Second newspaper starts up in Long Beach, while online news provider Patch slashes its staff. Yahoo's online-savvy CEO makes a fashion statement – in a magazine. This week in the economy.
Newspaper starts up, online news pioneer cuts back: Long Beach Register gathered staff to begin producing at least 16 pages of content for the first edition, due Monday. The newspaper, owned by the Orange County Register, reflects the owner's optimism that print journalism can prosper in the 21st century. The Register faces stiff competition from the port city's existing paper, the Long Beach Press-Telegram, which has an average weekday circulation of some 55,000. The upstart paper expects to distribute 10,000 copies a day, wrapped around the Orange County Register.
AOL, meanwhile, is cutting 500 jobs over the weekend from Patch, its network of hyperlocal news websites. The layoffs started Friday, with 350 of the division’s 1,000 total workers receiving pink slips. AOL employs 5,500 total workers; the Patch layoffs would mean a 9 percent cut of the workforce.
AOL is also planning to shutter or consolidate 150 out of 900 local Patch sites. The company may attempt to find corporate buyers for some of the sites.
Consumer sentiment surprises, in a bad way: The University of Michigan’s consumer sentiment index fell to 80.0 in its preliminary August reading, far below analysts’ expectations of an 85.0 reading. Consumers were pessimistic about both their present and future financial situations, and 38 percent of those surveyed reported they were worse off financially than they were a year ago (the highest percentage since January of this year).
“This is a bad report,” Ozlem Yaylaci, senior US economist for IHS Global Insight, wrote via e-mailed analysis. “Consumer sentiment is currently at the lowest level since April. The relatively poor employment report and anemic wage growth are having a negative impact on spending and confidence. Major retailers are also feeling the burn at the cash register. This is very unfortunate since the back-to-school season got off to a late start this year.”
Housing starts rise, but miss expectations: Housing starts rose 5.9 percent in July to an annualized rate of 896,000 starts – slightly below expectations of a 900,000 annualized pace. “On the surface, the numbers look promising,” IHS Global economists Patrick Newport and Stephanie Karol wrote in an e-mailed analysis. “But drill deeper down and the numbers show a loss of momentum. Single-family housing permits were down in three of the four regions, and declined for only the second time in 16 months. Single-family housing starts, which fell in the second quarter, fell again in July. The multifamily category rebounded smartly in July, but permits of this type simply returned to a plateau reached late last year.”
But there is some sign for hope, they said: Builders are feeling more confident in the market than they have in eight years. And tightening demand should drive up prices and prompt more builders to build. “The bottom line: builders are undersupplying the market, so inventories are likely to get leaner in the months ahead, and price growth is likely to accelerate,” Ms. Karol and Mr. Newport wrote.
Jobless claims fall again: The number of workers applying for unemployment benefits for the first time fell 15,000 to 320,000 claims last week, a sharper decline than expected. The drop pushed the four-week moving average to 332,000, another post-recession low.
Marisa Mayer in Vogue: Yahoo! CEO Marissa Mayer posed for a photo spread in Vogue’s September issue, part of a 3,000-word profile that debuted online Friday and is set to hit newsstands next week. Mayer is a favorite of Vogue – this is the fourth time she's been written up by the magazine since 2009.