Michael McCord of the New Hampshire Business Review provides a good synopsis of why ten hospital administrators are so upset about the latest state budget that they’ve filed a lawsuit. Continue Reading
More of the same…for two years running now. That’s the upshot of a story by AP writer Derek Kravitz analyzing the latest numbers from the National Association of Homebuilders.
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All over the country, homebuilders face stiff competition from banks trying to quickly unload foreclosed homes.
“The National Association of Home Builders said Monday that its index of builder sentiment in August was unchanged at 15. The index has been below 20 for all but one month during the past two years.
Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom…
Toward the end of the piece, Kravitz writes,
“A special question on the survey this month showed that 41 percent of builders had lost a contract because a buyer could not sell their current home, said Bob Nielsen, chairman of the builders’Â group.”
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At this point, the national unemployment rate is 9.1 percent, while in New Hampshire it's much lower, at 4.9 percent. Small business hiring is considered key to speeding-up the nation's economic recovery.
Today’s Boston Globe has an interesting take on the state of small business in the country. Reporters Erin Ailworth and Katie Johnston write that small businesses make up more than half of all private sector employment in the country, but:
“The percentage of small-business owners feeling optimistic about the economy fell from 67 percent in a June survey, to 47 percent in July Continue Reading
Here’s an interesting take on Granite State gas prices from the New Hampshire Business Review.
Â
Philippe Huguen / AFP/Getty Images
After Labor Day, could we see the triumphant return of gas prices below $3.50?
“The cost of a barrel of crude was $81 on Wednesday, about a 20 percent decrease from a couple of months ago. The fall in price is due in large part to global economic uncertainty stemming in part from the U.S. credit downgrade.
But Dr. Massood Samii, chair of the international business department at Southern New Hampshire University, said, ‘I don’t expect it to go much further down. Barring any major political upheaval, $80 to $90 seems to be a reasonable target, and that should lead to some decline in gasoline prices.'”
 So why wouldn’t we see a proportionate decline in gas prices as the price of crude goes down?
“The cost of crude oil accounts for about one-third of the cost of gasoline at the pump, he said. The other two-thirds are a combination of factors – taxes, transportation and refinery costs, and profits taken at every step of the value chain, from wholesaler to distributor to gas station.
For the most part, those costs are fixed, so a decline in the price of crude oil only decreases the price of gas by a fraction.
In fact, by the time gasoline arrives at the gas station, wholesalers pretty much dictate the price that retailers charge, he said. Most gas stations make only a ‘minimal’ profit margin – a few cents on each gallon sold, he said.”
The NHBR also quotes Samii as saying we’ll probably see gas prices in New Hampshire fall below $3.50 sometime after Labor Day, when summer winds-down and people start to lay off the heavy-duty driving.
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Itâs been a crazy couple of weeks, with financial tremors continuing to shake-up the jagged economic landscape. Â National GDP barely went up, Congress made an 11th hour deal to raise the debt ceiling, S&P downgraded the US credit rating anyway, and the Federal Reserve decided to hold interest rates steadyâat virtually nothingâfor the next two years.
And that was just the beginning. Continue Reading
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Following state budget cuts, Dartmouth-Hitchcock Medical Center is hoping to thin its workforce with an early retirement plan.
A piece by Denis Paiste in the New Hampshire Union-Leader illustrates the continued fallout of state budget cuts on the health care sector:
“Dartmouth-Hitchcock is seeking early retirements from about 725 employees, or 8.3 percent of its staff, at its main employees campus, Dartmouth-Hitchcock Medical Center, in Lebanon, and at community sites in Concord, Manchester, Nashua and Keene.
The state’s largest health care institution, with 8,700 employees, Dartmouth-Hitchcock said the realignment, which targets non-clinical staff, was in response to recent cuts by the state of New Hampshire in health care reimbursements.”
Recently, Dartmouth-Hitchcock joined nine other New Hampshire hospitals in a lawsuit against the state. The providers claim the state is violating the law by enacting $250 million in cuts to Medicaid payments. The lawsuit also accuses the state of levying an illegal 5.5 percent tax on large hospitals. NHPR Health Reporter Elaine Grant recently delved into the implications of the lawsuit, and how it ties into the hospital funding landscape nationwide. You can check out report here.
After a brief rally, AP Business Writer Stan Choe reports in The Boston Globe that the markets are once again sliding back downhill:
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It's been another up-and-down day on Wall Street as investors try to make out the long-term economic picture.
“The Dow Jones industrial average fell 413 points, or 3.7 percent, to 10,827in morning trading Wednesday. That erased nearly all of its 429 point gain from Tuesday, when the Federal Reserve pledged to keep its key interest rate at nearly zero into 2013.
Gold rose $30 per ounce to $1,773 as money poured into investments considered safe. The 10-year Treasury note, which has also served as a safe haven, also rose. Its yield fell to 2.14 percent from 2.26 percent late Tuesday. It had reached a record low of 2.03 percent on Tuesday. A bond’s yield falls when its price rises.
‘Investors are still trying to discern whether it’s going to be a double-dip recession or just a slowdown,’ said Oliver Pursche, president of Gary Goldberg Financial Services.”
With the markets in such a state of flux, it’s hard to pin down what the outcome will be for the broader economy in general, and the New England and New Hampshire economies in particular. But as Choe reports, something has changed, at least as far as the Fed’s concerned.
“As recently as June, the Fed said that the slowing recovery was due to temporary factors, such as high gasoline prices and the disruption to manufacturers following Japan’s March earthquake. But on Tuesday, the central bank acknowledged those factors were only part of the reason that the economy grew at its slowest pace in the first half of this year since the recession ended in June 2009.
The statement ‘was essentially a full admission that the Fed had not fully gotten their arms around the permanence to the weak trends in the economy,’ William O’Donnell, head of U.S. Treasury strategy at RBS Securities, wrote in a report.”
A spokeswoman for the Federal Reserve Bank of Boston declined State Impact’s request for an interview, citing a customary “blackout” following Fed meetings.
As Kyle Jarvis of The Keene Sentinel reports, fallout from state budget cuts continues, this time hitting the Monadnock region.
“Easter Seals of Keene is closing its program for young children with disabilities due to lack of funding, but its clients wonât be left out in the cold.
Monadnock Developmental Services, which contracts with Easter Seals to provide services for developmentally disabled children from birth to age 3, is facing a 10 percent reduction in state funding this year. That means a 10 percent cut in the funding from the agency to Easter Seals, which led Easter Seals officials to close its Keene office.
Last year, Easter Seals received about $285,000 from Monadnock Developmental Services for its early supports and services program. This yearâs figure will fall short of that by about $25,000, said Alan Greene, executive director for Keene-based Monadnock Developmental Services.
The agency is required by state law to provide the services, and will take over for Easter Seals immediately.
The Easter Seals program serves about 100 children with disabilities and their families, and will be terminated on Sept. 2, after 12 years, Easter Seals officials announced Monday.”
Jarvis reports that as Monadnock Developmental Services takes over young children’s programs, the agency hopes to be able to keep on some Easter Seals employees. MDS is also short on space, and wants to work something out with Easter Seals to use its soon-to-be-shuttered office. Whether these moves will represent a cost cut, a cost rise, or a break-even point for MDS–and by extension, the state–remains to be seen.
According to the Tax Foundation, 6.9 percent of New Hampshire’s direct spending went toward interest payments on debt in FY 2009. The only state that devoted a higher portion of its funds to interest was…Massachusetts, at 9.58 percent. (You can find more surprising comparisons between New Hampshire and Massachusetts here.)
Overall, New England eats up a goodly portion of the Top Ten, with Rhode Island at No. 3 and Connecticut at No. 4.  Vermont, meanwhile, just misses the top ten at No. 11.Â
Maine makes the most respectable showing in New England at No. 20, with 3.67 percent of state spending going toward interest.
Tax Foundation
Most of the bottom 10 states for direct spending on interest payments are in the Northeast, while the top 10 are scattered throughout the Southeast, Southwest, Midwest, and Intermountain West.
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