Posts Tagged Business
If You’re 50 and Haven’t Saved A Dime
Posted by Tetyana Matychak in Budget on February 9th, 2010
You’re 50, recently laid off, and now forced to figure out what work you’ll do for the next 15 years or more and how you’ll ever retire.
You’d dreamed of leaving your job at 65, vacationing in Tuscany, taking a trip around the world, or perhaps spending your afternoon on the golf course. But the reality is the economic downturn has tripled the number of unemployed wokers ages 55 to 64 over the past two years, compared with a doubling in the overall unemployment rate.
That means right now, for you, Job Number One is figuring out the next career you’ll embark on. This is the “new retirement” that many Baby Boomers (born between 1946-1964) must now envision.
The rise in job losses, grim prospects for Social Security benefits, and paltry personal savings has created a situation where many Boomers must put off retirement from the workforce because they simply cannot afford it. Even before the recession, the Congressional Budget Office predicted the Social Security Administration would be doling out more money than it took in by 2020, which would deplete the trust fund and cause a severe cut in benefits by 2043. Read the rest of this entry »
The Great Recession Continues
Posted by Tetyana Matychak in Budget on January 27th, 2010
The December jobs report has doused the hope that we were at the beginning of a sustained economic recovery.
The unemployment rate managed to hold at 10% in December only because of an extraordinary shrinkage in the labor force: Some 661,000 gave up looking for a job.
Bureau of Labor Statistics’ (BLS) nonfarm payroll data indicate that December job losses totaled 85,000. But the bureau’s household survey, a better and more comprehensive measure of both the unemployed and underemployed, indicated a loss of 589,000 jobs. Since the Great Recession began in 2007, some 8.6 million jobs have been lost, according to the bureau; and small businesses, the normal source for new jobs, are still shedding workers. Fewer than 10% added employees, while more than 20% cut back—and the cuts averaged nearly twice as many per firm as the hires at the expanding companies.
Unemployment, in short, has graduated from being a difficulty, a worry. It is now a catastrophe, with some 15.3 million Americans out of work, according to the BLS. Read the rest of this entry »
Portfolio makeover: Is our big debt doing us in?
Posted by Tetyana Matychak in Budget on January 6th, 2010
Marc and Sharon LeRoux always dreamed of opening a business together. They took the plunge in 2006, tapping home equity to buy a franchise selling pre-made meals to busy families. Alas, the business failed, and last year the couple closed it down.
Fortunately, neither had quit their day jobs - Sharon is an engineer at Hewlett-Packard, Marc owns a specialty game store. But they still have $154,000 on a home-equity line of credit from the venture dragging them down. “Our income is very good, but we’re living paycheck to paycheck,” say Sharon. “And I’m sure we’re underfunding our retirement and our kids’ college.” (They are parents of Marie, 15, Nicole, 12, and Marc, 5.)
That debt is indeed an obstacle, says Salem, Ore. financial planner Ron Keleman. It eats up $1,000 a month. In spite of that, they’ve been keeping up with retirement, managing to stash away $12,000 a year. At that pace, says Keleman, they’ll have about $1.25 million by age 65, assuming a 7% average annual return (which they may be able to get if they build more growth into their portfolio).
The good news: That amount, along with Social Security, should be enough for their modest income goals. The bad news: They’ve been unable to start an emergency fund - savings that are essential in such uncertain times. As for college, they’re aiming to have saved a year of state-school tuition for each kid . While they can probably get there, wiping out the HELOC would allow them to cover even more. Read the rest of this entry »
Economic survey: Job losses to bottom out in 1Q
Posted by Tetyana Matychak in Budget on November 27th, 2009
Economists expect the joblessness that has weighed down the nation’s economic recovery will start to slowly abate in 2010, but they predict consumers will continue to keep a tight rein on spending, according to a new survey.
While signs have pointed to the end of the recession, unemployment remains rampant. The national unemployment rate jumped to 10.2 percent in October, the highest in 26 years. About 9 million people currently receive unemployment benefits.
The November outlook by the National Association for Business Economics, which is set to be released Monday, shows economists expect net employment losses to bottom out in the first quarter of next year. Employers are seen starting to add to their payrolls after that.
“While the recovery has been jobless so far, that should soon change,”said Lynn Reaser, NABE’s president and chief economist at Point Loma Nazarene University.”Within the next few months, companies should be adding instead of cutting jobs.” Read the rest of this entry »
German Business Confidence Rises More Than Forecast
Posted by Tetyana Matychak in Trading Markets on November 23rd, 2009
German business confidence increased more than economists forecast to a 15-month high in November, suggesting the economic recovery may gather pace next year.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, rose to 93.9 from 92 in October, the highest reading since August last year. Economists expected a gain to 92.5, according to the median of 37 forecasts in a Bloomberg survey. The index reached a 26-year low of 82.2 in March.
Economic growth accelerated in the third quarter as companies replenished inventories and rising export orders prompted factories to ramp up production. The manufacturing industry expanded for a second month in November and the country’s benchmark DAX share index has advanced 20 percent this year. Unemployment, the euro’s strength and the expiry of government stimulus measures may still damp growth in 2010.
Ifo’s “sharper than expected rise” is “another encouraging sign that the economy continued to expand in the fourth quarter,” said Jennifer McKeown, an economist at Capital Economics Ltd in London. “We expect Germany to lead the euro- zone recovery.” Read the rest of this entry »
Is Brand Loyalty A Thing of the Past?
Posted by Tetyana Matychak in Budget on September 25th, 2009
Nearly a year on, the financial crisis has changed the way companies and consumers view the brand names in their wallets.
But is this a temporary change, or will it stick?
Some consumers, including those who have had their credit cards canceled, limits lowered or mortgages left in standstill, all say the same thing: “I’m never doing business with company X ever again.”
But some consultants and financial institutions say they aren’t worried about consumer ire toward brands today. They say that consumers have short-term memories and are fickle. And when the economy turns around, people will drift back to brands that they once dismissed.
Robert Passikoff, founder of Brand Keys, a research consulting firm, disagrees. He says that in the past it was easier for companies to win back consumers, but thanks to the Web, it’s easier for more consumers to get more information about brands before they buy. “This is not going to be a forget-and-forgive society,” he says. Read the rest of this entry »
U.S. Stocks Drop as Microsoft, American Express, Amazon Retreat
Posted by Tetyana Matychak in Favourites, Fund Markets on July 24th, 2009
U.S. stocks retreated from the highest levels of the year as Microsoft Corp., American Express Co. and Amazon.com Inc. posted disappointing quarterly results, overshadowing reports showing Europe’s economy improved.
Microsoft fell 10 percent, the most since January, on lower profit and sales than analysts estimated. American Express slipped 3.7 percent after saying earnings decreased as the recession made it harder for cardholders to keep up with payments Amazon.com slumped 8.2 percent following price cuts that caused the online retailer’s revenue to miss projections.
The Standard & Poor’s 500 Index dropped 0.8 percent to 968.22 at 9:58 a.m. in New York after futures on the measure rose as much as 0.5 percent earlier. Dow Jones Industrial Average futures fell 47.24 points, or 0.5 percent, to 9,022.05. U.S. stocks surged yesterday, sending the Dow above 9,000 for the first time since January.
“At these levels in the market, there’s not a lot of room for error,” said Mark Freeman, who helps manage $7.5 billion at Westwood Management Corp. in Dallas. “Anything that deviates brings about a reevaluation by the market.”
Futures advanced earlier as Europe’s economy moved closer to recovery as the manufacturing and service industries contracted at the slowest rate since August and German business confidence climbed to a nine-month high. Later, the Reuters/University of Michigan index of U.S. consumer confidence was better than economists forecast. Read the rest of this entry »
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