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The granddaddy of monthly economic reports is the federal reading on the employment situation. To call this a single report is deceptive. It actually has a bunch of moving parts that, on their own or as a group, can move stock and bond markets.
It's easy to think of the report in four parts. The first is non-farm payrolls, which tracks the month-over-month change in the number of jobs in the U.S. that don't involve milking cows or picking lettuce. Then comes the unemployment rate, which is the percentage of unemployed people as it relates to the total workforce.
The third component is the average hourly earnings change, which tracks how much more or less money U.S. workers are making. Finally, there's the average work week, which counts the number of hours non-farmers work.
Like most data reports, the unemployment one has its flaws. For one thing, it tracks non-farm payrolls, which means that a lot of folks who work off the land -- or, more to the point, are not currently working off the land -- are excluded. Also, if you¿re a consultant or small-business owner (a big part of the current economy), you¿re not counted. On the flip side, you can be double-counted if you hold down two jobs. That's one of the reasons why it's common to see non-farm payrolls drop (suggesting higher unemployment) but the unemployment rate shrinking (suggesting higher employment).
The impact of the Employment Situation report often depends on the mood of the markets. Take the wage component. If stock and bond traders are worried about inflation, an unexpected rise in hourly earnings suggests wage inflation and, ergo, can scare people. But, that same spike could be welcome if traders are more worried about a slowdown in consumer spending. Higher earnings mean more spending power.
Look for the employment report on the first Friday of every month at 8:30 a.m. EST.
Home / Markets / Industries / Transportation
Thursday, May 08, 2008
Fuel Surcharges Jump by $20 Roundtrip
Associated Press
NEW YORK -- The three biggest U.S. carriers said Thursday they have again raised ticket prices, this time by $20 roundtrip, to recoup rapidly rising fuel costs.
The increases by American Airlines, United Airlines and Delta Air Lines affect the carriers' fuel surcharges, which now total $130 roundtrip on many flights. That means passengers on some cheap flights could be paying more in fees and taxes than for the airfare itself.
Delta Air Lines Inc. initiated the increase, which applies to most domestic routes. It is the Atlanta-based carrier's second hike in just over a week. The previous increase was quickly matched by competitors.
"This is obviously a result of the current market, and fares have to reflect the cost of doing business," spokeswoman Betsy Talton said.
Representatives for AMR Corp.'s American Airlines and UAL Corp.'s United Airlines said the carriers matched the increase on most routes Thursday.
Airlines have been racing to raise airfares, tack on surcharges, and charge for amenities such as extra bags and legroom as they struggle to cope with soaring energy prices. Many airlines now count fuel as their biggest cost.
The price of jet fuel, like gasoline, has risen rapidly along with the price of crude. A gallon on the spot market in New York was selling for $3.57 as recently as Tuesday, according to the Energy Information Administration. That is up about 78 percent from this time last year.
At the same time, carriers are cutting back on flights to reduce costs and maintain their pricing power as the economy slows. Even so, analysts expect many large carriers to post large losses this year.
"I would say to my CEOs: fasten your seat belts, tougher times are coming," Giovanni Bisignani, director general and chief executive of the International Air Transport Association trade group, said in an interview.
Rick Seaney, chief executive of airfare research site FareCompare.com, said the increases mean that fees and taxes together now cost more than the actual base fare on several short-haul flights.
"With a backdrop of a slowing economy, I continue to look for a tipping point where domestic air travelers begin to significantly push back on record high airline ticket prices. At best the jury is still out," Seaney said in an e-mail.
Delta shares fell 10 cents to $7.57. AMR shares fell 26 cents to $8.31, while UAL shares fell 28 cents to $13.54.
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