- Global Business Confidence
- Sentiment remains darkly pessimistic across the
globe. Businesses reported last week that their sales
were as weak as they have been on record. Hiring
intentions remain very poor and pricing power has
collapsed, suggesting that deflation is increasingly
likely. Those that work in government are most
worried, followed by businesses in financial and
business services. The global economic downturn
continues to intensify.
- FOMC Monetary Policy
- The Federal Open Market Committee announced
it is keeping the fed funds target rate in a range from
0% to 0.25% and expects to keep it there "for some
time." The committee's statement said that
the "economy has weakened further" from the FOMC's
previous meeting in mid-December. The FOMC
expects economic growth to resume later this
year, "but the downside risks to that outlook are
significant." The statement expressed some concern
about possible deflation. The statement said that the
central bank will "employ all available tools" to boost
growth but does not mention any steps beyond those
it has already taken. One FOMC member dissented,
calling for the Fed to purchase Treasuries.
- Conference Board Leading Indicators
- The Conference Board index of leading indicators
surprised to the upside in December, rising 0.3%.
However, without a large increase in the real money
supply, leading indicators would be far weaker. The
Federal Reserve is expanding its balance sheet
beyond what is needed to keep rates at zero,
increasing the size of the monetary base and broader
measures of money supply to a lesser extent. The
index's weakening trend indicates that the slowdown
will persist, but it also suggests that the economy is
moving through the point of maximum decline.
- The Conference Board Consumer
- The Conference Board index of consumer
confidence retreated slightly to another record low in
January. The index fell to 37.7 from December's 38.6
(upwardly revised from 38). The expectations
component was responsible for the bulk of the
decline, falling to 43 from 44.2 (previously 43.8). The
present situation fell to 29.9 from 30.2 (previously
29.4). Assessments of current labor market
conditions remained very poor but improved slightly
- California Manufacturing Survey
- California's manufacturing sector remains mired
in recession. The composite index fell to 44.7 in the
fourth quarter, down from 45.1 in the third quarter and
well below the expansionary threshold of 50.
- Durable Goods (Advance)
- Durable goods orders fell 2.6% in December,
following a 3.7% decline in November. This was a
larger than expected decrease. New orders have
fallen for five consecutive months now. Shipments fell
0.7%, following a 4.2% decline in November. Unfilled
orders were down 1.3% over the month, and
inventories rose 0.4%. Orders of core capital goods
were down 2.8% over the month, reflecting ongoing
weak business investment conditions.
- Mass Layoffs
- The number of layoffs involving at least 50
workers from a single establishment in December
was 2,275, compared with 2,328 in November. The
layoffs involved 226,117 workers, compared with
224,079 in November. All numbers are seasonally
adjusted. Corporations are cutting payrolls to reduce
expenses, as revenue growth is decelerating.
- Jobless Claims
- Initial jobless claims increased by 3,000 to
588,000 for the week ending January 24. This was in
line with expectations. This latest data point suggests
that the labor market continues to rapidly
- Case-Shiller Monthly Home Price
- The descent of house prices slowed somewhat
during the three months ending in November.
Although house prices declined at the greatest year-
ago rate on record in November, the rate of decline did
not increase significantly from that recorded during
October. The 10-city index declined 19.1% from a year
ago, unchanged from the decline recorded in October.
The 20-city index decreased by 18.2% from November
- Existing-Home Sales
- Existing-home sales ended last year on a
surprisingly strong note. Home sales increased by
6.5% compared with November. This is the strongest
one-month gain in sales since 2002. The months of
inventory dropped sharply, from a peak of more than
11 months to 9.3, although seasonal factors may be
behind the large improvement. Despite the cheerier
sales figures, the housing market remains very weak,
with only 4.74 million annualized units sold in
December, the weakest pace since the late 1990s.
November sales were revised downward slightly. The
descent in the median house price accelerated in
December to -15% y/y, likely a reflection of stepped-up
foreclosure sales. For all of 2008, home sales were
down by 13% and the median price declined by more
- New-Home Sales (C25)
- The dismal housing market has taken a turn for
the worse. Sales of new homes sank 14% m/m in
December. At 331,000 annualized units, sales have
sunk to a pace that goes back to 1963. Further, the
Census Bureau revised downward the November
sales data. Months of inventory soared to 13, a new
record high, and the median sales price is down by
9%. Conditions appear dire.
- MBA Mortgage Applications Survey
- In the week ending January 25, the MBA market
index fell 38.8% to 732.1. This was driven by a
decrease in the refinance index, which fell 48% this
week to close at 3,373.9. In step, the purchase index
declined a mild 2.9% to finish at 294.3. These
declines all occurred despite contract rates holding
- Chain Store Sales
- Chain store sales dropped 1.8% in the week
ending January 24, continuing the erratic weekly
pattern and downward trend as consumers remain
very hesitant to spend. The year-ago decline shrank
expanded to 2.4%, the largest decline in decades.
- Oil and Gas Inventories
- Crude oil inventories increased by 6.2 million
barrels during the week ending January 23, according
to the Energy Information Administration, far
surpassing expectations of a 2.9 million barrel build.
Gasoline inventories fell by 100,000 barrels,
contrasting with expectations of a 2 million barrel
build. Distillate inventories fell by 1 million barrels, in
line with expectations. Refinery operating capacity fell
to 82.8% from 83.3%, more than expected, from
85.2%. Total domestic petroleum demand rose
considerably. This mixed report points to higher oil
- Weekly Natural Gas Storage Report
- Working gas in underground storage decreased
by 186 billion cubic feet during the week ending
January 23. The consensus estimate was for a
decline of 170 billion cubic feet.
THIS WEEKS LEADS:
- Schlotzsky's Deli
- Focus Brands, Inc. trades as Schlotzsky's Deli at
370 locations throughout 32 states nationwide and
- The deli's occupy spaces of 2,800
sq.ft. in entertainment, power and strip centers.
- Plans call for 40 openings throughout the central,
Mid-Atlantic, midwestern and southwestern regions of
the U.S. during the coming 18 months.
leases run for terms of 10 years.
- A vanilla shell
and specific improvements are required.
demographics include a population of 50,000 within
three miles earning $55,000 as the average
- Major competitors include
Quiznos, Panera Bread and McAlisters Deli.
company is franchising.
- For more information, contact
- Mark Whittle,
- Focus Brands, Inc.,
Glenridge Point Parkway,
- Atlanta, GA 30342;
- Web site: www.focusbrands.com.
- Dairy Queen, DQ Grill & Chill and Orange
- American Dairy Queen trades as Dairy Queen, DQ
Grill & Chill and Orange Julius at 5,893 locations
nationwide and internationally.
- The dessert
shops/restaurants, offering burgers, ice cream,
smoothies and fries, occupy spaces of 2,600 sq.ft. to
3,600 sq.ft. in freestanding locations.
- Plans call
for 50 openings nationwide during the coming 18
- Typical leases run 30 years.
- Preferred cotenants include Target and Wal*Mart.
- Preferred demographics include a population of
30,000 within three miles earning $35,000 as the
minimum household income.
- Major competitors
include Burger King, Culvers, McDonald's, Steak &
Shake and Wendy's.
- A land area of 34,000 sq.ft. is
- For more information, contact
- PO Box 390286,
- Minneapolis, MN
- Web site:
- Wendy's International, Inc. trades as Wendy's at
6,500 locations nationwide and internationally.
- The fast food restaurants occupy spaces of 2,800
sq.ft. to 3,300 sq.ft. in freestanding locations, lifestyle,
power and strip centers, in addition to
- Growth opportunities are
sought nationwide during the coming 18 months.
- Typical leases run 15 years with 15-year options.
- Preferred demographics include a population of
20,000 within two miles.
- A land area of one acre
is required for freestanding locations.
- For more information, contact
- Wendy's International, Inc.,
Dave Thomas Boulevard,
- Dublin, OH
Capital Funds for Homeless Shelters!
Homeless Providers Grant and Per Diem
- POSTED: 1/23/2009
- FUNDING SOURCE: Dept. of Veterans Affairs
- ELIGIBILITY: Nonprofit and public agencies,
including states and local governments
- $ AVAILABLE: $15,000,000
- GRANTS AVAILABLE: N.A.
- MAX GRANT SIZE: N.A.
- DEADLINE: 3/25/09
- CONTACT INFORMATION:
- DESCRIPTION: Grants for capital improvements to
housing for homeless persons.
Improve Transportation in Federal Parks!
- Paul S. Sarbanes Transit in Parks Program
- POSTED: 1/23/2009
- FUNDING SOURCE: Dept. of Transportation
- ELIGIBILITY: Federal land management agencies
- $ AVAILABLE: $26,900,000
- GRANTS AVAILABLE: N.A.
- MAX GRANT SIZE: N.A.
- DEADLINE: 2/27/09
- CONTACT INFORMATION:
- DESCRIPTION: Funds for capital and planning
expenses for alternative transportation systems such
as buses and trams in federally-managed parks and
- General Growth seeks investment partner
- Public Policy Initiatives
- Housing in Crisis: When Will Metro Markets
- Park Transportation & Homeless Shelter Grants
- Economic Notes
- This Weeks Leads
Utah Economic Snapshot - First Six Months
Utah State Government (Five & Four Months)
- Sales and Use Taxes (Gen Gov't, Higher
-10.1% (-7.3%, -8.6%)
- Individual Income Taxes (Public Education)
-15.3% (-15.8%, -12.6%)
- Corporate Franchise Taxes (Gen Gov't)
-14.1% (+1.6%, +10.6%)
- Motor Fuel Taxes (Transportation) -7.6% (-15.4%, -
- Severance Taxes (Gen Gov't) +88.2% (+111.5%,
- Sales and Use Taxes (includes food) -6.3% (-
- Transient Room Tax -7.5% (-12.4%, -4.6%)
- Tourism, Recreation, Cultural, Convention -5.3%
- Municipal Telecommunications License -11.6% (-
- Emergency Services Phone Charge -10.6% (-
- Public Transit -8.3% (-9.6%, -4.8%)
Projected Growth & Actual (6 months - July -
- Sales tax -9.0 % -10.1 % <= (-3% from loss of
- Income tax
-6.9% -15.3% <= (did they miss on their new
- Corporate tax
-29.0% -14.1% (holding up better than I expected,
should drop more)
- Motor Fuel tax (B&C) -1.1% -7.6% (finally, the $4
price makes an impact on drivers)
- Special Fuel taxes (B&C) 2.2% -7.0%
Source: Utah State Tax Commission, TC-23
Summary: Comments by Doug Macdonald,
Former Tax Commission Chief Economist
|Public Policy Initiatives
Public Policy Initiatives
- OH - Strickland Offers Bold Plan for Schools.
Saying that Ohio needs a 21st century system of
public education, Gov. Ted Strickland unveiled what he
called a "transformational" plan to change how
schools are funded and run while not raising taxes in
the next state budget. Strickland, who has staked his
success as governor on reforming school funding,
offered a six-point plan that would add $925 million to
education funding in the next two years alone. "It is
absolutely clear to me that simply tinkering with
centuries-old education practices will not prepare
Ohio's children for success in college, in the
workplace, or in life. Therefore, today I present my plan
to build our education system anew," Strickland said.
- OR - Opinion: Kulongoski Works to Repower
Oregon. President Barack Obama wasted no
time in removing a federal thorn in the side of state
climate solutions. He directed the Environmental
Protection Agency to review - and presumably reverse -
its refusal to allow 15 states, including Oregon, to get
cleaner cars. Automakers can deliver cleaner cars
now, with existing technology, and save Oregonians a
bundle on their fuel bills in the deal. Gov. Ted
Kulongoski is stepping up to this challenge. He plans
to "Repower Oregon" with a comprehensive strategy
to improve energy efficiency, provide transportation
choices, and turbocharge our new energy economy. At
the core of this strategy, tying together all the pieces is
a solid foundation - a real, no-nonsense commitment,
with a firm timetable, for reducing global warming
pollution and making Oregon more energy
- NJ - Corzine Awards Grants for Bikeway
Projects. Berkeley and Wall townships will
receive state grants to continue bikeway projects. The
two Shore-area towns were among 19 municipalities
across the state which shared in a $4.4 million pot of
Department of Transportation municipal Bikeways
grants announced by Commissioner Stephen Dilts.
The grants will help municipalities work toward a goal
of having 1,000 miles of dedicated bikeways
throughout the state, Gov. Jon S. Corzine said in a
statement. The state awarded approximately $1.5
million more in grants this year than in fiscal 2008, he
- CO - Ritter Seeks to Expand Bioscience
Sector. Gov Bill Ritter has released the "Colorado
Bioscience Roadmap," a report that shows gains in
employment and investment in an economic sector
that the governor said has become a key driver toward
economic recovery. The sector employs 18,000
Colorado workers spanning 920 establishments, an
increase of 5.5 percent from 2003. The Bioscience
Roadmap also outlines a plan for continued
development of the industry, building on research and
technology transfer from Colorado State University, the
University of Colorado and other entities.
- DE - Markell Requests 'Honest Assessment'
of State Government. To tackle a historic budget
challenge and deliver efficient and effective
government services, Gov. Jack Markell launched
what he called an 'honest assessment' of state
government. The assessment is a series of initiatives
that will examine how the government spends
taxpayer dollars, how to effectively measure agencies'
performance, how to identify innovation and how to
best meet the significant challenges facing
Delaware. "We are facing the largest budget shortfall
in Delaware's history. There are no easy answers, but
there are honest ones," Gov. Markell said. "We must
be open about our challenges and honest about our
efforts to solve them if we are going to tackle the
budget crisis and get our economy moving again. We
can and must take a systemic approach to making
government more efficient, effective, responsive and
- MD - O'Malley Announces Legislation to
Reduce Global Warming. Gov. Martin O'Malley,
along with sponsors Senator Paul Pinsky and
Delegate Kumar Barve, unveiled legislation to commit
Maryland to reduce its greenhouse gas emissions 25
percent by the year 2020. "In the current economic
climate, under the new Obama Administration,
Maryland cannot afford to let this opportunity pass us
by," said Governor Martin O'Malley. "For our prosperity,
for our current and future generations, and for the
health of our State, which is so vulnerable to rising
sea levels, we must take action on climate change
now - not later. Maryland can't afford to be left behind.
We must commit to taking the actions necessary to
protect our environment, our economy, and our
- MI - Granholm Works to Expand Access to
Unemployment Benefit Services. Gov. Jennifer M.
Granholm said that in this time of severe economic
challenge, the state is utilizing every available
resource to ensure that Michigan citizens have
expanded access to file claims, resolve problems,
and get information on unemployment benefits in a
timely manner. "We have pulled out all of the stops to
help those who have been most affected by the
recession," Granholm said. "We are using every
resource we have to beef up the help at the
employment agency to ensure that citizens have
expanded access to file claims for unemployment
benefits and do so in a timely manner."
- NJ - Corzine: Federal Stimulus Will Help Fund
Education, Health Care. Gov. Jon Corzine said
the Garden State could receive close to $4 billion in
federal stimulus money over two years to help pay for
education and health care. Corzine called the federal
stimulus package being advanced in the House "quite
substantial," but warned that it won't be a blank
check. "We ought to take this time and make sure
we're reforming government, so it's not just a bailout,"
- OH - Strickland Eyes Reform of Education.
Gov. Ted Strickland will argue that the days
of "tweaking'' are over when it comes to addressing
how Ohio should fund its schools. The Democratic
governor is expected to use his third state-of-the-state
address to propose what he characterizes
as "transformational'' reforms to Ohio's education
system, again seeking to inspire Ohioans to think
ahead despite the state's worsening economic
woes. "The state cannot afford not to do it,'' Mr.
Strickland said. "I have said for quite a length of time
that we cannot allow current circumstances to prevent
us from taking the steps that are necessary to deal
with education so that our kids get the education they
- WI - Doyle Creates Office for Aid. Gov. Jim
Doyle signed an executive order creating a new office
to advise officials on how to spend the potentially
billions in federal stimulus money the state is
expected to receive from President Barack Obama's
administration in the coming months. The Office of
Recovery and Reinvestment is designed to help the
government spend the money quickly and wisely by
identifying potential spending obstacles and working
with schools and local governments. One of the goals
is to jumpstart the economy through job growth in a
variety of different sectors, including University of
Wisconsin System projects.
Home Depot to close Expo
Home Depot is closing its 34 Expo Design
Centers and will begin liquidating the stores
today. "Exiting our Expo business is a difficult
decision, particularly given the hard work and
dedication of our associates in that business and the
support of our loyal customers," Chairman and CEO
Frank Blake said in a statement. "At the same time, it
is a necessary decision that will strengthen our core
Home Depot business." SCT Newswire (1/27) , The
Atlanta Journal-Constitution (free registration) (1/26) ,
The Globe and Mail (Toronto)/The Associated Press
Target to limit new-store
Target announced it will reduce planned store
openings, close its Little Rock, Ark., distribution center
and freeze salaries for senior management, among
other cost-cutting measures. "We are clearly operating
in an unprecedented economic environment that
requires us to make some extremely difficult
decisions to ensure Target remains competitive over
the long term," President and CEO Gregg Steinhafel
said. Los Angeles Times/The Associated Press (free
registration) (1/28) , Financial Times (1/27)
New Wal-Mart CEO to continue green
Incoming Wal-Mart CEO Mike Duke will continue to
push the retailer to become greener. The agenda
includes eliminating phosphates in detergent,
reducing waste and encouraging suppliers to adopt
more sustainable practices. Duke will succeed Lee
Scott as the company's CEO on Sunday. Reuters
General Growth seeks partner for California
Struggling to avoid bankruptcy, the developer of
the long-delayed Elk Grove Promenade shopping mall
is looking for investors to help complete the project.
Ailing General Growth Properties Inc. has hired
commercial real estate firm Jones Lang LaSalle to
find new capital for the Promenade, according to an
offering brochure. The brochure says General Growth
is looking for a partner "to recapitalize and participate
in the completion" of the 1.1 million-square-foot mall.
General Growth confirmed it's looking for
investors. "We are actively marketing Elk Grove
Promenade for a joint venture partner," said company
spokeswoman Nicole Spreck.
The mall is 80 percent done but construction was
halted last fall. The opening date has been moved
back three times, most recently to the fourth quarter of
2010. The mall is a victim of the weak economy and
the collapse of the housing market, which has hit hard
in Elk Grove.
Based in Chicago, General Growth is in serious
financial trouble because of billions in debt.
Source: ICSC, January 2009
Housing in Crisis: When Will Metro Markets
Despite the darkening national economic outlook
and the weak conditions in the housing market, some
positive signs give hope that housing is about to hit
bottom. Housing in Crisis: When Will Metro Markets
Recover?, a comprehensive new study, evaluates the
near-term prospects for housing markets in a
- House prices will stabilize by the second half of
- The national Case-Shiller house price index will
decline by another 12% from the third quarter of last
year for a total peak-to-trough decline of 30%.
- By the end of this unprecedented downturn, house
prices will have declined by double digits peak to
trough in nearly 62% of the nation's 381 metro areas.
In about 10% of metro areas, price declines will
Source: Economy.com, January 2009
|Working with clients to make good things happen!
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1976, Bonneville Research has completed
assignments throughout the intermountain west
yielding unmatched experience in high quality public
policy analysis and economic analysis.
Helping Clients Succeed
Our services include:
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Analysis and Budgets
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Each of our studies is tailored to address
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