Productivity Exceeds Outlook
Overall preliminary non-farm output per hour and unit labor costs both rose 2.2 percent in the first quarter of 2008, the
The U.S. Department of Commerce on Friday announced that total March exports of $148.5 billion and imports of $206.7 billion resulted in a goods and services deficit of $58.2 billion, down from $61.7 billion in February. March exports were $2.6 billion less than February exports of $151.1 billion. March imports were $6.1 billion less than February imports of $212.8 billion.

The February-to-March change in imports of goods reflected decreases in automotive vehicles, parts and engines ($2.1 billion); industrial supplies and materials ($2.0 billion); consumer goods ($1.1 billion); capital goods ($0.8 billion); and foods, feeds and drinks ($0.1 billion).

Retailers Plan for Stimulus Purchases
Last week, global supply chain optimization provider Manhattan Associates, Inc. and Retail Systems Research announced results of a joint survey focusing on how retailers are planning to increase profits through the government's $168 billion economic stimulus plan.

The online survey of 95 retailers found that 35 percent plan to capture consumer spending from the stimulus plan. Big box retailers plan to do the most. Of that 35 percent, most retailers' plans revolve around advertising: 77 percent plan special promotions. "But only 37 percent plan to increase inventory in preparation for those promotions, making reallocation of current inventory a high priority over the next several months," according to an announcement.

Dollar Sees Gains . . . Briefly
On Wednesday, "the dollar climbed against the euro and the yen after Federal Reserve Bank of Kansas City President Thomas Hoenig said 'serious' inflation pressures may prompt the central bank to raise interest rates and retail sales in Europe dropped by a record in March," says Bloomberg News. "Macro developments are supportive for the dollar continuing to strengthen,'' Geoffrey Yu, Zurich-based strategist at UBS, wrote in a research note last week.

But by Friday, the dollar lost its shine with the euro moving from $1.5463 to $1.5404. Similarly, $1 bought only ¥103.12, down from ¥104.17 earlier.

Consumers Borrowing More
"The total debt held by American individuals rose $15.3 billion from the prior month to $2.6 trillion," according to according to a report from the Federal Reserve released Wednesday (via CNNMoney.com). "The rise in consumer borrowing could be a good sign for the economy in the short-term" — as people are still spending money — though with the latest government report, personal deficit spending appears to have shifted.

Oil and Raw Materials Prices Rise
On Friday, a barrel of oil traded at $126 in New York to a record as the dollar weakened against the euro, reports Bloomberg News: "Crude oil for June delivery rose $2.27, or 1.8 percent, to a record closing price of $125.96 a barrel at 2:55 p.m. on the New York Mercantile Exchange. The contract surged to $126.27 [Friday], the highest since futures began trading in 1983. Prices are up 8.3 percent this week, the biggest weekly gain in more than a year. Futures have more than doubled in the past year."

How High Gas Prices Are Affecting Employees
Rising gas prices are affecting more than the family budget; more pain at the pump results in more employee stress and less attentiveness on the job, according to a recent study by Wayne Hochwarter, the Jim Moran Professor of Management at Florida State University's College of Business.

Hochwarter's data comes from a survey of more than 800 full-time employees this spring (when gas was about $3.50/gallon). Respondents work in a wide range of occupations, primarily in the southeastern U.S., and drive personal vehicles to work with an average commute of 15 miles each way. The study, submitted for publication later this summer, offers these findings (via Tallahassee.com):

• Fifty-two percent have reconsidered taking vacations or other recreational activities;

• Forty-five percent have cut back on debt payments, such as credit cards;

• Nearly 30 percent considered going without basics like food, clothing and medicine;

• About one in three said they would quit their job for a comparable one nearer to home; and

• Forty-five percent report escalating gas prices have "caused them to fall behind financially."

Container Traffic Declines
Inbound container traffic to the U.S. was down 4.8 percent in March from February, which traditionally is the slowest month of the year for retail-related imports, according to the latest Port Tracker reports from the National Retail Federation and forecasting firm Global Insight (via CNNMoney.com). Looking forward at year-over-year figures, the joint monthly report estimates a 3.2 percent dip in April, a 4.8 percent fall in May, a 7 percent drop in June, and a 2 percent decline in July. In September, inbound container traffic is finally seen rising by 3 percent.

N.J. to Build Wind Farm?
New Jersey's Governor wants his state to be the first in the U.S. Northeast to build an electricity-generating wind farm off the Atlantic coast, according to Bloomberg News. A draft of the proposal, released last month, calls for the state to get almost a quarter of its power from "renewable sources" such as solar panels by 2020, including 1,000 megawatts of offshore wind.

"Five companies are vying for $19 million in grants and the right to put as many as 200 windmills within 20 miles of the Jersey Shore."

Global Disparity of Manufacturers' Health-Care Costs
"U.S. manufacturers who provide health insurance spend an average of $2.38 per worker per hour on health care — more than twice as much as their foreign competitors," says the Los Angeles Times based on a new report, entitled Health Costs and U.S. Competitiveness, from the New America Foundation. "Every single year, health-care costs rise faster than productivity and wages."

Foreign manufacturers' health-care costs are lower because they are the beneficiaries of government-run programs that are not primarily employer-financed, economist Len Nichols, policy director for the New America Foundation and the analysis' author, told the L.A. Times.

IMF Fears Inflation
"This inflation speed-up must be taken seriously as it creates potentially significant challenges to economic stability,'' John Lipsky, the International Monetary Fund's first deputy managing director, told Bloomberg News. Research indicates that "if the dollar hadn't fallen from 2002 to 2007, oil prices would be $25 a barrel lower."

Europeans Detect Rising Inflation
Inflation rates have risen significantly since the autumn, owing mainly to increases in energy and food prices, Jean-Claude Trichet, president of the European Central Bank, said last week. "We emphasize that maintaining price stability in the medium term is our primary objective in accordance with our mandate," he added during a press conference in Greece.

GM to Buy Pay $200 mil. Worker Buyouts
General Motors Corp. (GM) has agreed to pay $200 million to help with employee buyouts and "buy-downs" to help resolve a crippling strike at Detroit-based supplier American Axle & Manufacturing Holdings Inc., the Detroit Free Press is reporting. GM said the agreement is "predicated upon an expedited resolution to the ongoing strike called by the International UAW [United Auto Workers] against American Axle."

About 3,650 workers at five American Axle plants have been on strike since late February. The strike has idled or hampered production at 30 GM plants, especially those producing pickup trucks and SUVs.

The UAW also has called local strikes at two GM plants that produce the hot-selling Chevrolet Malibu sedan and GM crossovers. "Workers at a plant that builds crossover vehicles, which are big sellers for G.M., near Lansing, Mich., have been on strike for weeks. Together, the plants employ about 4,500 people," The New York Times reports.