Consumer Confidential: A brewski for Burger King; economic gloom is growing

Consumer Confidential: A brewski for Burger King; economic gloom is growing

Here's your frankly-my-dear Friday roundup of consumer news from around the Web:

--How about a beer with your burger? Some fast-food chains are experimenting with alcohol sales as a way to boost business. Two Sonic restaurants in South Florida soon will sell beer and wine. The move follows Burger King "Whopper Bars" -- recently opened in Miami, Las Vegas and Kansas City -- that sell beer. Starbucks recently began serving beer and wine in a handful of Seattle stores. This may get the cash flowing in, but critics say the message to younger consumers is that it's OK to drink. I'll know that we've gone too far when Mickey D's starts selling McBrewskis alongside its Happy Meals.

--On the other hand, maybe we'll all need a drink if the economy doesn't get any better. Consumer sentiment worsened in June amid continuing anxiety over high unemployment and high prices for everyday goods. Falling gasoline prices stabilized consumers' view of their current economic conditions, but expectations remained gloomy, the Thomson Reuters/University of Michigan survey shows. Although small spending gains can be expected in the second half of the year, the trend is more likely to vary between lackluster and zero than lackluster and robust over the next several years, the survey says. To which I say, "Supersize me."

-- David Lazarus

BNA's Midyear Economic Outlook: Economy Will Strengthen in Second Half of Year and 2012

BNA's Midyear Economic Outlook: Economy Will Strengthen in Second Half of Year and 2012 

By BNA

ARLINGTON, Va., July 1, 2011 -- /PRNewswire-USNewswire/ -- After a weak first half of the year, U.S. economic growth will strengthen during the remainder of 2011 and in 2012, supported by lower energy prices, improved consumer confidence and job growth, and rising business investment and exports, according to survey results released today by BNA, a leading publisher of specialized news and information.

(Logo: http://photos.prnewswire.com/prnh/20090105/56509LOGO)

The nation's real gross domestic product will grow 2.8 percent this year, matching its 2010 pace, and then accelerate to 3.2 percent growth in 2012, BNA said in its Midyear Economic Outlook.       The report is based on the consensus of 24 economic forecasters surveyed in June.

The new forecast for 2011 is less than the 3.0 percent real GDP increase expected by economists when surveyed by BNA in December 2010, prior to the oil price hikes, severe weather, and Japanese earthquake that restrained U.S. growth in the first half of the year.

In addition, the rate of inflation is now expected to double this year to 3.0 percent from 1.5 percent in 2010, then ease to 2.1 percent in 2012.

"Monthly job gains will average 192,000 for the rest of the year, somewhat better than the actual gain of 157,000 jobs averaged in the first half," BNA's report said. Job gains will improve in the first half of 2012 to an average 206,000. The unemployment rate will remain high during the rest of 2011, averaging 8.9 percent, before declining to 8.3 percent on average in 2012.

The Federal Reserve Board is expected to keep its key interest rate close to zero through the rest of 2011, and then raise it to 1.5 percent by the end of 2012.

The economists who participated in the BNA study are from financial institutions, consulting firms, and academia. They were interviewed from June 7-24.

BNA is the largest independent publisher of specialized news, analysis, and reference services for professionals. BNA analysts produce more than 350 news and information products, including the highly respected Daily Labor Report, U.S. Law Week, and Daily Report for Executives.

SOURCE BNA

White House economists say 2009 stimulus responsible for at least 2.4 million jobs

White House economists say 2009 stimulus responsible for at least 2.4 million jobs

WASHINGTON — White House economists say the $821 billion economic stimulus passed early in 2009 is responsible for at least 2.4 million jobs that otherwise would not have existed because of the recession.

A new report by the White House Council of Economic Advisers says the spending and tax breaks in the package are phasing out and their effect on economic growth and hiring is declining.

When passed, the Obama administration said the stimulus would halt rising unemployment at about 8 percent.

Unemployment, however, peaked at 10.1 percent in October of 2009. The White House has said it underestimated the force of the recession.

The administration no longer uses the much maligned phrase “saved or created” jobs. Instead, it says the stimulus “raised employment relative to what it otherwise would have been.”

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Geithner Exit Would Add to Vacancies in Top Economic Posts

By Damian Paletta

Even before Treasury Secretary Timothy Geithner made noises about stepping down, the number of vacancies in top economic posts within the Obama administration was stunning.

U.S. Treasury Secretary Timothy Geithner speaks during the closing session of The Clinton Global Initiative America meeting Thursday. (AP Photo/Paul Beaty)

Federal Deposit Insurance Corp. ChairmanSheila Bair is on her way out. Also departing is White House Council of Economic Advisers Chairman Austan Goolsbee.

That’s just the beginning.

There are two open seats on the Federal Reserve’s seven-member board. The Office of the Comptroller of the Currency, which regulates national banks, and the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, have been run by temporary directors and permanent replacements have not been named.

The White House hasn’t nominated anyone to run the new Consumer Financial Protection Bureau, and it also hasn’t tapped people to fill three key Treasury posts – the ones that oversees banking policy, economic policy, and tax policy. Meanwhile, Treasury’s undersecretary for domestic finance, Jeffrey Goldstein, plans to leave soon himself.

What does all this mean?

Filling all of these jobs requires Senate approval, something that has proven extremely difficult for the Obama administration in recent months. The Treasury post, if Mr. Geithner leaves, would draw particular scrutiny, because of the growing national debate about how best to create jobs and how best to address the federal budget deficit. But the other jobs won’t be easy to fill either — just ask anyone at the White House or Treasury who has been trying to find confirmable candidates for months.

Nominating officials for these posts one-by-one could go nowhere, and the White House could be forced to try and move a slate of them as a package.

If that’s the case, the White House could be forced to reach a deal with Senate Republicans where they would put some Republican-favored officials in some of these posts in order to win support for other nominees. These decisions could have a lasting impact on U.S. economic policy for years, regardless of who is elected president in 2012. That’s because the posts at federal banking agencies are for five or more years, meaning whoever is put in those posts could be there for years to come.

Poland takes EU helm, economic revival a goal

By Ma Liyao (China Daily)Updated: 2011-07-02 07:53

BEIJING - Poland made reviving economic growth a priority on the European Union's agenda onFriday, the first day of its rotating presidency, among increasing threats of sovereign debt crisis.

Efforts to boost common defense and the EU enlargement are also on the list.

Huge challenges facing the EU will test Poland in its first presidency.

The ongoing sovereign debt crisis in the eurozone remains the leading threat to the globaleconomy, according to new research by Fitch Ratings.

To achieve the goal of a "growing Europe", the EU needs closer economic integration as the sourceof growth, Tadeusz Chomicki, Polish ambassador to China, said at a press briefing.

The process of economic integration has encountered severe resistance ever since the outburst ofthe sovereign debt crisis, and there is still no clear solution.

Poland wanted to strengthen the EU single market to boost solidarity by building consensus on theSingle Market Act (SMA) initiatives, Chomicki said.

The single market, the EU's biggest asset, is facing challenges for further growth because of a lackof transparency and simple rules, he said.

The European Commission launched the SMA, a series of measures to battle the economicrecession and a high unemployment rate, in the wake of the financial crisis.

The EU single market is the common area between 27 EU countries where goods, services, capitaland people can circulate freely.

Poland has scheduled the Single Market Forum for October in Krakow, the second largest and oneof the oldest cities in the country.

Poland will also finalize accession negotiations with Croatia, continue pushing accessionnegotiations with Turkey, begin membership talks with Serbia and secure a trade deal with Ukraine,Chomicki said.

Polish Foreign Minister Radek Sikorski said that Europe is ready to assist crisis-hit Belarus on thecondition that the regime free all political prisoners, the Associated Press reported.

Defense integration has long been discussed among EU countries.

The ongoing turmoil in North Africa has provided a good opportunity for EU countries to boostcommon security and defense policies that they "can't afford to miss", said Markus Ederer, EUambassador to China.

The EU will promote a permanent, operational cooperation with NATO, according to Poland's plan.

Ederer also said that in the next six months, the EU will continue to boost relations with China,including closer trading ties, more engagement in China's innovation and urbanization and furthercooperation on climate change.

Zhao Junjie, a Beijing-based senior researcher of European studies at the Chinese Academy ofSocial Sciences, said Poland's working plan was "pragmatic and rational".

"The biggest reality now in Europe is the severe debt crisis. It may, if keeps spreading, drag downthe Euro, and - worse case scenario - lead to a collapse of Europe's integration," Zhao said.

Concerns regarding the crisis remained despite an agreement by 27 EU members on a permanent$700 billion bailout fund for indebted members.

But it is not enough, Zhao said. "So Poland may continue to push the EU to discuss further funds."

However, the enlargement process is not likely to move forward during Poland's presidency,because the EU does not have enough money to do so, Zhao said.

"Plans of pushing forward the enlargement process may come from Poland's own concern. Thelargest East European country in the EU has always been trying to promote its influence within theUnion."

China Daily

Economic index dips slightly on slow construction activity

Economic index dips slightly on slow construction activity

Another month of slow construction activity and home sales caused the Lubbock Economic Index for May to suffer a marginal decline from April's levels.

By BY WALT NETT 

AVALANCHE-JOURNAL

Another month of slow construction activity and home sales caused the Lubbock Economic Index for May to suffer a marginal decline from April's levels, according to figures released Friday.

The index, which uses January 1996 economic conditions as a baseline, was at 122.6 last month, down from 122.7 in April. The index was down 1.9 percent from 125.0 in May 2010, said James Arnold, executive vice president of Lubbock National Bank, the index's sponsor.

Arnold compared the last few months of LEI results to the movie "Groundhog Day" in which the central character sees the same events repeated day after day.

"We're continuing to slide along sideways," he said, adding different segments of the local economy start to show some improvement, and then another will pull the index back.

In this case, the main number holding things back is the construction sector.

"Construction is a big part of our economy," Arnold said. "When that number is positive, our economy is positive."

A year ago, permit values for May totaled more than $36.7 million, while activity last month was about $26.6 million, or a 27.7 percent decline. On a year-to-date basis, total permit values are down more than $60 million from 2010 activity, which represents a decline of 37.4 percent.

In addition, most housing categories have been trailing 2010 results. Last month, homebuilders took out 59 permits, just three more than they did in May 2010.

For the year to date, builders have picked up 250 permits, compared with 329 in the first five months of 2010.

Existing home sales in May were off 18.6 percent, coincidentally the same decrease posted for the first five months of the year. For the year today, 1,044 home sales have closed in Lubbock, down from 1,282 through May 2010.

Some of the issues of a slow residential real estate market have been offset slightly by sale prices running ahead of 2010's numbers. Average sale price on a Lubbock closing last month was $146,655, up 7 percent from $137,054 a year ago. For the year to date, average home sale prices were 1.3 percent ahead of last year.

On the plus side, retail sales in May were 2.3 percent greater than last May. For the first five months of 2011, retail sales have totaled more than $1.08 billion, about $40 million ahead of a year ago.

Auto sales also have continued an upward trend, with nearly $44.7 million spent last month, compared with more than $41.6 million in May 2010. For the first five months of this year, total auto sales volume is up 11.9 percent.

The economy apparently also got a boost from increased tourism. According to the report, lodging tax receipts collected by local hotels were up 10.5 percent from May 2010.

Arnold said part of the increase came from the number of youth sports tournaments Lubbock hosted last month.

Unemployment numbers also pose a paradox in the local economy. The city's monthly unemployment rate has averaged 6 percent over the first five months of this year, unchanged from a year ago.

While Lubbock has one of the lowest jobless rates in the state, the unemployment rate here is hovering around historic highs, Arnold said.

To comment on this story:

walt.nett@lubbockonline.com • 766-8744

leesha.faulkner@lubbockonline.com • 766-8706

Sources: Lubbock Economic Index, Lubbock National Bank

Deal names two Savannahians to state economic development panel

Deal names two Savannahians to state economic development panel

Eric Johnson

By Larry Peterson 

Gov. Nathan Deal has named former state Senate President Pro Tem Eric Johnson of Savannah to the state Board of Economic Development.

Deal also named Richard Kevin Jackson, president and owner of EnviroVac Holdings LLC in Savannah, to the same board.

The panel meets four times a year and advises Chris Cummiskey, the state commissioner of economic development.

"This is a pretty big thing," said state Rep. Ron Stephens, R-Savannah. "It's one of the biggest appointments you can get from the governor."

Johnson was an unsuccessful rival to Deal for the 2010 Republican gubernatorial nomination, but has become one of his most prominent supporters.

He served on the governor's transition team and recently helped organize a reception that raised an estimated $200,000 for Deal's re-election campaign.

"Eric Johnson has spent most of his adult life giving his time and energy to our state," Deal said. "He represented Savannah in the legislature, but he served the whole state.

"Eric brings experience and dedication to the task of bringing jobs to Georgia, and he's a perfect fit for the board."

Johnson serves on the Savannah Economic Development Authority board and the Georgia Health Sciences University's Planning and Development Committee.

An architect, he's president of Hussey, Gay, Bell & DeYoung International Inc.

Jackson is the finance chairman for U.S. Rep. Jack Kingston's Capital Cabinet and also serves on the local economic development panel.

In addition to Johnson and Jackson, Deal announced 31 appointments Friday.

Among them was Tricia Pridemore of Marietta. Deal recently backed her unsuccessful bid to lead the state GOP.

Johnson and Pridemore are co-chairs of Republican presidential hopeful Tim Pawlenty's Georgia campaign.

Deal also named Richard Riley, father of his chief of staff, Chris Riley, to the Lake Lanier Islands Development Authority.

Survey suggests Midwest economic growth slowing

MAHA, Neb. -- Growing energy prices combined with weather-related supply problems has slowed economic growth in nine Midwestern and Plains states, according to a new monthly survey released Friday.

Creighton University economist Ernie Goss said the earthquake and tsunami that struck Japan in March, followed by flooding throughout the region hasn't helped business.

"Higher energy prices, and supply disruptions related to the Japanese tsunami and to floods in the Mid-America region are clearly slowing growth in the economy and cooling rapid commodity price growth," Goss said.

As a result, the overall index for the Mid-America region dropped in June, to 54.9 from 60.2 in May. The June index is still above 50, so the region's economy should continue growing in the next three to six months, but the growth has slowed since earlier this year.

The survey of supply managers and executives and the report use a collection of indexes ranging from zero to 100. Any score above 50 suggests growth in an index while a score below 50 suggests that index will decline.

States in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota,
Oklahoma and South Dakota.

The business managers who responded to the survey are less optimistic about the economy. The confidence index dropped to 52.3 in June from May's 60.4 and April's 57.5.

"Energy prices combined with uncertainty surrounding the national economy and U.S. debt situation served to puncture business confidence for the month," Goss said.

The June job index also declined but remained in positive territory at 53.6 in June, down from May's 58.1. Goss said it appears that companies will continue hiring in the region, but at a slower pace.

The survey's inflation gauge, which tracks the cost of raw materials and supplies, continues to indicate significant cost increases even though it declined. The prices-paid index decreased to 74.3 in June from May's 84.9 and April's record high 94.

The inventory index fell to 51 in June from May's 58.9, and supply managers in the survey said flooding in the region was creating delivery problems. The Missouri River and many smaller rivers are overflowing because of heavy spring rains and above-average snowpack in the mountains. The flooding is disrupting key highways and rail lines.

The region's exports declined a bit in June as the dollar strengthened. The export index declined to 54.9 in June from May's 60.1.

The other components of the June index were:

_ New orders at 55.9, down from May's 59.6.

_ Production or sales at 53.8 in June, down from 60.9.

_ And delivery lead time at 60.1, down from May's 63.6.

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