The housing market is warming up for buyers and sellers, according to the latest data from the National Association of Realtors.
Homes are selling for more money and selling more quickly, and more homes are up for sale.
The median list price was $225,000 in April, a 2 percent increase from last month and a 9 percent increase from last April.
The median length of time that homes stayed on the market was 73 days, a 12 percent decrease from last month and from last April.
The inventory increased by 5 percent last month but remains down compared to last year.
Inventory is unlikely to change much, however, until home prices rise enough to prompt owners with underwater mortgages to put their property on the market, Bloomberg Business recently reported.
The low inventory isn't the only reason buyers might be holding back, Nationwide Insurance chief economist David Berson told Bloomberg:
Because policy makers have signaled they will raise their key rate slowly and incrementally, potential buyers are less likely to rush into the market ahead of the first rate hike ... Besides, mortgage rates, while no longer at a record low, are still half their historical average in Freddie Mac data back to April 1971.
Realtor.com chief economist Jonathan Smoke has created a list of the 15 hottest medium-sized and large housing markets for buyers and sellers right now.
They rank in the top 20 percent based on listing views (which are considered a reflection of demand) and median days on the market (which are considered a reflection of supply).
Smoke says in a press release issued last week:
Sellers are seeing listings move between 29 and 49 days more quickly than in the rest of the country and at an accelerating pace from just last month -- an average of five days faster. Meanwhile, these markets are especially attractive to buyers, as listings are viewed two-to-three times more often than the national average.
One of the most common retirement concerns is spending down your savings too quickly and having to cut your standard of living in the later part of retirement. But there are a variety of ways to ensure that your nest egg will last for the rest of your life, no matter how long that is. Here are some strategies to make sure your retirement savings will provide you with enough income throughout retirement.
Maximize Social Security. Your first line of defense against running out of money is Social Security. Social Security payments are guaranteed to continue for the rest of your life, no matter how long you live, and are adjusted for inflation each year. However, it's a good idea to take steps to maximize your payments by carefully deciding when to sign up for benefits and coordinating claiming decisions with your spouse. "Every year that you delay taking Social Security, you get an 8 percent increase in the benefits that you take," says Cathy Pareto, a certified financial planner and president of Cathy Pareto and Associates in Coral Gables, Florida. Spouses can claim as much as half of the higher earner's benefit, and widows and widowers can inherit a spouse's benefit payments if they are larger than their own.
Plan to live until old age. While a 65-year-old man in 2015 has an average life expectancy of 84, and a woman the same age has a life expectancy of 87, there's certainly a significant possibility that you will live longer than average. Many financial advisers recommend that you plan as if you will live into your 90s or even until age 100 in case you do. "We generally fall somewhere between ages 90 and 105," says Bo Hanson, a certified financial planner for Preston & Cleveland Wealth Management in Franklin, Tennessee. "We make that determination based off of what their family history and health issues are." It's better to save up for too many years of retirement and leave the excess wealth to relatives than to prepare for too few years and end up depending completely on Social Security.
Protect yourself from inflation. Inflation can erode the purchasing power of your retirement savings. But you can allocate some of your money to investments that are guaranteed to keep up with inflation. Your Social Security payments and some types of government bonds automatically keep pace with inflation. "There's a government bond that is adjusted for inflation, Treasury inflation-protected securities, so we can build a ladder of those that mature each year in your retirement," says Joel Shaps, a certified financial planner for Bedrock Capital Management in Los Altos, California. "Then they know that bond is going to mature when they need the money." You could also keep a portion of your portfolio in investments that have historically kept pace with inflation such as equities, commodities or real estate.
Consider an immediate annuity. If you're willing to hand over a chunk of money to an insurance company, you can purchase an immediate annuity that will provide a guaranteed stream of payments that will continue for the rest of your life. "Some people want to annuitize a part of their retirement savings to produce enough income that covers their fixed expenses," Hanson says. "You essentially guarantee that no matter what happens with the financial market, you know that your mortgage payment is covered by the annuity." The downside is that your heirs won't receive the money you have annuitized, and some annuities have high fees and complicated mechanics. It's also important not to invest all of your wealth in an annuity because you might need funds available to cope with emergencies.
Withdraw 4 percent or less each year. You should take only small distributions from your portfolio every year if you want the money to last the rest of your life. If you withdraw 4 percent annually from a portfolio invested in 35 percent U.S. stocks and 65 percent corporate bonds, there's an 89 percent chance that the money will last 35 or more years, according to Congressional Research Service calculations. And if you withdraw less money in years when your portfolio performs poorly, it can help your investments recover faster. "When you get into retirement, if you really want to make sure that you don't outlive your assets, you need to control your withdrawal rate," Hanson says. "Somewhere around a 4 to 5 percent withdrawal rate of your assets is probably the most you can do. If you can make sure your lifestyle stays at or below that number, you are setting yourself up for success."
Elaine Thompson/APThe Space Needle towers in the background beyond a container ship anchored in Elliott Bay near downtown Seattle.By Lucia Mutikani
WASHINGTON -- A surge in imports lifted the U.S. trade deficit in March to its highest level in nearly 6½ years, suggesting the economy contracted in the first quarter.
Growth, however, is regaining momentum as other data Tuesday showed activity in the services sector, which accounts for more than two-thirds of the economy, accelerated to a five-month high in April.
"It looks like we are going to have negative GDP for the first quarter, just based on trade, but we expect a robust rebound in the second quarter. A lot of the headwinds we saw in the first quarter have unwound," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.
The Commerce Department said the trade deficit jumped 43.1 percent to $51.4 billion in March, the largest since October 2008. The percent rise was the biggest since December 1996. The surge came as imports snapped back after being held down by a now-settled labor dispute at key West Coast ports.
Economists had forecast the trade deficit rising to only $41.2 billion. When adjusted for inflation, the gap widened to $67.2 billion in March, the largest in eight years, from $51.2 billion in February.
U.S. stocks and Treasury debt prices were trading lower. The dollar fell against a basket of currencies.
March's trade gap was far larger than the $45.2 billion deficit the government assumed in its snapshot of first-quarter gross domestic product last week.
In that report, the government estimated trade sliced off 1.25 percentage points from GDP, helping to pull down growth to a 0.2 percent annual pace. The economy expanded at a 2.2 percent rate in the fourth quarter.
Economists said growth could be lowered by at least six-tenths of a percentage point when the government publishes its second GDP estimate later this month.
No Serious Downturn
The West Coast ports labor dispute, a strong dollar, deep spending cuts by energy companies reeling from lower oil prices, and bad weather hampered growth in the first quarter. But some of that drag on growth is fading.
In a separate report, the Institute for Supply Management said its services sector index rose to 57.8 last month, the highest since November, from 56.5 in March. A reading above 50 indicates expansion in the vast services sector.
There is little reason to believe that the potential contraction in first-quarter GDP is the start of a serious downturn in the U.S. economy.
"There is little reason to believe that the potential contraction in first-quarter GDP is the start of a serious downturn in the U.S. economy," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
Companies reported an increase in new orders and order backlogs. Export orders, however, contracted sharply, reflecting the dollar's impact. The greenback has gained about 12 percent against the currencies of the United States' main trading partners since last June, making American goods and services less competitive on the international market.
The trade report showed imports jumping 7.7 percent in March, the largest increase on record.
Some of the imported goods likely ended up as inventories, which in the first quarter recorded their biggest increase since the third quarter of 2010. That inventory overhang could spell bad news for second-quarter GDP.
Imports of capital and consumer goods were the highest on record in March, while imports of industrial supplies and materials slumped to an all-time low.
Imports of petroleum products hit a record low, highlighting lower crude oil prices and increased energy production in the United States, which has reduced its dependence on foreign oil.
The average import price for crude oil was $46.47 a barrel in March, the lowest in six years.
Exports increased 0.9 percent in March. Petroleum exports were the lowest since February 2011. Exports to the European Union rose 8.6 percent, with those to Germany reaching their highest level since October 2008.
The United States sold the fewest amount of goods and services to Brazil since April 2010. Exports to Canada and Mexico, the main U.S. trading partners, were up in March.
Exports to China increased 13.6 percent, while imports from that country jumped 31.6 percent. That left the politically sensitive U.S.-China trade deficit at $31.2 billion, up 38.6 percent from February.
The U.S. trade deficit with Japan was the largest in two years.
Chuck Robbins, the veteran salesman chosen by Cisco Systems (CSCO) to succeed legendary CEO John Chambers, must prove he has the technical knowledge to chart a new course and lead the network equipment maker into the new world of cloud-based computing.
Cisco, like tech stalwarts Hewlett-Packard (HPQ) and IBM (IBM), is trying to branch out from its core business into software, security and datacenters to capitalize on the explosion of remote computing.
He's going to run the company well as a caretaker, he's got good business acumen.
"He's going to run the company well as a caretaker, he's got good business acumen," said Glenn O'Donnell, an analyst at tech research firm Forrester (FORR). "The question is whether he has vision. I don't think anybody yet knows the answer."
Cisco is the clear market leader in selling network equipment to companies, controlling about half of a $38 billion global market, more than four times the total of the next two rivals combined, HP and China's Huawei, according to Gartner.
The company is now trying to break away from being type-cast as just a network equipment supplier, laying its bets on what it calls the "Internet of Everything", basically the recognition that soon almost every person, device, or sensor will feed data into a network. Cisco aims to play a role in analyzing and channeling that traffic in as many places as possible.
"They are making all this noise about the 'Internet of Everything'. That's a nice ambitious vision, but how can Cisco capitalize on that, and win in that marketplace?," asked O'Donnell.
Robbins, 49, gave no clear indication of his strategy during a conference call with reporters Monday, saying he would rather listen to customers and shareholders for the next 90 days before laying out his plan.
CEO-in-Waiting
The CEO-in-waiting, who takes over in late July, made his name at Cisco building relationships with the legion of companies that actually sell Cisco's products to large businesses, making up about 80 percent of Cisco's $49 billion in expected revenue this fiscal year.
That makes Robbins, who holds a bachelor's degree in mathematics with a concentration in computer science from the University of North Carolina, a consummate salesman, like his predecessor.
Chambers and Robbins, who joked together on a conference call earlier Monday, are "cut of the same cloth", said Tim Zimmerman, an analyst at Gartner (IT). "He's very sales focused, similar to John, and understands the voice of the customer," he added.
Cisco needs a leader to take the big picture and dismantle the "silo" approach to selling many, sometimes competing, products to clients, said Zimmerman. "Is he the right person? Time will always tell."
Some Wall Street analysts voiced reservations that Robbins had the deep knowledge of technology necessary to succeed.
"While we like Chuck Robbins individually, we believe investors would benefit more from technology leadership at the company given the disruptive changes we believe are coming to networking," said Rod Hall, an analyst at J.P. Morgan.
From Mother's Day to Memorial Day, May is a busy month for retailers and shoppers alike. In addition to being the unofficial start of the summer, it also marks the time of year when we start spending more time outdoors, and that can lead to additional spending. But before you purchase a new grill or try on any summer apparel, you'll want to read our guide, which points out some of the best (and worst) products you can buy this month.
Peruse the advice, then consider signing up for the DealNews Select Newsletter to get the best deals of the day delivered to your inbox.
Spring Clothing Shines During Early Memorial Day Sales
Although Memorial Day isn't until May 25, you can expect retailers to kick off their Memorial Day sales as early as May 12. That's when sales made their debut last year and most likely when they'll launch again this year. And while many sales will attempt to tease you with deals on summer apparel, the best savings will actually be on spring apparel. Summer apparel is always cheaper during the months of August and September, when retailers are trying to clear the summer inventory that consumers didn't buy. That leaves spring apparel with its deepest discounts of the year. Expect to see savings of 20 to 75 percent off from retailers such as Old Navy, Nautica and Eddie Bauer, to name a few.
Bargain hunters should also keep an eye out for coupons that also apply in addition to sale prices. For instance, last year more than half of all Memorial Day clothing sales featured such "stackable" coupons. Original Penguin, for example, took 50 percent off select men's apparel and offered two additional coupons that took an extra 20 percent off and bagged free shipping. Memorial Day sales are known for their stackable discounts and it's easy to find these type of deals throughout the month. Check out the coupon center for promos from your favorite stores, and be sure to peruse our entire Memorial Day sales guide.
Save Money By Avoiding Stereotypical Mother's Day Gifts
The longer you wait to buy your Mother's Day gifts, the more you'll pay. In previous years, our deal database has shown that jewelry deals tend to increase in price at the beginning of the month, which means procrastinators will pay a premium for their gifts. Our advice? Buy your mom something that you know is heavily discounted, such as items from our list of Editors' Choice deals, which include everything from apparel to tech. (Also check out our full guide on how to save money on Mother's Day gifts.)
Upgrade Your Mattress
Our deal archives show that spring is one of the best seasons for mattress shopping, and Memorial Day will usher in new deals this month. If you're flexible on the specific type of mattress you buy, then don't settle for anything less than 50 percent off. Also look for stackable coupons, which could take 10 to 40 percent off already discounted items. Retailers to follow include Sears, JCPenney, Overstock, Macy's, and US-Mattress.
Expect to Get More Perks From Your Mobile Carrier
April was an interesting month for mobile carriers. Not only did Republic Wireless announce its new consumer-friendly payment plan which reimburses customers for unused data, but search-giant Google also launched its new wireless plan, Project Fi. The hybrid network relies on Wi-Fi connectivity to make your calls and switches to Sprint's and T-Mobile's infrastructure when Wi-Fi isn't available. Monthly plans start at $20, plus $10 for each additional gigabyte of data. Each additional gigabyte of data costs an extra $10, but users will only be charged for the data they use.
At launch, however, the plan is only available to Nexus 6 owners. And while Google claims Project Fi isn't about making money, whenever the company enters a new market, competition spikes and that's bound to be a win for consumers. So although your mobile plan may not see a dramatic decrease in price, companies such as AT&T and Verizon Wireless may give their customers extra perks, as AT&T did when T-Mobile first announced its roll-over plans.
Skip the Apple TV Purchase
Last month, Apple slashed the price of its Apple TV streamer down from $99 to $69. Since then, rumors have spread that the company will debut a new player in June at its annual Worldwide Developers Conference. If you've had your eye on an Apple TV, it's likely you'll see even better deals after the newer version is released. Even if Apple doesn't launch a new Apple TV, retailers are slowly slashing the streamer's price to the point where we've now seen it for $60. Come June, that price could be even lower.
If You Need a TV, Go With a 55- or 42-inch Screen
Spring is traditionally a mediocre season for TV deals. However, if you must upgrade your TV this month, we recommend opting for a 55- or 42-inch 1080p LCD. These specific size categories are seeing the most deals at the best prices. The best deals on name-brand 55-inch 1080p LCDs, for instance, have averaged $500 since the start of the year. Additionally, you can save another $50 to $70 if you opt for an off-brand model, such as those from Insignia or Sceptre. Meanwhile, name-brand 42-inch 1080p LCDs have plateaued at $300 since fall of last year. While you could save between $30 to $50 by opting for an off-brand model, the savings aren't as significant.
Hold on the Laptop Purchases
Although you can currently get a 15-inch mainstream Intel laptop for about $380 to $400, in the coming weeks that same laptop might be 17 percent cheaper or include a free store credit. That's because late June traditionally marks the start of back-to-school sales. While it may sound absurd to start a back-to-school sale when most students are just wrapping up their semester, some retailers kick off their sales mid-to-late June. Last year, the Apple Store launched its back-to-school promotion in the last week of June, and we except it and other retailers to follow suit again this year.
So if you can push off your laptop purchase for another month or two, you'll reap cheaper prices and a wider selection of deals. Moreover, rumors indicate this summer, Microsoft will launch its new Windows 10 operating system, which could trigger special promotions from retailers like the Microsoft Store.
Ready to put this information to use? Set up an email alert or download the DealNews app in order to keep abreast of any and all of these best buys in May.
With over a decade of experience covering technology, Louis Ramirez has written for CNET, Laptop, Gizmodo and various other publications. Follow him on Twitter at @louisramirez.
WASHINGTON -- The IRS issued $5.6 billion in potentially bogus education tax credits in a single year -- more than a quarter of all education credits claimed by taxpayers, a government watchdog said Tuesday.
A new report by the agency's inspector general says questionable credits were issued to more than 3.6 million taxpayers in 2012. Most of them went to students even though the IRS never received a tuition statement from the school.
The IRS still does not have effective processes to identify erroneous claims for education credits.
Some students attended schools that weren't eligible for federal funding while others didn't take enough classes to qualify for the tax break.
"The IRS still does not have effective processes to identify erroneous claims for education credits," said J. Russell George, Treasury inspector general for tax administration.
George said the IRS has taken some steps to better police the credits, but has not addressed all the deficiencies that George's office identified in a 2011 report. In that report, the inspector general said the IRS issued $3.2 billion in potentially bogus education tax credits in 2010.
"As a result, taxpayers continue to receive billions of dollars in potentially erroneous education credits," George said.
The IRS said stepped up enforcement was largely responsible for a steep drop in credits issued in 2012. The amount of education credits issued dropped from $23.6 billion in 2011 to $19.1 billion in 2012.
Insufficient Resources
The IRS said Congress could help by simplifying the education tax credits and by giving the IRS more tools to validate student eligibility. Congress could also help by restoring budget cuts, the agency said.
"Since 2010, the IRS budget has been reduced by nearly $1.2 billion and we expect to have 16,000 fewer employees by the end of this fiscal year," said the IRS statement. "We simply do not have enough resources to audit every questionable credit."
"It's also important to note the IRS believes the dollar estimates in this report are overstated, and the methodology could be more accurate," the statement said. "Regardless of this, the IRS believes more can be done in this area and will continue working with Congress and [the IG] to make improvements."
Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, questioned the IRS' ability to police the credits.
"The IRS owes it to American families and hardworking taxpayers to properly safeguard their hard-earned dollars and not dole them out to people who are not qualified to receive such credits," Hatch said in a statement.
There are two main education tax credits. The American Opportunity Tax Credit offers up to $2,500 a year to help pay for tuition and other expenses. Students must be in a program that leads to a degree. Students can claim this credit for up to four years.
The Lifetime Learning Credit pays 20 percent of tuition and other education expenses, up to a maximum of $2,000. There is no limit on the number years this credit can be taken and students don't have to pursue a degree.
Both credits are available only to students attending schools that are eligible to receive federal student aid.
NEW YORK -- Weeding through the arcane, confusing and complicated terminology used by personal finance and investing experts can be a chore.
The acronyms alone can make your head spin and make it even more difficult to get a good grasp of managing your finances. But deciphering off-putting lexicon can help Main Street investors navigate their personal finances and even save some money down the road in interest and other ubiquitous fees.
Here are 10 popular terms that we demystify.
Liquidity
Liquid assets are ones that you can access such as withdrawing money from a checking or savings account without paying a penalty to access it, unlike taking money out of a retirement account in most circumstances.
"Many people discover too late that putting their life's savings into a government controlled 401(k) or IRA is like putting their money in prison," said Pamela Yellen, a financial security expert based in Sante Fe, New Mexico.
Though contributing to retirement is all the more necessary as consumers live longer and require additional funds to offset increased living and medical expenses, it's important for Americans to have money at the ready they can deploy. As a rule, consumers should have six months' worth of living expenses in an emergency fund.
Grace Period
This term is often misunderstood and is found in your credit card user agreement. The grace period doesn't refer to the amount of time a consumer has before the minimum payment is due. Instead, it is referring to the amount of time before interest is applied to a purchase.
"Understanding how this relates to the cost of borrowing will give cardholders an advantage when it comes to saving the most money," said Bruce McClary, spokesman for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.
Charge Off
This term means that if you have a debt that hasn't been paid and the lender determines that you are not likely to pay it, it is "written off as a loss by the creditor, usually after 120 consecutive days of non-payment," he said.
This doesn't mean you are no longer responsible for the debt. It will also show up on your credit report and will lower your credit score.
"Charged off debt is commonly sold to third-party debt collectors who may legally collect that balance as long as the collection activity is within the statute of limitations and they are abiding by the rules established by the Fair Debt Collection Practices Act," McClary said.
Financial Counseling
Financial counselors not only can teach you methods on how to improve money management, but they also can discuss how you can tackle paying down your debt. There is financial counseling available at low or no cost through the nonprofit network of National Foundation for Credit Counseling agencies at www.nfcc.org or at 800-388-2227.
A certified NFCC counselor is able to provide budget counseling, credit counseling, debt management programs, housing counseling and student loan counseling among other topics, McClary said.
Debt Negotiation or Debt Settlement
Some consumers use these companies when they have accrued a large amount of debt and feel like they can't control it. These companies help consumers lower the principal, or the amount they charged on a credit card, and are often able to "save as much as 50 percent of the total debt before the fees are assessed," said Kevin Gallegos, vice president of the Phoenix operations for Freedom Financial Network, a consumer debt resolution company.
"Those who complete a debt settlement program generally can fully resolve their debt in two to four years," he said.
The companies will negotiate with your creditors while you continue to save money for the settlement. The fee that consumers pay is typically a percentage of the debt "enrolled or of the debt reduced," Gallegos said.
Several years ago, the FTC said debt settlement companies are required to charge consumers only the fees after the firm has "successfully settled a debt and the consumer accepts the settlement," he said.
Debt Consolidation
Some consumers opt to combine all of their debt into one, which means all your debt is "under one roof" and at a better interest rate, said Gallegos. This is something you can easily do yourself by finding a balance transfer offer at a lower interest rate than your existing one. Other options are to borrow from a retirement plan, life insurance policy, friends or family, obtain a personal loan, a home equity loan or refinance a home and take out additional cash, he said. Balance the options carefully especially if there are penalties, fees or taxes you have to pay.
Companies which offer to consolidate your debt usually have consumers make one monthly payment, which the consolidator then uses to pay creditors, Gallegos said. While consolidation might simplify paying bills, the fees can be "high," he said.
Fiduciary versus Broker
Both fiduciaries and brokers are financial advisers who can manage investments for consumers. Fiduciaries are legally required to act in the client's best interests, and it is the "highest standard in wealth management," said Elle Kaplan, CEO of LexION Capital, a New York-based asset management firm.
Brokers are held to a "much lower legal bar called suitability that enables them to make money off of commissions, markups and 12b-1 fees while managing your assets," she said.
Seasoning
If you are a first time homebuyer, you should be aware that lenders examine the "seasoning" of the down payment to show that the funds have been in your bank account for 60 to 90 days, said Ray Brousseau, executive vice president of Carrington Mortgage Services in Santa Ana, California. The down payment represents the buyer's "skin in the game," or their personal risk, he said.
Greeting cards are a great way to let our family and friends know we're thinking of them, but while the sentiment is priceless, there's no reason to overpay. Here are a few ways to acquire greeting cards without the hefty price tag.
First, always check the lowest racks of greeting card displays at the store. That's where they usually stock the least expensive cards, including ones from name brands like Hallmark, which can be priced as low as 47 cents.
Next, try to stock up on greeting cards right after a holiday like Mother's Day, Christmas or Valentine's Day. Shopping ahead can help you get cards at up to 90 percent off of the pre-holiday price.
To make sure you don't misplace the cards, use a small shoebox or an expandable folder to store them. You can even create dividers for each type of card or time of year so you'll never miss an important occasion.
For those of you who want to send cards without leaving the house, there are some great online options, too. With Greeting Card Shop you can choose from tons of designs that available for every occasion. Once you select your theme, you can personalize your message, and the company will then print and mail your greeting anywhere in the country for only about $2.50 per card, including tax and shipping. You can even specify what date you'd like to send the card out on.
The next time you need to send a special message, give these tips a try. You'll see how easy it is to get your greeting cards at great, low prices.
David Zalubowski/APA line of 2012 Durango sports-utility vehicles at a Dodge dealership in Colorado.
DETROIT -- The U.S. government is reopening an investigation into Jeep and Dodge sun visors after reports that some caught fire even after a recall repair.
Fiat Chrysler Automobiles (FCAU) recalled 895,000 2011-2014 Jeep Grand Cherokees and Dodge Durangos worldwide last summer after a government investigation found that a short in the vanity lamp wiring could cause visors to burn. Fiat Chrysler has been adding a plastic part to properly guide the wires.
Fiat Chrysler said the defect was only present in SUVs that were incorrectly reassembled after previous repairs.
But Tuesday, the National Highway Traffic Safety Administration said it has reopened its investigation after receiving eight reports that visors caught fire even after the recall repair. No crashes or injuries related to the issue have been reported.
Fiat Chrysler said it's cooperating with the investigation.
NEW YORK -- U.S. stocks finished sharply lower Tuesday after a surprisingly wide March U.S. trade deficit raised concerns that the economy shrank in the first quarter.
The $51.4 billion March deficit was the highest in nearly 6½ years and larger than the $45.2 billion the government assumed in its snapshot of first-quarter gross domestic product last week, suggesting the economy had contracted.
It was something of a one-two punch between the trade-deficit report and higher interest rates that began overseas.
"A negative number is scary for the market," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments.
"It was something of a one-two punch between the trade-deficit report and higher interest rates that began overseas," he said of Tuesday's stock sell-off.
Long-term U.S. Treasury yields along with German Bunds rose on a host of factors including less pessimism about Europe, and easing downward pressure on U.S. and European inflation.
With corporate earnings season winding down, U.S. investors are bracing for an April payroll report due Friday that could give a hint of when the U.S. Federal Reserve will begin raising interest rates.
All 10 major S&P sectors fell, with the utilities index slumping 2.28 percent as investors dumped dividend stocks to take advantage of yields on benchmark 10-year Treasury notes at nearly two-month highs.
Despite a rally of 2 percent in oil, energy stocks were stung for a second day by criticism of fracking companies by David Einhorn, the influential head of hedge fund Greenlight Capital. The energy sector fell 1.1 percent.
Weighed down by a 2.25 percent decline in Apple (AAPL), technology stocks were the biggest drag on the three major indexes, erasing the Nasdaq's gains of the past two days.
The Dow Jones industrial average (^DJI) fell 142.2 points, or 0.8 percent, to end at 17,927.2. The Standard & Poor's 500 index (^GSPC) lost 25.03 points, or 1.2 percent, to 2,089.46 and the Nasdaq composite (^IXIC) dropped 77.60 points, or 1.6 percent, to end the session at 4,939.33.
Winners and Losers
Kellogg (KO) fell 1.5 percent to $63.18 after the world's largest maker of breakfast cereals' net sales fell 5 percent.
Cosmetics maker Estee Lauder (EL) rose 4 percent after better-than-expected profit.
After the bell, Groupon (GRPN) posted first-quarter revenue below expectations and its stock was down 2.2 percent in extended trade.
Tuesday's decline in stocks is only the most recent of several volatile sessions. Over the two weeks through Friday, the S&P 500 moved an average of 17.79 points daily, wider than the 12.43 point range in early March.
Declining issues outnumbered advancing ones on the NYSE by 2,452 to 610, for a 4.02-to-1 ratio; on the Nasdaq, 2,084 issues fell and 676 advanced for a 3.08-to-1 ratio.
The benchmark S&P 500 posted 16 new 52-week highs and no new lows; the Nasdaq composite recorded 39 new highs and 68 new lows.
About 7.3 billion shares changed hands on U.S. exchanges, above the 7.0 billion daily average for the last five sessions, according to BATS Global Markets.
What to watch Wednesday:
ADP releases private-sector hiring for April at 8:15 a.m. Eastern time.
The Labor Department releases first-quarter productivity data at 8:30 a.m.
Earnings Season
These selected companies are scheduled to release quarterly financial results:
Most financial literacy programs are burdened with a fatal flaw: the financial institutions that sponsor them are the same companies known to take advantage of their unsuspecting customers with hidden fees and exaggerated claims. Little wonder the public comes away having learned nothing about the caveats of investing.
But a standout success story is the work being done at FoolProofMe.com, a free online financial literacy curriculum for schools and individuals that has no links to household name banks and brokers. Middle and high school students made over 24 million page views of FoolProof's curriculum in 2014, and in Oklahoma, FoolProof's main test state, 20,000 students are using the site.
MainStreet spoke with FoolProof's volunteer chairperson, Remar Sutton, about the company's school curriculum and its insistence that financial institutions get no say in how the curriculum is crafted.
Why It Began
Q: You launched FoolProof's site for teachers and students in 2012. What motivated you to put the site together?
A: Nine full-time and four part-time. The average salary is about $30,000.
Q: We've read that the late television news anchor Walter Cronkite had a big influence on FoolProof's direction.
A: Walter felt strongly that it's the underserved who can least afford to be hurt who are hurt the most. And he immediately focused on the problem in financial literacy: That the people who are teaching it are conflicted, so the messages that must be taught are not taught.
Q: What's your take on the programs that are out there?
A: The banks do some things wonderfully well. They teach you how to fill out tax forms (for example). But that's not what people need to learn. They need to learn to question.
How Other Programs Fail
Q. Give me an example of what the big financial institutions are doing wrong in their literacy programs.
A: The way they present credit cards is worthless to the person wanting to make a smart decision. They will never say, 'The reason we advertise -- and the only reason we advertise - is to get you to charge more than you pay off each month. " And do you really think Bank of America is going to tell you 'Don't finance with us if our mortgage costs more?'"
Q: So their programs are flawed?
A: Do we think they're out to destroy the world? No. Do we think they hurt people? Yes. Of course the programs haven't worked. They can't if you don't teach critical thinking.
No Idiots Allowed
Q: How is FoolProof different?
A: It instantly tells you that you can't trust what you see. No big-bank financial literacy program does that. Our concept is that advertising has a role in a free enterprise system, but you can't believe what it says.
Q: I read that high school students have a favorite FoolProof module -- the one on credit card debt. The young person who appears in that video says "Only idiots blindly accept advertising. Don't be one of those idiots." Why is this one such a favorite with teenagers?
A: Kids don't want to be fooled. That video is all about how credit card companies are going to make a fool out of you. Kids start out so thrilled about the idea of getting a credit card. And then we shock them.
Q: The securities industry's main lobbying group, SIFMA, runs a stock market game for grade school kids. The association cites a 2009 study that shows kids' math scores went up after they played the game. What about that?
A: They do have better math scores. But they're not being trained to be better spenders or how to invest. What they are not saying in their PR is those kids will make as many mistakes as other kids.
Comedy or Tragedy?
Q: SIFMA also has a program in which Wall Street executives visit kids in their classrooms and talk about investing and the economy. What's your opinion of that?
A: It has to be funny because if it's not funny, it's tragic. I don't know any other way to put it.
Q: FoolProofMe's lessons include some tough jabs at the financial industry. You say in one module that you think the average payday lender is a slime ball. Have you gotten any lawsuits or complaints from the companies you criticize?
A: Absolutely none, ever.
Q: Have big banks or brokerage firms ever approached you, wanting to be financial supporters?
A: No, they haven't officially. I think our messaging is so strong that I don't know how that could work. Some businesspeople were having dinner with me in New York in February, and they said "We could get you money if you just changed this little thing." All of the team said "Absolutely not."
If you're just dying to have the last word about yourself forever, here's an option: Deliver your own eulogy at your own funeral -- via hologram.
Speaking about yourself for all of eternity through a moving, life-size 3D image is just one of the latest ways holograms, once the purview of science fiction, are popping up in our everyday lives.
The virtual you could deliver your eulogy while sitting in front of your fireplace with your golden retriever and a pipe, in front of your alma mater, in your sailboat or at the wheel of your favorite car, he says. Adding: "Really, your imagination is the only limitation to what can really happen."
And if you're not interested in a funeral hologram, AIM also targets families crafting loving life legacies, nonprofits honoring donors, luxury resorts impressing guests, and sales staffs making retail presentations. "We offer high-wealth clientele the opportunity to create lasting life legacies and powerful impressions," says AIM.
Video Eulogies
Equipment as small as an iPod to play the holograms starts around $2,000, and a lifelike capsule will run about $50,000, Minardo told WPBF-TV of West Palm Beach, Florida. A stage-size player will cost more than $300,000, he told Money Talks News. Minardo describes the devices as time capsules that are "not buried but alive and in your home."
Video eulogies recorded before people die have been used for years, says Jeff Staab, owner of Cremation Solutions in Arlington, Vermont. "A hologram will provide a lifelike version of the person and make it seem like they are almost in the room at the funeral," Staab recently blogged. Some find that endearing; others, creepy.
As predicted in 1989's "Back to the Future II," when Marty McFly thought he was about to be eaten by a projection of a shark promoting "Jaws 19," 3D holograms using photo projection are here.
"While there is still work to be done, the prospect is of 3D images seemingly leaping out of the screens, thus promising a total immersion of real and virtual worlds without the need for cumbersome accessories such as 3D glasses," says Dr. Qin Li, from the Queensland Micro- and Nanotechnology Centre at Griffith University School of Engineering in Australia.
Li was part of a team of scientists who tweaked graphene, a one-atom-thick carbon, to create full-color, pop-up, floating 3D displays that can be viewed without glasses. Though the images the team created were only 1 centimeter in height, scaling up would be easy, according to their study, published April 22 in "Nature."
In Other Hologram News
Virtual protests: On April 11 a horde of holographic figures holding placards staged a protest at the Parliament building in Madrid. Organized by the group Holograms for Freedom, the ghostly mob was a statement of opposition to a Spanish law cracking down on real demonstrators at government buildings. In reality, director Esteban Crespo days early filmed just 50 protesters in a town outside Madrid. Crespo told The New Yorker he carefully reproduced distances and angles so the holograms would line up when projected in Madrid.
Medical advances: The FDA recently approved a software platform called True3D Viewer, developed by California startup EchoPixel for use in diagnostics and surgical planning, Wired reported. Rather than 3D images displayed on flat screens from data gathered with CT scans, MRIs, ultrasound or other devices, EchoPixel creates a virtual body part in 3D space, allowing doctors to move it, zoom in on it and manipulate it. Other companies' hologram projects include virtual bodies in which medical students can see through layers of skin to the muscular, cardiovascular and skeletal systems; digital real-time updates of patients' organs that surgeons could view during operations; and super-powered microscopes that create detailed stereoscopic images of microbial and cellular life.
Drive time: Imagine you're behind the wheel, and all the information from your smartphone apps and dashboard instruments is projected right in front of you. Swiss innovator WayRay's Navion, due out later this year, mounts on your dashboard and projects all that information right onto your windshield. No squinting at tiny maps, the company says. When the car is stopped, Navion works with smartphones so you may make calls and access email and social networks. You can give orders to Navion with hand gestures.
Windows computing: Microsoft in January unveiled HoloLens, a headset operating as a holographic computer with no wires, phones or connection to a PC needed. HoloLens features see-through holographic high-definition lenses and spatial sound so you can pinch, pull, tap and flick away holograms. Advanced sensors, a next-generation system on a chip and a Holographic Processing Unit will sift terabytes of data to understand what you are doing and the world around you. Microsoft says it will bring Xbox gaming to HoloLens. The wearable device also is expected to transform medical training and patient care.
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NEW YORK -- Mother's Day blends love and guilt so seamlessly that the resulting, potent cocktail can fuel a spate of drunken overspending. Don't do it.
If this message has reached you too late, don't worry: You aren't alone in your Mother's Day misery. According to market research firm IBISWorld, Mother's Day ranks fourth on the holiday spending list behind Valentine's Day, Thanksgiving and the winter holidays. It accounts for roughly 6.5 percent of holiday spending overall and adds up to roughly $18.1 billion in total.
If you still haven't bought mom that perfect present, consider avoiding the traditional.
According to the National Retail Federation, shoppers planned to spend $225.87 on Mother's Day last year. That was down $30 from the year before, however, indicating that some Mother's Day shoppers are finally understanding that there are ways to recognize and thank their mothers without being gouged.
"If you still haven't bought mom that perfect present, consider avoiding the traditional," says Lindsay Sakraida, features editor at consumer site DealNews.
As May begins and Mother's Day shopping enters its final minutes, steering clear of those items everybody scrambles for each Mother's Day is just about the best plan you can make. In fact, IBISWorld found that just three items account for more than 50 percent of all Mother's Day spending. With help from IBISWorld, the National Retail Federation, DealNews and consumer site LifeHacker, we take a look at some of the more costly Mother's Day offerings and find reasons to avoid each around this time of year:
Flowers
Flowers are a trap laid for well-intentioned children and spouses. A whole lot of mothers like getting them on Mother's Day, and there's no way to buy them in advance and make them less costly.
According to the National Retail Federation, Americans planned to spend $2.3 billion on flowers alone last Mother's Day. IBISWorld notes that the cost of flowers is the third-highest among Mother's Day presents, with total spending on flowers increasing by more than 20 percent since 2010. The Society of American Florists, meanwhile, points out that Mother's Day accounts for 24 percent of all holiday flower transactions and 25 percent of all flower revenue, just edging out Valentine's Day and trailing only Christmas.
So how do you minimize the damage? Zig when the others zag. The Society of American Florists notes that 69 percent of consumers buy fresh flowers on Mother's Day while only 26 percent go for flowering houseplants. Considering that the latter tends to be less expensive and is more likely to still be around by next Mother's Day, it's a solid option.
Jewelry
It isn't as if jewelry is exactly dirt cheap at any other time of the year, but LifeHacker's Whitson Gordon notes that there are good and bad times to buy:
"Jewelry is best bought on Wednesdays, when most people tend to shop for it," he says. "However, stay away from gift-giving months like Valentine's Day, Mother's Day and Christmas."
Just how foolish is shopping for jewelry for Mother's Day or any time in May? IBISWorld says jewelry alone cost Mother's Day shoppers $3.08 billion last year, making it the single most-expensive item on the Mother's Day shopping list. The National Retail Federation put average per-person spending on jewelry at $47 last year, making it the most-expensive item on their list by nearly 20 percent above anything else.
There's no rule that states when you have to buy that perfect bauble for mom, though. In fact, picking retail dark months such as January or March to go jewelry shopping will give you a far better deal than you'd get by joining every other holiday shopper in December, February or May.
A 'Special Outing'
Let's pretend for a moment that this doesn't mean standing in line outside an IHOP on a Sunday morning with the rest of your town.
That special outing of food, movies, Broadway shows, Big Hero 6 On Ice, etc., accounted for $2.98 billion in spending last year, according to IBISWorld. The NRF says Americans spent an average $37 taking their mothers to places that were supposedly nice. But unless mom's a vegan, DealNews points out that you just took her out for a brunch or dinner with meat -- whose price continues to rise thanks to drought conditions and the increased cost of raising a herd. Great.
There is no good way to do this. All the inexpensive places including IHOP, Denny's, Waffle House or your local diner are going to be packed. All the nicer and somewhat more costly places will be switching to "special" Mother's Day breakfast, brunch and dinner menus that reduce options and make it easy to turn tables.
The easy way out of this one? Cook. Not only does it cost less, but it actually requires that extra effort that mom's been expecting out of you for all these years.
-Written by Jason Notte in Portland, Oregon, for MainStreet.
Paul Sancya/APThe Chevrolet Bolt is just one of several new electric cars expected to come to market in the next couple of years. But electrics are still a hard sell with most consumers.
"Electric cars are the future," investors have been saying, as they snap up shares of companies such as Tesla Motors (TSLA).
But consumers are saying something different, something more like, "We're not ready for that kind of future."
President Obama once hoped to see a million electric cars on American roads by 2015. But even though sales have been growing, the total isn't yet anywhere near that.
That isn't stopping the automakers from gearing up to bring more and more electric cars to market. But at a time when gas costs less than $3 a gallon, will anyone want to buy them?
New Electric Cars Still Have Disadvantages
There are a slew of new electric cars headed for market. General Motors (GM) promises that its upcoming new Chevy Bolt sedan will get about 200 miles of range at a price around $30,000. The Bolt is expected to go into production late next year.
Not to be outdone, Nissan is hinting that the next generation of its all-electric Leaf -- the best-selling electric car so far -- will have similar range at a similar price. It's expected to arrive at dealers at around the same time as the Bolt, late next year or early in 2017.
Upscale entries are coming, too. Tesla is planning to roll out its long-awaited Model X SUV late this year. It'll face competition from a new electric Audi SUV -- and possibly, in a few years, an all-electric Porsche sedan as well.
But one automaker noticeably absent from the rush to battery-electric cars is Toyota (TM). You'd think that the company that has sold more hybrids than anyone would be out in front of the next wave of green-car technology. But it's not.
Toyota thinks that the time it takes to recharge an electric car will end up turning off most consumers. It's pursuing a different technology: fuel cells, which chemically extract energy from hydrogen to make electricity. Toyota's new fuel cell car, the Mirai, can be refueled in just five minutes -- if there's a hydrogen station handy.
Toyota Is Skeptical for Good Reason
At almost $70,000, the Toyota Mirai is expensive, and Toyota is only planning to build it in tiny numbers at first.
But Toyota's concerns about battery-electric cars resonate with many car buyers. Electric cars are a hard sell, especially when gas is cheap -- and when automakers are still getting good improvements in fuel economy from their gasoline engines.
Analysts at InsideEVs.com estimate that Americans bought 119,710 plug-in vehicles in 2014. That category includes fully electric cars as well as "plug-in" hybrids, and it's an estimate because Tesla only reports total global sales, not U.S. sales.
That total represents a 23 percent increase from 2013, InsideEVs says. That's promising for fans of electric cars. But it's still just a tiny fraction -- 0.7 percent, to be precise -- of the over 16 million cars, pickups, and SUVs sold in the U.S. last year.
It's easy to understand why most car-shoppers are still shying away from electrics. Electric cars come with an unfamiliar set of hassles. They need to spend hours charging, and -- aside from the expensive Teslas -- they don't have anything like the range of a car powered by a gasoline engine. And they're still very expensive for what you get, more so than gasoline cars, although prices are coming down.
Electric Cars Don't Make Sense for Most Buyers Yet
Car buyers concerned about fuel economy -- but unwilling to deal with the high cost and hassles of an electric car -- are still better served by looking at hybrids. They offer some of the advantages of electric cars, but they're much easier to live with. If you want to try plugging in your car and cruising on electric power, but don't want to make the full leap to an electric, a "plug-in" hybrid like the Chevy Volt or Ford's (F) Fusion Energi sedan might be worth a look.
But the cost and inconvenience of fully electric cars explains why most automakers are continuing to bet big on hybrids, even while they dabble in electric cars. For consumers, owning a hybrid is a lot like owning a regular gas-powered car -- you'll just visit the gas station less often.
There may come a day when electric cars make sense for more car shoppers. That's the biggest reason that companies such as GM and Nissan continue to work on them. But unless something big changes in the next few years, the car of the near future is still likely to need gas from time to time.
Motley Fool contributor John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
Some people swear by their gym sessions and feel joining a fitness club is the best and only way to lose weight or get into shape. However, there are no hard-and-fast weight loss rules, and what works for one person may not work for another.
And the truth is, you don't need a gym membership to be physically fit. In fact, depending on your circumstances, joining a gym might be a complete waste of money (just don't tell my personal trainer that). A membership can easily run as much as $120 a month (I live in New York City, so it's a bit pricier than other places)
No one's telling you to quit your gym if it's working for you, but if you're on the fence, here are five times when a gym membership isn't worth it.
1. You're Not Fully Committed. You may say that you want to lose weight or improve your health, but if you're not fully committed to the challenge that lies ahead, don't spend money on a gym membership.
Losing weight or getting into shape takes more than desire -- it requires action. You'll need to be physically active on a regular basis and you'll need to modify your eating habits. It's pointless to spend an hour at the gym only to go home and fill up on high-calorie, high-fat foods and undo all your hard work.
This doesn't mean you should give up on physical activity altogether, but it doesn't make sense to spend $300 to $500 a year and not achieve any of your fitness goals. You're better off canceling the membership until you're ready to commit.
2. It's Too Crowded. If you're pumped and ready to exercise, there's nothing more frustrating than walking into a crowded gym and not being able to find a single piece of available equipment. You might spend more time waiting for equipment to become available than actually working out.
Some people hit the gym in the early morning hours or late at night when it's less crowded. But if this routine doesn't work with your schedule, you may not be getting the most out of your membership. The gym isn't the only way to achieve health and fitness goals. You can take what you normally spend on a yearly gym membership and invest in equipment to use around the house, such as a bike, an exercise ball, weights, DVD workouts, etc. (See also: At-Home Exercises That Give You a Gym-Quality Workout for Free)
3. You're Too Busy. I believe it's important for everyone to make time for exercise, but if you have a hectic schedule due to juggling work, family, and other personal obligations, it might be cost-effective to cancel your membership and squeeze in a workout whenever you have a few extra minutes throughout the day. You can walk on your lunch break or watch a workout video in the mornings before you get the kids ready for school.
4. You Have Access to a Free Fitness Center. Fitness rooms at a recreation center or apartment complex might be small and have limited options, but the equipment available might be exactly what you need to reach your fitness or weight loss goals. It's also a cheaper alternative to a gym membership and you'll probably deal with fewer people. Some community recreation centers only charge $15 or $20 for an annual membership, which gives you unlimited access to fitness room. And if you live in an apartment complex -- or have a friend who lives in an apartment -- you might have access to a fitness center 24 hours a day.
5. You Need to Save Money. Even if you like the idea of working out at the gym, sometimes we have to face reality and cut costs when living above our means. If you're struggling to pay your bills every month, the money spent on a gym membership can go toward paying a more important household expense. You can still enjoy workouts, but you'll need to find them for free.
Some people think they can't get results without their gym or trainer, but many workouts like walking, running, biking, and playing sports can transform your body. Personally I prefer physical activities in which I'm having fun and improving my fitness -- like kickball and dodgeball. There are even plenty of exercises using your own body weight to tone and shape, such as push-ups, squats, and lunges, which also are better with a friend. You also can find a fitness-focused Meetup group to join for free, or round up your pals to plan a meeting schedule to work out and support one another.
Do you know any other times when a gym membership isn't worth it? Let me know in the comments below.
Gene J. Puskar/APAppliances, and refrigerators in particular, see a drop in prices during the Memorial Day holiday weekend.
The two primary holidays in May -- Mother's Day and Memorial Day -- prompt many of the bargain buys for this month. Other factors include the change in season and manufacturers rolling out new products. If you're in the market for any of the following goods, now's the time to pounce.
Mattresses. Mattresses may seem a strange "best buy" for the month of May, but it kind of makes sense. The summer months see a lot of traveling, which may entail visitors to your home who are looking for a comfy place to sleep. It's also a prime month for spring cleaning and general "house rejuvenation." Look for discounts of up to 70 percent off at mattress retailers. You can sweeten the bargain by pairing in-store specials with coupons or deal websites such as Groupon or Living Social.
Apparel. With changing seasons comes changing store displays, especially where fashion is concerned. "You'll find deals at the department stores like Macy's and Kohls," says Phong Vu, CEO of DealScience.com, a platform that helps consumers shop more intelligently. "Specialty retailers like Gap will have coupon codes on top of already reduced prices. Look for 40 percent off at Gap during Memorial Day weekend. Ann Taylor and Express have also traditionally had sales during the Memorial Day weekend with discounts up to 40 percent."
Refrigerators. Memorial Day makes for some major bargains across the board. Appliances, and refrigerators in particular, see a drop in prices during the holiday weekend. That's partly because of the sales, and partly because manufacturers release new refrigerator models during May. The two forces coming together means you'll find discounts as high as 80 percent, especially if you're shopping last year's inventory.
Camping and Outdoor Gear. "The beginning of summer is also the beginning of camping season for most of the country," notes Vu. "Historically, DealScience.com has seen an increase in discounts for these items at Sears and Walmart. In addition, REI and Dick's Sporting goods will have discounts up to 25 to 40 percent off camping gear."
Health and Beauty. From sunscreen to perfume to creams, May is the best time to buy all of the above. Your best bet is to seek out coupons that are available both online and in inserts or newspapers. Also, don't forget to check out social media pages for discounts of up to 25 percent off, especially around Memorial Day weekend. In the past, stores such as Ulta, Target, Bath & Body Works and Sally Beauty Supply have offered such coupons.
Jewelry. After the Mother's Day jewelry buying frenzy, retailers put themselves into recovery mode. This entails getting rid of excess Mother's Day inventory. Offers.com says that shoppers can expect to save up to 70 percent off fine jewelry as long as they wait until after Mother's Day. Your best bet is to get there in the days and week or two after.
Patio furniture. "Consumers tend to replace patio furniture at the beginning or end of the outdoor season," explains Vu. "While our data suggests the best time to buy these items is at the end of summer during clearance events, there should be plenty of deals on outdoor furniture in May." He says that stores such as Sears, Walmart and Target will feature nice discounts on patio furniture in the week ahead of Memorial Day, and that markdowns will range from 10 to 35 percent off retail.
Caribbean Vacations. Because the month of May is considered the "middle of the Caribbean's shoulder season, or the period of time between a peak and lull in tourist traffic," prices are at their lowest. Not only will you find discounts on cruises and transportation, accommodations are also very cheap. Expect deals ranging from 50 to 65 percent off, says Offers.com.
M. Spencer Green/APA job seeker fills out an application at a job fair last month in Chicago.By Lucia Mutikani
WASHINGTON -- U.S. private employers in April added the fewest number of workers in more than a year, which could heighten worries about the economy's potential to rebound strongly from a first-quarter slump.
Private payrolls increased 169,000 last month, the ADP National Employment Report showed. That was the fewest since January 2014 and far below economists' expectations for a gain of 200,000 jobs.
March payrolls were revised down to show 14,000 fewer jobs created than previously reported. The report jointly developed with Moody's Analytics was released ahead of the government's more comprehensive employment report on Friday.
While it has a poor track record of predicting nonfarm payrolls, the ADP report poses a downside risk to economists' expectations for nonfarm payrolls growth of 224,000 in April.
Yields on U.S. Treasuries rose and U.S. stock index futures traded slightly higher after the data. The dollar was weaker against a basket of currencies.
A combination of cold weather, a strong dollar, port disruptions and deep spending cuts by energy companies, held down first-quarter economic growth to a 0.2 percent annual pace.
A jump in the U.S. trade deficit in March, however, suggests the economy actually contracted in the first three months of the year after expanding at a 2.2 percent pace in the fourth quarter.
Productivity Drops
In a separate report Wednesday, the Labor Department said nonfarm productivity fell in the first quarter as harsh winter weather weighed on output, pushing labor-related production costs to rise at their quickest pace in a year.
Productivity declined at a 1.9 percent annual rate after dropping at a revised 2.1 pace in the fourth quarter. That was the first back-to-back fall in productivity since 2006.
Economists polled by Reuters had forecast productivity, which measures hourly output for each worker, dropping at a 1.8 percent rate after falling at a previously reported 2.2 percent rate in the last three months of 2014.
The productivity drop, which mirrored the abrupt growth slowdown in the first quarter, is likely to be temporary. Still, the trend remains weak. Productivity rose 0.6 percent from a year ago.
Despite the weather disruptions, workers put in more hours in the first quarter. Hours increased at a 1.7 percent rate.
With hours outpacing a 0.2 percent pace of decline in output, unit labor costs increased at a 5 percent rate in the first quarter. That was the fastest pace since the first quarter of 2014.
Unit labor costs, the price of labor for each single unit of output, increased at a 4.2 percent rate in the fourth quarter. They rose 1.1 percent compared to the first quarter of 2014, a sign that wage inflation remains benign.
Compensation an hour increased at a 3.1 percent rate in the first quarter, also the quickest pace since the first quarter of 2014. Coming on the heels of a report last week showing a solid increase in labor costs in the first quarter, the rise in compensation suggests that wage inflation could be firming.
The steadily rising labor costs against the backdrop of weak productivity could squeeze corporate profits.
Shutterstock
There is certainly no shortage of financial advice available to those who are thinking of buying a new home. Where to buy, how to get the best mortgage rate, even why you shouldn't buy a house in the first place -- all this information is accessible with a few mouse clicks. And once the loan is approved, the piles of paperwork signed, and you have the keys to your new home in hand, there is a temptation to think that all the hard work is done. But it's not, it's just beginning.
Buying a home is the biggest purchase most people will ever embark upon, and that is why it is especially important to take a number of post-sale steps to make sure you protect your largest financial investment.
Like most of us, the previous owners of your home probably had multiple copies made of their house keys, the ones you got at the close of escrow. And those copies are most likely still in the possession of friends, family members, handymen and even neighbors.
The first thing you're going to want to do is re-key or change all the locks on the doors and windows of your new home. You may also want to consider installing deadbolts where there are none. Though this might not seem like a financial issue at first glance, it will be if you have to replace a whole house worth of stolen or damaged items resulting from a burglary.
The purchase of a new home will likely change the dynamics of your finances, which necessitates a review of your insurance to make sure it stays up to date with your needs.
"Whether you are moving up in house or a first-time home buyer, it is important to purchase or readjust your life insurance coverage to cover any new mortgage debt," says Jeremy Hallett, the CEO of Quotacy, an online insurance broker. "As a general rule of thumb, life insurance should cover 10 years of income plus any large debts or upcoming expenses -- in this case the mortgage, but also could include residual debts or a child's college costs."
If you purchased your home with less than 20 percent down, chances are you will have to pay private mortgage insurance until your loan-to-value ratio gets below that threshold. PMI rates are generally 1 percent of your loan balance, which can translate into thousands of dollars a year, depending on the size of your mortgage. This is money that you never recoup, and even worse, represents real risk if the value of your home decreases.
Because of this, it might make sense to pause any 401(k) or retirement contributions and defer them towards paying down your loan. The faster you can get below that 20 percent loan-to-value ratio, the sooner you can drop the PMI.
What many people forget -- especially new homebuyers -- is that once you take possession of a home, you also take the financial responsibility for anything that goes wrong it. Despite the best intentions of the pre-sale home inspection process, there is really no way to definitively determine the health of your house's infrastructure, and you need to be ready in case of "surprises."
Bulking up your emergency savings to cover the costs of a major repair or replacement is a good way to make sure you don't end up in a financial bind should something unforeseen happen to your new home. Even better, if you didn't get a home warranty as part of the purchase process, you can still get one after the close as long as no issues have presented themselves yet.
Though purchasing a new home is a time of excitement and hope about the future, there are some pragmatic issues you need to consider, namely, what happens if you were to unexpectedly pass away? This is a good time to review your will or trust with a lawyer to make sure that your new home is a part of those documents and that your beneficiaries are updated and complete.
Finally, remember that even though your home isn't a living being, from a financial standpoint, how it impacts your life going forward will change and evolve in a manner similar to that of a family member. The best practice is to do a yearly review on the fiscal impact your house is having on your life and take any measures needed to make sure it's as positive and cost effective as possible.
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Microsoft has yet to detail its plans for converting the Windows operating system into a free service. But that hasn't stopped critics from speculating about whether the arrangement will be as good -- or as cheap -- as it sounds.
In late January, the company announced that "a free upgrade for Windows 10 will be made available to customers running Windows 7, Windows 8.1 and Windows Phone 8.1 who upgrade in the first year after launch."
As Microsoft's executive vice president of operating systems, Terry Myerson, explained in a blog post:
This is more than a one-time upgrade: Once a Windows device is upgraded to Windows 10, we will continue to keep it current for the supported lifetime of the device -- at no cost. With Windows 10, the experience will evolve. ... We'll deliver new features when they're ready, not waiting for the next major release.
Part of the continued speculation among critics revolves around the definition of the phrase "the supported lifetime of the device," which remains unclear.
Microsoft's chief operating officer, B. Kevin Turner, said during the annual Credit Suisse Technology Conference in December that the company would announce the details of the Windows 10 business model over the spring and summer.
CBS MoneyWatch speculates on two reasons that Microsoft would give away the operating system that has traditionally constituted one of the company's main revenue streams:
One is that it can't afford not to give it away. Google has made some serious inroads into Microsoft's business...
Second, Microsoft has an end-run strategy: make money through additional services.
When asked during the tech conference whether Microsoft would start losing money on Windows, Turner replied:
Yes, let me -- that's not any conversations that we've had. The thing about it is, though, we've got to monetize it differently. And there are services involved. There are additional opportunities for us to bring additional services to the product and do it in a creative way...
Those "services," which also remain unclear, have also sparked speculation.
CBS reports that Microsoft will rely on app sales for revenue after the launch of Windows 10, which "will run re-worked Android and iOS apps, which means there is a massive potential number of software packages that developers might like to have available on the many computers that will likely run the new Windows version."
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Jacquelyn Martin/APFed Chair Janet Yellen speaking Wednesday at International Monetary Fund in Washington.By MARTIN CRUTSINGER
WASHINGTON -- Federal Reserve Chair Janet Yellen on Wednesday described stock market valuations as high and said the central bank was carefully monitoring their impact on financial stability.
"I would highlight that equity market valuations at this point generally are quite high," Yellen said in conversation with Christine Lagarde, managing director of the International Monetary Fund, at an economics conference.
Coupled with weak economic reports in the morning, her remarks drove stocks broadly lower in Wednesday trading.
Yellen added, however, that the overall risks to financial stability are "moderated, not elevated" and she doesn't see the hallmarks of any bubbles.
She cited one reason stock prices were high: the meager returns on safer investments such as bonds because of low interest rates.
"But there are potential dangers there," Yellen said.
'Taper Tantrum'
The very low level for short-term and long-term interest rates represented a risk because rates can move rapidly, she explained.
"We saw this in the case of the taper tantrum in 2013 where there was a very sharp upward movement in rates," Yellen said.
The "taper tantrum" occurred when global financial markets were rocked by comments then-Fed Chairman Ben Bernanke made in June 2013. He discussed the possibility that later in the year, the Fed would begin to trim the purchases it was making of long-term bonds, a program designed to keep interest rates low to spur economic growth.
Yellen said the Fed was mindful of the impacts of its decisions. At the moment, investors are intently watching the Fed for signals of when it will start to raise a key interest rate, which it has kept at a record low near zero since December 2008.
In her most extensive comments on financial stability, Yellen also discussed the potential stability risks facing banks, insurance companies and pension funds at a time of very low interest rates.
She described the risk as "moderated" because the Fed isn't seeing a broad rise in corporate or household debt or any rapid jump in debt levels.
"I would call those things kind of the hallmark of a financial bubble or the precursors of a financial crisis," Yellen said. "But these are things we are of course focusing on very carefully."
Keeping Rates on Hold
The Fed met last week and as expected left its key interest rate unchanged at zero while downgrading its view of the performance of the economy. The Fed offered no sign that a rate increase was imminent. Many analysts have moved their own forecasts for the first rate hike from June to September or even later.
At the conference hosted by the Institute for New Economic Thinking, Yellen and Lagarde posed questions to each other following their prepared remarks.
Yellen told Lagarde that she the financial system was better equipped now to guard against a repeat of the 2008 financial crisis.
"I think there was a great deal we missed before [the 2008] crisis," Yellen said. "I think we are better positioned now and have better tools."
In her speech, Yellen said that the Fed and other banking regulators had made significant progress in correcting the flaws in the financial system that triggered the crisis.
"Unfortunately, in the years preceding the financial crisis, all too many firms took on risks they could neither measure nor manage," she said.
Banking regulators are remaining "watchful" for any areas where further reforms may be needed, she said. Yellen cited the need to address the problem of "too big to fail" -- the perception among investors that some institutions are so large that the government will step in and save them if they get into trouble.
The Fed and other regulators are taking steps to ensure that the collapse of even very large banking institutions can be handled in ways that don't jeopardize the stability of the entire system.
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