U.S. Economic/Financial News
Real Economy, U.S. Business Contracting
Mar. 13 (EIRNS)The pace of collapse of the real economy, dragged down by the insane effort to bail out the bankrupt financial system, continues to accelerate. Recent developments include:
* RealtyTrac reported March 13 that U.S. home foreclosure filings rose 60% in February, and bank seizures more than doubled in the month, compared to the rate in February 2007. According to RealtyTrac, 223,000 properties were in some stage of defaultone in every 557 U.S. households. Nevada, California, Florida, and Texas, in that order, had the highest February foreclosure rates. RealtyTrac's executive vice president, Rick Sharga, forecast "explosive" foreclosure filings in May and June, as more adjustable-rate mortgages re-set at higher payment rates.
* The U.S. Commerce Dept. reported that retail sales unexpectedly (sic) fell in February. The decline of 0.6% was led by auto dealers and restaurants.
* The U.S. Commerce Dept. reported that U.S. business inventories rose in January, as companies drew down stockpiles, in anticipation of weaker demand. The 0.8% inventory increase was larger than what had been forecast, and the biggest since June 2006. Bloomberg.com notes that, with February's drop in retail sales, "efforts to pare inventories will lead to cutbacks in orders to wholesalers and factories," i.e., cause a ripple effect through the real economy.
* Pilgrim's Pride Corp., the nation's largest poultry producer by volume, was reported on March 13 by the Wall Street Journal to be cutting back its chicken business and slashing more than 1,000 jobs, "as soaring grain prices pinch margins." The company placed primary blame on the "misguided" U.S. ethanol program. Pilgrim's Pride calls it part of an "industry-wide crisis." The article reports that Smithfield Foods and Kellogg Co. are also cutting back production and seeking cheaper ingredients.
* The U.S. Labor Dept. reported that unemployment benefits rolls increased to a two-and-a-half-year high.