Welcome Back Toyota

After a two year period of struggling sales in the United States, it appears as though Toyota is back. The Japanese based automakers posted a 12% increase in April, it's highest total in 17 months according to The New York Times. During that time the company suffered through losses and minor gains due to the destruction in Japan from the early 2011 Earthquake/Tsunami. The strongest factor in Toyota's recovery was the doubling in sales of the Prius Hybrid compared to last year. After the price soared and the availability decreased significantly in the aftermath of the disaster; Toyota was finally able to produce enough Prius's to meet equilibrium price.
Toyota could not have picked a better month to pull off a sooner than expected recovery. Besides Chrysler's 20% increase and Volkswagon's incredible 32% increase, nearly every other major automaker suffered losses or minimal gains. Nissan's sales posted neither gain nor loss but other companies weren't so lucky. Honda fell 2% while GM decreased 8%. Overall it appears as though Toyota has recovered from the Tsunami/ Earthquake disaster quicker than most could have imagined.

Consumer Spending Rose slower in March

According to a New York Times online article, Consumer Spening increased 0.3% in March as opposed to 0.9 gain in February. The Commerce Department Suspects this slow down was caused by people's fear that their paychecks weren't growing fast enough or concern over income taxes. Despite this slow down in March, consumer spending rose 2.9% in the first quarter in 2012, the fastest pace in over a year. This increase is key for a few reasons. First, Consumer Spending accounts for roughly 70% of econominc growth. Secondly increased in consumer spending had been minimal in the months leading up to this quarter. In addition, this was not a particulary strong quarter for any other area of economic growth. The government reported that the economy grew 2.2% this quarter, down from 3% in the past few quarters. Also, spending on durble goods continued to fall, this month at 0.3%. Economists are concerned that people will not be able to safely keep spending as much money as they have been. However if Gas Prices are to fall and more jobs created; people will be able to keep spending money and not have to worry about paychecks as much.

iRich

According to an article in The Economist, Apple's share's have risen by nearly 50% in value in the first quarter of this year. This makes Apple the highest valued company on the American Stock Market at over $550 Billion. This will likely mean another huge payoff for share holders. For the past 2 decades three companies have alternated as the most valueable in the American stock market; General Electric, Exxon Mobile, and Microsoft. However Apple doesn't employ nearly as many people as these three and also doesn't generate nearly the revenue. Apple is able to be a more powerful player on the stock market than these three because it's unprecedented poosibiltity of growth. In the past ten years Apple has introduced the ipod, iphone, and ipad, each was on the cutting edge of technology. As soon as another company comes out with their own version of Apple's product, Apple updates theirs and released the newer version, keeping themselves ahead of the competition. This unique situation allows Apple to be a stronger stock than companies that are larger in traditional terms.

God over Economy?......No

Ever since the recession of 2008, the economy has been the most important issue for politicians seeking office. It has definitely been the key issue in each of the last two presidential elections. That is, however, except for one high profile Republican canidate. Time Magazine ran a story this week discussing Rick Santorum's unique stance on what is most important. The GOP hopeful believes that America's problems can be more easily solved by addressing the so called "family problem." He believes that increased marriages among parents will lead to other problems fixing themselves. While this isn't necesarily wrong, there's one major problem with it: You Can't legislate marriage. As President what is he expecting to do? Force the lower class to get married and stay together while having a good home life and thus producing a productive member of society? This can't possibly be accomplished and is ridiculous to even think of. Seperation of Church and State is clearly established and any educated voter should see that Santorum should more focused on economic issues and less focused on eradicating gay marriage and legislating family life. Even though he's of the more conservative belief that the government should interfere less with the economy; he should be campaigning on that. He should be focused on changing the economic policies of the current administration if he is against them. He should be focused on anything but what he's campaigned on. It's a good thing he'll never be president.

Bigger is Better(or cheaper) When it Comes to Cars

An article in the Wall Street
Journal online predicts that in 2012 it will become harder to find good deals
on fuel efficient cars, but it will be cheaper to find larger cars such as
SUVs. It’s being estimated that car sales rose 20% in February from last month
and the most popular types of cars sold were small sedans and fuel efficient
subcompacts. This is likely due to rising gas prices and consumer’s desire to
save more at the pump. As a result of the demand of these cars rising, the
price is also rising. As expected, the demand for SUVs has fallen in recent
years especially during months when fuel prices rise. This was no different in
February as demand is again down for these gas guzzlers. This likely means that
car dealers will be offering incentives and lower prices in an effort to
increase demand. I would expect this trend to continue as long as gas prices
continue to rise.

Sugar Cane

According to the Wall Street
Journal Online, Central American countries are planning growing more than the
normal amount of sugar cane this year. Normally growing more or less than the
usual or needed amount would affect the price in some way but in this case
governments are planning this increase to ensure that prices stay relatively
the same. This is necessary after droughts hit Mexico’s sugar cane fields,
rendering them useless. This plan will keep the prices stable until it is clear
that Brazil, which is the World’s top grower of sugar cane, is going to have a
strong output. I think this is a very proactive and intelligent plan by the
growers of Central America. Although it may affect the price in the
participating countries; it keeps the overall price of sugar cane stable. This
may also set a precedent that will allow for sugar cane prices to remain stable
in the years to come.

Wages go up, Spending Stays Down

It appears as though consumers are still a bit tentative when it comes to spending in this economic climate. According to the Wall Street Journal spending was a bit down from it's usual December figures despite wages rising. This goes against basic economic principles as usually an iincrease in wages will lead to consumers purchasing more products or more expenisive products. It also goes against tradition as December usually sees increased spending due to the holidays. The economic oddity is likely due to a lack of consumer confidence. However as the Wall Street Journal stated, this is a double edge sword because while consumers may need to spend less due to their low savings; economic growth won't occur until there's more spending. I believe that as people wages rise, they should spend more in accordance with how much more money they're earning. Thus they would be obeying basic economic laws while also contributing to economic growth.