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Source:CNN

NEW YORK: The government’s index of prices paid by consumers was unchanged in July from the previous month, but the closely watched inflation gauge recorded its largest over-the-year decline in 59 years. The Labor Department said Friday that its Consumer Price Index has fallen 2.1% over the past 12 months. It was the sharpest over-the-year drop since January 1950, when CPI fell at the same rate. Economists surveyed by Reuters had forecast a 2% decline. The decline was led by a sharp drop in energy prices, which are down 28.1% from July 2008, when both gasoline and oil prices were at record highs. But if you factor out volatile energy and food prices — which is known as the Core CPI — consumer prices rose 1.5% on an annual basis. On a monthly basis, Core CPI gained 0.1% in July while the basic CPI was unchanged. Both measures matched economists’ expectations.”The drop in CPI is mainly due to lower gasoline prices and lower grocery store prices,” said Mark Vitner, an economist at Wells Fargo Economics Group. Gas prices fell 0.4% in July after surging 17.2% the month before. The index of food prices was down 0.3% in July, and has fallen 1.8% over the last 12 months.”Lower food prices are good news for consumers and should help free up some discretionary dollars for other purchases,” Vitner said. Friday’s report indicates that inflation is not a threat to the economy and that the Federal Reserve will not have to raise interest rates any time soon, Vitner said. “The fact that inflation is well behaved means the Fed has more latitude to hold rates at current levels for as long as they need to,” he said. The U.S. central bank said Wednesday that it expects “inflation will remain subdued for some time” and said that rates will remain near zero percent “for an extended period.”

Source:CNN

NEW YORK: Consumer credit fell in June for the fifth straight month, as widespread unemployment curbed spending, a government report said Friday.Total consumer borrowing sank a seasonally adjusted 10.3 billion, or 4.9%, to 2.503 trillion, according to the Federal Reserve. The report measures how much debt consumers have outstanding.Economists predicted a decline in total borrowing of 5 billion in June, according to a consensus survey from Briefing.com. The reduced borrowing comes as the economy sheds jobs by the thousands, and mass layoffs and pay cuts have limited consumer spending power. At the same time, banks have tightened lending standards due to growing concerns about default risk.A separate Friday report showed the unemployment rate fell to 9.4% from 9.5% in June, the first decline since April of 2008. Economists had expected a rise to 9.6%, but the current rate remains high.Consumer credit began contracting last August, the first decline since January 1998. It rebounded in September before contracting again and fell for three consecutive months to close out 2008. Revolving credit, which includes credit card debt, fell 5.3 billion, or 6.8%, to 917 billion.Nonrevolving credit — which includes auto and student loans — decreased by 5.1 billion, or 3.8%, to 1.586 trillion.

Source:CNN

NEW YORK: Consumer bankruptcies surged in July to the highest level since October 2005 as U.S. households struggle under the burden of past debt and rising unemployment.Total filings reached 126,434 in July, a 34.3% increase from the same period a year ago and an 8.7% increase over June, according to a report released Tuesday from the the American Bankruptcy Institute.The number of filings was the highest monthly total since the Bankruptcy Abuse Prevention and Consumer Protection Act went into effect in October 2005.”Today’s bankruptcy filing number reflects the sustained and growing financial stress on U.S. households,” said ABI Executive Director Samuel J. Gerdano in a written statement. “Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year,” he added.

Source:CNN

NEW YORK: A key index of consumer confidence fell more than expected in July as the dismal job market continued to darken the outlook for household spending. The Conference Board, a New York-based business research group, said Tuesday its Consumer Confidence Index fell to 46.6 in July from a reading of 49.3 in June.Economists had expected the index to decline to 49, according to a consensus forecast gathered by Briefing.com.The index, which fell to an all-time low in February, had recovered earlier this year as the stock market rallied broadly over the last few months. But the weak job market continues to dampen consumers’ moods even as their retirement portfolios improve. The measure’s present situation index fell to 23.4 from 25 last month. The expectations index slipped to 62 from 65.5.”The decline in the Present Situation Index was caused primarily by a worsening job market,” Lynn Franco, director of the Conference Board’s consumer research center, said in a statement.

Source:CNN

NEW YORK: A key index of prices paid by consumers rose in June but showed the largest year-over-year decline since January 1950, the government said Wednesday.The Consumer Price Index, the Labor Department’s key measure of inflation, has fallen 1.4% over the past year. That’s the largest drop in more than 59 years, and is due largely to a 25.5% over-the-year decline in the energy index.On a monthly basis, CPI rose 0.7% in June, after rising 0.1% the previous month. Economists surveyed by Briefing.com expected a 0.6% increase.The report attributed the month-to-month increase to the gasoline index, which rose 17.3% in June. But a decline of 1.9% in the electricity index helped offset the gas price jump, causing the overall energy index to settle up 7.4%. Core CPI: The even more closely watched core CPI, which excludes volatile food and energy prices, increased 0.1% on an annual basis, after gaining the same amount in May. Core CPI increased 1.7% on an annual basis. Index-by-index: Most sectors saw at least a small uptick. The indexes for shelter and medical care posted slight increases in June, and indexes for new vehicles, used cars and trucks, recreation and apparel increased at least 0.5%. The food index, which had fallen for the last four months, was unchanged in June. The index for airline fares bucked the trend, though, falling 0.6%.

Source:CNN

NEW YORK: Consumer debt fell in May, for the fourth straight month, as the still-suffering economy and mounting job losses curbed spending, a government report said Wednesday.Total consumer borrowing fell by a seasonally adjusted 3.22 billion, or a 1.5% annual rate, to 2.52 trillion in May, according to the Federal Reserve. The report measures how much debt consumers have outstanding.But economists had expected a decline in total borrowing of 8.8 billion in May, according to a consensus survey from Briefing.com. April saw a revised drop of 16.5 billion in total consumer borrowing — a larger decline than originally reported, and the biggest dip in dollar terms since record-keeping began in 1943.Revolving credit, which includes credit card debt, fell by 2.9 billion to 928 billion. That’s a 3.7% decrease from the previous year. Nonrevolving credit – which includes auto and student loans — decreased by 400 million, or 0.3%, to 1.59 trillion. Last August, consumer credit contracted for the first time since January 1998. It rebounded in September before contracting again, falling for three consecutive months to close out 2008. A separate report released Tuesday showed delinquencies on credit card debt and other consumer debt hit record highs in the first quarter of 2009. Have you exhausted your unemployment benefits? We want to hear about your experiences. E-mail your story to realstories@cnnmoney.com and you could be part of an upcoming article. For the CNNMoney.com Comment Policy, click here.
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Source:CNN

WASHINGTON: In the debate over how to prevent the next financial crisis, the first fight has already erupted — and it’s over a proposal to create a new agency to protect consumers.On Tuesday, the Treasury Department sent to Congress a 150-page draft of a bill with new details about its plan for a regulator for mortgages, credit cards and other financial products. The Consumer Financial Protection Agency would be run by a presidentially-appointed, five-member board and wield subpoena power and wide-ranging investigative clout.The proposal has the support of consumer groups and populist fervor at its back. When it was proposed by President Obama earlier this month, Senate Banking Committee Chairman Chris Dodd, D-Conn., very publicly asked industry groups, such as the U.S. Chamber of Commerce, that were blasting the idea: “What planet are you living on?”However, as a House panel last week started to look at the best ways to create such an agency, the questioning from lawmakers of both parties suggested that establishing the agency won’t be an easy slam dunk for White House.Top Republicans are criticizing the proposal as more bureaucracy, saying that regulators failed to enforce current rules. And a few Democrats voiced concerns about the kinds of powers the regulator should get.”I think there’s a high probability that this ends up going into law, but the fights will be over how it’s being done, who’s being covered and how wide the net should be cast,” said Douglas Elliott, an economist and former investment banker at the Brookings Institution in Washington.New details releasedObama had already announced that the new agency would be tasked with making it easier for consumers to understand mortgages, credit cards and other financial products.One of its jobs would be to enforce a set of recently enacted credit card protections aimed at preventing banks and card-issuers from hiking fees and interest rates, according to the legislation released Tuesday.The bill also proposes an even broader swath of industry players that could fall under the regulator’s realm. These include title insurers, payday lenders and some smaller investment advisers not already registered with other regulators.Also, the bill suggests that the agency would be paid for through fees levied on the companies it regulates as well as congressional appropriations. But that means industries would have to dig into their pockets.One powerful lobbying group, the Financial Services Roundtable, which represents big banks, came out swinging.The proposed regulator “would actually harm consumers by increasing the cost of financial products, and reducing the availability of credit and consumer choices,” Steve Bartlett, the group’s chief executive, said in a statement Tuesday.For their part, Treasury officials sounded confident that opposition by banks will be a tough sell.”That’s a very hard argument for a bank to make: that the status quo was protective enough,” Michael Barr, an assistant Treasury secretary, told reporters Tuesday. “I don’t envy them that position to have to argue.”Points of contentionYet lawmakers are likely to scrutinize the Obama proposal. The House Financial Services Committee last week heard from a panel of experts, including Elizabeth Warren, a Harvard University Law professor considered the author of the idea for the new agency.Republicans openly blasted the idea.”What’s troubling is that … a panel of consumer experts couldn’t even agree amongst themselves what financial products rose to the level of being anti-consumer,” Rep. Jeb Hensarling, R-Texas, said in a statement Tuesday. “How then, do they propose to come to a consensus on what to regulate in the open market?”However, there will be some differences of opinions among Democrats, as well.House Financial Services Chairman Barney Frank, D-Mass., suggested that he agreed with consumer advocates who don’t like the proposal’s plan to give the the new regulator power to enforce the Community Reinvestment Act, which pushes banks to make loans to low-income households.And Rep. Brad Sherman, D-Calif., warned last week that he was concerned that Congress would cede some of its consumer law-making power to the executive branch if it established the agency.”Is the goal here to create a law enforcement executive branch agency, or to create a law making agency that would decide all the issues that I spent 13 years on this committee arguing about?” Sherman asked on Thursday.

Source:CNN

NEW YORK (Reuters) — Consumer confidence fell in June after two straight months of gains.The Conference Board, an industry group, said on Tuesday its index of consumer attitudes dropped to 49.3 from 54.8 in May. The Present Situation Index slid to 24.8 from 29.7.Americans saying jobs are “hard to get” increased to 44.8% from 43.9% the previous month, while those saying jobs are “plentiful” slid to 4.5% from May’s 5.8%.”The decline in the Present Situation index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier, are nonetheless weak,” said Lynn Franco, director of The Conference Board’s Consumer Research Center.

Source:CNN

NEW YORK: Honda’s new hybrid-only Insight, touted as a low-cost competitor to the Toyota Prius was dealt a major blow Monday after it failed to get a thumbs up from the influential magazine Consumer Reports.”The Insight is the most disappointing Honda Consumer Reports has tested in a long time,” said David Champion, director of the magazine’s auto test center.The magazine roundly panned Honda’s (HMC) new hybrid car in its upcoming August issue, criticizing its ride quality, handling, interior noise, acceleration, and rear-seat access.Champion called the car “noisy and stiff-riding.”Out of 22 hatchbacks and small wagons the magazine rated in its latest round of testing, the Insight ranked 21st. 0:00
/1:15Nissan bets on green exportsThe Insight scored 54 out of a possible 100 points in the magazine’s tests. Therefore, Consumer Reports will not recommend the Insight based on the results.The only car that ranked worse was the Dodge Caliber. The Caliber scored 49.The Hybrid is a “mild hybrid,” unlike the slightly more expensive Toyota Prius against which it competes. The Insight requires its gasoline engine to run as it drives and cannot drive under electric-only power. Consumer Reports recorded fuel economy of 38 mpg in its tests, a figure the magazine called “commendable.” The Insight’s official EPA-rated fuel economy is 41 mpg in combined city and highway driving.The Prius is Consumer Reports’ top-rated hybrid car and America’s top-selling hybrid vehicle by a wide margin.The Prius was redesigned for the 2010 model year and has, again, earned Consumer Reports recommendation.A Honda spokesman was not immediately able to comment on the’ findings.Consumer Reports rates vehicles using a series of standardized handling and performance tests performed at the magazine’s Connecticut test facility. It also rates vehicles using more subjective measures like build quality and functionality.

Source:CNN