Current Events in October 2015

Build-A-Bear Workshop of St. Louis, Mo., is recalling about 34,600 Starbrights Dragon stuffed animals in the U.S. and Canada.

The satin seam of the stuffed animal can open, allowing the stuffing material to be exposed, posing a choking hazard for young children.

No incidents or injuries have been reported.

Starbrights Dragon is covered in a blue furry fabric with silver satin tummy, feet pads, wings and horns. The horns light up and the toy makes a musical sound when the hand is squeezed. The stuffed animal is about 17 inches high.

The tracking label ending with 9333 or 9334 for USA and 9337 or 9459 for Canada can be found on the label sewn on the backside of the leg.

The stuffed animals. Manufactured in China, were sold at Build-A-Bear Workshop stores and online at www.buildabear.com between April 2015, and August 2015, for about $25.

Consumers should immediately take the recalled stuffed animal away from children and return it to any Build-A-Bear Workshop store to receive a coupon for any Build-A-Bear stuffed animal.

Consumers may contact Build-A-Bear toll-free at 866-236-5638 from 8 a.m. to 8 p.m. (CT) Monday through Friday, from 9 a.m. to 6 p.m. (CT) on Saturday and from 10 a.m. to 7 p.m. (CT) on Sunday; by email at ProductHotline@buildabear.com or online www.buildabear.com for more information.

Global Manufacturing Company of Windom, Minn., is recalling about 2,300 climbing tree stands.

The cable assembly on the climbing tree stand can release, posing a fall hazard to the user.

The company has received one report of the cable assembly releasing which resulted in a broken vertebra, fractured rib and sprained shoulder.

This recall involves model year 2014 API Outdoors climbing tree stands model GCL300-A (The Marksman) with batch numbers 9G-0114 and 9G-0614. The climbing tree stands are used to hunt from an elevated position and were sold with an accessory bag.

The light green metal tree stands include the main stand platform with a nylon hanging strap assembly. They have a nylon netted seat without a backrest. The batch number starts with BN and can be found on a small tag located on the frame below the seat.

The tree stands, manufactured in China, were sold at Menards and Rogers Sporting Goods stores nationwide and online from June 2014, through June 2015, for between $140 and $180.

Consumers should immediately stop using the recalled tree stands and return them for free replacement cables.

Consumers may contact Global Manufacturing Company at 888-393-9611from 8 a.m. to 4:30 p.m. (CT) Monday through Friday or online at www.apioutdoors.com and click on Recall Notice for more information. Consumers may also write to the firm at Global Manufacturing Company/API Outdoors, P.O. Box 24, Windom, MN 56101.

Just weeks after new rules went into effect for the use of credit cards with embedded security chips, the National Retail Federation (NRF) complains small businesses are being pressured to make an expensive investment without receiving the full level of security that could be provided.

NRF arranged for a small business owner to testify before Congress this week. Keith Lipert, owner of The Keith Lipert Gallery, a single-location, three-employee store in Washington, told lawmakers small businesses are being overwhelmed.

“Overwhelmed”

“The EMV transition is overwhelming and expensive for an independent, small retailer,” Lipert said. “Small retailers are entirely at the mercy and whims of the big players. We have no say and no way to use the marketplace to make our objections heard and our concerns valued.”

Retailers say the EMV cards, which have an embedded computer chip, don't go far enough to promote security. NRF wants the system to an include a PIN, which would make it less likely a lost or stolen card could be used.

Consumers may have noticed that many retail locations, especially small businesses, are still using the old “swipe” card readers, not the new “dipping” readers.

Unresponsive banks

“EMV is all new to me, and banks and the networks are not contacting small businesses to help the transition in any way,” Lipert said. “No one from my bank, processor or existing supplier even contacted me about the need to add a new EMV device, let alone a deadline by which to do so.”

The House Small Business Committee is investigating how Europay MasterCard Visa cards will affect small businesses. The hearing followed this month’s deadline set by the card industry for merchants to install chip-card readers be on the hook for fraudulent card usage.

Seven times more secure

Lipert said the EMV cards being issued by banks are chip-and-signature cards, instead of the chip-and-PIN cards used in nearly all other countries where EMV cards are used. He pointed to Federal Reserve data showing that a secure, secret PIN to approve transactions is seven times more secure than an easily forged and often-illegible signature.

Lipert also said small businesses are seeing “significant delays” in obtaining chip card readers or getting them certified once they are installed. He says small businesses just aren't a priority for hardware manufacturers.

Chip card terminal can cost as much as $2,000 when installation, software and other expenses are included.

Cashless transactions have become the norm for many businesses in recent years. While it is not uncommon for someone to carry cash on them, it is much faster and simpler to swipe your card and be on your way. Sweden, in particular, has taken this idea a step further. Projections show that it is on its way to becoming the first cashless country in the world.

Going cashless

A study conducted from Stockholm’s KTH Royal Institute of Technology shows that Sweden’s reliance on physical money is waning dramatically. Estimates show that the country currently has only 80 billion crowns (Swedish currency) in circulation. This is a major decrease from six years ago, when 106 billion marks were in circulation.

“Cash is still an important means of payment in many countries’ markets, but that no longer applies here in Sweden,” said Niklas Arvidsson, an industrial technology and management researcher at KTH.

Although 80 billion SEK (Swedish crowns) seems like a high number, Arvidsson says that the actual number is much lower than that. He estimates that only 40-60 percent of that amount is actually being used. The rest is saved by people in their homes, in bank deposit boxes, or circulating in the underground economy.

Electronic systems already in place

While still far away from being able to go truly cashless, Sweden may be able to reach that goal by using a direct payment app called Swish. The app was created through collaboration between Swedish and Danish banks and allows individuals to make transactions between each other in real time without exchanging currency.

Swish may be able to thrive in a country like Sweden due to its citizens’ ability to embrace new technologies. Electronic payment services have been in place for years in the country, so making the jump to all-electronic payments is not too far of a stretch. Many banks already have 100 percent digitalized branches that don’t accept cash.

This system has quite a few benefits for both the Swedish government and its citizens. Being able to track money more effectively has led to a crackdown on organized crime in the country. “At the offices which do handle banknotes and coins, the customer must explain where the cash comes from, according to the regulations aimed at money laundering and terrorist financing,” said Arvidsson. Bank employees are required to immediately report any suspicious transactions to the police.

Working out the kinks

While Swish is very popular with consumers, it will be some time before all of the kinks are worked out for going cashless. Citizens that are not familiar with electronic payment systems or computers in general would have trouble switching to the newer system. It would also force the homeless population and undocumented immigrants to become even more reliant on government systems and programs to survive.

Chances of cashless systems spreading to other countries is even more tenuous. “Swish is a brilliant idea, but to introduce it internationally is a challenge, not least because it takes a long time to change other countries’ banking systems from scratch. But it is not impossible that a Swish-based banking revolution can also occur abroad,” said Arvidsson. 

Not only does Volkswagen face punitive fines, lawsuits, and recall costs in connection with its diesel cars that cheat on emissions controls, its selling fewer vehicles.

And those that are selling are going at a discount.

Kelley Blue Book (KBB) reports that average auction prices, along with new-car shopping activity on KBB.com, for Volkswagen diesel vehicles have declined four weeks after the diesel emissions issue was announced. No surprise there.

The average auction price for Volkswagen diesel models dropped by nearly 16% since the news broke of the emissions scandal. The average auction price for the VW’s gasoline-powered vehicles declined by 2.9%.

On KBB.com, Volkswagen new-car shopping activity for affected TDI models has fallen, on average, by 2.4%.

“According to Kelley Blue Book Field Analysts, some auctions are still holding off on selling the affected Volkswagen inventory,” said Tim Fleming, analyst for Kelley Blue Book. “While Volkswagen diesel auction prices are in decline, we could see larger fluctuations depending on how this inventory is handled.”

According to KBB, the Volkswagen Golf SportWagen and Golf have seen the most significant declines in shopping activity, with decreases of 6.2 percent and 3.7 percent respectively.

The Audi A3 and Volkswagen Jetta SportWagen are the only TDI models seeing increases in activity, at 1.6% and 3% respectively. KBB says Audi A3 shoppers are increasingly cross-shopping competing luxury models following the announcement.

The most highly cross-shopped vehicles are the Lexus NX, BMW 2-Series, and Mercedes-Benz CLA.

Most new cars have cool infotainment systems that integrate wireless connectivity with cellphones, allowing drivers to send and receive verbal texts, make hands-free calls and issue voice commands to the music system.

They're billed as safety features but studies have suggested they might not be all that safe. Now, a new study from AAA says they're more dangerous than previously thought.

It's true these systems don't occupy your hands but they do take mind-share, and researchers say that's where the problem lies. Potentially unsafe mental distractions can for as long as 27 seconds after dialing, changing music or sending a text using voice commands, according to the research by conducted by the AAA Foundation for Traffic Safety.

Growing safety problem

“The massive increase in voice-activated technologies in cars and phones represents a growing safety problem for drivers,” said Marshall Doney, AAA’s President and CEO. “We are concerned that these new systems may invite driver distraction, even as overwhelming scientific evidence concludes that hands-free is not risk free.”

To some experts, the research raises new and unexpected concerns about the use of phones and vehicle information systems while driving. It's the third phase of the Foundation’s investigation into mental distraction behind the wheel.

It shows that new hands-free technologies can mentally distract drivers even if their eyes are on the road and their hands are on the wheel.

“The lasting effects of mental distraction pose a hidden and pervasive danger that would likely come as a surprise to most drivers,” said Peter Kissinger, President and CEO of the AAA Foundation for Traffic Safety. “The results indicate that motorists could miss stop signs, pedestrians and other vehicles while the mind is readjusting to the task of driving.”

At the 25 MPH speed limit in the study, drivers distracted for 27 seconds traveled the length of nearly three football fields. When using the least distracting systems, drivers remained impaired for more than 15 seconds after completing a task.

What's a driver to think? Maybe to think twice about when and where you use these voice-activated features.

“Drivers should use caution while using voice-activated systems, even at seemingly safe moments when there is a lull in traffic or the car is stopped at an intersection,” Doney said. “The reality is that mental distractions persist and can affect driver attention even after the light turns green.”

Best and worst

Some hands-free systems are more distracting than others. The best performing system was the Chevy Equinox, with a cognitive distraction rating of 2.4.

The most distracting was the Mazda 6, with a cognitive distraction rating of 4.6.

Among phone systems, Google Now performed best with a distraction rating of 3.0, while Apple Siri and Microsoft Cortana earned ratings of 3.4 and 3.8.

The Conference Board reports that after showing no change in both August in July, its Leading Economic Index (LEI) fell 0.2% in September -- the first decline since last February.

While that might raise questions among some economists about the future growth of the economy, Ataman Ozyildirim, director of business cycles and growth research at The Conference Board remains fairly upbeat.

“Despite September’s decline, the U.S. LEI still suggests economic expansion will continue, although at a moderate pace,” he said, explaining, “The recent weakness in stock markets, the manufacturing sector and housing permits was offset by gains in financial indicators, and to a lesser extent improvements in consumer expectations and initial claims for unemployment insurance. The U.S. economy is on track for moderate growth of about 2.5% in the coming quarters, despite the mixed global economic landscape.”

The LEI is essentially a composite of several indicators. It's constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component -- primarily because they smooth out some of the volatility of individual components.

The ten components of the Leading Economic Index include:

• Average weekly hours, manufacturing
• Average weekly initial claims for unemployment insurance
• Manufacturers’ new orders, consumer goods and materials
• ISM Index of New Orders
• Manufacturers' new orders, nondefense capital goods excluding aircraft orders
• Building permits, new private housing units
• Stock prices, 500 common stocks
• Leading Credit Index
• Interest rate spread, 10-year Treasury bonds less federal funds
• Average consumer expectations for business conditions

Jobless claims

In a separate report, the Labor Department (DOL) says first-time applications for state unemployment benefits rose by 3,000 in the week ending October 17 to a seasonally adjusted 259,000. The previous week's level was revised up by 1,000 -- from 255,000 to 256,000.

The 4-week moving average, which is less volatile than the weekly calculation and considered a more accurate gauge of the labor market, was down 2,000 to 263,250 -- the lowest level since December 15, 1973 when it was 256,750.

The complete report is available on the DOL website.

Sales of previously owned homes rebounded in September following a decline the previous month.

The National Association of Realtors (NRA) reports existing-home sales were up 4.7% last month to a seasonally adjusted annual rate of 5.55 million, and are now up 8.8% from September 2014 -- the 12th consecutive month of year-over-year increases.

Moderating home prices in some areas and mortgage rates below 4% are being given the credit.

"September home sales bounced back solidly after slowing in August and are now at their second highest pace since February 2007 (5.79 million)," said NAR Chief Economist Lawrence Yun. "While current price growth around 6 % is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace."

The median existing–home price for all housing types in September was $221,900 – up 6.1% from September 2014 ($209,100). September's price increase marks the 43rd straight month of year–over–year gains.

Regional breakdown

• September existing–home sales in the Northeast jumped 8.6% to an annual rate of 760,000, and are 11.8% above a year ago. The median price in the Northeast was $256,500, which is 4.0% above September 2014.
• In the Midwest, sales climbed 2.3% to an annual rate of 1.31 million in September, and are 12.0% above September 2014. The median price was up 5.4% from a year ago -- to $174,400.
• Existing–home sales in the South were up 3.8% to an annual rate of 2.21 million, and are up 5.7% year-over-year. The median price was $191,500, up 6.2% from a year ago.
• Sales in the West were at an annual rate of 1.27 million, up 9.5% from a year earlier. The median price rose 8.0% from a year ago to $318,100.

Home prices

Separately, the Federal Housing Finance Agency (FHFA) reports its monthly House Price Index (HPI) shows U.S. house prices rose a seasonally adjusted 0.3% in August.

The FHFA HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. On a year-over-year basis, prices were up 5.5%. Even with August advance, the index is 0.9% below its March 2007 peak and is roughly the same as the December 2006 level.

For the nine census divisions, seasonally adjusted monthly price changes from July 2015 to August 2015 ranged from -0.4% in the East North Central and Middle Atlantic divisions to +0.8% in the East South Central division.

The 12-month changes were all positive, ranging from +2.2% in the Middle Atlantic division to +8.3% in the Mountain division.

The complete report may be found on the FHFA website.

Toyota Motor Sales, U.S.A. is recalling of approximately two million vehicles related to the driver’s side power window master switch.

The power window master switch may have been manufactured with insufficient lubricant grease. If not enough grease is applied, under certain conditions the switch may develop a short circuit that can cause the switch assembly to overheat and melt. A melting switch can produce smoke and potentially lead to a fire.

The following vehicles are included:

• 2007 and 2009 Camry and Camry Hybrid
• 2009-2011 Corolla
• 2008-2011 Highlander and Highlander Hybrid
• 2009-2011 Matrix
• 2006-2011 RAV4
• 2009-2011 Sequoia
• 2009-2011 Tundra
• 2006-2010 Yaris
• 2009-2011 Scion xB
• 2009-2010 Scion xD

Toyota previously recalled certain 2007-2009 model year vehicles for a similar condition. This recall adds vehicles not previously involved in the prior action that used a different lubricant application method.

Owners of the recalled vehicles will be notified by first class mail. Toyota dealers will inspect the switch and apply heat-resistant grease. If the switch is not operating normally, an internal circuit board will be replaced.

Owners may call Toyota customer service at 1-800-331-4331, or Lexus customer service at 1-800-255-3987.  

Taylor Farms of Swedesboro, N.J., is recalling approximately 276 pounds of turkey meatloaf products.

The products contain eggs, soy and wheat, allergens not listed on the label.

There have been no confirmed reports of adverse reactions due to consumption of these products.

The following products, produced on Oct. 15, 2015, are being recalled:

• 13.9-ounce, single serve trays containing Taylor Farms “Turkey Meatloaf with tomato bacon glaze.”

The recalled products bear establishment number “P-34513” inside the USDA mark of inspection and a Sell By date of Oct. 29, 2015. They were shipped to retail locations in Delaware, the District of Columbia, Maryland, Massachusetts, Pennsylvania and Virginia.

Customers who purchased these products are should not consume them, but throw them away or return them to the place of purchase.

Consumers with questions about the recall may contact Marie Butler at (856) 294-4181.

Chrysler Group is recalling 1,624 model year 2016 Chrysler Town and Country and Dodge Grand Caravan vehicles manufactured August 19, 2015 to August 27, 2015.

The bolts that attach the hood striker may loosen and, as a result, the hood may open unexpectedly while the vehicle is being driven. That could obstruct the driver's vision, increasing the risk of a crash.

Chrysler will notify owners, and dealers will install new hood striker bolts with the proper torque, free of charge. The recall is expected to begin November 6, 2015.

Owners may contact Chrysler's customer service at 1-800-853-1403. Chrysler's recall number is R53.

If your credit score is not so hot, it makes companies nervous about signing you up for a monthly subscription. Sprint solves this by putting you in a special Account Spending Limit (ASL) program and charging you an extra $7.99 per month.

That might have been OK if it had given customers proper notification, which the Federal Trade Commission says it failed to do, an oversight that will cost Sprint $2.95 million in penalties.

“Sprint failed to give many consumers required information about why they were placed in a more costly program, and when they did, the notice often came too late for consumers to choose another mobile carrier,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Companies must follow the law when it comes to the way they use consumer credit reports and scores.”

Because Sprint allows customers to be billed for services after they are used, they are subject to the requirements of the Fair Credit Reporting Act and its Risk-Based Pricing Rule. The rule requires that companies inform consumers whenever they are offered service on less favorable terms – such as the ASL program – as a result of information from their credit reports or scores.

“Sprint puts its customers first and is always working to provide clear and necessary information to customers," said  Jeffrey S. Silva, corporate communications manager for Sprint. "The FTC’s relatively new Risk Based Pricing Rule requires certain specific disclosures in specific formats be provided by letter to ASL (Account Spending Limit) customers and applicants. 

"The FTC agreed that we were including almost all of the relevant information in our ASL letters, but requested that we modify the format of the letter.  We appreciated the dialogue with the FTC and we have already implemented the changes requested by the FTC.”

Too little, too late

The complaint alleges that Sprint in many cases failed to provide consumers placed in the ASL program with all of the disclosures in the required notice and often provided the notices to consumers after the window in which they could cancel their service and change to another provider without paying an early termination fee, leaving consumers unable to shop for another carrier that might have offered them better terms.

The proposed settlement requires Sprint to pay a $2.95 million penalty for violations of the Risk-Based Pricing Rule. It also requires the company to abide by the Rule’s requirements in the future. In addition, Sprint is required to provide the required notices to consumers within five days of signing up for Sprint service or by a date that gives them the ability to avoid recurring charges like those in the ASL program.  Finally, the proposed settlement requires Sprint to send corrected risk-based pricing notices to consumers who received incomplete notices from the company.

Most of us -- at least most males of a certain age -- have been guilty of occasionally falling for a car that seems to be the fastest, sleekest, coolest, and just generally meanest set of wheels ever. This infatuation usually fades after the thing has taken up space in the driveway for awhile. 

This seems to be what has happened in the love affair between Consumer Reports magazine, the somewhat staid non-profit publication of Consumers Union, and the Tesla S, the wild-eyed, needle-pinning, luxury electric sedan. 

In August, just a few short months ago, Consumer Reports was gaga over the Tesla S, giving it a score of 103 on a scale of 100. Entranced by the car's blinding speed, precise handling, and other race track virtues, the consumerists just couldn't say enough about the S.

But in cars, as in most things, the bloom is soon off the rose, and when Consumer Reports pried itself out of the Tesla S and began reading its mail, it made a discovery: the car has issues, some big, some small.

Issues great and small

Big issues include frequent failure of the electric motor. Little issues include the failure of the recessed door handles to pop out when the driver approaches the car. You can't open the door without a handle, so that little trick leaves you not breathless but stranded.

Tesla S owners also complained of squeaks and rattles, leaking sunroofs, and other maladies one normally associates with a car that costs way south of the Tesla's $127,000. 

Faced with all this, the CR staff whipped a quick U turn and downgraded the S to a "worse than average" reliability rating. To be sure, chief auto tester Jake Fisher said the Tesla S will snap your neck, knock your socks off, and otherwise stun you with its brute force and svelte handling, but it will also drive you bonkers with nagging maintenance issues.

To be sure, Tesla has been good about repairing the problems under warranty, but just because a problem is fixed doesn't mean it isn't annoying and time-consuming. And as the cars age and the warranties expire, fixing those selfsame problems could be expensive.

As some consolation, CR noted that other high-performace cars, like the Chevrolet Corvette and the BMW 5 series, have their issues too.

What no one mentioned is the Porsche Boxster, which scored so highly on CR's tests a decade ago that the scoring scale had to be rejiggered. The Boxster is still around, still scoring highly on everybody's scale, and still enjoying one of the best reliability ratings around. Boxster owners will tell you that while Porsches are expensive to maintain,  they are also remarkably free of the everyday problems that plague other marques.

When we send packages through a delivery service, most of us don't second guess the the charge. We usually assume it's correct and pay it.

Maybe a little follow up is called for. Fourteen states, as well as the cities of Chicago, New York, and Washington, DC, sued United Parcel Service (UPS) claiming UPS employees overcharged government agency customers on certain transactions.

The suit claimed that certain UPS employees recorded inaccurate delivery times on packages sent by government customers through next-day delivery services. The result, the suit alleges, was premium-priced packages that appeared to have been delivered by their guaranteed commitment times when they had not been delivered on time.

Weather delays on sunny days

The lawsuit also claimed certain UPS employees applied inappropriate exception codes to excuse late next-day packages. For example, they chalked it up to weather delays when the skies were sunny.

As a result, the government customers said they were unable to get refunds for the late deliveries.

In a settlement agreement, UPS agreed to pay the governments $4 million and will start training, monitoring, and reporting compliance programs to address any potential delivery failures or policy violations.

“UPS improperly profited from charging New York State government entities – and ultimately our taxpayers – when its employees failed to meet its guaranteed delivery times for overnight deliveries,” said New York Attorney General Eric Schneiderman. “Corporations that improperly profit at the expense of taxpayers will be held to account.”

Major beneficiary

New York will receive a large percentage of the settlement funds – $1.2 million. Other participating government entities include the states of California, Delaware, Florida, Hawaii, Illinois, Indiana, Minnesota, Montana, New Mexico, North Carolina, Tennessee, the Commonwealths of Massachusetts and Virginia, the District of Columbia, and the cities of New York and Chicago.

Schneiderman said the case came to light through the efforts of a whistleblower, a former UPS employee, Robert K. Fulk. Schneiderman says Fulk initially filed a lawsuit in Federal District Court in Alexandria, Va. New York investigated the whistleblower’s allegations under the New York False Claims Act. Under the New York False Claims Act, the whistleblower receives a portion of the recovery.

Chrysler Group is recalling 1,624 model year 2016 Chrysler Town and Country and Dodge Grand Caravan vehicles manufactured August 19, 2015 to August 27, 2015.

The bolts that attach the hood striker may loosen and, as a result, the hood may open unexpectedly while the vehicle is being driven. That could obstruct the driver's vision, increasing the risk of a crash.

Chrysler will notify owners, and dealers will install new hood striker bolts with the proper torque, free of charge. The recall is expected to begin November 6, 2015.

Owners may contact Chrysler's customer service at 1-800-853-1403. Chrysler's recall number is R53.

Ford Motor Company is recalling 33,481 model year 2015 Ford F-150 trucks manufactured March 18, 2014, to August 6, 2015 and equipped with Adaptive Cruise Control (ACC).

While using the ACC, the vehicle may falsely detect an obstacle in its path and may unexpectedly apply the brakes. A vehicle that brakes unexpectedly increases the risk of a crash.

Ford will notify owners, and dealers will reprogram the cruise control module with updated ACC radar software, free of charge. The recall was expected to begin October 19, 2015.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 15S29.

You can't go online these days without reading dire predictions about America's demise.

They range from a coming economic collapse and Great Depression to a 50% sell-off in the stock market. In most cases, the blame is placed on the Federal Reserve's policy of cheap money, enacted after the financial crisis.

The forecasters are sometimes people who are selling something – a report or video – telling you how to protect yourself or even profit from the coming calamity. Sometimes the warnings come from former politicians. In some cases, the forecasters have a strong political point of view.

So what is a consumer to think when the stock market has been volatile and the economy weak? Is the end really near?

Mainstream economist

We decided to ask a mainstream economist who monitors economic data on a regular basis. Joel Naroff, of Naroff Economic Advisors, says as things now stand, the U.S. domestic-related economy is just fine.

“Consumers are spending, firms that supply into the U.S. based economy are generally doing well and with wages rising and energy costs low, consumption should remain solid for all of 2016,” Naroff told ConsumerAffairs.

CA: Why does the economy seem to be so sluggish?

NAROFF: The slowdown is being caused primarily by the collapse in energy costs. Consumers are only slowly spending the added free cash but the energy companies have reacted much more quickly. They are laying off workers, slowing job growth. They have cut back investment activities, reducing orders and demand for all the companies that supply capital goods, operating products and services that are suppliers to the industry.

So investment is down as is manufacturing for those firms providing capital products. But the price of energy has stabilized and the energy industry is moderating its cut backs.

What about China?

CA: Some of the sense of unease seems to be be related to China. Is China in trouble?

NAROFF: Whether China is slowing sharply or the data are just catching up with the reality, is something we just don’t know. When you have as big an economy as is China’s, it is almost impossible to sustain 7%-9% annual growth. China will be throttling back to 5% and lower over the next few years. Thus, for there to be a catastrophe, certain things have to happen.”

CA: Like what?

NAROFF: “The price of oil has to fall sharply once again, basically crashing the elements of the energy sector that have been able to survive the fall to $40-$50. Is that likely? It doesn’t look like it. Second, Chinese growth has to not just slow, but probably flatline. Think of it this way, if China grew at a 5% pace, nominal GDP would expand by over $500 billion.

That would power an awful lot of purchases from the rest of the world. That would also be equivalent to about a nearly 8% rise in the Chinese economy just five years ago. In other words, on a nominal dollar basis, China is still growing strongly.

It is just the percentage change off of a really higher base that is confusing people. And in any event, the U.S. economy doesn’t depend upon China to buy much of its output. Exports to China will probably run about 0.6% of total GDP this year. Thus, even a 10% or 20% reduction in exports would have little direct effect. The rest of the world might be hurt more, but that makes it a secondary effect for the U.S."

We aren't without problems

CA: Well, are there economic problems facing the U.S.?

NAROFF: The primary problem is financial. Since corporate earnings growth has been powered by sharp gains outside the U.S., the slowdown in China would depress earnings. But those are earnings made in foreign markets and we shouldn’t be concerned about them. Similarly, earnings reductions that are due to the strong dollar, not a slowdown in sales, is also totally irrelevant when it comes to the U.S. economy.

CA: So, are we headed for an economic calamity?

NAROFF: I never say never, but right now, the probability is pretty low.  

Every Halloween seems to bring consumer warnings. Don't use those eye color-altering contacts, for example. They can cause eye damage.

One of the latest seasonal warnings comes from Sen. Chuck Schumer (D-NY), who reveals that Halloween makeup and face paint, often imported from China, can contain heavy metals like lead, nickel, cobalt, and chromium, which could pose a serious danger to the children wearing it.

Schumer said he became concerned when he realized the Food and Drug Administration (FDA) does not conduct routine testing of novelty cosmetic products or face paints sold to consumers. He says the agency needs to do more to enforce the packaging regulations that require companies to include the full list of ingredients.

Banned in Canada and Europe

Lead is no longer allowed in makeup sold in Canada and Europe, but it is not currently banned from makeup sold in the United States. Without this regulation, Schumer says many parents are exposing their young children, and even themselves, to products that contain harmful metals like lead.

Over the years, U.S. environmental regulators have moved to remove lead from other consumer products. It used to be a common ingredient in paint, but now it isn't.

The Centers for Disease Control and Prevention (CDC) says there is no safe blood lead level in children and that even low levels of lead in blood have been shown to affect IQ, disrupt concentration, and academic achievement.

Calls for new regulations

In light of all this, Schumer says he thinks the U.S. government has to do more to prevent children from being exposed to lead. A first step, he says, is not allowing Halloween makeup and face paint—geared towards children—to be produced using harmful heavy metals or chemicals, like lead.

Even if it weren't banned, Schumer says parents should at least know which ingredients are being used in the products they slather on their child’s face.

Schumer has asked the FDA to investigate Halloween make-up products to find out what’s being hidden and what’s not. He also plans to push for new regulations and better enforcement for these consumer products.

“Every Halloween we worry about the candy we’re putting in our kids’ mouths but nowadays, we need to worry about the face paint we’re putting on our kids’ faces,” Schumer said. “Toxic Chinese chemicals in children’s Halloween makeup and face paint is a scary thought, and yet, often times, parents don’t even know what’s in these products.”

Advice to parents

Schumer says parents need to pay close attention to where their child’s Halloween makeup is made. “Made in China,” he says, could be a sign that they are buying dangerous chemicals that could potentially pose a serious health risk to their kids.

The Department of Education is stepping up its scrutiny of ITT Educational Services, citing federal fraud allegations against two ITT executives and the company’s “failure of the general standards of financial responsibility.”

ITT had already been under heightened oversight, along with other for-profit schools that receive much of their revenue from federally backed student loans and the G.I. Bill.

The feds said they had found several discrepancies during the heightened scrutiny, including a failure to reconcile federal aid accounts promptly and conflicting information about Pell Grant awards.

“Taken together, these facts demonstrate a failure by ITT to meet its fiduciary obligations, to properly and timely reconcile Title IV program funds as per the regulations and Federal Student Aid guidance, and to meet the standards of administrative capability required of institutions participating in Title IV, Higher Education Act programs,” the department wrote in a letter to ITT.

Faces lawsuits

A company spokeswoman, Nicole Elam, said the company was in the process of straightening out the reporting and administration issues.

"While the additional requirements will result in an increased administrative burden, the company does not believe they will have a material negative impact on our financial results, or in any manner affect the timely award of financial aid to eligible students or the operation of our campuses," she said.

Among other things, ITT will be required to submit a monthly enrollment roster, as well as information about all federal aid funds it disbursed during the previous month.

ITT is facing several other legal challenges, including lawsuits filed by the Consumer Financial Protection Bureau and attorneys general in several states. The company enrolls about 50,000 studnets at its 135 locations.