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AAA Thanksgiving 2012 Travel Forecast

Prepared for:

Prepared for:

American Automobile Association

November 13, 2012

1 IHS Global Insight / AAA Thanksgiving 2012 Forecast

Table of Contents

Holiday Forecast Methodology: A Brief Overview ................................................................................................................... 2

Thanksgiving 2012 Travel Forecast ........................................................................................................................................ 3

Travel by Mode of Transportation ........................................................................................................................................... 5

Travel by Region: East North Central ..................................................................................................................................... 8

Travel by Region: East South Central ................................................................................................................................... 10

Travel by Region: Middle Atlantic ......................................................................................................................................... 12

Travel by Region: Mountain .................................................................................................................................................. 14

Travel by Region: New England............................................................................................................................................ 16

Travel by Region: Pacific ...................................................................................................................................................... 18

Travel by Region: South Atlantic ........................................................................................................................................... 20

Travel by Region: West North Central .................................................................................................................................. 22

Travel by Region: West South Central .................................................................................................................................. 24

Thanksgiving 2012 Holiday Traveler Profile Survey Methodology ....................................................................................... 26

Change in the Average Thanksgiving Traveler ..................................................................................................................... 27

Total Spending ...................................................................................................................................................................... 29

Party Composition ................................................................................................................................................................. 31

Activities ................................................................................................................................................................................ 32

Dates of Travel for Thanksgiving Trips ................................................................................................................................. 34

Addendum 1: US Economic Forecast Summary .................................................................................................................. 35

Addendum 2: US Regional Forecast Summary ................................................................................................................... 36

Regional definitions used throughout the report:

East North Central (ENC): IL, IN, MI, OH, WI

East South Central (ESC): AL, KY, MS, TN

Middle Atlantic (MATL): NJ, NY, PA

Mountain (MTN): AZ, CO, ID, MT, NM, NV, UT, WY

New England (NENG): CT, MA, ME, NH, RI, VT

South Atlantic (SATL): DC, DE, FL, GA, MD, NC, SC, VA, WV

West South Central (WSC): AR, LA, OK, TX

West North Central (WNC): IA, KS, MN, MO, ND, NE, SD

Pacific (PAC): AK, CA, HI, OR, WA


Holiday Forecast Methodology: A Brief Overview

The AAA Thanksgiving 2012 Travel Forecast combines information from several sources to provide a prospective

assessment of likely travel patterns for the upcoming holiday weekend. This report consists of two key components: the

holiday travel forecast and the holiday traveler profile. The travel forecast is based on economic conditions while the

holiday traveler profile is developed employing survey data on travel behaviors. This approach provides the most

comprehensive and detailed understanding of holiday travel at both the national and regional levels. In addition, the

regional travel sections in this report have been enhanced to incorporate information about the state of the local tourism

industries throughout the United States.

Holiday Travel Forecast

In cooperation with AAA, IHS Global Insight developed an approach to forecast actual domestic travel volumes. The

economic variables used to forecast travel for the current holiday are leveraged from IHS Global Insight. These data

include macroeconomic drivers such as employment, output, household net worth, asset prices including stock indices,

interest rates, housing market indicators, and variables related to travel and tourism, including prices of gasoline, airline

travel, and hotel stays.

The historical travel volume estimates come from the ongoing travel survey database of D.K. Shifflet & Associates

(DKSA), the premier source of US resident travel volume and behavior. DKSA interviews over 50,000 US households per

month tracking trip incidence, party composition, traveler behavior, and spending…all after the trips have been taken.

Holiday travel is forecasted by person-trips, where a person-trip is defined as a round-trip that involves travel of 50 miles

or more away from home. In particular, AAA and IHS Global Insight forecasts total US holiday travel, travel by mode of

transportation, and travel by US census region. The Actual Travel Forecast presented in this report was prepared the

week of October 8.

Holiday Traveler Profile

The Holiday Traveler Profile is a survey of intended travel behaviors related to party composition, travel distances, trip

expenditures, and vacation activities conducted by D.K. Shifflet & Associates. The initial survey includes 1,352

households, out of which only the respondents intending to travel during the designated holiday are interviewed in detail

about their anticipated trips. For Thanksgiving 2012, 417 respondents were interviewed in detail about their intended trips.

The survey was in the field from Monday, October 1 to Thursday, October 4, 2012.

Thanksgiving Holiday Travel Period

For purposes of this forecast the Thanksgiving holiday travel period is defined as trips that include travel of 50 miles or

more away from home during the period from Wednesday, November 21 to Sunday, November 25, 2012.


Thanksgiving 2012 Travel Forecast

Travel for the 2012 Thanksgiving holiday period is expected to remain largely unchanged from 2011, as AAA and IHS

Global Insight forecast an increase in travel volume of just 0.7 percent from last year. The expected volume of 43.6 million

travelers continues the string of increasing travel volume since 2008, but the pace should slow considerably this year.

Significant economic uncertainty remains, and after two years of growth in the six to eight percent range, much of the

post-recession pent-up demand has been met and a stronger economic climate will be needed to spur higher growth

levels.

CHART 1

THANKSGIVING TRAVELERS 2001-2012

TOTAL PERSON-TRIPS*

* 2001-2011 represent actual travel results. 2012 is a forecast.

The economic outlook for the Thanksgiving holiday period remains consistent with what has been seen throughout the

year. Improvements in the unemployment rate and the housing market are welcome, but gains are less than expected and

lower than needed to spur a strong recovery. Economic growth remains muted, showing only marginal improvements from

a year ago. Further, while gas prices have eased from their most recent peak in August, they still remain above year-ago

levels and act as a further drag on travelers.

Total economic activity, measured as real gross domestic product, is expected to grow by 1.6 percent for the fourth

quarter of 2012 compared to the fourth quarter of 2011. The employment market shows a similar expectation, with fourth-

quarter unemployment forecast to average 8.2 percent, which is more than half a percentage point lower than last year,

but still higher than needed to provide a boost to the overall economy. For consumers, the effect is that real disposable

income is forecast to be up just two percent, while consumer spending is forecast to rise 3.3 percent.

Gas prices nationally increased 15 percent from early July through mid-October with averages breaking daily record highs

every day between August 20 and the end of October. During this period, gas prices in California reached an all-time high

of $4.67 a gallon on October 9. Despite recent declines that should continue through the holiday, gas prices remain very

high in comparison to historical trends and it is possible that national average prices on Thanksgiving will be the highest

on record for the holiday. Nevertheless, average gas prices during the second-half of October have dropped at speeds not

44.141.5 38.2

46.8

58.6

47.650.6

37.8 37.940.9

43.3 43.6

-30%

-20%

-10%

0%

10%

20%

30%

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(F)

(Perc

en

t C

han

ge)

(Millio

n)

Person Trips (left) % change (right)


seen since the financial crisis of 2008. AAA predicts that Hurricane Sandy should have only a limited effect on gas prices

and the national average price of gasoline should continue to drop through the end of the year and may reach as low as

$3.25-3.40 by the week of Thanksgiving. While gas prices are not expected to have a significant impact on travel volume,

prices may have an effect on holiday spending depending on how fast prices drop by Thanksgiving.

Despite the continued sluggish economic recovery, consumers remain more positive than last year. The

Reuters/University of Michigan consumer sentiment index shows increases in both current conditions and expectations

compared to last year. The Bloomberg Consumer Comfort Index saw gains in all of its components as well, covering the

state of the economy, personal finances, and the buying climate. This overall level of positivity from the consumer, at least

compared to last year, will help offset the overall weakness in the economy to help keep travel volume ahead of last year.

The Thanksgiving holiday differs from the holidays earlier in the year in that it has a much greater focus on family. From

displaced family members congregating at a central location to college students returning home during their break, the

Thanksgiving holiday is a time to reconnect, and we don’t expect a sluggish recovery to impact Americans desire to spend

the holiday with family in 2012. The IHS Global Insight and AAA forecast of a 0.7 percent increase in travel volume will

bring the Thanksgiving 2012 travel volume up to 43.6 million person-trips. The 2012 volume represents a 15 percent

increase since 2008 and the fourth consecutive year of positive travel volume growth.


“Last year traveled to Hawaii. This

year going to a closer destination.”

Pacific Respondent

Travel by Mode of Transportation

AAA and IHS Global Insight forecast that automobile travel will account for just under 90 percent of total travel this

upcoming Thanksgiving holiday period. About 39.1 million Americans are expected to travel by automobile, which will be

an increase of 0.6 percent over the 38.9 million travelers who used this mode in 2011. With the expected growth in

automobile travelers right in line with the overall growth in travelers, that 90 percent share is nearly unchanged from 2011.

The price of gasoline remains an important issue for holiday travelers, and with

the national average price of self-serve regular as of October 31 at $3.52, it will

be an important factor in trip planning again this year. However, gas prices are

not expected to have a major impact on the share of travelers by automobile,

as the overall economic outlook favors car travel, due to its increased

convenience and lower average cost for groups when compared to air travel.

Air travel is expected to make up 7.2 percent of overall travel this holiday period, down slightly from the 7.4 percent share

seen in 2011. The 3.1 million travelers expected to fly to their destination will be 1.7 percent less than the 3.2 million who

flew in 2011. While this will be the second consecutive year of declining air travel for the Thanksgiving holiday, the total

decline since 2010 is only five percent as air travel volume seems to have leveled off at a new normal after two years of

steep declines in 2008 and 2009.

Other modes of travel (bus, trains, watercraft, multi-modal travel) will make up the remaining 2.9 percent of the total travel

volume, as just under 1.3 million travelers are expected to choose these modes. That volume is approximately 10 percent

higher than in 2011, and the resulting travel share is up from the 2.7 percent in 2011. Travel via these modes appears to

be on a slow and steady return towards historical norms after falling by more than two-thirds in 2009.

CHART 2

DISTRIBUTION OF US 2012 THANKSGIVING TRAVELERS

BY MODE OF TRANSPORTATION

Automobile

90%

Air

7%

Other

3%


CHART 3


AUTOMOBILE PERSON-TRIPS*

*2001-2011 represent actual travel results. 2012 is a forecast.

CHART 4


AIR PERSON-TRIPS*


36.034.4 30.8

38.8

49.9

40.243.0

32.535.5

36.8 38.9 39.1

-30%

-20%

-10%

0%

10%

20%

30%

40%

0

10

20

30

40

50

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(F)

(Perc

en

t C

han

ge)

(Mil

lio

ns)

Person-Trips (left) % change (right)

4.88

4.454.10

4.88 5.10

4.104.44

2.50

1.57

3.31 3.20 3.14

-60%

-30%

0%

30%

60%

90%

120%

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(F)

(Pe

rce

nt C

ha

ng

e)

(Millio

n)



CHART 5


OTHER TRAVEL MODES PERSON-TRIPS*


CHART 6

AVERAGE OCTOBER* GASOLINE PRICES

NATIONAL AVERAGE PER GALLON REGULAR UNLEADED

2001-2012

Source: AAA Fuel Gauge Report

* October gasoline prices are emphasized because prices observed several weeks prior to the holiday are likely to influence holiday travel planning, while actual holiday prices are typically less influential.

3.24

2.72

3.253.08

3.68

3.323.11

2.85

0.890.79

1.161.28

-80%

-60%

-40%

-20%

0%

20%

40%

60%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(F)

(Pe

rce

nt C

ha

ng

e)

(Millio

n)


$1.34 $1.45

$1.56

$1.99

$2.76

$2.24

$2.80$3.09

$2.55$2.79

$3.43$3.71

-40%

-20%

0%

20%

40%

$0.00

$1.00

$2.00

$3.00

$4.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(Pe

rce

nt

Ch

ange

)

$ per Gallon (left) % change (right)


-0.9%

1.5%

6.6%

1.5%

-0.5%

1.6%

3.1%

2.0%

-4%

-2%

0%

2%

4%

6%

8%

Unemployment Rate

Real Gross State Product

Median Price New Single

Family Home

Real Disposable Personal Income

Chart 1AYOY Growth, 2011Q4 to 2012Q4

East North Central and United States

ENC Total US

Source: IHS Global Insight

Travel by Region: East North Central

The recovery in the East North Central (ENC) region has weak momentum, but has not ground to a halt. Fourth-quarter

growth looks modest (1.5 percent, compared to fourth-quarter 2011), as the two key drivers of the recovery thus far—

exports and business fixed investment—have run out of steam in the face of global economic headwinds and domestic

policy uncertainty. The recovery will eventually come to life as light-vehicle sales and housing starts—traditionally the key

drivers of recovery—gain momentum. As the ENC economy crawls forward, travel volumes are expected to increase this

Thanksgiving holiday, albeit by less than 1 percent (0.7 percent, relative to last year). Travel by automobile, which

accounts for almost 90 percent of total person-trips, is expected to rise by 0.6 percent, while airplane trips are forecast to

decline by 1.7 percent. The 7.16 million person-trips from the ENC region represent 15.3 percent of the population, which

is higher than the national frequency expected to travel (13.8 percent).

TABLE 1A

2012 THANKSGIVING TRAVEL FORECAST – EAST NORTH CENTRAL REGION AND UNITED STATES

The ENC regional economy is growing, but at a very modest pace. The forecast for real gross regional product growth is

just 1.5 percent in the fourth quarter, which is on a par with the slow pace of growth that is expected nationwide. Still, the

vehicle market has been a bright spot in

the national recovery, and a key driver

of growth in the ENC. US light vehicles

sales rose 13 percent in September,

and year-to-date sales are up 14.6

percent, compared to 2011. This is

good news for Michigan and Indiana, in

particular, which are heavily dependent

on the automobile industry and durable

goods manufacturing. The combination

of an aging fleet needing replacement

and easing credit conditions continues

to support vehicle demand, which

reached a post-recession high in

September. Manufacturing is struggling,

however, due to weakness in exports

and business fixed investment. As such,

the pace of recovery remains modest.

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population

Total (millions of person trips) 0.7% 7.16 15.3% 0.7% 43.56 13.8%

Automobile (millions of person trips) 0.6% 6.43 13.8% 0.6% 39.14 12.4%

Air (millions of person trips) -1.7% 0.53 1.1% -1.7% 3.14 1.0%

Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level

Unemployment Rate (YOY Change) -0.9% 8.0% -0.5% 8.2%

Real Gross Product ($, bn)* 1.5% 1,836 1.6% 13,649

Median Price, New Single Family Home ($, thn) 6.6% 222 3.1% 227

East North Central United States


0%

1%

2%

3%

4%

5%

6%

7%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4

CHART 1BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY

YOY % CHANGE

ENC Total USSource: IHS Global Insight

IL, 33.7%

IN, 13.9%MI, 18.9%

OH, 22.3%

WI, 11.1%

CHART 1CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY

EAST NORTH CENTRAL REGION MAKEUP BY STATE, 2012Q4


Although consumer sentiment improved in September, spending remains cautious. Households still face too many

negatives to allow a robust consumer spending recovery—high debt burdens, low house prices, modest employment

growth, and a lack of confidence in the government’s ability to make things better. Compared to this time last year, real

disposable income in the ENC region increased 1.5 percent, which is less than the national figure for comparison (2

percent). The fact that the debt ceiling will need to be raised sometime in the first few months of 2013 adds an unwelcome

extra complication. Extreme uncertainty over fiscal policy is likely to remain a fact of life, and a deterrent to risk-taking,

well into 2013.

On the bright side, the regional housing market appears to have turned the corner. Inventories of unsold homes are falling

fast and housing permits and starts appear set on an upward trend. Home prices are rising as well, as the median price of

new single-family units in the ENC region is expected to be 6.6 percent higher than the previous fourth quarter. As

promising as the housing numbers have been recently, it is important to keep in mind that this market is still depressed

and recent improvements have been modest. The outlook is for a modest recovery that lasts about three years, not the

sharp upswing that characterizes most housing recoveries.

In addition to the originating travel forecast

of person-trips from the East North Central

region, the following information provides a

look into the state of the local tourism

industry in the region. In general, because

the majority of travel occurs by automobile

and remains within regional borders,

regional travel ties closely with the output

generated by that region's leisure and

hospitality industry.

The tourism industry in the ENC region, as

measured by leisure and hospitality industry

output (the value of goods and services

produced by the leisure and hospitality

industry), has been growing on an

annualized basis since the third quarter of 2011, albeit at

a decreasing rate over the course of the calendar year. In

the fourth quarter of 2012, total output from the leisure

and hospitality industry in the ENC region is expected to

see minor annual growth of 0.5 percent. Chart 1B

demonstrates that the tourism industry recovery in the

ENC region has lagged the national tourism recovery in

the past two quarters.

The composition of tourism industry output by state in the

ENC region is fairly balanced (Chart 1C). With Chicago

being one of the top cities for tourism in the United

States, it is no surprise that Illinois accounts for one-third

of tourism output in the East North Central region.

Wisconsin accounts for the smallest share, with just 11.1

percent of the total.


-1.0%

1.6%

0.4%

1.7%

-0.5%

1.6%

3.1%

2.0%

-2%

-1%

0%

1%

2%

3%

4%

Unemployment Rate



Family Home



East South Central and United States

ESC Total US


Travel by Region: East South Central

Travel from the East South Central (ESC) region over the Thanksgiving holiday is projected to show an increase of 0.8

percent relative to Thanksgiving 2011. This represents a slightly higher bump in travel volumes than is forecast for the

national population (0.7 percent). Automobile travel is expected to increase by 0.6 percent, while air travel is expected to

decline by 1.7 percent. The recovery has slowed in recent quarters, with the crisis in Europe and slowdown in Asia

dampening consumer and business confidence nationwide. As the ESC economy crawls towards Thanksgiving, travel

volumes will inch forward at a modest pace. Total person-trips in the East South Central region are projected to account

for 13.8 percent of the population, which is on a par with the expected nationwide frequency.

TABLE 2A

2012 THANKSGIVING TRAVEL FORECAST – EAST SOUTH CENTRAL REGION AND UNITED STATES

The ESC region is slowly recovering, but remains far from reaching its prerecession peak. Compared to this time last

year, real gross state product in the ESC grew by just 1.6 percent, fourth-lowest among the nine census regions.

Employment growth has been modest, with total payrolls expected to increase by just one percent in the current calendar

year. The service sectors are leading the way in terms of payroll expansion. The two areas that accounted for the largest

share of this year's employment gains were professional/business services and education/health services. Manufacturing

also posted a nice turnaround after crashing during the recession; however, the global slowdown has reduced export

growth to a low single-digit pace, thereby

constraining the expansion in

manufacturing. The unemployment rate

in the ESC stands at eight percent, down

one percentage point from Thanksgiving

2011. In the face of global economic

headwinds and domestic policy

uncertainty, employment growth remains

weak, and is expected to drive a modest

increase in holiday travel as a result.

The regional housing market continues to

make small strides. The residential real

estate market in the ESC region is in

better shape than the country as a whole.

With one of the least expensive housing

markets in the nation, the ESC region

weathered the real estate crisis better

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level


Real Gross Product ($, bn)* 1.6% 622 1.6% 13,649


East South Central United States


0%

1%

2%

3%

4%

5%

6%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

ESC Total USSource: IHS Global Insight

than most, protected by relatively little price speculation, an ample supply of land, and lack of a housing craze that

elsewhere led to boom and bust. As such, the median price of new single-family units is up 0.4 percent compared to this

time last year, which is lower than the degree of price appreciation experienced nationwide (3.1 percent). Slow but steady

improvements in the housing market support the modest increase forecasted for travel this Thanksgiving holiday.

In addition to the originating travel forecast of person-trips from the East South Central region, the following information

provides a look into the state of the local

tourism industry in the region. In general,

because the majority of travel occurs by

automobile and remains within regional

borders, regional travel ties closely with the

output generated by that region's leisure

and hospitality industry.

The ESC region's tourism industry has

lagged behind the national recovery over

the past year and a half. In the fourth

quarter of 2012, however, total output in

the leisure and hospitality industry is

projected to rise 1.2 percent over year-ago

levels, which is higher than the national

figure for comparison (one percent).

The share of tourism industry output in the ESC

region is rather even. Tennessee is the largest

contributing state, making up 43.7 percent of ESC

region’s tourism output, while Alabama, Kentucky,

and Mississippi make up the remaining three-fifths of

the total.

In terms of growth, Alabama is expected to see the

largest fourth-quarter increase in tourism output,

growing 2.6 percent compared to year-ago levels.

Conversely, Kentucky is forecast to experience a 0.4

percent contraction in tourism industry output.


0.3%1.9%

11.1%

1.9%

-0.5%

1.6%

3.1%2.0%

-4%

0%

4%

8%

12%

Unemployment Rate



Family Home



Middle Atlantic and United States

MATL Total US


Travel by Region: Middle Atlantic

Thanksgiving holiday travel originating from the Middle Atlantic (MATL) region is forecast to increase 0.3 percent relative

to last year. Sluggish job growth and overall weak momentum in the current recovery speak to the modest projected

increase in holiday travel originating from the MATL region. The forecast for travel by automobile calls for an increase of

0.3 percent in total person-trips, while air travel is expected to decline by two percent. About 12.4 percent of the regional

population is expected to journey at least 50 miles from home this holiday, a slightly lower frequency than is expected

nationwide (13.8 percent).

TABLE 3A

2012 THANKSGIVING TRAVEL FORECAST – MIDDLE ATLANTIC REGION AND UNITED STATES

The Middle Atlantic region fared pretty well through the first half of 2012, averaging 1.6 percent job growth from January to

June, which is a very solid performance. As the global economy ran out of steam, however, the regional labor market

decelerated as well. Total payrolls in the MATL are expected to increase by 1.3 percent in the fourth quarter, leading to an

unemployment rate of 8.6 percent, which is 0.3 percentage point higher than at this time last year. Much of western New

York state and nearly two-thirds of Pennsylvania are considered part of the Rust Belt, and these areas have been hit hard

by job losses in manufacturing. In this respect, the squeeze on foreign demand stemming from the rapidly deteriorating

global outlook is having a negative impact on the regional labor market.

In terms of real output, the Middle

Atlantic region is expected to show

modest signs of improvement in the

fourth quarter, growing 1.9 percent

compared to year-ago levels, slightly

higher than the projected increase in

real gross domestic product (1.6

percent). Consumers remain cautious

in terms of their spending decisions,

but consumer sentiment is improving,

as evidenced by the pickup in vehicle

and housing sales. Still, high gasoline

prices, sluggish employment growth,

and high debt burdens are some of the

negatives preventing a robust spending

recovery. Compared to the fourth

quarter of 2011, real disposable

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level

Unemployment Rate (YOY Change) 0.3% 8.6% -0.5% 8.2%



Middle Atlantic United States


0%

1%

2%

3%

4%

5%

6%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

MATL Total USSource: IHS Global Insight

incomes are forecast to increase by just 1.9 percent in the MATL in 2012. Subtle growth in real incomes combined with

the modest increase in real output supports the small increase in predicted travel volumes originating from the Middle

Atlantic region this Thanksgiving.

The median price of new single-family homes in the MATL is expected to increase by 11.1 percent in the fourth quarter of

2012, the second-highest rate of home price appreciation among the nine census regions. As promising as the housing

numbers have been recently, it is important to keep in mind that this market is still depressed and that the recent

improvements have been modest. The MATL housing market will continue to improve, so long as the regional economy is

creating jobs. This means that the recovery will be slow, in line with the modest pace of job creation.

In addition to the originating travel forecast of

person-trips from the Middle Atlantic region, the

following information provides a look into the

state of the local tourism industry in the region.

In general, because the majority of travel occurs

by automobile and remains within regional

borders, regional travel ties closely with the

output generated by that region's leisure and


The national tourism industry has witnessed

leisure and hospitality output (the value of

goods and services produced by the leisure and

hospitality industry) expand on an annualized

basis since the third quarter of 2011. Chart 3B

shows that Middle Atlantic tourism output has

also been increasing over this same time span,

but it has been recovering slower than the

nation over the last four quarters, until the fourth

quarter of this year.

In the fourth quarter of 2012, the leisure and

hospitality industry in the Middle Atlantic is

anticipated to generate two percent higher output

than in the fourth quarter of 2011. The relative

nationwide figure for comparison is one percent

annual growth in tourism output.

New York State contributes 57.7 percent of the

Middle Atlantic region's tourism output, which is no

surprise, since New York City is one of the top tourist

destinations in the country. New York State is also

growing faster than Pennsylvania and New Jersey in

terms of tourism output, expected to increase 2.6

percent annually since one year ago. However,

Pennsylvania and New Jersey contribute large

amounts to the Middle Atlantic regional tourism

output, accounting for 23.6 and 18.7 percent,

respectively.

NJ, 18.7%

NY, 57.7%

PA, 23.6%


MIDDLE ATLANTIC REGION MAKEUP BY STATE, 2012Q4



-0.5%

1.7%

3.4%

2.1%

-0.5%

1.6%

3.1%

2.0%

-4%

-2%

0%

2%

4%

6%

Unemployment Rate



Family Home



Mountain and United States

MTN Total US


Travel by Region: Mountain

The recovery in the Mountain region is crawling forward, amid weak employment gains and fiscal policy uncertainty. As

such, the holiday travel forecast calls for a modest increase of 0.6 percent in travel volumes originating from the Mountain

states, compared to last Thanksgiving. Automobile travel is expected to rise 0.5 percent, as travelers respond to the

current high price of gasoline by reducing travel distances and forgoing air trips (down 1.8 percent). The share of the

Mountain population that is expected to travel (14.4 percent) is higher than the projected national frequency of 13.8

percent.

TABLE 4A

2012 THANKSGIVING TRAVEL FORECAST – MOUNTAIN REGION AND UNITED STATES

The Mountain region is realizing economic growth, albeit slowly. Job growth in the region is expected to outpace the

nation in the fourth quarter (1.4 percent versus 1.3 percent nationwide), although the pace of recovery remains painfully

slow. Educational services and the natural resource and mining sectors are leading the recovery in terms of payroll gains,

expanding 4.2 and 3.6 percent, respectively, compared to year-ago levels. Manufacturing and construction will also

continue to expand payrolls in the fourth quarter, but the pace of job growth has slowed considerably from the first half of

this year. The regional unemployment rate sits at eight percent, which is 0.5 percentage point lower than last

Thanksgiving, and below the national average of 8.2 percent. While the Mountain region has made strides in the past 12

months, there is still huge slack in the

labor market, which is showing a slow

underlying pace of job creation.

While the housing recovery in the

Mountain states has been unsteady

over the past two years, there is

growing evidence that the pent-up

demand for homes is finally spurring

growth. The median price of new

single-family houses is expected to

rise by 3.4 percent in the fourth quarter

of this year compared to year-ago

prices, which is higher than the

national average (3.1 percent). Higher

home prices are especially good for

the economy as they bring more

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level




Mountain United States


0%

1%

2%

3%

4%

5%

6%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

MTN Total USSource: IHS Global Insight

builders into the game and accelerate the pickup in housing starts. Still, credit remains extremely tight for both

homeowners and builders, and credit must loosen if sales are to continue to climb. In this respect, the “fiscal cliff” brought

on by the political paralysis in the United States is, arguably, the single biggest drag on growth, as the extreme uncertainty

over fiscal policy is likely to remain a fact of life—and a deterrent to risk-taking—well into 2013. The good news is that the

underlying dynamics of recovery are in place so that growth will reignite once these high levels of uncertainty diminish.

The most likely timing for a growth rebound is late 2013 and early 2014. As such, the housing recovery will be slow, in

sync with the slow pace of overall economic growth, and will support a modest increase in travel volumes this

Thanksgiving holiday.

In addition to the originating travel

forecast of person-trips from the Mountain

region, the following information provides

a look into the state of the local tourism



and remains within regional borders,

regional travel ties closely with the output

generated by that region's leisure and


The tourism industry in the Mountain

region, as measured by leisure and

hospitality output (the value of goods and

services produced by the leisure and

hospitality industry), has been growing on

an annual basis since the third quarter of

2011. However, the Mountain region has

been trailing the national tourism recovery until the fourth quarter of this year. In the fourth quarter of 2012, leisure and

hospitality output in the Mountain states is expected to rise 2.1 percent relative to one year ago (the national tourism

output growth rate for comparison is one percent).

Of all the Mountain states, Arizona is expected

to see the largest year-over-year increase in

tourism output in the fourth quarter (3.3

percent), followed by Colorado (2.9 percent) and

Utah (2.5 percent).

The Mountain region includes Nevada,

Colorado, and Arizona, which contribute large

amounts of tourism output to the regional total.

Nevada, which includes the major tourist city of

Las Vegas, contributes 37.8 percent of the

Mountain region's tourism output. The

remainder of the states account for much

smaller shares of the Mountain region's tourism

output.

AZ, 20.1%

CO, 21.0%

ID, 3.3%

MT, 3.1%NM, 5.3%

NV, 37.8%

UT, 6.9%WY, 2.6%


MOUNTAIN REGION MAKEUP BY STATE, 2012Q4



-0.5%

1.6%

11.3%

2.0%

-0.5%

1.6%3.1%

2.0%

-8%

-4%

0%

4%

8%

12%

16%

Unemployment Rate



Family Home


Chart 5AYOY Growth, 2011Q4 to 2012Q4New England and United States

NENG Total US


Travel by Region: New England

Travel originating from the New England region is expected to increase a modest 0.6 percent over the 2011 Thanksgiving

holiday period, an increase that slightly trails the national holiday travel forecast (0.7 percent). Automobile travel from the

New England region is projected to rise 0.7 percent compared to the holiday last year, and the forecast also calls for a

decline in air travel of 1.6 percent. The forecast indicates that 13.3 percent of the New England population will travel this

upcoming Thanksgiving holiday period, which is lower than the national frequency (13.8 percent). However, a slightly

higher percentage of the regional population will travel by air than the broader nation (1.3 percent compared to one

percent).

TABLE 5A

2012 THANKSGIVING TRAVEL FORECAST – NEW ENGLAND REGION AND UNITED STATES

Uncertainties over the strength of global growth, the Eurozone crisis, the fiscal cliff, and the November elections are giving

employers plenty of reason for caution. Still, the employment numbers show that the New England labor market has

improved over the past year, with the unemployment rate falling 0.5 percentage point to 6.9 percent in the fourth quarter.

Some of the most important sectors that contributed to payroll growth were healthcare services; professional, scientific

and technical services; and administrative support services. It is important to note, however, that data for the most recent

months offer evidence that the regional economy has hit a soft patch, coinciding with accumulating concerns for the near-

term US and global economic outlooks. Key economic indicators show that the recovery has weak momentum, as real

gross state product is expected to

increase by just 1.6 percent,

compared to the fourth quarter of last

year. With the regional economy

crawling towards the Thanksgiving

holiday at a growth rate of less than

two percent, holiday travel in New

England is expected to increase by

just 0.6 percent, relative to last

Thanksgiving.

After adjusting for inflation, disposable

incomes in New England are expected

to rise just two percent in the fourth

quarter, compared to year-ago levels.

Weak income growth and high

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level




New England United States


0%

1%

2%

3%

4%

5%

6%

7%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

NENG Total USSource: IHS Global Insight

gasoline prices have forced many New Englanders to put less money aside in order to make ends meet. Households

have been aggressively reducing their debt levels over the past four years, and this process of deleveraging should ease

in the next two years, resulting in stronger growth in consumer spending. For now, however, households still face too

many negatives to allow a robust spending recovery. Consequently, holiday travel volumes are forecast to grow modestly

compared to last Thanksgiving.

Vehicles and houses are the bright spots in an otherwise muted national recovery, and New England has especially

benefitted from the revival in housing demand. Inventories of unsold homes are falling fast, and the median price of new

single-family homes is expected to increase 11.3 percent in the fourth quarter compared to year-ago prices, which is the

highest rate of home price appreciation among the nine census regions. Higher home prices will bring more builders into

the game and accelerate the pickup in housing starts, which is traditionally a key driver of economic recovery. Still, as

promising as the housing numbers have been recently, it is important to keep in mind that this market is still depressed

and that the recent improvements have

been modest. The outlook is for a modest

housing recovery that lasts about three

years, not the sharp upswing that

characterizes most housing market

recoveries. As a result, the recent uptick

in home prices is not expected to have a

sizable impact on holiday travel decisions,

but should allow for higher levels of

spending on discretionary items such as

travel in the future.

In addition to the originating travel

forecast of person-trips from the New

England region, the following information




automobile and remains within regional borders,

regional travel ties closely with the output generated by

that region's leisure and hospitality industry.

Tourism output (the value of goods and services

produced by the leisure and hospitality industry) in

New England is expected to rise 1.3 percent in the

fourth quarter, relative to this time last year. In

comparison, the national tourism industry is expected

to register growth of one percent.

Massachusetts is the largest contributor of tourism

output to the New England economy, accounting for

50.8 percent of the regional total. Rhode Island and

Vermont, although smaller than Massachusetts in level

terms, are expected to see the largest growth in

tourism output since the fourth quarter of 2011, both

rising 2.9 percent.

CT, 20.6%

MA, 50.8%

ME, 8.0%

NH, 8.6%

RI, 6.8%

VT, 4.9%


NEW ENGLAND REGION MAKEUP BY STATE, 2012Q4



-0.6%

1.8%

-0.3%

2.4%

-0.5%

1.6%

3.1%

2.0%

-4%

-2%

0%

2%

4%

6%

Unemployment Rate



Family Home



Pacific and United States

PAC Total US


Travel by Region: Pacific

The Pacific (PAC) region is continuing to undergo a slow and painful recovery. Real gross regional output growth in the

fourth quarter is expected to reach 1.8 percent, relative to the same quarter last year. While the unemployment rate has

declined 0.6 percent from last Thanksgiving, it remains the highest unemployment rate among the nine census regions,

and is expected to average 10 percent during the fourth quarter. With evidence of continued sluggish growth, total holiday

travel in the Pacific region is expected to increase by only 0.6 percent, compared to Thanksgiving 2011. This growth will

be driven by a 0.6 percent increase in automobile travel. Airplane travel, which accounts for about 10 percent of all travel,

will decline by 1.7 percent. The 7.3 million person-trips from the PAC region represent 14.3 percent of the population,

which is higher than the national frequency expected to travel of 13.8 percent.

TABLE 6A

2012 THANKSGIVING TRAVEL FORECAST – PACIFIC REGION AND UNITED STATES

The recovery in the Pacific region started off well in the beginning of 2012, with the economy recording 3.1 percent growth

in real output, relative to the first quarter of last year. However, real gross output has decelerated since then, and is

expected to increase by only 1.8 percent in the fourth quarter. The financial, manufacturing, and trade, transportation and

utility sectors account for nearly 50 percent of the region’s gross output. Growth in the financial sector is expected to

remain flat in the fourth quarter, while

mining (10.7 percent) and

manufacturing (6.4 percent) will show

the largest increases in output,

relative to the fourth quarter of 2011.

Despite positive output growth, the

PAC region maintains the highest

unemployment rate in the nation.

California, the region’s largest state,

contributes the most to this figure,

with an expected fourth-quarter

unemployment rate of 10.5 percent.

While most sectors are expected to

add jobs in the fourth quarter, the

reduction in the regional employment

rate will be modest.

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level



Median Price, New Single Family Home ($, thn) -0.3% 301 3.1% 227

Pacific United States


0%

1%

2%

3%

4%

5%

6%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

PAC Total USSource: IHS Global Insight

The housing recovery in the Pacific region remains sluggish, but it should improve now that the recovery at a national

level finally seems to be under way. California was the epicenter of the housing boom and bust, with home prices rising to

unsustainable levels in the prerecession years, and then plummeting spectacularly, bringing construction activity to a

screeching halt. Home prices are still falling, as the median price of a new single-family home is expected to decline by

0.3 percent during the fourth quarter, compared to this time last year. Thanks to increased economic activity, rising pent-

up demand, and improved affordability, the recovery should start to take hold in 2013, but it remains a strong headwind in

the near term. Low house prices, modest employment growth and high gasoline prices are some of the negatives that

households face impeding robust spending recovery. As a result, the increase in total person-trips originating from the

Pacific region will be modest, compared to Thanksgiving 2011.


of person-trips from the Pacific region, the

following information provides a look into

the state of the local tourism industry in the

region. In general, because the majority of

travel occurs by automobile and remains

within regional borders, regional travel ties

closely with the output generated by that

region's leisure and hospitality industry.

In terms of growth in total leisure and

hospitality output (the value of goods and

services produced by the leisure and

hospitality industry), the Pacific region had

been leading the national recovery during

the second and the third quarters of 2012.

However, in the fourth quarter of 2012,

tourism output in the Pacific region will be

roughly the same as it was last year.

Washington’s tourism industry is expected to shrink by

0.7 percent during the fourth quarter, the largest

contraction among the Pacific states. Conversely,

Hawaii will experience the highest increase in tourism

output, growing 2.5 percent, relative to the fourth

quarter of last year.

The composition of tourism industry output by state in

the Pacific region is dominated by California, which

accounts for 75.5 percent of tourism output in the

region. Washington is the second largest state,

contributing 11.9 percent of tourism output to the

Pacific region.

AK, 1.4%

CA, 75.5%

HI, 5.9%

OR, 5.4%

WA, 11.9%


PACIFIC REGION MAKEUP BY STATE, 2012Q4



-0.8%

1.3%

-0.3%

2.0%

-0.5%

1.6%

3.1%

2.0%

-6%

-4%

-2%

0%

2%

4%

6%

Unemployment Rate



Family Home


Chart 7AYOY Growth, 2011Q4 to 2012Q4South Atlantic and United States

SATL Total US


Travel by Region: South Atlantic

The South Atlantic (SATL) regional economy continues to crawl towards the Thanksgiving holiday. In the fourth quarter,

real gross regional output is projected to grow 1.3 percent, compared to this time last year, while the unemployment rate

is expected to decline 0.8 percent. Adjusted for inflation, disposable income levels are expected to be just two percent

higher than a year previous, as residents are faced with high gasoline prices, low house prices and debt burdens that are

still too high. The SATL economy has weak momentum, but has not ground to a halt, and travel volumes are expected to

increase 0.5 percent relative to last year. Automobile travel, which accounts for nearly 90 percent of total person-trips, is

expected to increase by 0.4 percent. Airplane travel is forecast to decline 1.9 percent. The share of the population from

the South Atlantic region expected to travel (13 percent) is slightly lower than the frequency projected nationwide (13.8

percent).

TABLE 7A

2012 THANKSGIVING TRAVEL FORECAST – SOUTH ATLANTIC REGION AND UNITED STATES

While the pace of recovery in the South Atlantic remains below the national average, the SATL region continues to record

positive growth. The manufacturing sector is expected to lead the recovery in the fourth quarter, with 4.4 percent growth in

real output, compared to year-ago levels. While business equipment spending growth has slowed at the national level, the

September ISM manufacturing report showed a rise in orders for the first time since May. This is a hopeful sign, but not an

“all clear.” If the mid-October increase in

the Reuters/University of Michigan

Consumer Sentiment Index is

maintained, this may provide a boost in

holiday sales that will benefit the SATL

manufacturing sector. The professional

and business services sector is expected

to lead the recovery in the regional labor

market, as fourth-quarter payrolls are

forecast to increase by 2.6 percent,

compared to year-ago levels. The overall

increase in employment will remain

modest, however, as the construction

sector, among others, continues to shed

jobs.

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level



Median Price, New Single Family Home ($, thn) -0.3% 224 3.1% 227

South Atlantic United States


0%

1%

2%

3%

4%

5%

6%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

SATL Total USSource: IHS Global Insight

Despite the recent improvements in consumer sentiment, spending decisions remain cautious. While the housing market

is beginning to demonstrate signs of growth around the country, the median price of a new single-family home in the

SATL region is expected to decline 0.3 percent in the fourth quarter, relative to last year. Uncertainty about future tax

policies coupled with low house prices, sluggish employment growth, and high rates of household debt preclude a rapid

consumer spending recovery. High gasoline prices add yet another strain to household budgets. In the South Atlantic

region, gasoline prices increased nearly 16 percent between July and October of this year. With modest disposable

income gains (two percent, compared to year-ago levels), holiday travel from the SATL region is expected to increase by

just 0.5 percent in the upcoming holiday season.

In addition to the originating travel forecast of person-trips from the South Atlantic region, the following information

provides a look into the state of the local tourism industry in the region. In general, because the majority of travel occurs

by automobile and remains within regional borders, regional travel ties closely with the output generated by that region's

leisure and hospitality industry.

The tourism industry in the SATL region, as

measured by leisure and hospitality industry

output (the value of goods and services

produced by the leisure and hospitality

industry), continues to grow, albeit at a

declining pace. In the fourth quarter of

2012, total output from the leisure and

hospitality industry in the SATL region is

expected to grow by 0.9 percent from the

year prior, which is slightly below the

national average of one percent.

Florida contributes almost 41 percent of

tourism output to the South Atlantic tourism

industry, with its draw of high-profile

beaches and amusement parks in the state.

Georgia contributes the second-largest

share of tourism output with Atlanta being

one of the top cities for tourism in the

United States. Other states such as North

Carolina, Maryland and Virginia contribute

nine to twelve percent each to the region's

tourism industry.

DC, 3.8%

DE, 1.4%

FL, 40.8%

GA, 13.1%

MD, 9.2%

NC, 12.0%

SC, 6.3%

VA, 11.1%

WV, 2.2%


SOUTH ATLANTIC REGION MAKEUP BY STATE, 2012Q4



-0.5%

2.0%

6.3%

1.4%

-0.5%

1.6%

3.1%

2.0%

-4%

-2%

0%

2%

4%

6%

8%

Unemployment Rate



Family Home



West North Central and United States

WNC Total US


Travel by Region: West North Central

The recovery in the West North Central (WNC) region is continuing on a slow path, albeit a faster pace than the nation.

Real gross regional product is expected to grow two percent compared to year-ago levels (versus 1.6 percent nationally),

while the regional unemployment rate is expected to fall another half-percentage point, reaching 5.8 percent by year-end

(compared to 8.2 percent nationwide). Although the region’s mining and energy sectors have performed well, the global

slowdown has reduced export growth to a low single-digit pace, and removed a key driver of the recovery thus far. With

questions over the weak momentum of the current recovery, travel originating from the WNC region is expected to

increase by just 0.9 percent over the upcoming holiday season, higher than the national increase of 0.7 percent. Travel by

automobile is expected to increase by 0.7 percent, while airplane travel is forecast to decline by 1.6 percent. While the

WNC region has one of the smallest populations in the country, 17.5 percent of the population is expected to travel, which

is well above the national average of 13.8 percent.

TABLE 8A

2012 THANKSGIVING FORECAST – WEST NORTH CENTRAL REGION AND UNITED STATES

At roughly 5.8 percent, the West North Central possesses the lowest unemployment rate of any region in the country. The

region’s mining sectors continue to generate jobs, particularly in resource-rich North Dakota, where the unemployment

rate fell to just three percent over the course of this year. The region’s service industries will also add jobs in the fourth

quarter, as will the financial sector, which benefits from a high concentration of finance firms in Omaha, and a North

Dakota energy sector that is fueling

finance job growth. Government remains

a weak spot across the country, including

the West North Central, where the

government sector will continue to shed

payrolls.

From a national perspective, the rebound

in housing activity has been one of the

lone bright spots in an otherwise weak

recovery. While the housing recovery is

still at an early stage, the WNC region

has experienced a bounce-back that

outperforms the nation. The median price

of new single-family homes in the WNC is

expected to grow 6.3 percent relative to

the fourth quarter of last year, which is

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level




West North Central United States


-2%

0%

2%

4%

6%

8%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

WNC Total USSource: IHS Global Insight

more than twice the rate of home price appreciation expected nationwide (3.1 percent). Inventories of unsold homes are

falling fast, and housing permits and starts appear set on an upward trend. The outlook is for a modest recovery that lasts

about three years, not the sharp upswing that characterizes most housing recoveries.

Measured employment gains and the recent uptick in housing activity are good reasons for optimism; however, the

current recovery in the WNC remains marred by uncertainties at home and economic weaknesses abroad. While job

growth in the region is among the highest in the country, real disposable personal income growth remains sluggish (1.4

percent compared to two percent nationwide). High gasoline prices and rising food prices are acting to further constrain

household budgets, amid weak personal income gains and high debt burdens. Moreover, the nascent recovery in the

WNC housing market, while certainly encouraging, is still at a very early stage. Household net worth remains significantly

below pre-recessionary levels and the recovery is likely to be long and laborious. Also, weak export markets and low

business fixed investment are constraining the expansion of manufacturing production. A significant portion of the region’s

manufactured exports are shipped to Asia and Europe, and the recently observed slowdown in Asia and the recession in

Europe will weigh heavily on the WNC region in terms of factory employment. Therefore, despite the promising signs of

improvement, the mood remains cautious

and the recovery is likely to continue at a

modest pace. As a result, travel during the

upcoming holiday season is expected to

increase by less than one percent.

In addition to the originating travel forecast of

person-trips from the West North Central

region, the following information provides a

look into the state of the local tourism



and remains within regional borders, regional

travel ties closely with the output generated

by that region's leisure and hospitality

industry.

Tourism in the WNC region, as measured by leisure

and hospitality industry output (the value of goods

and services produced by the leisure and hospitality

industry) has been growing at a declining pace over

the past year. In the fourth quarter of 2012, the

WNC region is expected to be the only region to see

a decline in leisure and hospitality output (down 0.3

percent). Minnesota and South Dakota are the only

states that are expected to see positive growth in

tourism output growth.

Missouri and Minnesota remain the largest

contributors to tourism output in the West North

Central region, followed by Iowa, Kansas,

Nebraska, South Dakota, and North Dakota.

IA, 12.6%

KS, 11.2%

MN, 29.9%

MO, 31.7%

ND, 3.3%

NE, 7.1%SD, 4.3%


WEST NORTH CENTRAL REGION MAKEUP BY STATE, 2012Q4



-0.6%

2.6%

1.3%

2.3%

-0.5%

1.6%

3.1%

2.0%

-4%

-2%

0%

2%

4%

6%

Unemployment Rate



Family Home



West South Central and United States

WSC Total US


Travel by Region: West South Central

The West South Central (WSC) region has shown relatively strong economic growth this year, expanding faster than the

rest of the country. The region continued to add jobs throughout the year, maintaining the second lowest unemployment

rate among the nine census regions (6.8 percent). With the recovery in the WSC outpacing the greater nation, total

holiday travel is expected to increase at a higher frequency than the nation at large (1.2 percent versus 0.7 percent

nationally). Automobile travel, which makes up nearly 90 percent of all travel, is expected to increase by 1.2 percent, while

airplane travel is forecast to decline by the same frequency (down 1.2 percent). The 4.5 million person-trips from the WSC

region represents 11.9 percent of the population, which is below the expected national frequency of 13.8 percent.

TABLE 9A

2012 THANKSGIVING TRAVEL FORECAST – WEST SOUTH CENTRAL REGION AND UNITED STATES

Real gross regional output in the WSC has been growing steadily throughout the year, and is expected to expand by 2.6

percent in the fourth quarter (compared to 1.6 percent nationwide). Texas is the region’s largest state and the largest

contributor to regional output, while being the leading producer of oil and natural gas in the country, As such, the

performance of the WSC economy is closely tied to energy prices. Despite the fluctuation in oil prices, the mining sector

has expanded rapidly this year and is expected to continue expanding payrolls, and producing more output in the fourth-

quarter of this year, compared to year-ago

levels.

Among the nine census regions, the WSC

has the second lowest unemployment rate at

6.8 percent. The West South Central region

has led the country in recovery, expanding

faster and adding more jobs than any other

region. Both Texas and Louisiana have fully

recovered all the jobs lost during the

recession, and in Oklahoma, payrolls are

less than one percent below their previous

peak. However, as in much of the country,

the expansion has slowed in recent months,

with the crisis in Europe dampening

consumer and business confidence

nationwide. During the remainder of the

Thanksgiving Travel

YOY %

Change Level

% of

Population

YOY %

Change Level

% of

Population




Economy (2012Q4)

YOY %

Change Level

YOY %

Change Level




West South Central United States


0%

2%

4%

6%

8%

10%

2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4


YOY % CHANGE

WSC Total USSource: IHS Global Insight

year, we expect the WSC economy will continue to expand at a moderate pace, unable to match the strong gains

recorded in the first quarter of the year. As a result, the expectations for total travel during the upcoming holiday season

remain modest.

The recovery in the WSC region will eventually come to life, but residents still face too many negatives to allow a robust

consumer spending recovery. High gas prices, modest employment growth, and high debt burdens are some of the

headwinds that residents face in the current economy. Real disposable income grew a mere 2.3 percent compared to the

same quarter of last year, and while the housing recovery finally seems to be under way with the median price of new

single-family units up 1.3 percent compared to year-ago prices, the recovery is still at a very early stage. Households have

been aggressively reducing their debt levels over the past four years. This process of deleveraging will ease in the next

two years, resulting in stronger growth in consumer spending and more bank lending. However, the current recovery has

weak momentum, and the upcoming Thanksgiving holiday is expected to see a modest increase in travel volumes as a

result.


of person-trips from the West South

Central region, the following information




automobile and remains within regional

borders, regional travel ties closely with

the output generated by that region's

leisure and hospitality industry.

The WSC region’s real gross state product

from the leisure and hospitality industry

(the value of goods and services produced

by the leisure and hospitality industry)

has been growing throughout the year at a

faster pace than the nation at large. In the

fourth quarter, WSC output in leisure and

hospitality is expected to increase by two

percent.

Texas accounts for nearly three-quarters

of tourism output in the West South

Central region. Arkansas accounts for the

smallest share with just five percent of

regional tourism output.

AR, 5.0%

LA, 14.9%

OK, 7.8%

TX, 72.3%

CHART 9DREAL GROSS PRODUCT -- LEISURE & HOSPITALITY

WEST SOUTH CENTRAL REGION MAKEUP BY STATE, 2012Q4



Thanksgiving 2012 Holiday Traveler Profile Survey Methodology

The Holiday Traveler Profile study, conducted by D.K. Shifflet and Associates, surveys holiday travelers regarding their

planned holiday travel including planned party composition, travel distances, trip expenditures, and activity participation.

For the Thanksgiving 2012 holiday, the survey was in the field October 1–4, 2012, and 417 respondents were interviewed

in detail about their holiday plans. This panel was designed to yield survey responses that are statistically significant at the

national level.1 Although we report detail for individual census regions, the reader should be aware that the census-region-

level results are not generally statistically significant and margins of error are generally large.

Those census region-level responses that do differ significantly from national responses are flagged with asterisks, as in

the example below from our Memorial Day 2010 report:

Party Composition Memorial Day 2010 (example)

* Indicates estimate differs from estimate for Total US with 99 percent confidence or greater.

Source: D.K. Shifflet & Associates, Ltd.

Numbers may not add due to rounding.

In the above example, note that the percent of New England respondents planning to travel as a party of "Two Adults" is

listed as "10 percent*." As the footnote below the table states, the asterisk indicates that the New England estimate differs

from the Total US estimate with 99 percent confidence or greater. In other words, if the actual proportion of New England

residents traveling in a party of two adults were the same as the actual proportion of US residents traveling in a party of

two adults, there would be a 1 percent or lower chance of seeing a difference as large as the difference observed in this

survey (10 percent for New England versus 33 percent for Total US). Therefore, it is unlikely—though not impossible—

that this difference is reflective of random sampling error.

Although we will focus primarily on national responses, our commentary on the Holiday Traveler Profile tables may call

out certain regional responses of interest. When we discuss a regional response, we will generally avoid highlighting

responses with large margins of error. For example, the margin of error for the share of New England residents travelling

in parties with two adults is +/-14 percent, meaning that the share could be as high as 24 percent. As such, we would

either avoid highlighting that result or provide the margin of error to the reader for appropriate statistical context.2

1 Specifically, the margin of error for each binary response question is, at most, about 6 percentage points, with 99% confidence.

2 This +/-14% margin of error reflects a 99% confidence interval based on a t-distribution.

One Adult Two Adults

Three or

more Adults Families

Total US 21% 33% 19% 27%

New England 11% 10%* 26% 53%

Middle Atlantic 7% 19% 15% 60%*

South Atlantic 30% 33% 23% 14%

East North Central 39% 17% 23% 21%

East South Central 27% 23% 15% 35%

West North Central 6%* 17% 28% 49%

West South Central 16% 39% 20% 24%

Mountain 26% 52% 10% 13%

Pacific 13% 67%* 14% 6%*


Change in the Average Thanksgiving Traveler

While consumer sentiment readings improved in September compared to last September, households still face too many

headwinds to allow a robust spending recovery. The recovery has weak momentum, and the travel plans of those

households making less than $50,000 will be most affected by the weak economic landscape. As such, the chart below,

taken from the Holiday Traveler Profile, shows that households making less than $50,000 are expected to make up 34

percent of all travelers this year, down from 37 percent in 2011. Households making over $100,000 will make up 28

percent of holiday travelers this year versus 31 percent in 2011, as households making between $50,000-$100,000 will

comprise the remaining 38 percent of total person-trips.

CHART 7

HOUSEHOLD INCOME DISTRIBUTION OF INTENDING TRAVELERS

THANKSGIVING 2012 AND 2011 HOLIDAY

TOTAL US


Numbers may not sum due to rounding

37%

32% 31%34%

38%

28%

0%

10%

20%

30%

40%

50%

Under $50k $50k - $100k Over $100k

2011 2012


“Not traveling as far. Driving instead

of flying.”

West South Central Respondent

Travel Distances Travelers intend to journey an average of 588 miles round-trip this upcoming Thanksgiving, which is a decline of 16.7

percent from last year, when travelers planned to log an average of 706 miles. When comparing the change in distribution

among mileage categories, there is an apparent shift towards shorter-distance holiday trips. Among those households

surveyed, only 28 percent expect to travel more than 700 miles this coming

holiday (versus 35 percent in 2011), while 38 percent are planning to travel 250

miles or less (compared to 34 percent last year). The increase in expected

round-trips spanning between 401 and 700 miles (20 percent in 2012 versus 14

percent in 2011) is likely the result of long-distance automobile trips replacing

air travel of more than 700 miles.

TABLE 8

EXPECTED ROUND-TRIP DISTANCE TRAVELED

THANKSGIVING 2012 HOLIDAY

TOTAL US AND BY REGION OF RESIDENCE


Numbers may not sum due to rounding

50-150

miles

151-250

miles

251-400

miles

401-700

miles

701-1500

miles

Over 1500

miles

Average

Miles

Total US 20% 18% 14% 20% 14% 14% 588

New England 32% 16% 19% 17% 10% 6% 473

Middle Atlantic 14% 26% 12% 27% 3% 17% 573

South Atlantic 19% 23% 14% 23% 17% 5% 529

East North Central 30% 29% 8% 13% 14% 5% 452

East South Central 20% 15% 16% 24% 16% 10% 525

West North Central 26% 14% 26% 11% 13% 10% 541

West South Central 12% 9% 24% 18% 14% 23% 714

Mountain 16% 14% 6% 31% 19% 14% 607

Pacific 20% 7% 8% 14% 18% 34% 887

(Percentage of Travelers)


“'This year, I will not be flying for the

holiday and the events I am going to

are price fixed.”

South Atlantic Respondent

Total Spending

The median Holiday Traveler Profile respondent expects to spend $498 this upcoming holiday period, which is 10 percent

lower than the expected median spending of $554 from intending travelers in 2011. The Thanksgiving holiday is a less

expensive holiday compared to other travel holidays, (Labor Day 2012—$749, July 4th 2012—$749, Memorial Day 2012—

$702) owing to its emphasis on the gathering of friends and family.

Total spending can be roughly grouped into the following categories:

transportation spending and spending occurring at the travel destination

including lodging; food and beverages; shopping; and entertainment.

Transportation spending accounts for roughly 32 cents of the traveler dollar,

while other categories make up the remaining 68 cents of the holiday dollar.

The largest single spending category is a tie between shopping and food, with

the shopping spend being driven by Black Friday, which is traditionally the

busiest shopping day of the year.

TABLE 9

MEDIAN EXPECTED TOTAL TRIP SPENDING AND AVERAGE EXPECTED SHARES OF BUDGET BY CATEGORY





Total US

New

England

Middle

Atlantic

East

North

Central

West

North

Central

South

Atlantic

East

South

Central

West

South

Central Mountain Pacific

Median Total $498 $425 $644 $250 $227 $522 $275 $802 $569 $767

Fuel Transportation 14% 11% 13% 15% 15% 20% 20% 13% 14% 7%

Other Transportation 18% 16% 19% 14% 7% 10% 13% 23% 19% 30%

Accommodations 13% 11% 17% 20% 9% 8% 14% 12% 17% 11%

Food & Beverages 20% 24% 19% 17% 17% 24% 17% 20% 19% 18%

Shopping 20% 23% 18% 15% 37% 23% 27% 16% 17% 18%

Entertainment/Recreation 11% 12% 11% 14% 11% 10% 6% 11% 10% 14%Other 4% 2% 3% 4% 3% 5% 3% 5% 4% 3%


Chart 10 illustrates the average expected shares of budget by category for 2012. Chart 11 shows the change in budget

distribution from Thanksgiving 2011 to Thanksgiving 2012.

CHART 10

US 2012 THANKSGIVING SPENDING

DISTRIBUTION BY CATEGORY

CHART 11

TOTAL US THANKSGIVING SPENDING

CHANGE IN BUDGET SHARE FROM 2011 TO 2012


Fuel

14%

Other

Transp.

18%

Lodging

13%

Food &

Bev.

20%

Shopping

20%

Ent/Rec

11%

Other

4%

0.2%

-1.3%

-3.0%

1.5%

2.5%

-0.3%

0.4%

-4%

-2%

0%

2%

4%

Fuel Other Transp.

Lodging Food & Bev.

Shopping Ent/Rec Other


Party Composition

For Thanksgiving 2012, the most common expected travel party (33 percent) is composed of two adults. About 23 percent

expect to travel as just one adult, and 28 percent of respondents expect to travel with family this Thanksgiving holiday

travel period.

TABLE 13

PARTY COMPOSITION





One Adult

Two

Adults

Three or

more Adults Families

Total US 23% 33% 16% 28%

New England 27% 34% 12% 27%

Middle Atlantic 25% 41% 12% 23%

South Atlantic 20% 41% 18% 21%

East North Central 15% 32% 27% 26%

East South Central 20% 27% 9% 44%

West North Central 26% 32% 5% 37%

West South Central 28% 21% 16% 35%

Mountain 17% 39% 6% 39%

Pacific 28% 30% 21% 21%


“Last year I didn’t hunt - this year

I will”

West North Central Respondent

Activities

While spending time with friends and relatives is a primary activity for nearly all holidays, it is even more relevant for

Thanksgiving travelers. It is therefore not surprising that three-quarters of all intending travelers expect to spend time with

friends and family during the holiday period. It is also unsurprising that dining would

take the next highest participation rate for the holiday.

Half of all travelers intend to shop, which is to be expected given that Black Friday

occurs during the holiday weekend and is the busiest shopping day of the year.

Travelers intend to participate in all other activities at a rate of less than 25 percent.

TABLE 14

EXPECTED PRIMARY ACTIVITIES





Total

US

New

England

Middle

Atlantic

East

North

Central

West

North

Central

South

Atlantic

East

South

Central

West

South

Central Mountain Pacific

Visit with friends/relatives 75% 77% 76% 71% 78% 81% 72% 77% 69% 74%

Dining 56% 52% 59% 50% 38% 62% 33% 59% 69% 66%

Shopping 50% 45% 51% 36% 43% 59% 36% 59% 50% 51%

Touring/sightseeing 21% 16% 22% 15% 12% 19% 22% 29% 16% 29%

Go to beach/waterfront 14% 4% 8% 9% 7% 19% 7% 26% 15% 15%

Night Life 15% 16% 16% 14% 11% 14% 14% 13% 7% 26%

Visit museums, art exhibits, etc. 15% 14% 27% 7% 14% 17% 13% 9% 9% 17%

Hike, bike, etc. 9% 6% 9% 8% 12% 6% 9% 7% 13% 10%

Visit historic sites 13% 17% 18% 11% 4% 10% 14% 9% 16% 20%

Attend festivals, craft fairs, etc. 10% 14% 11% 3% 8% 16% 7% 11% 7% 9%

Visit national or state parks 11% 4% 26% 2% 6% 12% 10% 9% 11% 9%

Watch sporting events 24% 23% 24% 19% 31% 28% 18% 26% 33% 11%

Attend concerts, plays, dance, etc. 6% 10% 5% 3% 8% 6% 11% 9% 10% 2%

Gambling 6% 4% 12% 7% 7% 0% 9% 2% 13% 7%

Boat/sail 3% 0% 12% 4% 2% 0% 1% 3% 0% 3%

Visit theme/amusement parks 4% 5% 6% 1% 1% 2% 5% 9% 11% 1%

Play golf 4% 3% 4% 4% 6% 1% 0% 1% 12% 5%

Observe & conserve nature/culture 4% 1% 12% 3% 3% 6% 2% 0% 1% 2%

Hunt, fish, etc. 6% 1% 3% 12% 4% 11% 0% 3% 7% 3%

Spa 5% 0% 8% 4% 1% 4% 0% 13% 5% 5%

Look at real estate 3% 6% 6% 3% 4% 2% 11% 2% 1% 2%

Attend show: boat, car, home, etc. 3% 2% 6% 0% 1% 0% 3% 8% 0% 3%

Compete in sporting events 2% 4% 6% 0% 6% 1% 0% 1% 2% 0%

Snow ski, snow board, other snow 3% 3% 6% 0% 7% 0% 0% 3% 7% 3%

Other 5% 6% 8% 2% 4% 4% 14% 4% 2% 8%


While the overall travel volume for this Thanksgiving period is not expected to change much from last year, we do expect

to see a decrease in spending and travel distance. As a result, there will be some changes in the expected activities

during the holiday. The drop in spending can be seen in the decrease in dining, touring, attending concerts, and gambling,

but comes despite an expected modest increase in those expected to shop during the holiday. Overall, the expected

activities are fairly consistent with 2011, as only visiting with friends and families, visiting historical sites and watching

sporting events is expected to see a change in expectations of more than five percentage points.

TABLE 15

VARIANCE IN EXPECTED PRIMARY ACTIVITIES


COMPARED TO THANKSGIVING 2011 HOLIDAY

Expected Primary Activities 2012 2011 Variance

Visit with friends/relatives 75% 68% 7%

Dining 56% 60% -4%

Shopping 50% 49% 1%

Watch sporting events 24% 18% 6%

Touring/sightseeing 21% 25% -4%

Night Life 15% 13% 2%

Visit museums, art exhibits, etc. 15% 13% 2%

Go to beach/waterfront 14% 16% -2%

Visit historic sites 13% 18% -5%

Visit national or state parks 11% 11% 0%

Attend festivals, craft fairs, etc. 10% 9% 1%

Hike, bike, etc. 9% 10% -1%

Attend concerts, plays, dance, etc. 6% 8% -2%

Gambling 6% 9% -3%

Hunt, fish, etc. 6% 4% 2%

Spa 5% 5% 0%

Other 5% 5% 0%

Visit theme/amusement parks 4% 4% 0%

Play golf 4% 4% 0%

Observe & conserve nature/culture - Eco-Travel 4% 3% 1%

Boat/sail 3% 2% 1%

Look at real estate 3% 5% -2%

Attend show: boat, car, home, etc. 3% 1% 2%

Snow ski, snow board, other snow/ice sports 3% 1% 2%

Compete in sporting events 2% 1% 1%


Dates of Travel for Thanksgiving Trips

Thanksgiving Day always falls on the fourth Thursday of November. The

midweek incidence of the holiday is part of what makes Thanksgiving

unique, as the long weekend frees up more time for families and friends

to spend together, while allowing more flexibility in terms of their travel

plans. Moreover, because the timing of the holiday is consistent each

year, travelers can schedule their plans accordingly to take full

advantage of the long holiday weekend.

The Holiday Traveler Profile asked intending travelers what day they

plan to leave for, and return from their Thanksgiving Holiday trip this

year. Among those surveyed, the majority of intending travelers plan to

leave the Wednesday before the holiday (45 percent) and return the

following Sunday (36 percent), with another 25 percent expecting to

return on Monday, November 26. Use of the remaining dates is fairly

even, which speaks to the added flexibility that the long holiday

weekend allows.

CHART 13

HAS ECONOMIC UNCERTAINTY

IMPACTED TRAVEL PLANS



Mon11/1916%

Tues

11/20 16%

Wed

11/21 45%

Thurs

11/22,18%

5%

10%

Fri11/2313%

Sat11/2417%

Sun11/2536%

Mon11/2625%

0%

10%

20%

30%

40%

50%

60%

Date of Departure Date of Return

(Percentage of Respondents)

WHAT DAY DO YOU PLAN TO LEAVE FOR, AND

RETURN FROM YOUR THANKSGIVING HOLIDAY

TRIP?

DATE OF DEPARTURE:

MONDAY, NOVEMBER 19TH, OR

EARLIER

TUESDAY, NOVEMBER 20TH

WEDNESDAY, NOVEMBER 21ST

THURSDAY, NOVEMBER 22ND

FRIDAY, NOVEMBER 23RD

, OR LATER

DATE OF RETURN:

THURSDAY, NOVEMBER 22ND

FRIDAY, NOVEMBER 23RD

SATURDAY, NOVEMBER 24TH

SUNDAY, NOVEMBER 25TH

MONDAY, NOVEMBER 26TH

, OR LATER


Addendum 1: US Economic Forecast Summary

PUBLISHED 10/08/2012

Crawling towards the election

The economy is crawling towards the election at a growth rate of less than 2%. Exports and business fixed investment have run out of steam in the face of global economic headwinds and domestic policy uncertainty, and employment growth remains weak. We are hopeful that growth will eventually accelerate as the traditional drivers of recovery—vehicles and houses—gain momentum, but fear that the fog of uncertainty will not clear quickly. Our optimism is for 2014 and 2015, rather than 2013. Questions over the Eurozone crisis and Chinese growth momentum are unlikely to be answered quickly. Domestically, we assume that, in the end, budget deficit reduction will require compromise and some combination of tax increases and spending reductions—whoever is president—but the process of getting there is likely to be messy.

Second-half growth still looks modest. We continue to expect second-half 2012 GDP growth to average 1.5%, slightly slower than the first half. We expect third-quarter growth to come in at just 1.4%; our estimate would have been below 1.0% but for a bump from an apparent jump in defense spending. GDP growth for calendar-year 2012 now comes in at 2.1%, down slightly from 2.2% in last month's forecast. Our 2013 projection remains 1.8%.

Exports and business fixed investment no longer leading the recovery. The global slowdown has reduced export growth to a low single-digit pace, hobbling one of the two key drivers of the recovery thus far. The other key driver, business fixed investment, is also weakening. We expect that business fixed investment will drop in the third quarter, the first decline since the recovery began. Business structures spending appears sharply lower, although it can be volatile from quarter to quarter. More troubling is that business equipment spending growth has slowed. Orders have fallen and production cannot be maintained indefinitely by order backlogs. The September ISM manufacturing report, which showed a rise in orders for the first time since May, is a hopeful sign but not an “all clear.”

Vehicles and houses are the bright spots. Vehicle and housing demand are traditionally the key drivers of recovery. A combination of an aging fleet needing replacement with easing credit conditions continues to support vehicle demand, which reached a new post-recession peak in September. The housing recovery is at a much earlier stage, but appears to be real. Household formation is reviving, despite sluggish employment growth, and the recovery in demand is spreading from rental units to the owner-occupied sector. Although we are skeptical of the effectiveness of the Federal Reserve's new quantitative easing (QE3) policy, its open-ended nature might convince nervous borrowers and cautious lenders that the downside risk on house prices is limited and that now is the time to act.

The “fiscal cliff” is not going away soon. Amid the discussion of taxes and deficits in the first presidential debate, there was no mention whatever of the immediate threat facing the economy—the fiscal cliff. We assume that the lame-duck Congress will punt this problem down the road, postponing the tax hikes and spending cuts for a few months. That means that extreme uncertainty over fiscal policy is likely to remain a fact of life—and a deterrent to risk-taking—well into 2013. The fact that the debt ceiling will need to be raised some time in the first few months of 2013 adds an unwelcome extra complication.

Federal Reserve: QE3 likely to be amplified in 2013. The Fed came through in September with an open-ended program of asset purchases, announcing $40 billion in monthly purchases of mortgage-backed securities. It pledged to do more still if the labor market outlook fails to improve "substantially." We assume that the Fed will begin purchasing Treasury securities again in 2013, after the expiry of the existing Operation Twist at year-end, since there is little chance that it will see the improvement it is seeking by then. We assume that the Fed will keep the federal funds rate near zero through mid-2015, in line with its new guidance.


Addendum 2: US Regional Forecast Summary PUBLISHED 11/1/2012

Moderate recovery continues

This fall, most state economies continue to slowly expand. Over the course of the year ending in September, 29 states saw positive job

gains, and West Virginia was the only one with a large loss. Although we saw a slight deceleration over the summer, the number of

states with positive year-over-year growth has been fairly stable since the spring.

For the remainder of the year and throughout 2013, employment growth should remain moderate, averaging 1.5% per quarter over the

next six quarters. All states except West Virginia will post job gains by the end of this year, and all will see payrolls rise in 2013. By the

end of 2012, though, only New York (although Hurricane Sandy could change this) and Oklahoma will join the five states that have

already returned to their prerecession employment levels—North Dakota, Alaska, the District of Columbia, Texas, and Louisiana.

Another seven states will move from recovery to expansion in 2013, but most states will not be able to close their employment gap until

2014, a testament to the depth of the recession and the sluggish pace of the ongoing recovery. Strong construction sector gains, on the

back of a recovering housing market, will move Arizona, Florida, California, and Nevada among the top 15 states in terms of

employment growth in 2013.

Regionally, we expect the West South Central to continue to be the leading economic performer, generating annual payroll growth well

ahead of the other regions in 2012, at 2.2%. Most of the rest of the regions will cluster around 1.0% job growth this year, again in line

with a moderate national recovery. The only outliers will be the Mountain region, which will vault forward a bit with 1.5% job growth, and

the Northeast, which will lag behind with 0.7%.

Meanwhile, the unemployment rate in most states has been trending lower since the last quarter of 2011. As a result, only three

states—Nevada, California, and Rhode Island—still have double-digit rates. We expect this rate to slow during the remainder of the


year and into 2013, however, as ongoing employment gains attract previously discouraged job seekers back into the labor force. By the

end of 2013, more than half the states will still have unemployment rates at or above 7%.

Employment Growth, 2012-18, Average Annual Growth Rate

Although the housing sector has finally seen some improvement, some of the drivers that were previously supporting growth have

weakened. Global economic headwinds and uncertainty surrounding the impending fiscal cliff have taken a toll on exports and business

fixed investment and, as a result, manufacturing has lost its momentum, at least temporarily. We thus expect that overall growth in

output and employment will remain modest through the remainder of this year and during much of 2013.

State personal income growth, second-quarter 2012

According to the latest figures published by the Bureau of Economic Analysis (BEA), state personal income decelerated in the second

quarter of 2012, rising by an annualized 4.1% quarter on quarter (q/q), after expanding by a revised 6.9% in the first quarter of the year.

Personal income rose in all states, but growth slowed in 40 states and the District of Columbia. While growth of the dividends, interest,

and rents component accelerated, net earnings and transfer receipts slowed significantly.

Earnings in the professional, scientific, and technical services sector and the healthcare sector once again contributed the most to

growth. These sectors drove earnings gains in all regions except the Southwest and the Plains. In the Southwest, the construction

sector added more to earnings growth than any other sector, with strong gains in Arizona and Texas. Indeed, these two states

accounted for nearly two-thirds of the national gain in construction sector earnings during the second quarter. In the Plains region, farm

sector earnings, which were actually down nationally, drove second-quarter personal income growth, with very strong gains in the

Dakotas. In North Dakota, however—the top state in terms of earnings growth—the mining sector drove earnings growth, as it

continues to benefit from a booming energy sector thanks to soaring exploration at the Bakken Shale.

Percent

0.8 to 1.1

1.2 to 1.3

1.4 to 1.6

1.6 to 2.4


Highest and lowest net earnings growth rates, 2012Q2

(Quarter-on-quarter, annual rate)

Rank State Growth rate

%

Rank State Growth rate

%

1 North Dakota 9.5 47 Delaware 1.0

2 South Dakota 9.2 48 Idaho 1.0

3 Hawaii 4.8 49 Montana 1.0

4 Mississippi 4.6 50 Wyoming 0.0

5 Indiana 4.5 51 New Mexico -0.5

Nationally, three sectors saw earnings drop during the second quarter: the farm, federal government, and military sectors. Large farm

sector losses made New Mexico one of the worst-performing states in the nation, and also contributed significantly to weak earnings

results in Wyoming and Idaho.

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