Current Events in June 2015

Lots of things aren't cool anymore and one of them is dieting. When's the last time you heard someone say they were on a diet? Eating fresh and local, going gluten-free, becoming vegan-ish -- sure. But dieting? No.

This has the folks at Lean Cuisine worried. After all, they basically make diet dinners. And so, after months of hungering for a solution, Lean Cuisine is swearing off the weight-loss pitch and converting its advertising and "branding," as they say in the biz, to more of a foodie approach.

This is somewhat complicated, though. After all, a fresh and local pitch gets a little tricky when your product is, well, frozen. Of course, frozen food really is just as nutritious as freshly picked in most cases but that's not really a discussion you can have in a 30-second commercial.

Weigh This

So Lean Cuisine will be talking instead about its customers' lives, their aspirations and so forth, trying to mold itself in their image. It's launching a new campaign called "Feed Your Phenomenal," which Ad Age tells us will celebrate the exceptional lives today's women lead. (Lean Cuisine is seen as a product that appeals to women. Men who buy it have to hide it under a newspaper at the check-out counter to avoid having couscous kicked in their face).

An accompanying social media campaign is called "Weigh This" and encourages women to weigh their accomplishments. Is this a little too cute? Maybe, but stranger campaigns have worked and it's not really a time for the frozen food business to sit around doing nothing. Their situation is about as bad as those faced by domestic beers and newspapers.

It's not just Nestle's Lean Cuisine that's suffering falling sales. The entire frozen food segment is being dissed by shoppers who now hang out in the fresh produce section. Talk about climate change -- Kellogg, General Mills, ConAgra and Nestle are all feeling the heat.

As their market melts away, the big manufacturers have been running a campaign called "Frozen. How Fresh Stays Fresh." Lean Cuisine is borrowing from this campaign, using such phrases as "freshly made, simply frozen."

Pending home sales are at levels unseen since April 2006.

According to the National Association of Realtors (NAR) the Pending Home Sales Index (PHSI), which is based on contract signings, climbed 0.9% in May to 112.6, putting it 10.4% above its year-ago level.

The index has now increased year-over-year for 9 consecutive months and is at its highest level in 9 years.

Off and running

Contract activity rose again in May for the fifth straight month, increasing the likelihood that home sales are off to their best year since the downturn. "The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring," said Lawrence Yun, NAR chief economist. "It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive."

At the same time, Yun warns that this year's stronger sales amidst similar housing supply levels from a year ago have caused home prices to rise to an unhealthy and unsustainable pace.

"Housing affordability remains a pressing issue with home-price growth increasing around 4 times the pace of wages," adds Yun. "Without meaningful gains in new and existing supply, there's no question the goalpost will move further away for many renters wanting to become homeowners."

Regional breakdown

• The PHSI in the Northeast surged 6.3% to 93.9 in May, and is now 10.6% above a year ago.
• The index in the West rose 2.2 % to 104.5, and is 13.0% above May 2014.
• In the Midwest the index dipped 0.6% to 111.4, but still shows a 7.8% year-over-year gain.
• Pending home sales in the South were down 0.8% to an index of 127.8 but are up 10.6% from the same time last year.  

Retailers call it “shrink.” What it is -- actually -- is stealing. And its a serious and expensive problem.

According to a new study from NRF Protect, the retail industry’s largest loss prevention event, retailers lose billions of dollars to shoplifting, employee and vendor theft and administrative error – collectively known as inventory shrink.

The National Retail Federation/University of Florida National Retail Security Survey (NRSS) found that retailers say inventory shrink averaged 1.38% of retail sales -- or $44 billion -- in 2014. The report was sponsored by The Retail Equation.

Specifically, retailers surveyed estimate shoplifting accounted for the largest part of reported shrink last year -- 38% -- followed by employee/internal theft (34.5%), administrative and paperwork errors (16.5%), vendor fraud or error (6.8%) and unknown loss (6.1%).

“Retail loss prevention professionals have one of the hardest jobs in the industry -- protecting their customers, employees and merchandise from the threat of harm and fraud, and the results of this survey prove the enormity of their task,” said National Retail Federation President and CEO Matthew Shay. “Retailers will continue to review best practices and work to better educate decision makers in Washington about the burdens these crimes place on consumers, retail companies, their employees and the economy.”

No big deal?

“A common misperception about shoplifting is that retailers can ‘afford’ the loss of a candy bar or a pair of jeans, but the truth is that the industry loses billions of dollars each year at the hands of callous criminals that could be put towards human capital, promotions and other necessary business operations,” said NRF Vice President of Loss Prevention Bob Moraca. “Though we are encouraged by the partnerships forged with law enforcement over the years and advances in technology that will help deter a crime before it happens, criminals continue to thwart much of the progress retailers have made thus far.”

When it comes to loss prevention budgets, 39.4% of those surveyed say their budget for 2015 increased over last year; just over one-third (36.6%) said their budgets would be similar to what they were last year -- leaving 23.9% of respondents with decreased resources.

Dr. Richard Hollinger, criminology professor at the University of Florida and lead author of the NRSS for the past 24 years, notes this year’s shrink percentage is the lowest seen in the survey’s history.

“Loss prevention professionals have done a commendable job of elevating the issue of shrink and retail fraud within their own companies and with industry insiders and the public, but the battle wages on to find ways to contain further losses to their businesses,” said Hollinger. “As retail issues like shrink and security become more complex, retailers should continue to work together as an industry to ensure continued partnerships, with the end goal of finding the most effective asset protection solutions possible.”

Whole Foods Market is recalling packaged raw macadamia nuts.

The product may be contaminated with Salmonella.

No illnesses have been reported to-date.

The recalled product was labeled as "Whole Foods Market Raw Macadamia Nuts, and packaged in 11-oz. plastic tubs. It has has best-by dates of March 19, 2016, through June 21, 2016, a UPC code of 0-76958-62059-1.

The recalled item was sold in Whole Foods Market Stores in Arkansas, Arizona, California, Colorado, Hawaii, Kansas, Louisiana, New Mexico, Nevada, Oklahoma, Texas and Utah.

Customers who purchased this product should discard it and may bring in their receipt for a full refund.

Consumers with questions may contact Whole Foods Market customer service, 512-477-5566 ext. 20060, Monday – Friday 9:00am – 5:00pm, CDT.

Today, the Texas Supreme Court struck down a state regulation requiring professional eyebrow-threaders to first get a cosmetology license requiring 750 hours of cosmetology training (with no focus on eyebrow threading) and pass two cosmetology exams (which ask nothing about eyebrow threading).

The court ruled 6-3 in favor of defendant Ash Patel, when deciding Patel v. Texas Department of Licensing and Regulation (TDLR). The non-profit Institute for Justice, which joined Patel in his lawsuit, said in a statement today that:

The case began in 2008, when TDLR suddenly decided that eyebrow threading—a traditional South Asian practice that uses only cotton thread to remove eyebrow hair—required the same license that conventional cosmetologists need for techniques like waxing, makeup and chemical peels. TDLR issued $2,000 penalties to threaders across the state and ordered them to quit their jobs until they completed coursework in private beauty schools costing between $7,000 and $22,000. None of this coursework is required to address eyebrow threading and the state’s cosmetology examinations do not require any knowledge of threading.

Three threaders and two threading business owners joined with the Institute for Justice and sued TDLR in 2009, arguing that the Texas Constitution prohibits useless and expensive training requirements that do nothing to protect the public.

This is not the first pointless cosmetology licensing law to be overturned in Texas this year, with help from the Institute for Justice. In January, a federal judge ruled against state requirements mandating that professional hairbraiders meet the same high licensing standards as barbers. In April, the state House of Representatives voted unanimously to deregulate hairbraiding, and in June the governor signed the braiding bill into law.

At the time, an IJ attorney called the ruling a victory for hairbraiders in the state, but added “occupational licensing has gone too far when 1 in 3 Texans are forced to obtain a government license to simply go to work each morning.”

Now that the Supreme Court has approved gay marriage nationwide, there may be less demand for gay-to-straight conversion therapies, which could be a boon for consumers who say they’ve thrown their money away trying to transform their sexual preferences or those of their family members.

Just yesterday in New Jersey, a jury needed only a few hours to find that JONAH -- Jews Offering New Alternatives for Healing -- made gross misrepresentations in advertising its program and awarded damages of $72,000. Three gay men and their parents had filed suit against JONAH, basically claiming it had committed consumer fraud.

“My clients needed help,” said James Bromley, a lawyer from the Southern Poverty Law Center, which represented the plaintiffs. “They went to JONAH. JONAH lied, and JONAH made it worse,” Religion News Service reported.

Not a mental illness

The defense argued that JONAH’s ideology and methods were both scientific and based on Jewish values. But that argument was undermined by a February ruling in which, Judge Peter Bariso held that it was a violation of the consumer fraud act to call homosexuality a mental illness or disorder -- thought to be the first such ruling in the country.

JONAH’s program included weekend retreats called “journey into manhood” weekends which allegedly included standing naked in front of a mirror while touching one’s genitals. JONAH insists its program works and says it will appeal the jury’s verdict.

Several states already prohibit licensed therapists from providing “conversion therapy” to minors and a bill pending in Congress would classify commercial conversion therapy and advertising that claims to change sexual orientation and gender identity as fraud.

Alcohol consumption has become widespread in the United States. Recent statistics show that 71% of adult Americans consume at least one alcoholic beverage per year. 7.2% of Americans have had an alcohol-related disorder, such as alcoholism.

Support groups and treatments are available to those who want to get better, but one particular social network is gaining popularity rapidly due to its rewarding features and ease of use.

Reddit is a popular entertainment, social networking, and news site where users come to share online content, ideas, and opinions on a plethora of different topics. The site is divided into sections called subreddits, so that users can find the topics that they want to read about or discuss. Each subreddit can be easily accessed by typing in the URL www.reddit.com, followed by “r/” and whatever topic they want to find.

Share personal struggles and give support

One particular subreddit called “r/stopdrinking” has accrued a massive following since its inception. It allows users to share their personal struggles with alcohol dependence and give support to each other. Researchers at recovery.org analyzed the top posts for the group, including interactions between members, and during which times of the year the site had the most traffic.

They found that the holidays seemed to provide the most challenges for users using the subreddit. There is often a temptation to drink at family gatherings and holiday parties, and the number of posts can vary greatly on those days. Holidays such as the Fourth of July, Christmas, and New Years can be especially hard on those suffering from alcoholism. A full breakdown of each holiday’s effect on the subreddit can be viewed on the researcher’s web page. 

The number of members on the subreddit has continued to grow. From October of 2012 to January of 2015, the group more than quadrupled in size. It now has nearly 28,000 readers who utilize it for support.

Fantastic Features

The rise in numbers may be due to the features that the subreddit offers. Each user has a badge that tracks the number of days that they have gone without a drink, which can be a strong deterrent to relapsing. There are also real-time chat features and surveys that members can take to gain support and identify their particular weaknesses.

The site is easily accessible from any computer or mobile device. It gives users assurance that they can access support at any time, day or night. “The subreddit r/StopDrinking is an excellent place to turn to for support when you need it most. Unlike meetings, this is not only a place where alcoholics can turn to discuss their issues with total strangers in a truly anonymous fashion, but it’s also a place where people can get almost instantaneous support at any hour,” the researchers said.

Recovery.org offers its own recovery programs, including live assistance and personalized recovery solutions. They believe that support communities can play a vital role in helping people maintain their sobriety. “After going through any of our recovery programs, support communities, such as r/StopDrinking, are wonderful tools to help you maintain a sober, healthy lifestyle.”

Humans aren't very good drivers but maybe computers won't be much better. Everyone's been assuring us that autonomous cars like those being designed by Google will be oh so much better than the ones with a breathing carbon unit behind the wheel.

But on San Antonio Road in Palo Alto, in the heart of Silicon Valley, a self-driving Audi Q5 being developed by Delphi Automotive was motoring along minding its own business Tuesday when a Google-driven Lexus SUV cut it off.

Delphi's software does not yet include such responses as laying on the horn and extending a certain digit out the window but fortunately, one of those soon-to-be-obsolete humans was on board and was able to take the wheel and avoid a fender bender, or worse, according to Reuters as interpreted by Business Insider, the Washington Post and others. 

(Fewer and fewer events are witnessed by human reporters these days but thanks to Google, we're better than ever at looking over each other's shoulder. When a tree falls in the forest, we may not be there to hear it but we will quickly report others' accounts.)

There have been several -- at least 11 -- fender benders on California streets since self-driving cars became sort of legal there. In each case, Google and the DMV have said, the self-driving car wasn't at fault, although consumer groups have insisted Google needs to release more information about those accidents. 

But what happens when two self-driving cars collide? Will it bring new meaning to the phrase "no-fault?" That hasn't happened yet, although Tuesday's incident suggests it won't be long now.

Toyota Motor Engineering & Manufacturing is recalling 3,013 model year 2015 Lexus NX200t vehicles manufactured December 18, 2014, to February 2, 2015.

These vehicles are equipped with an Anti-Lock Braking System (ABS), Traction Control System (TRAC), and Vehicle Stability Control System (VSC) which are controlled by an ABS actuator. A component inside the actuator may have been damaged during its assembly and may cause the actuator to not function properly.

Under some driving conditions, when the ABS is activated, the malfunctioning ABS actuator could cause a loss of vehicle stability, increasing the risk of a crash.

Toyota will notify owners, and dealers will inspect and replace the ABS actuator, as necessary, free of charge. The recall is expected to begin in early July 2015.

Owners may contact Toyota customer service at 1-800-331-4331.

Mazda North American Operations is recalling  444,907 model year 2003-2008 Mazda6 vehicles manufactured May 29, 2002, to May 5, 2008; 2004-2008 RX-8 vehicles manufactured April 10, 2003, to February 18, 2008; and 2006-2007 Mazdaspeed6 vehicles manufactured August 4, 2005, to June 29, 2007.

The recalled vehicles are equipped with a dual-stage driver front air bag that may be susceptible to moisture intrusion and other factors, including manufacturing variability that, over time, could cause the inflator to rupture.

In the event of a crash necessitating deployment of the air bag, the inflator could rupture with metal fragments striking the driver or other occupants resulting in serious injury or death

Mazda will notify owners, and dealers will replace the driver's frontal air bag inflator, free of charge. The manufacturer has not yet provided a notification schedule.

Owners may contact Mazda customer service at 1-800-222-5500. Mazda's number for this recall is 8215F.

Northern Tool + Equipment Company of Fredericksburg, Va., is recalling about 7,000 Little Digger toys.

The red paint on the Little Digger toy frame contains excessive levels of lead, which is prohibited under federal law.

No incidents or injuries have been reported.

This recall involves Wel-Bilt brand Little Diggers, Item # 28303. It is a stationary scooper toy with moveable poles that allow the child to scoop items up into the bucket. The item has a red powder-coated steel frame with a black plastic seat and black adjustable scoop with two yellow plastic grips on the poles and a six-sided frame base.

The toy is about 17 inches high and 25 inches wide.It has a manufacture date of August 2014, through June 2015.Wel-Bilt is printed on the front of the bucket and the manufacture date is written on the tracking label located on the bucket.  The item number #28303 is printed only on the toy’s packaging

The toy, manufactured in China, was sold at Northern Tool + Equipment retail stores and catalogs and online at www.amazon.com, www.kotulas.com  andwww.northerntool.com from August 2014, through June 2015, for about $30.

Consumers should immediately stop using the Little Digger Toy, put it out of reach of children and contact the firm for a full refund.

Consumers may contactNorthern Tool + Equipment toll free at (888) 518-0339 from 7 a.m. to 6 p.m., CT, Monday through Friday.

In the seven years since the financial crisis home ownership rates have plunged. In its latest report on The State of U.S. Housing, the Harvard Joint Center for Housing Studies notes that the home ownership rate has dropped to 64.5%, a 20-year low.

That, the study says, has had a profound impact on rents. The share of renters in the 25-34 age group who pay more than 30% of their incomes for housing increased from 40% to 45% last year.

“With rents rising and incomes well below pre-recession levels, though, the number of housing cost-burdened renters set another record, far surpassing public efforts to provide affordable housing,” the authors write. And despite the rebound in much of the nation, a number of minority and low income neighborhoods remain severely distressed.”

Bad timing for gen-X

Generation X, consumers born between 1965 and 1984, is among the most distressed, since the financial crisis arrived just as it was entering its prime first-time home-buying years. As a result, home ownership rates among gen-Xers — now mostly in the 35–44 and 45–54 year-old age groups — have fallen further than those of any other age group. They stand 4–5 percentage points below rates among same-aged households 20 years ago.

Millennials have joined them, competing for increasingly expensive rental property. That has allowed landlords to consistently raise rents year after year.

Since incomes have remained stagnant, an increasing number of renters are feeling the squeeze. The report found that nearly 20% of renters earning $45,000 to $75,000 a year are among those spending 30% or more of their monthly income on rent.

Home-buying alternative

High rent may be prompting Millennials to get serious about home ownership. At least that's how Realtor.com is interpreting the results of a consumer behavior survey it conducted. They polled 12,000 people in the first half of this year.

Realtor.com chief economist Jonathan Smoke says Millennials are showing more positive home-buying sentiment.

“Despite the slow indicators we saw earlier this year, 2015 is on pace to be one of the best years for housing since 2006 due to strong sales and higher than predicted home prices,” Smoke said. “Additionally, we’re observing an uptick in Millennial traffic and sentiment that we expect will result in more first-time home buyer sales in the later part of the year.”

Since the beginning of the year, Realtor.com has counted a slight increase in older Millennials – between the ages of 25 and 34 years old – visiting its website looking at homes for sale. Traffic appeared to build throughout the first 6 months of the year.

In the first half of June, Realtor.com says its share of traffic represented by older Millennials looking for a home to purchase increased to 23%, as compared to 21% in January. In mid-June, it also saw its share of those looking for property to rent fall to 20%, from 26% in January.

Buying not that easy

Shopping, of course, isn't the same as buying - and plenty of obstacles remain for younger consumers who want to buy their first home, not least of which is saving for a down payment.

Qualifying for a mortgage is also harder to do than in the pre-bubble years. Buyers need good credit scores, documented income in the same industry for at least 2 years, and a comfortable debt to income ratio. Those who meet those requirements may still find the loan process arduous and frustrating.

Yet hope springs eternal. The survey in mid-June found that 65% of 25-34 year-olds indicated that they intend to buy a home within 3 months, up from 54% in January.

As recalls of cars equipped with Takata airbags mount, Takata Corp. President Shigehisa Takada has delivered a personal apology for the deaths and injuries that have resulted from his products' defects.

Takada has previously apologized in written statements, but following the company's annual shareholders meeting in Tokyo, the executive appeared at a press briefing to say his company is reviewing several different ways to help victims, including a fund to compensate them.

“I apologize for not having been able to communicate directly earlier, and also apologize for people who died or were injured,” Takada said. “I feel sorry our products hurt customers, despite the fact that we are a supplier of safety products.”

Supposed to save lives

Airbags, of course, are designed to save lives. In high-impact crashes they deploy with sudden force, providing a cushion of air to protect occupants. In over 30 years of use they have been shown to be extremely effective and are now standard safety equipment on all vehicles.

The problem with the Takata airbag is that more than air comes shooting out of them when they deploy. Bits of loose metal can also be fired from the inflator, with incredible force, into the bodies of the occupants. These bits of shrapnel have been blamed for 8 deaths and hundreds of injuries.

The family of the eighth victim of a lethal airbag, 26-year old Jewel Brangman, has sued a rental car company, claiming it ignored recall notices for the car in which the victim died. The car had been recalled back in 2009 but its owner, Sunset Car Rental of San Diego, had never bothered to take the car in to have the recall carried out, the suit alleges.

More Toyotas recalled

Meanwhile, more cars with Takata airbags are receiving recall notices. Toyota has announced it is expanding its recall, adding approximately 1,365,000 additional 2003-2007 Corolla and Corolla Matrix; 2005-2006 Tundra; 2005-2007 Sequoia; 2003-2007 Lexus SC430 vehicles to the list.

That makes nearly 3 million Toyota and Lexus vehicles with Takata airbags recalled so far.

While Toyota is a major Takata customer, so is Honda, whose total number of recalls thus far has outpaced Toyota's. In fact, the Takata airbag is so widespread that as many as 30 million cars on U.S. highways, from a wide range of automakers, have received recall notices.

Meanwhile, we don't really know why the inflators on Takata airbags are prone to firing bits of metal when they deploy. Takada told his company's shareholders an internal investigation so far has not come up with a definitive answer.

Attempting to lose weight is a struggle for many people. Controlling what you eat and how you live can be very difficult, but a new study suggests that weighing yourself every day could be helpful.

The initial phase of the study took place over a year. Researchers gathered 162 participants and told them that they were allowed to use whatever means they wished to lose weight. The participants each had a goal of losing 10 percent of their initial body weight by the end of the first year.

Maintaining weight loss

Members of the control group were given no additional directions, but the experimental group, which consisted of 88 people, were each given a scale. Researchers asked the latter group to weigh themselves every day and track their progress on a chart.

The experimental group outperformed the control group in its weight loss goal. Those who weighed themselves and recorded the results lost an average of three percent of their body weight in the first year. Those who did not receive additional directions did not see any significant change in their weight, on average.

After the first year, the experimental group continued to outperform the control group. They maintained their weight loss more effectively over the course of the following year. “There are thousands of ways to lose weight … Losing weight is not the problem, but to maintain that weight loss is the problem,” said David Levitsky, an author of the study and professor of nutrition and psychology at Cornell University.

Of the two groups, those that weighed themselves daily were more than twice as successful at losing at least five percent of their initial weight during the first year (29% vs. 11%). Those that reached the goal of losing 10 percent of their initial body weight were also stacked in the experimental group’s favor (9% vs. 5%).

Losing weight is still a challenge

These results show that losing weight is still a challenge, but that regularly stepping on the scale can make a difference. It is not clear why this is the case, but researchers theorize that those that weigh themselves every day are more conscious of the food choices they make daily.

“If you find what you did yesterday made you gain weight, I think that acts as a negative reinforcement,” said Levitsky. Weighing yourself can also make you more likely to skip dessert or control your portion size more effectively.

The study was published in the Journal of Obesity on June 17^th. 

U.S. consumers saw their incomes rise in May -- and they ran right out and spent the money.

Figures released by the Commerce Department show personal income rose 0.5%, or $79.0 billion, last month, with disposable personal income (DPI) also up 0.5% or $65.5 billion.

Personal consumption expenditures (PCE) jumped 0.9%, or $105.9 billion.

Wages and salaries were up $37.1 billion in May, compared with an increase of $21.6 billion the previous month, with private wages and salaries increasing $34.8 billion, and government wages and salaries up $2.4 billion.

Personal outlays and saving

Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- shot up $106.9 billion in May, compared with an increase of $9.5 billion in April

Personal saving -- DPI less personal outlays -- was $685.5 billion in May, compared with $726.9 billion in April. The personal saving rate -- personal saving as a percentage of DPI -- was 5.1% in May, compared with 5.4% in April.

The complete income and spending report is available on the Commerce Department website.

Initial jobless claims

The number of workers applying for first-time unemployment benefits inched higher last week.

The Labor Department (DOL) reports initial applications for jobless claims rose by 3,000 in the week ending June 20 to a seasonally adjusted was 271,000. The previous week's level was revised up by 1,000 to 268,000.

DOL says no special factors affected the initial claims

The 4-week moving average, which economists consider a more accurate gauge of the labor market, came in at 273,750 -- a drop of 3,250 from the previous week's average, which was revised up by 250. 

The full report may be found on the DOL website.