Junk food junkies rejoice: Twinkies are back; just one of the stories in our roundup of the day's top business stories.
Consumer Price Index Jumps 0.5 Percent in June
A sudden jump in gasoline prices caused a higher than expected rise in U.S. consumer prices in June, the Labor Department reported Tuesday. The Consumer Price index rose 0.5 percent in June, a large hike from May’s 0.1 percent. The increase was the largest since February of 2013.Reuters’ published expectations for the month was 0.3 percent. For the 12-month period ending in June, consumer prices rose 1.8 percent, which was also 0.4 percent higher than the 12-month report for May.
Industrial Production is Up
Manufacturing output rose in June, according to reports from the Federal Reserve. Output at factories, utilities and mines rose 0.3 percent in June after the May reading was flat. Economists had expected a 0.2 percent rise in manufacturing, so the published numbers exceeded expectations. Industrial output rose 0.6 percent for the second quarter of 2013. The manufacturing numbers were improved by a 1.3 percent increase in motor vehicle production and parts, as well as a 1.5 percent increase in machinery.
Citigroup Quarterly Profit Jumps 42 percent
Citigroup Inc., the nation’s third-largest bank, posted a 42 percent jump in quarterly profit as bond trading revenue gained and stronger home prices helped the bad mortgages on its books, underscoring the bank's recovery since the financial crisis, Reuters reports. The bank’s management woes forced it to seek three government bailouts in 2008 and 2009. In the second quarter, Citigroup's biggest profit boosts came from its securities and banking unit, where bond trading revenue rose 18 percent, while stock trading revenue soared 68 percent, and underwriting and advisory work was up 21 percent. Overall second-quarter net income rose to $4.18 billion from $2.95 billion in the same quarter last year. Reuters said.
Sweet Return--Twinkies are Back!
After an eight month absence, Twinkies are hitting store shelves this week, but the iconic yellow sponge cake will be smaller than its original incarnation. The new Twinkies are 38.5 grams vs. 42.5 grams for the classic snack. Hannah Arnold, a Hostess spokesperson, said the downsizing was made by the predecessor company before it went bankrupt and shut down its plants in late November, The Associated Press reports. The retail price of $3.99 a box is unchanged, although prices may vary at different locations. Apollo Global Management and Metropoulos & Co. purchased Hostess, producers of Twinkies, Hostess Cupcakes, Ho Hos and other snacking stapler after the company announced it would close in the wake of failed attempts to reach a contract agreement with its second largest union. The new owners are not using unionized workers. Only about 20 percent to 25 percent of the 18,500 people who formerly worked for the company will reportedly be returning, analysts estimate.
Nissan Takes Datsun Out of Mothballs
Twinkies isn’t the only brand resurrection this week. CNN reports that a new, $7,000 Datsun model was unveiled Monday in New Delhi as part of Nissan’s marketing push into emerging markets. This will be the first car to carry the Datsun label since the company garaged the brand in the 1980s. The new five-door hatchback is called the Datsun Go, and it will go on sale early next year in India. Other new Datsun models will be unveiled this year in Indonesia and Russia. Nissan has given no indication it plans to revive the brand in North America.
Skechers Pays Up
Skechers USA has sent out more than $500,000 in checks to reimburse customers who bought toning shoes that did not match advertised claims. The Federal Trade Commission and Skechers reached a settlement on a $40 million payout after the FTC charged the company with deceptive advertising. Advertisements said the Shapeup shoes would help customers lose weight, and tone buttocks, legs and abdominal muscles. The FTC charged the company with falsely claiming their advertised benefits were supported by clinical studies.