Productivity fastest in two years, labor costs subdued

WASHINGTON, Wed Dec 5, 2012 — Nonfarm productivity increased at a much faster clip than initially thought in the third quarter as businesses held the line on hiring even as output surged, with unit labor costs falling at their fastest pace in almost a year.

Productivity increased at a 2.9 percent annual rate, the fastest since the third quarter of 2010, the Labor Department said on Wednesday.

It had previously estimated that productivity, which measures hourly output per worker, rose at a 1.9 percent pace in the third quarter. In the second quarter, productivity had increased at a 1.9 percent rate.

Economists polled by Reuters had forecast productivity being revised up to a 2.7 percent pace in the third quarter.

The upward revision to productivity growth reflected an upward adjustment to the estimate for third-quarter economic growth to a 2.7 percent pace from 2.0 percent.

But most of the pick-up in GDP growth

Luxury homebuilder Toll Brothers profit rises, orders jump

HORSHAM, Pa., Tue Dec 4, 2012 — Toll Brothers Inc., the largest luxury homebuilder in the United States, reported a higher quarterly profit and said new orders rose sharply, indicating that the U.S. housing market is well on its way to recovery.

The U.S. housing recovery has gained traction this year with prices for single-family homes having risen since February. Economists expect home construction to add to U.S. economic growth this year for the first time since 2005.

The Standard & Poor’s homebuilder index .GSPHOME has almost doubled in value this year.

Toll, which targets affluent customers who typically make at least $100,000 a year and have spotless credit records, said pent-up demand, rising home prices and low interest rates motivated buyers to return to the housing market in 2012.

The Federal Reserve, which has kept interest rates at rock-bottom levels since 2008 to support the housing market, launched an open-ended program to buy mortgage-backed securities in September.

Average selling prices for Toll rose to $582,000 in the fourth quarter from $565,000 a year earlier.

Toll — the only publicly traded luxury homebuilder — has gained market share as small and mid-sized private builders are constrained for capital.

Consumer spending rises strongly in September

WASHINGTON, Mon Oct 29, 2012 – Consumer spending rose solidly in September as households stepped up purchases on automobiles and a range of other goods, setting up a firmer base for consumption this quarter.

The Commerce Department said on Monday consumer spending increased 0.8 percent after a unrevised 0.5 percent gain in August.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity to increase 0.6 percent in September.

Producer prices up on surging gasoline, core rate flat

WASHINGTON, Fri Oct 12, 2012 – Producer prices rose more than expected in September as the cost of energy surged, a government report showed on Friday, but underlying inflation pressures were muted.

The Labor Department said its seasonally adjusted Producer Price Index increased 1.1 percent last month.

Economists polled by Reuters had expected prices at farms, factories and refineries to rise 0.7 percent last month.

Despite the rise in overall wholesale inflation last month, there is likely to be little pass-through to consumers given sluggish job growth, which puts a brake on inflation.

Wholesale prices excluding volatile food and energy were flat last month. That was the lowest reading since October 2011 and fell short of analysts’ forecasts.

Consumer inflation is currently below the Federal Reserve’s 2 percent target, and many economists think it will trend below that level for years to come.

In a bid to boost economic activity, the Fed launched an aggressive new stimulus program last month, pledging to buy $40 billion of mortgage-backed debt a month until the outlook for jobs improves substantially.

Waste Management stock risks 10-15 percent drop: Barron’s

NEW YORK, Mon Aug 20, 2012 – Investors have been attracted to Waste Management Inc.’s high dividends, but the stock of the trash hauling company is at risk of falling as much as 10 percent to 15 percent if it continues missing profit expectations, Barron’s financial weekly reported on Sunday.

Waste Management’s revenue, earnings, margins and cash flow have been stagnant for years as many investors seem content collecting a 4 percent annual yield on the stock, Barron’s said.

It said a Waste Management spokeswoman noted that the company already has started to slow its rate of dividend increases. After two years of 10-cent increases, the payout was up 6 cents a share in 2012 from 2011.

“With smaller increases, the stock is likely dead money at best, and is at risk of falling 10 percent to 15 percent toward $30 if the company’s habit of missing profit expectations continues,” the Barron’s report said.

Waste Management closed at $35.66 per share on Friday.

The dividend consumes most of Waste Management’s net income and free cash flow, Barron’s said. It said a few corporate insiders had sold about 180,000 shares during the past six months near current prices instead of holding them for the attractive dividend.

U.S. productivity rises in second quarter; 2011 revised upward

WASHINGTON, Wed Aug 8, 2012 – Nonfarm productivity rose more than expected in the second quarter as companies expanded output but only modestly increased the hours worked by their employees, data from the Labor Department showed on Wednesday.

Productivity climbed at a faster-than-expected 1.6 percent annual rate between April and June.

In the same report, the government also said productivity rose 0.7 percent last year, more than the initially estimated advance of 0.4 percent. In another revision, productivity declined less than initially thought in the first quarter of 2012, the Labor Department said.

The upwardly revised trend in recent productivity growth is heartening for the economy because in the long run living standards improve when workers are more productive.

Analysts polled by Reuters had expected productivity to increase at a 1.3 percent annual rate during the period.

Output increased at a 2.0 percent rate during the period, but hours worked only rose at a 0.4 percent rate, the department said.

The report also showed unit labor costs climbing 1.7 percent during the period, a faster pace than the 0.6 percent gain expected by economists polled by Reuters.

Consumer confidence rises in July unexpectedly

NEW YORK, Tue Jul 31, 2012 – Consumer confidence unexpectedly rose in July as Americans were more optimistic about the short-term outlook than they were about their current conditions, according to a private sector report released on Tuesday.
The Conference Board, an industry group, said its index of consumer attitudes climbed to 65.9 from a upwardly revised 62.7 in June, topping economists’ expectations for a decline to 61.5.
June was originally reported as 62.0.
Despite the improvement, confidence still remains at historically low levels, Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
“While consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment – in particular the weak labor market – consumer confidence is not likely to gain any significant momentum in the coming months,” said Franco.
The expectations index improved to 79.1 from 73.4, while the present situation index edged down to 46.2 from 46.6.
Consumers’ labor market assessment was mixed as the “jobs plentiful” index slipped to 7.8 percent from 8.3 percent, while the “jobs hard to get” index also fell to 40.8 percent from 41.2 percent.
The view in six months from now was more optimistic, with 17.6 percent expecting to see more jobs, up from 14.8 percent in June.
But consumers were more concerned about price increases, with expectations for inflation in the coming 12 months rising to 5.4 percent from 5.3 percent.

June homebuilder sentiment highest in five years: NAHB

NEW YORK, Mon Jun 18, 2012– U.S. homebuilder sentiment nudged upwards in June to its highest level in five years, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index rose one point from the month before to 29, in another sign that the housing market may be slowly heading into recovery, and one point ahead of the expectations of economists polled by Reuters. May’s reading was previously reported as 29.

The index, however, was still below 50, meaning more builders view market conditions as poor than favorable. It has not been above 50 since April 2006.

The single-family home sales component rose to 32 from 30 in May, its highest level since April 2007. The gauge of single-family sales expectations for the next six months held steady at 34 from May, and prospective buyer traffic also remained in place at 23.

“This month’s modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates,” said NAHB chairman Barry Rutenberg in a statement.

David Crowe, NAHB chief economist, said in a statement that “overly tight lending conditions and inaccurate appraisals” are hindering the completion of further sales.

Sentiment varied by region. The northeast and south registered slight declines in June, down two points to 29 and 26, respectively. The West and Midwest saw increases of 4 and 5 points, up to 33 and 31, respectively.