The U.S. economy continued to improve modestly in February despite uncharacteristically severe weather in many regions of the country, the latest Federal Reserve report on economic conditions reports.
Nine of the Fed’s 12 regional banks — including the New York Bank which encompasses Buffalo and Upstate — reported in the U.S. central bank’s Beige Book survey that economic activity improved last month.
Two districts, St. Louis and Atlanta, reported a more mixed performance and one district, Richmond, Va., was snowed under by winter storms.
The survey is a collection of anecdotes compiled by the Fed to give policy makers a feel for conditions across the country as they prepare for the next meeting on March 16 to plot monetary policy strategy.
Among the survey’s findings: Credit conditions have not improved and businesses still are unable to obtain credit, which is a critical factor behind the sluggish pace of growth creditreport.
Also, loan demand remains weak and banks are sticking to tight standards.
There were no signs in February of an improving labor market, though the pace of layoffs slowed.
Consumers appeared somewhat more willing to spend, the survey found, and demand for services was generally positive.
Manufacturing activity was stronger, but worries persisted about whether it was a result of customers restocking their shelves and unlikely to result in sustained improvement.
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By the time it marks its first year this May, Branson Airport will be reachable by air service from seven cities — compared with one today.
Earlier this month, Denver-based Frontier Airlines announced new flights between Denver and Branson beginning in April. Then last week, Branson Airport officials announced that scheduled charter flights will begin serving five new markets in May on the newly minted Branson AirExpress.
"Things are expanding and growing like we hoped they would," said Branson Airport Director Jeff Bourk.
The $155 million privately developed airport opened last May. AirTran Airways would not discuss passenger loads on its daily flights between Atlanta and Branson, but spokesman Christopher White said the airline was "very happy" with its first year of service.
Bourk said AirTran provided a link to the eastern United States through its Atlanta hub, and Frontier will provide low-cost flights to destinations west of the Ozark entertainment venue. The new charter service, by contrast, will be more of a regional feed from Houston; Austin, Texas; Terre Haute, Ind.; Des Moines, Iowa; and Shreveport, La.
"Scheduled public charters are not unique," Bourk said last week. "What makes it unique is the relationship between … our community here and their airports out there and their communities."
Introductory fares on Branson AirExpress will start at $39 one way for the Terre Haute, Shreveport and Des Moines markets, and $49 one way for Austin and Houston travelers. It will be operated by ExpressJet Airlines using 50-seat Embraer ERJ-145 jets.
Terre Haute, which has been without commercial air service for more than a decade, is looking forward to the business, said airport director Dennis Wiss.
"No. 1, it’s activity," Wiss said. "We need the activity at the airport. We stand to make a small amount of revenue. If this model works, we hope to expand and add more flights."
In Des Moines, airport officials helped put Branson AirExpress in touch with Prairie Meadows Racetrack and Casino, which will help "mitigate some risk," said Roy Criss, a spokesman at Des Moines International Airport payday loans with no fax.
Branson provided data showing about 1,200 Iowans visit the Missouri resort area each week during its peak season from May 17 to Dec. 11, Criss said. To make the air service profitable, he said, it would have to capture only one-sixth of that, or 200 passengers a week.
A secondary benefit is that travelers would be able to connect through Branson to cities such as Austin and Houston, he said.
If the Branson charter service demonstrates strong demand, Bourk said, a commercial airline could step in and take over one or more of the routes.
"We are not an airline," he said. "That is a very important distinction. We are trying to prove these routes to other airlines. If somebody wanted to come in and take the Houston route, a major airline, we would be happy to see that happen."
The Branson Airport opened during one of the worst commercial aviation slumps in U.S. history. But Bourk said the low fares and the affordable nature of Branson had helped offset the recessionary effects.
Branson airport officials expected as many as 300,000 passenger boardings in the first year of operation. Airport officials did not provide actual figures by late Friday.
Meantime, passenger numbers have climbed 55 miles away at Springfield-Branson National Airport.
In 2009, passenger numbers grew 4 percent at Springfield-Branson, despite an 11 percent cut in its flight schedule. No other airports in the region were seeing growth, said airport spokesman Kent Boyd.
Boyd credits low fares, the growth of Allegiant Air in the market, the relatively strong performance of the southwest Missouri economy and the heightened awareness of the new passenger terminal at the airport.
Bourk said Springfield-Branson served business travelers "very well," but it is not the type of service that will bring leisure travelers into the market.
He is hoping the new charter service will help to do that.
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U.S. foreclosure filings rose 15 percent in January from a year earlier and exceeded 300,000 for the 11th consecutive month as modification programs failed to keep delinquent borrowers in their homes, RealtyTrac Inc. said.
A total of 315,716 properties received a notice of default, auction or bank seizure last month, or one in 409 households, the Irvine, California-based seller of default data said today in a statement. Filings fell 10 percent from December.
Bank seizures, also known as real-estate-owned or REOs, may rise to a record 3 million this year, RealtyTrac said last month. About 66,000 delinquent loans out of a targeted 4 million by 2012 were permanently modified as of Dec. 31 under the Obama administration’s Home Affordable Modification Program, according to the Treasury Department. About 787,000 mortgages are in trial programs that change loan terms, the Treasury said Jan. 19.
“It’s almost inevitable that modifications will fail,” Michelle Meyer, New York-based U.S. economist for Barclays Capital Inc., said in an interview. “Over the next several months, we should see REOs increase at an accelerated pace.”
Foreclosure filings also fell in January of last year from December, only to rise in subsequent months, RealtyTrac said.
“If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.
Negative Equity
Unemployment and negative equity, where homeowners owe more than their properties are worth, are adding to the foreclosure total, said Stan Humphries, chief economist at Zillow.com. More than a fifth of U.S. homeowners had negative equity in the fourth quarter, the Seattle-based real estate data provider said yesterday in a report.
“It’s tough to come up with a program that works for unemployment-related foreclosures where the owner can’t pay, or for rate resets where the owner is way underwater,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview yesterday.
The jobless rate unexpectedly fell to 9.7 percent in January, and payrolls dropped by 20,000, the Labor Department said Feb. 5 in separate reports. About 8.4 million jobs have been lost since the recession began in December 2007, with more than 4 million cut since Obama took office in January 2009.
Home Sales
Sales of existing U payday loans.S. homes rose 14 percent in the fourth quarter from the third while the median price fell 4.1 percent from a year earlier, the Chicago-based National Association of Realtors said today. The sales gain may not last when government support for housing, including the Federal Reserve’s $1.25 trillion purchase of mortgage bonds and a first-time buyer tax credit, ends as scheduled in the spring, Humphries said.
January’s total filings were down 12 percent from the July peak, according to RealtyTrac. Bank seizures climbed 31 percent from a year earlier, default notices rose 4 percent and scheduled auctions increased 15 percent.
Nevada had the highest foreclosure rate for the 37th straight month, with one in 95 households receiving a filing in January. Total filings in the state fell 18 percent from a year earlier to 11,854.
Arizona ranked second, with filings for one in 129 households. The rate for both California and Florida was one in 187 households, RealtyTrac said.
Utah, Idaho, Michigan, Illinois, Oregon and Georgia rounded out the 10 highest foreclosure rates.
California Filings
California had the most filings with 71,817, down 6.4 percent from a year earlier. Florida followed with 47,069, up 15 percent, and Arizona was third at 21,048, up 43 percent. The three states accounted for 44 percent of the U.S. total.
Illinois was fourth with 18,120 filings, up 25 percent from January 2009. Michigan ranked fifth with 17,574, up 54 percent. Texas, Nevada, Georgia, Ohio and New Jersey completed the 10 states with the most filings, RealtyTrac said.
Filings increased 23 percent from a year earlier to 6,146 in New Jersey. They rose 34 percent to 2,218 in Connecticut, and jumped 31 percent to 4,569 in New York.
Las Vegas had the highest foreclosure rate for cities with a population of more than 200,000. One in 82 households there got a filing, a 21 percent decrease from a year earlier.
Phoenix was second among the biggest cities at one in 102 households. Six California cities ranked third through eighth: Modesto, Stockton, Riverside-San Bernardino, Merced, Vallejo- Fairfield and Bakersfield, according to RealtyTrac.
Cape Coral-Fort Myers and Orlando-Kissimmee in Florida were ninth and 10th respectively, said RealtyTrac, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.
Bucks County drug-discovery company BioLeap raised $5 million in a venture capital financing Tuesday.
The financing was led by Quaker BioVentures of Philadelphia and Adams Capital Management of Sewickley, Pa.
BioLeap, of New Hope, Pa., plans to use the funding for business development, to support continued development of its computational fragment-based drug design and to pursue alternative models of early drug discovery.
The fragment-based drug design process involves using the company’s in-house computer cluster and proprietary algorithms to rapidly calculate the potential for small molecular fragments of biological compounds to bind to, and inhibit, targeted proteins.
David Pompliano, CEO of BioLeap, said, “We are using our computational method to design novel drugs for specific diseases, and to build the foundation for the next generation of drug discovery.”
Brenda Gavin, founding partner of Quaker BioVentures, said BioLeap, since its creation in 2004,
has demonstrated its ability to save drug discovery costs for pharmaceutical and agricultural chemical companies. “By minimizing nonproductive guesswork during the drug discovery process, BioLeap assists in bringing better drug candidates to market in a shorter period of time,” she said.
Gavin and William A. Frezza of Adams Capital Management will join BioLeap’s board of directors.
Companies in the U.S. expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010.
The Institute for Supply Management-Chicago Inc. said today its barometer rose to 60, exceeding the most optimistic estimate of economists surveyed by Bloomberg News and the highest level since January 2006. The gauge, in which readings greater than 50 signal expansion, showed companies boosted production and employment as orders climbed.
Stimulus programs and discounting have propelled a rebound in global sales that is reducing stockpiles, which may spur manufacturers to further increase production in coming months. Caterpillar Inc. is among companies that may recall dismissed staff, pointing to gains in employment that will drive consumer spending, which accounts for 70 percent of the economy.
“Manufacturing is now moving into recovery,” said David Sloan, senior economist at 4Cast Inc. in New York, whose estimate was the highest among economists surveyed. “Inventories are rebuilding and exports are looking strong, with the Asian economies looking firmer and the dollar weak.”
Stocks drifted between gains and losses. The Standard & Poor’s 500 Index was little changed to close at 1,126.42.
Exceeds Estimates
Economists projected the Chicago index would drop to 55.1 from 56.1 in November, based on the median estimate of 53 projections in the Bloomberg survey. Forecasts ranged from 52 to 58.5.
The group’s gauge of orders climbed to the highest level in more than two years and its measure of employment showed growth for the first time since November 2007, the month before the recession began. Indexes of production and order backlogs also improved.
Caterpillar, the world’s largest maker of bulldozers and excavators, will bring back some laid-off workers next year as sales improve, said Chief Executive Officer Jim Owens.
“We’ll gradually begin to call people back and to rebuild our overall sales and ability to ship product,” Owens said in a Dec. 11 interview with Bloomberg Television. “I think it will gradually begin to pick up as 2010 unfolds.”
Caterpillar cut about 18,700 full-time jobs and about the same number of temporary workers since December 2008 as the global recession reduced demand. The Peoria, Illinois-based company predicts 2010 sales will increase as much as 25 percent from the midpoint of the 2009 forecast range.
Early Indicator
Economists watch the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12 percent of the economy. The group has said their membership includes both manufacturers and service providers, making the gauge a measure of overall growth.
The Tempe, Arizona-based Institute for Supply Management’s factory index probably rose this month to 54 from 53.6 in November, according to a survey median. That report is due Jan. 4.
The world’s largest economy expanded at a 2.2 percent pace from July through September after a yearlong contraction that was the worst since the 1930s, figures from the Commerce Department showed last week. Economists surveyed by Bloomberg forecast growth to pick up to a 3 percent pace in the fourth quarter and average 2.6 percent for all of 2010.
Exports rose for the sixth month in October as economies worldwide rebounded from the global economic slump. A 13 percent drop in the dollar since March 5 against a basket of six major currencies also making American goods more competitive to overseas buyers.
Inventories Increase
Inventories at U.S. companies rose in October for the first time in more than a year, the government said Dec. 11, a sign firms are boosting production in line with rising sales.
United Parcel Service Inc. Chief Executive Officer Scott Davis said Dec. 2 that shipping demand was starting to improve as companies rebuild inventory and consumers began holiday shopping. UPS, the world’s largest package-delivery company, is considered a bellwether for the economy because it handles goods ranging from auto parts to electronics to clothing.
“Inventory has gotten real low,” Davis said in a Bloomberg Television interview. “We think there will be some replenishment of inventories going forward, so the outlook is much better.”
– With assistance from Will Daley in Chicago and Betty Liu in New York. Editors: Carlos Torres, Vince Golle
Taiwan’s central bank kept its benchmark interest rate at a record low and pledged to monitor property-price inflation, reinforcing forecasts for an increase in borrowing costs next year.
Governor Perng Fai-nan and his board left the discount rate on 10-day loans to banks at 1.25 percent yesterday, as forecast by all 11 economists surveyed by Bloomberg News.
Taiwan, emulating Asian counterparts such as South Korea, is putting off rate increases to encourage investment and private consumption and pull the economy out of a yearlong slump. The central bank said in a statement yesterday that it saw no inflation pressure and Perng told reporters that policy makers will closely monitor property prices.
“The central bank is keeping rates steady to help strengthen the economic recovery,” said Serena Tseng, an economist at Jih Sun Securities Co. in Taipei. “Low consumer prices provide scope for the central bank to focus on reviving the economy.”
Kevin Hsiao, director of wealth management research at UBS AG in Taipei, said the central bank may raise rates by 25 basis points in the second quarter of 2010 as an economic recovery strengthens.
Rates Unchanged
Japan’s central bank on Dec. 18 maintained its benchmark overnight lending rate at 0.1 percent, and the Bank of Korea on Dec. 10 kept its rate unchanged for a 10th month at a record-low 2 percent, while signaling it may increase borrowing costs as the economic recovery gathers pace.
Taiwan’s central bank set next year’s target for growth in M2 money supply at between 2.5 percent and 6.5 percent, the same as for this year. It said that liquidity in the financial system in enough to support economic activities.
The island’s gross domestic product shrank 1.29 percent in the three months through September, the least in a year, after a revised 6.85 percent contraction in the second quarter. The economy may expand 4.39 percent next year, the cabinet’s statistics bureau projected last month.
President Ma Ying-jeou’s administration plans NT$858.5 billion ($26.5 billion) of spending over four years, or about 6 percent of GDP, on infrastructure, consumer grants and tax cuts to help revive the economy. Perng lowered borrowing costs by 2.375 percentage points from September 2008 to February.
Falling Unemployment
Signs of a recovery have prompted employers to start hiring, with Taiwan’s unemployment rate falling for a second straight month in November, and companies including Taiwan Semiconductor Manufacturing Corp. forecasting better sales.
The benchmark Taiex stock index has climbed 74 percent this year, set for its best year since 1993, as investors bet the island’s economy is past the worst. The index climbed 21.13, or 0.3 percent to 7,984 easy fast payday loans.67 as of 12:11 p.m., rising for the sixth- consecutive day to its highest since June 19 last year. Taiwan’s dollar rose 0.2 percent to NT$32.247 against its U.S. counterpart at today’s lunch break, according to Taipei Forex Inc.
Low interest rates have boosted consumer spending and business investment. Domestic consumption climbed 2.2 percent in the three months through September, the first increase since the recession began.
Taiwan’s consumer prices will be “subdued” in the next three months, Governor Perng told reporters in a briefing after the rate decisions in Taipei yesterday.
Salary Increase
Taiwan Semiconductor, the island’s biggest company by market capitalization, said this month it will increase employees’ base salary by 15 percent, and capital spending next year will be “much higher” than the $2.7 billion budgeted for this year.
Taiwan’s exports climbed for the first time in 15 months in November, and consumer prices may increase 0.92 percent in 2010 after falling 0.73 percent this year, the statistic bureau said last month. The island’s top economic planner says the economy may grow 4.8 percent next year, the jobless rate fall to 4.9 percent and inflation run at 1 percent.
Economists including Chuang Rehong of SinoPac Securities Corp. in Taipei and Mill Lin of Chinatrust Commercial Bank say the central bank may shift to a tightening rate policy to curb excessive property-market movements after Perng last week repeated a call for lenders to monitor risks of deteriorating mortgage-loan quality.
Asset Bubbles
“The central bank has signaled its concerns on asset bubbles,” said Lin, who forecasts a rate increase in June 2010. “As long as the recovery persists, there is no reason for the central bank not to start raising borrowing costs.”
Taiwan’s central bank today issued a statement denying a newspaper report that said it is placing credit controls on properties in three metropolitan areas on the island. The Taipei-based Commercial Times said today the central bank is imposing credit controls in Taipei, Taichung and Kaohsiung.
Banks on the island of 23 million people have cut mortgage rates to the lowest since records began, helping drive up home prices 14.4 percent in the nine months through September, according to Sinyi Realty Co., Taiwan’s biggest real-estate brokerage.
Taiwan banks increased home loans by 4.3 percent to NT$4.91 trillion at the end of October from a year earlier, according to the central bank.
“I hope foreign inflows are for direct investment, not for purchases of assets,” Perng said.
Colorado nonprofits expected a tough year in 2009 — and that’s exactly what they got, according to a survey released Wednesday by the Colorado Nonprofit Association and the Community Resource Center.
Of the 450 leaders of Colorado nonprofit organizations surveyed, 48 percent said their organizations expect to fall short of their revenue goals for the year.
Other key survey findings:
• Fifty-six percent of respondents reported an interval over the last 12 months when total expenses exceeded total revenue.
• Sixty-five percent said a major donor reduced or eliminated support due to the economic downturn.
• Sixty-four percent said the economy had a negative impact on obtaining funding from foundations, government agencies and corporations.
The survey — entitled “Weathering the Storm” — is an update of a similar report published earlier this year.
When it became apparent that nonprofits in the state were doing worse than they expected at the beginning of the year, CRC and the Colorado Nonprofit Association invited charities to complete an online questionnaire between Oct. 26 and Nov. 6.
But despite discouraging financial returns, the latest report shows that Colorado nonprofits are taking measures to persevere in during a challenging economic time.
According to the survey, the state’s nonprofits responded to the funding gap by:
• Collaborating with other organizations, with 39 percent sharing expenses and costs payday loan.
• Increasing fundraising activities. Thirty-two percent of nonprofits ramped up face-to-face solicitations, 42 percent requested more foundation grants and 27 percent asked board members to contribute more money.
• Reducing expenses. To respond to the economic downturn, 28 percent of nonprofits surveyed cut back or eliminated programs. Meanwhile, 21 percent cut staff pay or hours and nearly 16 percent laid off staff.
• Using more unpaid volunteers. The survey said 43 percent of nonprofits are already using more volunteers and nearly 40 percent are considering such action.
Looking ahead over the next three years, many Colorado nonprofit leaders say they are re-examining their services and existing programs.
Roughly one-third are re-evaluating their assumptions with the possibility of fundamental restructuring. Another 35 percent expect to expand services in key areas (an increase from 26 percent in the first version of the report).
However, most respondents said they expected their nonprofit will “stay in business.” Fewer than 1 percent of respondents anticipated the need to close.
Click here to download the report in PDF format.
Hiring by U.S. discount, grocery, restaurant and specialty chains in November rose to the highest level in 2009, signaling that retailers may be anticipating a gradual recovery in consumer spending, a monthly survey found.
In November, 3.87 percent of applications resulted in hires, the most this year according to seasonally adjusted figures compiled by software maker Kronos Inc. Job applications last month fell to 1.27 million, the lowest since March, after 10 straight months of increases, the closely held Chelmsford, Massachusetts-based company said today in a statement.
While these are classic signs of a gradual, post-recession recovery, last month’s hiring increase might be a “spill over” from October, as retailers delayed the peak season for taking on employees, Robert Yerex, Kronos’s chief economist, said by telephone Dec. 4 from Beaverton, Oregon.
The U.S. jobless rate decreased to 10 percent in November after reaching a 26-year high of 10.2 percent in October, according to a Dec. 4 report from the Bureau of Labor Statistics.
Retailers “weren’t sure how good or bad this year would be,” Yerex said. “There’s still a little bit of shell shock from 2007 and 2008, when retailers were caught with a lot of people on staff, a lot of product inventory, but a difficult time selling it.”
Kronos’s analysis covers 68 companies with 27,034 U.S. stores. The company makes software that businesses use to process hiring, payroll and scheduling, and manage employees. Chains that use Kronos products account for about 15 percent of U.S. retail jobs, according to the company.
Ailing telecom equipment maker Nokia Siemens Networks NSN.UL has changed its business focus to increasing its market share, the new chief executive of the venture was quoted as saying on Sunday.
“In early 2008 we made a strategic decision to focus more on cash flow and profitability than on the market share. Now it’s to give it up and to focus solely on the market share,” Rajeev Suri told Finnish daily Helsingin Sanomat.
Nokia Siemens Networks NSN.UL, a 50-50 venture of Nokia and Siemens, has struggled to make a profit since its start in 2007 as it has faced fierce competition from rivals Ericsson and Huawei HWT.UL.
As Nokia Siemens has focused on profits and avoided the deals most heavily competed for, its market share has dropped since last year, and in the last quarter it lost its second spot in the wireless equipment market to Huawei, according to research firm Dell’Oro.
(Reporting by Tarmo Virki; Editing by Clarence Fernandez)
The number of people shopping on Black Friday is expected to pick up more than 16% this year, according to a survey released Tuesday.
A staggering 57 million people said they would "definitely" head to stores on the day after Thanksgiving, up from 49 million in 2008, according to a survey by the National Retail Federation.
An additional 77 million said they would wait to decide after seeing the weekend deals.
And they could be persuaded, according to NRF president Tracy Mullin.
"Regardless of what we’ve already seen these last few weeks in terms of promotions, retailers still have a few tricks up their sleeves to excite Black Friday shoppers," Mullin said in a statement. "Americans can expect huge sales on popular items like toys, electronics and apparel."
Overall, up to 134 million people said they will shop on the Friday, Saturday or Sunday following Thanksgiving, up 6% from 128 million people the previous year.
The survey said 66.3% of consumers said they will head to department stores and 62.4% to big box stores on the day that kicks off the holiday shopping season cash advance loan. About 41.0% will shop at electronic stores, 36.3% at clothing stores, and 28.8% at grocery stores. With increased cyber deals from retailers, 27.6% said they would shop online.
A modest 10.3% said they would get to stores to scour for deals as early as midnight, according to the survey, while 28.8% said they would arrive around dawn, between 4 a.m. and 6 a.m. Another 28.2% said they would shop between 7 a.m. and 9 a.m.
Some stores are extending hours on Black Friday so consumers have more time to shop for their "doorbuster" deals.
Toys R Us announced last week it will open at midnight on Thanksgiving and offer deals 70 deals then and 50 more "doorbuster" deals at 5 a.m.
Wal-Mart (WMT, Fortune 500) also said its 810 stores that are not already open 24-hours will pull all-nighters for Black Friday.
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