Sales pace of new homes in July grew 2.4%, due to a large downward revision in sales from the previous month. Unadjusted monthly sales fall to 13-year low.
The government offered more discouraging news about the housing sector on Tuesday, reporting that new home sales rose slightly in July only after revising the previous month's number sharply lower.
Sales for July came in at a seasonally adjusted annual rate of 515,000, up 2.4% from 503,000 in the previous month, the Census Bureau reported. Last month, Census had put the June figure at 530,000.
The change marks the fourth of the past five reports that Census has slashed the previous month's number. The trend worries economists who say a hoped-for stabilization of the housing market remains elusive.
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Wednesday, August 27, 2008
Read his lips: Don't bank on bailouts, Bernanke warns
The great Wall Street bailout of 2008 keeps growing. For Bear Stearns, $30-billion (U.S.). Perhaps as much as $100-billion for Fannie Mae and Freddie Mac. Tens of billions of dollars in discounted short-term loans to investment banks. And lower interest rates for everyone.
So where will it all end? In a dark hole of moral hazard, unless the United States overhauls and strengthens its financial system, and that's according to one of the key architects of the bailout.
U.S. Federal Reserve Board chairman Ben Bernanke warned last week that the government's safety net for brokers, banks and mortgage lenders won't necessarily be there in the future. The rescue of Bear Stearns earlier this year was the exception, not the rule, he said, offering his fullest explanation yet of its year-long campaign to ease the credit crisis.
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So where will it all end? In a dark hole of moral hazard, unless the United States overhauls and strengthens its financial system, and that's according to one of the key architects of the bailout.
U.S. Federal Reserve Board chairman Ben Bernanke warned last week that the government's safety net for brokers, banks and mortgage lenders won't necessarily be there in the future. The rescue of Bear Stearns earlier this year was the exception, not the rule, he said, offering his fullest explanation yet of its year-long campaign to ease the credit crisis.
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Regulators step up action on U.S. banks: report
Federal regulators have raised the number of struggling U.S. banks they have effectively put on probation, forcing them to fix their problems to avoid potential failures, the Wall Street Journal said on Monday.
The two main U.S. bank regulators -- the Federal Reserve and the Office of the Comptroller of the Currency -- have issued more memorandums of understanding this year than they did for all of 2007, the Journal said, citing data obtained from regulators under Freedom of Information Act requests.
Banks don't have to disclose the memorandums, which are an early-warning system about troubled banks but are not meant to imply a bank is at risk of failing, the Journal said. They are often a precursor to more severe, publicly disclosed enforcement actions if conditions do not improve.
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The two main U.S. bank regulators -- the Federal Reserve and the Office of the Comptroller of the Currency -- have issued more memorandums of understanding this year than they did for all of 2007, the Journal said, citing data obtained from regulators under Freedom of Information Act requests.
Banks don't have to disclose the memorandums, which are an early-warning system about troubled banks but are not meant to imply a bank is at risk of failing, the Journal said. They are often a precursor to more severe, publicly disclosed enforcement actions if conditions do not improve.
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Japan Goes on Buying Spree, Shrugging Off '80s Bubble
Japanese companies are increasing overseas acquisitions, using their cash-hoards to snap up assets beaten down by the global credit crisis and economic slowdown.
The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout.
Takeovers by companies including TDK Corp. and Daiichi Sankyo Co. are putting Japan on course for its biggest buying spree since the 1980s bubble, when Japanese buyers overpaid for assets like New York City's Rockefeller Center and California's Pebble Beach Golf Links.
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The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout.
Takeovers by companies including TDK Corp. and Daiichi Sankyo Co. are putting Japan on course for its biggest buying spree since the 1980s bubble, when Japanese buyers overpaid for assets like New York City's Rockefeller Center and California's Pebble Beach Golf Links.
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Tuesday, August 19, 2008
Home building at 17-year low
Housing starts and permits both fall sharply in July to levels not seen since 1991 recession.
Home building fell sharply in July to a 17-year low, according to government readings released Tuesday that offered fresh signs that the battered real estate market has yet to hit bottom.
Housing starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.
Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.
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Home building fell sharply in July to a 17-year low, according to government readings released Tuesday that offered fresh signs that the battered real estate market has yet to hit bottom.
Housing starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.
Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.
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Stagflation? Or just stagnation?
The inflation figures for July were ugly. But oil prices have fallen and the dollar has strengthened in August. Too bad a global slowdown is the reason.
Two key reports in the past week show that inflation was running high in July. But August is offering relief.
Oil has fallen to about $112 a barrel, nearly 25% from its mid-July record high. Gas prices have declined for 33 consecutive days. After flirting with $1,000 an ounce last month, the price of gold is now below $800.
And the dollar? It's gained more than 8% against the euro in the past few weeks.
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Two key reports in the past week show that inflation was running high in July. But August is offering relief.
Oil has fallen to about $112 a barrel, nearly 25% from its mid-July record high. Gas prices have declined for 33 consecutive days. After flirting with $1,000 an ounce last month, the price of gold is now below $800.
And the dollar? It's gained more than 8% against the euro in the past few weeks.
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Wholesale prices rising at fastest pace since 1981
Wholesale inflation surged in July, leaving prices for the past year rising at the fastest pace in 27 years, according to government data released Tuesday.
The Labor Department reported that wholesale prices shot up 1.2 percent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 percent gain that economists expected.
Core prices, which exclude food and energy, rose 0.7 percent. That increase was the biggest since November 2006 and more than triple the 0.2 percent rise in core prices that had been expected.
In other economic news, the Commerce Department reported that housing construction fell in July to the lowest pace in more than 17 years. Builders broke ground on 965,000 housing units at a seasonally adjusted annual rate last month — the weakest showing since March 1991 — as the housing industry continues to struggle with falling sales and rising mortgage foreclosures.
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The Labor Department reported that wholesale prices shot up 1.2 percent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 percent gain that economists expected.
Core prices, which exclude food and energy, rose 0.7 percent. That increase was the biggest since November 2006 and more than triple the 0.2 percent rise in core prices that had been expected.
In other economic news, the Commerce Department reported that housing construction fell in July to the lowest pace in more than 17 years. Builders broke ground on 965,000 housing units at a seasonally adjusted annual rate last month — the weakest showing since March 1991 — as the housing industry continues to struggle with falling sales and rising mortgage foreclosures.
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Monday, August 11, 2008
Dollar Gain Signals Pain; Rally Prompts Exit
Just because the dollar posted its biggest gain against the euro in almost eight years doesn't mean the U.S. currency won't continue to be plagued by the nation's slowing economy, widening budget and trade deficits and negative inflation-adjusted interest rates.
The 4 percent surge against the single European currency this month was enough to prompt Bank of America Corp. to tell its customers to exit trades betting on more gains. Morgan Stanley still forecasts the greenback will approach a record low by October as the U.S. housing slump and credit-market losses keep the Federal Reserve from raising interest rates this year.
Barclays Plc in London and New York-based Merrill Lynch & Co. said trading patterns suggest the dollar's 5.1 percent gain in the past three weeks measured by an index of six major trading partners can't be sustained.
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The 4 percent surge against the single European currency this month was enough to prompt Bank of America Corp. to tell its customers to exit trades betting on more gains. Morgan Stanley still forecasts the greenback will approach a record low by October as the U.S. housing slump and credit-market losses keep the Federal Reserve from raising interest rates this year.
Barclays Plc in London and New York-based Merrill Lynch & Co. said trading patterns suggest the dollar's 5.1 percent gain in the past three weeks measured by an index of six major trading partners can't be sustained.
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FDIC Fund Strained by Bank Failures May Have to Raise Premiums
The failure of IndyMac Bancorp Inc. and seven other banks this year may erase as much as 17 percent of a government insurance fund and raise premiums for all banks, from Franklin National of Minneapolis to Bank of America Corp.
The closing of IndyMac in July, the third-biggest U.S. bank failure, may cost the fund $4 billion to $8 billion, in addition to an estimated $1.16 billion for seven closures through Aug. 1. Premiums for deposit insurance will likely rise, FDIC Chairman Sheila Bair said in a July 30 interview. A decision on the increase is due by the fourth quarter.
``It's going to be a bloody, expensive mess for the banking industry,'' said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. ``Healthy banks are paying for the mistakes made by failed banks.''
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The closing of IndyMac in July, the third-biggest U.S. bank failure, may cost the fund $4 billion to $8 billion, in addition to an estimated $1.16 billion for seven closures through Aug. 1. Premiums for deposit insurance will likely rise, FDIC Chairman Sheila Bair said in a July 30 interview. A decision on the increase is due by the fourth quarter.
``It's going to be a bloody, expensive mess for the banking industry,'' said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. ``Healthy banks are paying for the mistakes made by failed banks.''
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US Appeals against WTO Verdict
The United States has appealed a World Trade Organization decision upholding Indian import taxes on wine and spirits citing that its findings were based on erroneous findings on issues of law when it rejected in February the US complaint over extra duties applied by India.
The U.S. appeal was filed last week and has been posted on the WTO's Web site. US had made it clear at the time of rejection of its claim that it would appeal the decision. At the time the original complaint was filed, the issue related only to the Additional Duties.
The verdict was not a total loss for the United States because India did waive Additional duties in July 2007 buckling under heavy pressure from the US and Europe. On 24 May 2007, the United States had requested the establishment of a panel which was composed on 3 July 2007. Next day, the government had announced eliminating the Additional Duties.
EU had dropped its complaint as a result. However, Washington continued to press its case, numbered DS360R. Its complaint was rejected by WTO in February this year.
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The U.S. appeal was filed last week and has been posted on the WTO's Web site. US had made it clear at the time of rejection of its claim that it would appeal the decision. At the time the original complaint was filed, the issue related only to the Additional Duties.
The verdict was not a total loss for the United States because India did waive Additional duties in July 2007 buckling under heavy pressure from the US and Europe. On 24 May 2007, the United States had requested the establishment of a panel which was composed on 3 July 2007. Next day, the government had announced eliminating the Additional Duties.
EU had dropped its complaint as a result. However, Washington continued to press its case, numbered DS360R. Its complaint was rejected by WTO in February this year.
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Slump in U.S. to Worsen as Consumers Get `Squeezed'
The U.S. economic slump will extend into 2009 as the longest expansion in consumer spending on record comes to an end, according to a Bloomberg News survey.
The world's largest economy will grow at an average 0.7 percent annual pace from July through December, half the gain in the first six months of the year, according to the median forecast of 50 economists surveyed from Aug. 1 to Aug. 8.
Household spending, which has grown every quarter since 1992, is projected to stall in the last three months of the year as the impact of tax rebates fades, wages fail to keep up with inflation and property values fall. The jobless rate, now at 5.7 percent, will reach a five-year high of 6 percent in early 2009.
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The world's largest economy will grow at an average 0.7 percent annual pace from July through December, half the gain in the first six months of the year, according to the median forecast of 50 economists surveyed from Aug. 1 to Aug. 8.
Household spending, which has grown every quarter since 1992, is projected to stall in the last three months of the year as the impact of tax rebates fades, wages fail to keep up with inflation and property values fall. The jobless rate, now at 5.7 percent, will reach a five-year high of 6 percent in early 2009.
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Thursday, August 7, 2008
Foreclosure crisis: The $4 billion fix
Washington will give funds to states and cities to rehab houses. Proponents say it will help stabilize neighborhoods, but others say it's too little to do much good.
City officials and community activists can't wait to get their hands on nearly $4 billion the federal government is about to inject into blighted neighborhoods suffering from record foreclosures.
Opponents of the measure say the paltry sum won't do much good considering the number of vacant homes on the market - one million families are expected to lose their homes this year - and will more likely turn into a political boondoggle.
It remains to be seen which side is right. But the program - part of the massive housing rescue bill Bush enacted last month despite his own misgivings - will serve as one test of Washington's ability to mitigate the foreclosure crisis.
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City officials and community activists can't wait to get their hands on nearly $4 billion the federal government is about to inject into blighted neighborhoods suffering from record foreclosures.
Opponents of the measure say the paltry sum won't do much good considering the number of vacant homes on the market - one million families are expected to lose their homes this year - and will more likely turn into a political boondoggle.
It remains to be seen which side is right. But the program - part of the massive housing rescue bill Bush enacted last month despite his own misgivings - will serve as one test of Washington's ability to mitigate the foreclosure crisis.
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July retail sales weaken as tax rebates dry up
Retailers, including Wal-Mart Stores Inc and Target Corp, posted disappointing July sales results on Thursday as shoppers ran out of extra tax rebate cash, diminishing the outlook for the current back-to-school shopping season.
The sales results, along with cautious outlooks for August, left little hope that there would be a lasting boost from tax rebate checks to prop up consumers headed into the back half of the year and the all-important December holiday season.
"The stimulus (checks) really had a marginal effect at best and it has run its course and there's no carry-through," said Retail Metrics President Ken Perkins. "It's difficult to see where some sort of boost in spending is going to come from."
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The sales results, along with cautious outlooks for August, left little hope that there would be a lasting boost from tax rebate checks to prop up consumers headed into the back half of the year and the all-important December holiday season.
"The stimulus (checks) really had a marginal effect at best and it has run its course and there's no carry-through," said Retail Metrics President Ken Perkins. "It's difficult to see where some sort of boost in spending is going to come from."
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U.S. weekly initial jobless claims rise to 455,000
Claims stay unusually high as more workers take advantage of benefits
First-time claims for jobless benefits remained unusually high in the latest week as more workers took advantage of states' efforts to sign them up for unemployment insurance, the Labor Department said Thursday.
Claims for the week ended Aug. 2 rose to 455,000, a gain of 7,000 from the prior week. The figure was the highest in more than six years.
Many economists see claims above 400,000 as a sign of recession.
Investors reacted negatively to the uptick in unemployment claims. See Market Snapshot.
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First-time claims for jobless benefits remained unusually high in the latest week as more workers took advantage of states' efforts to sign them up for unemployment insurance, the Labor Department said Thursday.
Claims for the week ended Aug. 2 rose to 455,000, a gain of 7,000 from the prior week. The figure was the highest in more than six years.
Many economists see claims above 400,000 as a sign of recession.
Investors reacted negatively to the uptick in unemployment claims. See Market Snapshot.
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Wind Power Is Poised To Support U.S. Jobs
The U.S. Department of Energy contends that wind power can provide 20 percent of the nation’s electricity by 2030.
(NAPSI)- In 2007, wind was already one of the fastest-growing sources of electricity in U.S. households, and the U.S. Department of Energy contends that wind power can provide 20 percent of the nation’s electricity by 2030 and be a critical part of the solution to global warming.
Some say achieving a 20 percent wind contribution to U.S. electricity supply would:
• Reduce carbon dioxide emissions from electricity generation by 25 percent by 2030;
• Reduce natural gas use by 11 percent;
• Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030.
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(NAPSI)- In 2007, wind was already one of the fastest-growing sources of electricity in U.S. households, and the U.S. Department of Energy contends that wind power can provide 20 percent of the nation’s electricity by 2030 and be a critical part of the solution to global warming.
Some say achieving a 20 percent wind contribution to U.S. electricity supply would:
• Reduce carbon dioxide emissions from electricity generation by 25 percent by 2030;
• Reduce natural gas use by 11 percent;
• Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030.
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Tuesday, August 5, 2008
Putting Obama's energy plan to the test
Obama's proposed release of 70 million barrels of oil from the strategic reserve could lower crude prices, experts say. But the impact of his broader overhaul is less clear.
Democratic presidential candidate Barack Obama said Monday that he feels Americans' pain from rising energy costs and laid out his plan to break the country's "addiction" to oil.
Much of Obama's energy plan had been outlined before. But some of his ideas - such as tapping the Strategic Petroleum Reserve and allowing a "limited amount" of offshore drilling - were new to his campaign.
Overall, analysts welcomed Obama's plan, which included both short-term and long-term proposals. But they stressed that for the plan would need bipartisan support to succeed.
Obama said a short-term proposal, like selling crude oil from the Strategic Petroleum Reserve, "has lowered gas prices within two weeks" in the past.
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Democratic presidential candidate Barack Obama said Monday that he feels Americans' pain from rising energy costs and laid out his plan to break the country's "addiction" to oil.
Much of Obama's energy plan had been outlined before. But some of his ideas - such as tapping the Strategic Petroleum Reserve and allowing a "limited amount" of offshore drilling - were new to his campaign.
Overall, analysts welcomed Obama's plan, which included both short-term and long-term proposals. But they stressed that for the plan would need bipartisan support to succeed.
Obama said a short-term proposal, like selling crude oil from the Strategic Petroleum Reserve, "has lowered gas prices within two weeks" in the past.
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Oil falls as low as $118 on demand concerns
Oil prices kept falling Tuesday, sinking as low as $118 a barrel on growing concerns that a U.S. economic slowdown and high energy costs are curbing consumer demand for gasoline and other petroleum products.
Crude's decline is giving Americans more relief at the pump. A gallon of regular gasoline on average fell another penny overnight to $3.871, according to auto club AAA, the Oil Price Information Service and Wright Express. Gas prices have fallen four straight weeks for the first time in December; prices are off 5.9 percent from their July high as U.S. motorists cut back on their driving to save money.
A day after plunging as much as $5 a barrel in a dramatic sell-off, crude continued its downward trend Tuesday as traders sold oil contracts on the belief that prices are still too high in relation to demand and have further room to fall.
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Crude's decline is giving Americans more relief at the pump. A gallon of regular gasoline on average fell another penny overnight to $3.871, according to auto club AAA, the Oil Price Information Service and Wright Express. Gas prices have fallen four straight weeks for the first time in December; prices are off 5.9 percent from their July high as U.S. motorists cut back on their driving to save money.
A day after plunging as much as $5 a barrel in a dramatic sell-off, crude continued its downward trend Tuesday as traders sold oil contracts on the belief that prices are still too high in relation to demand and have further room to fall.
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No change expected in Fed interest rates
The Federal Reserve, caught between mounting job losses and rising inflation, is likely to sit tight and hope that the interest rate cuts it has already provided will be enough to heal a sick economy.
The central bank started Tuesday's meeting with a new member. Elizabeth Duke, formerly an officer at a Virginia-based community bank, was sworn in by Fed Chairman Ben Bernanke before the closed-door deliberations got under way.
Private economists believe that when the central bank will decide during the discussions Tuesday to leave its target for the federal funds rate, the interest that banks charge each other, at 2 percent.
Bernanke and his colleagues are being forced to navigate treacherous waters, trying to keep the economy from plunging into a deep recession while worrying about keeping interest rates so low that they could trigger a dangerous inflation spiral.
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The central bank started Tuesday's meeting with a new member. Elizabeth Duke, formerly an officer at a Virginia-based community bank, was sworn in by Fed Chairman Ben Bernanke before the closed-door deliberations got under way.
Private economists believe that when the central bank will decide during the discussions Tuesday to leave its target for the federal funds rate, the interest that banks charge each other, at 2 percent.
Bernanke and his colleagues are being forced to navigate treacherous waters, trying to keep the economy from plunging into a deep recession while worrying about keeping interest rates so low that they could trigger a dangerous inflation spiral.
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Monday, August 4, 2008
A second, far larger wave of U.S. mortgage defaults is building
The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is building with alarming speed.
After two years of upward spiraling defaults, the problems with mortgages made to people with weak, or subprime, credit are showing the first, tentative signs of leveling off.
But with the U.S. economy struggling, homeowners with better credit are now falling behind on their payments in growing numbers. The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.
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After two years of upward spiraling defaults, the problems with mortgages made to people with weak, or subprime, credit are showing the first, tentative signs of leveling off.
But with the U.S. economy struggling, homeowners with better credit are now falling behind on their payments in growing numbers. The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.
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In a shift, Obama says tap oil reserves
Barack Obama proposed on Monday tapping the strategic oil reserve to help lower gas prices, a reversal of an earlier stance, and called rival John McCain a tool of big oil companies as rising energy costs took center stage in the U.S. presidential campaign.
Obama, celebrating his 47th birthday, released a new ad hitting McCain's contributions from big oil firms. In a Michigan speech, he proposed releasing 70 million barrels of light oil, easier to refine into gasoline, from the emergency U.S. stockpile.
The Democratic senator from Illinois, who also proposed a series of steps to reduce long-term dependence on foreign oil, said the light oil could be replaced later with heavier crude in a swap designed to bring quick relief from high gasoline prices.
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Obama, celebrating his 47th birthday, released a new ad hitting McCain's contributions from big oil firms. In a Michigan speech, he proposed releasing 70 million barrels of light oil, easier to refine into gasoline, from the emergency U.S. stockpile.
The Democratic senator from Illinois, who also proposed a series of steps to reduce long-term dependence on foreign oil, said the light oil could be replaced later with heavier crude in a swap designed to bring quick relief from high gasoline prices.
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Oil prices drop about $4 after storm threat eases
Oil prices plunged in a massive sell-off Monday, falling below $120 a barrel for the first time since early May after Tropical Storm Edouard appeared unlikely to threaten oil and natural gas facilities in the Gulf of Mexico.
Also weighing on prices was a report by the Commerce Department that consumer spending fell in June as shoppers dealt with higher prices for gasoline, food and other items. That fed investors' beliefs that a U.S. economic slowdown is forcing Americans to cut back on energy use.
Light, sweet crude for September delivery fell more than $5 at one point to $119.50 a barrel on the New York Mercantile Exchange, its lowest level since May 6. The contract later recovered slightly, trading $3.92 lower, or 3.13 percent, at $121.18 a barrel. Crude has now fallen in six of the last nine sessions and has shaved 18 percent off its trading record of $147.27 reached July 11.
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Also weighing on prices was a report by the Commerce Department that consumer spending fell in June as shoppers dealt with higher prices for gasoline, food and other items. That fed investors' beliefs that a U.S. economic slowdown is forcing Americans to cut back on energy use.
Light, sweet crude for September delivery fell more than $5 at one point to $119.50 a barrel on the New York Mercantile Exchange, its lowest level since May 6. The contract later recovered slightly, trading $3.92 lower, or 3.13 percent, at $121.18 a barrel. Crude has now fallen in six of the last nine sessions and has shaved 18 percent off its trading record of $147.27 reached July 11.
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U.S. Spending Rises; Prices Jump the Most Since 2005
The biggest increase in prices in almost three years eroded consumers' buying power in June, diminishing the boost from the government's tax rebates.
Consumer inflation climbed 0.8 percent, the most since September 2005, the Commerce Department said today in Washington. Spending increased 0.6 percent after a 0.8 percent gain in May.
The tax rebates from the government's stimulus plan will provide only a temporary boost for Americans in the face of $4-a- gallon gasoline, tumbling home prices and mounting job losses. The Federal Reserve is projected to hold interest rates unchanged tomorrow as the risks of both faster inflation and slower growth mount.
``There is a bit more inflation pressure than many people anticipated,'' said Kevin Logan, a senior market economist at Dresdner Kleinwort in New York, who correctly forecast the gain in spending. ``Inflation pressure is more widespread and that has to be some concern for the Fed. The tax cuts have helped maintain spending, but it's likely to drop off pretty dramatically in the fourth quarter.''
Read Complete StoryDollar falls on weak economic reports
Greenback retreats after a worse-than-expected GDP report and a jump in unemployment claims.
The dollar lost ground against major currencies Thursday, after a report showed the economy grew less that expected over the past several months, and jobless claims reached the highest levels since 2003.
The euro traded at $1.5598, up from $1.5574 the night before in New York trading. The dollar also fell to ¥107.84, down from ¥108.04 a day earlier.
GDP: The U.S. Commerce Department said the gross domestic product rose at an annual rate of 1.9% through the second quarter, a significant jump over the first quarter, but less than predicted. Analysts polled by Briefing.com had expected an increase of 2.3%.
The government also revised economic growth through the last three months of 2007 downward, showing the economy retracted by a 0.2% annual rate during the period.
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The dollar lost ground against major currencies Thursday, after a report showed the economy grew less that expected over the past several months, and jobless claims reached the highest levels since 2003.
The euro traded at $1.5598, up from $1.5574 the night before in New York trading. The dollar also fell to ¥107.84, down from ¥108.04 a day earlier.
GDP: The U.S. Commerce Department said the gross domestic product rose at an annual rate of 1.9% through the second quarter, a significant jump over the first quarter, but less than predicted. Analysts polled by Briefing.com had expected an increase of 2.3%.
The government also revised economic growth through the last three months of 2007 downward, showing the economy retracted by a 0.2% annual rate during the period.
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Looming job cuts march on - report
The number of job cuts announced in July jumps 26%. Airlines and financial firms top the list, according to a monthly study.
The nation's employers continue to put jobs on the chopping block at a steep rate as the economy struggles, according to a new report.
Challenger, Gray & Christmas, an outplacement consultancy firm, said Monday that planned job cuts announced by employers in July jumped 26% to 103,312 from 81,755 announced in June.
That's up 141% from a year ago, when employers announced planned job cuts totaling 42,897.
The July figure marks the second-highest number of planned job cuts this year, rivaling the May reading that showed 103,522.
"We have seen job cuts increase in the majority of industries that we track," John Challenger, chief executive of Challenger, Gray & Christmas, said in a statement.
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The nation's employers continue to put jobs on the chopping block at a steep rate as the economy struggles, according to a new report.
Challenger, Gray & Christmas, an outplacement consultancy firm, said Monday that planned job cuts announced by employers in July jumped 26% to 103,312 from 81,755 announced in June.
That's up 141% from a year ago, when employers announced planned job cuts totaling 42,897.
The July figure marks the second-highest number of planned job cuts this year, rivaling the May reading that showed 103,522.
"We have seen job cuts increase in the majority of industries that we track," John Challenger, chief executive of Challenger, Gray & Christmas, said in a statement.
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Friday, August 1, 2008
Manufacturing flat in July as exports keep growing
U.S. manufacturers' business was flat in July, as higher prices and tight credit kept them from expanding, but exports propped them up.
The Institute for Supply Management said its reading of activity from the country's producers of cars, airplanes, appliances and food hit 50, down from 50.2 in June.
That beat economists' prediction of a reading of 49.2, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.
The report has been hovering near 50, which economists call "the boom-bust line," for the last 12 months.
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The Institute for Supply Management said its reading of activity from the country's producers of cars, airplanes, appliances and food hit 50, down from 50.2 in June.
That beat economists' prediction of a reading of 49.2, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.
The report has been hovering near 50, which economists call "the boom-bust line," for the last 12 months.
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Jobless rate rises to 4-year high of 5.7 percent
The nation's unemployment rate climbed to a four-year high of 5.7 percent in July as employers cut 51,000 jobs, dashing the hopes of an influx of young people looking for summer work.
Payroll cuts weren't as deep as the 72,000 predicted by economists, however. And, job losses for both May and June were smaller than previously reported.
July's reductions marked the seventh straight month where employers eliminated jobs. The economy has lost a total of 463,00 jobs so far this year.
The latest snapshot, released by the Labor Department on Friday, showed a lack of credit has stunted employers' expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.
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Payroll cuts weren't as deep as the 72,000 predicted by economists, however. And, job losses for both May and June were smaller than previously reported.
July's reductions marked the seventh straight month where employers eliminated jobs. The economy has lost a total of 463,00 jobs so far this year.
The latest snapshot, released by the Labor Department on Friday, showed a lack of credit has stunted employers' expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.
Read Complete Story
U.S. Economy: Growth Rate Falls Short of Forecasts
The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than investors had anticipated.
``We're in a recession,'' Allen Sinai, chief economist at Decision Economics Inc. in New York, said in a Bloomberg Television interview. ``It's going to widen, it's going to deepen.''
The last time the economy contracted was in 2001. It may weaken further as the temporary boost from tax rebates, which aided a pick-up in gross domestic product last quarter from the previous three months, fades. Stocks dropped, Treasuries rallied and traders reduced bets that the Federal Reserve will raise interest rates this year.
``This confirms the general picture of weakness, but it is surprising that GDP declined,'' said Martin Feldstein, who headed the National Bureau of Economic Research until June and serves on the group's recession-dating panel. He added that today's figures underscored his estimate that a downturn began in December or January. ``I don't see a recovery'' on the horizon, he said.
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``We're in a recession,'' Allen Sinai, chief economist at Decision Economics Inc. in New York, said in a Bloomberg Television interview. ``It's going to widen, it's going to deepen.''
The last time the economy contracted was in 2001. It may weaken further as the temporary boost from tax rebates, which aided a pick-up in gross domestic product last quarter from the previous three months, fades. Stocks dropped, Treasuries rallied and traders reduced bets that the Federal Reserve will raise interest rates this year.
``This confirms the general picture of weakness, but it is surprising that GDP declined,'' said Martin Feldstein, who headed the National Bureau of Economic Research until June and serves on the group's recession-dating panel. He added that today's figures underscored his estimate that a downturn began in December or January. ``I don't see a recovery'' on the horizon, he said.
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