USPS Reports Largest Annual Shortfall|
The U.S. Postal Service (USPS) reported their largest annual shortfall in
the agency's history with a loss of $15.9 billion. The hefty loss for the fiscal
year ended September 30 reflects the Postal Service's default earlier this year
on $11.1 billion in required retiree health benefit payments as well as, the
continued decline in first-class mail volume, the agency's primary revenue
driver. The continued heavy loss by the USPS demonstrates the likelihood of the
agency to become a burden on the taxpayers unless Congress acts to overhaul the
agency's finances. USPS receives a small appropriation from the Federal
government, but owes billions of dollars to the U.S. Treasury and has no way to
repay that debt. Definitely not a creditor anyone would want to lend money to -
you have to wonder, if they had a credit score, what would that be? The USPS
reached its borrowing limit of $15 billion for the first time, at the end of
fiscal year 2012. "It's critical that Congress do its part and pass
comprehensive legislation before they adjourn this year to move the Postal
Service further down the path toward financial health," said Postmaster General
Patrick Donahoe. Postal officials said the USPS is likely to run out of cash by
October 2013 and is planning to default on its required retiree health payments
for a third time next year, during the Board of Governors meeting Thursday
morning. The Senate passed postal overhaul legislation earlier this year
although the postmaster said the bill did not go far enough. Until more study
was done, it prevented USPS from ending Saturday delivery. More aggressive cost
savings have been proposed in the House, but that bill still has not been taken
up by the full body. Getting the attention of Congress in the coming weeks,
while they attempt to tackle the fiscal cliff and other issues, will be
Philadelphia Fed November manufacturing survey reported as negative in November,
dropping to negative 10.7 from +5.7 in October.
The Mortgage Bankers Association reported on Thursday that both mortgage
delinquencies and foreclosures on U.S. homes decreased during Q3. Delinquency
rate, which includes mortgages that are past due but not yet in foreclosure,
fell to a seasonally adjusted 7.4% during Q3, down from 7.58% in Q2 and 7.99% in
the Q3 2011. The percentage of mortgages in the foreclosure process was 4.07%,
down from 4.27% during Q2 and 4.43% a year ago. A positive note - the percentage
of properties entering the foreclosure process hit its lowest level since 2007.
Mike Fratantoni, MBA's vice president of research and economics said, "At this
pace, it will be another two and a half to three years until we get there," -
there being a more normal level of foreclosures.
The U.S. Labor Department reported on Thursday that U.S. consumer prices rose
0.1% during October, as higher food and shelter prices offset a decline in
energy costs. Core prices, which strip out volatile food and energy costs, rose
a seasonally adjusted 0.2%. Over the past 12 months, consumer prices have risen
an unadjusted 2.2%, up from 2% in prior month. Core CPI remained unchanged at 2%
on a year-over-year basis. Inflation-adjusted hourly wages fell by 0.2% during
October while real wages are down 0.7 % over the past 12 months
For the fourth month in a row as reported by the New York Federal Reserve Bank
on Thursday, the Empire State Manufacturing index contracted. The ESM index rose
to negative 5.2 in November from negative 6.2 in October. For the first time
since June, the key new orders sub-index rose above zero and shipments soared to
its highest level since May. Only 21% of manufacturers reported a loss of
activity due to Hurricane Sandy but all firms reported some reduction in
According to the U.S. Labor Department on Thursday, U.S. jobless claims soared
higher by 78,000 in the week ended November 10 to an 18-month high of 439,000 -
reportedly on the heels from damage caused by Hurricane Sandy. The destruction
of job sites, closure of government offices and widespread power outages caused
more people to file claims after an initial delay. Initial jobless claims from
two weeks ago were revised up to 361,000 from an original reading of 355,000,
based on more complete data collected at the state level. Labor Department said
continuing jobless claims increased by 171,000 to a seasonally adjusted 3.33
million in the week ended November 3. Nearly 4.98 million people received some
type of state or federal benefit in the week ended October 27 down, 100,423 from
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Nov 15, 2012