September 23, 2021

Bulletproofing Your Finances

Ralph Bruce, 78, works as a casino security guard. He took the job because his Social Security wasn’t enough to cover the basics.

Pushing 80, and Still Punching the Clock

Workers age 75 and older make up less than 1 percent of the United States work force, according to federal data, but that proportion is likely to increase as conventional retirement funds dwindle.

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Pace of Home Sales Quickened in December

Home sales in the United States rose in December to the highest pace in nearly a year, the National Association of Realtors reported. The gain coincided with other signs that show the troubled housing market improved at the end of 2011.

Still, sales remain depressed and ended the year well below healthy levels.

The Realtors group said home sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million.

“The pattern of home sales in recent months demonstrates a market in recovery,” said Lawrence Yun, the group’s chief economist. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

For the year, home sales totaled only 4.26 million, up from 4.19 million the previous year. Since the housing bust four years ago, home sales have slumped under the weight of foreclosures, tighter credit and falling price.

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Europe Says It Ended Subsidies to Airbus

Working on an Airbus A380 at a factory in Hamburg, Germany. Government aid was called unfair by the United States.

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A.I.G. Unit and a French Bank Settle a Lawsuit

AIG Retirement Services, formerly SunAmerica, and Crédit Lyonnais, filed a settlement agreement in federal court in Los Angeles.

The A.I.G. unit sued a group of French companies including Crédit Lyonnais in 2005, saying that it was defrauded when it bought a 33 percent stake in the insurer, New California Holdings, because it did not know that the French owners, a group led by MAAF Assurances, were a front for Crédit Lyonnais.

At the time, the French bank could not own an insurer under United States law.

New California is the restructured successor of Executive Life, which was taken over by the state of California after it had become insolvent and was later sold to the MAAF group. France, on behalf of Credit Lyonnais, paid $600 million to settle claims the bank misled regulators by not disclosing it was the true owner of Executive Life.

Credit Agricole SA bought Credit Lyonnais in 2003.

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Economix Blog: Job Losses Across the Developed World


Dollars to doughnuts.

Across the developed world, the biggest job losses in the 2008-9 downturn were in mining, manufacturing and utilities, according to new data from the Organization for Economic Cooperation and Development.

Here’s a chart showing job losses and gains by sector for a selection of developed countries. Bars above the horizontal axis show industries that added jobs, and bars below the axis show industries that lost jobs. The red bars refer to jobs lost in mining, manufacturing and utilities:

Source: O.E.C.D., Structural Analysis (STAN) Database, O.E.C.D. National Accounts Database and national statistical institutes, June 2011. Statlink:

Across the entire O.E.C.D., job losses in this sector equaled 35.3 percent of total employment changes in 2008 and 2009.

The biggest gains, by contrast, were in community, personal and social services (the light blue bars).

This is probably no surprise to people who have been following job trends in the United States, where the health industry has been going gangbusters in both good and bad economies. But actually growth across the broader sector has been smaller in the United States than elsewhere in the developed world.

In the United States, growth in community, personal and social services totaled 8.2 percent of overall employment changes in 2008-9, whereas across all O.E.C.D. member countries this supersector added jobs that equaled 18.3 percent of total job changes during the same period.

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Business Briefing | COMPANY EARNINGS: McDonald’s Sales Rise but Fall Short of Forecasts

McDonald’s reported a lower-than-expected rise in worldwide August sales at established restaurants, citing a steep drop in Japan and a lull in new product introductions in the United States. McDonald’s said sales at restaurants open at least 13 months rose 3.5 percent globally. Analysts surveyed by Thomson Reuters were looking for an increase of 4.3 percent. Same-restaurant sales rose 3.9 percent in the United States, just shy of analysts’ 4.0 percent expectation. In Europe, the company reported an increase of 2.7 percent, missing analysts’ estimate of a 4.7 percent increase. McDonald’s reported a 0.3 percent decline in Asia/Pacific, the Middle East and Africa, while Wall Street had forecast a rise of 3.5 percent.

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Off the Charts: A Revival In Manufacturing Seems to Be Fading

Surveys of manufacturing companies around the world indicate that business is still improving for many of them, but that the pace of growth has slowed.

In the United States, the Institute for Supply Management reported that the overall reading for its survey in May fell to 53.5 from 60.4. Figures above 50 indicate that more companies say business is improving than say it is getting worse, so that is hardly a sign of a new recession.

Still, it played into a rising fear that the recovery is slowing again at a time when unemployment remains high.

On Friday, the Bureau of Labor Statistics reported that the rate rose to 9.1 percent in May, up a tenth of a percentage point.

The drop of 6.9 points was the largest one-month decline since January 1984, a fact that received considerable attention. Less noted was the fact that the earlier decline came off even higher figures and did not presage a return to the recession that ended in late 1982.

The figures show the direction of change, not the magnitude or the existing level. Extremely strong numbers can persist for long periods only if conditions are continually improving.

The accompanying charts show three components of the survey, which is conducted in many countries around the world, and indicate that the slowing of growth is a more general phenomenon. For ease of understanding, the figures are converted to place a 50 reading — one that indicates an equal number of positive and negative responses — at zero.

The slide appears to be worse in Britain, where a strong revival late last year and early this year seems to have vanished. There, readings came in at negative levels for both output and new orders, the first time that had happened since May 2009, when the credit crisis was only beginning to ease. But more companies there continue to say they are hiring rather than reducing payrolls.

In the United States, the figure for new orders remains barely positive, and the output figure also declined, although it remains positive. The figure for employment also fell, but it remained at a level that historically has accompanied good jobs figures. The employment index has been over 55, or 5 in the chart, for 16 consecutive months, the longest such stretch since 1965.

Labor Department figures indicate that the number of manufacturing jobs hit bottom in December 2009 and that employment has been rising more rapidly in that sector than in the economy as a whole, although it fell by 5,000 jobs in May.

On average, the euro zone appears to be stronger than any of the other countries shown, but this is a case where averages can be misleading. The German boom cooled only a little, and France remains strong. But already weak figures in Greece are getting worse, and Spanish manufacturers see some deterioration.

In Japan, the figures show some revival from the blow caused by the earthquake and tsunami in March. The output index went above break-even levels after falling sharply, but as a group, Japanese manufacturers still say they are reducing employment.

Floyd Norris comments on finance and the economy on his blog at

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Advertising: Study Measures Ad Industry’s Impact on State Economies

Those are among the findings of a study commissioned by the Advertising Coalition, a consortium of trade organizations and associations that represent the ad, marketing and media industries.

The study, conducted last August, found that 630,783 people worked in advertising in the United States, and that they were responsible for ad spending that totaled $278.9 billion.

The study is an updated version of one that the coalition commissioned in 1997 and again in 2004. The goal is to demonstrate that the industry affects many places beyond those traditionally associated with the business, like New York and California.

To that end, the study includes data meant to suggest a multiplier effect — that the people who work in advertising, and the money that they spend, create many additional jobs and stimulate significant economic activity.

Nationally, the study declares, “every dollar of ad spending generates just under $20 of economic output, and every million dollars of ad spending supports 69 American jobs.” Thus, the 630,783 people who work in the industry contribute to 19.1 million people having jobs, according to the study, and the $278.9 billion spent on advertising contributed to $5.5 trillion in economic activity.


The study also reports the data not only state by state but also by Congressional district.

So, for example, the study describes how in the 3rd Congressional District in Arkansas, in the northwest part of the state, ad spending accounts for $14.3 billion in economic output, or 20.1 percent of the $71 billion in total economic output in the district.

And the sales of products and services in the district driven by advertising, according to the study, “help support 59,662 jobs, or 15.5 percent, of the 385,504 jobs” in the district.

The summaries of those effects carry the assertive headline “Advertising Generates Sales and Jobs in …,” followed by the number of each of the 435 districts.

“It opens people’s eyes,” said Robert D. Liodice, president and chief executive of the Association of National Advertisers, which is part of the coalition along with organizations like the Four A’s, formerly the American Association of Advertising Agencies; the National Cable and Telecommunications Association; and the Newspaper Association of America.

The primary use for the study will be, like its predecessors, to fight proposals on federal, state and local levels to raise revenue by passing taxes on advertising or to limit or eliminate the deductibility of advertising as a business expense. For instance, during the debate last year before the passage of the health care law, some legislators sought to reduce the deductions for pharmaceutical advertising.

“When you talk to congressmen and senators, the bottom line of jobs and dollars almost always immediately gets their attention,” said Daniel L. Jaffe, who is executive vice president of the Association of National Advertisers and runs its Washington office.

“We’ve always known advertising had major impacts,” he added, and given the current economic conditions, the study enables the coalition to counter proposals affecting the industry by saying: “It’s bad enough already. Do you want to make it worse?”

Before the coalition received the results of the study, which was conducted by IHS Global Insight, a market research firm, “what I was afraid of was that you’d look at Wyoming or Montana or Alaska and you’d see very little effect,” Mr. Jaffe said, “but that’s not what happened.”

“Yes, there is significant variation from state to state and from Congressional district to Congressional district,” he added, “but there is no place that is an advertising-free zone, where advertising is not an important part of the marketplace.”

Mr. Jaffe’s counterpart at the Four A’s echoed his effusiveness.

“That tool is the most powerful we have in convincing lawmakers of the power of advertising,” said Dick O’Brien, executive vice president and director for government relations at the Four A’s, who is also based in Washington.


One way the Four A’s could use the study is to “bring in ad people who work in a district” when visiting a representative, Mr. O’Brien said, and have them describe how “less advertising translates to fewer jobs.”

If a representative is told that restrictions against the industry would “require laying off 10 people, 15 people, 20 people,” he added, “it’s not an economic treatise; it’s an emotional conversation.”

No changes last year affected the deductibility of advertising, Mr. O’Brien said, but proposals to reduce the federal budget deficit and reform the tax code — coming from President Obama and Congressional Republicans — could mean that “for the next year, advertising will be under the microscope.”

That makes it “so important if we can use the particulars to localize this,” he added, “to help them realize that advertising is not just Madison Avenue, not just New York.”

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