues that need to be addressed.”
The Index, comprising of four components — tax burden, initial unemployment claims, real wages and real home prices — posted a 0.3% gain, up from a revised decline of -0.05% in November.
Home Depot ends Olympic sponsorship
ATLANTA Home Depot has announced it is ending its multimillion-dollar sponsorship deal with the U.S. Olympic Committee (USOC) and discontinuing a program that offered jobs and benefits to American athletes, the Associated Press reported.
The partnership began in 1992 and was worth between $15 million and $20 million during the four-year period ending in 2008.
The 86 athletes currently in the program — who worked flexible schedules depending on their Olympic training — will be offered traditional jobs at the Home Depot stores they now work in. After March 2, however, they will no longer receive full-time pay and benefits for part-time work.
“It’s been an outstanding relationship and we greatly appreciate everything Home Depot has done,” USOC spokesman Darryl Seibel told the A.P. “We’re sorry to see them go. At the same time, we appreciate their continued support of America’s athletes.”
At the height of the program, Home Depot employed more than 200 athletes. To make up for the financial loss, the USOC plans to provide stipends to winter athletes in the program through January 2010 and a one-time, $5,000 stipend to summer athletes. It will also provide health insurance these athletes might lose if they scale back or quit their Home Depot jobs.
Home Depot, which recently reported a 31 percent drop in third-quarter earnings for 2008, would not confirm that this decision was directly associated with the economy, according to the A.P.
Sears Domestic comps take toll on Sears Holdings Dec. results
HOFFMAN ESTATES, Ill. Sears Holdings announced that total comparable-store sales for the month of December declined 7.3%. Comparable-stores at Kmart fell 1.1%, and Sears Domestic comps fell 12.8%.
Kmart’s December comparable-store sales benefited from a year-over-year increase in sales through the retailers’ layaway program, Sears Holdings reported, while Sears Domestic December comps suffered from reduced sales across most hardlines and apparel categories.
For the full year ending Jan. 31, the company expects net income to be between $163 million and $243 million, or between $1.27 and $1.90 per fully diluted share.