By: Lucia Moses
Newspaper analysts welcomed the government’s report on Thursday that the economy rumbled ahead in the third quarter as the latest in a string of good omens for ad spending, while also expressing caution.
“The concern is, will this trail off, will business pick up?” said newspaper economist and consultant Miles E. Groves, who didn’t plan to change his outlook for 5% newspaper ad revenue growth in 2004: “What about recruitment? There’s no new jobs coming out.”
If the 7.2% G.D.P. growth rate in the third quarter is sustained, newspapers could first feel the benefits in terms of increased retail ad spending as early as the fourth quarter, which could lead newspaper companies to revise up their earnings estimates.
But Kevin Gruneich of Bear, Stearns & Co., sees the benefits coming next year. “I think it’s going to make for more confidence going into ’04,” he said.