Current Events in July 2015

It wasn't by much, but economic activity in the non-manufacturing, or services sector, of the economy posted its 65th consecutive month of growth in June.

According to the Institute for Supply Management's (ISM) Non-Manufacturing Business Survey Committee, the Non-Manufacturing Index (NMI) registered 56% last month, up 0.3% from May.

The Non-Manufacturing Business Activity Index rose 2.0% to 61.5%, reflecting growth for the 71st consecutive month at a faster rate. The New Orders Index was up 0.4%, while the Employment Index fell 2.6%. Still the reading of 52.7% indicates growth for the 16th consecutive month. The Prices Index was down 2.9% to 53%, indicating prices increased in June for the fourth consecutive month.

Committee Chairman Anthony Nieves says the majority of respondents’ comments are “positive about business conditions and the economy.”

Gainers and losers

The 15 non-manufacturing industries reporting growth in June -- listed in order -- were:

1. Arts, Entertainment & Recreation;
2. Real Estate, Rental & Leasing;
3. Accommodation & Food Services;
4. Transportation & Warehousing;
5. Management of Companies & Support Services;
6. Health Care & Social Assistance;
7. Public Administration;
8. Agriculture, Forestry, Fishing & Hunting;
9. Finance & Insurance;
10. Professional, Scientific & Technical Services;
11. Educational Services;
12. Wholesale Trade;
13. Retail Trade;
14. Utilities; and
15. Information.

The three industries reporting contraction in June were:

1. Mining;
2. Other Services; and
3. Construction.

Dollar stores are big business, and discount retailers Dollar Tree and Family Dollar will be even bigger now that the Federal Trade Commission has approved Dollar Tree's proposed $9.2 billion acquisition of Family Dollar.

But 330 Family Dollar stores will be spun off to private equity firm Sycamore Partners to mollify the Federal Trade Commission, which charged that the deal as originally proposed would be anticompetitive.  

The stores to be sold will be re-named “Dollar Express” and will become a part of a chain of deep discount stores being launched by Sycamore Partners.

Dollar Tree and Family Dollar sell deeply discounted general merchandise items – including food, home products, apparel and accessories, and seasonal items – at prices below $10 (in the case of stores under the “Dollar Tree” banner, all items are priced at $1.00 or less).

Head-to-head

The stores currently compete head-to-head in terms of price, product assortment, and quality, as well as location and customer service in local markets nationwide. The FTC identified 330 stores in local markets from 35 states where competition would be lost if the acquisition went forward as proposed.

Seventeen states joined in the action, including Vermont, ​where Attorney General Bill Sorrell said: “It is important to maintain competition in Vermont. The sale of two Family Dollar stores, one in in Newport and the other in Morrisville, to Dollar Express will insure a competitive market because those areas will now be served by two independently owned stores.” 

Since the housing bust gathered momentum in early 2009, buyers paying cash instead of taking out a mortgage have made up a bigger share on each month's home sales.

Generally, these buyers are investors – either “mom and pop” investors flipping one house at a time or hedge funds buying up large blocks of homes and converting them to rental property.

Needless to say, this has had a distorting effect on the housing market.

Trend shifts

In May, the trend appeared to shift. RealtyTrac, a foreclosure marketing company, reports 24.6% of all single family home and condo sales in May were all-cash purchases, down from 28.5% in the previous month and down from 30.4% a year ago.

It's the lowest percentage of all-cash buyers since November 2009 and well below the 42.2% level of February 2011. In fact, it was very close to the long-term average going back to 2000 – 24.8%.

What's the significance? The numbers suggest fewer investors are in the housing market and are being replaced by people who are taking out mortgages and who plan to live in the houses they buy. Industry professionals say it suggests that balance is beginning to return to the market.

“For the potential first time homebuyer or move up buyer this is a good time to move ahead,” said Craig King, COO at Chase International brokerage, covering the Lake Tahoe and Reno, Nevada, markets. “Interest rates remain historically low, and the outlook for price appreciation is great.

"The competition in the marketplace is also different. While inventory is tight many investors have dropped out of the market and cash deals are not as prevalent as they were. Even in multi-offer situations much has been equalized. This is great news for first time buyers,” King said.

But home prices have continued to rise in recent months, a product of tighter-than-normal inventory and fewer foreclosures, which tend to drag down the average price. According to RealtyTrac, the median sale price of residential properties — including both distressed and non-distressed properties — that sold in May was $173,900, which is up 4% from the previous month.

“Distressed sales in May represented a significantly smaller share of a growing home sales pie as an increasing number of non-distressed sellers continued to cash out on the equity they’ve gained over the last 3 years of rising home prices,” said Daren Blomquist, vice president at RealtyTrac.

43% discount

But distressed sales are still out there and represent a significant savings for buyers. Blomquist says a distressed property sells at a median discount of 43% to a non-distressed property.

Blomquist also says the transition from an investor-driven, cash-is-king market to one more dependent on traditional buyers is a healthy sign.

“Sales volume has been increasing over the last few months and is on track in 2015 to hit the highest level we’ve seen since 2006,” he said.

As sales rise, prices are beginning to level off because the number of homes for sale has slowly begun to increase. RealtyTrac says that tips the market balance more in favor of buyers – at least those who can qualify for a mortgage.  

Ford Motor Company recalling approximately 433,000 model year 2015 Focus vehicles from June 17, 2014, through June 12, 2015; 2015 C-MAX vehicles built from April 22, 2014, through June 12, 2015; and 2015 Escape vehicles built from April 1, 2014, through June 12, 2015.

It could be possible for the engine to continue to run after turning the ignition key to the “off” position and removing the key, or after pressing the Engine Start/Stop button.

Ford says it is not aware of any accidents or injuries associated with this issue.

Dealers will update the body control module software at no cost to the customer.

Barber Foods of a Portland, Maine, is recalling approximately 58,320 pounds of frozen, raw stuffed chicken product.

The product may be contaminated with Salmonella Enteritidis.

The following Chicken Kiev item, produced on January 29, 2015; February 20, 2015; and April 23, 2015, is being recalled:

• 2-lb. 4-oz. cardboard box containing 6 individually pouched pieces of “BARBER FOODS PREMIUM ENTREES BREADED-BONELESS RAW STUFFED CHICKEN BREASTS WITH RIB MEAT KIEV” with use by/sell by date of April 28, 2016, May 20, 2016 and July 21, 2016 and Lot Code number 0950292102, 0950512101, or 0951132202.

The recalled product recall bears the establishment number “P-276” inside the USDA mark of inspection and was shipped to Sam’s Club retail stores in Illinois, Minnesota and Wisconsin.

While the product subject to recall has not been available for retail sales since June 26, 2015, it is suspected that consumers may have this item in their freezers.

Consumers with questions may contact the company directly at (844) 564-5555.

Ford Motor Company is recalling 182,520 model year 2014-2015 Ford Escape vehicles manufactured May 19, 2014, to February 6, 2015, and Transit Connect vehicles manufactured May 13, 2014, to December 10, 2014.

Due to a software incompatibility issue, the instrument panel cluster be inoperative including a blank multiple functional display (MFD), and non-functional warning chimes, messages and warning lights.

If the instrument cluster is inoperative, the driver of may not be warned of safety related issues such as low tire pressures or disabled air bags, increasing the risk of personal injury or a crash.

Ford will notify owners, and dealers will update the instrument panel software, free of charge. The recall is expected to begin August 10, 2015.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 15C03.

Vitamin Cottage Natural Food Markets of Lakewood, Colo., is recalling one lot of Natural Grocers brand Caribbean Nut & Fruit Mix.

The product may be contaminated with Salmonella.

The company says it has received no reports of illness to date.

The following product, packaged in clear plastic bags , is being recalled:

The product was distributed to Natural Grocers’ 97 stores in Arkansas, Arizona, Colorado, Idaho, Kansas, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, Texas, Utah, Washington and Wyoming.

Customers who purchased this product should return it to the store for credit or refund.

Consumers with questions may contact the company at (303)-986-4600, ext. 531, Monday through Friday 8 a.m. to 5 p.m. (MST).

The long July 4th weekend was even longer for executives of FCA US LLC, formerly known as Chrysler. After a hearing Thursday, the head of the National Highway Traffic Safety Administration said he would take action against the automaker soon, possibly sometime this month.

FCA is accused of botching 23 safety recalls and being slow to recognize and report safety defects to NHTSA, as federal law requires.  

"What you heard here is there's a pattern that's been going on for some time, frankly," NHTSA Administrator Mark Rosekind said after the hearing.

NHTSA has already "tentatively concluded" that the company has failed to complete as many as 11 million recalls in a timely manner, sometimes because it took too long to find a remedy and other times because it took too long to make enough replacement parts available.

This is a problem that is not limited to FCA. As we reported recently, car owners complain constantly that dealers are slow to carry out recall remedies, frequently blaming shortage of parts. 

But NHTSA has zeroed in on FCA, saying that it performed poorly in 23 recalls involving 11 million vehicles and NHTSA is expected to hit the Italian-American automaker with stiff penalties.

“Fiat Chrysler takes a long time to produce the parts needed to get vehicles fixed," said Scott Yon, chief of the vehicle integrity division at the agency’s Office of Defect Investigations, according to Automotive News. "Their dealers have difficulty getting parts for recalls. Their customers have trouble getting recall repairs done. Fiat Chrysler’s recall remedies sometimes fail to remedy the defects they are supposed to fix."

$35 million each

NHTSA could fine the company up to $35 million for shortcomings in each of the 23 disputed recalls, for a possible total of $805 million. It could also order FCA to buy back some of the recalled vehicles and it is almost certain to order that the company take steps to improve its defect detection and reporting processes. 

At the hearing, Jennifer Timian, acting director of NHTSA's Office of Defects Investigation, singled out recalls involving fuel systems catching fire in rear-end collisions, defective ignition switches which disable air bags and defective air bags that "can unexpectedly go off."

"There are times when intervention is warranted," Timian said, saying there have been fatalities and injuries from repairs not being made in a timely fashion. the Detroit Free Press reported.

Witnesses testifying at the hearing buttressed Timian's contention. Center for Auto Safety Director Clarence Ditlow pointed to the recalls of 2006-07 Jeep Commanders, 2005-07 Grand Cherokees and 2008-10 Chrysler Town & Country, Grand Caravan and 2009-10 Journey for ignition switches that can get knocked out of the run position, similar to the Chevrolet Cobalt and Saturn Ion defect.

"One year after the recalls were announced, not a single vehicle has been repaired," Ditlow said. "Fiat Chrysler treats the ... owner notification as a get-out-of-jail free card which can put the actual recall on hold forever."

"The worst of Fiat Chrysler"

Ditlow said the recall involving allegedly fire-prone fuel tanks in Jeep Cherokkes "represents the worst of Fiat Chrysler," labeling it "the recall Fiat Chrysler never wanted to do."

Ditlow said the company failed to notify NHTSA of a defect despite confidentially settling at least 44 lawsuits since the Jeep Grand Cherokee was introduced in 1993.

"When forced to do a recall by NHTSA in June 2013 with a dubious trailer hitch as a remedy, Fiat Chrysler failed to send an interim ... owner notification until January 2014 and a final ... until September 2014," he said, noting that two two years after the recall started, only 5.9% of the nearly 1.5 million 1993-98 Grand Cherokees and 25% of the nearly 1 million 2002-07 Liberty’s have been remedied.

"People die when manufacturers fail to remedy recalled vehicles," Ditlow said. "On November 11, 2014, Kayla White burned to death in a rear impact in her 2003 Jeep Liberty. Kayla was 8 months pregnant and had tried to get Fiat Chrysler to install the trailer hitch before the fatal crash."

Ditlow charged that there have been at least 20 deaths in the recalled Jeeps since NHTSA recall request on June 3, 2013.

In its defense, Fiat Chrysler points to earlier findings by NHTSA that the Jeeps “do not present an unreasonable risk to safety” and that the fires only occur "in severe, high-energy rear impacts." The company also contends the recalled Jeeps performed similarly to comparable competing models.

Many things may contribute to road rage, but there can be little doubt that traffic signals that are not synchronized are among them.

According to the U.S. Department of Transportation, outdated traffic signaling accounts for more than 10% of all traffic delays. Besides adding to driver frustration, it also contributes to excessive fuel consumption and air pollution.

It's not as though traffic engineers haven't known for years how to fix this. “Smart” traffic lights are in place in many areas, allowing signals at intersections to adjust to real-time traffic conditions.

In fact, some form of adaptive signal control technologies have been in use in the U.S. for approximately 20 years, but have been deployed on fewer than 3% of intersections controlled by traffic signals.

Los Angeles and neighboring Orange County have deployed the most adaptive traffic signals, but as Time Magazine recently reported, Bellevue, Wash., is making a major investment in the technology.

Longer greens during heavy traffic

Wires have been embedded in city streets to inform the lights how much traffic is moving through the intersection. At times of heavy traffic, the green signal stays on a little longer. During rush hour nearby intersections sync their lights to allow long periods of green.

Adaptive signals are the next generation of newer technology traffic signals that detect the presence of cars at an intersection and adjust the signal accordingly. Some use electromagnetic loops in the pavement.

Cars activate the sensors when they drive over them, causing the light to stay on for a certain period. But oftentimes, the timing at intersections only gets reset every three to five years.

More sophisticated signals

Municipalities have lately been migrating toward more sophisticated signals. While they still use loops, video cameras, and radar to gather data on traffic patterns, they have changed the way they handle that information.

According to a report by the Pew Charitable Trusts, rather than having a traffic engineer set and reset a signal’s timing in a control room, they install adaptive systems that use algorithms that work in real time. The signals essentially figure out how much traffic is coming their way and adapt automatically to change their timing. That requires a lot of technical support.

Engineers at Florida Atlantic University (FAU) are using a $100,000 grant from the City of Miami Beach to test two new adaptive traffic signals being considered for one of the busiest corridors in South Beach – Arthur Godfrey Road.

“With better sensing technologies such as wireless communication and personal mobile devices, smarter algorithms, and more processing power, we are moving towards an era of much more efficient, safer and eco-friendly traffic signals,” said Mohammad Ilyas, Ph.D., dean of FAU’s College of Engineering and Computer Science.

Ground zero

FAU's Laboratory for Adaptive Traffic Operations & Management (LATOM) is ground zero for research and development of smart traffic signals.

“Congested roads have long been a headache for contemporary cities and we need to look at innovative ways to deal with traffic,” said Aleksandar Stevanovic, director of LATOM. “While better management of traffic signals won’t reduce the number of cars on our streets, we can do a much better job in adjusting signals to work more efficiently.”

Stevamovic also says smart traffic lights, if timed properly and continually, can both reduce traffic delays and improve public safety.

Since they are relatively new technology, adaptive control systems are still pretty expensive. That's why state and municipal governments are turning to research institutions to pre-test their effectiveness.

According to the Federal Highway Administration, a major barrier to wider use of smart traffic control systems has been their cost. Start up includes initial investments in signal control hardware, communication networks, and comprehensive traffic studies, as well as the cost of periodic updates to adjust systems to changing traffic conditions. Both conventional and adaptive systems require periodic traffic studies and recalibration.  

Many recent advances in treating diabetes have focused on making the disease more manageable by allowing those affected to measure their glucose levels more quickly and with less pain. Now researchers have developed a new way of doing just that for those suffering from Type 1 diabetes.

They have proposed implanting an “artificial pancreas” into people that can measure their blood sugar levels and automatically release insulin when it is needed.

Type 1 diabetes affects well over one million people living in the United States today, many of which are teenagers or children. The disease results from the immune system destroying pancreatic cells which are responsible for insulin production. In order to make up for this, patients take insulin injections every day to keep their glucose levels normal.

The current method of injecting insulin is less than optimal, since it relies on the user to constantly keep track of their blood sugar levels and the amount of insulin they are taking. This is particularly hard for people who are very young or very old, since they may not be able to keep track of all of the pertinent information.

Even after injecting the insulin, there is still a significant amount of time that needs to pass before it can affect a person’s system. This can be dangerous in cases where the desired effects are needed sooner rather than later. In order to fix this problem, Francis J. Doyle III and his team researched ways in which monitoring and delivering insulin injections would not be so laborious.

Faster reactions

Doyle and his team designed an algorithm that keeps track of blood sugar levels in the human body and calculates how much insulin is needed to counteract imbalances. The formula is designed to work with implanted devices, like the artificial pancreas.  

If proven viable, the artificial pancreas would be able to react to insulin needs much faster than someone with Type 1 diabetes ever could. Because it is constantly monitoring the body, it can deliver the correct dosage as soon as a person needed it. The algorithm is even designed to take food intake and sleep periods into account when making its determinations.

Early tests of the artificial pancreas have proven positive. It maintained blood sugar levels within a target range almost 80 percent of the time. The researchers will strive to improve upon that number as time goes on. They hope to begin testing the device in animals in the near future. 

A federal judge has ruled that GOP presidential hopeful Donald Trump must disclose how much money he made from Trump University as part of a racketeering lawsuit that claims Trump defrauded students out of millions of dollars.

U.S. District Judge Gonzalo Curiel on Tuesday ruled that Trump's financial transactions involving Trump University are relevant and must be disclosed, Courthouse News Service reported.

Plaintiff Art Cohen claims that Trump "devised and executed a scheme to make tens of millions of dollars" by misrepresenting that Trump University was an actual university taught by a faculty of professors at least partly selected by Trump himself.

The next Apprentice

According to the suit, Trump University promised big things, claiming to be "the 'next best thing' to being Donald Trump's next Apprentice." Indeed, the company's website promised that students could "become the next real estate mogul," "become your own success story," or "learn wealth strategies."

But the plaintiffs say it didn't take long before they realized that "[t]he primary lesson Trump University teaches its students is how to spend more money buying more Trump seminars.

Cohen says that he paid more than $36,000 before deciding the claims were false. Cohen said Trump does not teach students his real estate investing secrets, contribute in any meaningful way to the curriculum, or handpick the instructors.

Trump's lawyers had challenged the demand that they produce records of Trump's profits from the school but Judge Curiel said the evidence is relevant and discoverable.

Curiel agreed with Cohen's argument that evidence that Trump profited from the university is relevant to show motive and bias.

New York Attorney General Eric Schneiderman successfully sued Trump in 2014, charging he was personally liable for running Trump University without a license. Schneiderman accused Trump of fraud, claiming he had defrauded students of $40 million. 

Presidential material?

Trump announced recently that he was seeking the GOP nomination for president, taking the opportunity to say that Mexican immigrants are criminals, rapists and drug dealers, setting off something of a crisis in the Republican Party, which has been trying to figure out how to appeal to Hispanic voters. 

Univision cut ties with Trump after the remarks and Trump responded with a $500 million lawsuit, saying the action was illegal. NBC Universal and Macy's have also canceled their business dealings with the hotel mogul and financier, whose poll numbers have been rising in lockstep with the controversy. 

After vigorously denying charges that it mis-weighed some fresh food products in its New York City stores, Whole Foods Markets has done an abrupt about-face, saying some of its employees made mistakes.

Last week the New York City Department of Consumer Affairs (DCA) disclosed the results of a lengthy investigation, saying it was apparent that Whole Foods, already with a reputation for being expensive, “routinely” overcharged customers in its stores in the city.

The DCA said it tested packages of 80 different types of pre-packaged products and found – not just a few but all – of the products had mislabeled weights.

The federal government sets limits on how much the label of an individual package of food can deviate from the actual weight. DCA officials say that 89% of the packages it tested did not meet the federal standard, with overcharges ranging from 80 cents for a package of pecan panko to $14.84 for a package of coconut shrimp.

Denials

The company initially denied the charges. A Whole Foods attorney said the products in question were sold as a unit, not by the pound. The attorney said the company had been working with the DCA since December to resolve the issues and that in some cases, consumers were getting more than their moneys worth.

On Wednesday, that position changed as co-CEOs Walter Robb and John Mackey posted a YouTube video in which they said New York City customers were, in fact, charged the wrong prices for some products.

Owning it

“Straight up, we made some mistakes,” Robb said . “We want to own that and tell you what we’re doing about it.”

The executives, who blamed some employees in its New York stores for the overcharging, said the company will improve its training in all its stores. It also will begin a third party auditing system to monitor the improvements. And from now on, if a customer finds a pricing error not in the consumer's favor, he or she will get the item at no charge.

The DCA had not yet reacted to the company's mea culpa by Thursday morning. Last week DCA Commissioner Julie Menin said she didn't think the mislabeling was an isolated case. She was also not buying the company's initial denials.

“Our inspectors tell me this is the worst case of mislabeling they have seen in their careers, which DCA and New Yorkers will not tolerate,” Menin said. “As a large chain grocery store, Whole Foods has the money and resources to ensure greater accuracy and to correct what appears to be a widespread problem – the city’s shoppers deserve to be correctly charged.”

The Allstate Foundation tries to keep tabs on perceptions of driving habits and how those perceptions mesh with reality.

In particular, the foundation measures how well parents are supervising their teenage drivers. The foundation's latest report finds many parents are pretty much out of the loop.

The foundation reached that conclusion after quizzing both parents and their teens. Here's the data the foundation says jumped out at investigators:

• Seventy-nine percent of teens admit to speeding, but only 55% of parents believe their teens speed.
• Ninety-five percent of teens admit to getting a moving violation; only 79% of parents believe their teens have committed an offense.
• Twenty-three percent of teens admit they’ve driven after drinking alcohol and/or using marijuana, but only 7% of parents believe their teens have driven under the influence.
• Eighty-seven percent of teens admit to using cellphones while driving, but only 63% of parents say their teens use phones while driving.

Improvement needed

The insurance giant says it believes parents have to do a better job of ensuring their children practice safe driving habits.

“Our teen safe driving program has contributed to a nearly 48 percent decline in teen crash fatalities since 2005,” said Steve Sorenson, executive vice president of Allstate. “While there has been progress, we continue to encourage parents and teens to have an open dialogue about driving. It’s also important that parents ensure their teens are wearing their seat belts, obeying speed limits, and eliminating distractions, because these actions help to keep teens safer on the road.”

And something else: the report also found that parents do some of the same risky things behind the wheel as their teens. For example, 84% of parents admit to speeding, slightly more than their children.

And teens aren't the only ones chatting on their phones as they drive. The report found parents admitted to doing it just as much.

“Teens continue to tell us their parents are the number one influence on how they drive, so as parents we have an important responsibility to model good driving behaviors,” Sorenson said. “We must find new and compelling ways to motivate teens and parents to engage in safe driving habits.”

Encouraging note

On an encouraging note, the report found that teens are more aware of highway dangers than they were a decade ago. The number of teens age 15 to 17 who worry about financial and legal consequences from car crashes has nearly tripled since 2005.

The foundation has three pieces of advice for parents of teenage drivers; ride with their teen at least 30 minutes a week, especially in the first year after they are fully licensed; follow your state's Graduated Driver Licensing laws; and be a good role model by putting away cellphones, buckling up, and obeying speed limits.

According to the Centers for Disease Control and Prevention (CDC) about 2,650 teens in the U.S., aged 16 to 19, were killed in 2011 and almost 292,000 were treated in emergency departments for injuries suffered in motor-vehicle crashes. That works out to seven teens who died every day from motor vehicle injuries.

The CDC says young people ages 15 to 24 represent only 14% of the U.S. population, but account for 30% of the total costs of motor vehicle injuries among males and 28% of the total costs of motor vehicle injuries among females.

The manufacturing sector of the economy continues to barrel along.

According to the latest Manufacturing Institute for Supply Management (ISM) Report On Business, economic activity in the manufacturing sector expanded in June for the 30th consecutive month, with the overall economy growing for the 73rd month in a row.

"The June PMI registered 53.5%, an increase of 0.7% percentage point over the May reading,” said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee. The New Orders Index registered 56%, up 0.2%, the Production Index registered 54%, a dip of 0.5%, and the Employment Index registered 55.5% -- a gain of 3.8% over May.

Meanwhile, inventories of raw materials rose 1.5% to 53%, and the Prices Index was unchanged at 49.5%, indicating lower raw materials prices for the eighth consecutive month.

Sector breakdown

Of the 18 manufacturing industries, 11 are reporting growth in June in the following order:

1. Furniture & Related Products;
2. Wood Products;
3. Nonmetallic Mineral Products;
4. Miscellaneous Manufacturing;
5. Food, Beverage & Tobacco Products;
6. Electrical Equipment, Appliances & Components;
7. Transportation Equipment;
8. Fabricated Metal Products;
9. Chemical Products;
10. Paper Products; and
11. Computer & Electronic Products.

The four industries reporting contraction in June are:

1. Petroleum & Coal Products;
2. Primary Metals;
3. Plastics & Rubber Products; and
4. Machinery.

This summer, United Airlines is flying high with a new type of fuel. They are going to be using fuel that is made from farm animal manure and fats. The effort is an attempt to curb the greenhouse gas emissions produced by burning jet fuel in commercial aircraft.

Conventional fossil fuels, which airlines have utilized for many years, have been proven to be bad for the environment because they release large amounts of new carbon into the atmosphere. Biofuels are a much better alternative because farm waste and fats have already been exposed to the atmosphere and have absorbed carbon during their lifetime. So, when they are burned as a fuel source, no extra carbon is introduced into the atmosphere.

The first flight powered by animal waste will be pretty short; it will take off from Los Angeles and land in San Francisco. The airline company plans to make several of these short-range flights over the next two weeks to test the effectiveness of the new fuel source. All of these flights will be using about 30 percent biofuel. They will be acquiring it from a California-based company named AltAir fuels.

$30 million investment

The commitment doesn’t stop there. United just announced that they made a $30 million investment in Fulcrum BioEnergy, one of the largest makers of aviation biofuels. According to the New York Times, this is the largest investment in alternative fuels ever made by a commercial airline. United is hoping to integrate biofuels into its entire fleet of planes soon.

United officials said Tuesday that they expect to begin receiving fuel from Fulcrum BioEnercy Inc. in 2018. They hope to be acquiring 90 million gallons a year by 2021.

United’s managing director for environmental affairs, Angela Foster-Rice, said the airline has greatly reduced emissions by buying more fuel-efficient planes, and it seeks to take the next step by expanding use of alternative fuels.

Biofuels have been proven to be comparable to jet fuel prices, and with United’s commitment to the energy source, this could spell good things for biofuel companies. Fulcrum is planning on building five plants near United hub airports to support their fuel needs. 

Led by gains in professional and business services, health care, retail trade, the economy created another 223,000 jobs during June. At the same time, the unemployment rate dropped 0.2% -- to 5.3%, according to the Bureau of Labor Statistics (BLS).

While it was the third straight monthly increase in nonfarm payroll employment, June failed to measure up to the 254,000 jobs created in May.

Demographic breakout

Among the major worker groups, the unemployment rates for adult men (4.8%), adult women (4.8%), and blacks (9.5%) edged lower last month in June, while the rates for teenagers (18.1%), whites (4.6%), Asians 3.8%), and Hispanics (6.6%) showed little change.

The number of long-term unemployed (those out of work for 27 weeks or more) dropped by 381,000 to 2.1 million in June. They account for 25.8% of the unemployed. Over the past 12 months, the number of long-term unemployed has fallen by 955,000.

The labor force participation rate declined by 0.3% -- to 62.6% in June, the lowest since October 1977. The employment-population ratio, at 59.3%, was essentially unchanged and has shown little movement thus far this year.

Who's hiring

The gain in nonfarm payroll employment was led by professional and business services (+ 64,000), health care (+40,000), retail trade (+33,000) and financial activities (+20,000).

Employment in mining fell by 4,000, while construction, manufacturing, wholesale trade, information, and government, showed little or no change over the month.

Average hourly earnings for all employees on private nonfarm payrolls were unchanged at $24.95. Over the year, average hourly earnings have risen by 2.0%.

The complete report is available on the BLS website

Initial claims

The number of workers filing initial applications for state unemployment benefits moved higher last week.

The Labor Department (DOL) reports first-time claims were up by 10,000 in the week ending June 27 to a seasonally adjusted 281,000. Officials say there were no special factors affecting the claims level.

The 4-week moving average, which lacks the volatility of the weekly tally, and is considered a more accurate barometer of the labor market, was 274,750, an increase of 1,000 from the previous week, and remains near its 15-year low.

The full report may be found on the DOL website.

Nissan North America is recalling certain model year 2015 Rogue Select vehicles manufactured November 17, 2014, to December 12, 2014 and equipped with seventeen-inch wheels.

The vehicles have incorrect tire size information on the tire labels. Installing tires of the incorrect size may increase the risk of a crash.

Nissan will notify owners, and will send them new labels with the corrected information, free of charge. The recall is expected to begin by early August 2015.

Owners may contact Nissan customer service at 1-800-647-7261.