Dee DePass has been a Star Tribune business reporter since 1993, covering small business, financial institutions, manufacturing and, most recently, the economy. Originally from New York, Dee came to Minnesota after earning her master's in journalism at the University of Maryland and her undergraduate degree at Vassar College.

Posts about Economics

Economists predict slight growth in this week's pending reports

Posted by: Dee DePass Updated: February 13, 2012 - 12:04 PM

The folks at the renowned research group, IHS Global Insight, note that several reports due this week should show modest improvement across different sectors of the U.S. economy.

Mild weather - the third warmest on record since 1895 -- is expected to have boosted January housing starts to the highest monthly level in three years, IHS economists said. They suspect warm weather trends also bumped up retail and auto sales and industrial production for the month.

The key take away of IHS's over-the-weekend report is that housing and manufacturing are on the move again. Housing starts could grow by 6.5 percent for the month.

The national industrial production report -- due out Wednesday -- could show a 1.1 percent gain from prior month. "Manufacturing has gotten off to a strong start in 2012, with business, equipment demand, motor vehicles, and inventory rebuilding [being] the big drivers," the IHS report said.

On the downside, consumer and producer prices are believed to have inched upward in January due to higher energy prices.

Keep an eye out for the following national economic reports this week for January:
Tuesday Feb. 14,  Auto and retail sales
Wednesday  Feb.15, Industrial production
Thursday Feb. 16,  Producer price index and housing starts
Friday  Feb. 17, Consumer price index


Economists warn of trouble brewing in the new year

Posted by: Dee DePass Updated: January 2, 2012 - 2:27 PM

Economists surely guzzled champagne and trotted a jig as 2011 ended happily with decreased weekly jobless-claims and an unexpected surge in holiday spending.

But just two days into the New Year, those same economists are now packing away the wine glasses and bracing for trouble.

Yes, "the U.S. economy is entering the New Year on a strong note," said Jerry Jasinowski, economist, author, and former president of the National Association of Manufacturers. "But there are clouds on the horizon that are likely to slow U.S. economic growth to 2 percent for the year as a whole. We must remember that we are still recovering from a deep financial recession."

Jasinowski worries that there are no strong drivers for economic growth; that consumer will retrench from holiday spending, and that state government budgets are contracting. He added that business capital spending "will remain subpar because of uncertainty about direction from Washington," and that export growth will slow as the dollar strengthens and global growth slows.  

The economic research gurus at IHS Global Insight noted similar concerns on its weekend note. Fresh concerns about Italy's recent bond auction and ongoing debt scenario caused IHS researchers to note "this source of volatility is here to stay."

As a result, the "first half of 2012 could look similar to the second half of 2011," IHS officials said. Beyond Europe's messy debt woes, the economic expectations for the United States were mixed. While consumer confidence improved thanks to better jobs prospects and lower gas prices, home prices are expected to continue falling thanks to foreclosure backlogs. 

On the plus side, IHS officials expect that 150,000 jobs were created in December. That's not enough to dramatically lower the national unemployment rate below 8.6 percent, but it's progress. Officials from the Economic Policy Institute say they hope 2012 is the year the ratio of applicant-to-job changes for the better. Right now they stand at four applicants for every job opening. Minnesota still has more than 193,000 unemployed jobseekers.  


Survey finds employees confused about pending retirement needs

Posted by: Dee DePass Updated: October 11, 2011 - 5:47 PM

 Pre-retirees need a refresher course. And fast.

When MetLife asked 1,213  56- to 65-year-olds about the income they'll need and the expenses they'll have, most had only five correct answers  to the 15 questions. That's not good. In 2008,responders got six of the 15 questions right. 

Oh boy. time to go back to the drawing board. After all Americans are not getting any younger.

According to the results released Tuesday by the MetLife Mature Market Institute, misperceptions include: : 

  • Social Security - only 17 percent knew that delaying benefits by three years would add 24 percent to the amount they receive.
  • Retirement income - Only 45 percent knew that they will need 80 percent of their pre-retirement income to keep their current standard of living.
  • Savings - 40 percent didn't know that experts suggest spending only 4 to 6 percent of savings a year. Most wrongly thought spending 7 to 15 percent was fine. 
  • Long-term care insurance - 42 percent incorrectly believe that health insurance, Medicare or disability insurance will cover the cost of long term care

But respondents did get a few things right.

Most understood they will live longer and need to plan while they still working. A healthy 87 percent are planning to work longer or have jacked up their 40(k) contributions. And 62 percent have sought professional financial advice.

Still, it's not enough.

"Everyone knows they're likely to live longer, but most don't realize that can mean living past age 85,’’ said MetLife Institute director Sandra Timmermann. “And they fail to calculate how much money they will need for a steady and lasting income."


Small businesses are down in the dumps

Posted by: Dee DePass Updated: October 10, 2011 - 10:39 AM

SurePayroll's Small Business Scorecard has learned that mom and pop companies are down in the dumps.

The Scorecard, which tracks the health of the nation's small business economy, found that only 33 percent of surveyed business owners reported feeling optimistic in September. That's way down from 67 percent in June and 48 percent in August.  

Another key finding? Business owners lack confidence in the government's ability to stimulate the economy.

Other findings:

  • 20 percent were more optimistic after President Obama's speech last month. 40 percent were more pessimistic.
  • 30 percent felt Obama's American Jobs Act would increase jobs.
  • 10 percent said they would hire additional workers if the Act was enacted.

SurePayroll, which provides payroll services for tens of thousands of small companies nationwide, also peeked in on small businesses wage and hiring trends for metro areas around the country. It found the following:

Metro Area September Staffing changes

Paycheck Size changes

Chicago   +1.0 %   -2.2 %
Cincinnati   -10.5 %   -2.3 %
Columbus   +1.0 %   -7.8 %
Minneapolis    -2.5 %   +3.0
Indianapolis    -2.5 %  -10.80 %
Cleveland    -6.8 %    -5.4

 In Minneapolis, the findings show that job growth isn't rising, but that paychecks are, slightly. No one's getting rich on a 3 percent bump in pay, but it's a start.


Labor secretary: Rebuilding is just the ticket for jobs

Posted by: Dee DePass Updated: September 29, 2011 - 7:04 PM


U.S. Labor Secretary Hilda Solis zipped through the Twin Cities Thursday in an effort to rustle up support for President Obama's American Jobs Act. Her message was simple: To rebuild the jobs market, the United States has to start building.

Holding up a thick copy of the American Jobs Act, the former California Congresswoman stood near the 10th Avenue Bridge in Minneapolis and told 60 people that the bill would bring jobs to Minnesota, if only it was passed,

How many jobs? At least 7,900 to be exact, she said unabashedly.

"There are more than 10,000 bridges in Minnesota, including this one, that are in need of serious repairs," said Solis, who earlier noticed the bare rebar that was exposed on the underside of the bridge. "I understand the bridge right next to this is the bridge that collapsed. And they [rebuilt] that in a matter of less than a year."

In 2007, there were 116,000 Minnesotans working in construction. Today there are just 86,300, according to the Labor Department. If passed, the Jobs Bill could help put contractors back to work on a series of similar projects that "could be implemented right away, Solis said. 

The bill certainly has its critics. Some claim that the Jobs Act funding is too small to offer meanignful longterm relief to the millions of unemployed. Others insist it is one more unproven stimulus program that is certain to drive the deficit higher.

Undaunted,Obama's bill proposes $608 million in funding just for Minnesota road and bridge construction projects that could span three to 10 years. Other components of the bill would: restore teachers' jobs;  subsidize re-training programs for workers who are laid off;  and create payroll tax cuts to encourage employers to hire.

If adopted, Obama's $447 billion proposal would create 1 million to 1.2 million jobs nationwide and help slot the unemployed, the administration projects. The proposal calls for $5 billion to assist dislocated workers. Some of that money would be in the form of wage subsidies paid to employers.  "We are talking about putting a lot of people  back to work. not just those in construction but all the suppliers ...[and] restaurant owners, Solis said.

In her role as Obama’s jobs emissary, Solis spent the afternoon in the Twin Cities meeting with road and bridge construction workers, the unemployed, recent college grads, the AFL-CIO and the Star Tribune editorial board.

She told the editorial board that labor groups expressed support for the Jobs Act. "It's been music to their ears," she said. The support of labor groups is important as labor leaders have been particularly critical of Obama in the last year.

But Solis praised labor unions across the country saying that the UAW and other unions made concessions that helped bring back industries and jobs. Still much work is to be done, she said, noting that a staunch jobs advocate is missing from Capitol Hill.

Solis bemoaned the absence of former Minnesota Congressman Jim Oberstar on Capitol Hill while trying to win support for the Jobs Act. He was "our lead representative on transportation. He was the one who was fighting for projects all over the country," she said.  

Solis praised Oberstar' for having "very good relationships with people across both the isle. We kind of lost that. She noted she was "confounded" by some of the rudeness and severe partisanship she faces when she has to testify on Capitol Hill about public private partnerships for green jobs and renewable energy projects. Some accuse her of wasting tax payers money.

So the fight goes on. "Right now we are kind of stuck. And it's hurtful for economic reasons, not just the immediacy of jobs on the ground, but what it means for our import and export capacity and our global competitiveness," she told the Star Tribune board.

Solis left the Star Tribune for the Hilton Hotel, where the AFL-CIO invited her to speak at its Next-Up Young Worker Summit. The former Californian heads to Wisconsin Friday where she will visit labor unions and several green energy projects.


Consumers still buying. Just not flowers.

Posted by: Dee DePass Updated: September 28, 2011 - 11:36 AM

 Sick and tired of all the bad news, research firm Sageworks decided to do a little snooping and found some fun facts that you won't see in any of the economic reports due out this week.

The Consumer Confidence Report came out Tuesday with sad news that consumer shopping remained as weak as bland tea in September, even after falling to depression-era lows in August. 

Undaunted, the folks at Sageworks decided to find out just where the money's going. Turns out consumers ARE shopping their little hearts out. Just not where you think. Flowers are out and cars are "in."

After studying the financial statements from 10,200 CPAs and bankers , Sageworks learned a little bit about the taste of their clients.

Automobile dealers reported that sales are up nicely at 14.8 percent, while flower sales at florists fell half a percentage point in the last 12 months.

Gas stations saw a 14.26 percent uptick in sales over the last 12 months after seeing a pathetic 17 percent drop in 2009. Nice recovery.

All other categories of merchandise except flowers rose in the single digits.

Auto parts, furniture and clothing stores produced decent 8.43 percent, 7 percent and 6.8 percent rises, respectively. 

Rounding out the bottom of the list sat: depressed florists (-0.52 percent), lawn and garden centers (up 1.6 percent) , Beer Wine and Liquor (up 3.93 percent)  and Health and Personal Care Stores (up 4.01 percent). 

Surprisingly jewelry sales rose 4.8 percent in the last 12 months. Economists have noted that some luxury items such as jewelry do well during bad economic times. Maybe pearls and touch of gold can rescue the rest of us from financial  doldrums.   





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