US Producer Prices fall dramatically
US producer prices recorded the largest drop in three years in April, according to CNBC. Producer prices fell as gasoline and food costs fell, pointing to weak inflation pressures. This will give the Federal Reserve flexibility to keep monetary policy accommodative. The Labor Department said that its seasonally adjusted producer price index fell 0.7 percent last month, the biggest decline since February 2010. In the last 12 months, wholesale prices were up only 0.6 percent, the smallest increase since July of last year. Wholesale prices excluding food and energy were up only 0.1 percent, the smallest amount since November. De-inflation is potentially a concern for the future.
US factory output falls 0.4 percent in April
US factories cut back sharply on production in April, according to the Associated Press. It was the third decline in four months and the largest since October. A fall in factory output means that factories are producing fewer cars and other goods. Lower production may be due to fears that higher taxes will lower demand. Additionally demand from Europe is weak and likely to remain so.
Eurozone stuck in recession
The Financial Times indicates that the Eurozone is stuck in the longest recession since the birth of the currency bloc. The economies of the combined bloc shrank in the first three months of the year. France fell back into recession while Germany, the strongest member of the bloc, barely managed some growth in its economy. Gross domestic product for the eurozone as a whole fell 0.6 percent; the contraction being worse than expected. Italy, the third largest economy, shrank 0.5 percent in the first quarter after a 0.9 percent fall in the 4th quarter. Germany is expected to continue to grow and currently maintains a low unemployment rate, unlike other countries in the region.
John Deere Profit beats estimates
Deere reported higher quarterly earnings on Wednesday and forecast a record profit for the full year, according to CNBC. But the company warns that global financial pressures and adverse weather patterns make its outlook cautious. The earned $1.08 billion, or $2.76 per share in the second quarter, up from $1.06 billion or $2.61 per share compared to a year earlier. Deere is a Moline, Illinois based manufacturer of tractors, harvesters, other agricultural and construction equipment.
HSBC to lay off 14,000
HSBC announced another round of heavy cost cutting with potentially 4,000 to 14,000 layoffs anticipated. The bank seeks an additional $2-3 billion of cost savings after having already cut $4 billion of expenses. The Financial Times is reporting that HSBC has become the first European bank to consider share buybacks. HSBC’s staff numbers which were above 300,000 two years ago have already fallen to 254,000.
Burger King rolls out BK Rib
In an effort to compete with McDonalds’ McRib sandwich, Burger King will introduce the BK Rib Sandwich on May 21st. The BK Rib is boneless, just like the McRib, and comes with a tangy sauce, sweet bread and pickles. Other summer roll-outs include a Memphis Pulled Pork sandwich, Caroline BBQ sandwiches and sweet potato fries. It will also have a new BBQ Chicken sandwich and Oreo infused desserts. Burger King is actively taking on McDonalds in product innovation. So much for the “healthy” menu movement.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.