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Why U.S. Economic Growth Has Disappointed This Year

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In this Friday, Feb. 6, 2015 file photo, a shopper pays for produce at a Farmers Market in downtown Los Angeles. Consumers have been uncharacteristically frugal, even as the country added jobs and a sharp drop in gas prices over the past year left them more money to spend. (AP Photo/Richard Vogel, File)

In this Friday, Feb. 6, 2015 file photo, a shopper pays for produce at a Farmers Market in downtown Los Angeles. Consumers have been uncharacteristically frugal, even as the country added jobs and a sharp drop in gas prices over the past year left them more money to spend. (AP Photo/Richard Vogel, File)

Christopher S. Rugaber, ASSOCIATED PRESS

 
WASHINGTON (AP) — Like an underachieving student, the U.S. economy isn’t living up to the high hopes it began the year with.

Consumers have been uncharacteristically frugal, even as the country added jobs and a sharp drop in gas prices over the past year left them more money to spend. Meanwhile, drilling companies reeling from cheaper oil have slashed spending much more rapidly than anyone expected.

A host of other, mostly temporary, factors have also weighed on growth. Harsh winter weather kept shoppers at home, and a labor dispute at West Coast ports slowed exports.

Yet hope is still alive for the second half of the year amid signs that the economy could regain lost momentum.

Employers are holding onto their existing workers, keeping layoffs at rock bottom, and adding staff — evidence that their outlook remains positive.

In a report Thursday, the government said applications for unemployment benefits are at the lowest level in 15 years, which means layoffs are low and job security is very high. Employers added 223,000 jobs in April, and the unemployment rate fell to 5.4 percent.

“Companies are implicitly telling us that they believe this is temporary,” says Joseph LaVorgna, an economist at Deutsche Bank. “They’re looking through the weakness from the ports and the weather.”

Indeed, the first half of the year is shaping up to be surprisingly lackluster.

Analysts estimate the economy may expand at an annual rate of just 2 percent in the April-June quarter after barely discernable growth of 0.2 percent in the January-March quarter. Some economists say the government’s next revision will likely send the figure into negative territory, possibly as low as minus 1 percent.

That would put growth in the first half of 2015 at a “pretty disappointing” 0.5 percent, says Michael Feroli, an economist at JPMorgan Chase. That’s a far cry from the 3 percent pace for all of 2015 that most economists expected late last year. Growth hasn’t reached that level since 2005.

The biggest reason behind the disappointment is consumers, who were widely expected to return to their free-spending ways.

Gas prices are still about $1 a gallon cheaper nationwide than a year ago, despite some recent increases. Steady hiring in the past year means 3 million more people are earning paychecks compared with a year ago. And consumer confidence has also risen in recent months.

Yet in the first three months of the year, Americans increased their spending by just 1.9 percent, the weakest gain in a year. A report on restaurant and retail sales Wednesday showed that spending was flat in April, crushing hopes for a stronger rebound.

“The disappearance of consumer spending in early 2015 has now become even more mysterious, as some of the excuses shopped around earlier, like bad weather, are looking more stretched with the passage of time,” Feroli says.

Most economists have concluded that Americans, at least so far, are reluctant to spend their savings from cheaper gas because they believe the drop in prices will be temporary. Meanwhile, spending by oil and gas companies on drilling rigs, steel pipes and other equipment plummeted nearly 50 percent in the first quarter, a much steeper drop than economists forecast.

“We expected (cheaper gas) to have a positive impact,” Paul Ashworth, an economist at Capital Economics, said. “It hasn’t.”

So are things turning around? Short answer: probably.

Many trends currently weighing on growth should fade. International trade will be less of a drag in the second half of the year, economists say. The dollar’s rise against other major currencies, such as the euro, has leveled off. A strong dollar has made exports more expensive, hurting sales in overseas markets.

A surge of imports in March, which widened the trade gap and cut growth, was probably a one-time event triggered by the resolution of the West Coast port dispute.

Consumer spending should rebound from the first quarter’s unusually low level. And spending by energy companies will likely stop falling by the third quarter, LaVorgna said. He expects growth will reach a 3 percent annual rate in the second half.

Home construction is also poised to lift growth. Harsh weather postponed many projects in January and February, but homebuilding rose 2 percent in March from the previous month.

Steady job gains will also help, giving more Americans paychecks that they will ideally spend.

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Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Business

A Store for ‘The People’ in East Oakland

The People’s Store is open Tuesdays through Saturdays between 11:00 a.m. and 6:00 p.m.; Sundays and Mondays 12:00 p.m. to 5:00 p.m.

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The People's Storefront, Photo courtesy of realtor.com

The People’s Store, located in East Oakland, is a boutique that sells small batch African clothing, jewelry, crystals, and sage along with natural personal care products.

Customers rave about the natural shea butter, black soap and oils that are found in the store. The owner sells products wholesale and retail.

Located at 2366 High St, Oakland, CA 94601, they can be reached at  (510) 698-4371. The owner supports the local community, supporting small, local entrepreneurs by stocking the shelves of The People’s Store with their products. Check out their IG for giveaways, events and discounts.

The People’s Store is open Tuesdays through Saturdays between 11:00 a.m. and 6:00 p.m.; Sundays and Mondays 12:00 p.m. to 5:00 p.m.

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

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Balance Your People and Profits: Cal Bill Pushes Amazon, Walmart, and Other Big E-Retailers

Gonzales said she authored AB 701 to help decrease worker injury, encourage more transparency, and end the use of production quotas at corporations and government agencies, which critics say contribute to low job satisfaction and harmful working conditions.

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Amazon Warehouse Worker, Photo Courtesy of California Black Media

Last week, warehouse workers, labor leaders, elected officials, and community groups came together on the steps of the California state Capitol. Their goal was to generate public support for California’s pro-worker “Warehouse Workers Protection Act,” – also called Assembly Bill (AB) 701– and to encourage the state Senate to pass it.

“Working in warehouses for corporations like Amazon has quickly become one of the most dangerous jobs in the private sector,” Assemblywoman Lorena Gonzalez (D-San Diego) asserted, placing giant e-retailers square in the scope of her target.

In the United States, e-commerce is skyrocketing, growing from a $441.51 billion industry in 2017 into a market valued at $759.47 billion in 2020. Amazon.com has the largest market share (about 40%) among leading e-retailers, followed by Walmart (about 7%) and eBay (about 4%).

Gonzales said she authored AB 701 to help decrease worker injury, encourage more transparency, and end the use of production quotas at corporations and government agencies, which critics say contribute to low job satisfaction and harmful working conditions.

“Workers are risking their bodies to guarantee same-day delivery and being pushed to the point that many can’t even break long enough to use the bathroom. There is no excuse for a company to prioritize customers’ convenience and their own profits over the safety of their workers,” said Gonzales.

In March 2020, Irene Tung and Deborah Berkowitz released a National Employment Law Project (NELP) report titled “Amazon’s Disposable Workers: High Injury and Turnover Rates at Fulfillment Centers in California.”

According to the study, “Workers who can’t keep up extreme productivity goals are fired or encouraged to quit.”

“Amazon workers around the country have reported being subject to unsustainably fast productivity requirements resulting in injury and exhaustion. Workers describe pushing their bodies to the brink to avoid automatic termination for missing quotas,” the NELP report stated. “Data from the company’s own records have confirmed their accounts showing that Amazon warehouses have stunningly high injury rates.”

Assemblymember Ash Kalra (D-San Jose), chairperson of Assembly Labor Committee; state Senator Dave Cortese (D-San Jose), chair of Senate Labor Committee; state Senator Maria Elena Durazo (D-Los Angeles); and chair of the Assembly Public Safety Committee Reggie Jones-Sawyer (D-Los Angeles) all attended the rally.

Jones-Sawyer said his 19-year-old son worked at Amazon this past summer before heading off to college in Colorado. He got sick and had to take time off work. When he returned to work, after three weeks he was fired.

“Unfortunately, he saw all the bad things about working in a factory,” Jones-Sawyer said.

Jones-Sawyer said he attended the rally for his son.

“So that’s why I am here, not only for my son but all the other sons who don’t have fathers who could speak up for them,” he said. When it comes back to the Assembly for concurrence, I will stand up, speak up and vote for it again.

The language in AB 701 directs the California Division of Occupational Safety and Health (Cal/OSHA) to establish new standards by Jan. 1, 2023, that are “designed to minimize the risk of injuries and disorders among warehouse employees who are subject to production quotas.

The California Chamber of Commerce (CalChamber) labeled AB 701 “job killer legislation” in April and criticized it as one of “23 legislative bills that would place California employers and the state’s economy in harm’s way” should it become law.

“(AB 701) threatens warehouse employers with duplicative costly litigation by creating a new, independent private right of action, and a representative action under the Private Attorneys General Act (PAGA), for failing to comply with vague standards,” CalChamber said in a statement. The organization is the largest business advocate in California.

In California, Amazon warehouses are in counties whose populations are “overwhelmingly people of color,” according to the NELP study. Combined, nearly 75% of warehouse workers are minorities. Of that number about 55% are Latinos and about 9% are Black.

If passed by the Senate and signed by Gov. Gavin Newsom, AB 701 would require employers to inform employees about quotas that corporations and organizations set to measure their performance.

The legislation requires employers to quantify work employees are expected to do.  They must explain specific tasks and how meeting those goals may affect their job standing.

“AB 701 also directs the Division of Occupational Safety and Health (Cal/OSHA) to establish new standards by Jan. 1, 2023, that are “designed to minimize the risk of injuries and disorders among warehouse employees who are subject to production quotas.”

The bill also prohibits an employer from taking disciplinary action (including firing) against employees for failure to meet quotas that have not been disclosed to them. In addition, the legislation prohibits quotas that do not allow a worker to comply with meal or rest periods or occupational health and safety laws.

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African American Bay Area Woman Launches Natural Hair Care Collection

After blending numerous concoctions and conducting focus groups with friends transitioning from straightening their hair, Truth landed on the perfect ingredients that resulted in healthy, moisturized, shiny curls and coils. Currently the collection consists of three core hair care products and a heat activated deep conditioning cap.

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I LUV CURLS PRODUCTS

In June, founder Joy Truth debuted her new hair care collection, “I Luv Curls.” The hair care system is designed to inspire women to embrace their curls and “luv” their natural hair.

In the midst of the pandemic and on the heels of the passing of the CROWN Act, (a California law that prevents race-based hair discrimination and is currently on the ballot in seven states), Joy Truth saw this as the perfect time to launch her new products targeting women of color who are transitioning back to their natural hair.

“Launching and innovating during a pandemic was divine order; it provided the time and focus that I needed. When everything shut down, the frolicking stopped, and I transferred that energy to my heart’s joy: ‘I Luv Curls.’” Joy Truth said. “I made a commitment to move forward despite what was going on around me.”

After blending numerous concoctions and conducting focus groups with friends transitioning from straightening their hair, Truth landed on the perfect ingredients that resulted in healthy, moisturized, shiny curls and coils. Currently the collection consists of three core hair care products and a heat activated deep conditioning cap.

The “add + clarity” clarifying cleanser is a gentle, botanical, clarifying, sulfate-free deep cleanser containing peppermint oil and rosemary oil. The “Add+ Moisture” ™ hydrating masque is a botanical, nutrient-rich, luxurious, deep treatment with moisture-locking humectants. The “Add + Strength” ™ is a luxurious, botanical, protein-rich ayurvedic deep strengthening treatment. And finally, the “Add + Heat” microwavable deep conditioning heat cap enhances the masque treatments by slowly diffusing heat to infuse moisture and/or strength deep within your hair follicles.

Joy Truth has plans for further product development of the collection with styling products and other hair treatments focused on curly hair health.

This is not the first launch for this entrepreneur; A creative and visionary entrepreneurial leader whose passion for beauty and wellness led her to leave corporate America and launch twin companies, Harmony Beauty Boutique and Harmony Yoga Pilates – a unique brand of personal care products and wellness services.

Born and raised in the SF Bay Area, Joy Truth holds a BS in Information Systems Management from the University of San Francisco, serves as the vice-chair of the Advisory Board of her alma mater, is a Christian ministry leader and contributes to social impact causes that benefit women of color.

She resides in Berkeley, with her husband Neil, stepson Jordan and their dog (Malshi) Zoe.

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