What's Important in the Financial World (9/25/2012)
Halloween may be one of the events that helps keep consumer spending at a reasonable level. BIGinsight conducted research for the National Retail Federation that found more than 71% of American will celebrate the holiday this year. That is up to 170 million people, which BIGinsight claims is a record. According to a CNBC story on the information:
The average person will fork out about $79.82 on decorations, costumes, and candy, up from $72.31 last year.
A bigger part of the budget this year will go to costumes. Although the average person will spend about $28.65 on costumes, up slightly from $26.52 in 2011, retailers and costume manufacturers are saying that costumes continue to become more elaborate each year and shoppers are buying more items to go along with their costume.
American Airlines Flight Delays
Passengers who fly American Airlines, the operating division of bankrupt AMR, have found it increasingly frustrating to use the carrier. The Allied Pilots Association allegedly has encouraged some of its members to skip work. This has caused very substantial delays in flights, as well as a number of cancellations. According to The Wall Street Journal:
Flight cancellations at American are running between 3% and 5% a day in an industry where a 1% rate is considered a very bad day. And only about half of American’s flights are arriving on time, compared with more than 80% for most large carriers.
What has not been covered by the media is the extent to which the other large carriers — US Airways Group Inc. (NYSE: LCC), Delta Air Lines Inc. (NYSE: DAL) and United Continental Holdings Inc. (NYSE: UAL) may benefit as passengers flee American.
Despite a drop in oil prices that has taken Brent crude from just below $100 a barrel three weeks ago to about $92, drivers have not benefited at all. AAA Fuel Gauge shows that the average price of a gallon of regular nationwide was $3.810, down very slightly from last week, but up from $3.748 a month ago. And among states with very large populations, prices for regular are still well above $4. These include California, New York and Illinois. Gasoline prices could add to the headwinds that have begun to slow gross domestic product growth and may even put the economy back into recession early next year. People worried about their taxes, wages and jobs can hardly pay $4 for a gallon of gas. That is particularly true for Americans in the middle and lower class based on income.
Douglas A. McIntyre