Tuesday PM May 26th, 2009
by: Ed Mayberry, May 26, 2009 9:05:21 pm
A private research group says consumer confidence in May soared to the highest level since last September amid tentative signs that the economy is improving. The Conference Board says that its consumer confidence index, which had dramatically increased in April, zoomed past economists' expectations to 54.9 from a revised 40.8 in April. Economists surveyed by Thomson Reuters were expecting 42.3. The reading marks the highest reading since last September--three months before the official start of the recession--when the level was 61.4.
A widely watched index shows home prices fell at the sharpest rate ever in the first quarter. The Standard & Poor's/Case-Shiller national home price index reported home prices tumbled by 19.1 per cent in the first quarter--the most in its 21-year history. Home prices have fallen 32.2 percent since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002. The 20-city index fell by 18.7 per cent in March from the year before and the ten-city index lost 18.6 per cent. But the rate of decline for both indexes slowed for the second month in a row.
Proponents say walk-in retail clinics in grocery and drugstore chains can help the uninsured find health care. But a new study suggests most retail clinics aren't in the poorest neighborhoods. Industry leaders CVS Caremark and Deerfield-based Walgreens now run more than 1,200 retail clinics in the United States. Florida has the most with 147 clinics, followed by Texas, California, Illinois, Tennessee and Georgia. Like most businesses, they go where the money is—to more affluent neighborhoods, which already happen to be well-served by other medical resources. The study's results suggest financial incentives may be needed to lure the clinics to low-income neighborhoods. Only 123 clinics were located in areas defined by the federal government as medically underserved.
A Houston company is using the Web for its funeral planning service. Everest President and CEO Mark Duffey says consumers can comparison shop for funeral services in their communities by zip code.
"We don't sell funeral goods or services, we don't own funeral homes. All we do is provide advice and counseling—the best way to go about planning a service, and then to actually shop for and negotiate all the aspects of that funeral."Ed: "And you become like a middle man, is that what's happening?"
"Well, we become like an attorney. We're giving them advice. The consumer actually makes all their own choices. We're just getting them all the information in a format that's easy to understand to make those decisions."
Hartford Insurance recently partnered with Everest to allow workers that add or renew Hartford's group life insurance to access Everest's services for free.
Energy ministers from the Group of Eight Industrialized Countries urged their governments and the rest of the world to keep investing in new and cleaner energy sources, despite the economic crisis. Concluding a two-day summit in Rome, G-8 ministers and officials from 15 more countries said governments and businesses must also work to keep energy prices stable or risk hampering the economic recovery. In a joint declaration, the 23 national delegations urged investments to improve access to energy in poor countries and to develop new technologies to reduce emissions that cause climate change. U.S. Energy Secretary Steven Chu said the participants had agreed on the need for diversifying energy sources to help keep prices stable and help the economic recovery.
Business leaders meeting in Denmark have agreed to help world governments set a price on carbon, establishing a market that governments can use to cut greenhouse gases. One business leader, BP head Tony Hayward, says most executives he had spoken with agree the world "is going to establish a carbon price"—making carbon emissions a global commodity with a universally accepted price. The comments came at a global business summit where corporate leaders are focusing on how to help politicians negotiate a new global climate treaty. The current Kyoto treaty expires in 2012. They're talking about setting limits on carbon dioxide and then issuing permits to companies that divvy up how much of the overall pollution each of them can emit. Any unused portions could be traded to other companies.
A jump in oil prices to six-month highs despite anemic world demand is working against hard-line OPEC members advocating even costlier crude ahead of a meeting of the 12-nation organization—and in favor of those wanting to keep production levels steady. Formally, the meeting Thursday in Vienna could decide on a variety of options: cutting output levels, keeping them steady or raising them. But with prices high—and demand stubbornly low thanks to the worldwide recession—oil ministers will likely shrug off pressure from price hawks Iran and Venezuela to reduce output in an attempt to boost prices and opt to keep present levels.
A June 1st deadline looms for General Motors to restructure. This week is expected to bring more plant closures, employee concessions and other last-minute efforts. Without changes, the federal government has said, GM will have to file for bankruptcy protection by next Monday. The company has been trying to overhaul its business so it can keep receiving federal money to stay afloat as it deals with soaring costs and slumping sales.
General Motors will give the United Auto Workers 17.5 per cent of its common stock, $6.5 billion of preferred shares and a $2.5 billion note to fund a trust that will take over retiree health care costs starting next year. The funding for the trust is outlined in a summary of concessions that the company and union have agreed to as GM tries to restructure outside of bankruptcy. The summary was obtained by the Associated Press.
Canadian auto workers members have voted 86 per cent in favor of a cost-cutting deal with General Motors Canada. Union leader Ken Lewenza said in a release that the new deal should provide a much-needed sense of security. Lewenza has said the deal allows GM Canada to meet the cost benchmarks set by the Canadian government, namely cost cuts to become competitive with non-unionized Toyota Canada. The deal also stipulates that GM's car assembly and parts plants in Ontario will stay open.
The Obama administration plans to spend some $4 billion from the economic stimulus package to create so-called "green jobs," focused on making public housing more energy efficient. The money had been budgeted to renovate public housing. Housing Secretary Shaun Donovan will make the announcement at a meeting of President Barack Obama's Middle Class Task Force in Denver. Meanwhile, Labor Secretary Hilda Solis will announce that $500 million from the stimulus will be made available to train workers for the jobs. That includes $50 million for communities hit by job losses in the auto industry. Donovan and Solis also will announce plans for the Housing and Labor Departments to work together to make it easier for public housing residents to find training programs or a green job.
Emergency supply retailers and military surplus stores nationwide have seen business boom in the past few months as an increasing number of Americans spooked by the economy rush to stock up on gear that was once the domain of hardcore survivalists. These people snapping up everything from water purification tablets to thermal blankets shatter the survivalist stereotype: They are mostly urban professionals with mortgages, SUVs, solid jobs and a twinge of embarrassment about their newfound hobby. They say the dismal economy has made them prepare for financial collapse as if it were an oncoming Category 5 hurricane. They worry about rampant inflation, runs on banks, bare grocery shelves and widespread power failures that could make taps run dry.
Drought and a freeze have hurt the wheat crop in Oklahoma and Texas, cutting down on work for custom harvesters from Kansas who make a living off following the trail of ripening wheat. In Texas, drought already had damaged wheat fields before farmers received another setback—the late-season freeze. The U.S. Department of Agriculture says that state's producers will harvest only a third of its wheat fields. Officials estimate Oklahoma's crop will be cut in half. Pam Shmidl is operations manager of Hutchinson-based U.S. Custom Harvesters. She says the crop damage has meant less work for harvesters who travel around the states cutting wheat.
New home sales are the focus of this week's economic reports. Later this week, reports are scheduled on durable goods orders as well as a look at first quarter GDP.