April 2009

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Consumer Spending Fell 0.2 Percent In March

April 30, 2009 in General | Permalink

Consumer spending fell for the first time in three months while income growth slipped for a second straight month, indicating that the economy is still struggling to emerge from the recession.

The Commerce Department reported today that consumer spending dropped by 0.2 percent in March, worse than the 0.1 percent decline that economists had expected.

Incomes, reflecting the continued massive way of layoffs, dropped by 0.3 percent, worse than the 0.2 percent dip that had been expected.

After-tax incomes were flat in March, leaving the personal savings rate at 4.2 percent, an improvement from a year ago when the rate was near zero. Households have been cutting back on spending and boosting savings during the current hard times, worried that they need to replenish depleted nest eggs in the face of massive job layoffs.

The 0.2 percent drop in spending was the first decline after two consecutive increases. Spending shot up by 1.1 percent in January, the largest monthly jump in nearly five years, but that increase followed six straight monthly declines as consumers slashed outlays in the face of a deepening recession.

The fact that spending turned negative again in March was a worrisome sign about future economic prospects. Consumer spending in the first quarter of the year grew at a 2.2 percent annual rate after two consecutive quarters of declines.

A price gauge tied to consumer spending showed a modest 0.2 percent increase, excluding food and energy, and a 1.8 percent increase over the past year. The country’s deep recession, on its way to becoming the longest in the post World War II period, has dampened price pressures.

Is there a bright side to the Las Vegas and Gaming Industry in the current economic environment?

April 29, 2009 in General | Permalink

Merrill Lynch believes so. It issued a lengthy report on the industry that said, “Despite near-term uncertainty around gaming fundamentals and the dramatic disruptions faced by the global economy, we continue to like the longterm outlook for the sector. We believe that the core attributes that made the Gaming sector so attractive to investors prior to the current economic meltdown have not fundamentally changed (and in fact some longer term structural changes will likely be positive for the industry).”

If you want this comprehensive, 200 page report, please click here.

U.S. Home Sales Down in March

April 24, 2009 in General | Permalink

Sales of newly built U.S. single-family homes dropped 0.6 percent in March, but the stock of homes for sale at the end of the month still plummeted at a record pace, the Commerce Department reported today.

The inventory of new homes shrank in March, to 311,000 from 328,000 in February. That left the supply of homes available for sale at 10.7 months’ worth, compared to February’s 11.2 months.

The Commerce Department said that the monthly change in inventories, of 5.2 percent, was the largest drop in more than 45 years and the year-on-year plunge of 33.7 percent was the largest on record.

February sales were much stronger than originally thought, with the report showing they rose 8.2 percent, compared to the 4.7 percent gain previously reported.

The March drop brought home sales to a 356,000 annual pace. Analysts polled by Reuters had forecast sales at 340,000.

The median sales price for a new home fell to $201,400 from $208,700 in February. The average price, however, rose slightly to $258,000 from $255,100.

Western Alliance Bancorp Reports $86.5 Million Net Loss in Q1

April 24, 2009 in General, Media Relations | Permalink

Western Alliance Bancorporation (NYSE: WAL) reported a net loss of net loss of $86.5 million, or $2.33 per share for the first quarter ended March 31, 2009, compared to net income of $4.1 million, or $0.14 per share for the a year earlier.

The company said first quarter 2009 results include a non-cash goodwill impairment charge of $45.0 million and a securities impairment charge of $36.4 million (net of tax), essentially comprising a non-cash write down of its holdings of Bank of America (BofA) preferred stock, as these securities were cut to below investment grade by credit rating agencies.

Western Alliance said that despite the credit downgrade, the its holdings of Bank of America rank pari passu with the preferred stock issued by Bank of America to the United States Treasury under the TARP program.


March Mass Layoffs Highest On Record

April 23, 2009 in General, Media Relations | Permalink

In March, employers took 2,933 mass layoff actions involving 299,388 workers, the highest levels on record. Mass layoff events increased by 164 from February, and initial claims increased by 3,911. Twenty-six states reached program highs for March in terms of average weekly initial claims.

Additionally, new jobless claims rose more than expected last week. Both figures are fresh evidence layoffs persist amid a weak job market that is not expected to rebound anytime soon.

The Labor Department said today that initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the previous week. That was slightly above analysts’ expectations of 635,000. The number of workers continuing to filing claims for unemployment benefits topped 6.1 million.

Jobless claims have historically peaked six to 10 weeks before recessions end. Initial claims reflect the level of job cuts by employers. However, the latest report shows job losses remain high. The four-week average of claims, which smooths out volatility, dropped slightly to 646,750, about 12,000 below the peak in early April.

In another sign of labor market weakness, the number of people continuing to claim benefits rose to 6.13 million, setting a record for the 12th straight week. As a proportion of the work force, the total jobless benefit rolls are the highest since January 1983. The continuing claims data lag initial claims by a week. The high level of continuing claims is a sign that many laid-off workers are having difficulty finding new jobs.

Employers have cut 5.1 million jobs since the recession began in December 2007 in an effort to slash costs as consumers and businesses have sharply reduced spending. The department said earlier this month that companies cut a net total of 663,000 jobs in March, sending the unemployment rate to 8.5 percent, the highest in 25 years.

The cuts reflect the depth of the downturn, which has been global in scope. The International Monetary Fund estimated Wednesday that the global economy would shrink 1.3 percent this year, the first drop in more than six decades. The IMF projects the U.S. economy will decline 2.8 percent, the worst since 1946.

Among the states, Florida saw the largest increase in claims with 9,303 for the week ending April 11, which it attributed to more layoffs in the construction, service and manufacturing industries. The next largest increases were in Pennsylvania, California, Wisconsin and New York.

Michigan saw the largest drop in claims with 12,566, which it said was due to fewer layoffs in the automobile industry. The next biggest declines were in North Carolina, Missouri, Kentucky and Oregon.

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