Government Shutdown Poses Increasing Risk to Wider Economy
WASHINGTON (AP) – At this time of year, John Sprinkle and his wife would normally be planning their summer vacation. Not now. Sprinkle, a furloughed federal employee, is about to miss his second paycheck since the partial government shutdown began.
With no end in sight to the longest shutdown in American history, Sprinkle and his family are postponing all manner of spending.
“We were thinking of getting a new computer, but that’s not going to happen,” he said. “We’re not really eating out like we normally would be. We are not going out to events like we would be.”
Multiply those decisions by 800,000 federal employees across the country and hundreds of thousands of government contractors who aren’t being paid either, and the shutdown looms as an accelerating threat to the wider economy.
The shutdown’s biggest effect on the economy is likely to be the cutback in federal spending. But consumer spending, which is critical to growth, is another important factor.
Organic Price Premiums Dip As Demand Grows, Choices Multiply
DETROIT (AP) – U.S. shoppers are still paying more for organic food, but the price premium is falling as organic options multiply.
Last year, organic food and beverages cost an average of 24 cents more per unit than conventional food, or about 7.5 percent more, according to Nielsen. That was down from a 27 cent, or 9 percent, premium in 2014.
There’s a lot of variation within those numbers. The average price for a gallon of organic milk — $4.76 — is 88 percent higher than the $2.53 shoppers pay for a gallon of regular milk. Organic eggs have an 86 percent premium. At $4.89 per loaf, organic bread is double the cost of regular bread.
Verizon Cutting About 800 Jobs In Troubled Media Business
NEW YORK (AP) – Verizon is cutting about 800 jobs, or 7 percent of its media and advertising employees, as it reorganizes the troubled division.
The wireless company had hoped to create an ad business that could compete with Google and Facebook. It spent roughly $10 billion buying up former internet pioneers Yahoo and AOL . But Verizon found benefits from integrating those two companies were less than expected. The company slashed the value of its media unit by nearly $5 billion in December.
The new CEO of Verizon’s media division, Guru Gowrappan, informed employees of the layoffs in an email Wednesday. He says the division’s priorities will now include focusing on mobile and video products and stemming declines with desktop users.
Ford Posts Quarterly Loss Amid Struggles in Europe, China
DEARBORN, Mich. (AP) – Ford Motor Co. has reported its first quarterly loss in two years due to a pension accounting charge and poor performances in Europe and China.
The Dearborn, Michigan, company on Wednesday said it lost $116 million, or 3 cents a share, in the fourth quarter, compared with a $2.52 billion profit in the same period a year earlier.
The loss included an $877 million charge to revalue global pension assets due to a late-year market slide.
Excluding one-time items, the company posted a profit of 30 cents per share from October through December. That fell just short of analyst estimates of a profit of 31 cents.
The company still made $3.68 billion for the full year, about half of what it made in 2017. Without one-time items, Ford’s full-year profit was $1.30 per share, in line with the company’s recent guidance but short of Wall Street’s expectations. Analysts polled by FactSet expected $1.32 per share.