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NEW YORK, N.Y.—Shares of Walmart Stores Inc. moved ahead Monday morning in the first trading since the retail giant announced on the weekend that it’s slashing 11,200 jobs at Sam’s Club warehouse stores.

In New York, Walmart (NYSE:WMT) stock lifted 20.5 cents to US$53.14, as other U.S. retailers also moved on the news, pulling the entire sector higher.

Walmart said it will close 10 underperforming warehouse locations, at a cost 1,500 jobs, as it works to improve sales at its Sam’s Club stores.

Sam’s Club has fallen short of expectations for the Walmart chain in the U.S. and abroad.

Walmart already pulled its Sam’s Clubs stores out of Canada, laying off 1,200 people at six stores in Ontario last year.

Sam’s Club had been in Canada for only about five years. Walmart Canada president and CEO David Cheesewright said at the time that the stores didn’t perform to the company’s standards no fax payday loans.

In the U.S., Sam’s Club employees found out about the cuts during a mandatory meeting on Sunday morning. The stores are undergoing various changes as the company turns over the task of in-store product demonstrations to an outside marketing company.

The job cuts represent about 10 per cent of the warehouse club operator’s 110,000 staffers across its 600 stores. That includes 10,000 workers, mostly part-timers, who offer food samples and showcase products to customers.

Walmart also eliminated 1,200 Sam’s Club workers who recruit new members.

During Walmart Stores’ most recent quarter, revenue at the Sam’s Club division slipped nearly one per cent to US$11.55 billion while U.S. Walmart stores posted a 1.2 per cent sales increase to $61.81 billion.

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The cost of living rose less than forecast in December, indicating the economic recovery is showing few signs of stoking inflation.

The consumer-price index rose 0.1 percent following a 0.4 percent gain in November, Labor Department figures showed today in Washington. Excluding food and energy costs, the so-called core index also increased 0.1 percent from a month earlier.

Companies may have little success raising prices with unemployment projected to average 10 percent this year, the highest annual rate in seven decades. Federal Reserve policy makers have said they expect “subdued” inflation in coming months, allowing them to keep interest rates close to zero to help fuel growth.

“Consumer pricing pressures remain very subdued,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who accurately forecast the rise in the core rate. “It gives the Fed further leeway to continue keeping rates where they are well through 2010.”

Stock-index futures trimmed losses and Treasury yields fell after the report. Futures on the Standard & Poor’s 500 Index expiring in March declined 0.3 percent to 1,141.9 at 8:34 a.m. in New York after losing 0.7 percent earlier. The yield on the 10- year Treasury note dropped to 3.7 percent from 3.74 percent late yesterday.

Last Year

Americans paid 2.7 percent more for goods and services in 2009. The annual gain followed a 0.1 percent rise in 2008 that was the smallest since 1954 as energy costs plunged the most since those records began four years later.

Prices excluding food and energy rose 1.8 percent in 2009, matching the previous year as the smallest gain since 2003. Service costs, which make up 60 percent of the CPI, rose 0.9 percent last year, the smallest gain since 1945.

Economists forecast the consumer-price index would rise 0.2 percent in December from a month earlier, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from a 0.1 percent drop to a gain of 0.3 percent.

The core index was forecast to rise 0.1 percent, according to the Bloomberg survey.

Fed policy makers’ long-term forecast for their preferred measure of inflation, the Commerce Department’s index tied to consumer spending and excluding food and fuel, calls for gains in a range of 1.5 percent to 2 percent. That gauge, which is typically lower than the CPI, was up 1.4 percent in the 12 months to November.

Energy Prices

Energy costs increased 0.2 percent in December, less than the previous month as gasoline and fuel oil costs slowed.

The year-over-year gains in the consumer price index are getting bigger as crude oil prices increase from an almost five- year low in December 2008. Energy costs last year jumped 18.2 percent, the most since 1979.

Crude oil futures traded on the New York Mercantile Exchange averaged $74 need a personal loan with bad credit.60 in December, compared with $78.15 the previous month. Prices have rebounded this month, averaging $81.59 a barrel.

Gasoline prices in December averaged $2.61, compared with $2.65 a gallon the previous month, according to AAA. Prices for regular-grade gasoline at the pump have climbed to an average of $2.71 so far this month.

Food Costs

Food costs, which account for about 15 percent of the CPI, increased 0.2 percent in December, reflecting higher prices for fruits and vegetables, dairy products and cereals. The cost of food for all of last year dropped 0.5 percent, the biggest decline since 1961.

Delhaize Group SA, owner of Food Lion supermarkets in the U.S., said in a statement yesterday that revenue fell for the first time in five quarters on declining food prices. The Brussels-based company said U.S. retail food deflation accelerated to 2.1 percent in the fourth quarter and prices in its stores fell 0.92 percentage point more than the cost of goods sold.

Rents, which make up almost 40 percent of the core CPI, were unchanged. Owners-equivalent rent, one of the categories used to track rental prices, held steady last month after a 0.1 percent decline. Owner-equivalent rent hasn’t risen since August.

The CPI is the broadest of the three monthly price gauges from the Labor Department because it includes goods and services. A report yesterday showed the cost of imported goods was unchanged last month. The Labor Department is scheduled to report December wholesale prices on Jan. 20.

Prices of Services

Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

United Airlines, the third-largest U.S. carrier, discounted fares to as low as $55 each way in an effort to boost travel during the winter months. The carrier’s Chicago-based parent UAL Corp. made the announcement this month in a statement and followed one-way discounts offered by JetBlue Airways Corp.

Retailers offering discounts during the holiday shopping season to spur demand weighed on earnings for some companies.

GameStop Corp., the world’s largest video-game retailer, reported fourth-quarter earnings that fell short of estimates because of disappointing sales. The Grapevine, Texas-based company offered a $50 discount on Nintendo Co.’s top-selling Wii console from Wal-Mart Stores Inc.

“The macroeconomic environment put a damper on people buying as many video-games as we expected,” Chief Executive Officer Daniel DeMatteo said in a Jan. 8 interview. He said sales were impacted by “economic weakness.”

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In another ominous sign for state budgets nationwide, state and local governments reported another drop in overall tax revenue on Tuesday.

General sales tax, individual income tax and corporate income tax were all down in the third quarter of 2009, resulting in an overall 6.7% drop in total tax revenue, compared to the same quarter in 2008, according to the U.S. Census Bureau.

This is the fourth consecutive quarter in which tax revenue collection has fallen.

The one bright spot was property tax collection, which showed a slight increase of 3.5%, compared to the same quarter in 2008.

Total taxes collected in the third quarter were $266.5 billion compared to $285.6 billion during the same quarter in 2008.

States are wrestling with some of the worst budget deficits since the Great Depression. Rising unemployment has wreaked havoc on their vital revenue streams of personal income, corporate profits and sales taxes.

Though governors and lawmakers are reluctant to raise taxes, particularly in bad economic times, the current fiscal situation has prompted some to turn to such measures.

Some 29 states enacted revenue hikes for fiscal 2010, which began on July 1 in nearly all states. Personal income tax hikes accounted for the largest portion, some $10.7 billion. Corporate levies declined by $202.2 million. 

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SUDBURY–Andrea Daily fell to her knees in the grocery store as her young daughter begged one more time for that special granola bar. Tearfully, Daily grabbed her 5-year-old and told her to stop asking because it was an item she could no longer afford.

"When she asks, it’s difficult to say `no’ over and over again," says Daily, 32. "But we have no choice because of the strike."

The strike at Vale Inco hit the Daily household hard.

Her husband, Dave, 34, joined Vale Inco as an apprentice mechanic in February 2008 and earned $27 an hour. She later began working part-time at a spa. They bought a home and a car and looked forward to finally settling down with their two young daughters.

Then Dave Daily’s union, the United Steelworkers, walked out in a contract dispute last summer. His income plunged by more than 75 per cent. It turned the family budget, and their lives, upside down.

"We never had much chance to build any strong savings," she says.

The Dailys are just one of the young families struggling through a strike that has lasted more than five months. A majority of Inco workers are in their late-20s and 30s, with less than three years service. Many have heavy financial obligations.

Before the strike, the Dailys felt financially comfortable enough to donate to the community food bank instant personal loans guaranteed. Now, they are using it.

"We’ve been humbled," she says.

The Dailys have slashed spending. Cable TV is gone. The cellphone disappeared and the couple bunch up numerous errands to save fuel costs. They are stretching their food dollar like never before.

Dave Daily makes some extra dollars fixing cars. Relatives and the union help, but the bills pile up. A student loan remains outstanding.

The bank has shown flexibility on mortgage payments but for every bit of relief, another problem sets them back. The spa reduced her work hours, partially because business has slowed during the strike.

"Christmas is cancelled here," she says, but adds that they’re pulling out some old toys from when her husband was a boy.

Dave Daily voted in favour of the strike. "When I signed up (Vale Inco) told me about the bonus incentive, but now they want to take some of it away," he says. "I don’t know if I want to stay with a company like that any more."

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Builders in November probably broke ground on more U.S. homes, and gains in consumer prices were within the Federal Reserve’s long-term forecasts, economists said reports today may show.

Housing starts rose 8.5 percent to an annual rate of 574,000, according to the median forecast of 78 economists surveyed by Bloomberg News. A Labor Department report may show the cost of living climbed 0.4 percent last month.

Government tax credits, lower home prices and borrowing costs near record lows may stabilize sales and construction into the new year. A lack of inflation means Fed Chairman Ben S. Bernanke and his colleagues today will probably reiterate a pledge to keep the benchmark interest rate low for “an extended period” to ensure the economic recovery is sustained.

“The construction market is starting to come back,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “Residential construction is going to contribute to growth going forward.”

The Commerce Department’s housing report is due at 8:30 a.m. in Washington. Survey estimates ranged from 540,000 to 620,000.

Also at 8:30 a.m., the Labor Department’s report may show consumer prices compared with the same time last year rose 1.8 percent, according to the survey median.

Excluding food and energy costs, the so-called core index rose 0.1 percent after climbing 0.2 percent in October, according to the survey median. The gauge was probably up 1.8 percent in the 12 months to November, the survey showed.

Inflation Measure

Fed policy makers’ long-term forecast for their preferred measure of inflation, the Commerce Department index tied to consumer spending and excluding food and fuel, calls for gains in a range of 1.8 percent to 2 percent. That gauge, which is typically lower than the CPI, was up 1.4 percent in the 12 months to October guaranteed payday loans.

The housing report may also show building permits, a sign of future construction, increased 3.4 percent to a 570,000 annual pace, according to the survey.

Favorable weather probably also played a role in boosting construction last month, according to IHS Global Insight’s Newport. November was the third warmest in 115 years of record keeping, according to the National Climatic Data Center, giving builders an opportunity to keep working. By contrast, October was the wettest in the past century, contributing to the 11 percent drop in starts that month.

President Barack Obama’s extension last month of a first- time homebuyers’ tax credit of as much as $8,000 until April 30 will also give builders reason to speed up projects over the next couple of months.

Toll Brothers

Some companies are already seeing a turn. Toll Brothers Inc., the largest U.S. luxury homebuilder that reported a 42 percent surge in fiscal fourth-quarter orders, is anticipating a gradual recovery in the market, Chief Executive Officer Robert Toll said during a Bloomberg Television interview on Dec. 11.

“There is a pretty good reservoir of pent-up demand,” he said in New York City. “We don’t know how fast we’re coming back, but we do know we’re coming back.”

The Standard & Poor’s Homebuilder Supercomposite Index has gained 53 percent since March 9, compared with a 64 percent increase in the S&P 500 Index from a 12-year low reached that day.

Any sustained recovery will require gains in employment, economists said. The economy has lost 7.2 million jobs since the recession began, and economists surveyed by Bloomberg early this month forecast joblessness will average 10 percent next year.

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European industrial output fell for the first time in six months in October, led by a slump in demand for consumer goods. Employment declined in the third quarter.

Production in the economy of the 16 euro nations dropped 0.6 percent from September, when it gained 0.2 percent, the European Union’s statistics office in Luxembourg said today. Economists forecast a decline of 0.7 percent, the median of 30 estimates in a Bloomberg survey showed. Euro-region employment fell 0.5 percent in the third quarter from the previous three months, according to a separate report by the office.

The euro-region economy may struggle to gather strength after emerging from the worst recession in more than six decades in the third quarter as a stronger euro hurts exports just as rising unemployment erodes consumer spending. In Germany, Europe’s largest economy, investor confidence dropped in November.

“Today’s figures confirm the previous picture of an economy that is staggering, rather than bounding, back toward health,” said Colin Ellis, an economist at Daiwa Securities SMBC Europe Ltd. in London. “Further job losses are likely in the months ahead.”

European payrolls fell 2.1 percent in the third quarter from the year-earlier period, today’s data showed. October output dropped 11.1 percent from a year earlier after declining 12.8 percent in September.

Benchmark Bond

The euro fell against the dollar after the data and traded at $1.4648 at 10:35 a.m. in London, up 0.2 percent on the day, after reaching $1.4685 earlier. The yield on the German 10-year benchmark bond dropped 0.2 basis point to 3.18 percent.

European companies may keep spending plans on hold as the euro’s ascent makes their goods less competitive abroad. The single currency has gained 18 percent against the dollar since mid-February. Europe’s jobless rate has risen to 9.8 percent, the highest since December 1998.

“There are increasing signs that demand is weakening a little bit after an initial surge,” said Christoph Weil, an economist at Commerzbank AG in Frankfurt. “It’s a recovery with a foot on the brake one hour payday loan. Indicators will continue to point upward, but we’ll see a phase of disillusionment.”

European output of non-durable consumer goods dropped 1.6 percent in the month after rising 0.7 percent in September, today’s report showed. Production of durable consumer goods fell 1.4 percent, while energy output slipped 0.3 percent. Production of capital goods such as factory machinery was unchanged.

‘On Probation’

“I should like to warn against overly great optimism,” Martin Winterkorn, chief executive officer of Volkswagen AG, Europe’s largest carmaker, said earlier this month. “It would be premature now to call the end of the crisis. The recovery that’s emerging right now is a recovery on probation.”

The global economy is gathering strength after central banks cut interest rates to near zero and governments pledged $2 trillion in stimulus measures. The European Central Bank said on Dec. 3 it expects the euro region to expand about 0.8 percent in 2010 instead of a previously forecast 0.2 percent. In 2011, the economy may grow 1.2 percent, the bank said.

Daimler AG, the world’s second-largest maker of luxury cars, said on Dec. 7 that the Mercedes-Benz cars unit’s fourth- quarter sales will rise “significantly.” Alstom SA, which makes high-speed trains and energy-generation equipment, sees “some businesses doing better and they will eventually rebound,” CEO Patrick Kron said on Dec. 2.

Emergency Financing

ECB President Jean-Claude Trichet said on Dec. 3 that the bank will scale back its emergency financing operations next year after the economy emerged from the recession. The recovery will “likely be uneven,” he said that day.

“It’s very clear that there won’t be any easy and rapid recovery in the world economy,” ECB council member Erkki Liikanen told Bloomberg News in an interview on Dec. 11. The recovery is “slow and shaky.”

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Fenton — It has been nearly six months since the last Dodge Ram rolled out of the massive Chrysler plant here.

Now, on a weekday morning, there are perhaps two dozen cars in parking lots meant for thousands. The neat rows of shiny new pickups are gone. The smokestacks stand cold.

And six months after the closure of vast twin auto plants along Interstate 44, there is a growing conversation about just what to do them, how to take this empty symbol of St. Louis’ old economy and use it to help the new one.

It’s a tough question.

There are, after all, few uses for a one-story building the size of 86 football fields, surrounded by acres and acres of asphalt. Throw in environmental question marks and a weak economy, and the options grow even fewer.

But local leaders want to take a hard look at what those options might be.

St. Louis County is applying for a federal grant of nearly $1.6 million to establish a commission to study the site. With cash from the state, the county and the city of Fenton, officials are ready to launch a two-year, $2 million effort to plan incentives, cleanup, marketing and more.

"There’s a lot of things that could happen here," said County Executive Charlie Dooley. "How do we use this land to attract the business we want?"

That question is being asked by many cities these days. At least 20 U.S. auto plants have closed in the last two years, from Delaware to Detroit to St. Louis, and most of them face the same daunting challenges of age, size and a highly specialized use that is no longer needed.

"We’re kind of new in this game right now," said Kim Hill, who heads the Automotive Communities Program at the Center for Automotive Research in Ann Arbor, Mich. "Obviously, there are a lot of facilities that shut. There’s a lot of head-scratching going on.

Chrysler alone shuttered eight plants when it filed for bankruptcy in April. It spun them off into a separate company and now must sell them one by one under court supervision. A spokesman for the automaker wouldn’t discuss any specifics about the two Fenton plants but said they were being actively marketed. He acknowledged it would take some "creativity to get them back into productive use."

So far, just one Chrysler plant has found a buyer.

Last month, the University of Delaware closed on a $24.3 million deal for the automaker’s assembly plant in Newark, Del. The 272-acre site is across the street from the university’s campus, and the school hopes to expand there, said spokesman Dave Brond.

"It provides generations of capacity for us to grow," he said. "It adds 22 percent to the size of our campus."

The university hopes to take advantage of an Amtrak line that runs by the plant to build offices and stores around a rail station, and to partner with a medical school and a nearby Army base on research and teaching facilities.

"It was an opportunity we couldn’t pass up," Brond said.

Still, he expected it would be three or four years before any buildings were complete. And Delaware officials knew the closure was coming and started talking with Chrysler 20 months ago, eight months before the plant actually closed. That’s a contrast with St. Louis, where local leaders had focused mainly on getting Chrysler to keep operating in Fenton almost until the day of the shutdown.

That may have been a long shot, but given the thousands of good-paying jobs Chrysler supported here, it was one worth taking, said U.S. Rep. Russ Carnahan, D-St. Louis.

"Unfortunately that didn’t work," he said. "Now we’re at Plan B."

Some, such as Carnahan, say Plan B might be a next-generation automaker’s moving into Fenton, something like Fisker Automotive’s decision to buy a GM plant in Wilmington, Del., to build plug-in hybrid vehicles.

But those opportunities are few, and the longer the plant sits empty, the less appealing it becomes payday loan.

So when it comes to finding a new use, Dooley said, pretty much everything is on the table.

He will have the commission study cleanup costs and potential incentives for a developer, the prospect of breaking the 5-million-square-foot building up for several tenants, or knocking the thing down and starting over.

"We will do everything we possibly can to make something happen there," Dooley said. "That’s too much space to leave undone."

But one thing that won’t happen is the county’s taking over the site itself. It’s just too complicated, Dooley said. A private company will have to lead any project.

That’s what has happened in Hazelwood, where Ford Motor Co. closed a plant in 2006. California-based Panattoni Development Co. bought it two years later and has since demolished the 3.5-million-square-foot structure. It plans to turn the 160-acre site into Aviator Business Park, an 11-building, $200 million complex of office and warehouse space.

Site work is basically complete, said Mark Branstetter, a senior vice president in Panattoni’s Clayton office, and the company will start marketing it to tenants in early 2010. It will have some nice things to offer, he said: a good location on Lindbergh Boulevard near Lambert-St. Louis International Airport and Interstate 270, a rail line, tremendous power and water connections, and a 25-year tax abatement negotiated with the city of Hazelwood.

Even with all that, Branstetter said, it made no sense for Panattoni to keep the old buildings in place. The plan was always to tear them down.

"These buildings really aren’t made for any sort of adaptive reuse," he said. "They’re simply an envelope around a bunch of equipment. And once that equipment goes out, it has no use."

Then there’s what lies beneath the envelope.

Most auto plants made cars for decades. The ground underneath may include metals, dangerous chemicals, all sorts of things. Often, no one is quite sure what is there, or who would be liable for pollutants two or three owners down the road.

If the concrete slab is taken up, cleanup costs could easily run $10 million or $20 million, Hill said. That makes buying one without some sort of insurance or cleanup fund a risky proposition.

"That is probably the No. 1 issue in moving these properties," he said.

In Hazelwood, Branstetter said, Panattoni did extensive testing when it took over the property. It thinks it knows what is in the ground. In Delaware, Brond said, the state took on the risk and factored it into the price.

In Fenton, that is still in the future. It will be part of the task of Dooley’s commission — if it gets funding. The county executive said he hoped to hear on that by the end of the year. Carnahan, who is supporting the application, said it might be January. Either way, they want to get started.

Meanwhile, the bankruptcy court is in the process of hiring a broker to market the site, and several people close to the process say a number of potential buyers are taking a close look.

"There’s been enough interest that (advisers for the bankruptcy court) believe it’s going to be sold, probably sooner rather than later," said Fenton Mayor Dennis Hancock.

If it is, the challenge will become what happens next, and how this place that may well have put out its last-ever vehicle six months ago can find a new reason for being.

"The obstacle is in people believing that something is going to go there," Dooley said. "To a lot of people, a church is a church and a school is a school and a plant is a plant. We’ve got to figure out how to turn it into something else."

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China and other faster growing developing nations may lure more funds away from advanced economies for the next two decades, according to Goldman Sachs Group Inc.

Those flows will counter any impact on China’s capital markets from government measures aimed at curbing asset bubbles, said Thomas Deng, Goldman Sachs’ head of China strategy. Corporate profit growth in China, estimated at between 20 percent and 30 percent on average next year, will fuel an equity market rally, said Deng. He recommended buying shares in China’s auto and healthcare industries, and companies with large land reserves in Shanghai ahead of next year’s World Expo.

“Western countries’ money is moving to oriental countries, and that means developed world money is flowing into developing countries,” Deng told reporters in Hong Kong yesterday. “This will be a trend in the next 10 to 20 years.”

Developing economies will expand 5.1 percent in 2010 compared with 1.3 percent growth in advanced nations, according to the International Monetary Fund. Asia-excluding-Japan equity funds posted net inflows of $975 million in the week ended Nov. 25, bringing the total for the year to $18 billion, EPFR Global said on Dec. 1. Flows into China equity funds reached a year-to- date high of $827 million, according to EPFR, which tracks funds holding $10 trillion worldwide.

China Index Forecasts

Goldman Sachs forecasts Hong Kong’s Hang Seng China Enterprises Index will reach 17,000 by the end of next year, according to Deng. That’s higher than his previous forecast of 16,800 in an Oct. 29 report and the gauge’s closing level yesterday of 13,341.17.

China’s CSI 300 Index will hit 4,300 by the end of 2010, Deng said. Hong Kong’s Hang Seng Index will climb to about 27,000 next year, Timothy Moe, an analyst at the brokerage, said at the same media briefing. The CSI 300 closed at 3,957.33 and the Hang Seng at 22,289.57 yesterday.

An unprecedented $1.3 trillion of loans this year and a $586 billion stimulus package pushed China’s economy to record 8.9 percent growth in the third quarter, the fastest expansion in a year. The credit boom helped the Shanghai Composite Index rally 80 percent this year and Hong Kong’s H-share index surge 69 percent. Home prices in 70 major cities in China climbed at the fastest pace in 14 months in October, the government reported Nov. 10.

Real estate in China is “slightly expensive, but not a bubble,” Deng said. The nation needs a gradual exit strategy to prevent a bubble, he said.

Bubble Concerns

China is among the emerging markets facing risks of property and commodity market bubbles, central bank adviser Fan Gang said Nov. 18, echoing the World Bank, which said last month that the nation needs to tackle the “misallocation of resources.” China’s five largest banks have submitted plans to regulators for raising money after record lending eroded their capital, according to four people with knowledge of the matter.

China’s economy will expand 9 percent this year and 11 percent in 2010, mainly driven by domestic demand and will translate into corporate earnings, Deng said.

Investors should also favor companies that will sell shares in Shanghai for the first time next year, Deng said yesterday. China Mobile Ltd., Cnooc Ltd. and China Resources Enterprise Ltd. were named as examples of companies that would likely perform well in Hong Kong ahead of their mainland listings, Deng wrote in his Oct. 29 report.

“Liquidity is favorable to Chinese shares, particularly the Hong Kong-listed Chinese shares,” the analyst said.

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Despite rising fears of the U.S. falling into another recession, a survey of top economists found them more optimistic about growth in the fourth quarter of this year and throughout 2010. But job seekers will have to wait a little longer for employers to start hiring again.

According to the November survey by the National Association of Business Economics, 48 top forecasters now expect the economy to grow at a 3% annual rate during the last three months of this year, up from their prediction of 2.4% growth in October.

The economists also raised their forecast for growth during every quarter of 2010. They now expect a 3.2% rise in economic activity over the course of the next four quarters, up from their previous estimate of 3%.

But the outlook isn’t as good for the record 31 million Americans unable to find full-time jobs.

The economists pushed back their expectations for when U.S. payrolls will start to grow again to the second quarter of 2010. They previously had predicted a gain of 12,000 jobs a month in the first quarter.

The nation’s unemployment rate hit 10.2% in October — higher than expected. The continued problems in the labor market, combined with disappointing reports about housing and retail sales recently, have raised concerns about a so-called "double dip" recession pay day advance.

Despite this, the majority of experts surveyed by NABE said they felt the economy was on track and did not additional help from the government.

Asked if there should be another round of economic stimulus, only 15% said that would be appropriate, while 40% said they would leave the stimulus package approved early this year unchanged.

The other 45% said they would like to see a cut in the stimulus money already approved but not yet spent. Along those lines, 55% of the economists said they are extremely concerned about the amount of federal debt over the next five years

Still, the economists surveyed were slightly more optimistic about a recovery in housing and the likelihood that consumer spending would increase. They were also more bullish about the stock market, forecasting that the S&P 500 will reach 1,199 at the end of 2010, a gain of about 10% from Friday’s closing level. 

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Wholesale prices in the U.S. increased in October for just the second time in the past four months, indicating inflation will not be a concern for the Federal Reserve.

The 0.3 percent increase in prices paid to factories, farmers and other producers was smaller than forecast and followed a 0.6 percent drop in September, according to Labor Department data released today in Washington. Excluding food and fuel, so-called core prices unexpectedly dropped 0.6 percent, capping the smallest 12-month gain in five years.

Near-record excess capacity will probably prevent suppliers from passing on the recent rebound in commodity costs for months to come. The report underpins Fed expectations, reiterated yesterday by Chairman Ben S. Bernanke, that inflation will be “subdued,’ allowing policy makers to keep interest rates low for a long time.

“Core measures of inflation continue to be remarkably tranquil, if not trending downward,” Richard DeKaser, chief economist at Woodley Park Research in Washington, said before the report. “I think this gives the Fed all the leeway they require to stand on the sidelines.”

Economists forecast prices would rise 0.5 percent, according to the median of 73 projections in a Bloomberg News survey. Estimates ranged from no change to an increase of 1.3 percent.

Excluding Food, Fuel

The decrease in prices excluding food and energy last month was the biggest since July 2006. The core measure was forecast to rise 0.1 percent after a 0.1 percent drop a month earlier, according to the Bloomberg News survey.

Compared with a year earlier, companies paid 1.9 percent less for goods today’s report showed. Core costs were up 0.7 percent from a year earlier, the smallest 12-month gain since March 2004.

Prices overall were buoyed by 1.6 percent increases in both food and fuel as the cost of everything from gasoline to vegetables and fruit climbed.

Declining prices of light trucks and passenger cars, which reflected the switch to the 2010 model year, pushed core costs lower.

Producer prices are one of three monthly inflation gauges reported by the Labor Department installment payday loans. The cost of imported goods rose 0.7 percent in October and increased 0.4 percent excluding energy. The government is scheduled to release its consumer price report tomorrow.

‘Subdued’ Inflation

“Inflation seems likely to remain subdued for some time,” Bernanke said yesterday in a speech to the Economic Club of New York. He also said “significant economic challenges remain.”

One challenge is trying to absorb excess capacity. The share of plants in use reached 68.3 percent in June, the lowest level since records began in 1967, according to Fed data. Economists track operating rates to gauge factories’ ability to produce goods with existing resources. Lower rates reduce the risk of bottlenecks that can force prices higher.

Fed policy makers this month reiterated plans to keep interest rates near zero for “an extended period” and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline.

Some companies still see pressure to hold down costs. Wal- Mart Stores Inc. Chief Executive Officer Michael T. Durke said the company continues “to experience ongoing deflation across our businesses.”

Falling Prices

Huntsman Corp., a chemical maker, said Nov. 4 that third- quarter sales fell 23 percent to $2.11 billion as a 3 percent increase in volumes could not make up for a 25 percent drop in prices.

Nonetheless, a falling dollar and expanding global economies are forcing up commodity costs.

The U.S. last week raised its forecast for crude-oil prices this year and next on speculation that demand will rise as the global economy improves.

“Commodity prices are responding to the weak dollar by rising but core measures are responding to economic slack,” Woodley Park Research’s DeKaser said.

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