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Wednesday, January 09, 2013

Outlook for 2013

In 2012, we saw all the predictions from last January were accurate:

The economy did strengthen; value oriented customers are paying a premium for added quality; commodity markets remain volatile due to weather and oil prices; most restaurant operators have been able to past cost increases on to customers by increasing their menu prices; and, unemployment at year end was below 8%.

We expect interest rates to remain low for the first half of 2013. Consumers will most likely refrain from using home equity lines of credit to pay down credit card balances as the recession is still fresh in their mind. Possible rate increases would come in the second half if employment data continues to improve.

Unemployment rate will continue to gradually decline in 2013. Our year end forecast is for a 6 1/4% rate.

Severe weather events are now expected by most people. Droughts, floods, wind damage and other factors will impact insurance premiums. Restaurants will increase their coverage by adding riders for previously uncovered outcomes.

Companies will experience higher employee turnover as better jobs open up for previously downsized workers unhappy with their current pay.

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