Current Events in July 2016

Ford Motor Company is recalling 5,280 model year 2016 Ford Explorers and F-150s equipped with a manual recline driver's seat.

The seat back frame may have insufficient welds which may not meet the requirements of Federal Motor Vehicle Safety Standard (FMVSS) numbers 202, "Head Restraints" and 207, "Seating Systems."

The seat back may not restrain the occupant adequately during a crash, increasing the risk of injury.

What to do

Ford will notify owners, and dealers will inspect and, if necessary, replace the seat back frame, free of charge. The recall is expected to begin on August 15, 2016.

Owners may contact Ford at 1-800-392-3673. Ford's number for this recall is 16C11.

The U.S. Senate this week voted to move to a final debate on legislation to establish a national, uniform label for food containing genetically modified organisms (GMO). A final vote of the bill could come within days.

Food activists and the food industry have long battled over the use of GMO, with activists taking their campaign against it to the state level. Vermont was the first state to adopt its own language, requiring a special label for all GMO products sold within its borders. The law went into effect late last week.

The food industry protests that having to apply different labels for food sold in different states would be incredibly expensive and highly inefficient. While it is Democratic lawmakers who have been most sympathetic to food activists in the past, enough Democrats in Congress support the national label to make it a bi-partisan issue.

Key Democrat supports

Among them is Sen. Debbie Stabenow (D-MI), the ranking Democrat on the Senate Agriculture Committee, who reached agreement with Committee Chairman Pat Roberts (R-KS) on a mandatory labeling bill after a voluntary measure died in the Senate in June.

“This bipartisan bill is a win for consumers and families,” Stabenow said. “For the first time ever, consumers will have a national, mandatory label for food products that contain genetically modified ingredients.”

The food industry also supported the measure, since it would override the Vermont law and head off a move by other states considering their own GMO labels. Pamela G. Bailey, president and CEO of the Grocery Manufacturers Association (GMA), urged the Senate to complete work on the measure as soon as possible.

“Vermont’s mandatory on-package GMO labeling law took effect on July 1 and consumers and small businesses in the state are already facing fewer products on the shelves and higher costs of compliance on small businesses,” Bailey said.

Stabenow said the Senate bill would close what she called “glaring loopholes” in the Vermont law that would allow a number of processed food products containing GMO ingredients to go unlabeled.

A final vote of the bill could come as early as today.

Childhood obesity is a growing problem in the U.S., and a new study from the University of Sydney’s School of Public Health shows that the parents of obese children could be paying for it in medical bills.

Researchers found that obese children between the ages of two and five are 2-3 times more likely to be admitted to a hospital. Additionally, parents and guardians will need to pay 60% more to cover healthcare costs.

“Childhood obesity is a serious public health issue, and is becoming an increasing problem in children under five years old. . . In addition to the health impacts of childhood obesity, there are major economic impacts, which may occur earlier than previously thought,” said Alison Hayes, lead researcher of the study.

Lifelong problems

The study analyzed healthcare use for 350 children, including all doctor and specialist visits, medical tests, diagnostics, prescriptions, and other medical costs. They found that obese children were not only admitted more often, but paid a heftier price when all was said and done. The most common issues that plagued obese children included respiratory disorders and diseases of the ear, nose, mouth, and throat.

While worldwide obesity statistics for children are at roughly 7%, the researchers point out that countries like the United States, United Kingdom, and Australia have much higher numbers of obese children -- with some estimates showing as high as 23%. They caution that this early form of obesity can lead to lifelong problems.

“We know that children who are obese in early childhood are more likely to be obese in later childhood, adolescence and adulthood, which can lead to serious chronic diseases that have a huge impact on our health care system,” said Hayes.

Keeping costs down

The researchers say that their results point to the need for early prevention strategies that can help curb the onset of obesity and keep costs down.

“Our results are important for health care funders and policy makers because preventing obesity in the early childhood years may be a cost-effective way to tackle the obesity crisis, improve the nation’s health and reduce the economic burden of obesity,” said Hayes.

The full study has been published in the journal Obesity.  

For new moms and dads, whipping up a from-scratch, organic meal may not seem like it’s in the cards. Working parents, especially, may find it difficult to balance the demands of a new baby and a job.

But baby food delivery services like Lilly & Bella aim to make it possible for parents to prepare nutritious meals for their baby or toddler right at home.

The ability to skip the grocery store is just one of the benefits of the weekly, subscription-based service, which delivers organic produce and recipes to parents' doorsteps. 

Beyond jars and pouches

Parents of little ones may appreciate the service for its ability to gradually expose kids to a variety of different foods.

Just as meal kit delivery services for grown-ups seek to add variety to an adult’s diet by delivering new genres of food, Lilly & Bella aims to expose kids’ palates to new foods.

Upon reaching the last of the service’s four stages, kids will have tasted more than 30 different fruits and vegetables. Lilly & Bella also seeks to eradicate the stress of meal planning by including recipes that can help make cooking a meal from scratch a breeze.

Lilly & Bella subscriptions are currently only available to residents of North Texas, but similar services have begun cropping up all over the U.S.

Similar subscriptions

Ayesha Curry’s new meal delivery service, Gather, includes a baby food add-on. Like Lilly & Bella, its goal is to expose kids to the types of food that mom and dad are eating.

“Whatever vegetable or meal the adults are having, it’s already prepared for the baby in the form of baby food,” Curry told HauteLiving.com. “For me, this component is something that I wish was around when my kids were super little.”

For residents of Los Angeles, there's Caer: a baby food delivery service that offers nutrient-dense, low sugar food. New Yorkers with babies or toddlers can get their organic baby food delivered from Shoogles.

After nearly two years of relatively-low gasoline prices, U.S. consumers have saved a lot of money at the gas pump. The Energy Information Administration (EIA) has estimated consumers saved about $700 last year.

What they did with it is the million dollar question. Many economists assumed the savings would significantly boost the economy as consumers used their savings to satisfy pent-up demand. It hasn't worked out that way, as consumer spending hasn't risen that much.

So where is the money going? JP Morgan Chase conducted a survey of one million consumers to find out.

A 1% pay raise

 The Chase report relies on a survey of Chase customers in 23 states. It found middle-income households spent about $480 less on gas in 2015 than in 2014. For 60% of households, that's the same as getting a 1% pay raise.

Of course, gasoline prices varied across the country. They were low in Oklahoma and Texas but fairly high in California and Nevada. All that was figured into the equation.

The report looked at gas spending and savings, the consumers most and least impacted, and how lower gas prices affected consumer spending.

The research found that households spent over $200, which is 45% of their gas savings, on things other than gasoline. They were most likely to spend the money at restaurants and retail merchants.

Spent a lot of it at gas stations

In an interesting finding, housesholds spent over $150 of their gas price savings at gas stations. This could mean a couple of things.

First, it could mean they bought more gasoline – perhaps for trips they might not have taken when prices were higher.

But they might have also been more inclined to go inside and purchase a beverage or snack – something they would have hesitated to do when gas prices were higher.

Chase notes that the results of its research, based on actual credit and debit card use, differ from previous estimates based on aggregate data. Those projections suggested consumers were banking their gas savings or paying down credit card debt.

So why hasn't there been a more significant boost to the economy? Who's to say there hasn't been?

True, the U.S. economy has been barely growing, but at least it's growing, while much of the rest of the world is slowing. It could be the impact of lower gasoline prices has been more keenly felt in the U.S., and the spending from the savings has simply helped the economy stay afloat.

A class-action suit filed in Massachusetts focuses on a sore point for many employees. The employee shows up on the job as scheduled, but due to a lack of work is sent home with no pay.

Massachusetts law addresses the issue of “reporting pay,” requiring employers to pay employees for at least three hours of work at minimum pay for every shift that is cancelled or shortened after the employees arrive at the work site.

The named plaintiff in a class-action suit against United Parcel Service (UPS) is Cort Szafarz, who says he worked as a part-time package handler at UPS from September 2014 to May 2015 in the Chelmsford, Mass. facility.

According to the complaint, Szafarz was scheduled to work Monday through Friday from 6pm to 11pm. Even though he arrived at work ready to work the assigned hours, Szafarz says his shift was often cancelled or reduced.

'Just the way we do it here'

When that happened, Szafarz ssays he and others were not paid for at least three hours of work. When he complained to the company, he said he was told, "that's just the way we do it here."

Szafarz's lawsuit seeks class status to represent other UPS hourly employees in Massachusetts that have faced similar experiences.

"It's important that employers know they cannot take advantage of their employees,” said Andrea Gold, one of the plaintiff attorneys in the case.

She says the law is clear – if an employee shows up for work as scheduled, he or she is entitled to compensation.

Common practice?

The National Women's Law Center maintains American businesses are increasingly moving to on-demand scheduling, making last-minute schedule changes to deal with fluctuations in consumer demand.

“These practices, which are often described as 'just-intime' scheduling, shift the risk and the cost of slack business onto workers,” the group wrote in a recent fact sheet. “Workers who are sent home early without working their scheduled shifts have already paid for transportation to and from work, paid for child care in many instances, and foregone any other plans they might have made for that day—such as working a shift at another job or going to school.”

The issue is not currently covered by the federal government, but by the individual states, which have different rules and regulations.

California, the District of Columbia, New Jersey, New York, and Rhode Island require all non-exempt workers to receive reporting time pay. New Hampshire has a similar rule but it doesn't apply to employees of counties or cities. Oregon requires reporting time pay only for minors. Connecticut and Puerto Rico’s laws only apply to certain businesses.

Another 172,000 people found work in the private sector during June, according to the ADP National Employment Report. However, that's down by about 1,000 from the May tally.

Small businesses continued to supply the bulk of the new positions as payrolls at firms with 49 or fewer employees increased by 95,000 -- a jump 0f 11,000 from May. Employment at companies with 50-499 employees increased by 52,000 jobs, compared with May's 60,000. The number of jobs at large companies -- those with 500 or more employees -- increased by 2,000 from the month before to 25,000. Companies with 500-999 employees added 21,000 and those with more than 1,000 employees hired 4,000 workers in June.

"Since the start of 2016, average monthly job creation has slightly dropped," said Ahu Yildirmaz, vice president and head of the ADP Research Institute. "Lackluster global growth, low commodity prices, and an unfavorable exchange rate continue to weigh on U.S. companies, especially larger companies."

Goods and services empoyment

The goods-producing sector lost jobs -- 36,000 of them -- in June following a decline of 5,000 in May. Within that category, 5,000 construction industry jobs disappeared and there were 21,000 fewer people employed in manufacturing.

Employment in the service-providing category rose by 208,000 jobs last month on top of the May increase of 173,000. Professional/business services contributed 51,000 jobs, trade/transportation/utilities grew by 55,000, and financial activities added 2,000.

Despite the decline from May, Mark Zandi, Moody's Analytics Chief Economist Mark Zandi believes job growth revived last month from its spring slump. “Job growth remains healthy,” he said, “except in the energy and trade-sensitive manufacturing sectors. Large multinationals are struggling a bit, and Brexit won't help, but small- and mid-sized companies continue to add strongly to payrolls."

The ADP National Employment Report is produced by the payroll firm in collaboration with Moody's Analytics.

Pink slips were in the wind during June as employers announced plans to cut payrolls by 38,536 jobs.

While that's up 28% from May, when firings fell to a five-month low in June, it's still well below the 12-month average of 53,049 monthly job cuts. And according to outplacement consultancy Challenger, Gray & Christmas, which tracks job cuts, it indicates a positive employment environment.

“Job cut announcements were up last month, but they increased from the lowest total of the year to the second lowest of the year,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

The June total is 26% lower than the monthly job cuts averaged over the past year and 14% below the same month a year earlier.

A slowing pace

While the total of 313,754 planned job cuts so far this year is up 9% from the first six months of 2015, the pace of job cutting has slowed significantly since the beginning of the year. Job cuts in the second quarter were down 27% from the first quarter and 10% lower than the second quarter of 2015.

“It is not unusual to see a slowdown in job cuts during the summer months,” said Challenger. “Other factors are definitely contributing to the decline, the biggest one being the precipitous drop off in job cuts attributed to low oil prices.”

Firms in the energy and industrial goods sectors blamed oil prices for 50,053 announced job cuts in the first quarter. In the second quarter, oil-related job cuts were down 48%. In the energy sector alone, job cuts declined 42% in the second quarter.

More of the same

Challenger said we may continue to see low job cut totals throughout the remainder of 2016, as employers take a wait-and-see stance on workforce levels.

“Several uncertainties, including national elections, the recent Brexit, and global security and economic issues are giving employers pause when it comes to workforce decisions," he noted, adding “We are seeing it in layoff numbers, as well as the job creation numbers, which have been lackluster in recent months.”

Not every sector is holding off on job cuts. Terminations in the computer industry increased in the second quarter and total 39,589 through the first half of the year -- more than triple the number announced by these firms in the first six months of 2015.

Initial claims

Another big drop in the number of initial jobless claims last week.

The Department of Labor (DOL) reports the seasonally adjusted total of first-time applications for state unemployment benefits initial claims was 254,000 in the week ending July 2, down 16,000 from the previous week, when the level was revised upward by 2,000.

Initial claims have now been below 300,000 for 70 weeks in a row, the longest stretch since 1973.

The four-week moving average, which many economists believe better reflects the labor market because it lacks volatility, was down 2,500 from a week earlier to 264,750.

The complete report may be found on the DOL website.

Ten firms are recalling about 501,000 self-balancing scooters/hoverboards.

The lithium-ion battery packs in the self-balancing scooters/hoverboards can overheat, posing a risk of the products smoking, catching fire and/or exploding.

There have been at least 99 incidents reports of the battery packs in self-balancing scooters/hoverboards overheating, sparking, smoking, catching fire and/or exploding including reports of burn injuries and property damage.

This recall involves self-balancing scooters, commonly referred to as hoverboards. They have two wheels at either end of a platform and are powered by lithium-ion battery packs. Recalled self-balancing scooters include the following retailers, brands and online firms:

Retail Stores:

Online Retailers:

What to do

Consumers should immediately stop using these recalled products, which were manufactured in China, and contact the recalling company to return their hoverboard for a full refund, a free repair or a free replacement depending on the model.

Consumers may contact the recalling companies through their websites and call centers listed above.

American Honda Motor Co. is recalling 39 model year 2015 Acura MDX 2WD and MDX 4WD vehicles, 2016 Acura MDX 4WD vehicles, 2015-2016 Honda Odyssey vehicles and 2016 Honda Pilot 2WD and 4WD vehicles.

The vehicles have fuel tanks that were manufactured with insufficient welds which may separate and allow fuel to leak out.

A fuel leak in the presence of an ignition source may result in a fire.

What to do

Honda will notify owners, and dealers will replace the fuel tanks, free of charge. The recall is expected to begin July 8, 2016.

Owners may contact Honda/Acura customer service at 1-888-234-2138. Honda's numbers for this recall are KA9 (Honda vehicles) and KB0 (Acura vehicles).

General Mills is recalling a limited quantity of frozen Beyond Meat Vegetarian Indian Curry with Beyond Chicken, produced over seven days in April 2016.

The product may be contaminated with Listeria monocytogenes.

The company has not received any reported consumer illnesses related to this issue.

This product is available exclusively at Whole Foods.

The recall is limited to Vegetarian Indian Curry with Beyond Chicken with the following "Better if Used By" dates printed on the package:

What to do

Customers who purchased the recalled product should of the it.

Consumers may call General Mills consumer relations at 1-800-754-9061 for a replacement product.

Verizon Wireless is launching new wireless plans that will cost more but give customers access to more data.

Also, for the first time, customers on the new plans will be able to save unused data for the following month, a feature the company calls “Carryover Data.” The new plans and features take effect July 7.

Customers may switch to one of the new plans using the MyVerizon app. The lowest-cost plan is the S plan, which goes from $30 to $35 a month but doubles the data to 2 gigabytes (GB) per month. The M plan also goes up by $5 while the data allowance goes from 3GB to 4GB.

The L plan rises $10 a month but will offer 8GB a month of data instead of 6GB. The XL plan goes from $80 to $90 but the data allowance jumps from 12GB to 16GB. The largest plan, the XXL, also goes up another $10 to $110. The data allowance goes from 18GB to 24GB.

MyVerizon app

The company says the MyVerizon app will allow you to view your bill at any time, show you how much data is being used, and allow you to get more.

The app will also allow you to order additional devices, pay your bill, and connect with technical support.

“The new Verizon Plan puts your mobile experience in the palm of your hand with the My Verizon app, giving you greater value with new capabilities that get rid of the fear of overages, offer bill simplicity, and help you better manage your overall mobile experience with a few quick taps,” said Verizon marketing VP Nancy Clark.

Catching up to competitors

Clark adds that the app is just a way of putting consumers in charge of their accounts. If Verizon customers like the new options, they can thank many of Verizon's competitors, who adopted many of them years ago.

With the changes, you can have up to 10 consumer and business lines on an account. Some things will remain as they are: line service charges for smartphones is $20 per month, tablets and Jetpack devices are $10 per month, and connected devices are $5 per month.

But Verizon says connected devices won't count toward the limit for devices on an account, whether they’re offered by Verizon or not.  

A Detroit-area man and his son-in-law survived the crash of their 2016 Tesla Model X on the Pennsylvania Turnpike last week, the second reported crash involving a Tesla in self-driving mode.

Albert Scaglione, who owns an art gallery in Southfield, Mich., said his Tesla was in Autopilot mode when it ran off the right side of the highway, hit a guardrail, then crossed over the eastbound lanes and hit the concrete median, the Detroit Free Press reported.

The car overturned and wound up upside down in the middle of the eastbound lanes, Pennsylvania State Police said, but Scaglione and his artist son-in-law Tim Yanke, survived. 

The crash follows last week's report that federal safety regulators are investigating the design of the Tesla Autopilot system following the death of an Ohio man who died in Florida when his Tesla hit a tractor-trailer while in self-driving mode.

The tractor-trailer was making a left turn in front of the Tesla and apparently was not detected either by the driver or the Autopilot system. 

The Pennsylvania Turnpike is notorious for its narrow lanes and concrete median. It's not clear whether those were factors in the Scaglione accident. State police have not yet issued a citation in the accident.  

Ashley Madison, the dating website that helped married members find partners for affairs, has repositioned itself and hit the reset button.

Two new top executives of parent company Avid Life Media – CEO Rob Segal and President James Millership – have unveiled what they call transformative changes to help the company bounce back from last year's system hack that made members' names public.

“A year ago, Avid Life Media was silenced by a devastating, criminal hack that affected our company and some of our members,” Segal said. The company is truly sorry for how people’s lives and relationships may have been affected by the criminal theft of personal information. That’s why we’re charting a new course and making some big changes.”

Among the changes, Ashley Madison will no longer be just a dating site for married people looking to cheat, but will also be a site for “the open-minded dating community.” The company says the website will try to appeal to a wide range of people seeking relationships.

Like any major business, Segal says Avid Life Media has made major investments in new security safeguards to counter cyber threats. After last year's exposure, Segal says Ashley Madison worked with Deloitte’s cyber security team to set up new security systems that include 24/7 monitoring.

The Impact Teams strikes

The Ashley Madison system hack took place nearly a year ago by hackers who identified themselves as The Impact Team. The hackers' objective was the removal of the website, claiming the company lied to its members.

A month later, some Ashley Madison members filed suit against the company over the data breach. However, the suit was complicated by the fact that the plaintiffs did not want to be publicly identified. That was the issue behind the suit in the first place.

Meanwhile, Segal confirmed to The New York Times that the Federal Trade Commission is investigating Ashley Madison, but he isn't sure of the focus. Nonetheless, he said the company is cooperating.

Growth in the non-manufacturing, or services, sector of economy picked up steam in June.

According to the Institute for Supply Management (ISM), the sector was up 3.6% from May to a reading of 56.5%, representing continued growth in the non-manufacturing sector at a faster rate. It also marked the 77th consecutive month of expansion.

A reading above 50 indicates expansion, while below that suggests contraction.

The New Orders Index registered 59.9%, 5.7% points higher than the reading of 54.2% in May. The Employment Index grew 3% in June after contracting in May to 52.7%. The Prices Index dipped 0.1% from May to 55.5%, the third consecutive price increase.

Industry by industry

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

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

The three industries reporting contraction were:

1. Educational Services;
2. Professional, Scientific & Technical Services; and
3. Other Services.

A continuing decline in interest rates sent mortgage applications surging last week.

The Mortgage Bankers Association (MBA) reports applications shot up 14.2% in the week ending July 1. The Refinance Index jumped 21%, while the refinance share of mortgage activity rose to 61.6% of total applications -- the highest level since February -- from 58.1% the previous week.

“Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over three years,” said MBA Chief Economist Mike Fratantoni. “In response, refinance application volume jumped almost 21% last week to its highest level since January 2015.”

The adjustable-rate mortgage (ARM) share of activity fell to 5.6% of total applications, the FHA share of total applications dropped to 9.5% from 10.6% a week earlier, the VA share was 12.8% -- up from 12.2% the week prior -- and the USDA share was up 0.6%.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) fell nine basis points -- from 3.75% to 3.55% -- its lowest level since May 2013, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dropped to its lowest level since January 2011 -- 3.67% from 3.74% -- with points decreasing to 0.24 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA was down five basis points to 3.56%, its lowest level since May 2013, with points decreasing to 0.31 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages slipped from 3.02% to 2.96%, its lowest level since May 2013, with points decreasing to 0.32 from 0.38 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week
• The average contract interest rate for 5/1 ARMs declined three basis points to 2.85%, its lowest level since April 2015, with points decreasing to 0.26 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.

Volkswagen Group of America is recalling 536 model year 2007-2009 Audi A8 and S8 vehicles.

The sunroof glass on the recalled vehicles may not be properly secured to the sunroof frame. As a result, the sunroof glass may detach from the car while driving.

If the glass detaches from the sunroof frame it could be come a road hazard, increasing the risk of a crash.

What to do

Volkswagen will notify owners, and dealers will install additional adhesive between the sunroof glass and frame, free of charge. The recall is expected to begin in July 2016.

Owners may contact Audi customer service at 1-800-253-2834. Volkswagen's number for this recall is 60C3.

Hype Wireless of Edison, N.J., is recalling about 25,000 self-balancing scooters/hoverboards.

The lithium-ion battery packs in the self-balancing scooters/hoverboards can overheat, posing a risk of the products smoking, catching fire and/or exploding.

The company has received one report of a self-balancing scooter/hoverboard overheating and smoking. There have been no reports of injuries or property damage.

This recall involves Hype Roam brand self-balancing scooters, commonly referred to as hoverboards. The hoverboards have two wheels at either end of a platform and are powered by lithium-ion battery packs. Roam brand hoverboards were sold in black, red and blue. Roam is printed on a sticker attached to the undercarriage of the scooter.

The hoverboards, manufactured in China, were sold at Bed Bath and Beyond, Sports Chalet, VMZ Enterprises LLC and Trans World Entertainment stores nationwide and online from November 2015, through January 2016, for about $500.

What to do

Consumers should immediately stop using these recalled products and contact Hype Wireless to exchange their hoverboard for a free UL-compliant replacement.

Consumers may contact Hype Wireless toll-free at 866-449-7186 from 9:30 a.m. to 6:30 p.m. (ET) Monday through Friday, or online at www.hyperoam.com and click on Recall for more information.