Is Economic Outlook Growing Brighter? Maybe Not
(CBS)
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Read all 'Signs Of Recession' posts in Econwatch
May 6, 2009 3:51 AM Some beams of sunlight have begun to peek through the economic storm clouds, raising the possibility that the Great Recession that started in late 2007 may be nearing an end. Or is that a hailstorm on the horizon?
April 30, 2009 11:36 AM 
Vice President Joe Biden told viewers of NBC's "The Today Show" this morning that, due to the spread of the H1N1 virus, people should avoid unnecessary air travel and that sick travelers should avoid confined spaces like airplanes all together. It may be sound advice for travelers, but the vice president's words could hurt an already-ailing industry.
The World Health Organization raised the level of influenza pandemic alert from phase 4 to phase 5 on Wednesday, yet the organization is not advising any restriction of regular travel or closure of borders. Even so, the airline industry says passenger concerns over the flu could take its toll on business.
James May, president and CEO of the Air Transport Association, sent Mr. Bident a letter today expressing "extreme disappointment" with his comments.
"No responsible officials or healthcare professionals have suggested that people avoid air travel," the letter said. "We need to deal responsibly with the flu threat but, at the same time, while following professional healthcare advice, keep our economy moving forward."
Ailing Airline Industry Braces For Flu Impact
(AP Photo/John Bazemore)
The World Health Organization raised the level of influenza pandemic alert from phase 4 to phase 5 on Wednesday, yet the organization is not advising any restriction of regular travel or closure of borders. Even so, the airline industry says passenger concerns over the flu could take its toll on business.
James May, president and CEO of the Air Transport Association, sent Mr. Bident a letter today expressing "extreme disappointment" with his comments.
"No responsible officials or healthcare professionals have suggested that people avoid air travel," the letter said. "We need to deal responsibly with the flu threat but, at the same time, while following professional healthcare advice, keep our economy moving forward."
April 24, 2009 12:17 PM
Luxury Or Necessity? Americans Cut Back
From the kitchen to the laundry room to the home entertainment center, Americans are paring down the list of familiar household appliances they say they can't live without, according to a new national survey by the Pew Research Center's Social & Demographic Trends project.
No longer do substantial majorities of the public say a microwave oven, a television set or even home air conditioning is a necessity. Instead, nearly half or more now see each of these items as a luxury, the report found. Similarly, the proportion that considers a dishwasher or a clothes dryer to be essential has dropped sharply since 2006.
The study also found these recession-era reevaluations are all the more striking because the public's luxury-versus-necessity perceptual boundaries had been moving in the other direction for the previous decade.
For example, the share of adults who consider a microwave a necessity was just 32% in 1996. By 2006, it had shot up to 68%. But it has now retreated to 47%. Similarly, just 52% of the public in the latest poll say a television set is a necessity -- down 12 percentage points from 2006 and the smallest share to call a TV a necessity since this question was first asked more than 35 years ago.
Read the full report.
(Pew Research Center)
The study also found these recession-era reevaluations are all the more striking because the public's luxury-versus-necessity perceptual boundaries had been moving in the other direction for the previous decade.
For example, the share of adults who consider a microwave a necessity was just 32% in 1996. By 2006, it had shot up to 68%. But it has now retreated to 47%. Similarly, just 52% of the public in the latest poll say a television set is a necessity -- down 12 percentage points from 2006 and the smallest share to call a TV a necessity since this question was first asked more than 35 years ago.
Read the full report.
April 21, 2009 10:02 AM 
College students have to worry about more than just shedding their spring break sunburns or studying for final exams. For those graduating in the coming months, a weak job market threatens to exacerbate a looming problem – repaying student loans.
Defaults on those loans are rising as students cope with a shortage of well-paying jobs coupled with ever-increasing tuition costs, according to a Wall Street Journal report Tuesday.
According to the U.S. Department of Education, default rates are expected to hit 6.9 percent for fiscal year 2007, up from 4.6 percent two years earlier and the highest mark since 1998.
Recent Grads Face Student Loan Woes
(AP)
Defaults on those loans are rising as students cope with a shortage of well-paying jobs coupled with ever-increasing tuition costs, according to a Wall Street Journal report Tuesday.
According to the U.S. Department of Education, default rates are expected to hit 6.9 percent for fiscal year 2007, up from 4.6 percent two years earlier and the highest mark since 1998.
April 10, 2009 3:37 PM 
President Obama on Friday offered a mildly upbeat forecast about the prospects of the United States, saying he saw "glimmers of hope."
One reason, Mr. Obama said, was that "we feel very good about the progress that we're making in unlocking lending in particular markets," and mentioned small businesses as an example.
In truth, banks lend money to individuals and businesses only when they believe they're going to make money. And there may not be that much the government can (or should) do to change that.
If Americans are falling behind on credit cards, as they are, it should be no surprise that lending standards are tightening. People with histories of not paying their bills may be cut off entirely.
Plus, as our colleagues at CBS Evening News reported last fall, investors have been spooked by the the dangers of slicing up loans and selling them off in chunks and have lost much of their appetite for auto loans, credit card purchases, and student loans that are carved up that way. (The process is called securitization, and arguably helped the housing bubble grow to the size it did.)
Is Obama Wrong About A Credit Crunch?
(CBS)
One reason, Mr. Obama said, was that "we feel very good about the progress that we're making in unlocking lending in particular markets," and mentioned small businesses as an example.
In truth, banks lend money to individuals and businesses only when they believe they're going to make money. And there may not be that much the government can (or should) do to change that.
If Americans are falling behind on credit cards, as they are, it should be no surprise that lending standards are tightening. People with histories of not paying their bills may be cut off entirely.
Plus, as our colleagues at CBS Evening News reported last fall, investors have been spooked by the the dangers of slicing up loans and selling them off in chunks and have lost much of their appetite for auto loans, credit card purchases, and student loans that are carved up that way. (The process is called securitization, and arguably helped the housing bubble grow to the size it did.)
April 6, 2009 9:39 AM 
They probably won't be asking the federal government for any bailout money, but the weak economy has many Major League Baseball teams in a cost-cutting mood.
Nearly half the league heads into the 2009 baseball season with reduced payrolls, according to a USA Today survey. Fourteen teams total are lowering salaries and 10 will slash at least $10 million off the books.
Buy Me Some Peanuts And Cracker Jack … And Lower Payroll While You're At It
(AP Photo/Julie Jacobson)
Nearly half the league heads into the 2009 baseball season with reduced payrolls, according to a USA Today survey. Fourteen teams total are lowering salaries and 10 will slash at least $10 million off the books.
March 30, 2009 2:20 PM 
From cars to clothes, prices have been lowered on virtually everything as the recession has deepened — making the current retail climate a bargain hunter's dream, but a retailer's nightmare.
"Many stores can't protect their brand right now because they have to worry about cash flow," said Gilbert Harrison, the chairman of Financo, an investment bank that specializes in merchandising.
In order to keep this cash flowing — or just trickling in — even high-end stores like Bloomingdale's and Saks Fifth Avenue have offered serious discounts, especially during the holiday season. Shoppers once had to wait months until full-priced items went on sale, but not anymore. And big-ticket items are no exception.
Beth Kobliner, author of "Get A Financial Life," agrees.
"Retailers have been hurt by the economy and are doing everything they can to attract customers," Kobliner explained.
Are Sales The New Normal?
(CBS)
"Many stores can't protect their brand right now because they have to worry about cash flow," said Gilbert Harrison, the chairman of Financo, an investment bank that specializes in merchandising.
In order to keep this cash flowing — or just trickling in — even high-end stores like Bloomingdale's and Saks Fifth Avenue have offered serious discounts, especially during the holiday season. Shoppers once had to wait months until full-priced items went on sale, but not anymore. And big-ticket items are no exception.
Beth Kobliner, author of "Get A Financial Life," agrees.
"Retailers have been hurt by the economy and are doing everything they can to attract customers," Kobliner explained.
March 23, 2009 5:15 PM 
Last week, First Lady Michelle Obama presided at a groundbreaking for a garden on the White House lawn.
Her plan is to educate children about healthy food options. Her hope is that "they will begin to educate their families and that will, in turn, begin to educate our communities."
This message is timely. With less money to spend, consumers are more likely to turn to cheaper food options that lack high nutritional value.
For example, Dollar Menu sales are credited to McDonald's 5.4 percent sales increase in the U.S. this January. Though McDonald's and others in the fast food business do offer healthy options, the reality is that economic recessions test the resolve and pocketbook of even the most health-conscious individuals and families.
The math is simple — can you afford a $3 organic apple or $7 bag of organic granola versus a $1 McDouble Burger? Many will say no, despite the fact that an unhealthy diet can foster long-term consequences like obesity or heart problems that an economic recovery won't suddenly fix.
Cheap Food Trumps Healthy During Recession
(AP Photo/Ron Edmonds)
Her plan is to educate children about healthy food options. Her hope is that "they will begin to educate their families and that will, in turn, begin to educate our communities."
This message is timely. With less money to spend, consumers are more likely to turn to cheaper food options that lack high nutritional value.
For example, Dollar Menu sales are credited to McDonald's 5.4 percent sales increase in the U.S. this January. Though McDonald's and others in the fast food business do offer healthy options, the reality is that economic recessions test the resolve and pocketbook of even the most health-conscious individuals and families.
(AP Photo)
March 20, 2009 5:25 PM
The Downturn in Dalton
In Dalton, Georgia, about an hour and a half up I-75 from Atlanta, carpet is king. According to the town's mayor, David Pennington, 85-90 percent of the carpet made in America is manufactured in the Dalton area.
It was an industry that just a couple years ago was booming; growing so fast, carpet factory managers had a hard time finding enough workers to start new shifts.
Now, the days of virtual full employment are a fleeting memory in Dalton. Unemployment in the metro area reached 12.1 percent at last count, a full 4 points above the national average.
"The housing slump means houses aren't being built and carpet's not being sold. We're so heavily leaning on carpet in Dalton that any affect on the housing industry impacts the carpet industry negatively," says Georgia Department of Labor official Jerry Garland.
And it's not just the carpet industry in Dalton that's being hit. Small businesses in town, which are largely dependent on the foot traffic brought in by the big carpet companies, can't catch a break either.
It was an industry that just a couple years ago was booming; growing so fast, carpet factory managers had a hard time finding enough workers to start new shifts.
Now, the days of virtual full employment are a fleeting memory in Dalton. Unemployment in the metro area reached 12.1 percent at last count, a full 4 points above the national average.
"The housing slump means houses aren't being built and carpet's not being sold. We're so heavily leaning on carpet in Dalton that any affect on the housing industry impacts the carpet industry negatively," says Georgia Department of Labor official Jerry Garland.
And it's not just the carpet industry in Dalton that's being hit. Small businesses in town, which are largely dependent on the foot traffic brought in by the big carpet companies, can't catch a break either.
March 20, 2009 11:26 AM 
The recession has forced consumers to cut back on spending in almost every area of life. Now death, it seems, is no exception. The funeral industry is changing to accommodate budget-conscious families and the number of cremations is on the rise.
"These are tough economic times," said National Funeral Directors Association (NFDA) spokesperson Jessica Koth, "and what we are hearing from our members is that more and more families are opting for cremation" as a low-cost alternative to a traditional burial.
It's not the service or the casket that breaks the bank, Koth said. According to NFDA's data, the average funeral package (with a casketed service and a burial) costs $4,277. A casketed service and cremation costs slightly less, about $4,054.
The issue is that these packages don't include the grave, which can practically double the cost of a funeral.
At Ocean County Memorial Park in New Jersey, for example, plots start around $925. But in cemeteries as in real estate, location is everything.
Sheri Richardson Stahl, who runs Island Funeral Home in Beaufort, S.C., said there are no public graveyards in the Hilton Head area, so plots at the nearest semi-private cemetery start at $2500 and "can easily reach $10,000."
Another Sign Of The Recession — Cremation On The Rise
(iStockphoto)
"These are tough economic times," said National Funeral Directors Association (NFDA) spokesperson Jessica Koth, "and what we are hearing from our members is that more and more families are opting for cremation" as a low-cost alternative to a traditional burial.
It's not the service or the casket that breaks the bank, Koth said. According to NFDA's data, the average funeral package (with a casketed service and a burial) costs $4,277. A casketed service and cremation costs slightly less, about $4,054.
The issue is that these packages don't include the grave, which can practically double the cost of a funeral.
At Ocean County Memorial Park in New Jersey, for example, plots start around $925. But in cemeteries as in real estate, location is everything.
Sheri Richardson Stahl, who runs Island Funeral Home in Beaufort, S.C., said there are no public graveyards in the Hilton Head area, so plots at the nearest semi-private cemetery start at $2500 and "can easily reach $10,000."
