Finance

What Next In U.S. Economy?

April 29, 2016 By Twila Van Leer

Even though the government reports job growth again this spring, other factors seem inconsistent, leading to a somewhat hazy view as to what actually can be said for the national economy in the long run.

Inconsistent Factors In Determining Growth Or Decline In Economy

In March, only 126,000 new jobs were reported by the Labor Department, ending a run that saw more than 200,000 per month. The April figure rose again, to 225,500 new jobs. But the rising employment numbers have not been matched by significant increases in earnings.

Counterpoints to the job market improvements are signs that worker productivity is lagging, exports are diminishing, only modest gains have been reported in consumer spending and overall economic expansion is “sluggish.”

America has been the engine pushing the world’s economy in recent years, but the International Monetary Fund predicted recently that recovering strength in the big Asian economies could see them move into the lead.

The many factors determining either growth or decline in the economy are sending mixed signals of either potential strength or potential weakness. Lower oil prices have led to cutbacks at energy companies and the manufacturers who supply them. A stronger dollar has stymied export growth and depressed corporate profits.

On the rosy side, layoffs are down and home sales have surged this spring. A bad winter weather-wise, cheaper oil and a West Coast port wrangle (since resolved) all had a negative impact.

Factors Being Poured Into The Economic Mix In Recent Reports Include:

The number of Americans who applied for unemployment benefits dropped to 279,500 recently, the lowest level in 15 years. The decline seems to portend more hiring, according to the Labor Department. Some employers are holding off on hiring until the trend of the economy is clarified, the department report said. That opinion was supported by a private survey by ADP, a payroll processor. That survey showed that businesses added 169,000 jobs in April, compared with 175,000 in March.

Worker productivity dipped in the first quarter of this year while labor costs went up. The Labor Department report said it was only the third time in 25 years that productivity has shown a decline over two quarterly reporting periods. Such declines suggest that workers are becoming less efficient.

The trade deficit increased in March, creating a drag on the U.S. gross domestic product. However, imports rebounded after the West Coast ports dispute was settled. American exports have become more expensive for foreign purchasers because of the strength of the dollar. The trade gap rose 43 percent over February, the government report shows.

Although the government estimated an 0.2 percent annual growth during the first quarter of 2015, some economists argue that when the trade deficit is factored in, there was actual shrinkage in the economy from January through March.

Finding Good Travel Deals

April 27, 2016 By Twila Van Leer

With a little bit of research you can find good travel deals. — With a little research you can find good travel deals.

Summer travel time is blossoming and smart air travelers are looking for deals.

And the factors that enter into travel decisions are becoming more convoluted and confusing. That means you need to take care that your search for a cheap flight really ends up that way.

Things such as whether or not an airline charges a baggage fee, options for extra leg room, etc., make it important to look ahead and study all the possible configurations you might choose.

Airline travel is changing in ways that mean some of the old strategies for saving money don’t apply any more. For instance, it used to be that choosing to travel on a Tuesday or Wednesday would save some bucks but that is not necessarily true anymore. More airlines that offer loyalty benefits are looking at how much you spend, not how many miles you travel. That makes it harder for leisure travelers to rack up enough points to make a significant difference.

Travel experts offer these tips to help you make choices:

Discover Restrictions

Read the fine print on the airline website so you are certain what comes with your seat. A less expensive ticket that doesn’t include checked luggage may not be the best deal. Some airlines, including Delta, have a lower basic economy fare, but it places a bunch of restrictions on the package. It’s impossible to change the terms and you don’t get a seat assignment in advance. Do the homework.

Travel Dates

Be flexible regarding travel dates and destinations. Traveling at the end of the season (September, for instance) is cheaper than traveling at the height of the summer. That doesn’t work well for families that have children in school, but it’s worth considering.

Budget Airlines

The budget airlines sometimes have very attractive fares. Iceland’s WOW air and Norwegian Air Shuttle, for example, have added routes across the Atlantic this year and their prices may offer a savings. You may sacrifice a little in comfort and convenience, but the bottom line will look better. If you prefer all the niceties, stick with the familiar airlines.

Seat Assignments

Families should begin right away to confirm free seat assignments. The discount airlines don’t allow you to pick a seat without paying extra and that can quickly add to costs for family travel. The fees for having guaranteed seats range from $2 up to $100 for a round-tripper on Spirit. Frontier charges from $12 up on Frontier. If you have to reschedule due to unforeseen changes in your travel plans, a nonrefundable U.S. ticket on American, Delta or United may cost $200. Southwest doesn’t charge a fee. If you use an airline’s branded credit card, some will waive fees, but not all do. You need to know in advance.

Currently, the federal Transportation Department is considering imposing rules that would require airlines to provide information about fees to third parties, such as online travel agencies. That would greatly simplify making comparisons. But until that happens – not until later this year or beyond – your best bet is to take the time to shop carefully.

Giving Money to Relatives Or Friends Common

April 26, 2016 By Twila Van Leer

Many households give or lend money to help others out. — Many people give or lend money to help family and friends out.

Opening one’s wallet to help a family member or friend is “a hidden dimension of the financial system,” according to a study from the Pew Charitable Trust. “Transfers of money across household lines are really important for keeping families afloat.”

25% Of Households Lent to Friends Or Family.

About 25 percent of American households gave or lent a median of $1,000 to friends or family in the past year, the study showed. More than 7,800 households were included in the survey. Black households are most likely to give or receive such help, but the practice is spread among all demographics.

Burden Created.

It isn’t always easy. One in five of the respondents said the “gift money” creates a burden on the giver. Not unexpectedly, the households with the least income saw their donations as a difficulty. But even those making $85,500 per year reported that their generosity was a burden.

Single Mothers Receive And Give The Most.

Single mothers are among the most common recipients, but they also are more likely to give when necessary. Half of all the single-mother households either received or gave help, compared with 30 percent of two-parent households. Some 75 percent of the single parents said it was hard to give, but they also are the group that recognizes it may need a boost at some time. They are, in essence, investing against future need, creating a safety net that they can use to tide them over emergencies.

More Common For Parents To Help Adult Children.

The study showed that adult children in the period from 2005 to 2013 were more likely to draw on cash from their wealthy parents than was common in the 1980s. About 10 percent of those in the more recent group received help with a home purchase, Pew found. Slightly more than 30 percent were given money to help with education costs, enhancing their ability to become more wealthy in the future.

The bottom line of the Pew Study: Poor people tend to help each other out so they can get through tough times. Wealthy families benefit financially when they donate to kin.

Save Big Bucks On Airline Tickets

April 2, 2016 By Twila Van Leer

Prices for airline tickets are all over the place. If you want to fly right and for less, become savvy about making your purchases. It is possible to save a lot – up to $300 or more per ticket – if you buy when the prices are at their lowest.

Best Time To Buy

So, how do you know when that magical moment has arrived? CheapAir did some of the footwork for you. The company monitored air travel fees for some 5 million flights in 2014, comparing the cost of bookings from 320 days in advance of the desired flight time to just one day. The research pinpointed 47 days pre-flight, on average, as the time at which fares were likely to be at their nadir.

“Window” Opportunity

From 114 days to 27 days, however, were identified as a “window” of opportunity during which it is worthwhile to shop for the best airfares. If you wait until only 14 days before you plan to fly, the price may jump by an average of $174. By that point, the airlines know you are likely to pay what they ask. Booking too early, on the other hand, can raise the price by an average of $50 per ticket, the CheapAir review found.

Book Early

Of course, there are many factors that affect prices, including dates and destinations. The research organization suggests early booking for holiday and standard vacation times in the area in which you are interested. If your travel group includes more than four people and you want to be seated together, early booking will be better. Start checking fares once a week as soon as your plans seem firm, to get a sense of the market. If you see a good price, go for it. It is more likely to rise than to fall further.

Information is available from airfarewatchdog.com, cheapair.com or kayak.com, which regularly monitor airfares.

International Travel

Fares for international travel do not fluctuate as much as those for domestic flights. If you are leaving the country, book early. Sales open 335 days before departure, CheapAir says. About 90 days before the departure date, fares start rising rapidly. If Europe is your destination, book at least 276 days in advance to get the best price. The best opportunities for cheaper tickets to the Caribbean is 144 days in advance; to Asia, 318 days; Africa, 262 days; Mexico, 251 days; South Pacific, 244 days; Middle East, 213 days; Central and South America, 96 days.

Be Flexible

Allowing yourself a little flexibility can also save money. Booking flights with connections or those that leave either early in the morning or late at night are cheaper. Tuesday, Wednesday and Saturday are the days when fares tend to be lower.

Price Drop Rebates

Many airlines and travel agencies will give you a rebate if your flight’s price drop below what you paid. Often the rebate will come in the form of credits or vouchers. Sign up with Yapta.com to receive alerts about falling prices. But be aware that some airlines will charge a big fee for re-booking a flight to a lower price. If the fee outweighs the difference in the fare price, obviously, you don’t want to consider it. CheapAir offers a $100-per-passenger credit if the price of your ticket drops. That avoids a fee for rebooking.

Finding the best fare may take some time and effort, but the savings will make it worthwhile.

Lower Airfares Predicted

March 20, 2016 By Twila Van Leer

For travelers all over the world, the lure of lower airfares is attractive. NASA scientists are working on eliminating a problem that just may drop airfares. Bugs are the target for this new technology. They are developing a coating to be applied to the airplane that will keep insects (and other debris) from sticking to the wings and fuselage of a craft, allowing smoother air flow and lower fuel costs.

Researchers count insect residue on the wing of the ecoDemonstrator 757 aircraft. Photographer: Paul Bagby/NASA Langley

Fuel Efficiency

NASA says the improvement in “laminar flow” reduces drag and improves fuel efficiency. Even very small bits of debris, including bug splats, can cause air turbulence that roils the airstream. The scientists describe it as tiny air waves crashing against each other.

Two Potential Coatings

Eliminating the problem would be no small deal. Two potential coatings, tested last year on the wings of a Boeing 757, showed real promise.

The projected savings in fuel costs are enormous.
“It’s like taking your car from 20 miles per gallon to 200,” said Mark Drela, professor at Massachusetts Institute of Technology and a specialist in aerodynamics.

Estimates are that successful coatings could cut airline fuel consumption by 1 percent. If that sounds like a small amount, consider that it represents 167 million gallons of fuel at a savings of 308 million a year.

Those working on the potential coatings say they would be most effective if incorporated into the design of new planes, rather than adding it to craft already in use. And as with all new technologies, it would have to prove itself effective before the manufacturers would run to get on the bandwagon. But environmentalists are pushing, because of the anticipated benefits to the air. Airplanes are blamed for a significant portion of the climate warming that is happening. Amid predictions that more controls will inevitably be placed on the air travel industry (some prospective new regulations are due to be implemented by 2020), they are looking for better solutions.

Expensive Research

The technology being tested borrows a lesson from nature. For instance, they looked at lotus leaves, which has pits and ridges that repel water. The costs of research are enormous. Some $400 million has been spent. Those working on the coatings (at a cost of some $10 million) expect that royalties paid by airlines for use of the technology will recoup their investment.

Future Plans

How soon we will be seeing airplanes with the new coating remains to be seen. And whether it will portend less expensive air fares also is part of the unknown equation. But the prospects are worth thinking about.

While the science is still in its infancy, the prospect offers a number of advantages: less pollution of the air from air flight, (aircraft emit 3 percent of the greenhouse gases in the U.S.) and, down the road, possibly a drop in the cost of air fares.