California Economic Performance Scorecard

(June 6, 2008) CalChamber President and CEO Allan Zaremberg yesterday unveiled the findings of a recent survey of business executives detailing their attitudes about the state’s economy, business climate, and budget. In addition, CalChamber issued a first-of-its-kind “California Economic Performance Scorecard” ranking the state 38th of fifty, based on measurements of economic health and future competitiveness.

“This assessment of California’s business climate shows what we all know – the economy, the state budget crisis, and quality of life issues are all weighing heavily on the minds of business owners,” said Zaremberg. “What is particularly interesting in this survey is that California companies remain optimistic about their ability to weather these challenging economic times and remain competitive in the future. In addition, both the business climate survey results and the economic performance scorecard indicate that there is no higher priority than to reform our educational system.”

For more: http://www.calchamber.com/CC/Headlines/06062008TS.htm

For the Executive Summary: http://ontario.org/ExecutiveSummary.pdf

Oil Surge Is a Fresh Hit to Economy

Crude's nearly $11 leap to $138.54 -- the largest price jump ever -- is reinvigorating worries about the economy. The sudden jolt has left some OPEC officials wondering whether the market had lost all logic, and is sure to add fire to accusations that the price rise is largely the work of market speculators.

Recession Fears Reignited

Unemployment rose sharply and payrolls shrunk for the fifth consecutive month, increasing the likelihood that the U.S. is in a recession. The news -- along with surging oil prices -- dashed lingering hopes that lower interest rates and fiscal stimulus were sufficient to help the U.S. economy right itself.

Unemployment Rate Jumps to 5.5%

The U.S. unemployment rate posted its sharpest one-month increase in 12 years last month, suggesting U.S. consumers already facing a housing slump and soaring gasoline prices now confront growing pressure from a weakening jobs market. The unemployment rate jumped 0.5 percentage point to 5.5%, its highest level since October 2004.

Meanwhile, nonfarm payrolls, which are calculated by a separate survey, declined 49,000 in May, the fifth straight drop. The decline was broad based, including manufacturing, construction, retail trade and business services.

United expected to ground dozens of aircraft

United Airlines is expected to ground dozens of its least fuel-efficient aircraft, including Boeing 747 jumbo jets, as part of sweeping cuts intended to help the carrier conserve cash and surviving a daunting environment as a stand-alone company.

The Chicago-based airline intensified planning for the initiative as it cooled on a potential merger with US Airways in mid-May, say people familiar with its plans. United is expected to announce the cuts as early as Wednesday.

With the economy in a downdraft, capital constraints have made large-scale mergers largely unfeasible, forcing carriers like United to seek other ways to cut capacity in an effort to gain sufficient pricing power to cover rising fuel costs.

United plans to retire the workhorses of its domestic fleet: 94 decades-old Boeing 737 jets, single-aisle planes that seat up to 123 passengers and shuttle over medium-range distances, say people close to the company.