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To: Mephisto who wrote (4638)10/30/2002 1:04:08 AM
From: Mephisto  Respond to of 5185
 
Consumer Confidence Plummets in October
Tue Oct 29, 7:28 PM ET

By Ross Finley


story.news.yahoo.com

NEW YORK (Reuters) - Worries about jobs and a possible U.S. attack on Iraq
pummeled consumer confidence to its lowest level in nine years in October, a
report said on Tuesday, a grim omen for the holiday shopping season ahead.


The shock slump in sentiment rattled financial
markets, stoking speculation the Federal Reserve
could cut interest rates as early
as its meeting next week, which could lower
borrowing costs for everything from car loans to
mortgages.

"A weak labor market, the threat of military action in
Iraq and a prolonged decline in the financial markets
have clearly dampened both consumers' confidence
and their expectations for the near future," said Lynn
Franco, director of The Conference Board's consumer confidence survey.


"The outlook for the holiday retail season is now fairly bleak. Without the
likelihood of a pickup in consumer spending, an already weak economic
recovery could weaken further," Franco added in a release.

The private business research group said its Consumer Confidence Index (news
- web sites) slid to 79.4, a low not seen since November 1993, from 93.7 in
September and far below forecasts for 89.7. Excluding September 2001 this
was the biggest monthly drop since 1990.


Most U.S. retailers book about a quarter of their sales during the
November-December holiday season, and some make the bulk of their profits in
that period. But already many retailers are feeling the pinch on profit margins as
consumers aggressively hunt for bargains.

Evidence that spending may cool even further in the months ahead was seen in
a deterioration in consumers' expectations for income gains and employment --
the prime drivers behind consumers' ability to spend.

While so far in this stage of the recovery there has been scant correlation
between drops in consumer confidence and spending, many analysts were
alarmed by the speed and the magnitude of the erosion in confidence over the
past five months.

"The speed of the deteriorating trend appears ominous," said Ian Morris, chief
economist at HSBC Securities (USA).

CAUTIOUS ALREADY

Weekly reports on chain store sales showed consumers are already growing
cautious.


Retail sales at the nation's chain stores fell 1.9 percent in the week ended Oct.
26 after a 0.6 percent rise in the previous week, the Bank of Tokyo-Mitsubishi
and UBS Warburg said in a joint report. A separate report said sales were up
1.4 percent during the first three weeks of October but annual growth slowed.

U.S. Treasuries rallied after the confidence report was released as investors
piled on bets the Fed will cut rates at its Nov. 6 meeting. The Dow Jones
industrial average (^DJI - news) fell sharply but managed to recoup its losses by
the end of trading to finish nearly unchanged.

"The dominoes are falling one by one and the consumer is just the latest. You
should expect the Fed to cut rates on November 6, probably by 50 basis
points," said Ram Bhagavatula, chief economist at Royal Bank of Scotland
Financial Markets.

Interest rate futures were factoring in about a 90 percent chance the Fed will cut
rates at its policy-setting meeting next Wednesday, compared with less than
50-50 odds priced in the market late last week.

That view has been fueled by weak economic data over the past few days and
reports citing Fed officials who are worried that growth is stumbling. Fed
Chairman Alan Greenspan (news - web sites) in a speech on Tuesday did not
address the data, but he did note that fear of terrorist attacks could undermine
the economy.

But in a conference with reporters after touring a furniture plant in Lexington,
North Carolina, Treasury Secretary Paul O'Neill brushed off concerns that a
slide in confidence could signal weak consumer spending ahead.

"Consumer confidence is a poll, and the only real poll that counts is at the cash
register, and what the cash register is saying is that consumers are still
buying," O'Neill said when asked about the big drop in confidence.

WORRIED ABOUT NOW, AND THEN

The Present Situation Index, a measure of consumers' attitudes about the
economy and their finances right now, plunged to its lowest level since early
1994, to 77.5 in October from 88.5 in September. The Expectations Index, a
gauge of consumers' six-month outlook, fell to 80.7 from 97.2.

Consumer worries about the job market also increased. The jobs-hard-to-get
index rose to its highest level since 1994 in October. A rise in this index often
foreshadows a move up in the jobless rate, which currently stands at 5.6
percent.

The government will release its report on the employment situation for October
on Friday and it is likely to be weak. While consensus forecasts are for a
meager 7,000 net job gain during the month, many economists are expecting
job losses, according to a recent Reuters poll.

The unemployment rate is expected to rise to 5.8 percent.

Consumers' plans to buy a new home or car also fell during the month, raising
concerns about two areas of the economy that have been firing on all cylinders.

Other measures of confidence are likewise caught in a downward spiral. The
University of Michigan's index also hit a nine-year low in October. ABC/Money
Magazine Consumer Index for the week ended Oct. 27 steadied, rising slightly
to minus 21 after tumbling the prior week to minus 23 -- its lowest level since
January 1994.

"Unless the downward momentum is quickly halted, the accumulated loss in
consumer confidence could tip the economy back into recession," Richard
Curtin, director of the University of Michigan survey said on Monday.


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To: Mephisto who wrote (4638)10/30/2002 1:29:24 AM
From: Mephisto  Read Replies (1) | Respond to of 5185
 

The Cost of Presidential Travel Is Anyone's Guess


"The largest cost is air travel, roughly $8.6 million. A 1999 GAO report
put the cost of Air Force One at $34,400 per hour"


washingtonpost.com

By Dana Milbank

Tuesday, October 29, 2002; Page A19

Presidents of the United States do not buy discount airfares.

This fact, though hardly surprising, is an endless source of outrage
in the nation's capital. During the Clinton administration, the
Republicans expressed fury that taxpayers spent $42.8 million,
not including security, for President Bill Clinton and his entourage to go to
Africa.

Now it's the Democrats' turn to voice shock and dismay.
Harry M. Reid (Nev.), the No. 2 Democrat in the Senate, has asked the General
Accounting Office to investigate how much taxpayers are spending on
President Bush's trips around the country for GOP fundraisers.

Figuring out how much presidential trips cost is a murky business. Even
when the GAO, the investigative arm of Congress, tackles the
subject, it must ignore security costs, which are classified. For the public and the press,
which have no standing to demand the information
from the administration, it's even more difficult.

Still, while waiting for a comprehensive GAO study, it's possible to make
a ballpark estimate of the cost of presidential travel. An analysis
based on interviews with current and former government officials and
calculations of the number and distance of Bush's trips, indicates it
has cost roughly $15.7 million for Bush to attend the 59 out-of-town political
events he had done this year as of last week.

To be clear, the $15.7 million is a back-of-the-envelope calculation
based not on actual travel records, but on the guesswork of those who
are or have been involved in presidential travel.
Nor was any
attempt made to track who pays -- or should pay -- which costs (most trips
were a mixture of political and official functions, with the bulk of the cost
covered by the government just as it was in 1994 when Clinton
pursued a slightly more aggressive political travel schedule).

Still, the estimate provides a rough way to measure the costs
and benefits of Bush's political travel. Though he has raised $145 million for
the GOP and its candidates this year, according to a CBS News tally,
$78.5 million was raised in Washington. That means it cost something
on the order of $15.7 million for Bush to raise $66.5 million.

The largest cost is air travel, roughly $8.6 million. A 1999 GAO
report put the cost of Air Force One at $34,400 per hour and the cost of the
cargo planes typically used for presidential trips at $5,349 and $7,025 per hour.
As of last week, Bush had taken 47 distinct trips (most
from Andrews Air Force Base but some from Waco, Tex.) to 59 events.
Using an estimate of 170 hours of flying time, based on mileage
flown, for Air Force One and a single cargo plane, the cost was about $6.9 million
(Some trips use a smaller version of Air Force One, but
others require extra cargo planes or an Air Force One backup.)


In addition, Bush's Marine One helicopter costs $5,597 per hour, and
a version of a Blackhawk he sometimes uses costs $3,658. The
helicopters (at least three at a time) are used to bring Bush to and from Andrews
(or another air base) at the start and end of most trips.
They also are flown in a small number of trips to meet Bush at the destination end,
when urban traffic or long driving distances make a
motorcade impractical. Assuming 350 flying hours for all the helicopters
involved, the helicopter costs would be $1.7 million.

The cost of the events themselves is relatively straightforward. According to
documents and interviews, this ranges from about $20,000 to
$50,000 and includes most ground costs such as lighting, stages, backdrops
and room rent. Assuming 59 events cost an average of $35,000
apiece, that comes to $2.1 million.

The White House staff cost for travel is relatively small. This includes hotels,
meals and rental cars for advance teams and traveling staff,
vans for the motorcade and the like. A Bush White House spokeswoman
estimated the cost at $29,000 to $56,000 per trip. But other
current and former officials said that figure is high and likely includes
some of the event cost; these officials put the White House cost at
$10,000 to $25,000 per trip. Assuming 59 events at an average cost
of $17,500, White House costs are $1 million.

The most nebulous area is the bill for security and military personnel
involved in presidential trips. This includes bills for Secret Service,
telecommunications, military and medical officers and a variety
of others -- most of which are confidential. Those who have been involved in
presidential travel recommended using a multiple for this category
of "at least" four times the White House staff cost. That estimate, the
most uncertain of all, would be $4 million -- bringing the grand total to $15.7 million.

Bush spokesman Scott McClellan neither confirmed nor quibbled with the calculation.

"Presidents have a long tradition of traveling outside of Washington," he said,
"and President Bush believes an important part of his job is to
get out of the confines of Washington, D.C., and talk directly with the American people."

President Bush says the percentage of judges confirmed by the Senate this term
is "way below those confirmed under President Clinton or
President Bush or President Reagan." Democrats, who control the Senate, say
they have confirmed "a record number of judges."

Who's correct?

According to a Brookings Institution analysis, the confirmation rate
for the 107th Congress, 61 percent, is lower than the 90 percent
Clinton enjoyed in his first two years -- when his own party controlled the Senate.
Democrats prefer to point out they have confirmed more
judges -- 79 -- than the 69 the GOP Congress confirmed in Clinton's
last two years, the 106th Congress. In that Congress, the Senate
confirmed 62 percent of Clinton's choices, virtually identical to the current rate.

© 2002 The Washington Post Company
washingtonpost.com