November 5th Monday Report - We've Moved! November 5th, 2007


Economic Notes:



We've Moved
  • Only one phone line is working!
  • The internet connection isn't up!
  • Phones are on the floor!
  • Files are in boxes!
  • But, we've done it!

Bonneville Research

  • 170 South Main Suite #775 (New)
  • Salt Lake City, UT 84101
  • Bob - 801-364-5300
  • BobSpring@BonnevilleResearch.com

  • Jon - 801-746-5706
  • JonSpring@BonnevilleResearch.com
  • Fax - 801-505-4088(New)

Please Note the Changes!


In this issue:

  • Grants
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research

  • Grants:
  • The Health Resources and Services Administration (HRSA) recently issued the 2007 New Access Points (NAP) RFP. There is $138,000,000 available over three years (grants to $650,000/year) to support operations at new primary health care delivery sites.


  • Economic Notes:
    • International Business Confidence
    • Global business sentiment slipped last week and has shown no measurable improvement since falling sharply during this past summer's subprime financial shock. Confidence remains consistent with an economy that is expanding very slowly. Businesses are particularly dour in the broad assessment of current conditions. Expectations regarding the six- month outlook also remain firmly negative. It is encouraging that businesses are more upbeat when responding to more specific questions regarding payrolls and especially equipment investment. Confidence is weakest in the U.S., followed by Europe. Asian and South American confidence are notably stronger. Sentiment is weakest among those in housing and financial services, and strongest among high-tech firms.
    • Risk of Recession
    • The Moody's Economy.com probability of recession remains elevated. In September, the probability of recession was 32%, unchanged from August's downwardly revised 32% (previously 40%). The risks to the U.S. economy increased appreciably in August and September, led by tighter credit conditions, rising mortgage delinquencies, turbulence in global financial markets and weakening housing markets.
    • The Fed
    • The FOMC lowered the federal funds rate by 25 basis points to 4.5%, and also lowered the discount rate by 25 basis points, to 5.0%. The committee cited an easing in financial market conditions and strong third quarter growth. However, the housing market remains a weight on growth, and the FOMC expects growth to be below potential in the near term. Although inflation has eased, higher energy prices are a concern. The statement moved the monetary policy bias toward neutral, saying that with the fed funds rate at 4.5%, the risks to the economy are roughly balanced between upside and downside. One member voted to hold the fed funds rate steady at 4.75%.
    • GDP
    • Economic growth was above potential in the third quarter, with real GDP increasing 3.9% at an annualized pace, up just a bit from 3.8% in the second quarter. This is well above the consensus expectation for 3.0% growth in the third quarter. Real GDP has increased 2.6% over the preceding year. Most components contributed to strong growth in the third quarter, with residential construction the major exception. Growth was stronger than in the second quarter due to consumer spending and exports, with imports, homebuilding and slower growth in nonresidential construction offsetting much of this. Despite the strong third quarter number, the economy remains soft, with trend growth below potential due to the continued drag from the housing market and now financial markets.
    • The Conference Board Consumer Confidence
    • e Conference Board index of consumer confidence fell in October to 95.6 from a downwardly revised 99.5 in September (previously 99.8). This put the index at its lowest level since October 2005. The decline was led by the expectations component, although the present situation also declined. Assessments of labor market conditions weakened.
    • Consumer Comfort Index
    • Consumer confidence remains fragile. According to the ABC News/Washington Post consumer comfort index, consumer sentiment inched two points higher to -15 in the week ending October 28. Despite the improvement, confidence remains well below the levels seen prior to the global financial events that took place in August.
    • S&P/Case-Shiller Monthly Home Price Indexe
    • Housing continues to take a hit. The 10-metro house S&P Case-Shiller house price index decreased 5% year to year in August. This is the worst reading since April 1991. The 20-metro index decreased 4.4%. The m/m declines are deepening, as tighter lending standards and a weakening economy put downward pressure on demand.
    • Employer Cost Index
    • Employer costs rose 0.8% in the third quarter of 2007, slightly below expectations of a 0.9% increase. This report was generally upbeat as benefit costs moderated. Also, growth in wages and salaries rose 0.8% for the second consecutive quarter. This is good news for as the Fed as it is concerned about the threat of wage-based inflationary pressures. Therefore, today's report, coupled with recent data on consumer prices, provides the Fed plenty of maneuverability to cut interest rates.
    • Construction Spending (C30)
    • Construction spending increased 0.3% in September, above analysts' projections. Private construction declined by 0.2%, hurt by a 1.4% decline in residential construction. In addition, public construction increased 1.9%.
    • Agricultural Prices
    • The all farm index of prices received by farmers in October rose 0.7% from the previous month. Crop prices are up 4.9%, but livestock prices reversed last month's gains and fell 5.0%. Farmers saw higher prices for lettuce, wheat, soybeans and tomatoes, but the livestock side was less kind to producers, with lower prices for broilers, hogs, cattle and eggs. From a year ago, the aggregate index is up 23%. Prices paid for factors of production were unchanged from September overall, but diesel fuel, LP gas, feed supplements and complete feeds saw prices rise. Nitrogen fertilizers, feeder cattle, feeder pigs and herbicides saw price declines.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 3.8% in the week ending October 26. Purchase applications decreased 0.7% and refinance applications increased 9.2%. Putting the volatility of this index aside, the numbers finally breakout according to expectations.
    • Chain Store Sales
    • Chain store sales rose 0.1% in the week ending October 27, reversing virtually none of the prior week's large decline, but sufficient to boost year-over-year growth to 2.5% as comparisons eased. Warm weather, higher gasoline prices, and California fires were cited as drags, partially offset by Halloween- related sales.
    • Oil and Gas Inventories
    • Crude oil inventories unexpectedly fell by 3.9 million barrels for the week ending October 26, according to the Energy Information Administration, below expectations of a 0.4 million barrel build. Distillate supplies rose by 0.8 million barrels, above expectations of a 1.0 million barrel draw. Gasoline inventories rose by 1.3 million barrels, above expectations. Refinery activity fell sharply from 87.1% to 86.2%, below expectations. Today's report is bullish.

      Source: Economy.com, Financial Times 2007


    • Fuzziwig's Candy Factory and Sweets From Heaven
    • Fuzziwig's Candy Factory, Inc. trades as Fuzziwig's Candy Factory and Sweets From Heaven at 65 locations nationwide and internationally.
    • The candy stores occupy spaces of 1,000 sq.ft. in malls and lifestyle, outlet and tourist centers, in addition to urban/downtown areas.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • Typical leases run 10 years.
    • A vanilla shell is required.
    • Major competitors include Sweet Factory.
    • For more information,
      • contact
      • Kayo Folsom,
      • Fuzziwig's Candy Factory, Inc.,
      • 656 Main Street,
      • Durango, CO 81301;
      • 970- 247-2770,
      • Fax 970-247-2735;
      • Email: info@fuzziwigscandy.com; Web site: www.fuzziwigs.com.
    • The Fresh Market
    • Wish we could!!
    • operates 70 locations throughout the Midwestern and southeastern regions.
    • The The Fresh Market markets, offering produce, seafood, wine and beer and bakery departments, in addition to a floral and gift department, occupy spaces of 22,000 sq.ft. in freestanding locations and power and specialty centers.
    • Growth opportunities are sought throughout Baltimore, MD; northern VA and Washington, DC during the coming 18 months, with presentation by Paraclete Realty, LLC.
    • Major competitors include Whole Foods.
    • For more information, contact
      • Charlie Phelps,
      • Paraclete Realty, LLC,
      • 408 Headquarters Drive, Suite 3C,
      • Millersville, MD 21108;
      • 410-987-9500,
      • Fax 410-987-9502; Email: charlie@paracleterealty.com;
      • Web site:
      • www.paracleterealty.com.

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    Bonneville Research is a Utah-based consulting firm providing economic, financial, market and policy research to public and private sector clients throughout the intermountain west.

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    • Financial Analysis
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    If we can help, please call or email us at

    • Bob
      • 801-364-5300
      • BobSpring@BonnevilleResearch.com
    • Jon
      • 801-746-5706
      • JonSpring@BonnevilleResearch.com

    We've Moved!

    Our new address:

    Bonneville Research

    170 South Main Suite #775 (New)

    Salt Lake City, UT 84101

    Bob - 801-364-5300


    Jon - 801-746-5706


    Fax - 801-505-4088(New)

    Please Note the Changes!


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