April 30, 2008GDP says: Quit that recession talkWhile things are certainly difficult for a lot of Americans right now, I wish we would put the notion of a recession behind us for a bit. The economy continued to grow in the first quarter, which means we're at least six months away from declaring a recession. Odds are, by that time, we won't be suffering from the same problems. WASHINGTON - The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down. The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the definition of a recession, which is a contraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly. Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more — to a pace of just 0.5 percent — in the first quarter. Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that will likely happen during the current April-to-June period. Have you talked about a recession without understanding the definition (two consecutive quarters of GDP drop)? Take three steps back. April 29, 2008Foreclosure activity up 112 percent over 2007Data out today says foreclosure activity is up 23 percent over the fourth quarter of 2007 and 112 percent over the first quarter of last year. We've written about a couple of high-profile foreclosures in the market, and there are a couple of others out there we're working on writing about. Everyone seems to think Roanoke remains insulated from such problems. Do you still believe it? This is from RealtyTrac, the nation's leading provider of information on foreclosures: RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its Q1 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 649,917 properties during the first quarter, a 23 percent increase from the previous quarter and a 112 percent increase from the first quarter of 2007. The report also shows that one in every 194 U.S. households received a foreclosure filing during the quarter. RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. “Foreclosure activity in the first quarter increased on a year-over-year basis in 46 out of the 50 states and in 90 of the nation’s 100 largest metro areas, demonstrating that most regions of the country are seeing more foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac. “In some areas there are also some unusual, non-market factors impacting the foreclosure numbers. For example, the city of Philadelphia in late March issued a temporary moratorium on all foreclosure auctions for April, and the city has since adopted a program that will delay foreclosure proceedings on owner-occupied properties until the owners have met face-to-face with lenders to attempt a loan workout plan that would prevent foreclosure. April 28, 2008When the Oracle of Omaha speaks...The top of this story from Reuters doesn't do much to instill confidence, does it? NEW YORK - Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect. Buffett made his comments on CNBC television after his Berkshire Hathaway Inc. agreed to invest $6.5 billion in the takeover of chewing gum maker Wm. Wrigley Jr. Co. by Mars Inc. in a $23 billion transaction. "This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow." Airline merger could affect RoanokeNews out today on the airline consolidation front could lead to Roanoke Regional Airport having one fewer airline servicing it. From the Associated Press today: CHICAGO - A person close to the negotiations says United Airlines and US Airways are in very advanced talks with the expectation of announcing within two weeks that they are combining. The two carriers have stepped up their talks after Continental Airlines Inc. caught United off guard by deciding not to pursue a deal with the Chicago-based carrier. The source asked Monday not to be named because of the sensitive nature of the talks. A combination of United and USAirways would carry more than 50 percent of the traffic out of Roanoke, using March traffic numbers (55 percent). Any potential impact on Roanoke would be months away, but analysts expect more activity before Bush leaves office. April 25, 2008Rebate checks coming a few days earlyThe tax rebate checks, ranging from $300 to more than $1,800 depending on your family's status, are coming a few days earlier than previously announced. The Associated Press reports today: WASHINGTON - President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy. Democrats said they were glad the rebate checks were about to go out, but suggested that multinational oil companies were not among the businesses the stimulus package was originally designed to help. “Starting Monday, the effects of the stimulus will begin to reach millions of households across our country,” Bush said Friday in remarks on the South Lawn of the White House. The checks were originally scheduled to go out next Friday, May 2. So we're not getting too much of a break here. What are you spending yours on? My family's loot (hopefully $1,800) will be used on college savings for our two boys. Not exactly what the Prez and Congress have in mind, I'm afraid. Consumer confidence falls to 26-year lowFrom a Reuters story published today: NEW YORK - Consumer confidence fell for a third straight month in April, hitting its weakest in more than a quarter century on heightened worries over inflation and the sagging housing market, a survey showed on Friday. The Reuters/University of Michigan Surveys of Consumers said its final index of confidence fell deeper into recessionary territory, to 62.6 from 69.5 in March. This was just below economists’ median expectation of a reading of 63.2, according to a Reuters poll. The April result is the lowest since March 1982’s level of 62.0., when the “stagflationary” period of low growth and high inflation was still an issue for many Americans. Everyone here in the newsroom knows I love the term "stagflation," but this is starting to feel a little like the early 80s to some... how about you? April 23, 2008Auto industry told to deliver more fuel-efficient carsIt appears as though the federal government is holding strong to its mandate of last year that the auto industry's average fuel efficiency by 2025 be 35 mpg. This is from Dow Jones: Automakers, often criticized for moving too slowly to react to environmental and geo-political concerns, are facing a new set of rules aimed at raising fuel economy standards, the Transportation Department said Tuesday. Current federal regulations call for average fuel economy across the industry of 25 miles per gallon, which amounts to 27.5 miles per gallon for cars and 22.5 mpg for light trucks. The new proposed rules look to bring that average up to 31.6 mpg by 2015. Last year, Congress mandated that the industry average for cars and trucks reach 35 mpg by 2025. And, by the way, if you didn't notice, gas prices in Roanoke rose another 3 cents overnight to $3.408. April 22, 2008Roanoke home sales down 16 percentI recently received the Roanoke Valley Multiple Listing Service report for April in my mailbox. Always interesting information, and usually gets me in trouble. So here goes: The Roanoke Valley Association of Realtors reported 406 residential units sold in March, which is down 16 percent from last March and is the lowest March total since 2004. The average home price for the month was $198,142, which is up about 4 percent over last March. At March's pace, and with a housing inventory of 3,750, according to the association, there is a current absorption rate of slightly more than nine months - considerably down from February's 12.9 months. Housing slump may reach epic proportionsThis guy admits to being chronically bearish, but it's hard to consider the possibilities brought up in this Associated Press story moving today: An influential economist who long predicted the housing market bubble cautioned Tuesday that the slump in the U.S. housing market could cause prices to fall more than they did in the Great Depression, and bailouts will be needed so millions don’t lose their homes. Yale University economist Robert Shiller, pioneer of the widely watched Standard & Poor’s/Case-Shiller home price index, said there’s a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15 percent since their peak in 2006, he said. Continue reading "Housing slump may reach epic proportions" » More gas newsI know you're probably already sick of seeing my gas updates, but this time it's different. This time, it was me paying the high prices, and it ticked me off. I paid $3.45 in Christiansburg this morning. It should not take $40 to fill up my manual-drive Saturn, but it did. And it didn't even fill up. If you want evidence to my pain, AAA reports this morning that Roanoke-area gasoline prices hit a new record at $3.375, up 2.2 cents since YESTERDAY. Passenger numbers flat at Roanoke RegionalMarch passengers at Roanoke Regional Airport fell less than .5 percent from last year to 28,503 in 2008. For the first quarter, traffic was up nearly 2 percent to 77,225. While Allegiant Air only operates a couple of flights daily, its passengers were up nearly 30 percent in March, and Northwest Airlines was up more than 17 percent. Taking the biggest hits were Delta Connection (down 12.7 percent) and United Express (down 10.6 percent). Cargo was up in March (3.6 percent), but remains down for the year (3.2 percent). Are people flying instead of driving? Are people doing neither? We've looked a flying in candidates for jobs here at the paper and have had a terrible problem finding reasonable fares (spelling corrected at 3:41 p.m., April 22 after ridicule received from airport officials) without spending a lot of time looking at different airports, travel days and planning weeks ahead. Meanwhile, the numbers just keep looking better for flights in and out of Greensboro. But is it worth the drive and the parking? It's tough to say. What say you? April 21, 2008As gas rises, so does hybrid usageAs gas prices continue to climb (Roanoke hit a record $3.353 per gallon this morning), the number of people opting for super-fuel-efficient vehicles is also on the rise. This is from the Associated Press this morning: A growing number of buyers feel like Fenske. U.S. registrations of new hybrid vehicles rose 38 percent in 2007 to a record 350,289, according to data to be released Monday by R.L. Polk & Co., a Southfield-based automotive marketing and research company. Hybrids made up just 2.2 percent of the U.S. market share for the year, but they were growing steadily even as overall sales declined 3 percent. Virginia is listed as one of the leading states for hybrid usage. The state has 3.4 percent of all registered hybrids in the country. What are you driving? Are you considering a hybrid? Stocks down on BoA earningsThe first hour of trading of the week pushed stocks down 85 or more points as Bank of America became the first of the week's big earnings announcements. This is from the Associated Press: CHARLOTTE, N.C. - Bank of America Corp. said Monday its profit fell 77 percent in the first quarter, hurt by trading losses and a $3.3 billion increase in reserves for problem loans. The Charlotte-based bank, set to acquire troubled subprime mortgage lender Countrywide Financial Corp. later this year, reported earnings of $1.21 billion, or 23 cents per share, on $17 billion in revenue. That compared with net income of $5.26 billion, or $1.16 a share, a year earlier on $18.16 billion in revenue. Analysts on average expected a profit of 41 cents per share on revenue of $16.5 billion, according to Thomson Financial. It could a very long week on the stock market if they are all like this. April 11, 2008Confidence in economy waningAnother day, more Americans are showing concern about the economy and their own economic conditions. Here are the first few graphs of an Associated Press article from this morning: Americans' confidence in the economy fell to a new low, dragged down by worries about mounting job losses, record-high home foreclosures and zooming energy prices.According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low. "Consumers are very pessimistic," said Mark Vitner, economist at Wachovia. "There are not a lot of happy campers out there." Over the past year, consumer confidence has deteriorated significantly. Worsening problems in housing, harder-to-get credit, financial turmoil on Wall Street and lofty energy prices have put people in a much more gloomy mind-set. Last April, confidence stood at 85.4. The index is based on results from the international polling firm Ipsos. I'm certainly less confident now than I was last April. But what has really changed? Nothing. As I walk down the downtown Roanoke streets for lunch, I only see new construction going up. As I drive through downtown Blacksburg, there are shoppers. When I head over to the New River Valley Mall, there are people with full bags. What am I missing? April 10, 2008Roanoke gas prices set new recordThe price of a gallon of regular, unleaded gasoline in the Roanoke metropolitan area set a new record at $3.235 today, according to AAA. The average price statewide also set a new record at $3.278, and experts say parts of the nation will see the average price rise to $4 at some point this summer. Some people are changing their plans for summer vacations. Are you? How are you staying sane at the pump? March spending the worst in 13 yearsMore bad news for the nation's retailers today, as consumers seem to continue cutting back. Here is what the Associated Press is reporting today about March retail sales: The nation's retailers reported the weakest March sales in 13 years on Thursday as consumers — fretting about mounting economic problems and enduring a frigid Easter — limited their shopping to food and other essentials.With prices at the pump rising and worries about jobs increasing, shoppers bought basics at discounters and wholesale clubs and snubbed mall-based chains' clothing, jewelry and furniture. The earliest Easter in 95 years also hurt sales; shoppers weren't in the mood to buy spring clothing in cold weather. What do you think? How is your family handling things? Are you spending less -- or more? Are you more careful about what you spend money on in light of the economy? Is Smith Mountain Lake sinking?A story by Jeff Sturgeon in this morning's paper showcases a large luxury condo project that is headed to the auction block next Wednesday if the developers doesn't make amends with their bank before then. Bridgewater Pointe, the emblem of high-style living at the lake with its planned 96-unit development, and its developers owe BB&T some $21 million. They also owe contractors, sub-contractors and Franklin County. Until some of the bills are paid, the 48 completed units can't be sold and the developers might lose it all. What do you think? Is this a sign of the market slowing? Is this a sign of an overbuilt SML? Are these too nice for our region? Overzealous developers? Chime in. Welcome to Heads or TailsGood morning, and welcome to the new local economy blog at The Roanoke Times. Our goal is to provide key, up-to-date information about the world, national, state and local economies. Here you will find links to Roanoke Times stories about Southwest Virginia's economy, quick updates on the national economic news and a place to discuss how the changing economic conditions are affecting you and your family. Since I'm the business editor of The Roanoke Times, I'll try to provide reliable information without too much spin... I'm hoping you'll provide that and make this joint hop. So please come back early and often. There's plenty of news out there to discuss, and you'll find it all right here. Have a great day. |
About this blog
As the U.S. economy struggles to find its footing -- and experts debate daily whether or not we are in a recession, heading toward a recession or neither -- business editor Chris Winston writes this blog to provide local, state and national information to help you make heads or tails of the headlines. .....Advertisement.....
|
...Advertisement...
...Advertisement...
