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Wednesday, May 29, 2013

China trade growth accelerates beating forecasts

Story originally appeared on BBC News.

China's trade growth accelerated in April, beating analyst expectations, a positive sign for the country's fragile economic recovery.

Exports surged by 14.7% compared with a year earlier. That is up from 10% in March. Imports also rose by 16.8% up from 14.1%.

The data meant a trade surplus for China, reversing a surprise deficit in March.

However, some analysts raised questions about the accuracy of the data.

"I have no strong conviction whether the data reflect reality," said Zhiwei Zhang, chief China economist at Nomura in Hong Kong.

China had a bigger-than-expected trade surplus in April of $18.2bn, after a surprise deficit of $884m in March.

'Crack down'

In recent months Chinese export data has shown positive signs of a gradual recovery in external demand.

But that is not in line with other Asian exporter countries, such as South Korea and Taiwan, which have seen their export growth weaken amid slowing global demand.

Some analysts said they suspected that some Chinese exporters may be overstating their business to avoid capital restrictions on funds they are bringing into the country.

China, which keeps a tight grip on capital flows in and out of country, has announced fresh moves to control any illegal flows.

On Sunday, the State Administration of Foreign Exchange (SAFE), China foreign exchange regulator, said it would increase its scrutiny of export invoices and impose tougher penalties on firms providing false data.

Analysts said the move indicated that the practice had become a concern for them.

"China's SAFE recently launched new rules to crack down against capital inflows disguised as trade payments. I'm suspicious about the trade data," said Mr Zhang.

Delayed recovery?

Chins has been trying to boost its economy, after the recent slowdown in its growth rate.

The world's second-largest economy saw its annual growth rate slow to 7.7% in the January to March quarter, compared with 7.9% in the last three months of 2012.

However, analysts said that while there had been some signs of a recovery, it continues to remain a fragile one.

They pointed out to the purchasing managers' index (PMI) survey released last week, which showed that growth in China's huge factory sector slowed in April as new export orders shrank.

At the same time there have been doubts that growth numbers in the first quarter may have been inflated by the over-invoicing by exporters.

Some analysts said the data over the next few months will be a more accurate indicator of China's trade growth, and the overall health of its economy.

"With Beijing tightening checks on hot money inflows disguised as trade transactions, I think the export figures in the coming months will more reflect the real underlying momentum of external demand," said Shen Lan, an economist with Standard Chartered Bank in Shanghai.

Cost of feeding a family of four: $146 to $289 a week

Story originally appeared on USA Today.

Latest statistics give a range of prices for feeding a family of four a healthy diet.

The cost of feeding a family of four a healthy diet can run $146 to $289 a week, according to the latest numbers from the U.S. Department of Agriculture.

That's based on preparing all the meals and snacks at home for a couple with two school-aged children. It doesn't include one-dollar deals at fast-food restaurants or splurges at pricey restaurants.

The USDA uses national food intake data and grocery price information to calculate different costs for a healthy diet at home. The latest numbers for a four-member family: a thrifty food plan, $146 a week; a low-cost food plan, $191 a week; a moderate-cost plan, $239; a liberal plan, $289 a week. Some food waste is built into these costs.

"We constantly hear the claim that you can't eat healthy on a budget, and to us that's a myth because a family can eat a healthy diet with fruits and vegetables that meets the Dietary Guidelines for Americans," says Robert Post, associate executive director of the USDA's Center for Nutrition Policy and Promotion.

Costs today are up from 10 years ago, when a thrifty-cost food plan for a family of four was $108; a low-cost food plan, $139; moderate-cost plan, $173; a liberal plan, $208 a week.

The price of a moderate-cost healthy plan went up 38% between 2003 and 2013, says Mark Lino, a USDA economist. The cost of food in general went up 32%, he says. During that time period, inflation was about 26%, he says.

But you do have to use "smart shopping strategies" like the ones on www.choosemyplate.gov, Post says.

The thrifty plan is used as the basis of SNAP, the Supplemental Nutrition Assistance Program, formerly known as food stamps. Eating a healthy diet on that amount of money means buying the lowest-cost fruits and vegetables such as bananas, apples, carrots, potatoes and greens, says Lino. People who spend the higher amounts on food can buy more expensive fruits and vegetables and even pre-cut and pre-washed ones, he says.

The liberal plan allows for more expensive cuts of meat and types of seafood. It does not allow more desserts such as chocolate cake or cheesecake because it represents a nutritious diet, Lino says. The limit for calories from solid fats and added sugars is the same in all the plans.

Registered dietitians who work with families and dieters say how much people spend on food depends on their income, how much they budget for groceries, where they live and a number of other factors.

It is possible to eat healthfully on $146 a week, but you can't do it without planning, says Bethany Thayer of Detroit, a registered dietitian and spokeswoman for the Academy of Nutrition and Dietetics. You have to shop sales, buy produce in season, purchase store brands and buy canned and frozen vegetables when they are on sale. Buying store brands instead of national brands can save you up to 30%, she says.

To eat cheaply at home you have to make an investment of time to plan meals, grocery shop, cook and prepare the food, says Tami Ross, a nutrition expert in Lexington, Ky., and co-author of Diabetes Meals on $7 a Day — or Less!, written with Patti Geil.

She advises her patients to plan for five evening meals a week and then have a night or two to clear out the refrigerator of leftovers or incorporate what she calls planned-overs.

Planned-overs are taking one main food, such as chicken, and using it several different ways throughout the week. You can serve it as an entree one night and then other nights put it on top of a green salad or incorporate it in soups, wraps, casseroles or chicken salad. That way you aren't eating the exact same thing but you don't waste food, she says. "Throwing food away is like throwing money in the trash can."

Ross also tells patients to think of meat as the side dish, not the centerpiece of their meal, because it's often the most costly part of the meal.

Thayer points out that there are many inexpensive protein choices — beans, eggs, peanut butter and other nut butters, she says. And when it comes to inexpensive whole grains, you can eat store-brand old-fashioned oatmeal for 9 cents a serving, she says.

"People spend a lot of money in the grocery store on their beverages," Thayer says. To save money, your beverages should be tap water and low-fat or fat-free milk, she says.

Elizabeth Ward, a registered dietitian in Boston and author of MyPlate for Moms, says you can save both time and money with simple meals. An omelet with vegetables, whole-grain toast, fruit and milk is a relatively low-cost meal. So is a grilled cheese sandwich on whole-grain bread, green salad and fruit.

Make a list to take to the store to cut costs, but it's OK to deviate from it for sale items that you know you will use.

To avoid waste, take leftovers for lunch the next day, Ward says. "For me, that's the best part of cooking dinner — you get lunch, too."

Thayer adds that people also can eat inexpensively on value meals and fast-food fare, but there's a tradeoff. "Processed food and fast food offer a lot of calories for the dollar but not a lot of nutrients. That's one reason we have people who are overweight but undernourished."

$3.3 billion lost in unemployment fraud, study says

Story originally appeared on USA Today.

Unemployment fraud is costing the government billions of dollars in paid benefits to people who are still working, no longer alive or are behind bars, according to a report.

A study by the St. Louis Federal Reserve released last week found that of the $108 billion paid out in unemployment benefits in 2011, some $3.3 billion was paid out dishonestly The largest share of the fraud payments — $2.2 billion — went to people who were still working.

"It's likely that with bad economic times, the chances for fraud like this rise," said Yuzhe Zhang, a professor at Texas A&M University and one of the report's co-authors. "People are struggling economically. I think the fraud problem is going to get worse."

According to the study, individuals with relatively low earnings constitute a larger fraction of those committing fraud. High-earnings individuals, however, account for larger dollar amounts of fraud.

Breaking down the $2.2 billion shows that nearly half a billion in dollars when to the category of workers earning at least $900 a week. Those earning less than $300 a week got $210 million of the fraudulent payments.

"This shows we need a better way to monitor this type of payout," said Amy Gordon, an employment benefits lawyer at McDermott Will & Emery. "We're not doing a very good job of it."

To collect unemployment insurance, a person in the U.S. must be out of work through no fault of their own. Each worker collects benefits equal to a percentage of his or her previous earnings.

Most benefits last for 26 weeks but since unemployment benefits are a joint state and federal program, the period can last longer.

An employee who has exhausted all state benefits can apply for federal extended benefits. Extended benefits are a joint federal-state program—though it's currently funded fully by the federal government. This program provides an additional 13 weeks of benefits to eligible employees when state unemployment rates are high.

Unemployment insurance did go up to 99 weeks for the long term unemployed during the Great Recession, but that program ended in September.

"I can have some sympathy for someone who got let go and can only find a part time job," said Gordon. "They can't make ends meet on part-time work that may be paid under the table, so they stay on unemployment."

"But for the ones collecting UI benefit checks for a dead relative, those are the real bad people in this," Gordon added.

Unemployment benefit fraud has drawn scrutiny in recent years. Nearly 3,200 households making more than $1 million per year received unemployment benefits during the economic downturn, according to reports. That amounted to $80 million paid out by the government.

Other people illegally collecting benefits include prisoners. Inmates in Philadelphia's prison system fraudulently collected $7 million in unemployment benefits while behind bars in 2011. Benefits are also going to people who have died but have not been purged from the government rolls.

But not everyone who should be getting benefits is collecting them. A study released last year also by the St. Louis Fed found that the amount of unclaimed benefits outweighs improper payments.

"The additional expenditures in 2009, toward the end of the recent recession, would have been a whopping $108 billion," the authors wrote. "On average, the unclaimed benefits are much larger than the more frequently discussed over payments."

That report concluded that on average, just 35% of the jobless have collected benefits over the past 22 years.

Wednesday, May 1, 2013

Network Upgrades Threatening 300,000 Europe Telecom Jobs: Tech

Story originally appeared on Bloomberg.

Marianne Wehner is among about 80 Vodafone Group Plc (VOD) customer service employees in the Frankfurt suburb of Eschborn who were given a choice: Move to Halle, 400 kilometers (250 miles) to the east, for a job at a subcontractor at a “drastically lower” salary, or quit. Just one person is moving, said Wehner, a 20-year veteran at the company.

Vodafone “always said we wouldn’t have to worry,” the 47- year-old said in a phone interview. “But then it became clear they really didn’t want us any longer.” Vodafone confirmed that only one person accepted the transfer.

Many of Europe’s 1.1 million telecommunications workers won’t have the option even of moving or accepting lower pay as new technologies make their jobs redundant.

European carriers will probably cut their workforce by 30 percent -- more than 300,000 jobs -- over the next five years, said Franca Salis Madinier, chairman of the UNI Europa ICTS union, which represents telecom employees in 27 countries. Within a decade, industry employment will be cut in half as carriers seek to close an efficiency gap with North American peers, predicts a top executive at a major phone company who asked not to be identified because job cuts are sensitive.

Such cuts darken an already grim employment picture in Europe. Unemployment in the region is at a record high of 12 percent as governments slash spending. In Spain, where 6 million are out of work, the jobless rate stands at 27 percent.

‘Moral Obligation’

The three biggest U.S. carriers -- AT&T Inc. (T), Verizon Communications Inc. (VZ) and Sprint Nextel Corp. (S) -- have shrunk their workforces by almost a quarter since 2007, data compiled by Bloomberg show. In Europe, where phone companies serve more fragmented markets and governments often balk at firings, many have held back large-scale layoffs and have turned to asset sales and dividend cuts to bolster finances.

Across Europe, phone companies “often remain the largest employer and therefore the object of a certain amount of moral obligation not to decrease employment,” said Fabio Colasanti, who oversaw telecommunications policy for the European Commission from 2002 to 2010.

The pace of job cuts is picking up as European governments set up austerity programs. Telecom Italia SpA (TIT) last month reached a compromise with unions over the elimination of 3,350 positions, or about 6 percent of its domestic workers, in exchange for an agreement to refrain from hiving off call-center operations for a year.

More Layoffs

Vodafone, the world’s second-largest wireless carrier, with about 86,000 employees in more than 30 countries, has said it will cut almost 2,000 jobs in Italy, Spain and Germany this year. In October, Sweden’s TeliaSonera AB (TLSN) announced plans to eliminate 2,000 positions over two years.

Still, cuts like Vodafone’s, which accounted for less than 4 percent of the Newbury, England-based carrier’s European workforce, are far from enough, analysts say. More layoffs are likely as operators switch to fiber optic systems from maintenance-intensive analog networks running on copper wires.

About 10,000 employees at Deutsche Telekom AG (DTE) could be laid off when the Bonn-based carrier makes that move, according to Michael Schwemmle at Input Consulting GmbH, which advises clients including the German government. Deutsche Telekom (DTE), 32 percent owned by the state, has reduced employment in its home market by 10 percent since 2008, to about 118,800 at the end of last year.

Shares Trailing

Deutsche Telekom says it’s teaching veteran workers, such as those who check on cables in the countryside, to monitor and address problems in front of a computer screen. The company plans to fully switch off its analog network in 2018.

Shares of U.S. carriers have outperformed their European peers, helped by higher monthly wireless bills. AT&T has added 14 percent over the past 12 months, while Verizon has rallied 33 percent and Sprint has tripled. In the same period before today, Deutsche Telekom rose 6.3 percent, Telefonica SA (TEF) lost 1.5 percent, France Telecom SA (FTE) dropped 22 percent, and Telecom Italia declined 26 percent.

France Telecom (FTE) said last week its first-quarter revenue fell 5.9 percent to 10.3 billion euros ($13.5 billion), as wireless customers in its home market spent on average 11 percent less than a year ago. Moody’s Investors Service said April 10 that it may cut France Telecom’s A3 rating, the fourth- lowest investment grade, if the carrier doesn’t do more to trim costs and conserve cash. Standard & Poor’s last week reduced its rating on the company.

Younger Generations

Vodafone fell 0.3 percent to 196.25 pence at 9:06 a.m. in London. Telefonica dropped 0.1 percent to 11.14 euros in Madrid, Deutsche Telekom lost 0.3 percent in Frankfurt, Telecom Italia declined 0.6 percent in Milan and France Telecom advanced 0.1 percent in Paris.

Even demand for call-center services -- which in recent years have been outsourced to India and eastern Europe -- may be declining as younger generations grow up using tablet computers and smartphones and are comfortable going online to solve problems such as sorting out their monthly bills.

Acquisitions in the U.S. wireless market are also helping carriers trim costs. As it merges with MetroPCS Communications Inc. (PCS), T-Mobile -- a unit of Deutsche Telekom -- has announced plans to eliminate some positions at its headquarters in Bellevue, Washington.

European phone companies “have been pretty good at keeping people on the payroll when they’re not needed,” said Will Draper, an analyst at Espirito Santo Investment Bank in London.

Michigan's film incentive loss is Maryland's gain?

Story originally appeared on Freep.

Here's a head-scratcher for you.

Michigan's popular film credits, which became a source of controversy when Gov. Rick Snyder questioned their economic value and cut the program drastically, are on track to be funded at about $25 million in the next fiscal year.

And filmmakers? They've pretty much stopped lining up so fast to shoot here. Advocates for the film credits say we've closed our window of opportunity.

But Maryland recently tripled its film incentives to -- wait for it -- $25 million, and seems awash in movie business. And actually, that state started landing big film shoots while its credits were much, much smaller.

They were just $1 million in 2011, and jumped to $7.5 million in 2012. That was enough to get several independent films, the HBO drama "Game Change," about Sarah Palin's vice presidential run, and the HBO series "Veep."

Now, the Netflix political drama "House of Cards" has started shooting its second season there, while state officials are bragging about the economic effects that series is having. (Warning: There may be nothing fuzzier than "spinoff" calculations from film production, as we've learned here in Michigan; depending on how you do it, you could get wildly different results. But $140 million, the reported impact from "House of Cards," is a big, big number; so is 2,200, which is the number of estimated jobs created by the series.)

It really makes you wonder whether we're doing something wrong here in Michigan, right? Maryland, for starters, is not offering individual credits nearly as high as Michigan's were. Theirs is 25% of total costs; ours, under Jennifer Granholm, was 42%, highest in the nation.

In addition, Maryland seems to have been more successful landing long-term projects, like "Veep" and "House of Cards," series that will pay off more over time than one-time filmings.

In Michigan, we've been having a prolonged argument about the absolute value of film incentives, with the governor saying they're essentially nothing, while advocates argue that they're unlimited.

But I wonder whether maybe the question is more relative: Have other states figured out how to make more of film incentives with less money, both per-film and overall, in the program?

Does Maryland maybe have some advantages that we're unaware of? Proximity to Washington, D.C., might help with D.C.-based stories, I suppose. Or maybe the state's doing something else we're not thinking of.

In either case, I know this: Michigan could definitely use $140 million in economic activity. If there were a way to make that happen through film incentives, I'd be all for it.