School Spending Expected to Rise

Morning Business Memo:

Families are expected to spend more money on back-to-school shopping than they did last year, when sales were flat. Walmart told Wall Street analysts that spending on back-to-school categories is up 7 percent. The University of Michigan's consumer sentiment index rose to its highest level since May. The National Retail Federation forecasted a stronger season this summer. Tina Wells, CEO of Buzz Marketing, follows shopping trends. She says many households made big changes in what they shop for. "Technology is the hot item for back to school this year," Wells says. "Ten years ago it was always fashion trending more than tech. More money being spent on back to school clothes." Wells says moms are the "chief technology officer" in many families. Kids are also playing a very active role in family decisions about which computers to buy. "Parents are being handed up the older technology and kids are getting the cooler technology," she says. Some gadgets are shared, especially laptop. "I think you're seeing a lot less of 'this is mine' and a lot more of 'this is ours,'" she adds.

Airlines are squeezing more money out of passengers by squeezing them closer together. This morning's Boston Globe reports: "Southwest is one of several airlines squeezing seats closer together in order to pack in more passengers, create rows with extra legroom for people willing to pay more, or both. Southwest Airlines has started adding six more seats to its planes, losing an inch of room between seats in the process. WestJet, out of Canada, is whacking several inches of space to make room for a section of higher-fare seats with extra legroom. Even JetBlue, which has boasted it has more legroom than the competition, announced this month it removed an inch of legroom in economy on some planes to give more space to passengers in more expensive rows.

Gas prices across the country continue to climb above year-ago prices, a trend that began last week after more than 100 days of holding below 2011 prices. The U.S. Energy Department releases its weekly survey today. AAA says the national average price for a gallon of regular gas is $3.72, 29 cents more than one month ago.

Flight attendants at American Airlines have approved a contract offer. By voting yes to concessions, flight attendants are less likely to be hit by deeper cuts proposed in bankruptcy court. The union's leadership pushed hard in the final days for ratification. It warned that 2,000 flight attendants could be forced to take unpaid leave, or furloughs, if the offer had been rejected. AMR, the parent company of American Airlines, has said the new contract will reduce annual spending by $195 million.