Dow Jones Economic Sentiment Indicator rises in January

Dow Jones Economic Sentiment Indicator rises in January

2011-02-01 07:16:52 GMT+7 (ICT)

NEW YORK (BNO NEWS) -- With a gain of just under one point in January, the Dow Jones Economic Sentiment Indicator (ESI) on Monday signaled an improving U.S. economy as it rose from 46.1 in December to 46.9 in January, consolidating a positive 2.2 point gain in December.

"Fears of a double dip recession have fallen off the radar, but reporting about the economy is still short of the optimism we ought to be seeing at this stage, were this a normal expansion," Dow Jones Newswires 'Money Talks' columnist Alen Mattich.

"This muted sentiment mirrors the lackluster trend in employment growth," he added.

The ESI is determined by in-depth analysis of national news coverage across 15 daily newspapers, and as corporate earnings reports made headlines in January, strong profits from major retailers kept the tone positive.

Apple reported a 70 percent increase in revenue following record holiday season sales and several retailers – including Sears Holdings Corp. and Tiffany & Co. – raised their earnings forecasts before reporting their numbers.

In addition, Christie's and Sotheby's said art buyers were back in the market as well as commercial real estate as developers are set to break ground on a new $150 million high rise in Los Angeles' Wilshire district, among other projects around the country.

However, the indicator was pulled down with baby boomers' lack of preparedness for retirement, reviving discussion of the financial crisis spurred by the release of the Financial Crisis Inquiry Commission report, and rising rents for apartments as demand increases.

The Dow Jones ESI aims to predict the health of the U.S. economy by using a proprietary algorithm and derived data technology to examine every article in each of the 15 newspapers for positive and negative sentiment about the economy.

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