The longest U.S. recession of the postwar era is showing further evidence of losing steam.
Encouraging signs appeared on various fronts yesterday, with the number of first-time jobless claims falling sharply and bargain-hungry shoppers boosting April sales for discount retailers. Earlier this week, a report showed the pace of decline in the service sector slowing.
Along with Federal Reserve Chairman Ben Bernanke's relatively optimistic assessment Tuesday, those developments suggest that the economy may finally be stabilizing.
"The bottom is forming," said Joel Naroff, president of Naroff Economic Advisors. "It doesn't say we're out of the woods . . . but I think things are turning."
Analysts stressed that while the panicky period that followed the collapse of Lehman Brothers last fall is over, a recovery is still months away and is likely to be grinding and slow. Unemployment, which trails other indicators, is likely to keep rising after the recession officially ends. Analysts expect the jobless rate to rise from 8.5 percent to 8.9 percent or so when the government releases its April employment report today.
Yesterday, the Labor Department reported that first-time jobless claims dropped to 601,000 last week. But even if they continue to fall, they will likely remain above 500,000 for some time, said Arpitha Bykere, lead analyst for RGE Monitor.
"These are very sharp job losses," she said. "This clearly affects the U.S. consumer, who is already under pressure because of tight credit and falling home prices."
Indeed, other data released yesterday by the Federal Reserve showed many consumers in the grip of a credit crunch. Consumer credit in March fell by more than 5 percent, the biggest drop in nearly 20 years. Analysts attributed much of the decline to tougher lending standards as well as reduced spending.
Trouble accessing credit, mounting job losses and the need to rebuild savings mean consumers need to stretch every dollar they have. And they appear to be doing that by shunning luxury for bargains. Value-conscious shoppers flocked to discount stores such as Wal-Mart and T.J. Maxx last month. Wal-Mart said sales at its stores open at least a year - a key measure of success in retailing known as same-store sales - rose 5 percent during April compared to the same month last year.
Some industry experts cautioned that any improvements in retailers' performance was largely driven by better management of prices and inventory rather than an increase in consumer demand. Luxury department stores continued to suffer double-digit declines, with Nordstrom down 11 percent, Neiman Marcus dropping 23 percent and Saks falling 32 percent.
"All we're really seeing is a continued flight to value," said Craig Johnson, president of Customer Growth Partners, a retail consulting firm.
Despite such warnings, many economists are voicing hope. When he appeared on Capitol Hill earlier this week, Bernanke endorsed the view that the nation's "pace of contraction may be slowing." He also said that consumer demand "may be stabilizing" and that the housing market has "shown some signs of bottoming."
In a telling sign, many lawmakers quizzed Bernanke not about how much the economy would contract, but about how the Fed would wind down lending programs and tame inflation once economic growth resumed.
"Clearly, the massive economic stimulus from the administration and the Federal Reserve have had a very positive real, as well as psychological, effect on the economy," said California State University economist Sung Won Sohn. "The economy seems to be coming out of this recession faster than I expected."
May 9: Taking a cue from Tata group’s “Subha Gruha”, realtors have slashed prices of apartments considerably to suit the wallets of the middle class.
A two bedroom flat with all basic amenities at Rs 10 lakh was a dream last year. However, with changing times, it is turning into a reality now.
“We can build a small flat at less than Rs 2.92 lakh,” said Mr C. Sekhar Reddy, president State Builders’ Forum.
“It is possible in all the adjoining municipalities which were recently merged with the Greater Hyderabad.”
According to him, in 225 square feet, a decent one room and kitchen flat can be built at a cost of Rs 1,300 per square feet and sold for Rs 2.25 lakh.
Several builders have started focusing on budget apartments. The basic model has a room, a kitchen and a bathroom.
And to get back customers, real estate giants like Ashoka Builders, Aliens and PBL Constructions are coming out with additional facilities.
Apartments under construction in and around Hyderabad, Guntur, Vijayawada and Visakhapatnam are now being offered 20 to 30 per cent discount, and most of the builders are offering children’s play area, cable connection, water filter unit etc for free.
Consider the case of Ashoka Builders: it only used to take up projects to cater the high-end consumers with prices ranging from Rs 5,000 to Rs 8,000 per sq.ft.
Now it has launched a project to build 100 flats at Madhapur at Rs 2,500 per sq.ft price.
“The middle class segment has turned out to be a gold mine. So we have changed our plans to suit their needs and purses,” said Mr K. Laxma Reddy, chairman of Ashoka Developers and Builders Ltd.
Mr Sekhar Reddy says prices can be reduced further if the government provides loans to this sector at 3 per cent interest and changes are made in the floor space index.
Vishal declared that he is not in love with Shriya, as reported by the media. There were reports that Vishal shared a special friendship with Shriya in the sets of Thoranai. However, the actor said that Shriya will remain his best buddy for ever and the fans should not read more than that in their relationship.
The actor also refuted director Tarun Gopi’s allegation that he was not paid for directing the film Thimiru. The actor clarified that he is neither the producer nor the financier of the film and hence the allegation against him is baseless. Vishal added that Tarun should have brought this up when the film was released and he could not comprehend why the director brought up the issue after all these years.
Why did Telugu Desam Party president N Chandrababu Naidu announce his Cash Transfer Scheme only a few days before polling?
Naidu said he had to keep the scheme under wraps till last moment, because he feared Chief Minister Dr Y S Rajasekhara Reddy would copy it and announce it well in advance, had it been leaked earlier. “YSR copied the Rs 2 a kg rice scheme in the same manner,” he alleged.
According to the TDP sources, Naidu had planned Rs 2 a kg rice scheme well in advance and was about to be discussed at the TDP politburo meeting. But a few hours before, it was leaked to YSR, allegedly by Naidu’s erstwhile personal secretary Vijayakumar (who later shifted loyalties to YSR and is now in SV Bhakti channel). Without wasting time, YSR announced the scheme without even discussing it with the officials of the finance and civil supplies department.
Though Naidu’s driver Ravi complained to Naidu that the information was leaked by Vijayakumar, he did not believe it; instead, he sacked Ravi. A few days later, Ravi was found dead in his room, while Vijayakumar shifted loyalties to YSR.
Riyadh, Saudi Arabia: A Saudi judge told in a conference on domestic violence that a man has the right to slap his wife if she spends lavishly on such things as clothing, a Saudi newspaper reported, drawing criticism from rights activists in the conservative kingdom.
The remarks by the judge do not carry the weight of law, as they were made out of court. But such public pronouncements by Saudi judges who are also Islamic clerics are often widely respected.
Those campaigning for women's rights in Saudi Arabia said the comments were another setback in efforts to gain the right to vote, drive and freely participate in politics.
"If a person gives 1,200 Saudi riyals ($320) to his wife and she spends 900 riyals ($240) to purchase an abaya (head-to-toe robe) from a brand shop and if her husband slaps her on the face as a reaction to her action, she deserves that punishment," Judge Hamad Al-Razine was quoted as saying by the English-language Arab News newspaper on Sunday.
Chennai/Kottayam (Kerala), May 11 (IANS) A Tamil Nadu court Monday acquitted former Kerala public works minister P.J. Joseph of charges that he had misbehaved with a woman passenger on a flight. Mons Joseph, who now holds the portfolio in the state government, said he would resign to enable his predecessor to return to the post.
The Sriperumbudur magistrate's court near Chennai acquitted P.J. Joseph in the sexual harassment case filed against him by television anchor Lakshmi Gopakumar in 2006.
While P.J. Joseph hailed God for the favourable verdict, Gopakumar's counsel said they would appeal against the decision.
Gopakumar had complained to the Chennai airport police, accusing P.J. Joseph of misbehaving with her on board a Kingfisher Airlines flight from Chennai to Kochi Aug 3, 2006.
Besides the Chennai airport police probe, the Kerala government had asked Inspector General of Police B. Sandhya to investigate the charges.
In her report late August 2006, Sandhya said the victim stood by her allegations and 'it was possible that such an act might have occurred on board'. The report ruled out any conspiracy theory as suggested by P.J. Joseph.
P.J. Joseph, the chairman of the Kerala Congress-Joseph, was replaced by T.U. Kuruvilla as public works minister in September 2006 after the former quit the cabinet over the misbehaviour allegations.
Mons Joseph took over from Kuruvilla, who also resigned in the wake of a land scam involving his children.
P.J. Jospeph's supporters took out a rally shouting slogans in favour of their leader in his hometown in Thodupuzha as soon as the news of the acquittal came.
Current Public Works Minister Mons Joseph addressed reporters in Kottayam in Kerala minutes after his party chairman P.J. Joseph got a clean chit and said he would step down.
'I informed the chairman that I am holding a press conference here to announce my decision to resign to make way for him. He said that he and his family were leaving on a pilgrimage to the Velankanni church (in Tamil Nadu),' Mons Joseph said.
'It is for the party to decide the future course of action but I am clear I will step down in favour of my party chairman. This acquittal is going to give a huge boost to our party,' he added.
Chief Minister V.S. Achuthanandan said in Thiruvananthapuram: 'I am happy to hear about the acquittal. Whether or not he becomes minister has to be decided by his party and the LDF.'
Vaikom Viswan, the ruling Left Democratic Front (LDF) convenor, told reporters in Kottayam that he welcomed P.J. Joseph's acquittal, but said his re-appointment as minister would be decided later.
'If Joseph will go on to become a minister (or not) will be decided later at the appropriate forum and cannot be disclosed now,' said Viswan.
Tanda/ Bisalpur, May 11 (ANI): General Secretary of Samajwadi Party, Amar Singh on Sunday said that actor-turned-politician and his party's candidate from Rampur seat, Jayaprada might commit suicide if she loses the poll. Few days back, an argument between Singh and senior SP leader Azam Khan had hurt Jayaprada's prospects, which is seeking her re-election from the seat.