Economic News

[Fivetears]

Cingular posts higher net income, revenue
NEW YORK - Cingular Wireless, the No. 1 U.S. mobile service provider, said on Thursday second-quarter net income and revenue rose as it added new subscribers at a rate that was better than expected. Cingular said it added 1.5 million customers in the quarter, compared with an average estimate of 1.2 million from six analysts contacted by Reuters. Overall monthly subscriber churn, which measures cancellations, fell to a record-low 1.7 percent, an improvement of half a percentage point from a year earlier.
AT&T's plan to buy BellSouth would give it full ownership of Cingular later this year.
http://news.yahoo.com/s/nm/20060720/bs_nm/telecoms_cingular_earns_dc_2

 

[Fivetears]

Safeway second-quarter profit jumps
NEW YORK - Safeway Inc., the third-largest U.S. grocery chain, posted a jump in second-quarter profit on Thursday, aided by strong sales of gasoline and a benefit related to a tax refund.
http://news.yahoo.com/s/nm/20060720/bs_nm/retail_safeway_earns_dc_1

 

[Fivetears]

Higher Housing Costs Pushed Consumer Prices Up in June
A closely watched barometer of inflation grew at a strong pace in June but shed little light on whether the Federal Reserve would increase interest rates again next month. While the Labor Department reported yesterday that core consumer prices had the largest sustained rise since 1995, Ben S. Bernanke, the Fed chairman, sounded a less-than-hawkish tone on inflation in testimony on Capitol Hill. Without a more declarative position from Mr. Bernanke, economists were left to speculate whether the Fed may pause when it meets next month or approve its 18th consecutive increase in interest rates. The Labor Department reported that the core Consumer Price Index, which does not include food and energy prices, rose by 0.3 percent in June, its fourth consecutive increase. That was a larger increase than economists expected, and represented the longest period of high inflation in the core rate since the first four months of 1995. Over all, consumer prices rose 0.2 last month, a more moderate pace than the 0.4 percent rise reported in May. A retreat in energy prices in June helped hold down the number. Energy prices declined 0.9 percent last month, the first time since February they dropped. But with crude oil prices once again near record highs, the June decline may be short-lived. “The reality is that inflation continues to accelerate,” Joel L. Naroff, chief economist at Naroff Economic Advisors, wrote in a report yesterday. “Excluding energy, retail costs rose at a pace that cannot make anyone on the F.O.M.C. comfortable,” he said, referring to the Federal Open Market Committee, the group at the Fed that sets interest rates. A major contributor to the increase in consumer prices last month was the cost of housing. The indexes for rent and its equivalents in the consumer price calculation climbed 0.4 percent. Prices for medical care, education and tobacco also went up. With prices over the next several months expected to be higher because of record oil prices and rising rents, many economists say they believe the current inflationary trends are likely to become the norm. “What this suggests is a broad-based rise in core inflation, and this has been happening over the past several months,” said Dean Maki, chief United States economist at Barclays Capital. “This is the trend.” Simon Hayley, senior international economist with Capital Economics in London, said, “This is not a temporary blip.” Still, investors appeared to shrug off the concerns raised by the numbers and to focus instead on remarks by Mr. Bernanke in Senate testimony. Mr. Bernanke said that while inflation was still on the rise, he believed that the impact of the Fed’s past interest rate tightening had yet to be fully felt. Investors also largely ignored another government report yesterday with more signs the housing market was slowing. Building permits fell to a three-year low and new residential construction fell by 5.3 in June, the slowest pace in a year and a half.
http://www.nytimes.com/2006/07/20/b...ca4ae0266b7b&ei=5089&partner=rssyahoo&emc=rss

 

[Fivetears]

National Pension Deal Closer, but Hurdles Exist
Congressional negotiators have reached a preliminary oral agreement on a long-awaited package of amendments to overhaul the nation’s pension system, the chairman of the negotiating group said yesterday. The chairman, Senator Michael B. Enzi, Republican of Wyoming, left a session yesterday afternoon saying that he thought “everything is resolved, pending getting the exact wording.” Mr. Enzi declined to give details, but he said the negotiators would be working today on a written draft. The legislation is meant to keep more pension plans from failing and being taken over by the federal government. "Probably this will be our last chance," said Jerry Fisher, a retired truck driver in Asheville, N.C., who is traveling to Washington to fight a provision of the bill that would reduce the benefits of people who take early retirement in certain types of plans. Failed airline plans have long been a problem for the pension guarantor and are the source of some of its biggest losses. Already this summer, Delta has begun the process of terminating its pilots’ pension plan. The idea of relief for the airlines has been popular in Congress, although outside Washington many financial analysts say that delaying pension contributions in any industry is a bad idea, because the plans are likely to be terminated later and will only be further behind. But the prospect of pension relief for the airlines is causing concern in other industries. Companies that expect to have to contribute more to their pension plans under the coming amendments have been asking why they should pay more when the airlines will be paying less. The questions of fairness appear to be one issue keeping negotiators at the table. Some of the greatest unhappiness appears to involve changes in how companies are allowed to get credit when they make pension contributions that are larger than needed. Currently, companies may keep a running balance of their excess contributions, year after year, and in years when they do not put in the required amount, they can make up the difference by using some of their credit balance from previous years.
http://www.nytimes.com/2006/07/20/b...f195c44c8b2b&ei=5089&partner=rssyahoo&emc=rss

 

[Fivetears]

Flat-panel TVs get less pricey faster
Lower-than-expected demand for flat-panel TVs is spurring makers to cut prices — setting the stage for a bargain-filled back-to-school and holiday shopping season. A year ago, a 37-inch flat-panel model typically cost about $4,000. Now, some can be found for as little as $1,100, says television analyst Rosemary Abowd at Pacific Media Associates. From January to May, the most recent data available, average flat-panel prices tumbled more than 12%, she says. Expect prices to fall even more in coming months, Abowd says. TV makers generally offer discounts during the busy fall and winter shopping seasons. Prices "are good and are only going to get better," says television analyst Chris Connery at researcher DisplaySearch. Why the glut? Optimistic TV makers overestimated demand.
http://www.usatoday.com/money/industries/technology/2006-07-18-flat-tv_x.htm

 

[Fivetears]

Layoffs improve, reflecting fewer layoffs in auto industry
WASHINGTON — The number of Americans filing new claims for unemployment benefits posted a big decline last week, reflecting fewer layoffs in the auto industry. The Labor Department reported that 304,000 newly laid off workers filed applications for benefits, a drop of 30,000 from the previous week, when claims had surged by 20,000. The big swings over the past two weeks reflected the normal layoffs that occur when the auto industry shuts down production lines for model changeovers. Looking past that volatility, the claims figures have been flashing signals that growth in the labor market is slowing as a result of the slowing economy. Employers added a disappointing 121,000 jobs last month, below the 175,000 job increase that economists had expected.
http://www.usatoday.com/money/economy/employment/2006-07-20-jobless_x.htm

 

[Fivetears]

Leading economic indicators rise in June, pointing to slow growth
WASHINGTON — A widely watched gauge of economic activity increased slightly in June, suggesting continued economic growth, though at a slow to moderate rate for the time being, a research group said Thursday. The Conference Board, an industry-backed research group based in New York, said its index of leading economic indicators rose 0.1% to 138.1 in June after declining 0.6% in May and 0.1% in April. The June figure was slightly below the 0.2% gain analysts expected. The index is watched closely because it's designed to predict economic activity three to six months in the future. Six of the ten indicators that comprise the leading index rose in June — the biggest positive contributor was a decline in average weekly initial claims for unemployment insurance, followed by the index of consumer expectations, real money supply, average weekly manufacturing hours, interest rate spread and manufacturers' new orders for new non-defense capital goods.
http://www.usatoday.com/money/economy/2006-07-20-lei_x.htm

 

[Fivetears]

Thousands in New York powerless as blackout problem persists
NEW YORK (AP) — A mysterious electrical problem blamed for subway delays, flight cancellations and power outages on the hottest days of the year persisted for a fifth day Friday, leaving 25,000 customers without power. Power company Con Edison initially said that only 2,500 customers were effected, but it increased that number tenfold Friday morning. The blackouts started Monday evening in a handful of neighborhoods in Queens. Two LaGuardia Aiport terminals lost power Tuesday, hundreds of businesses have been idle, and the city's jail complex on Rikers Island had to operate on backup generators. "This is outrageous," City Councilman Peter F. Vallone Jr. said. "When is this going to be fixed? If it's going to be days, they should tell people it is going to be days." The blackouts were at their worst on Wednesday, when 10 of the 22 feeder cables that supply the area with power were down simultaneously. The temperature had hit 100 degrees in the neighborhood the day before. Consolidated Edison spokesman Chris Olert said the power company was making every effort to get the situation fixed but couldn't estimate when that might happen. He said the company didn't know why things went wrong.
http://www.usatoday.com/news/nation/2006-07-21-newyork-electricity_x.htm

 

[Fivetears]

Rates on 30-year mortgages are highest since 2002
Rates on 30-year mortgages rose this week to the highest level since the spring of 2002. Freddie Mac, the mortgage company, says rates on 30-year, fixed-rate mortgages increased to a nationwide average of 6.80%, from 6.74% last week.A year ago, 30-year mortgages averaged 5.73%, 15-year mortgages stood at 5.32%, one-year ARMs were at 4.42% and five-year ARMs averaged 5.26%. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, increased to an average of 6.41% this week, from 6.37% last week.
http://www.usatoday.com/money/perfi/housing/2006-07-21-mortgage-rates_x.htm

 

[Fivetears]

Housing downturn 'appears orderly'
Softening in the housing market has been gradual and has been marked by little increase in mortgage delinquencies or home foreclosures, Federal Reserve Chairman Ben Bernanke said Thursday. "The downturn in the housing market so far appears orderly," Bernanke told members of the House Financial Services Committee. "The level of (housing) activity is still relatively high on a historical basis." When asked if higher interest rates could cause a more rapid deterioration in housing as those with adjustable-rate mortgages would likely see their rates, and payments, head higher, Bernanke said the Fed estimates that 20% of outstanding mortgages have variable rates. Half of those are set to change interest rates this year, he said. "So there will be some effect on variable-rate mortgages," Bernanke said. "But it should be a relatively slow process that would provide some cushion."
http://www.usatoday.com/money/economy/fed/2006-07-20-bernanke-housing_x.htm

 

[Fivetears]

Study: Medication errors harm 1.5M a year
Medication errors are among the most common medical errors, harming at least 1.5 million people every year. The problem is so serious that, on average, a hospital patient is subject to at least one medication error per day. These are among the findings in a report released Thursday by the Institute of Medicine, chartered by Congress to advise the government on science and medical issues. The extra costs of treating medication-related injuries occurring in hospitals alone conservatively amount to $3.5 billion a year, the report states. The IOM panel estimates that at least a quarter of these injuries are preventable.
http://www.usatoday.com/money/industries/health/2006-07-20-drug-errors_x.htm

 

[Fivetears]

Next Week's U.S. economic releases
July 25 Consumer confidence
July 25 Existing home sales
July 26 Fed beige book
July 27 Durable goods orders
July 27 Help wanted index
July 27 New home sales
July 28 Employment cost index 2Q
July 28 Gross domestic product 2Q
July 28 Consumer sentiment

 

[Fivetears]

Army Cuts Expenses Not Essential to War
The Army, bearing most of the cost for the wars in Iraq and Afghanistan, said Thursday its money crunch has gotten so bad it is clamping down on spending for travel, civilian hiring and other expenses not essential to the war mission. A statement outlining the cutbacks did not say how much money the Army expects to save, but senior officials have said the cost of replacing worn equipment in Iraq and Afghanistan is rising at a quickening pace. The Army chief said there is too little money available to keep up with equipment repairs. He said the Army's five major repair depots are operating at only 50 percent of capacity, resulting in a backlog of 1,000 Humvee utility vehicles awaiting attention at the Red River Army Depot in Texas and 500 tanks at a depot in Alabama. The Army's 2006 budget is $98.2 billion, and the 2007 budget request not yet approved by Congress seeks $111 billion for the Army.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060721&ID=5884239

 

[Fivetears]

Gauge of economy flat in latest week
A gauge of U.S. economic growth was unchanged in the latest week due to higher commodity prices and lower jobless claims, a report showed on Friday. The moves were partly offset by lower housing activity. The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index was flat at 136.9 in the week ended July 14. "Despite the latest uptick in the annualized growth rate, the weekly leading index's growth remains in a clear cyclical downtrend," said Melinda Hubman, a research associate at ECRI. The downtrend points to dimming U.S. economic growth prospects, Hubman said.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20060721&ID=5885809

 

[Fivetears]

BellSouth Shareholders Approve Sale to AT&T
BellSouth Corp. shareholders approved Friday the proposed sale of their company to AT&T Inc. for $67 billion in stock, a deal that would expand the reach of the nation's largest telecommunications provider and put the two companies' wireless joint venture under one roof. The vote during a special meeting in Atlanta was 97 percent in favor of the deal, which was announced March 5 and is expected to close by the end of the year. AT&T shareholders were scheduled to vote later Friday in San Antonio on whether to issue new stock in the combined company. In papers filed with the government, AT&T and BellSouth have said that allowing the parent companies of Atlanta-based Cingular Wireless LLC to merge will help eliminate challenges they now face in managing the nation's largest cell phone provider.
Federal and state regulators also must approve the deal.
http://www.foxnews.com/story/0,2933,204946,00.html

 

[Fivetears]

Heat subsides in St. Louis, power outages rise with 2nd storm
ST. LOUIS — Heavy rains and tree-toppling winds pummeled St. Louis again Friday, adding more power outages to hundreds of thousands of homes and businesses already without electricity. The St. Louis region, already crippled by vast power outages Wednesday, came under a severe thunderstorm warning for the second time in three days. Friday morning, before the storm, 320,000 homes and business were still without power from Wednesday night's 80 mph winds and heavy rain. Progress with restoration was being made, and more than 200,000 customers had power back on within 36 hours. The power company has said it could take four days before power is restored, but now it could take longer. Ameren Corp. has called the outage the worst in its 100-plus year history. As many as 500,000 customers lost power from the storm, which was followed by another day of near-triple-digit-heat. More than 500 people spent Thursday night in two Red-Cross shelters, and a third shelter was scheduled to open Friday afternoon to take in people who could not stay in their hot homes.
http://www.usatoday.com/weather/storms/2006-07-20-st-louis-storms_x.htm

 

[Fivetears]

2006 Back-to-School Tax Holiday Schedules
Thirteen states and the District of Columbia are offering shoppers sales tax holidays this year, most on the first weekend of August. Florida started yesterday. They are listed below:
http://www.bankrate.com/smm/itax/news/20050804b1.asp

 

[Fivetears]

Where is Robin Hood when you need him?
The federal minimum wage hasn't budged in almost a decade. Gas prices at $3 a gallon are crushing the working poor. So what is Congress doing? It's working hard — not to raise the minimum wage for millions of the poorest working Americans, but to repeal or reduce the estate tax for a tiny sliver of America's wealthiest. This seems perverse, unless you understand the corrosive influence of money in politics. Running for office requires hundreds of thousands of dollars, sometimes millions. This money comes from wealthy donors and business interests — the people most interested in scrapping the inheritance tax and keeping wages low. Minimum-wage earners, meanwhile, don't make big campaign contributions or underwrite junkets, and they don't have as loud a voice on Capitol Hill. At a time when the gap between rich and poor is widening, the skewed economic priorities of the Republican-controlled Congress are increasingly indefensible.
http://www.usatoday.com/news/opinion/editorials/2006-07-23-our-view_x.htm

 

[Fivetears]

How to really help the poor.
Everyone agrees we should do everything we can to help poor Americans earn more. But one of the worst ways for Congress to attempt to do that is, paradoxically, one of the most popular: raising the minimum wage. There are several reasons why minimum-wage hikes don't achieve all their objectives:

• Most workers who earn the minimum wage — generally teenagers — don't come from low-income households. Indeed, the average household income for such a worker is $45,000 a year, and many workers with incomes close to the minimum wage come from households earning more than $80,000 annually.

• Minimum-wage jobs are nearly always entry-level positions, usually filled by new workers who, as they gain experience and become more productive, see their incomes rise without government help. About two out of every three workers hired at the minimum wage, in fact, are earning more within a year.

• Minimum-wage hikes increase labor costs, prompting businesses to create fewer entry-level positions. Employers forced to pay more to new workers naturally prefer to hire more experienced workers who require less training. Who loses out? Ironically, less-skilled workers who are poor.

Such workers are no better served by calls to retain the estate tax because this tax directly undermines job creation. The federal estate tax alone is responsible for the loss of 170,000 to 250,000 potential jobs each year, Heritage Foundation economists estimate. This additional employment never appears in the economy because the investments that would have brought higher employment aren't made.
http://www.usatoday.com/news/opinion/editorials/2006-07-23-oppose_x.htm

 

[Fivetears]

Global Trade Talks Collapse As Top Powers Fail to Reach Breakthrough
GENEVA - Global commerce talks at the World Trade Organization collapsed Monday as top powers failed to agree on steps toward liberalizing trade in farm and manufactured goods. Indian Trade Minister Kamal Nath said the talks had been suspended and added that "it could take anywhere from months to years," to restart the negotiations. "This is a serious setback, a major setback," said Brazilian Foreign Minister Celso Amorim. EU trade chief Peter Mandelson blamed the failure on the United States.
http://biz.yahoo.com/ap/060724/wto_trade_talks.html?.v=8