Gas prices bite into personal income
WASHINGTON » Americans are earning and spending more, but much of the extra money is going down their gas tanks. Gas prices have drained more than half the extra cash Americans are getting this year from a cut in Social Security taxes. Unlike some other kinds of spending, paying more for gas doesn’t help the economy much. Most of the money goes overseas, and higher prices leave people with less money to buy appliances, computers, plane tickets and other things that can be postponed.
Consumer spending jumped 0.7 percent last month, and personal incomes rose 0.3 percent, the Commerce Department said yesterday. The gains reflected the cut of two percentage points in the Social Security tax, raising take-home pay. They also illustrated how gas prices are stressing household budgets. After adjusting for inflation, spending rose 0.3 percent and after-tax incomes fell 0.1 percent.
Harry & David files for Chapter 11
Fruit basket and gift seller Harry & David filed for Chapter 11 bankruptcy protection yesterday, brought down by a weak economy and a proliferation of competitors.
The Medford, Ore., company agreed with a majority of its senior creditors on a reorganization plan that will eliminate “substantial” debt and provide financing to restructure its balance sheet, according to court documents.
Harry & David Holdings Inc., which grew out of an orchard business about a century ago, has been struggling as businesses slashed corporate gift budgets and consumers cut spending in the weak economy. It relies on discretionary spending that’s often the first to get cut from household and business budgets. Online competitors have also grown significantly. The retailer expects to continue operating during the reorganization process.
EBay to buy GSI for $2.4 billion
SAN FRANCISCO » Online marketplace operator eBay said yesterday that it will pay $2.4 billion for GSI Commerce, which operates websites for retailers like Toys R Us and Bath & Body Works.
EBay Inc., which runs its namesake site where users buy and sell items through auctions and fixed-price “Buy It Now” formats as well as online payments service PayPal, hopes the acquisition will bolster its ability to connect buyers and sellers around the world. It could also help it become more of a threat to Amazon.com Inc.
GSI runs websites, packs and ships products, and offers interactive marketing services to a variety of retailers. It has long-term contracts with 180 retailers, including Radio Shack, Ace Hardware and American Eagle Outfitters.
Home sales contracts up 2.1 percent
WASHINGTON » More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market. Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors’ pending home sales index released yesterday. Sales rose in every region but the Northeast.
Signings were 19.6 percent above June’s index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level.
Effort to raise airfares by $10 fails
DALLAS » The airlines’ latest effort to broadly raise U.S. fares by $10 per round trip has crumbled as discount carriers like Southwest decided not to raise their prices.
After several successful price increases from December through February, two efforts to raise fares this month have died, raising questions about how much consumers are willing to pay for travel.
United and Continental started the push for another fare increase last week and were joined by Delta, American and US Airways. But low-cost airlines never went along, and by yesterday afternoon US Airways joined other large airlines in dropping the fare hike, making the collapse complete.
ON THE MOVE
First Hawaiian Bank has announced the following promotions:
» Chris L. Dods to vice president and division manager from vice president, card services division.
» Jose Garcia to vice president and sales manager from assistant vice president, Maite Banking Center on Guam.
» Roni Gaspar to vice president from assistant vice president, service delivery division.
» Kathy M. Hintz to vice president from project manager, operations research and development division.
» Kim A.K. Huber to vice president and personal trust service manager from assistant vice president, personal trust division.
» Lisa Kamibayashi to vice president and customer information officer from assistant vice president, retail information and planning department.
» Maeda C. Timson to vice president from assistant vice president, retirement savings plans.
» Rochelle L. Wright to vice president and service manager from assistant vice president and service manager, trust employee benefits.
Hi‘olani Care Center at Kahala Nui has promoted Olivia Kim to assistant director of assisted living and memory support from staff nurse. She was previously working in the home and health nursing field as well worked in the emergency room in the San Francisco Bay Area.