Still-cautious clientele keep casual-dining sector in slump

Nation's Restaurant News,  Nov 12, 2007  by Malcolm M. Knapp

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Just-released Internal Revenue Service data for 2005 show that the top 1 percent of tax tilers that year earned 21.2 percent of all adjusted gross income--which is income after some deductions such as contributions to individual pension accounts and alimony. That was up from 19 percent in 2004 and exceeded the prior high of 20.8 percent in 2000. The bottom 50 percent earned 12.8 percent of all adjusted gross income.

The IRS data also show that between 2000 and 2005, the median tax filer's income fell 2 percent, adjusted for inflation, to $30,881 while the income for the threshold filer at the bottom of the top 1 percent of tax tilers rose 3 percent to $364,657.

The actual average income in 2005 by income group showed the adjusted gross income of the top 1 percent of all tilers averaged $1.2 million; the average for the top 95 percent to 99 percent of all tilers was $202,471; for those in the 90 percent to 95 percent range it was $121,117; the 75 percent to 90 percent group's was $79,553; the 50 percent to 75 percent segment's was $44,502; and the bottom half's was $14,526.

The third and "final" estimate for growth in real Gross Domestic Product for the first quarter was just 0.6 percent, the slowest rate since the fourth quarter of 2002. However, the third and "final' estimate of the second quarter's real GDP growth was a much stronger 3.8 percent.

The Manufacturing Index, as measured by the Institute for Supply Management, was 52.0 in September 2007, down 0.9 index points from 52.9 in August 2007. An index number above 50.0 indicates an expansion of manufacturing activity. The average Manufacturing Index for the prior 12 months was 52.5. The basic good news in manufacturing was that export orders were still expanding, with a September index number of 54.5, down 2.5 index points from August. Export orders had expanded for 58 months as of September.

The Non-Manufacturing Business Activity Index of the Institute for Supply Management was down 1.0 index points with an index of 54.8 in September 2007, versus 55.8 in August 2007. Services have expanded since March 2003, a consecutive increase of 54 months. The average Non-Manufacturing Index for the prior 12 months was 56.7.

The upbeat news is that from September 2006 through September 2007 the number of payroll jobs increased by a revised 1.63 million, for an increase of 1.19 percent in the number of jobs.

The Household Survey showed an increase of 463,000 jobs in August 2007, versus a gain of 110,000 in the Establishment Survey. The unemployment numbers rose 0.1 percentage point to 4.7 percent because there was an increase of 573,000 people in the civilian labor force.

On September 3, regular-grade gasoline prices averaged $2.796 per gallon, down 4.2 cents from August 6. On October 8, gasoline prices were $2.770 per gallon, down 2.6 cents from September 3.

From the 2007 low on Jan. 29 of $2.165 per gallon to Oct. 8, gasoline was up 60.5 cents a gallon, or 27.94 percent. From a year ago, gasoline was up 50.9 cents per gallon, or 22.51 percent. The gasoline price on May 21 was $3.218, an all-time high. Since May 21, prices through Oct. 8 were down 44.8 cents a gallon, or 13.92 percent.