Random Thoughts

By JEANNINE AVERSA
AP Economics Writer

WASHINGTON (AP) — In a shower of pink slips, U.S. employers cut jobs last month for the first time in more than four years, the starkest signal yet that the economy is grinding to a halt if it hasn’t already toppled into recession.

Conditions are deteriorating, according to the latest employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hadn’t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.

“We are certainly on thin ice,” said John Silvia, chief economist at Wachovia. And even President Bush, normally a cheerleader for the economy, said there were “serious signs” it was weakening.

Wall Street, however, took the news in stride. The Dow Jones industrials rose 92.83 points to 12,743.19.

Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs - casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.

All those cuts swamped job gains in education, health care, retailing and elsewhere.

The unemployment rate actually dipped slightly to 4.9 percent, from 5 percent in December, as people left the labor force.

“Discouraged by a sluggish job market, many more adults are sitting on the sidelines,” said Peter Morici, an economist and business professor at the University of Maryland.

Wage growth also slowed, another indication of belt-tightening. Smaller wage gains could make people who still have jobs - already squeezed by high energy prices - reluctant to spend, further hurting the economy.

President Bush prodded Congress anew to quickly pass an economic rescue package.

“There’s serious signs that … the economy is weakening and that we’ve got to do something about it,” Bush said. On Capitol Hill, Democratic and Republican supporters of a stimulus package - including tax rebates for people and tax breaks for businesses - agreed the gloomy employment report underscored a need for urgency. The package is pending in the Senate, where there are disputes over attempts to expand it.

The Democratic presidential contenders, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, said the job losses were evidence of failed Bush policies. “We are sliding into a second Bush recession,” Clinton said. Obama called the employment figures “troubling news” and urged Congress to extend unemployment benefits “for more time and to more people.”

To help ease the credit crisis, the Federal Reserve announced it would provide cash-strapped banks with an additional $60 billion in short-term loans through auctions later this month. The Fed started the auctions in December and has already provided $100 billion in loans to banks.

With fears of recession growing, the Fed has gotten much more aggressive - ordering two big interest rate reductions in just over a week. A severely depressed housing market, hard-to-get credit, turbulence on Wall Street and “some softening in labor markets” were cited by the Fed when it lowered rates by a bold half-point on Wednesday. The weak employment report would justify additional rate cuts, economists said.

The health of the nation’s job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring and put a lid on wages, that will spell more trouble.

People running companies are concerned.

“They are thinking if there is some capital spending I should postpone for a while, I should do that. If there is some hiring I don’t necessarily need to do right now, I can put that off for a few months to see what happens,” said Joel Naroff, president of Naroff Economic Advisors. “The problem with that thinking is that more economic weakness or a recession can become somewhat of a self-fulfilling prophecy.”

Average hourly earnings for jobholders rose to $17.75 in January, a 0.2 percent increase from the previous month. It was half the pace logged in December. Over the past 12 months wages went up by 3.7 percent. With high energy and food prices, though, workers may feel like their paychecks aren’t stretching as far.

The unemployment rate had shot up in December to 5 percent, from 4.7 percent in November. The magnitude of that increase - something not seen since right after the September 2001 terror attacks - set off alarms. In the past, such a big increase has signaled the economy was starting a recession or already in one.

With economic growth slowing this year, the unemployment rate will climb again. In fact, Mark Zandi, chief economist at Economy.com, predicts the jobless rate will rise to near 6.5 percent in early 2009.

The 17,000 drop was in total payrolls - both government and private employers - in January, the first monthly decline since August 2003. The government sliced 18,000 positions, while private employers added just 1,000, the fewest in nearly a year.

The government on Friday also released annual revisions - based on more complete information - that showed job creation was even weaker last year than initially thought.

The economy added an average of just 95,000 jobs per month in 2007, versus an earlier estimate of 111,000 a month. In 2006, payroll employment grew by an average of 175,000 a month.

Construction and factory workers have been especially hard hit by the meltdown in housing, which has catapulted home foreclosures to record highs. Construction companies cut 27,000 jobs last month and have lost 284,000 since employment peaked in September 2006. Spending by private builders on housing projects last year plunged by a record 18.3 percent, the Commerce Department said in a separate report.

Factories eliminated 28,000 positions in January, and have cut 269,000 jobs over the past 12 months. Manufacturing activity gained some ground in January, after contracting in December, the Institute for Supply Management said in still another report Friday.

The economy nearly stalled in the final three months of last year, and some economists believe it may actually be shrinking now.

Under one rough rule, the economy would have to contract for six months for the country to be considered in a recession. The likelihood of a recession has risen sharply over the past year, and analysts increasingly believe the U.S. will be in one during the first half of 2008. The worry is that people and businesses will hunker down and pull back their spending, sending the economy into a tailspin.

Bush said, “We’re just in a rough patch. And, I’m confident we can get through this rough patch.”

—

On the Net:

Employment report: http://www.bls.gov
from the bismark tribune / ap

From the Tennessean Newspaper

Studies say physicians are being influenced drug

By STEVEN G. GABBE, M.D. • February 18, 2008

At 8 a.m. on Aug. 8, 2007, during their very first week of medical school, Vanderbilt medical students heard a lecture from Dr. Ellen Wright Clayton, professor of law and pediatrics, about potential conflicts of interest faced by practicing physicians, including those related to pharmaceutical and medical device companies.As the students left the lecture hall, they passed by tables of bagels, juice and coffee set up for another lecture next door where the audience of faculty physicians and residents listened to a noted expert on heart disease review the latest research on a new treatment.
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These types of lectures, commonly known as grand rounds, represent a tradition of how physicians at academic medical centers like Vanderbilt stay up to date on the very latest medical discoveries and their application to patient care.

However, students noticed that, at the end of the breakfast table was a display of pens, notepads and pamphlets all prominently bearing the name of a new and highly effective drug brought to the market by a pharmaceutical company whose representative was sitting behind this table.

During their first week of medical school, these students faced their very first professional dilemma: Does the presence of marketing materials and the offer of a free meal by a pharmaceutical company representative create a potential conflict of interest for physicians in the care of their patients because they may be more likely to prescribe a specific drug as a result of this exposure?
Prescribing behavior is affected

Many physicians believe their level of professionalism and integrity would not allow such a small token to influence their medical judgment. Recent studies, however, have shown that the prescribing behavior of physicians may be more highly influenced by meals and gifts than physicians often realize. These studies are consistent with years of marketing research that show how all of us are affected by product advertising.

That’s why many medical centers, including Vanderbilt, have for years had some level of restriction on the value of gifts and meals that companies could provide physicians and employees.

However, as recently reported in The Tennessean, Vanderbilt University Medical Center has joined a growing number of academic medical centers across the country by establishing a policy that no physician, staff member or trainee shall accept a personal gift or meal from an industry representative regardless of the value of the gift. This new policy is based upon the understanding that physicians and other health-care providers have a special obligation to their patients to make medical decisions based solely upon the best scientific evidence available.

These decisions should not be compromised by even the slightest appearance of any conflict by industry marketing practices. If we are going to teach medical students, beginning in their first week of medical school, about their obligations as a professional, we must make sure their teachers are modeling the behavior we are teaching. It’s the right thing to do for our students and our patients.

Steven G. Gabbe, M.D. is dean of the Vanderbilt University School of Medicine.

Study: Online privacy concerns increase
from yahoo news / AP
By ANICK JESDANUN, AP Internet Writer 1 hour, 15 minutes ago

NEW YORK - Privacy concerns stemming from online shopping rose in 2007, a new study finds, as the loss or theft of credit card information and other personal data soared to unprecedented levels.
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Sixty-one percent of adult Americans said they were very or extremely concerned about the privacy of personal information when buying online, an increase from 47 percent in 2006. Before last year, that figure had largely been dropping since 2001.

People who do not shop online tend to be more worried, as are newer Internet users, regardless of whether they buy things on the Internet, according to the survey from the University of Southern California’s Center for the Digital Future.

The study, to be released Thursday, comes as privacy and security groups report that an increasing number of personal records are being compromised because of data breaches at online retailers, banks, government agencies and corporations.

The Identity Theft Resource Center, for instance, listed more than 125 million records reported compromised in the United States last year. That’s a sixfold increase from the nearly 20 million records reported in 2006.

Data breaches often result from lost or stolen computer equipment such as laptops, though the single largest breach was a case of online hacking. Early last year, TJX Cos. disclosed that a data theft had exposed tens of millions of credit and debit cards to potential fraud.

The card numbers were typically collected during brick-and-mortar retail transactions at T.J. Maxx, Marshalls and other TJX chains. The breach is believed to have started when hackers intercepted wireless transfers of customer information at two Marshalls stores in Miami — an entry point that led the hackers to eventually break into TJX’s central databases.

Nonetheless, concerns about credit card security have largely stabilized, with 57 percent very or extremely concerned last year. It was 53 percent in 2006, a difference within the survey’s margin of sampling error of 3 percentage points in either direction.

As of 2007, two-thirds of adult Internet users shop online, compared with just half a year earlier. Most spend $100 or less a month, and two-thirds of online shoppers have reduced buying at brick-and-mortar stores.

“You’d think the logical attitude would be to look at this level of concern and say I’m not going to shop on the Web, but it’s not happening,” said Jeff Cole, director of the Center for the Digital Future. “The advantages, the conveniences are so extraordinary.”

With credit card fraud, a customer’s liability is capped at $50, and even that amount is often waived. Customers often know of fraudulent charges quickly if they check their accounts online or are notified by their banks, which have security measures in place to flag suspicious transactions.

Identity theft, on the other hand, can take months and sometimes years to find out about and resolve, Cole said, possibly explaining the greater concern over privacy.

Among other findings in the annual survey, online parents are more likely than ever to withhold Internet use as punishment — 62 percent in 2007, compared with 47 percent a year earlier and 32 percent in 2000. For the first time, denying Internet access is on par with banning television for bad behavior.

“What we’ve seen over those seven years is parents really now seeing that the Internet has lots of great stuff on it and can be really important, but also can be a time waster,” Cole said. “They view it much closer to the way they see television.”

Nearly two-thirds of parents, meanwhile, worry about kids participating in online communities and about half believe online predators to be a threat, notwithstanding other research showing fewer youths receiving sexual solicitations over the Internet as they become smarter about where they hang out and with whom they communicate online.

“The perception is higher than reality, but the perception is significant and leads to how much access you give your kids and whether you let them (surf) unsupervised,” Cole said.

Internet penetration continues to show signs of plateauing. The percentage of former users who say they have no intention of going back online continues to increase, and less than half of those who have never used the Internet plan to log on in the coming year.

Newer users are more likely than veterans to access the Internet through a dial-up connection, and newer users tend to spend an average of 1.2 hours a week more than veterans playing online games. Veterans are more likely to read a newspaper or listen to the radio over the Internet.

Twenty-one percent of Internet users have stopped a newspaper or magazine subscription because they could get it online, while half of the Americans who read a print edition of the paper said they would miss it if it were to go away.

The study of 2,021 Americans was conducted Feb. 28 to Aug. 6, with participants selected randomly by telephone.

Consumers strained by rising prices - Yahoo! News
Consumers strained by rising prices

By Glenn Somerville

WASHINGTON (Reuters) - Shoppers faced moderate price rises in December but that capped a year in which prices soared at the sharpest rate in 17 years, pressuring households also dealing with a steep housing downturn and tighter credit.

The Labor Department said on Wednesday its Consumer Price Index rose 0.3 percent in December, less than half November’s 0.8 percent jump. For all of 2007, the CPI rose 4.1 percent, well ahead of 2006’s 2.5 percent gain and the steepest since 1990.

The data “underlines our view that we’re on the razor’s edge here, that we could be headed into recession,” said Mike Schenk, senior economist with Credit Union National Association in Madison, Wisconsin.

Separately, the Federal Reserve said that output by the nation’s mines, factories and utilities was flat in December and for the full year 2007 posted its weakest gain since 2003.

Fed policy-makers are widely expected to cut interest rates aggressively by a half percentage point when they meet January 29-30 and the White House, Congress and politicians campaigning for presidential nominations all are urging swift action on a complementary fiscal stimulus plan.

Stock prices were mixed at mid-day. The Dow Jones Industrial Average (.DJI) was slightly ahead, helped by news that banker JP Morgan Chase & Co. (JPM.N) managed to make a profit in the fourth quarter in contrast to some other big banks.

But the Nasdaq composite index was lower with technology shares hurting after a disappointing earnings report from sector bellwether Intel Corp (INTC.O). Intel’s chief financial officer, Stacy Smith, said he was a “little bit cautious” about the economy’s prospects, a comment that fed investor fears about a potential downturn

U.S. Treasury debt prices were mixed as traders apparently took some profits from a recent run-up in prices.

The Consumer Price Index is the most widely watched gauge of inflation. The so-called core CPI, which strips out volatile food and energy items, was up 0.2 percent in December after a 0.3 percent November increase, which some analysts said was a reassuring sign that price pressures might be easing.

“Over the last 12 months, core inflation increased 2.4 percent, still a little too hot for the Fed but below the 2.6 percent year-over-year level we saw in November,” said Bernard Baumohl, managing director of The Economic Outlook Group LLC in Princeton, N.J.

“Given this relatively calm inflation environment, the Fed need not be reluctant to significantly lower short-term interest rates,” he added.

The department said both food and energy costs rose during 2007 at the fastest rates since 1990. Energy costs in the 12 months were up 17.4 percent while food gained 4.9 percent.

In a separate report, the Fed said U.S. industrial production was flat in December, defying expectations for a decline. Manufacturing output was also flat last month following a revised 0.3 percent rise in November.

Despite signs of a slowing economy, foreign investors continued to pour money into U.S. investments. Net overall capital inflows into the United States surged to $149.9 billion in November, from a revised $92.2 billion in October, the Treasury Department said.

November’s inflows were more than sufficient to cover the month’s U.S. trade deficit of $63.1 billion.

Net long-term capital inflows totaled $90.9 billion compared with $114.0 billion in October.

(Additional reporting by Gertrude Chavez-Dreyfuss and Ellen Freilich in New York and Alister Bull in Washington; Editing by Andrea Ricci)

Be Careful What You Search For
from fox

By Lis Wiehl

Thelma Arnold, 62, of Lilburn, Ga., is curious about single men in their 60s, termites and what to do about a dog that “urinates on everything.”

Ms. Arnold did not intend to make these musings public when she originally typed them into her Internet search engine. “Most people assume the Internet is a more private medium than it is,” says Greg Lastowka, a Rutgers law professor specializing in the Internet. Nevertheless, thanks to a recent blunder by AOL, Ms. Arnold’s life (not to mention the lives of some 600,000 other AOL members) has been laid bare.

In a bungled attempt to aid software developers, an AOL staffer in late July released details of 20 million web searches typed in by 658,000 users over a three month period. Until AOL took it down, anyone could download the data. Entire portions of it remain in circulation.

Granted, the data was supposed to be anonymous — each user’s name was replaced by a number. Ms. Arnold, for example, was identified only as AOL user no. 4417749. Even so, given her searches for “landscapers in Lilburn, Ga”, several people with the last name Arnold and “homes sold in the shadow lake subdivision gwinnett county georgia,” it did not take long for the New York Times to discern that user no. 4417749 was Thelma Arnold. “With enough puzzle pieces, in this case search, it’s very possible to figure out who someone is,” confirmed Jim Harper, of the Cato Institute.
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User 1515830, a presumably troubled woman struggling with her weight (among other things), was also probably unaware that her Internet queries were being tracked. She initially searched for the number of calories in various foods, but later sought out a recipe for “baked macaroni and cheese with sour cream.” She also entered “I hate men,” terms related to incest, depression and psychotic drugs, “divorce laws in Ohio,” and an inquiry about “teaching positions in Denver Colorado.”

• Click here to read Lis’ Column, “Lis and the Single Girl”

Unfortunately, the potential for data breaches does not reside exclusively with AOL. Spokesmen for Yahoo and Google say search records are kept for “as long as it’s useful.” And to be fair, that information can be useful to Internet search engines in helping Web surfers find what they are looking for. But the potential consequences of all that data being compiled are what Marc Rottenberg, the executive director of the Electronic Information Privacy Center, has called a “a ticking privacy time bomb.”

Meanwhile, curious folks have been sifting through the AOL data just for kicks. Paul Boutin, writing for Slate.com posted several interesting queries:

User 672368 progressed over several weeks from “you’re pregnant he doesn’t want the baby” to “foods to eat when pregnant” to “abortion clinics in charlotte nc” to “can christians be forgiven for abortion.” User 3696023 revealed that “i hurt when i think too much i love road trips i hate my weight i fear being alone for the rest of my life” and user 190827 went from “talking parrot jokes” and “poems about a red rose” to “sexy dogs and hot girls.” (Boutin also observed that “nobody knows how to spell ‘bestiality.’”)

Some other widely discussed strings involve user 9486162 who seems to be considering suicide (“how to kill yourself by natural gas”); user 2708, who searched for “I hate my ex boyfriend,” “how to humiliate someone,” “free angry stuff to send an ex lover” and “makehimpay.net.” User 17556639 who searched repeatedly for terms including “how to kill your wife,” “murder photo” and “decapitated photo” — interrupting that string momentarily to search for “steak and cheese.”

And this raises another sticky question: should the police be alerted to the identity of the potential suicide victim, vengeful stalker, or wife killer? The San Jose Mercury News answers that question with a resounding no. “Searches don’t prove anything other than interest,” said the News. People must be able to make queries without fear that the records will be handed over, misconstrued, or used against them.” “Searching for ‘Al Quaida training camps’ doesn’t mean you want to enroll in one,” echoed the Los Angeles Times.

Indeed, to the outsider, it might appear that Thelma Arnold is suffering from a wide range of illnesses. Her search history includes “hand tremors,” “nicotine effects on the body,” “dry mouth,” and “bipolar.” But when asked, Ms. Arnold reported that she routinely researched medical conditions in order to provide counsel for her friends. Explaining her search about nicotine, Ms. Arnold explained, “I have a friend who needs to quit smoking and I want to help her do it.”

As AOL has shown, Internet search records are very much like a diary. The intention may be to keep the information private, but the content can all too easily wind up in the wrong hands. John Battelle, the author of the 2005 book The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture, suggests that AOL’s mistake, while unfortunate, might not be all bad if it leads to a greater understanding of precisely what is at stake with Internet searches. “It’s only by these kinds of screw-ups and unintended behind the curtain views that we can push dialogue along,” said Battelle.

Search engines reportedly keep their information private unless compelled by a subpoena or court order to share it. “That’s a start,” said the Los Angeles Times, “but it would be far more comforting if they had clear data retention policies limiting how long information could be linked to individual accounts or Internet addresses. Those policies should also be public so market forces could help shape them.”

“My goodness, it’s my whole personal life,” said an understandably shocked Thelma Arnold upon learning that the New York Times had so easily procured her identity from the content of her Internet searches. “I had no idea somebody was looking over my shoulder.”