Archive for April, 2013

US Consumers Less Positive as Economic Concerns Weigh

U.S. consumer sentiment eased in April as Americans remained concerned about their employment and financial prospects, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 76.4 from 78.6 in March, although it topped economists’expectations for 73.2.

(Click here to track the U.S. stock market following this economic report.)
It also was an improvement from April’s preliminary reading of 72.3.

The barometer of current economic conditions fell to 89.9 from 90.7, while the gauge of consumer expectations slipped to 67.8 from 70.8.

Just 23 percent of consumers anticipated a improvement in the unemployment rate during the coming year, while three out of four expected an unchanged or higher jobless rate. Read the full article here:

Is Prius next after Toyota’s decision to produce Lexus in U.S.?

Toyota’s announcement Friday that it will start building the Lexus ES 350 at a factory in Georgetown, Ky., is part of a larger policy of moving production of cars to the markets where they are sold that could result in the automaker’s Prius hybrid being built in the U.S.

In an interview with The Times, Toyota’s North American CEO Jim Lentz said the Prius would be the only major gap in Toyota’s North American production once the Lexus assembly line is up and running in Kentucky.

“If you look at most of the vehicles we sell in the U.S., most have been localized — from Camry to Corolla to the trucks. If you look at Lexus, the two biggest volume vehicles, the RX is made in Canada and now the ES will be made here,” Lentz said.

“The only vehicle that is really left out there is the Prius. If you look at global demand and global supply on the Prius, they are in sync,” he said. “There is no need to build more capacity now but at some time more capacity will be needed and we would be raising our hand here.”

The Prius was the bestselling vehicle in California last year. The automaker expects to sell about 250,000 of the hybrids nationally this year.

Lentz also talked about whether it is politically difficult for Toyota to move production from Japan. The ES is now built at a factory in Kyushu, Japan.

“That is a difficult question for me to answer because I am not in the heart of Japan,” he said. “Akio [Toyoda, president of the automaker] has talked about maintaining production of 3 million vehicles in Japan. The ES makes sense to come here because Kyushu will get another product in 2014 that will have volume bigger than the car that is leaving.”

The ES is the bestselling Lexus and accounted for about 56,000 of the brand’s U.S. sales last year.

Lentz said that production of the Lexus will begin in mid-2015, and Toyota expects the factory to turn out about 50,000 annually. It will be the first Lexus built in the U.S.

“It will be built on a dedicated line on the plant. The assembly, paint and weld all will be for just the ES,” Lentz said.

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Wholesale Prices in U.S. Fall More Than Forecast on Energy

Wholesale prices in the U.S. fell more than forecast in March as the cost of energy slumped by the most in three years.
The 0.6 percent drop in the producer price index was the biggest since May and followed a 0.7 percent gain in the prior month, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of 75 economists called for a 0.2 percent decline. A core measure of prices that excludes the volatile food and energy categories rose 0.2 percent for a third month.
Weakness in Europe and slower growth in other global markets are restraining demand for commodities including oil, limiting the ability of U.S. companies to raise prices. A smaller risk of inflation is giving Federal Reserve officials room to keep buying assets at an unprecedented rate as they seek to boost growth and lower unemployment.
“Inflation fortunately remains low and that will support spending,” said Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh. “Inflation is a non-issue.”
Another report showed retail sales unexpectedly fell in March by the most in nine months as employment slowed, showing household spending ended the first quarter on softer footing.
Retail Sales
The 0.4 percent decrease, the biggest since June, followed a 1 percent gain in February, according to the Commerce Department in Washington. The median forecast of 85 economists surveyed by Bloomberg called for no change in March. Department stores and electronics dealers were among the weakest showings.
Stock-index futures extended declines after the retail data. The contract on the Standard & Poor’s 500 Index expiring in June dropped 0.4 percent to 1,581.1 at 9:08 a.m. in New York after closing at an all-time high yesterday.
Economists’ estimates for producer prices ranged from a decrease of 1.1 percent to a 0.5 percent gain. Core wholesale prices were projected to rise 0.2 percent, the Bloomberg survey showed.
Compared with the same month last year, companies paid 1.1 percent more for goods, the smallest 12-month advance since July, today’s report showed. The core index increased 1.7 percent in the year ended in March, matching the prior month’s gain.
Energy Prices
The wholesale cost of energy, including gasoline, diesel fuel and natural gas, slumped 3.4 percent in March. The decrease was the biggest since February 2010.
Diesel prices dropped 12.8 percent last month, the most in four years. Gasoline costs decreased 6.8 percent, the biggest decline since November.
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Zynga CEO Pincus to Receive $1 Salary

Mark Pincus, the CEO of San Francisco-based gaming company Zynga, sets his own salary.

$1 — with no cash bonuses, according to Reuters.

Pincus has been at the helm of the company best-known for “FarmVille” since 2007. He received $1.7 million in 2011, a year before the company became known for an IPO that debuted at $10 before plummeting to $3.45 a share this week.

Zynga was once one of the hottest companies, thanks to the many Facebook users who forked over real cash for in-game items.

But users have been leaving the company’s games — so Zynga hopes that starting online gambling games in the United Kingdom will restore its fortunes.

In the meantime, Pincus announced in filings this week that he’ll receive a grand total of $1 in compensation for all of 2013. His 2012 compensation package was not disclosed.

It’s not likely Pincus is hurting for cash: he recently closed on a luxury San Francisco mansion and was at one time a billionaire before Zynga’s stock plummeted in value.
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