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Down and out

Housing and job numbers highlight a renewed sense of economic unease

Down and out
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Newly released figures showed that home prices continued to plummet in the first three months of the year-down 4.2 percent, following a 3.6 percent drop in the final three months of 2010. Data from the S&P/Case-Shiller Home Price Index also revealed that housing prices in 20 U.S. cities dropped in March to their lowest levels since 2003.

The data served as a "confirmation of a double-dip in home prices across much of the nation," S&P economist David Blitzer said. A slight price rebound last year "was largely due to the first-time homebuyers tax credit," Blitzer noted. "Excluding the results of that policy, there has been no recovery or even stabilization in home prices."

Days after the housing report, new unemployment figures from the Labor Department showed virtually no job growth in May. The jobless rate ticked up to 9.1 percent-a 2011 high-and the number of long-term unemployed (out of work 27 weeks of longer) rose by 361,000 to 6.2 million.

In a June 7 speech to bankers, Federal Reserve Chairman Ben Bernanke conceded that early 2011 economic growth "looks to have been somewhat slower than expected." While predicting the economy would gain steam in the second half of the year, Bernanke acknowledged that the pace of recovery is "frustratingly slow from the perspective of millions of unemployed and underemployed workers."

Crazy aid

Five nations that are large creditors of the United States are also getting tens of millions of dollars in financial assistance from Washington, according to a report issued by the Congressional Research Service at the request of Sen. Tom Coburn, R-Okla. China, Brazil, Russia, Mexico, and India-all of which hold many billions in U.S. debt-receive U.S. financial assistance in areas ranging from combating HIV to addressing environmental concerns.

"If countries can afford to buy our debt perhaps they can afford to fund assistance programs on their own," Sen. Coburn said in a statement.

The CRS report showed that China, America's top creditor with holdings of more than $1 trillion in U.S. Treasury obligations, received $27.2 million in U.S.-provided assistance last year. Russia, which holds $127.8 billion in U.S. debt, received $71.5 million in aid from Washington. Overall, foreign governments that hold U.S. debt received more than $1 billion in financial assistance from the United States in fiscal year 2010.

Let's get small

Walmart, pioneer of the 180,000-square-foot superstore, opened two tiny-by-comparison grocery stores in early June, not far from its Bentonville, Ark., headquarters. The two stores are the first of a scheduled 15 prototype Walmart Express locations to be test marketed in the coming months. The stores have about 15,000 square feet of space and fewer than 50 parking spaces. In addition to groceries, some locations will feature a pharmacy and sell office supplies.

Walmart's small-store strategy is a partial reaction to the success of "dollar stores"-such as Family Dollar and Dollar General-that have siphoned off some of Walmart's business. One reason for their success: The average round trip to a dollar store is six miles, compared to 30 miles for a typical Walmart trip, according to Credit Suisse analyst Michael Exstein.

One of Walmart's top rivals, Target, is also planning to test market smaller stores in urban markets.

Joseph Slife is the assistant editor of

Joseph Slife Joseph is a former senior producer of WORLD Radio and former co-host of The World and Everything in It podcast.


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