Economic News: Things You Should Know

(10 am – promoted by ek hornbeck)

I thought that with all the discussion regarding the US economy recently, and after the Bear Stearns fire sale to J.P. Morgan, it might be a good time to look at what is going on in America, overall.

Now, remember!  Presnit Bush sez that we are in a bit of a rough patch, but that all the leading indicators show a robust economy!  Or somes such drivel.

Unemployment Claims Surge In Latest Week

New filings for unemployment claims rose more than expected last week, matching the highest level since 2005, according to a report released Thursday by the Labor Department.

According to the report, 378,000 people filed for unemployment for the first time in the week ended March 15, up 22,000 from a revised 356,000 reported in the previous week.

The 378,000 reading, which is subject to revision, matched the number reported for the week ended Jan. 26. New jobless claims last exceeded that number on Oct. 1, 2005 when they hit 385,000.

A consensus of economists polled by Briefing.com had expected to see initial jobless claims to rise by 4,000 to 360,000.

The level of new jobless claims can be used as a recession indicator. “I think it confirms that we’re in a recession, or at least in a period of negative growth,” said Ethan Harris, chief U.S. economist for Lehman Brothers.

Have you ever noticed that since the Bush administration has come into office (Thanks again, SCOTUS!) that when a number is adjusted, it is always worse than when first reported?  Coincidence, I’m sure.

Speaking of leading indicators, while I’m sure Presnit Bush has been getting some insider information that, no doubt is classified due to possible use by terrorists to fly hang-gliders into the front doors of neighborhood banks, some actual experts disagree.

Leading Indicators In 5th Straight Drop

The Conference Board’s measure’s down streak is longest since 2001.

An indicator of the economy’s future performance fell for the fifth straight month in February, the first time that has happened since 2001, according to a report released Thursday.

The index of leading U.S. economic indicators issued by The Conference Board, a business research group, fell 0.3% to 135 last month, extending the 0.1% decline logged in January. The decline was in line with economists’ expectations, according to a consensus compiled by Briefing.com.

The decline is “certainly reflective of a very slow economy,” said Ken Goldstein, an economist at the Conference Board. “But we still have strong fundamentals.”

The index has not declined for five consecutive months since 2001, when it fell from 114.3 in October of 2000 to 112 in April 2001. The National Bureau of Economic Recession said the nation’s economy went into recession from March through November 2001.

Yet, do remember that the fundimentals are still strong!  Therefore, when Bushie tells us that we ARE NOT in a RECESSION right now, you will need to use your own judgement.

Bushie says UP, I say DOWN.  If you get my drift.

A Slice of Pizza Gets Pricier

Rising wheat prices are pushing up costs for baked goods, and foods from muffins to pizza are getting more expensive.

Pizzeria owner Joe Vicari shakes his head as he prepares to rip open a 50-pound bag of flour for another batch of dough.

“That’s 37-bucks. $37. I couldn’t believe it!” says Vicari.

Since opening Mariella Pizza in mid-town Manhattan 30-years ago, Vicari, says he has never experienced such a jump in the cost of his ingredients.

“I can’t even believe how much the flour [goes] up. When I see the bill I can’t believe it, that’s too much,” says the veteran pizza maker, who emigrated from Sicily. Only four weeks ago, Vicari says, he was paying just $16-a-bag for Gold Medal brand flour, which at $37-a-bag now seems more golden than ever.

Vicari struggles with the thought of raising the price of a slice, which he lifted to $2.50 only a few months ago due to an increase in cheese costs.

“Over here people come to buy pizza, working people. How much [am] I going to raise the pizza now?” asks Vicari. “Somebody come in here for two slices, and I take $5. I feel very, very bad for the person.”

But, he concedes, if flour rises a few dollars more, above $40-a-bag, he probably will pass along the higher expense to customers.

The cost of cereals and bakery products climbed at an annual rate of more than 9% last month, according to the Bureau of Labor Statistics, compared to a rise in the overall Consumer Price Index during the past 12 months of 4%.

Yikes!  Prices more than double in one month!  Flour?  Staple food ingredient that is used, like, more than any other staple food ingredient.  

Get used to eating cheeseless pizza baked directly on a plate.  Or something.

Now for the GOOD NEWS!

Gas Prices Edge Lower

Average price of a gallon of regular continues to pull back, according to motorist group survey.

The nationwide average price of gasoline continued to head lower Thursday, according to a survey conducted for the motorist group AAA.

The average price for regular unleaded fell slightly to $3.275 a gallon, down from $3.279 Wednesday, according to AAA’s Web site. That’s down a full penny from the record high of $3.285 reported on Sunday. The average price-per-gallon of diesel fuel continued to rise, hitting a record high of $4.033.

Regular was $3.032 on average at this time last month and $2.564 a year ago, according to the AAA. Diesel was $3.454 a month ago, and $2.744 at this time last year.

Remember when $2.744 per gallon seemed obscene?  Ah, the good ol’ days!

Dollar Gains Against Euro

Greenback strengthens following a smaller-than-expected interest rate cut and news of mortgage-related writedowns by a major European bank.

The dollar was up versus the 15-nation euro Thursday as regulators halted trading in IKB Deutsche Industriebank AG, which reported more mortgage-related write-downs.

The euro bought $1.5443 in morning European trading, below the $1.5613 it bought the night before in New York and well off its all-time high of $1.5904 set Monday.

The dollar dropped to 99.59 Japanese yen from 100.00 yen the night before, above its 12-year low of 95.77 set on Tuesday. The British pound drifted lower to $1.9817 from the $1.9849 it bought in New York the night before.

James Hughes, a currency analyst at CMC Markets in London, said the dollar’s rise was helped by the three-fourths of a percent rate cut by the U.S. Federal Reserve Bank on Tuesday, but said markets are keenly aware that more rate cuts could in fact weaken the dollar and push the euro back upward.

“That smaller-than-expected rate cut by the Fed on Tuesday continues to trouble some investors and has helped lend some support to the greenback over the past 36 hours, but consensus remains that further softening of monetary policy will be seen in the U.S. and this sentiment could well initiate a resumption of selling pressures on the dollar as we approach the weekend break,” he said.

There are lots of things going on behind the scenes, so each day will bring new information concerning our financial realities.  

Remember, keep your eyes and ears open and be vigilant.