Poll finds Americans conflicted about economy
Nearly two-thirds of Americans responding to a nationwide survey conducted for the Associated Press believe their family finances will worsen or remain the same this year. Fewer than half expect the economy will improve in 2010, with nearly three-fourths rating 2009 as a terrible year for the economy.
However, 82 percent told the same survey that they are optimistic about what 2010 has in store for them.
Only 20 percent of Republicans believe their family finances will improve in 2010, while almost half of Democrats and 40 percent of independents are optimistic about household bank accounts.
What the credit managers see ahead in new year
The National Association of Credit Management's (NACM) December Credit Managers' Index (CMI) matched the mood of the economy as a whole: essentially flat, but showing some mild progress. The most important aspect of the report is that the index remained above the 50 mark that separates growth from contraction and even showed a slight gain as it moved from 52.3 to 52.9.
Indicators showing the least movement included sales and new credit applications.
The CMI's preliminary retail numbers show a gain of approximately 4.5 percent over last year. There was an increase in dollar collections and an expansion of credit extended.
"Both of these data points bode well for the coming year, and the fact that there is still evidence of companies seeking to catch up on their debt is making it a bit easier to advance credit," stated an NACM press release.
"As has been stated many times and from a variety of sources, the key to the economy's healthy recovery is the rebound in the credit markets," the statement continued. "Thus far that recovery has been slow, but there continues to be a willingness to extend new credit and there is some sense that more will become available in the coming year."
Other elements showing promise include the modest improvement in unfavorable factors - disputes, rejection of credit applications and the like are still showing declines. But one unfavorable factor - filings for bankruptcies - has deteriorated significantly.
"There have been more bankruptcies and that poses some long-term problems. The growth of bankruptcy activity is not unexpected at this point in a recession, but until these are worked through, there will be hesitation in the market to extend credit to any but the most healthy companies," said NACM economist Chris Kuehl. "As the economy rebounds, the companies that have been struggling to survive will start to encounter more aggressive competition, which is often the straw that breaks the back of these weakened companies."
Kuehl's overall conclusion after analyzing the December data is that the economy remains weak but is headed in the right direction. The slow thaw in the credit markets is still taking place and there are signs of expansion in both the manufacturing and service sectors. There has been no sign of explosive growth thus far, but that is consistent with most of the other assessments on the economy. The improvement in 2010 looks more feasible, but there are still no fireworks in the immediate future.
The pattern in the manufacturing sector was similar to that in the index as a whole when it came to favorable factors, but there was real decline in the unfavorable category, which caused manufacturing to slip into contraction territory for the first time since January 2009.
"The December period is usually pretty challenging to this sector, and this December's decline was much less drastic than that of a year ago," said Kuehl, "but the fact remains that manufacturing ended its 10-month run of positive growth. It is likely that the new year will bring some progress again, but this dip in the index demonstrates that there are still problems in manufacturing that will take some time to correct."
Sales actually declined a little from the November data, but there were sharp increases in the amount of dollar collection and the level of additional credit extended.
The service sector held its own and managed to save the combined index from sliding into contraction. The contrast with the manufacturing sector was not so great when it came to the favorable factors, but there were some real differences in unfavorable factors - the biggest being in sales. Unlike manufacturing, this is the season for the service sector because it includes retail. The surge in holiday spending was late in arriving but did show up, and the index reflects this advance in sales activity, jumping from 53.7 to 57.5, twice what the index showed in December 2008. The retail season has been judged positive by most analysts and the CMI reflects that assessment. Most of the other favorable factors were flat, but there was modest growth.
Trane layoffs sign of times
The national economy may be entering the most fragile of recoveries, but not from the perspective of scores of hourly employees at Trane, one of Lexington's top employers. The manufacturer of climate control systems for commercial and institutional buildings laid off 140 employees.
Tom Coffey, president of United Auto Workers Local 912, which represents the employees, said a decline in new commercial real estate construction has resulted in a drop in orders. The union chief said he expects most of the employees will be recalled once the economy picks up.
Recession's casualties in Kentucky
Since last June, 277 Kentucky businesses have laid off 34,073 workers, compared with 398 businesses experiencing layoffs in the previous six months, according to the U.S. Department of Labor.
Fayette County has lost more than 4,000 jobs since October 2008, according to data provided by Labor Department.
Despite those job losses, as of November 2009, Fayette County recorded the lowest jobless rate in the commonwealth, at 7.1 percent.
Unemployment rates rose in all 120 Kentucky counties between November 2008 and November 2009, according to the Kentucky Office of Employment and Training, an agency of the Kentucky Education and Workforce Development Cabinet.
Magoffin County recorded the state's highest unemployment rate: 21.1 percent. It was followed by Metcalfe County at 18 percent; Jackson County at 16.9 percent; Powell County at 16.6 percent; Trigg County at 15.9 percent; Grayson County at 15.8 percent; Menifee County at 14.4 percent; Wolfe County at 14.2 percent; Lewis County at 13.8 percent; and Edmonson County at 13.7 percent.
2009 a great year for local investment firm
While the majority of Americans may look back on 2009 as a major downer, a Lexington investment firm says the year was so fruitful that it's expanding. Citing "unprecedented growth in the Lexington market in 2009," Hillard Lyons will open a second Lexington office in Beaumont. The Louisville-based firm currently has an office in downtown Lexington.
New disclosure requirements vex mortgage industry
The most sweeping changes to home loan disclosures since the 1970s arrived with the new year, and many in the industry are warning of a logjam of confusion.
A thorough overhaul of the "good faith estimate" - a standard disclosure document sent to borrowers - under the Real Estate Settlement Procedures Act, known as RESPA, took effect on January 1.
The new procedures developed by the U.S. Department of Housing and Urban Development expand a one-page form to three pages and are aimed at improving transparency on costs associated with closing a loan, including broker fees, and preventing the kind of unexpected increases in payments that contributed to the housing crisis.
The changes have been the subject of countless hours of debate for banker and broker groups that question the benefits to consumers.
With the new rules now in effect, much of the industry is still grappling to understand what must be disclosed.
The new estimate details and defines loan terms and costs - versus undefined line items in the old one. It specifies rate, whether the rate can change, and encourages the borrower to shop around.
And for the first time, good faith estimates must match costs on closing statements. Since the input of lawyers, title companies and brokers increase chances for error, it means more work and liability for lenders, leaving them on the hook if closing costs vary.
Also this year, all mortgage loan originators must be tested and registered in 2010 under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.
Lexington likes, Kroger keeps
Lexington's reputation as a great place to test-market anything having to do with food has produced a winner for Kroger. The supermarket chain test-marketed its "Wholesome at Home" fresh sandwiches and salads at store locations in Lexington, Roanoke, Va., and Knoxville, Tenn. Sales were strong, so the line stays.
Bank sponsors Ashland Stakes
Central Bank has stepped up to sponsor the Grade-1 Ashland Stakes at Keeneland in April. The $400,000 Ashland is a key preparation race for the Kentucky Oaks held on the eve of the Kentucky Derby.
Lexington-based international show looks for funds to go HD
The WoodSongs Old Time Radio Hour, produced before a live audience at the Kentucky Theater on Monday evenings, is broadcast not only over nearly 500 radio affiliates, XM-Sirius satellite radio and American Forces Radio, but the show is also presented in video on PBS stations around the country as well as on Insight Communications cable television. Host Michael Johnathon has launched a drive to raise $260,000 to convert the production from standard definition to high-def.
More information is available at (859) 255-5700 or by e-mailing queries to radio@woodsongs.com.