Economic News

[Fivetears]

Chinese Company Intends to Build MG’s in Oklahoma
That’s the bet by Nanjing Automobile Group, which plans to resurrect the fabled MG marque in a tricontinental demonstration of how truly global the automotive industry has become. Nanjing, which purchased the assets of the bankrupt MG Rover Group last year, aims to be the first Chinese carmaker to open a factory in the United States. The company has scheduled a news conference for Wednesday in Oklahoma to announce plans to build a newly designed MG TF Coupe there, starting in 2008. It said the coupe would compete with cars like the Mazda Miata, which sells for $20,000 to $25,000. It also will assemble a convertible TF Roadster version at MG’s now-shuttered factory in Longbridge, England, and three sedan models in China. American and European operations for MG Motors will be based in Oklahoma City, 90 miles north of the new factory in Ardmore, Okla.
http://www.nytimes.com/2006/07/12/b...1451beee2c4d&ei=5089&partner=rssyahoo&emc=rss

 

[Fivetears]

Experts Say High Gasoline Prices May Dent Economic Growth, but Not Consumers' Fuel Appetite
High gasoline prices may dent economic growth, but consumers' fuel appetite is still strong. Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon -- a threshold once feared to be disastrous for motorists and potentially the economy. Economists say neither gasoline demand nor the economy have cratered in the face of soaring fuel prices because energy costs are only a small percentage of the average U.S. household budget. Consumers have been helped by relatively low interest rates and low core inflation, though both of these indicators are rising -- trends that could augur further weakness in the economy.
http://biz.yahoo.com/ap/060712/gas_prices.html?.v=8

 

[Fivetears]

America’s trade deficit widens in May
Imported oil price rises by largest amount in some 16 years
A record jump in the price of imported oil pushed the trade deficit to $63.8 billion in May, offsetting robust overseas sales gains by American companies. On Wall Street, stocks dropped sharply after a separate report showed that weekly oil inventories fell to their lowest level since early March. That raised the prospect that the U.S. will have to import even more oil. The price of foreign oil jumped by the largest amount since the run-up to the first U.S.-Iraq war in 1990, and America’s trade imbalance rose 0.8 percent from a revised April deficit of $63.3 billion, the Commerce Department said Wednesday. The trade deficit is running at an annual rate of $763 billion, 6.5 percent higher than last year’s record of $716.7 billion. President Bush’s critics blame the dwelling deficits on unfair trade practices in China and elsewhere, and say they have contributed to the loss of nearly 3 million manufacturing jobs since Bush took office.
http://www.msnbc.msn.com/id/13826182/

 

[Fivetears]

Intel Cuts 1,000 Managers in Shake-up
SAN FRANCISCO - Intel Corp. said on Thursday it will lay off 1,000 managers, or about 1 percent of its work force, as it seeks to tries to restart profit growth amid heated competition with rival Advanced Micro Devices Inc. "This action is designed to both reduce costs and improve communications and decision-making across the company," Intel spokesman Chuck Mulloy, adding that employees were being notified this week.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20060713&ID=5866413

 

[Fivetears]

Mortgage Rates Decline for First Time in Five Weeks
WASHINGTON — Rates on 30-year mortgages declined this week for the first time in five weeks amid expectations that the Federal Reserve won't push interest rates much higher.
http://www.foxnews.com/story/0,2933,203361,00.html

 

[Fivetears]

Tyson Foods to Eliminate 850 Positions
SPRINGDALE, Ark. — Tyson Foods Inc., the world's largest meat company, said Thursday it would cut 850 positions to help trim $200 million in costs as it tries to boost profit amid slower sales of beef, chicken and pork. The savings goal is up from the $110 million pledged in May by new Chief Executive Richard L. Bond. The company said 420 jobs, mainly managers, will be slashed. Another 430 positions that are currently unfilled will also be eliminated. The job cuts include 90 in Dakota Dunes, S.D., and Dakota City, Neb. Other positions being cut are scattered throughout the company, which employs 114,000 worldwide. Forty outside consultants will also be eliminated. The company said hourly workers at its meat plants will not be laid off.
http://www.foxnews.com/wires/2006Jul13/0,4670,TysonLayoffs,00.html

 

[Fivetears]

Ford Halves Dividend, Board Member Fees
DETROIT — Ford Motor Co. on Thursday cut its dividend in half to 5 cents a share, a move expected to save the struggling automaker about $92 million per quarter. Its shares dropped more than 4 percent. The board of directors of the nation's second biggest automaker also voted to halve its members' own fees. "Our directors are well aware of the difficulties and sacrifices involved in turning around our company,"Chairman and Chief Executive Bill Ford said in a statement. "They have underscored this by voting to reduce their own compensation." Dearborn-based Ford is almost six months into a turnaround plan that calls for cutting 30,000 jobs and closing 14 facilities by 2012.
http://www.foxnews.com/wires/2006Jul13/0,4670,FordDividend,00.html

 

[Fivetears]

Claims for Jobless Benefits Up to 332,000
WASHINGTON — The number of people filing new claims for unemployment benefits jumped last week, apparently reflecting the spring slowdown in the economy. The Labor Department said Thursday applications for jobless benefits totaled 332,000 last week, an increase of 19,000 from the previous week that exceeded market expectations. Economists had forecast a rise of 7,000. The level of unemployment claims was near a high of 337,000 in late May, a time of markedly weak job growth. The latest weekly figure included some 4,000 claims for jobless benefits filed by workers in New Jersey during the weeklong state government shutdown there.
http://www.foxnews.com/wires/2006Jul13/0,4670,Economy,00.html

 

[Fivetears]

Wal-Mart Shares Hit Nine-Month Low After Downgrade
Wal-Mart Stores Inc. shares slumped to a nine-month low on Thursday after Merrill Lynch lowered its rating on the stock, citing concerns over slowing sales and a tough economic outlook. Analyst Virginia Genereux said that historically, Wal-Mart's sales outperform other retailers in slower economic times, but that may not happen now because its core lower-income customers are grappling with a troubling mix of steep energy prices, rising interest rates, and stricter credit card payment terms. Nearly one-half of Wal-Mart's sales come from households earning $30,000 a year or less, Genereux noted. The average household spent $4,600 on energy in 2005, and costs have continued to rise this year, taking up a hefty chunk of the budgets for lower-income families.
http://www.foxnews.com/story/0,2933,203325,00.html

 

[Fivetears]

GM's future in balance at Detroit meeting of CEOs
DETROIT - The chief executives of General Motors Corp and Renault-Nissan are scheduled to meet on Friday in Detroit, a formal first step in complex talks that could change the face of the global auto industry. Analysts remain divided about whether the tie-up would produce the cost-savings Kerkorian has suggested or threaten to distract both CEOs at crucial times for their respective companies. In a move that could ease potential union opposition to a deal, Ghosn also suggested Nissan could take over some of the excess production capacity GM is planning to shed in North America. Analysts have said GM competes heavily with Renault in Europe and that in the United States, non-unionized Nissan would be wary of retaining unionized GM workers.
http://news.yahoo.com/s/nm/20060714/bs_nm/autos_gm_nissan_meeting_dc_1

 

[Fivetears]

Dell Plans Broad Cutback in Promotions
Dell Inc. on Thursday said it planned to sharply cut the number of mail-in rebates on products and services, moving to simplify its pricing structure. Dell said the "net price" that customers pay for PCs will remain the same. Shares of Dell were down 34 cents, or 1.5 percent, at $22.04 in afternoon Nasdaq trading. Plans to cut back on promotions and simplify prices come as the Round Rock, Texas, company is spending $100 million to improve customer relations, including adding more sales and support staff and expanding its call center network.
http://news.yahoo.com/s/nm/20060713...74Z8W6b.HQA;_ylu=X3oDMTA4MHNjNWZuBHNlYwMxNjk0

 

[Fivetears]

Stock Investors Hope GE Brings Good Words to Light
Rattled investors will look for soothing words on the economy from General Electric Co. Friday morning, giving the stock market bellwether as much credence as most macroeconomic indicators. If GE says nothing about the strength of orders or the broader economy -- or CEO Jeffrey Immelt dons rose-colored glasses to discuss such topics -- investors may use that as another excuse to sell stocks and buy bonds. GE disappointed stock investors in January when it did not boost its forecasts for the year, even though the company reported a 14 percent rise in first-quarter profits that matched analysts' expectations.
http://news.yahoo.com/s/nm/20060713/bs_nm/markets_earnings_ge_dc_1

 

[Fivetears]

Despite the Lure of Renewed Trade With Japan, Thousands of U.S. Beef Plants Opt Out
When Japan banned U.S. beef in 2003 because of mad cow fears, the industry braced for a big financial hit, with job losses spilling into Midwest feedlots, supply companies and retail businesses. So when the Japanese agreed to lift the ban -- contingent on Japanese checks of U.S. beef plants -- it was easy to assume that the inspectors would be welcomed everywhere with open arms. But while 35 American beef processing plants are submitting to the inspections, thousands of other plants have opted out, deciding not to bother with exporting.
http://biz.yahoo.com/ap/060714/us_beef_japan.html?.v=2

 

[Fivetears]

Low-Cost Carriers Expand Routes in Effort to Obtain More of the Airline Industry Pie
Low-cost carriers are extending their push into the territory of their bigger competitors, with JetBlue Airlines Corp. announcing Thursday that it will expand to Ohio and Southwest Airlines Co. ready to debut in Washington, D.C. The New York-based JetBlue said it will begin providing daily nonstop flights in October between Port Columbus International Airport and New York and Boston, offering introductory one-way fares as low as $69. Dallas-based Southwest on Thursday announced one-way fares as low as $79 for new daily nonstop flights between Washington Dulles International Airport and four cities. JetBlue's expansion efforts come as it posted its second consecutive quarterly loss in April. The airline said high fuel costs drove it to a first-quarter loss of $32 million, versus a year-ago profit of $6 million.
http://biz.yahoo.com/ap/060714/low_cost_airlines.html?.v=2

 

[Fivetears]

Retail Sales Unexpectedly Fall 0.1%
Sales at U.S. retail stores unexpectedly shrank 0.1 percent in June, the first decline since February, pulled down by weaker sales of cars and building material, government data showed on Friday. Wall Street analysts had expected a 0.4 percent rise in retail sales compared with a 0.1 percent increase in May. Consumer spending accounts for about two-thirds of U.S. economic activity and analysts worry that higher energy prices, which act as a tax on household budgets, could crimp spending. Weakening underlying retail sales might also persuade the Federal Reserve that growth was slowing enough to keep inflationary pressures in check as it considers halting a two year campaign of raising interest rates.
http://news.yahoo.com/s/nm/20060714/bs_nm/economy_retail_dc_2

 

[Fivetears]

Consumer morale dips, worries over growth
Surging energy prices helped cause unexpected drops in U.S. retail sales in June and consumer sentiment in July, reports on Friday showed, raising the prospects the Federal Reserve may be close to halting its campaign of hiking interest rates. The University of Michigan's preliminary reading on consumer sentiment in July was 83.0, down from June's final 84.9 reading, said sources who saw the subscription-only report. The median forecast of Wall Street economists polled by Reuters was for a reading of 85.5. This data, coupled with news from the Commerce Department that June retail sales fell 0.1 percent -- the first decline since February -- raised concerns of a economic slowdown. Economists had forecast retail sales to rise 0.4 percent. Consumer spending accounts for about two-thirds of U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending. Consumer spending accounts for about two-thirds of U.S. economic activity and analysts worry that higher energy prices, which act as a tax on household budgets, could crimp spending. Weakening retail sales might also persuade the Fed that growth was slowing enough to keep inflationary pressures in check.
http://news.yahoo.com/s/nm/20060714/bs_nm/economy_retail_dc_5

 

[Fivetears]

California Agency OKs Changes to Insurance Law
SACRAMENTO - A state administrative office on Friday approved changes to the state's insurance law, clearing the way for regulations that will force insurers to base premiums on drivers' records instead of their address. The action should result in lower premiums for many drivers, said Insurance Commissioner John Garamendi. However, some of the state's largest insurers said they would consider filing a lawsuit to stop the rules from taking effect. The regulations, approved by the California Office of Administrative Law, will force insurance companies to comply with an initiative passed by voters in 1988, Garamendi said. The initiative required rates primarily to be tied to a person's driving record, number of years licensed and miles driven annually, rather than the ZIP code where a vehicle is registered.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060715&ID=5868897

 

[Fivetears]

Northwest flight attendants protest
Northwest Airlines flight attendants picketed Friday in Minneapolis and Detroit in an effort to bring pressure on management, which could soon void their contract. "We need to help management understand how angry we are," said Sara Nelson, a spokeswoman for the Association of Flight Attendants (AFA). "I think a strike would be a last resort." The AFA took over last week as the union for the Eagan, Minn.-based airline's 9,300 flight attendants, and began talks with Northwest (Pink Sheets: NWACQ) on Tuesday. Northwest, which is seeking $195 million in cost savings from flight attendants, has received permission from a bankruptcy court to impose new terms on the workers if the two parties fail to reach a deal by Monday. The court said Northwest could impose the terms of a contract offer that union members soundly rejected last month.

 

[FundSurfer]

Core inflation up just 0.2 percent in June

WASHINGTON - Wholesale prices rose by a larger-than-expected 0.5 percent in June but core inflation, excluding food and energy, edged up just 0.2 percent.

The Labor Department also reported Tuesday that wholesale food prices increased 1.4 percent last month, with prices for processed chickens jumping 12.1 percent and increases marked by eggs, fresh fruit and dairy products. Wholesale energy prices rose 0.7 percent.

For wholesale prices overall, analysts had been expecting an increase in June of 0.3 percent. Core inflation was in line with expectations.

The 0.5 percent increase followed rises of 0.2 percent in May and 0.9 percent in April.

Concern has permeated the markets that higher inflation will prompt further interest rate hikes by the Federal Reserve and contribute to a more severe economic slowdown.

 

[Fivetears]

Housing Starts Fall By 5.3 Percent
Economists had expected June housing starts to decline to 1.90 million units from May's originally reported 1.957 million unit pace. Permits for future groundbreaking, an indicator of builder confidence, fell 4.3 percent to a 1.862 million unit pace, the slowest since May 2003. Economists polled by Reuters had expected June permits to fall to 1.920 million units after an upwardly revised 1.946 million units, originally reported as 1.932 million. U.S. single-family housing starts fell 6.5 percent to an annual pace of 1.486 million units, the slowest since November 2004.
http://www.foxnews.com/story/0,2933,204353,00.html?sPage=fnc.business/economy