Economic News

[Fivetears]

Oil price and dollar plunge as American growth stalls
Oil prices plunged and the dollar fell sharply last night amid fears that the US economy is buckling under the weight of rising interest rates and the threefold increase in oil prices. Wall Street was urging the Federal Reserve to hold back from an expected rise in interest rates next month after the commerce department in Washington reported that the growth rate in the world's biggest economy more than halved in the second quarter of 2006.
http://business.guardian.co.uk/story/0,,1832845,00.html

 

[Fivetears]

Spending Less? You're Helping Slow the Economy.
Belt-tightening by consumers is a key reason the U.S. economy is slowing. Inflation-adjusted economic growth fell to a surprisingly sluggish 2.5% in the second quarter from 5.6% in the previous three months, largely because of slower consumer spending, the Commerce Department reported Friday. The economy's latest growth rate was below the expected 3%, which is average for an economic expansion. It triggered a rally in stock and bond markets as investors boosted their expectations that the Federal Reserve will soon halt its anti-inflation campaign to raise interest rates. Consumers — accustomed in recent years to spending more than they earn, saving little and tapping home equity to pay the bills — have clearly been hit by $3-plus gasoline prices. Whether that and other worries prompt consumers to scale back even more will largely determine whether the economy can maintain a slower but steady "soft landing" or veer toward recession, economists say.
http://www.latimes.com/business/la-...coll=la-headlines-business&ctrack=1&cset=true

 

[Fivetears]

IMF: Fed must hold careful economic course.
WASHINGTON - The Federal Reserve has a difficult task ahead as it seeks to put the U.S. economy on an even keel, the International Monetary Fund said Friday. In its annual review of the economy, the institution observed that the Fed "will need to steer an especially delicate course" that limits downside risks to economic activity while ensuring that investors' expectations about inflation are kept in check. To fend off inflation, the Fed has boosted interest rates 17 times since June 2004. Wall Street is hoping the Fed will take a break in its credit-tightening campaign at its next meeting on Aug. 8. But some economists believe another rate increase will be needed to fight inflation.
http://news.yahoo.com/s/ap/20060728...5nqxQcB;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

 

[Fivetears]

Core inflation edges higher in June
WASHINGTON - Core U.S. consumer prices rose a moderate 0.2 percent in June for a third straight month, but the year-on-year rate hit a nearly four-year high, keeping financial markets on edge over a possible Federal Reserve interest-rate hike. In the same report, the Commerce Department said on Tuesday personal income rose 0.6 percent in June, with nominal spending up 0.4 percent.
http://news.yahoo.com/s/nm/20060801/bs_nm/economy_usa_dc_1

 

[Fivetears]

Stocks fall as reports fuel rate concerns
Investors worry that higher interest rates would slow economic growth and dent consumer spending, a key driver of corporate profits. Fed policy-makers will meet next Tuesday to decide on interest rates. Investors worry that higher interest rates would slow economic growth and dent consumer spending, a key driver of corporate profits. Fed policy-makers will meet next Tuesday to decide on interest rates.
http://news.yahoo.com/s/nm/20060801/bs_nm/markets_stocks_dc_21

 

[Fivetears]

Eastman Kodak Posts Seventh Consecutive Quarterly Loss, Moves to Eliminate 2,000 More Jobs
N.Y. - Eastman Kodak Co., scrambling to squeeze bigger profits from digital photography, posted its seventh quarterly loss in a row Tuesday and moved to axe 2,000 more jobs as it navigates a historic shift away from its waning film business. Its shares tumbled nearly 14 percent to their lowest close in 15 years. Kodak said Tuesday it is shifting manufacturing of digital cameras to Flextronics International Ltd. and transferring 550 employees to the Singapore-based company. Those will be among 2,000 jobs that Kodak is aiming to eliminate by the end of next year -- on top of 22,000 to 25,000 jobs already targeted since January 2004.
http://biz.yahoo.com/ap/060801/earns_kodak.html?.v=10

 

[Fivetears]

Natural gas prices soar with demand for electricity
WASHINGTON — Natural gas prices jumped to their highest in nearly six months Monday as hot weather across much of the USA led to increased demand for natural-gas-generated electricity. Natural gas trading for future delivery rose $1.027, or 14%, to $8.211 per thousand cubic feet as investors fretted about natural gas supplies. That was the biggest increase since December and the highest close since Feb. 3. The increase came as hot weather spread across the USA, leading to elevated demand for electricity. Pepco, which provides electricity to 745,000 customers in Washington, D.C., and Maryland, warned demand could hit records this week in the area, where temperatures were in the mid-90s Monday. Natural gas is a key source of electricity generation. When demand for air conditioning, and thus electricity, rises, natural gas supplies can decline if they are not replenished. This week's heat wave came after the Energy Department last week reported an unexpected decline in natural gas inventories.
http://www.usatoday.com/money/industries/energy/2006-07-31-natural-gas-usat_x.htm

 

[Fivetears]

Consumers cut spending in June
WASHINGTON — The economy is cooling but not folding. Consumer spending was more subdued in June while inflation lurked, but construction and manufacturing activity were solid and personal income was up, according to government and private data Tuesday. Also Tuesday, new Treasury Secretary Henry Paulson, in his maiden speech in office, told a New York audience that recent data show the economy "transitioning to a more sustainable rate of growth, similar to the pattern we saw in the mid-1990s." Paulson, former CEO of Goldman Sachs, called the forecast growth of Medicare and Social Security the main economic threat and said it must be faced. He also acknowledged many Americans were seeing wage gains "eaten up by high energy prices and rising health care costs, among others."
http://www.usatoday.com/money/economy/income/2006-08-01-consumer-june_x.htm

 

[Fivetears]

Disney World raises ticket prices
Florida - Walt Disney World is hiking ticket prices for the second time in 2006, raising the cost of a basic one-day, one-park admission to $67, according to a pricing chart posted on the company's media Web site. The $4 price increase takes effect on Sunday. "We're doing this to meet the production needs of the travel industry," Disney spokeswoman Jacquee Polak said on Saturday.
http://news.yahoo.com/s/nm/20060806/bs_nm/leisure_disney_dc_1

 

[Fivetears]

Price Checkers Comb Store Aisles to Assemble Government's Closely Watched Inflation Barometer
SILVER SPRING, Md. - Caren Gaffney would be the perfect contestant on "The Price is Right." She moves from store to store, meticulously combing the aisles and taking down prices. A head of Boston butterhead lettuce. A bottle of Advil. Car inspection. Diamond bracelet. Eyeglasses. A 50-foot black TV cable. Washing machine. It's an eclectic shopping list that comes from her employer, the U.S. government. The items that she prices -- and thousands of others -- are reflected in the government's most closely watched inflation barometer. The Consumer Price Index measures the prices shoppers pay for a market basket of goods and services. Gaffney is one of about 450 people who check prices on 96,000 items from thousands of merchants for the monthly reports assembled by the Labor Department's Bureau of Labor Statistics. "We price everything from condoms to cremations," says Katie Gollannek, branch chief in the bureau's division of price programs. The price collectors do what they have to do to get the job done. Crawl on floors. Paw through racks. Scale shelves. During busy times, Gaffney, an economic assistant who works part time, has visited about 45 stores in a 10-day period to get prices on 150 items.
http://biz.yahoo.com/ap/060806/price_patrol.html?.v=5

 

[Fivetears]

Consumer borrowing rises sharply in June
WASHINGTON - Americans increased their borrowing in June at a much faster pace than expected, with the rise led by higher credit card debt. The Federal Reserve reported Monday that consumer borrowing rose at an annual rate of 5.7 percent in June, up sharply from a 3.3 percent increase in May. The June advance reflected a rise in consumer debt of $10.27 billion at an annual rate, much larger than the $3.7 billion increase economists had been expecting. Analysts are expecting consumer borrowing to slow in coming months, reflecting the slowdown that has already occurred in consumer spending.
http://news.yahoo.com/s/ap/20060807...jZw7.kYaNuyBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

 

[Fivetears]

Fed may pause rate rises
WASHINGTON - U.S. Federal Reserve policy-makers on Tuesday may break the chain of interest-rate rises they began two years ago but economists say this won't necessarily mean they are laying down arms against inflation. The U.S. central bank faces a multi-pronged dilemma, trying to calibrate the eventual impact of past policy actions on a slowing economy that is simultaneously under pressure from rising energy and labor costs.
http://news.yahoo.com/s/nm/20060808...MQ3PQElLHyyBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

 

[Fivetears]

Wal-Mart increases starting pay, adds wage caps
Wal-Mart Stores is raising starting pay at a third of its nearly 4,000 U.S. stores an average 6% and introducing wage caps for the first time on each type of job in all stores, the company said Monday. The nation's largest private employer said the changes would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand. Wal-Mart has more than 1.3 million U.S. employees, who it refers to as associates. The retailer's pay and benefits have been under fire from union-backed critics, who call them skimpy. Wal-Mart has defended its average full-time hourly wage of $10.11 and launched lower cost health plans this year with premiums as low as $11 a month in some areas. The retailer did not specify the new starting rates or give examples for the new pay caps. Simley said the numbers vary too much by local market conditions across the country to provide an accurate average figure.
http://www.usatoday.com/money/industries/retail/2006-08-07-walmart-pay_x.htm

 

[Fivetears]

Productivity growth slows in the spring
WASHINGTON - The efficiency of American workers slowed sharply in the spring while a key gauge of labor costs rose at the fastest rate since late 2004. The Labor Department reported that productivity — the amount of output per hour of work — slowed to an annual rate of increase of 1.1 percent in the April-June quarter, down from a 4.3 percent rate of increase in the first three months of the year. Productivity is the key factor determining rising living standards. Strong growth in output allows businesses to pay their workers more without having to raise the cost of their products, which fuels inflation. The growth in productivity is often cited by the Federal Reserve as a reason that inflation pressures have been contained. But the combination of slowing productivity and rising labor costs is a recipe for rising inflation pressures down the road.
http://news.yahoo.com/s/ap/20060808...s8VGIayBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

 

[Pilgrim]

I think the data released this morning on slowing productivity and rising labor costs was available to the Fed at the start of their meeting yesterday. It greatly increases the chances that an announcement of a "pause" will be accompanied by harsh inflation rhetoric. Wish I had stayed all G for today.

 

[Fivetears]

Gas Prices Inch Up to Hit Another High
CAMARILLO, Calif. - Nationwide gas prices hit yet another record in the last three weeks, rising just over one cent to nearly $3.03 per gallon, according to a survey released Sunday. The national average for self-serve regular stood at $3.025 a gallon Friday, up 1.06 cents since July 21, according to the Lundberg Survey of 7,000 gas stations across the country.
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20060813&ID=5943142

 

[Fivetears]

Wall Street is back on inflation watch
NEW YORK - Investors got their long-awaited pause in interest rate hikes from the Federal Reserve last week. But perhaps they should've looked up the definition of the word "pause" before wishing so hard. In reality, they were looking for a stop. The Fed, didn't give Wall Street the sense of finality it was looking for. There are still inflationary pressures in the market, according to the Fed. If they increase, then the pause could last just five more weeks, until September's Fed meeting. While it's now more likely that the Fed will hold off, never underestimate Fed Chairman Ben Bernanke's fervor in trying to quash inflation. Investors are back on inflation watch, parsing each day's economic data in an attempt, vain as it likely will be, to predict the Fed's next move. Unfortunately, that's likely to mean more up-and-down trading and a market trapped in the same trading range it's been in all summer.
http://news.yahoo.com/s/ap/20060813...1kOTOeyBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

 

[Fivetears]

Homeowners say "Downsize Me!"
NEW YORK - Americans are carrying a lot of excess weight and desperately want to slim down. No, not their waistlines -- in the size of their homes. "Steeply deteriorating." "Hard landing." "Kaput." These are some of the terms used by analysts to describe the slowing of the U.S. housing market. And with the glory days of home-price appreciation now over, some homeowners are declaring, "Downsize Me!" A huge gap between the supply of homes for sale and demand for housing means prices are leveling off -- and could tumble.
http://news.yahoo.com/s/nm/20060813...cx5QyC71JCyBhIF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

 

[Fivetears]

Alaska Remains Heavily Dependent on Oil
BP PLC's decision last week to shut down part of the nation's largest oil field shows just how dependent the state has grown on oil, and how much it has to lose if the industry slips up. Alaska receives 89 percent of its income from oil revenue, and the state has no state sales tax and no personal income tax. Economist Patrick Burden also estimates that about a third of the state's overall economy is fueled by the oil industry. Another third is powered by state government, while the rest comes from other industries. Experts say the net effect of the oil industry on the large, sparsely populated state is huge. The industry, which drew workers here decades ago to build the massive trans-Alaskan pipeline, has continued to supply high-paying jobs that, in turn, feed spending in the service economy and other areas. Without oil, Alaska "would be a very, very small economy with limited infrastructure and vastly fewer people," said Burden, who is president of Northern Economics. Alaskans got a taste of what life without oil might look like last week, when Gov. Frank Murkowski instituted a state hiring freeze just days after BP said it would have to shut down the Prudhoe Bay oil field it operates because it had discovered leaks and severe corrosion in oil pipelines there.
http://biz.yahoo.com/ap/060813/oil_field_economy.html?.v=5

 

[Fivetears]

Economic Calendar
Aug 15
ICSC-UBS Store Sales (wk8/12 , 2006)
NY Empire State Index (Aug , 2006)
Producer Price Index (Jul , 2006)
Redbook (wk8/12 , 2006)
Treasury International Capital (Jun , 2006)
NAHB-WF Housing Market Index (Aug , 2006)
Aug 16
MBA Purchase Applications (wk8/11 , 2006)
Housing Starts (Jul , 2006)
Consumer Price Index (Jul , 2006)
Industrial Production (Jul , 2006)
Full list: http://money.cnn.com/markets/IRC/