1. He Loves Me, He Loves Me Not A Forecast of U.S. Jewelry Sales Alex Gates Ling-Ching Hsu Shih-Hao Lee Hui Liang Mateusz Tracz Grant Volk June 1, 2010

2. Purpose Examine trends in jewelry sales in the United States Create a model capable of forecasting future U.S. jewelry sales Forecast U.S. jewelry sales for one year

3. Data Data obtained from U.S. Census Bureau website (http://www.census.gov/retail)http://www.census.gov/retail Data is monthly U.S. Jewelry Sales from January, 1992 through March, 2010

4. Jewelry Sales Data (JSALES)

5. JSALES Correlogram

6. Pre-Whitened JSALES

7. SDLNJSALES

8. SDLNJSALES – Unit Root Test

9. SDLNJSALES AR(1)

10. SDLNJSALES ARMA(1,1)

11. SDLNJSALES – Final ARIMA Model: AR(1) MA(1) MA(12) MA(14) MA(16)

12. SDLNJSALES - Correlogram

13. SDLNJSALES Serial Correlation Test

14. SDLNJSALES Correlogram of Residuals Squared and ARCH Test

15. SDLNJSALES - ARCH/GARCH

16. Actual, Fitted, Residual

17. Histogram of Residuals Non-normal, but single-peaked

18. Correlograms Standardized ResidualsResiduals Squared

19. ARCH Test for Heteroskedasticity

20. Conclusion: Accept the model!

21. Forecasting SDLNJSALES for Previous 12 Months

22. Forecasting SDLNJSALES for Next 12 Months

23. Recolored Forecast of JSALES

24. Detailed Graph

25. JSALES Data and Forecast Actual values of U.S. Jewelry Sales from January, 2009 through March, 2010 Forecasted values from April, 2010 through March, 2011

26. Final Conclusions Forecasted recovery of Jewelry Sales for 2010 holiday season 10.35% increase predicted for December 2010 sales over 2009 levels Upper bound of 95% confidence level predicts that, if everything goes very well, sales could be their highest since 1992

27. Final Conclusions