Current Events in April 2019

Inflation jumped in March due to higher gasoline prices and rising food costs.

The Labor Department reports that the Consumer Price Index (CPI) rose 0.4 percent in March, twice the rate of February’s increase. Despite the sizable increase, inflation over the last 12 months is still running just under the Federal Reserve’s target of 2 percent.

Consumers saw the biggest price hikes last month in gasoline and other energy costs. That category was up 3.5 percent, accounting for about 60 percent of the seasonally adjusted all items monthly increase.

The index tracking gasoline prices rose sharply, along with the electricity index. With the heating season mostly over, natural gas prices were slightly lower.

Higher food costs

Food costs were higher last month, rising 0.3 percent. That follows a 0.4 percent increase in February. Most of the higher costs were in the produce section, with fresh vegetables rising 2 percent and fresh fruit going up 1.2 percent.

Despite the monthly rise in the CPI, Robert Frick, corporate economist for Navy Federal Credit Union, says inflation is still fairly tame, given the slow rise in wages.

“The index for all items except food and energy was up just 0.1 percent,” Frick told ConsumerAffairs. “The difference between this core number and headline number was mainly due to the energy index rising 3.5 percent in March. The food index also showed an increase, and in the last year that portion of CPI was up 2.1 percent, the most since 2015.”

Nothing to alarm the Fed

The CPI strips out food and energy costs from its main inflation number because those two sectors tend to be highly volatile. Frick says rising food costs may be a sign of economic health because consumers feel confident enough to splurge at the supermarket and at restaurants.

“These steady-as-it-goes numbers should have little effect on the Federal Reserve's decision to raise, lower or stand pat on rates,” he said.

Two sectors that were down in February were back up in March. Medical care costs rose 0.3 percent last month, largely due to a 0.6 percent jump in the cost of prescription drugs.

New car costs were 0.4 percent higher last month after giving ground in February. Meanwhile, clothing prices dropped 1.9 percent in March after going up in February.

Ford Motor Company is recalling 874,000 model year 2015-2019 F-150s and model year 2017-19 Super Duty vehicles equipped with engine block heaters that had been inspected in an earlier recall.

In previously inspected vehicles, the engine block heater cable splice connectors may have inadvertently become damaged during that service procedure.

A damaged block heater cable can cause an inoperative engine block heater and/or tripping of household breakers or GFCI-equipped outlets or a resistive short, which can increase the risk of overheated or melted wiring and fire while the vehicle is parked and the block heater is plugged in.

A safety risk only exists while the vehicle is parked and the block heater cable is plugged into an electrical outlet.

The affected vehicles include approximately 327,000 vehicles in North America, with approximately 131,068 in the U.S., and federalized territories and approximately 196,269 in Canada.

What to do

Customers are advised to not use the engine block heater cable.

Dealers will disable the vehicle’s engine block heater cable by cutting off the plug end prongs and sealing the end cap with silicone sealant.

Customers will be notified when an engine block replacement cable is available.

The Ford reference number for this recall is 19S11.

Quality Bicycle Products of Bloomington, Minn., is recalling about 1,900 Salsa Warbird and Vaya bicycles.

The bike’s fork legs can break, posing an injury hazard.

The firm has received two reports of forks breaking with one injury of minor scratches reported.

This recall involves all 2019 Salsa Warbird Carbon series bicycles and framesets, including Ultegra Di2, Force 1, 105, Apex 1, and Tiagra bicycles and all 2019 Salsa Vaya 105 bicycles and framesets.

The model name is printed on the frame of the bicycles.

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The bicycles are sold in a variety of different colors and sizes.

The bicycles, manufactured in Taiwan, were sold at specialty bicycle retailers nationwide from September 2018, through November 2018. The Salsa Warbird sold for between $2,000 and $5,400 and the Vaya sold for between $1,000 and $2,000.

What to do

Consumers should immediately stop using the recalled bicycles, contact Quality Bicycle Products, and return the recalled Salsa Warbird or Vaya bicycles to the retailer where purchased for free installation of a replacement fork.

Consumers may contact Quality Bicycle Products toll-free at (877) 774-6208 from 9 a.m. to 6 p.m. (CT) Monday through Friday or visit www.salsacycles.com click on “Safety and Support” at the top of the page then “Recall” for more information.

As he left office, Food and Drug Administration Commissioner Scott Gottlieb was highly critical of e-cigarette maker JUUL, charging the company has had a role in the increase of teen “vaping.”

But concern about the company is a bipartisan issue, with 11 Democratic members of the U.S. Senate now voicing their concern. In a letter to the company, the lawmakers asked for answers to questions about JUUL’s marketing practices.

The Democrats told JUUL they will not only look at how the company markets its product but also investigate its sale of a portion of the firm to Altria, a tobacco company.

“While JUUL has promised to address youth vaping through its modest voluntary efforts, by accepting $12.8 billion from Altria—a tobacco giant with such a disturbing record of deceptive marketing to hook children onto cigarettes—JUUL has lost what little remaining credibility the company had when it claimed to care about the public health.,” the senators wrote. “While you and your investors may be perfectly content with hooking an entire new generation of children on your tobacco products in order to increase your profit margins, we will not rest until your dangerous products are out of the hands of our nation’s children.”

Following FDA commissioner’s lead

On his way out the door, Gottlieb took another shot at JUUL, a company he has repeatedly pressed to limit access by underage consumers to their product.

“I hope they recognize the problem that’s been created has been created largely by their product,” Gottlieb said in an interview with Vox.

During his nearly two years as FDA head, Gottlieb made combating the rise in underage use of e-cigarettes one of the agency’s highest priorities. He’s previously called out JUUL for its role in creating what he’s called a public health crisis, which he’s previously described as an “epidemic.”

‘Public health epidemic’

Sen. Dick Durbin (D-Ill.), one of the senators signing the letter, noted that both the U.S. Surgeon General and the Food and Drug Administration (FDA) Commissioner have called youth use of e-cigarettes a “public health epidemic.”

Durbin cites data from the National Youth Tobacco Survey (NYTS) showing 20.8 percent of high-school students and 4.9 percent of middle-school students—more than 3.6 million children—currently use e-cigarettes. Durbin says in the last year children’s use of e-cigarettes has increased by 78 percent.

JUUL has defended itself from criticism by saying it makes its product for smokers who are trying to break their addiction to cigarettes. It said it agreed to the investment by Altria because the money it received allows the company to reach more smokers who are trying to quit.

A new analysis by Axios, which has been tracking the pay of health care CEOs, reveals that the combined pay of executives in 2018 overshadowed the budget that the Center for Disease Control and Prevention (CDC) set aside for disease prevention.

Axios added up the salaries and stock values of the 62 highest paid health CEOs in the United States. The amount tallied to a total of $1.1 billion, or $157 million more than what the CDC spent on its chronic disease prevention program.

Executives at biotech, pharmaceutical and hospital companies topped the list as having the highest pay grades. Even executives fighting off controversies were shielded when it came to compensation.

Johnson & Johnson had a rough time at the stock market at the end of 2018 after a Retuers report revealed that the company hid the evidence of asbestos contamination in its talc. But CEO Alex Gorskey nonetheless earned over $46 million in compensation in 2018, placing him ninth on the list of top-paid executives.

Walmart announced plans today to expand its reliance on in-store technology -- such as floor-scrubbing robots, so-called “Fast Unloaders,” and new Pickup Towers -- in an effort to give employees more time to focus on other tasks.

“Smart assistants have huge potential to make busy stores run more smoothly, so Walmart has been pioneering new technologies to minimize the time an associate spends on the more mundane and repetitive tasks like cleaning floors or checking inventory on a shelf,” the retailer said in a statement.

“This gives associates more of an opportunity to do what they’re uniquely qualified for: serve customers face-to-face on the sales floor,” the company added.

Walmart’s push to rely more heavily on technology will involve the rollout of 1,500 new autonomous floor cleaners (called "Auto-C”), 300 additional shelf scanners (called "Auto-S), 1,200 more FAST Unloaders that automatically scan and sort items from trucks, and 900 more Pickup Towers that will assist in retrieving customers’ online orders.

“When a customer receives a notification via email that the item is available, they can use the Pickup Tower like a giant vending machine to retrieve their purchase,” Walmart said of its new Pickup Towers.

Expanding reliance on technology

In December, the Bentonville, Arkansas-based retailer said it planned to bring robotic floor scrubbers to 360 stores by the end of January 2019. In its latest announcement, Walmart said it’s bumping up that figure; it plans to deploy the technology at 1,500 additional locations this year.

The retailer said last year that it had debuted 30 Fast Unloaders in the U.S. and that it was on track to add 10 more each week. That figure also ballooned significantly in the latest announcement, with the company now saying 1,200 more are being added to stores.

Walmart promises that customers will benefit from its increased reliance on robots.

“It means a store that can function seamlessly and associates who are there when customers need them. It also means the items are on shelves where the customers expect in smarter stores all over the country,” the retailer said.

The company said the technology will be deployed in U.S. stores “soon.”

If you like shopping in stores, you may find fewer of them in the next seven years. Analysts at UBS predict 75,000 more stores will likely close their doors if online shopping continues at an aggressive pace.

The reason is simple. There are only so many shoppers, and they have only so much money and credit. If more of it is going into online channels, then less of it will go into brick and mortar stores.

In a note to clients, UBS explains its math: online channels such as Amazon are expected to grow their share of the retail sales pie from its current 16 percent to 25 percent by 2026. If that happens, as expected, it would force the closing of 75,000 retail stores.

2018 rally might not last

Strong 2018 performances by Walmart, Target, and Macy’s have blunted recent talk of a building retail apocalypse, but the UBS analysts say the trend may be hard to stop. They say online sales will likely take the heaviest toll on retail stores that sell clothing, electronics, home furnishings, and even home improvement products.

The damage to brick and mortar retailers has been well-documented in recent years. Sears has closed hundreds of its stores since 2016 and was a shadow of its former self by the time Chairman Eddie Lampert purchased the remaining assets in bankruptcy.

Other retailers shuttering locations in the last couple of years include Payless, Toys R Us, Sharper Image, Abercrombie & Fitch, and JC Penney.

Physical store closures

The UBS analysts acknowledge that brick and mortar retailers upped their game last year, but they said the pace of productivity will be hard to sustain throughout 2019.

“This will likely lead to an acceleration in physical store closures in the upcoming year,” the analysts wrote.

Coresight Research reported this month that a number of diverse factors are combining to create headwinds for retailers. They include saturation of physical retail space, changing consumer trends, a declining middle-class population, a shift to e-commerce sales, and rising debt among retail companies.

The report says that so far this year seven retailers with more than $50 million in liabilities have filed for bankruptcy protection.

In its latest move to crack down on spam and bot accounts, Twitter has announced that it’s capping the number of accounts users can follow per day at 400. Previously, users could follow up to 1,000 accounts in a 24-hour period.

In a tweet announcing the newly reduced daily limit, Twitter revealed that the move is intended to prevent accounts from following only to later unfollow accounts that didn’t follow them back -- a practice that tends to be utilized by accounts that are only interested in boosting their follower metrics.

“Follow, unfollow, follow, unfollow. Who does that? Spammers. So we’re changing the number of accounts you can follow each day from 1,000 to 400. Don’t worry, you’ll be just fine,” Twitter said in its post.

In recent years, Twitter has made a number of efforts to improve the user experience, primarily by focusing on weeding out abusive tweets.

Last month, Twitter confirmed that a “hide tweet” feature spotted by a user will begin rolling out to users “in the coming months.” In 2018, Twitter announced that it would ban accounts that engage in “bulk tweeting” behaviors. Twitter has also added new tools that enable users to flag tweets that violate the site’s rules and has implemented a more stringent identify verification process when creating a new account.

A picture may be worth a thousand words, but using the right words in a home listing might help sell it for more money. At least, real estate marketplace Zillow says that’s the case.

The words have to do with a home’s features, particularly what’s in the kitchen. If you have things that buyers want, mentioning them prominently in the home description will increase traffic and the price a buyer is willing to pay.

34 percent more

In their Home Features That Sell analysis, Zillow researchers found that descriptions that mention “steam oven” or “professional appliance” sold for up to 34 percent more than expected. The data revealed that six out of the top ten features in homes that attracted buyers and brought more money were entertainer-friendly kitchen amenities.  

To reach those conclusions, Zillow looked at listing descriptions from 4.6 million home sales around the country that were posted on its site in the two previous years. The analysis identified the features and design styles that made a house sell for more, compared to others in the neighborhood.

The analysis also pinpointed the markets where that feature was most commonly mentioned in for-sale listing descriptions. Of all the trendy kitchen features, mentioning a home had a steam oven appeared to be the most powerful.

However, it didn’t make a home sell faster. Homes mentioning steam overs, which is a wall oven that steams food, stayed on the market 22 days longer than average. But when the house sold, it sold for above the market average.

Skylar Olsen, director of economic research at Zillow, says having the amenity and mentioning it may be a trigger for buyers.

"Having a steam oven, a heated floor or other luxury features in the home is a signal that there are more than the home's basic features at play,” Olsen said. “These homes are special. They likely come with an elevated design sense and the extra touches valued by home shoppers who are willing to pay."

Mention the amenities

Olsen says sellers who have homes with these features should not be shy about flaunting them.

Most starter homes don’t have these kinds of luxury amenities, but the Zillow researchers found that upgraded features are always worth mentioning to attract these mostly millennial buyers.

The analysis found starter home listings mentioning “free-standing tub,” “pizza oven,” or “wine cellar” brought a bigger sale price than expected. The researchers say this likely reflects the lifestyle millennial homeowners want to live.

That’s not to suggest that you should invest in adding these amenities to your home in hopes of selling at a higher price, only mention them if you have them. If you are considering renovations and updates to an older home, ConsumerAffairs has compiled this handy guide with some suggestions.

Applying to college can be a demanding, rigorous process, and it can also exclude many potential applicants because of cost, poor grades, or other policies.

Now, researchers have found that countries that adopt more inclusive education policies that help more students of the working-class attend college have happier citizens.

“Schools have the potential to have a huge impact on children and youth and on their life chances, but a narrow focus on academic outcomes such as test results provides an incomplete picture of the consequences of education policies,” said researcher Björn Högberg.

Gauging happiness

The researchers delved deeper into this topic after seeing a disparity between the happiness of middle-class kids into adulthood and kids from lower classes into adulthood.

They examined nearly 15,000 responses from the European Social Survey, with participants ranging in age from 18-29 years old and representing over 20 different countries. The survey focused on participants’ overall happiness and satisfaction in life.

The next step of the experiment was looking at education policies in the different countries. The researchers focused on four major initiatives:

• Offering students multiple chances to get into college if they had poor grades in high school;

• Reducing the cost of college;

• Increasing the number of accepted applicants at colleges; and

• Monitoring children’s school performance from a young age.

Overall, the researchers found that participants from a higher social class were happier and more satisfied with their lives than those from lower social classes. The biggest gaps in happiness between the classes were found in Hungary, Germany, Bulgaria, and the U.K.

Conversely, residents in Denmark were the happiest, and they also had the most inclusive educational policies. This was true of many of the countries: more inclusive policies led to happier citizens.

Unlike many of the other countries represented in the survey, students in Denmark were given several chances to attend college, and private education didn’t come with a hefty price tag.

“Among the wealthier western European countries, those with more inclusive education systems, such as Denmark, had smaller social differences (in fact none at all, on average) than equally wealthy but less inclusive countries, such as the U.K. or Germany,” Högberg said.

The researchers hope that these findings inspire more countries to prioritize students when determining education policies, as the effects go far beyond what many may expect.

“I would recommend that education policy, especially at higher levels, are designed such that the opportunity to access education, should one want to, is maximized, either through institutional measures, such as widening access for poorer students, or through financial measures -- such as lower student fees,” said Högberg.

Education is key

While this study focused primarily on European countries, the U.S. could take a cue from some of these policies, particularly after the Trump administration announced plans to get rid of the Public Service Loan Forgiveness Program (PSLF).

Student loans are stressful for everyone, and recent studies have found that financial education is key in helping reduce that stress. Researchers have found that many borrowers are unsure of how interest adds up, which loans are eligible for forgiveness, or how their loans work in general.

“A majority of borrowers, 55 percent, reported being worried about their student loans; however, only 30 percent of borrowers said that they had received financial education about paying off their student loans,” said researcher Lu Fan. “Moreover, only 40 percent of borrowers reported having financial influence from their parents. Given the number of people who need student loans to attend college, we need to do better at educating borrowers.”

While many consumers turn to vitamins to add a boost to their health regimen, one recent study warns of the dangers of consuming too much vitamin D.

Health experts recount the story of a 54-year-old man who started a rather aggressive round of vitamin D over the course of two years, ultimately leaving him with kidney failure.

“Although vitamin D toxicity is rare owing to a large therapeutic range, its widespread availability in various over-the-counter formulations may pose a substantial risk to uninformed patients,” said Dr. Borne Auguste.

Moderating consumption

It isn’t common for many consumers to think of vitamins as posing a danger to overall health, as they are marketed as being beneficial in virtually every sense. However, this study revealed that that may not always be the case.

The researchers focused on the case of a 54-year-old man who returned from a two-year stint in Southeast Asia with kidney failure. He came into the hospital with alarmingly high creatinine levels -- a telltale sign of kidney damage.

Prior to his trip, the patient was in seemingly good health, with no past issues that would require an increase in vitamin D consumption. However, a naturopath prescribed him a vitamin D treatment that involved eight to 12 drops of the vitamin every day.

For comparison, health experts recommend consumers take no more than 400-1,000 IU of vitamin D per day, or double that benchmark for those who are older or suffer with bone-related issues. The patient in question was consuming 8,000 - 12,000 IU of vitamin D every day for over two years.

In addition to the supplements, the patient spent a good amount of time in the sun during the entirety of his trip abroad, adding to his vitamin D exposure. The excess of vitamin D caused his kidneys to fail due to an increased amount of calcium in the blood.

The researchers explained that there are several ways to help reduce vitamin D toxicity, including having all medications carefully reviewed and focusing on reducing the supplement from the patient’s diet. There are also several medications doctors can prescribe to help cut back on the amount of calcium in the blood.

The researchers hope that this study shines a light on vitamin D toxicity; the team advises consumers to be cautious about any supplements that they take moving forward.

“Our experience informs us that patients and clinicians should be better informed about the risks regarding the unfettered use of vitamin D,” the authors wrote. “Given new findings from the U.S. Preventive Services Task Force, current Canadian guidelines regarding its use in low-risk individuals should be revisited.”

Positives and negatives

While one recent study focused on the dangers associated with consuming vitamin D in excess, much research has shown how much good the supplement can do when taken responsibly.

One study found that a lack of vitamin D during pregnancy can lead to children being born with developmental issues, while another found that many children’s multivitamins aren’t providing enough vitamin D.

Researchers have also found that higher levels of the vitamin can reduce consumers’ risk of colorectal cancer, and also lead to better exercise ability.

Bank of America, which recently earned a spot on LinkedIn’s annual Top Companies list, has announced that it will be raising its minimum hourly wage to $20 an hour over the next two years.

Starting May 1, the company’s minimum wage will climb to $17 an hour. By 2021, Bank of America plans to have bumped its minimum wage another $3 to $20 per hour.

“If you get a job at Bank of America, you’ll make $41,000” a year, Chairman and CEO Brian Moynihan said in an appearance on the MSNBC show “Morning Joe.” “With the success our company has ... we have to share that success with our teammates.”

The company said in a statement that the pay hike is part of its commitment to “being a great place to work,” as well as remaining competitive in the sector.

Competitive compensation

Earlier this week, LinkedIn released its annual list of the top 50 most sought-after companies to work for, and companies in the financial industry appeared to be making a resurgence. Bank of America, along with fellow banking companies Citi and Wells Fargo, placed among the top 25.

Bank of America earned a spot at number 18, ranking slightly higher than Citi (no. 22) and Wells Fargo (no. 25). LinkedIn said it based its 2019 ranking on job demand, overall interest from job seekers, and the employee retention rate at each company.

Back in 2017, Bank of America raised the minimum wage for its more than 205,000 employees to $15 an hour.

In a statement announcing the most recent pay hike, chief human resources officer Sheri Bronstein said the company is raising its minimum wage “because we believe that to best serve our customers and clients, we need the best teams.”

Other financial institutions have also raised wages in an effort to offer competitive compensation. In January 2018, JPMorgan Chase announced that it planned to boost wages to a minimum of $15 to $18 for 22,000 employees, “depending on the local cost of living.”

Suzuki Motor of America is recalling 31,302 model year 2010-2013 Kizashis and model year 2006-2013 Grand Vitaras.

The front passenger leather seat may shrink due to high humidity and high temperature. As a result, the occupant classification system (OCS) sensor mat may not accurately detect if an adult or child is occupying the seat.

In the event of a crash necessitating airbag deployment, an incorrect classification may result in the passenger front airbag deploying even if there is a child in the front passenger seat, increasing the risk of injury.

What to do

Suzuki will notify owners, and dealers will replace the seat bottom cushion, free of charge.

The manufacturer has not yet provided a notification schedule.

Owners may contact Suzuki customer service at (800) 934-0934. Suzuki's numbers for this recall are 4011 and 4012.

With no guaranteed fix in place to get the Boeing 737 MAX back in the skies anytime soon, American Airlines has decided to play it safe and extend all related flight cancellations through June 5.

American -- like Southwest and United -- has had to sit on its hands since March 14 when the United States grounded all MAX-driven flights after two MAX aircraft crashes in five months.

The take-charge positions of airlines, the Federal Aviation Administration (FAA), the Department of Transportation (DOT), the National Transportation Safety Board (NTSB), and Boeing to find a solid, long-lasting solution is good for everybody, especially the consumer whose lives and loyalty are at stake.

“In an effort to provide more certainty and avoid last minute flight disruptions, American has extended cancellations through June 5,” American wrote in a news release. “This will result in the cancellation of approximately 90 flights each day based on our current schedule. By proactively canceling these flights, we are able to provide better service to our customers with availability and rebooking options.”

Do you have an upcoming reservation on American?

American is taking a proactive approach to try and cover all the bases for anyone booked on one of its flights between now and June 5. Here’s everything the airline feels the customer needs to guide them through this extension:

Question: My flight was previously scheduled on a MAX. Will it be canceled?

Answer: Not all flights that were previously scheduled on a MAX will be canceled, as American plans to substitute other aircraft types. In total, approximately 90 flights will be canceled per day.

Question: My flight wasn’t scheduled to be on a MAX. Why has it been canceled?

Answer: A flight that was not scheduled as a MAX flight might be canceled to enable American’s team to cover a MAX route with a different aircraft. The company’s goal is to minimize the impact to the smallest number of customers.

Question: How will customers know if they are impacted?

Answer: American’s Reservations team will contact affected customers directly by email or telephone. Customers who booked through a travel agent will be contacted by their agency directly.

Question: My flight was canceled and I don’t want to rebook. Can I get a refund?

Answer: Yes. If a flight is canceled and a customer chooses to not be rebooked, they may request a full refund by visiting aa.com/refunds.

Any update from the other airlines involved?

At press time, neither United or Southwest had announced an extension similar to American’s.

ConsumerAffairs has reached out to both airlines and will update our readers as soon as we hear something.

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Update: 4/8/19, 12:00 p.m. (EST)
In a statement to ConsumerAffairs, a United Airlines representative said that the company is "working diligently to reduce any customer impacts through use of alternate aircraft and rebooking and [has] contingency plans through June 05."

Update: 4/8/19, 1:15 p.m. (EST)

In a separate statement to ConsumerAffairs, Southwest Airlines said that it will also be revising its schedule through June 7. Below is the full statement given by a representative.

"Today, Southwest’s flight schedule was revised through June 7 in an effort to support our Customers by reducing last-minute trip disruptions and cancelations which have been caused by the removal of the Boeing 737 MAX 8 from service for longer than anticipated. By cancelling flights through June 7 now, we can offer rebooking options sooner so that affected Customers can maintain confidence in their travel plans," said Southwest representative Brian Parrish.

"Customers affected by flight changes are being proactively notified. We sincerely appreciate our Customers’ patience and understanding regarding these schedule changes, and we look forward to restoring the level of reliability and on-time performance that our Customers and Employees deserve and expect from Southwest."

Parrish also noted that affected MAX 8 aircraft represent less than 5 percent of Southwest's entire fleet.