Growth likely slowed as fuel costs Rose: overview of the U.S. economy

April 24, 2011, 12: 22 EDT by Timothy r. Homan

April 24 (Bloomberg) — the economy The us probably grew at a slower pace in the first quarter as a jump in the price of gasoline caused consumers to cut, economists, said that a report this week will show.

Gross domestic product grew at a 1.9% annual pace after increasing at a rate of 3.1 per cent in the previous three months, according to the median estimate of 66 economists surveyed by Bloomberg News prior to April 28 report of the Ministry of trade. Other data may show business investment remains a pillar of economic recovery, while real estate prices fell.Reserve Federal decision makers, when they meet this week, say likely that they will complete the second round of stimulus 600 billion, as expected, through the end of June to help support the recovery. Although companies such as General Electric Co. and Apple Inc. are among the beneficiaries of its expenditures of material gains and software, households are feeling the pinch of food higher and fuel prices. "" The economy has hit a bit of a soft patch, "said Ryan Sweet, a senior economist of Moody Analytics Inc. in West Chester, Pennsylvania). "If we continue to get these sharp at the pump breaks, which will be a major success with consumers." It is a point of no return for consumers. "The estimate of GDP is the first of three for the quarter, with the other versions planned for may and June, when more information becomes available.CoolsHousehold purchases, which represent approximately 70% of the largest economy in the world, spending increased at an annual 2.1% pace a gain of 4 per cent in the last three months of 2010, the best performance in four years, according to the survey median.Of the higher prices for the products of first necessity such as food and energy can could hurt to spend on less essential items. The cost of a gallon of regular gasoline rose 18 percent in the first three months of the year, according to AAA, the nation more great motoring organization. The price rose another 6 percent so far this month, reaching $3.85 a gallon on 21 April, the highest since September 2008.Prices for all goods and services pink last quarter to a 2.4% annual pace, the biggest gain in more than two years, economists expected that GDP will also show.U.S. manufacturers are perform better than consumers as the increase in demand from emerging countries like China supplements gains in business spending. "" Good form ""We are really good form to accelerate the growth of industrial revenues", Jeffrey Immelt, chief executive officer of GE based in Fairfield, Connecticut, said on a conference call last week. "All the precursors are in place: good equipment levels, the growth of good backward, levels of good service, international growing two numbers and we invest to build a competitive advantage."Orders for durable goods increased by 2% in March after a decline of 0.6 per cent the previous month, economists forecast the Commerce Department figures will show April 27. actions of manufacturers of machines exceeded the broader market since the beginning of the year. The Standard & Poor Supercomposite machines Index rose by 9.8% compared to a 6.3% increase for policy makers of S & P 500 Index.Fed, in two days of meetings beginning on April 26, are likely to confirm that they will complete a program of the Board of Treasury purchase of 600 billion as scheduled at the end from June, according to economists like Neal Soss, Chief Economist at Credit Switzerland in New York. S. Ben Bernanke, President will hold his first press conference, after the Declaration of the Central Bank on 27 April, giving him the opportunity to discuss his next steps.Home PricesHousing continues to fight as mount seized. Home prices in 20 cities for the 12 months through February fell 3.3%, the largest decline since November 2009, according to the Bloomberg survey. The S & P/Case-Shiller index is due on 26 April sales of new homes, due tomorrow of the Department of trade, rose 12 per cent for a 280 000 annual pace in March, according to economists surveyed by Bloomberg. Purchase of 250,000 of February of the pace is at the lowest data dating back to 1963.Pending sales or contract for existing houses, rose 1.7 percent in March after an increase of 2.1 percent the prior montheconomists forecast, the National Association of Realtors will report on April 28. gains in employment, with higher stock values, are outweighed by the increase in the price of gas and the decline in home values when it comes to measuring the attitudes of consumers.The Thomson Reuters/University of the final index of Michigan for April, due April 29, is expected to climb up to 70 of 67.5 at the end of March, according to economists surveyed. The Conference Board, based in New York on 26 April can present its gauge of confidence rose to 64.5 of 63.4 last month, the survey showed.

-With the help of Alex Tanzi in Washington. Editors: Carlos Torres, Vince Golle

To contact the reporter on this story: Timothy r. Homan in Washington to thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington to cwellisz@bloomberg.net

View the original article here

AMR posts smaller loss, growth in the capacity of cuts for 2011

April 20, 2011, 4: 19 pm EDT by Mary Schlangenstein

(Updates with estimate on the loss of revenues at paragraph 10).

April 20 (Bloomberg)--parent of American Airlines AMR Corp. posted a loss in the first quarter smaller than analysts estimated and trimmed of projected growth as rising prices pushed fuel to its great expense.Excluding some costs related to the aircraft, the loss was 405 million, or $ 1.21 per share, compared to 452 million dollars, or $1.36, a year earlier, the company based in Fort Worth, Texasa statement said today. Analysts expected $1.32, what is the average of 13 estimates compiled by Bloomberg.American paid more than 24 per cent for each gallon of fuel, over the previous year, and the expenditure accounted for 32 per cent of operating costs. The airline reduced growth capacity of 2011 for a second time in less than two months, 2.2 per cent of 3.6%, to reduce fuel consumption. "Oil prices have increased considerably, and who made a certain number of flights and marginal routes less profitable for the airlines, said Matthew Jacob, an analyst with ITG Investment Research in New York. "As oil prices remain high, and there was that they could go above, that we are likely to see more airlines to reduce capacity and airlines that already expectations were dug to try to reduce even more."AMR fell 6 cents to $5.64 4 h 01 in New York Stock Exchange composite trading. The shares fell by 28 per cent this year.LossesAmerican Airlines is the first of five largest carriers U.S. first-quarter results. Among them, only Southwest Airlines Co. is expected by analysts to post a profit. United Continental Holdings Inc. and Southwest are planned for the results of the report tomorrow, with Delta Air Lines Inc. and US Airways Group Inc. set at April 26, us and other key rates wide six U.S. airlines implemented increased during the quarter to compensate for an increase of 41% of the average reference price fuel. "Traffic of international passengers from the American, which generally carries higher rates increased by 5.8%."High fuel prices remain one of the greatest challenges of our industry and our society, "Director General Gerard Arpey said in the statement." AMR expects its fuel Bill this year to increase as much as $ 2.1 billion in 6.4 billion he spent in 2010, he said on a conference call. AMR is 1.84 billion on fuel in the first quarter.The company net loss narrowed $ 436 million, or $ 1.31 per share, $ 505 million dollars, or $1.52, a year earlier. Loss of this year, includes the $ 31 million in one-time costs, non-cash related to aircraft which AMR then leased and sold.Storms, fire, EarthquakeSales increased from 9.2% 5.53 billion a year earlier. Winter storms which forced into cancellation of 9 000 flights Americans, a fire at Miami airport fuel farm, the earthquake in the Japan and tsunami and a conflict with the revenue of the travel agencies online reduced by more than 100 million dollarsChief Financial Officer Bella Goren said today.American suspended two of the six daily flights from the U.S. to the Japan on 6 April, due to a decline in demand after the earthquake and said then the service would resume on April 26. The carrier is followed by the request, said Goren and did not have"several decisions." She agreed with estimates that demand has fallen as much as 30 percent.The airline will retire at least 25 MD-80 aircraft fleet this year as it works to replace aging aircraft more efficient fuel Co. of Boeing 737 - was. American has 219 MD - 80, with an average age of 19 years. Aircraft represent 35% of total fleet of the us.The airline is "hope" he can manage the reduction in capacity without employee layoffs, account rather on the expected retirements and attrition, said Arpey.American also said today that he exercised options for two Boeing 777-300ER aircraft more to be delivered in 2012 and 2013. The action brings to five the number of 777-300ERs will be delivered to the carrier.

-Editors: Ed Dufner, Stephen West

To contact the reporter on this story: Mary Schlangenstein in Dallas at the maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

View the original article here

DealBook: Goldman Sachs slow growth raises concern on Wall Street

Pankaj Nangia/Bloomberg paid Goldman Sachs news from a lifeline by Warren E. Buffett company, Berkshire Hathaway.

Goldman Sachs gave investors a look at the new normal on Wall Street - and many are concerned.

In some ways of Goldman latest results looked good.

On Tuesday the Bank results reported in the first quarter of $1.56 a share, nearly double analysts expectations. Some divisions such as investment banking and investment management showed improvement. And the expensive lifeline by Warren E. Buffett holding company, Berkshire Hathaway, the Bank paid Goldman last important temple from the financial crisis.

But strong on the difficulties of an investment bank in the postcrisis world focused investors instead on Goldman slow growth, offered.

In the trade and the rest of institutional client services, once the hallmark of the company's operations, sales fell by 22 percent, to $6.7 billion. Total profit fell in the first quarter by 21 percent, to 2.74 billion $ of $3.5 billion, including the unique hit from the repayment of Berkshire. Revenue fell to $11.9 billion of 12.8 billion US $. And the return on equity, a key measure of profitability, is heavily on a few years ago.

"Everyone is saying this sector dead money, is," said Roger Freeman, analyst at Barclays Capital. "I hear it over and over and Goldman is one, the".

Investors noted. The Goldman broke shares on Tuesday, drop by up to 3 percent, to $151.86, to 1.3 per cent. The stock is from almost 10 percent for the year.

It is as Goldman Sachs and the rest of Wall Street eliminated the earnings situation will be given the new mandate to take advantage of and hang up temper to more capital. The threat of the new financial regulation makes only an uncertain Outlook. Investment banks, and its shareholders have felt no clear, as the rules will have a business at a time when economic growth is already slow.

Goldman, which more than most companies born out of the crisis, is gesattelt not with many of the same problems as his rival. Bank of America still the lazy legal consequences struggle under the weight loans and mounting. Morgan Stanley pays 2008 for an investment by the Japanese Bank of Mitsubishi UFJ financial group, a business that will cost the company $900 million per year.

The company struck a note of optimism in terms of the quarter despite lackluster results. On a conference call with analysts, executives said that client activity had increased, even in the midst of further economic interests.

"We are pleased with our first quarter," Chief Executive said Lloyd C. Blankfein, in a statement. "In general improvement of the market and economic conditions, coupled with our strong client franchise, solid results produced." "Looking ahead, we continue to see indications of economic activity throughout the world promote."

Still, investors are nervous about Goldman prospects. Many big names have actively their exposure, been reduced including the Wellington management, based in Boston. It sold over a million shares in Goldman end of 2010, according to filings. Wellington refused to comment.

A concern is that Goldman-return on equity deterioration of. In the first quarter, Goldman Sachs return on equity was 12.2 per cent. It was 20.1 per cent a year and 38 percent at the beginning of 2009.

"" Most investors have only one question: "what is the return on equity go to?" ", said Mr Freeman of Barclays.""Is not clear the response, in the light of the uncertain regulatory environment."

The current return on equity is also far below Goldman the stated goal of 20 percent-a level, which closely to the company tracks the average since its initial public offering in 1999. But the company is not ready, review your goal down, was until it less "unknown variables are" close around its operating model, according to a person to the company that has not authorized to speak publicly about the matter.

Although analysts are confident, that is Goldman finally can increase over the course of time, it will be a hard slog in the near future.

Return on equity is the amount of money that delivers a company on each share. So if the total investor base is growing, Goldman must produce even higher yields to keep are the same. Currently, Goldman sits on $64 billion of shareholders shareholder equity, up from 46.6 billion US $ at the end of 2008, which means that it must work harder to generate the same return on equity.

To improve the gives the company could issue a number of one-time dividends or share buy-backs to reduce the capital. But that would be a tricky move right now. Regulators were to buy back large quantities of material, because they should have sufficient capital of an economic shock to let companies like Goldman. Also, to bucks Goldman capital let go until it knows what regulatory changes.

In the meantime, the company has not the same opportunities to increase profits. Before Goldman could increase profits up its leverage effect, ratchet wrench relying on borrowed money. With pressure from regulators, wet risk leverage ratio to 12.9 per cent dropped the company's gross at the end of the quarter, from 27.9 per cent at the beginning of the year 2008.

Mr Freeman said "until now, they were bound working with two hands behind the back". "Now they have only one hand, and it's still not easy."

View the original article here