U.S., UK bank seizure plans focus on absorbing losses: regulators

WASHINGTON, Mon Dec 9, 2012 — Both the United States and United Kingdom have developed viable approaches to seizing and unwinding failing global financial institutions, but more work is needed on the UK side to ensure that losses can be adequately absorbed, American and UK regulators said on Sunday.

The Bank of England and the U.S. Federal Deposit Insurance Corp. said in a joint paper that each country’s plans for dealing with the types of cataclysmic financial failures that marked the 2007-2009 financial crisis would reduce risks to financial stability.

“The FDIC and the Bank of England have developed resolution strategies that take control of the failed company at the top of the group, impose losses on shareholders and unsecured creditors — not on taxpayers — and remove top management and hold them accountable for their action,” they said in the paper.

The new authorities to seize and resolve so-called global systemically important financial institutions came in the United States from the 2010 Dodd-Frank financial reform law, and in Britain from the anticipated approval by early 2013 of the European Union Recovery and Resolution Directive.

Both the U.S. and UK approaches ensure continuity of all critical services of the failing firms and minimize cross-border contagion, the regulators said.

Home resales climb, housing recovery gains traction

WASHINGTON, Mon Nov 19, 2012 – U.S. home resales rose in October and a gauge of homebuilder sentiment climbed to a six-year high in November, a sign slow improvements in the labor market are helping the housing sector recovery gain traction.

The National Association of Realtors said on Monday that existing home sales climbed 2.1 percent last month to a seasonally adjusted annual rate of 4.79 million units, beating forecasts by Wall Street economists.

The data suggests America’s recovery from the 2007-09 recession is becoming increasingly self-sustaining, with job creation helping drive home sales, which in turn are supporting economic growth.

“The housing market is continuing to improve. It’s probably improving more than most economists were projecting earlier this year,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Mass.

However, the data also showed that superstorm Sandy, a mammoth storm that slammed in the U.S. East Coast on Oct. 29, continues to distort economic data in the United States.

The deadly storm had only a slight impact on home resales last month, with sales dropping in the Northeast. But NAR economist Lawrence Yun said the storm could temporarily hold back the pace of sales in November and December.

The storm, which killed more than 130 people in the United States and left millions of homes and businesses without electricity, also lead U.S. factories to cut production in October while consumers pulled back on automobile purchases. Economists, however, think Sandy’s impact on the economy will only prove temporary.

Home prices rise for 6th month, sign sector recovering

NEW YORK, Tue Sep 25, 2012 – U.S. home prices rose for a sixth straight month in July in the latest sign of a sustainable housing market recovery, while a jump in consumer confidence this month offered a harbinger that Americans are ready to loosen their spending.

Six years after its collapse, economists believe the housing market has turned a corner.

Two separate reports on Tuesday showed that home prices rose in July, though the gains were not as strong as the previous month. That follows recent data that home resales and groundbreaking on new properties rose in August, while business sentiment among homebuilders hit a more than six-year high this month.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.4 percent in July on a seasonally adjusted basis. Economists had expected a gain of 0.9 percent, which would have matched June’s advance. Case Shiller is one of the most closely watched barometers of the U.S. housing market.

On a non-adjusted basis, prices were up 1.6 percent.

The gain in house prices supports the view that “even with the broader economic recovery struggling to gain traction, the housing recovery is sustainable,” wrote Paul Diggle, property economist at Capital Economics.

Housing has regained its footing at the same time as the broader economic recovery has lost traction. The economy grew at a 1.7 percent annual rate in the second quarter, and economists say it is not likely to fare much better in the current quarter.

Long road to U.S. housing recovery despite tighter supply

WASHINGTON, Wed Aug 8, 2012 – U.S. home prices are inching up as an ebbing tide of foreclosures creates a shortage of properties at a time of pent-up demand, but do not expect the housing market recovery to shift into higher gear.

Tightening house supplies have turned some parts of the country into sellers’ markets, marked by intense bidding wars among buyers eager to take advantage of rock-bottom mortgage rates and still-low home prices.

“It is encouraging that demand is flowing back into the market and buyers are getting off the fence at last,” Stan Humphries, chief economist at real estate group Zillow told Reuters.

But it’s not off to the races for the housing market, the main trigger of the 2007-09 recession. Many homeowners remain saddled with properties worth less than the amount they owe banks and other financial institutions.

This means they cannot afford to sell their houses, even if they wanted to. As such, the supply of houses on the market will remain tight and weigh on sales.

Home resales declined 5.4 percent in June, with realtors blaming the drop on lack of inventory.

Contracts to buy homes, a forward-looking indicator of sales, also fell during the month for the same reason, casting a shadow on the budding housing market recovery.

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.

Economic growth gauge drops in latest week: ECRI

NEW YORK, Fri Jul 20, 2012 – A measure of future U.S. economic growth fell in the latest week, while the annualized growth rate rose, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 121.9 in the week ended July 13 from 122.9 the previous week. That was originally reported as 123.2.
The index’s annualized growth rate rose to -2.3 percent from -2.7 percent a week earlier. That was originally reported as -2.2 percent.

Plunge in durable goods orders clouds U.S. outlook

WASHINGTON, Wed Apr 25, 2012 – Demand for long-lasting manufactured goods tumbled by the most in three years in March and businesses cut back on spending plans, suggesting the economy slowed as the first quarter drew to a close.

Durable goods orders dropped 4.2 percent, the largest decline since January 2009 when the economy was nose-diving, Commerce Department data showed on Wednesday. Economists had expected a drop of just 1.7 percent.

February orders were revised to show only a 1.9 percent increase instead of the previously reported 2.4 percent rise.

“This adds to the evidence that momentum in the economy sort of fell flat in March,” said Ellen Zentner, a senior U.S. economist at Nomura Securities in New York.

Data on durable goods, items ranging from toasters to aircraft that are meant to last three years or more, is notoriously volatile and investors on Wall Street ignored the report. Stock prices rose, cheered by forecast-beating results from Apple. Prices for U.S. Treasury debt fell, while the dollar was marginally weaker against a basket of currencies.

The data, which was the latest to show the factory sector losing a step in March, came as officials at the Federal Reserve met for a second day to deliberate on monetary policy, and it reinforced the central bank’s views of moderate growth.

U.S. sales boost McDonald’s Corp. first-quarter profit

OAK BROOK, Ill., Fri Apr 20, 2012 – McDonald’s Corp. reported higher quarterly profit on Friday, paced by strong sales at established restaurants in the United States and Europe.

Quarterly sales at restaurants open at least 13 months were up 7.3 percent, more than the 6.7 percent increase expected by analysts polled by Consensus Metrix. Comparable sales rose 8.9 percent in the United States and 5 percent in Europe.

Companywide, the restaurant chain expects the momentum to continue in April, forecasting comparable sales will be up 4 percent for the month.

A difficult economy in Europe, the company’s biggest market, had raised concerns that McDonald’s patrons might pull back.

“People have been most concerned about Europe and it looks like it’s OK,” said Sara Senatore, an analyst with Sanford C. Bernstein & Co.

In Asia/Pacific, Middle East and Africa, comparable sales were up 5.5 percent.

Shares of McDonald’s rose 1.7 percent to $96.95 in premarket trading on Friday.

Net income at the world’s biggest fast-food chain rose to $1.27 billion, or $1.23 per share, during the first quarter, up from $1.21 billion, or $1.15 per share, a year earlier. That was in line with analysts’ average forecast, according to Thomson Reuters I/B/E/S.

U.S. trade gap narrows sharply in February to $46 billion

WASHINGTON, Thu Apr 12, 2012 – The U.S. trade deficit narrowed unexpectedly in February as exports hit a record high, imports from China and other key suppliers declined and oil import volume fell to the lowest in 15 years, a government report showed on Thursday.

The monthly trade gap shrank 12.4 percent to $46.0 billion, the biggest month-to-month decline since May 2009, the Commerce Department report said. Analysts surveyed before the report had expected the deficit to narrow only slightly from January’s revised estimate of $52.5 billion.

U.S. exports edged slightly higher to a record $181.2 billion, led by record exports of services and capital goods, such as civilian aircraft and industrial machines.

Exports to Canada, the biggest U.S. trade partner, grew 7.2 percent and also rose to the 27-nation European Union, China, Brazil and newly industrialized countries. Exports to Britain hit a record $5.3 billion.

Imports dropped 2.7 percent to $227.2 billion, the biggest monthly drop in three years.