Gas Prices are
nearing a painful mark
Gasoline prices are as high as $4.70 in Chicago and $4.80 in Los Angeles, and Michigan prices are rising quickly. Regular unleaded was $4.10 on Friday, up 14 cents from a week earlier. The quick increases have some experts predicting $5 a gallon sometime this year.
Effects of high gasoline prices:
Prices for food and other products
Higher fuel costs translate into higher shelf prices for consumers.
The list of companies saying this week that they are raising prices is long: Kimberly Clark (Huggies diapers, Kleenex facial tissue); Procter & Gamble (Pampers diapers, Gillette shavers); Unilever (Dove soap, Ben & Jerry's ice cream); Colgate-Palmolive (toothpaste, soap), and PepsiCo (soft drinks, Frito-Lay snacks).
Kroger told analysts earlier in the week that it saw 2% grocery inflation in recent months and plans to keep passing through higher prices from national suppliers to its shoppers. Safeway said Thursday that it is passing along higher prices.
Shifts in housing
In the near term, rising gas prices may put a strain on the ability to pay a mortgage, resulting in an even greater increase in foreclosures.
Over a longer term, however, rising gas prices make long commutes look too expensive. That encourages people to live closer to their jobs, or closer to the center of the metropolitan area. That could weaken housing values on outer suburban fringes, but boost them in places like Ferndale, Royal Oak, Dearborn and Livonia, which are closer to major bus lines.
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Arabs seek free trade zone
The Arab League's Economic and Social Council convened in Cairo May 2 to focus on how to put a pan-Arab free trade zone and an Arab customs union in place.
Representatives from Arab ministries of economy and trade are partaking in the two-day meeting. They stressed that the significance of the event as a good opportunity for the conferees to discuss the implementation of Arab joint ventures.
Representatives called on Arab countries to exert more concerted efforts to attain economic integration with a view to fulfilling the expectations and aspirations of all Arab peoples.
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Chrysler reports
$116-million in 1Q profit
Chrysler earned $116 million during the first three months of the year, giving the company its first profit since emerging from bankruptcy in 2009, as well as details about its debt refinancing plans.
The profit compares to a $197-million loss for the same January-March period last year and represents a major milestone for a company that filed for Chapter 11 bankruptcy almost two years ago.
Chrysler and Fiat CEO Sergio Marchionne said the results boosted the morale of the company's management team when he announced them at an 8:30 a.m. internal meeting.
Chrysler also said today it intends to repay $7.5 billion in government loans with new loans and new debt it expects to secure by the end of June totaling $7.5 billion.
Marchionne had previously said Chrysler would earn a profit this year but did not say how early the profits would begin.
The Auburn Hills automaker said today its financial performance improved over the last three months because sales, market share and pricing improved.
Revenue increased 35% to $13.1 billion for the first quarter compared with $9.7 billion for the same period last year.
Chrysler's worldwide sales of cars and trucks increased 18% to 394,000 cars and trucks during the first quarter.