Beyond the county: Demand for U.S. goods declines, CA home sales rise
Why optimism about the US economy’s strength has dimmed
WASHINGTON — Consumers, fueled by job growth, cheaper gas and higher home values, would drive the U.S. economy through a global slump.
That was the widespread hope just a few months ago. Now, doubts are growing that the United States can withstand economic pressures flowing from overseas. Economies in China, Canada, Brazil and Europe are struggling. Canada, the largest U.S. trading partner, is in recession.
Americans have been holding back on spending even though lower gas prices have put more cash in their pockets. Employers have slowed hiring and held down pay. Home sales have flattened. And the U.S. economy has been hobbled by a stronger dollar, which makes U.S. goods costlier overseas and is depressing corporate profits.
“There’s no question that the economy is losing momentum,” said Mark Vitner, an economist at Wells Fargo. “The question is whether it is temporary … or is it something that will prove more lasting?”
As recently as early August, economists had sketched a bright picture for the rest of the year and, as a result, thought the Federal Reserve would be confident enough to raise interest rates from record lows in September. The Fed chose not to. And many economists and investors have pushed back their forecast for a Fed rate hike into next year.
The U-turn in sentiment happened fast. It occurred soon after China made a clumsy attempt last summer to prop up its stock prices and then devalued its currency. Financial markets plunged on fears that China’s once-sizzling growth was shakier than anyone had thought and would slow economies elsewhere.
This week, China said its economy’s growth slid to 6.9 percent in the July-September quarter from a year earlier, the slowest pace in more than six years.
As China’s appetite for oil, copper, iron ore and other commodities has fallen, so have prices for those goods. One consequence is that U.S. energy companies, squeezed by lower oil prices, are buying fewer factory goods. At Ahaus Tool & Engineering in Richmond, Indiana, orders for components it sells to drilling equipment makers have dropped.
Gas drillers “are cutting their costs, which means they’re slowing down on buying new components,” said Kevin Ahaus, the company president. “We’re not seeing much business there.”
U.S. factories cut production for a second straight month in September. Manufacturers are being hurt by a declining appetite for their goods overseas and by cheaper foreign-made products. U.S. exports are down this year compared with 2014, the first year-over-year decline since the Great Recession officially ended in 2009.
Falling demand for U.S. goods hurts even companies that don’t themselves export products. CSX Corp., for example, said its revenue from transporting coal fell 19 percent in the third quarter from a year earlier in part because of reduced coal exports.
The higher-valued dollar is squeezing U.S. corporations’ sales in another way, too: Their revenue in foreign currencies is worth less once it’s converted back to dollars. Wal-Mart, for example, says it expects flat sales this year, partly because of such currency effects. Johnson & Johnson and Monsanto have also said currency exchange rates are depressing revenue.
At the same time, U.S. consumers appear to be pulling back. Sales at retail stores and restaurants dipped in September after a flat reading in August. Though Americans are snapping up cars at a solid pace, retail sales excluding autos have fallen for two months.
In this Aug. 22 file photo, men chat on the street near a billboard promoting deposit rates for the U.S. dollar in Beijing. A few months ago, the hope was that consumers, fueled by job growth, cheaper gas and higher home values, would drive the U.S. economy through a global slump. Now, doubts are growing that the United States can withstand economic pressures from overseas.
Calif. home sales rise on lower-priced markets
SAN DIEGO — A research firm says California home sales surged in September as buyers snapped up properties in more affordable cities away from the coast. Prices cooled.
CoreLogic said Tuesday that the median sales price for new and existing single-family homes and condominiums was $406,000. That’s down less than 1 percent from $408,500 in August but up 6 percent from $385,000 in September 2014.
Nearly 41,000 homes sold throughout the state, a 13 percent increase from a year earlier.
The numbers suggest that a modest slowdown in sales during August was temporary.
Sales gains and price increases were sharpest in areas like Southern California’s Inland Empire and Contra Costa County near San Francisco, which are more affordable than coastal markets.
Texas teen arrested for homemade clock to move to Qatar
DALLAS — The family of a 14-year-old Muslim boy from Texas who was arrested after a homemade clock he brought to school was mistaken for a possible bomb has announced he’ll be attending school in the Middle East. Ahmed Mohamed’s family said in a statement Tuesday they’ve accepted a foundation’s offer to pay for his high school and college in Doha, Qatar. He recently visited the country as part of a whirlwind month that included a visit Monday to the White House. Ahmed’s father, Mohamed Elhassan Mohamed, told The Dallas Morning News that “we are going to move to a place where my kids can study and learn and all of them being accepted by that country.”
— Associated Press
Reno newspaper, Tesla at odds after arrest of photographer
RENO, Nev. — A lawyer for the Reno Gazette-Journal says one of the newspaper’s photographers was attacked by Tesla Motors security guards before he was arrested for trespassing and battery at a Sparks industrial park.
Tesla says the photographer Andy Barron and a reporter accompanying him were trespassing Oct. 9 and injured two security guards with their vehicle when they tried to flee.
Reno attorney Scott Glogovac said in a letter to Tesla on Monday the guards rammed the newspaper’s vehicle with an ATV, smashed a car window with a rock and cut Barron from his seat belt with a knife before dragging him to the ground.
Glogovac says the newspaper is considering filing criminal charges and seeking civil damages.
— Associated Press
Monarchs get help from unlikely source: the drought
VISTA, Calif. — In California’s drought, the struggling monarch butterfly may have found a sprinkling of hope.
Suburban homeowners ripping out thirsty lawns are dotting their new drought-tolerant landscapes with milkweed native to California’s deserts and chaparral — plants that have the potential to help save water and monarchs at the same time, because the female monarch will only lay her eggs on milkweed.
Overall numbers of the majestic black-and-orange butterflies have dropped from 1 billion to fewer than 60 million over the past two decades as milkweed nationwide has fallen prey to development and pesticides.
Earlier this year, the U.S. Fish and Wildlife Service announced $1.2 million starter investment to restore habitat; other national projects aim to distribute milkweed seeds by mail and build databases of breeding habitats as alarm grows.
Whether by choice or by chance, ecologists hope California gardeners looking to save water can provide a boost to the butterflies on the West Coast.
Nurseries are increasingly stocking multiple varieties of native milkweed and catering to customers who want to be drought savvy but also want to attract butterflies.
Business was up 50 percent this season at Tom Merriman’s native plants nursery in Vista, California.
Five years ago, Merriman didn’t sell milkweed at all; this summer, he sold more than 14,000 plants and is shipping truckloads of seedlings all over California and other bone-dry Western states like Arizona, New Mexico and Utah.
Dozens of monarchs flit through a butterfly atrium he built next to his greenhouses and sometimes sneak inside his greenhouses to lay eggs on plants awaiting sale.
“If you plant it, they will come,” said Merriman, who has a greenhouse stuffed with 8,000 milkweed of a dozen types. “We had chrysalises on shovels, we had them on wheelbarrows. They were up in the nursery on palm trees. They were everywhere, under tables. We were releasing 500 caterpillars a week on native milkweed.”
Anya Shortridge bought a few milkweed plants last year for her drought garden.
Now, she grows more than 100 milkweeds and carefully scans them for microscopic monarch eggs.
When the eggs hatch, she feeds the tiny black-, gold- and white-striped caterpillars until they disappear into a shimmering, light green chrysalis where the mysterious transformation into a butterfly occurs.
In this Aug. 19 photo, a monarch is shown in Tom Merriman ‘s butterfly atrium at his nursery in Vista.
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