The number of first-time filers for unemployment insurance fell more than expected last week, according to a weekly government report released Thursday.
There were 473,000 initial jobless claims filed in the week ended Aug. 21, down 31,000 from an upwardly revised 504,000 the previous week, according to the Labor Department’s weekly report.
Economists surveyed by Briefing.com were expecting new claims to fall to 485,000.
Claims had been stuck in the mid- to upper-400,000 range for about nine months, but spiked above 500,000 for the first time since November in last week’s report.
"The latest numbers provide a sigh of relief to stressed financial markets and at least uphold the possibility that the economy can avoid a double-dip recession," said economist John Lonski, of Moody’s Economy.com. "But we still need to establish a declining trend for jobless claims so we can feel more confident in the economic recovery."
The 4-week moving average of initial claims — a number that tries to smooth out week-to-week volatility — was 486,750, up 3,250 from the previous week.
Lonski said that figure needs to break below 450,000 and set new lows in order to improve the outlook for the job market, which he is optimistic about.
"Given that business sales rebounded in July after two months of decreases, companies may hold on to more employees, if not hire more," he said business card templates. "So it’s conceivable that that latest decline in jobless claims will be the first in a series of such declines."
Continuing claims: The government said 4.46 million people continued to file unemployment claims for their second week or more, during the week ended Aug. 14, the most recent data available. That’s down 62,000 from an upwardly revised 4.52 million the week before.
Continuing claims reflect people who file each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, or people who have exhausted their benefits but are still out of a job.
The 4-week moving average for ongoing claims fell by 28,000 to 4.51 million.
State-by-state: Jobless claims in eight states declined by more than 1,000 in the week ended Aug. 15, which is the most recent state data available. Claims in California dropped the most, by 5,275. The state attributed the drop to fewer layoffs in the service and manufacturing industries.
Claims jumped by more than 1,000 in Wisconsin and Puerto Rico.
fast cash loan is fast becoming a viable financial option for consumers who need a few extra dollars.
Attorney General Andrew Cuomo remains the overwhelming favorite to become New York’s next governor yet voters want to hear more from him on the state’s budget woes.
That message is from a Quinnipiac University poll released Tuesday.
Overall, 64 percent of New York voters, against 21 percent, want the Democratic candidate to weigh in on the protracted fiscal situation. Broken down by party, Republicans say (68-20) percent Cuomo isn’t explaining enough, an opinion shared by Democrats (58-26) percent and independent voters (71-15) percent.
“Imagine that: Voters want to hear more from a politician. Attorney General Andrew Cuomo has been too quiet on how we would solve Albany’s budget mess, which he’ll inherit — if he’s elected,” said Maurice Carroll, director of the Quinnipiac University Polling Institute.
Despite his silence, Cuomo maintains a 72-16 percent approval rating and holds a commanding lead on two Republican challengers. Quinnipiac has Cuomo in front of former Congressman Rick Lazio, 58-26 percent, up from 55-26 percent April 13. When put against Buffalo businessman Carl Paladino, Cuomo’s advantage is 59-23 percent, compared to 60-24 percent in a previous poll.
Lazio, the endorsed GOP candidate, tops Paladino in a Republican primary 46-17 percent, with 28 percent undecided.
The poll results on the governor’s race and other issues, including the U.S. Senate seat held by Kirsten Gillibrand and President Barack Obama’s job performance can be found here.
Microchip Technology Inc. has completed its purchase of Silicon Storage Technology Inc., closing the nearly $300 million deal.
Chandler-based Microchip (Nasdaq:MCHP) finalized is acquisition of SST (Nasdaq:SSTI) after shareholders approved the deal in a special meeting on Thursday.
We are pleased to have completed this transaction,” said Steve Sanghi, Microchip president and CEO, in a prepared statement. “Through this acquisition, we gain access to SST’s SuperFlash technology and extensive patent portfolio, which are critical building blocks for advanced microcontrollers. We expect that SST will also enhance our ability to customize technology variants, thereby adding an advantage over competing technologies.”
Microchip sought SST’s technology as a way to build its presence in the memory market and add to its own patent portfolio. Microchip twice upped its bid for the Sunnyvale, Calif.-based manufacturer after rival bids were submitted to its board.
“We are confident that SST will flourish as a part of Microchip,” said Bing Yeh, co-founder and CEO of SST. “As part of a larger, more diversified company, we believe that SST will be better positioned to deliver the superior service and innovative NOR flash and embedded flash solutions that our customers expect.”
Today will mark the last day that SST’s stock trades. Owners of the stock will receive $3.05 in cash as part of the sale.
The Arizona Cardinals well get some high-profile home games next season — including contests against the Dallas Cowboys, Denver Broncos and Oakland Raiders.
The Cardinals’ 2010 regular season schedule lineup is set in terms of teams but dates and times and what kind of national games the Cards will be play will be determined later this year. The Cardinals will also host the New Orleans Saints, Tampa Bay Buccaneers and games against NFC West foes (San Francisco 49ers, St. Louis Rams and Seattle Seahawks).
High-profile teams such as the Cowboys, Broncos and Raiders all have strong followings in the Phoenix sports market, which should insure quick sellouts for those games and push up ticket prices next year free business cards.
The Cardinals have sold out all their home games since moving from Tempe to Glendale’s University of Phoenix Stadium in 2006.
The Cards' road games include visits to San Diego, Minnesota, Atlanta, Kansas City, Carolina and the NFC West rivals.
The NFL playoffs start this weekend and include a 2:30 p.m. Sunday game between the Cardinals and Green Bay Packers that will be televised by Fox.
Question: How do REITs work? And is it prudent to have them in a diversified retirement portfolio? –M. C., Indianapolis, Indiana
Answer: After going from rock stars of the investing world during the real estate boom to candidates for a VH1"Where Are They Now" episode the last two years, REITs are generating some interest again.
Gee. Could it have anything to do with the fact that, after slumping badly in 2007 (-17.8%) and 2008 (-37.3%), REITs have been on a bit of a roll again with a year-to-date return of more than 25% through mid-December?
Well, whatever has spurred your interest, the answer to your first question is that REITs, or real estate investment trusts, are essentially companies that own and operate income-producing properties that could range from office buildings to hotels to malls to apartment buildings or a combination of these or other facilities.
Since you can buy many REITs just like stocks, investing in them allows you to gain exposure to the real estate market without the hassle of having to buy, manage and sell actual bricks and mortar. And because for tax reasons REITs must distribute 90% or more of their taxable income to shareholders annually as dividends, many investors looking for steady income from their investments also gravitate toward REITs.
As for whether it’s prudent to include REITs in a diversified retirement portfolio, I’d say the answer depends on why you’re buying them.
If you’re considering REITs now because you think their recent gains might be a prelude to another real estate feeding frenzy, I would urge extreme caution. Much of the REIT rebound this year is what you might call a "relief" rally. Things were looking so bad both in terms of property values and availability of financing in the commercial real estate market earlier this year that many REITs were knocked down to Armageddon prices. As investors came to believe that maybe conditions weren’t quite so horrendous and that the correction in REIT values had perhaps been overdone, REITs enjoyed a nice little pop.
But the residential and commercial real estate markets still face daunting challenges. That’s not to say that REITs don’t have the potential to deliver decent returns from here. Indeed, some have been able to raise capital that may allow them to pick up properties at bargain-basement prices. I think it would be foolish, though, to buy into REITs expecting them to retrace their recent trajectory.
But if you want to invest a portion of your retirement savings in REITs as part of a long-term strategy to improve your portfolio’s performance by enhancing its diversification, then I’d say yes, it could be prudent to find a place for them quick guaranteed personal loans. That’s because research shows that adding a small helping of REITs to an already diversified portfolio may be able to slightly boost returns without increasing volatility.
Be aware, however, that this approach assumes you’ll invest a modest portion of your assets in REITs and that you’ll hold them during good and bad periods. And to get the full benefit of the additional diversification they offer, you must be willing to rebalance periodically so REITs continue to account for the same percentage of your portfolio that you set originally.
That means you’ll probably be selling off part of your REIT stake after years in which they’ve soared (like 2003 and 2004), and adding to it after lousy years (like 2007 and 2008). If you don’t have the discipline, or the stomach, to do this, then adding REITs probably isn’t such a hot idea.
Keep in mind too that while REITs’ dividends can be a plus for investors looking to draw income from their retirement portfolio, those dividends can be cut in hard times. Some REITs did exactly that during the financial crisis. What’s more, a December 2008 "revenue procedure" from the IRS gave REITs the option of paying out up to 90% of their dividends in stock rather than cash this year. I think it’s fair to say most income investors would prefer hard currency to more shares of stock. It’s unclear whether, one way or another, REITs will have access to that option again in the coming year.
You should also know that, unlike payouts from most companies, REIT dividends do not generally qualify for the 15% maximum tax rate for qualified dividends. So if you do opt for REITs, you may want to hold them in a tax-advantaged retirement account such as an IRA or 401(k).
All things considered, though, I think REITs can still play a role in a well-rounded retirement portfolio. But unless you know how to analyze the prospects for individual REITs, I’d recommend investing in them through a mutual fund or ETF that owns a diversified portfolio of REITs. You can find both on our Money 70 list of recommended funds.
Bottom line: If you want to make REITs part of your long-term investing strategy for your retirement savings, go ahead. Just be sure to take a prudent approach, as I’ve outlined.
Private equity shop Cerberus plans to float gun-maker Freedom Group soon. It had better hurry. President Barack Obama’s victory sent weapon sales — and the valuations of firearms producers — shooting upward. Falling backlogs hint sales could plunge. The U.S. gun bubble may backfire.
Two sparks set off this speculative burst in the gun business. First, fears of economic calamity inspired sales of weapons — Sturm, Ruger’s 30 shot autoload SR-556 rifle is useful according to the company for shooting varmints and for "personal defense", presumably pesky biped varmints.
Second, gun collectors feared a Democratic president would restrict gun ownership. After all, you can’t buy the SR-556 in blue-state strongholds California and Massachusetts.
There’s plenty of anecdotal evidence of mania in the sector. Retailers reported ammunition shortages. Gun show attendance overflowed. Firearms factories are running flat out.
Meanwhile, insiders are preparing for a slowdown. Smith & Wesson diversified into security systems. Cerberus’ decision to sell may be indicative of a top — the durability of recent demand is indeed listed as a risk factor in Freedom Group’s prospectus.
The figures are more damning. Total U.S. firearm sales should be around $3 billion this year. That’s twice to three times as much as is typically spent according to estimates derived from Treasury excise taxes. Background checks over the past 12 months, which are a leading indicator of gun sales, were 50% higher than the levels reported during the middle years of the decade.
Naturally, rising sales lit a fire to stocks of gun makers and sellers. Armaments manufacturers Smith & Wesson (SWHC) and Sturm, Ruger (RGR) saw their stocks rise 115% and 85% respectively since the election last November. Hunting superstore Cabelas (CAB) has risen 70%.
This bubble may already be deflating. Smith & Wesson’s backlog hit $268 million earlier this year and shrank to $177 million last quarter due to cancellations and fewer orders. Considering it only stood at $50 million in April 2008, the backlog could have much further to fall. Sturm, Ruger reported roughly similar figures.
This could prove painful for all involved. If sales fell to more typical levels of recent years, up to two-thirds of U.S. gun sales could disappear. And they could fall further. There are somewhere between 200 million and 300 million fireable guns (estimates vary widely) already in the U.S. Firearms have a very long lifespan if properly treated.
Gun buyers may well decide their now-stuffed racks don’t need more company for a few years.
More than a year before stock markets crashed in the fall of 2008, Paul Dau noticed a steep drop in the number of customers entering his furniture store on Manchester Road in Ellisville.
Instead of whole-room makeovers, they might buy a few pieces of furniture. As time went on, even those purchases dwindled.
By the end of 2008, sales were off 18 percent. As 2009 started, the numbers got worse.
"There were evenings I didn’t sleep well," said Dau. As the fourth-generation of his family to run Dau Home Furnishings, he determined long ago not to see it close on his watch.
He cut his own pay. Then did it again. And once more in April.
"You do what you have to do,” he said.
But increased traffic and sales in the past few months are raising the optimism of some furnishings dealers, including Dau, who thinks he might soon be able to restore at least part of his salary.
"I do feel confident that we’ve bottomed out and we’re turning," he said.
It’s been a dreary decade for the home decor business.
"Ever since 9/11, it’s been in a spiral," said Jackie Hirschhaut, vice president of marketing for the American Home Furnishings Alliance, the nation’s largest trade association for furniture manufacturers.
Then came last year’s market meltdown.
People put off purchases and delayed projects. Nationally, sales by furniture and home furnishing stores totaled $7.7 billion in June, down more than 10 percent from last year and almost 20 percent from June 2007.
"For many mainstream consumers there’s just a lot of uncertainty," Hirschhaut said. "They may be working now, but there are no guarantees."
Changing customer habits forced many businesses to find new strategies to survive.
In addition to his pay cuts, Dau trimmed inventory by almost 20 percent, slashed advertising by nearly a third and reviewed every contract, from building maintenance to snow removal. Because he didn’t want to cut his 18-member staff, Dau used warehouse employees instead of contractors to trim bushes, wash windows and perform other duties. He cut back some full-time positions to part-time jobs and didn’t replace two employees who left.
"What hits you most is concern for all these families," he said of his employees. "They need their incomes to run their households. That’s the scary thing weighing on you."
Brook Dubman, who owns Carol House Furniture stores in Valley Park and Maryland Heights, said that despite a small decline in traffic and sales in the wake of the recession he’d also avoided laying off any of the company’s 140 employees.
"We didn’t change the way we did anything,” he said. "I think that helped us do better."
Customers often linger longer over decisions to buy and make smaller purchases, but Dubman said that traffic and sales in August were up substantially over last year and that September started off well.
"Our Labor Day weekend was gang busters,” Dubman said. "I’m pretty optimistic that we will be consistently better."
If not for his wealthier clients, Alan Richardson wonders if he’d still be in business payday loans online.
The owner of English Living, situated on Washington Avenue in downtown St. Louis, said that since the first of the year the entry-level home buyers and younger home owners who used to be a substantial part of his customer base have all but disappeared.
"The only thing that kept us going well through that was the high-end … very-upscale clients … that are spending a lot of money on their home," Richardson said. "They were our biggest contributors through some pretty tough times."
Although he said sales were "exceptionally slow" in July and August, Richardson saw an increase in traffic that has translated into sales in September.
"In the first ten days of this month we did as much as we did in all of July, and that’s unusual," Richardson said.
But he’s not ready to declare the dark days over.
"We’ve had slow downs before," he said. "The strange thing about this one is you’ll have days you think it’s starting to turn and then it all stops again."
Bruce Bernstein bought a 39-year-old company a few months before the 2008 crash. He immediately sought to re-brand Sunshine Drapery and Interior Design as up to date and offering the highest-quality products.
While still offering sales, the company eliminated the 85 percent discounts the previous owners promoted. Bernstein also updated what he called the company’s "industrial looking" website and reached agreement with a furniture chain to allow Sunshine displays in their stores and to refer business to each other.
He trimmed his fabric inventory, cut hours and laid off and brought back some of his 60 or so employees as the sewing workload required.
Sales the last three months are running about two percent ahead of last year, he said.
"If I had continued on the same route as the previous owner … I don’t know if we would be getting the same business,” he said.
Not everyone struggled through the downturn.
In Belleville, Mueller Furniture Company saw a double-digit increase in sales last year and is on pace to do the same this year.
Owner Lynwood Mueller credited Scott Air Force Base, two nearby hospitals and area school districts, among others, for providing a steady supply of customers. Mueller said much of his merchandise was American made, a point the store emphasizes in its marketing. "People seem to respond to that," he said.
Mueller said that if anything, he’d increased his advertising and promotion in the recent downturn and emphasized customer service. "When times are tough, I think people appreciate that more," he said.
It has helped the family business endure difficult days in the past. Mueller’s grandfather opened the store just two years before the stock market crashed in 1929 and plunged the country into the Great Depression. When the younger Mueller entered the business in the mid-1970s, Belleville was home to 11 furniture stores, he said. One moved. The others closed.
"We’re a survivor," he said.
After two years of pumping money into the financial system to keep the economy afloat, Fed Chairman Ben Bernanke will have to reverse the process or risk an opposite problem: inflation.
After much anticipation, he announced in July the Fed’s "exit strategy" from its vast intervention, declaring it will happen "in a smooth and timely manner."
It’s reassuring that Fed officials are aware of the inflation risk, but their program is unlikely to succeed. Much research shows that it takes about two years for anti-inflation policy to work. That means the Fed needs to start now and stick with it.
I do not doubt the Fed’s ability to control inflation; however, history warns that we should be skeptical of the Fed’s willingness to sustain the program when pressured to abandon it by so many powerful forces: Congress, the Obama administration, the business community, and labor unions.
Sustaining the program requires accepting a temporary medium-term increase in unemployment and interest rates and maintaining a degree of independence that this Fed has not shown.
I am skeptical too about the adequacy of the program that the chairman proposed. The Fed has to remove most of the remaining $700 billion increase in bank reserves that it supplied in the past year before the banks use them to increase money growth.
The Fed has two responses.
One is that many of the reserves will disappear as banks and others repay the special-purpose loans that followed the Lehman bankruptcy last September. While the Fed’s balance sheet has started to shrink, much of that reflects reduced demand for credit because of the weak economy — and it won’t bring about the needed increase in long-term rates.
The second part of Bernanke’s program depends on a power the Fed acquired recently. It can now pay interest on bank reserves, so it claims that banks will willingly hold more reserves to earn interest instead of lending. But how much more will banks hold? Surely less than the $500 billion or $600 billion of excess reserves.
Once the economy recovers, banks will start to lend to their customers and attract new ones instant cash advance. The Fed must be willing to let lending and bond rates rise as banks reduce their reserves. Many influential voices will complain that letting rates rise will prolong the recession.
This problem repeats the experience of 1966-67, 1969-70, 1973-75, and other times. Outside pressures on the Fed increased when the unemployment rate reached about 6.5% or 7%, well below its current or prospective level. That ended the anti-inflation commitment.
There is only one exception: the Volcker disinflation of 1979-82. Paul Volcker was the most independent chairman in the Fed’s modern history. When President Carter interviewed him, Volcker told the President that he would follow a less inflationary policy than his predecessors. To his surprise, Carter said, "That’s what I want." The change reflected a major shift in public opinion. For the first time the public told pollsters that inflation, which reached 17% at one point, was the most serious economic problem the country faced.
In the 1980 presidential election, the public chose Ronald Reagan, who promised to end inflation. Unemployment rates rose above 10% and shortterm interest rates reached 20% during the disinflation. But in less than two years inflation fell to about 4%. Gradually we entered a long period of stable growth, mild inflation, and short recessions that lasted until 2006.
Are the Obama administration, Congress, and the public willing to tolerate high nominal interest rates and higher unemployment? Very unlikely. The chairman has stated "at some point … as economic recovery takes hold, we will need to tighten monetary policy."
But since he and his colleagues don’t see that point being reached anytime soon, by the time we get there it may well be too late.
Allan H. Meltzer is the Allan H. Meltzer University Professor of Political Economy at Carnegie Mellon and the author of A History of the Federal Reserve.
The U.S. trade gap narrowed unexpectedly to $26 billion in May to the lowest reading since November 1999, as exports rose and imports shrank, government data on Friday showed.
The Commerce Department said exports increased 1.6% to $123.3 billion, while imports declined by 0.6% to $149.3 billion.
Analysts polled by Reuters had expected the trade deficit to widen to $30.2 billion in May. The trade gap in April was revised to $28.8 billion from a previously reported $29.2 billion deficit.
May’s import level was the lowest since July 2004 and the 10th straight monthly decline, providing further evidence that the recession-mired United States has diminished as a source of demand for the rest of the world.
The auto sector has been hard hit in the economic slowdown and May imports of automotive vehicles and parts slipped to $10.2 billion, the lowest level since March 1996, while auto exports were the lowest since July 1998 cash advance no faxing.
The monthly deficit on goods trade with China grew to $17.5 billion from $16.8 billion in April and was the largest with any single country.
But the U.S. trade deficit with other big trading partners declined, falling to $2.8 billion with the European Union in May, for the lowest reading since March 1999, and retreating to $1.9 billion with Japan, which was the lowest since February 1984.
Imported oil cost $51.21 a barrel in May, up from $46.60 in April. The value of crude oil imports in May declined only slightly to $13.4 billion, despite a sharper decline in the quantity of oil actually imported, to 262 million barrels from 293 million in April, the Commerce Department said.
Four men at the Cargill Meat Solutions plant in Dodge City have been indicted on charges of aggravated identity theft and using false documents to gain employment in the United States.
The indictments claim all four men were citizens of Mexico, unlawfully working in the United States and had stolen Social Security numbers to get their jobs, according to a release from Acting U.S. Attorney Marietta Parker’s office.
According to court documents, the indictments of the four men consist of:
• Alejandro Cruz-Lopez possessed a Cargill Meat Solutions employee identification card with his picture and another person’s name, a Blue
Cross/Blue Shield card, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, three Cargill pay stubs with a false name on them, and two Kansas identification cards with photos and a false name.
• Ramiro Santos-Carreto possessed a Cargill Meat Solutions identification card with his picture and another person’s name, a Cargill health insurance card, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, an Arkansas identification card with his picture and another person’s name, and a Cargill Treatment and Work Restriction Record with a false name on it used car loans.
• Rogelio Gomez-Bernardino possessed a Cargill Meat Solutions employee identification card with his picture and another person’s name, three Cargill health insurance cards, two Blue Cross/Blue Shield cards, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, and a California identification card with his photo and another person’s name.
• Leonardo E. Leon-Flores possessed a Cargill Meat Solutions employee identification with his photo and another person’s name on it, two
Cargill health insurance cards, a Blue Cross/Blue Shield card, two Delta Dental insurance cards, and a Kansas identification cared with his picture and a false name.
In each case, agents with the U.S. Immigration and Customs Enforcement office obtained employment forms containing Social Security numbers belonging to someone else.
If convicted, the defendants face a maximum penalty of 10 years in federal prison without parole and a fine of up $250,000 for possessing the false documents and a mandatory two-year sentence (running consecutive to other sentences) and up to $250,000 in fines on the aggravated identity theft.
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