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Toys ‘R’ Us: We’re Not Dying After All

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They may not be ready to declare “We ‘R’ Solvent,“ but Toys ‘R’ US appears to be back from the brink of oblivion. The company’s top creditors have decided to cancel the bankruptcy auction of its famous name and other intellectual property and will attempt to revive the brand instead, reports Reuters. The company filed for bankruptcy in September last year and announced in March that it was “putting a for sale sign on everything” and closing around 800 stores in the US. According to a court filing Monday, the hedge funds now controlling the company decided that the bids for the company’s assets were “unlikely to yield a superior alternative” to reviving the Toys ‘R’ Us and Babies ‘R’ Us brands.

The plans set out by the hedge fund group calls for “a new, operating Toys ‘R’ Us and Babies ‘R’ Us branding company that maintains existing global license agreements and can invest in and create new, domestic, retail operating businesses,“ the Wall Street Journal reports. Registry lists, website domains, and even mascot Geoffrey the Giraffe would have been sold off if the funds had gone ahead with the bankruptcy auction. The Journal reports that two of the three private equity firms involved, Bain Capital and Kohlberg Kravis Roberts, have agreed to set aside $20 million to be distributed to 33,000 former Toys ‘R’ Us workers still fighting for severance pay.

Producer Price Index

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The Producer Price Index for final demand increased 0.2 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in August and were unchanged in July.  On an unadjusted basis, the final demand index advanced 2.6 percent for the 12 months ended in September.

In September, the rise in the final demand index can be traced to a 0.3-percent increase in prices for final demand services. In contrast, the index for final demand goods decreased 0.1 percent.

The index for final demand less foods, energy, and trade services moved up 0.4 percent in September, the largest rise since a 0.5-percent increase in January. For the 12 months ended in September, prices for final demand less foods, energy, and trade services advanced 2.9 percent.


Final Demand

Final demand services: The index for final demand services increased 0.3 percent in September following two consecutive declines of 0.1 percent. The broad-based advance was led by a 1.8-percent jump in the index for final demand transportation and warehousing services. Prices for final demand services less trade, transportation, and warehousing rose 0.3 percent, and the index for final demand trade services inched up 0.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: In September, over one-third of the advance in prices for final demand services can be traced to the index for airline passenger services, which rose 5.5 percent. The indexes for food and alcohol wholesaling; deposit services (partial); outpatient care (partial); apparel wholesaling; and lawn, garden, farm equipment, and supplies retailing also moved higher. Conversely, margins for apparel, jewelry, footwear, and accessories retailing fell 2.5 percent. The indexes for automotive fuels and lubricants retailing and for traveler accommodation services also declined.

Final demand goods: The index for final demand goods edged down 0.1 percent in September, the first decrease since a 0.5-percent drop in May 2017. Leading the September decline, prices for final demand energy fell 0.8 percent. The index for final demand foods decreased 0.6 percent. In contrast, prices for final demand goods less foods and energy rose 0.2 percent.

Product detail: Leading the September decline in the index for final demand goods, gasoline prices fell 3.5 percent. The indexes for electric power; iron and steel scrap; canned, cooked, smoked, or prepared poultry; and fresh and dry vegetables also moved down. Conversely, the index for light motor trucks rose 0.8 percent. Prices for liquefied petroleum gas, pharmaceutical preparations, and unprocessed and prepared seafood also increased.

Struggling GE Makes a Surprise Move

The Free Press WV

More turmoil at GE: The company has ousted CEO John Flannery a little more than a year into the job. Flannery took over from longtime exec Jeff Immelt in August 2017 with grand plans to restructure General Electric and turn around its slumping fortunes, reports CNNMoney. But significant troubles at the company’s power division apparently prompted the board to fire Flannery, a move that “stunned some inside the company,“ per the Wall Street Journal. That is, big changes were anticipated, but not at the CEO level. In fact, on Friday, Flannery himself had sent a rally-the-troops video to staff in regard to the power unit troubles, including the failure of gas turbines that forced power plants to close.

Flannery has been replaced, effective immediately, by H. Lawrence Culp Jr., who previously led a successful turnaround at the manufacturing company Danaher. GE shares were up 16% in pre-market trading on the news. Since the end of 2016, however, company shares have dropped nearly two-thirds. In addition to the surprise ouster, GE also announced that it expects to miss profit goals for 2018.

Employment Situation

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The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, in health care, and in transportation and warehousing.


Household Survey Data

The unemployment rate declined by 0.2 percentage point to 3.7 percent in September, and the number of unemployed persons decreased by 270,000 to 6.0 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.5 percentage point and 795,000, respectively.

Among the major worker groups, the unemployment rates for adult women (3.3 percent) and Whites (3.3 percent) declined in September. The jobless rates for adult men (3.4 percent), teenagers (12.8 percent), Blacks (6.0 percent), Asians (3.5 percent), and Hispanics (4.5 percent) showed little or no change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.4 millionover the month; these individuals accounted for 22.9 percent of the unemployed.

In September, the labor force participation rate remained at 62.7 percent, and the employment-population ratio, at 60.4 percent, was little changed.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 263,000 to 4.6 million in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

In September, 1.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (Data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 383,000 discouraged workers in September, about unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force in September had not searched for work for reasons such as school attendance or family responsibilities.


Establishment Survey Data

Total nonfarm payroll employment rose by 134,000 in September, compared with an average monthly gain of 201,000 over the prior 12 months. In September, job gains occurred in professional and business services, in health care, and in transportation and warehousing.

Employment in professional and business services increased by 54,000 in September and has risen by 560,000 over the year.

Health care employment rose by 26,000 in September. Hospitals added 12,000 jobs, and employment in ambulatory health care services continued to trend up (+10,000). Over the year, health care employment has increased by 302,000.

In September, employment in transportation and warehousing rose by 24,000. Job gains occurred in warehousing and storage (+8,000) and in couriers and messengers (+5,000). Over the year, employment in transportation and warehousing has increased by 174,000.

Construction employment continued to trend up in September (+23,000). The industry has added 315,000 jobs over the past 12 months.

Employment in manufacturing continued to trend up in September (+18,000), reflecting a gain in durable goods industries. Over the year, manufacturing has added 278,000 jobs, with about four-fifths of the gain in the durable goods component.

Within mining, employment in support activities for mining rose by 6,000 over the month and by 53,000 over the year.

Employment in leisure and hospitality was little changed over the month (-17,000). Prior to September, employment in the industry had been on a modest upward trend. Some of the weakness in this industry in September may reflect the impact of Hurricane Florence.

Employment showed little or no change over the month in other major industries, including wholesale trade, retail trade, information, financial activities, and government.

The average workweek for all employees on private nonfarm payrolls remained unchanged at 34.5 hours in September. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime edged down by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $27.24. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.81 in September.

The change in total nonfarm payroll employment for July was revised up from +147,000 to +165,000, and the change for August was revised up from +201,000 to +270,000. With these revisions, employment gains in July and August combined were 87,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 190,000 per month over the last 3 months.

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