Headline roundup - the economy Nov. 7 - slower exports and uncertainty over organics

Here are a few headlines about the state of the economy this morning, and at least one speaks to softening export demand linked to the rising value of the dollar. That trend could squash fresh produce exports as well in coming months....

Business activity slows, pointing to a deepening recession From Business Week
A compilation of global purchasing managers’ indexes by economists at J.P. Morgan Chase implies a steep decline in global gross domestic product in the fourth quarter and offers hard evidence that the recent market turmoil has pushed the global economy into a recession. That, plus the renewed strength in the dollar, will cut deeply into U.S. exports, which have been the single most important contributor to U.S. economic growth this year.

Will economy eat Whole Foods lunch?

The company also says that it isn't making any predictions. "The uncertain and rapidly changing economic environment makes it highly difficult to forecast future results," it says in a release, adding that it will not give sales estimates.

Marketing experts in many categories are closely watching Whole Foods as a bellwether of organic performance, to see if the widespread acceptance that organic products have earned with consumers holds up in tough economic times.

A recent analysis by Nielsen reports that organic sales now total $4.7 billion, with dollar sales up 23% and unit sales up 20% compared with a year ago. But as the economy worsens and grocery prices continue to rise, that growth has slowed. In the most recent period (through early September, before October's market meltdown), growth slowed to 13% for dollar sales and 8% for unit sales.

Many industry groups predict that the health, wellness and environmental concerns that prompt loyalists to shop organic will not be shaken--or at least not by much--by a faltering economy, and that Gen X and Gen Y organic lovers will ensure that "organic products will be commonplace by 2025," Nielsen says--adding that the Natural Marketing Institute expects growth will taper off to about 10% in 2008 and 2009, and 5% by 2020.

Wall Street hammered From AP

The decline came with a heap of new economic indicators, all of them discouraging:

_ The Labor Department reported 481,000 new filings for unemployment benefits for last week, slightly lower than the week before but well into recession territory.

_ The total number of people drawing jobless benefits in late October rose to 3.84 million, worse than analysts had expected and far higher than a year ago. The last time the figure was that high was February 1983, toward the end of a painful recession, although the work force then was only about two-thirds the size it is today. The increase in people on the rolls suggests the out-of-work are having a harder time finding jobs than in previous weeks.

_ Retail sales for October were the worst in at least 39 years, according to the International Council of Shopping Centers-Goldman Sachs index, suggesting shoppers will be skittish this holiday season.

_ Productivity of U.S. workers slowed dramatically in the summer, another Labor Department report showed. Labor costs rose.

_ The International Monetary Fund, in an updated forecast, predicted the economies of the United States, Europe and Japan will shrink in 2009. If that proves correct, it would mark the first annual decline by such "advanced economies" since World War II.

_ Target Corp. and Costco were among the many retailers reporting sales declines last month. Even teens stayed away from malls. American Eagle Outfitters Inc. and Abercrombie & Fitch Co. reported drops in sales. Cisco Systems issued a warning about slumping demand, sending shudders through technology companies. Auto parts maker Dana Holding Corp. said it will cut 2,000 more employees than originally planned after a bigger loss in the third quarter. Wal-Mart Stores Inc. managed a sales gain as shoppers hunted for bargains.

Dr. Doom From ABC

The cheery face that Roubini wears at social gatherings may be finding its way into his professional life … at least a little.

His predictions for the economy remain dire -- he expects an 18- to 24-month-long recession, far longer than the typical 8-month U.S. downturn. But he believes that a range of measures, from more government spending on infrastructure to more money for banks to a temporary freeze on foreclosures, could allow the country to avoid an even more severe financial crisis.

And he doesn't think the nation is headed toward another Great Depression.

"I'm sure we'll get out of it," Dr. Doom said.

"A year and a half from now when things are changing," he added, "I might be Dr. Boom."

Foreclosures increase

A recession that began in the third quarter is deepening the housing slump and adding to mortgage defaults as companies shed jobs, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association. Home prices fell 5.9 percent in August from a year earlier, the biggest drop since 1991, according to the Federal Housing Finance Agency.

The U.S. median sale price declined the most on record, the National Association of Realtors reported Sept. 24.

Plant closing affect food banks

Demand growing for food assistance