Russia to Lower U.S. Debt Holdings

June 21st, 2011

The Wall Street Journal

By: Ira Iosebashvili

Russia will likely continue lowering its U.S. debt holdings as Washington struggles to contain a budget deficit and bolster a tepid economic recovery, a top aide to President Dmitry Medvedev said Saturday.

“The share of our portfolio in U.S. instruments has gone down and probably will go down further,” said Arkady Dvorkovich, chief economic aide to the president, told Dow Jones in an interview on the sidelines of the St. Petersburg International Economic Forum.

Russian holdings of U.S. Treasury securities fell to $125.4 billion in April 2011 from $176.3 billion in October 2010, Treasury Department data showed.

Click here for the full report from The Wall Street Journal

Gasoline Prices Up 40% This Summer, U.S. Says

April 22nd, 2011

Market Watch

By: Ruth Mantell

Retail prices for a gallon of regular-grade gasoline will average $3.86 from April through September, up from $2.76 for the comparable period last year, said the Energy Information Administration, the statistics arm of the Department of Energy.

In some areas, monthly average prices could top the national average by at least 25 cents a gallon.

“The continuing economic recovery tends to boost gasoline and diesel fuel consumption, while the effect of higher retail prices tends to dampen it,” according to EIA. “These counterbalancing forces are expected to be prominent features of the summer driving season.”

According to AAA’s daily fuel-gauge report, the national average price for a gallon of regular gasoline is about $3.79, up about 33% from $2.86 a year earlier.

The average U.S. household’s vehicle fueling costs will rise about $825 from last year’s level, hitting $3,360 in 2011, the EIA said.

The government also expects refiner acquisition costs of crude oil to average $112.50 a barrel this summer, up about 50% from the prior year.

Meanwhile, wholesale gasoline margins — the difference between the wholesale price of gas and the refiner acquisition cost of crude — are forecast to average 53 cents a gallon this summer, up 47% from last year.

The catalyst for the increase, according to EIA, will be “continuing strength in worldwide liquid fuels consumption.”

Click here for the full report from Market Watch

Where Are The Jobs Going?

January 17th, 2011

Daily Finance

By: Danny King

Take heart, America. Yours isn’t the only country to lose jobs to developing nations.

Australia, Canada and Israel, among others, have dropped off the list of best places for information-technology and business-processing services, according to a report that research firm Gartner released Monday.

As more developing countries have created workforces that can handle those tasks at lower cost, Ireland, New Zealand, Singapore and Spain are also no longer on Gartner’s list of the 30 best countries for outsourcing, which considers both costs and skill sets.

Meanwhile, Bangladesh, Bulgaria, Colombia, Peru and Mauritius have all joined the list for the first time, while Panama, Sri Lanka and Turkey reappeared after an absence during previous years. Those nations join South American countries, such as Argentina, Brazil, Chile and Colombia, as well as the Asian powerhouses of China and India.

Competition for Outsourcing Grows

The changes reflect the growing trend of cost-cutting via outsourcing, which started with U.S. companies and spread to other parts of the world.

Countries such as Mexico, Chile and Costa Rica have created government programs that boost education and upgrade the domestic labor pool. China and Malaysia, among others, have improved their infrastructure to make them attractive to tech companies. And Brazil’s relatively stable government status keeps the country attractive to many different types of companies.

“In this increasingly dynamic global environment, multinational providers will continue to extend their footprint in different geographies, carrying with them their expertise and maturity, while local providers will strive to become offshore providers, searching for opportunities and niches they can explore,” Ian Marriott, research vice president at Gartner, said in a statement. “Even though some countries are rated poorly for some categories, clients may find individual providers — global and local — whose capabilities mitigate some of the risks.”

Where Are the Jobs Going?

Increased outsourcing has hindered the U.S.’s economic recovery and may pose similar problems to other countries that have been bumped off the list.

Click here for the full report from Daily Finance

Fannie Mae and Freddie Mac Paid to Help Run TARP

October 14th, 2010

TheHill.com

By: Silia Brush

The Treasury Department has paid $437 million to Fannie Mae, Freddie Mac and private contractors to help run the Wall Street bailout program, a congressional oversight panel said in a report Thursday.

The Congressional Oversight Panel said some of the 96 private contracts for the $700 billion bailout, known officially as the Troubled Asset Relief Program (TARP), raise “significant concerns” and potential conflicts of interest that limit the public’s understanding of the program.

“The vast majority of people working on the TARP today receive their paychecks from private companies, not the federal government,” the report said.

Fannie and Freddie have received about $240 million, or more than half of the money paid to outside contractors to help administer TARP, according to the report. The two companies were bailed out by the government in 2008 and continue to rely on taxpayer support.

Fannie currently employs 600 people working on TARP, compared with Treasury’s 220 employees working on the program, according to the report, which said the companies “have a history of profound corporate mismanagement.”

Treasury Secretary Timothy Geithner and Obama administration officials have recently praised the TARP program for helping to stabilize the financial system following the worst crisis since the 1930s.

Mark Paustenbach, Treasury Department spokesman, defended the department’s use of private contractors.

“In late 2008, Treasury had to stand up a major new initiative that helped stabilize the financial markets and began the process of economic recovery,” Paustenbach said in a statement. “Treasury’s demand for skills, resources and expertise was urgent and we quickly needed qualified assistance. At the same time, our contracting process remains open and transparent.”

Click here for the full report from TheHill.com

Dow Falls Below 10,000 As Worries Escalate

August 25, 2010

CNBC

Stocks were lower for a fifth straight day Wednesday amid worries about the economic recovery but pared losses amid gains in homebuilders, tech and some consumer names.

The Dow Jones Industrial Average was down about 20 points, reclaiming 10,000. Earlier, the blue-chip index had fallen below that level. This came after a four-day losing streak in which the Dow lost a total of 3.6 percent.

Caterpillar [CAT  64.10  -0.94  (-1.45%)   ], Disney and Bank of America led the index laggards while Home Depot and McDonald’s were among the gainers.

The CBOE volatility index, widely considered the best gauge of fear in the market, was above 27.

Disney[DIS  31.66  -0.48  (-1.49%)   ] shares fell 1 percent following news that the company is in talks with Apple [AAPL  239.10  -0.83  (-0.35%)   ] about renting TV shows to viewers for 99 cents each through iTunes.

Dell [DELL  11.746  0.161  (+1.39%)   ] shares rose following news that Hewlett-Packard [HPQ  38.4106  0.0206  (+0.05%)   ] has begun talks with 3Par. HP is offering $24 a share for the data-storage company, which trumps Dell’s $18-a-share offer by a wide margin. There has been some speculation that Dell might raise its offer.

Internet stocks are among the few bright spots on the board today, with Google and eBay both higher. Wireless stocks are also higher, with Motorola, Leap and Qualcomm all higher.

In other merger news, Rio Tinto [RTP  47.90  -0.03  (-0.06%)   ] is apparently not planning a bid for Potash [POT  145.6025  -3.5075  (-2.35%)   ]. The Canadian fertilizer maker is said to be seeking alternative offers to the $130-a-share offer from BHP Billiton [BHP  64.93  -0.49  (-0.75%)   ]. For its part, BHP slapped down speculation, that it would make a higher bid.

On the economic front, new-home sales dropped 12.4 percent to a 276,000 annual rate in July after a 12.1-percent increase in June.

This followed a dismal housing report on Tuesday that showed existing-home sales fell 27.2 percent last month to their lowest pace in 15 years.

Investors were piling into homebuilder stocks, with many up 2 and 3 percent, following several research notes yesterday, including one from Citigroup, that now may be the time to get in on housing stocks. KBHome [KBH  10.35  0.31  (+3.09%)   ] and Toll Brothers [TOL  16.89  0.70  (+4.32%)   ] were both up about 4 percent. Earlier, Toll Brothers reported it swung to a profit, helped by tax benefits.

American Eagle shares [AEO  13.36  0.87  (+6.97%)   ] jumped more than 6 percent even after the teen retailer reported lower earnings as high inventories fueled discounting.

A few consumer names were also higher, including Home Depot [HD  28.05  0.27  (+0.97%)   ], Starbucks [SBUX  23.11  0.29  (+1.27%)   ] and JCPenney [JCP  20.44  -0.13  (-0.63%)   ].

And in the morning’s other economic news, orders for durable goods, big-ticket items like refrigerators and cars, rose 0.3 percent but fell well short of the 2.8-percent increase expected. Excluding transportation, orders fell 3.8 percent.

Talk of a double-dip recession has accelerated in recent weeks, with Gluskin Sheff economist David Rosenberg going so far as to say this is a depression, not a recession.

But several market pros in the past few days have offered a counterpoint, saying they don’t think the signs of worsening are there.

“We’ve got a very soft economy—it’s a constant disappointment, but we don’t think we’re going to have a double-dip because the most cyclical sectors of the economy are already in the basement,” David Kelly, chief market strategist at JPMorgan Funds, said on CNBC.

Strategist David Kass, founder and president of Seabreeze partners, agrees.

“I just can’t be that negative right now,” Kass said. “If you look at cyclical areas of the economy … It’s hard for me to expect material economic weakness in the second half of this year and into 2011,” said Kass, founder and president of Seabreeze Partners.

Meanwhile, central bankers, economists and other officials from around the world headed to Jackson Hole, Wyoming, to assess the economic outlook at the Federal Reserve’s annual retreat.

Crude oil fell toward $71 a barrel after a report showed a 4.1-million barrel jump in crude supplies, more than double of what was expected. Retail gasoline prices are also falling heading into the Labor Day holiday, with the national average around $2.70 a gallon.

Gold rose to an eight-week high above $1,240 an ounce as the dollar fell against the euro and economic concerns fueled interest in the metal as a safe haven. Gold miners including Barrick Gold [ABX  45.00  1.22  (+2.79%)   ] and Newmont Mining [NEM  58.37  1.25  (+2.19%)   ] rose more than 2 percent.

FedEx [FDX  78.03  -1.06  (-1.34%)   ] shares dropped about 2 percent following news that the package-delivery giant is suing New York attorney general Andrew Cuomo, seeking to stop an investigation of the company. The company said Cuomo has exceeded his authority in seeking information on rates, routes, and price information.

Click here to read the full report

Global Economy Now In The Hands Of Europe

May 24, 2010

WashingtonPost.com

by Howard Schneider & Neil Irwin

If the trouble starts — and it remains an “if” — the trigger may well be obscure to the concerns of most Americans: a missed budget projection by the Spanish government, the failure of Greece to hit a deficit-reduction target, a drop in Ireland’s economic output.

But the knife-edge psychology currently governing global markets has put the future of the U.S. economic recovery in the hands of politicians in an assortment of European capitals. If one or more fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way. Credit markets worldwide could lock up and throw the global economy back into recession.

For the average American, that seemingly distant sequence of events could translate into another hit on the 401(k) plan, a lost factory shift if exports to Europe decline and another shock to the banking system that might make it harder to borrow.

“If what happened in Greece were to happen in a large country, it could fundamentally mark our times,” Angelos Pangratis, head of the European Union delegation to the United States, said Friday after a panel discussion on the crisis in Greece sponsored by the Greater Washington Board of Trade.

That local economic development boards are sponsoring panels on government debt in Greece is perhaps proof enough that Europe’s problems are the world’s. That the dominoes can tumble fast was shown Thursday when a new and narrowly drawn stock-trading policy in Germany helped trigger a sell-off on Wall Street.

It marks a change, Barclays Capital chief European economist Julian Callow wrote in a Friday analysis, from a situation in which the bonds of European countries were considered to carry virtually zero risk to a “brave new world” where sovereign default in one of the world’s core economic areas is a tangible threat. Bank holdings of European debt are now being studied with the same focus given to holdings of U.S. mortgage-backed securities as the global financial crisis unfolded in 2008 — and with the same suspicion that problems in one part of the world could wreck others.

The most vulnerable European countries — Greece, Spain, Portugal and Ireland — may represent only about 4 percent of world economic activity, but “the debt crisis and its ripple effects are bad news for all corners of the world,” said Cornell University economist Eswar Prasad.

The risk of a worst-case scenario is still considered remote. European countries have pledged hundreds of billions of dollars to aid indebted neighbors that run into trouble, and they say they are committed to fixing the continent’s larger economic problems. The euro and U.S. markets were both higher Friday after the German Parliament approved a key piece of that support program. A renewed effort by the U.S. Federal Reserve to ensure that European banks have adequate access to dollars has generated little demand — a sign that a feared shortage of cash is not in the offing.

U.S. banks are not heavily exposed to the weaker European countries, Fed governor Daniel K. Tarullo said in testimony on Capitol Hill last week. Banks are in better shape overall, after fresh infusions of capital. Meanwhile, the U.S. economic recovery has been strengthening through the year, with jobs added in five of the last six months, and recent consumer spending and industrial output stronger than most forecasts.

But the fallout from Europe could still be widely felt. U.S. trade officials, hoping the country can dramatically boost its exports, are dismayed at the steep drop in the value of the euro — which is around $1.25, down from more than $1.50 in November. The decline makes American goods more expensive compared with those produced in Europe. The slide in the common European currency could also change the way China and a host of Asian countries approach their currency policies, possibly making them less likely to agree with U.S. demands to raise the value of their money. If they raised it, Asian goods would become more expensive in world markets, making it easier for U.S. products to compete.

The connections are being closely watched. Analysts are studying how the involvement of Greek financial institutions in Eastern Europe, or Spanish banks in Latin America, could affect those economies. The International Monetary Fund and E.U. officials are doing biweekly checks on Greece’s progress to ensure its economic reform program stays on track, according to Vassilis Kaskarelis, Greece’s ambassador to the United States.

Inside the euro zone, banks are intimately linked, with a web of investments and cross-country bond holdings that could be a main vector for financial “contagion,” with a default in one country weakening banks elsewhere.

There are some positive impacts in all this for the United States.

For one, uncertainty about European government debt has driven global investors toward U.S. government bonds, which in turn is pushing down long-term interest rates. The 10-year Treasury bond had a rate of 3.2 percent Friday compared with nearly 4 percent last month. Those lower rates should flow through to private borrowing, helping Americans getting mortgages or businesses looking to grow.

The European panic is also lowering the price of oil and other commodities on global markets, potentially making it cheaper for Americans to fuel their cars and heat their homes. A barrel of oil went for about $70 on Friday, down from almost $87 on April 6.

A final positive for the U.S. economy is that the stronger dollar will help keep inflation in check by reducing the cost of imports. That, combined with renewed worry about the strength of the recovery, is likely to give the Fed some leeway to delay raising interest rates above their current extremely low levels longer than it would have otherwise.

The most precise comparison is to the East Asian financial crisis that enveloped Thailand, Indonesia, South Korea and other nations in 1997 and 1998. There were widespread fears that the crisis would damage the U.S. economy, including through a financial contagion effect. The Fed even cut interest rates in the fall of 1998 to try to forestall a weakening in U.S. growth.

But there was little obvious impact on the U.S. economy, which grew 4.5 percent in 1997, 4.4 percent in 1998, and 4.8 percent in 1999.

Click here to read the full report

Home Foreclosures Hit a Five-Year High in March

April 15, 2010

Daily Finance

By: Betsy Schiffman

Amid growing signs of an economic recovery, one troubling fact remains: Foreclosure rates aren’t slowing down. In March, 367,056 foreclosure filings were reported, according to RealtyTrac, up 19% from February and up 8% from a year earlier. It was the highest monthly total RealtyTrac has recorded since it began issuing a foreclosure report in January 2005.

The five states with the highest number of foreclosures are California (93,173), Florida (59,067), Arizona (18,856), Georgia (17,779) and Michigan (17,700).

“Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March,” said RealtyTrac CEO James Saccacio in a prepared statement. “One difference, however, is that the increases were more tilted toward the final stage of foreclosure, with REOs [bank repossessions] increasing 9% on a quarterly basis in the first quarter of 2010 compared to a 13% quarterly decrease in REOs in the first quarter of 2009.”

Modifying the Mortgage Modification Program

While the real estate market was burning, consumers were apparently out spending. March retail sales (in stores open at least a year) were up 9% from the same period last year, according to Thomson Reuters, and results easily exceeded analysts’ expectations for a 6% increase. It seems that consumers tapped into some of their savings and credit to cover March’s shopping sprees, given that income levels aren’t increasing and the unemployment rate still hasn’t budged from 9.7%.

Although the federal government is clearly cognizant of the foreclosure problem — it has made at least half-a-dozen modifications to its foreclosure prevention program since early 2009 — its efforts to stem foreclosures have thus far been futile. Most recently, President Obama pitched a plan that was meant to provide unemployed homeowners with temporary mortgage relief. Earlier this month, the federal government also vowed to loosen some of the restrictions on grants set aside for local governments to redevelop abandoned communities or foreclosed properties.

Washington has also rolled out a program to modify second mortgages called 2MP, as well as a plan to provide incentives to banks for forgiving some of the principal on underwater mortgages. Some banks, such as JPMorgan Chase (JPM) are adamantly opposed to the idea of principal reduction, while others have embraced the concept. Bank of America (BAC), for example, said it will reduce the outstanding principal on some mortgages by up to 30%.

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Ron Paul: Legalize Competing Currencies

January 26, 2010

Campaign For Liberty

by Ron Paul

Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendas.

They have even set up a commission to investigate the crisis as if it were all in the past.

The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started! Instead of reversing course, they are maintaining Bush’s policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.

We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington. When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.

First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.

The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.

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Gold Hits Record High While Dollar Plumets

November 9, 2009

BreitBart.com

By AFP

Gold prices hit a record above 1,100 dollars on Monday with the dollar weakening after a pledge by G20 countries to keep economic recovery pumped up with easy money.
In morning trading here, gold struck an all-time peak of 1,109.50 dollars an ounce as the euro rose to 1.50 dollars for the first time in two weeks.

Gold “established itself above the psychological (1,100-dollar) level this morning as ministers at the weekend G20 meeting pledged to maintain their fiscal stimulus measures,” said James Moore, an analyst at TheBullionDesk.com.

The governments of the world’s biggest and top emerging economies said in a statement over the weekend that “recovery is uneven and remains dependent on policy support.”

And “to restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured,” the G20 said in a communique issued after a finance ministers’ meeting in Scotland.

The International Monetary Fund meanwhile said on Saturday that emergency stimulus measures must remain to avoid endangering a “nascent” economic recovery.

“An overarching risk is that the recovery stalls” owing to early exits from record-low interest rates and massive state cash injections, the IMF said in a report to coincide with the G20 meeting.

“Premature exit from accommodative monetary and fiscal policies could undermine the nascent rebound, as the policy-induced rebound could be mistaken for a strong and durable recovery,” the IMF said.

Last week, the US Federal Reserve decided to hold rock-bottom US interest rates for “an extended period” and to keep trillion-dollar stimulus measures in place to support the United States’ fragile recovery from recession.

“Unless there’s a turn in US interest rates, gold will be well bid,” Ronald Leung, director at Lee Cheong Gold Dealers in Hong Kong, said on Monday.

The precious metal had on Friday reached above 1,100 dollars an ounce for the first time, following news that Sri Lanka had joined India in purchasing gold in favour of the US currency.

“We have been observing that prices of gold have been going up so we have been strategically buying gold over the past several months as part of a reserve management process of diversifying our portfolio,” Srik Lanka Central Bank assistant governor Nandalal Weerasinghe told AFP on Saturday.

However he declined to disclose from which sources the bank was buying the gold or at what prices.

The IMF last week said it had carried out a massive sale of the precious metal to India.

The Fund revealed it had sold 200 tonnes of gold to India’s central bank over a two-week period last month for 6.7 billion dollars to bolster its finances.

In London on Monday, the euro was changing hands at 1.4978 dollars against 1.4846 dollars late on Friday, at 134.91 yen (133.45), 0.8904 pounds (0.8934) and 1.5108 Swiss francs (1.5100).

The dollar stood at 90.07 yen (89.90) and 1.0086 Swiss francs (1.0171).

The pound was at 1.6823 dollars (1.6611).

On the London Bullion Market, the price of gold grew to 1,108.55 dollars an ounce from 1,096.75 dollars an ounce late on Friday.

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Salary Raise Counted as ‘Saved Job’

November 4, 2009

Associated Press

By Brett J. Blackledge and Matt Apuzzo

President Barack Obama’s economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.

The Georgia nonprofit’s inflated job count is among persisting errors in the government’s latest effort to measure the effect of the $787 billion stimulus plan despite White House promises last week that the new data would undergo an “extensive review” to root out errors discovered in an earlier report.

About two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren’t saved at all, according to a review of the latest data by The Associated Press. Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren’t saved.

That type of accounting was found in an earlier AP review of stimulus jobs, which the Obama administration said was misleading because most of the government’s job-counting errors were being fixed in the new data.

The administration now acknowledges overcounting in the new numbers for the HHS program. Elizabeth Oxhorn, a spokeswoman for the White House recovery office, said the Obama administration was reviewing the Head Start data “to determine how and if it will be counted.”

But officials defended the practice of counting raises as saved jobs.

“If I give you a raise, it is going to save a portion of your job,” HHS spokesman Luis Rosero said.

The latest stimulus report, released Friday, significantly overstates the number of jobs spared with money from programs serving families and children, mostly the Head Start preschool program. The report shows hundreds of the programs used nearly $323 million to provide pay raises and other benefits to their existing employees.

The raises themselves were appropriate — the stimulus law set aside money for Head Start salary increases — but converting that number into jobs proved difficult. The Obama administration told Head Start officials to consider a fraction of each employee as a job saved.

“That’s more than ridiculous,” said Antonia Ferrier, a spokeswoman for Republican House Minority Leader John Boehner.

Many Head Start programs around the country went further, counting everyone who received a raise as a job saved.

“It’s a glitch in the system,” said Ben Allen, the research director at the National Head Start Association. “There was some misunderstanding among some in the Head Start community about completing the reporting requirements.”

Allen said a cost-of-living adjustment “may not be viewed traditionally as a job saved, but one could interpret it that, by providing COLA, you’re retaining staff.”

The Bergen County Community Action Program in Hackensack, N.J., noted the nearly $213,000 it received went to cover raises for existing staff only, but it also reported saving 85 jobs.

At Southwest Georgia Community Action Council in Moultrie, Ga., director Myrtis Mulkey-Ndawula said she followed the guidelines the Obama administration provided. She said she multiplied the 508 employees by 1.84 — the percentage pay raise they received — and came up with 935 jobs saved.

“I would say it’s confusing at best,” she said. “But we followed the instructions we were given.”

Ed DeSeve, who oversees the stimulus at the White House, said the Head Start numbers “represent a few percent of all jobs reported” and said the problems would probably be balanced out by other errors that underreported jobs.

“So we don’t expect any corrections to this data to meaningfully impact the total 640,000 direct jobs,” DeSeve said.

More than 250 other community agencies in the U.S. similarly reported saving jobs when using the money to give pay raises, to pay for training and continuing education, to extend employee work hours or to buy equipment, according to their spending reports.

Other agencies didn’t count the raises as jobs saved, reporting zero jobs.

Last week’s stimulus report claimed 640,000 jobs saved or created by the economic recovery plan so far. Those jobs came from 156,614 federal contracts, grants and loans awarded to more than 62,000 recipients, worth a total of $215 billion.

Obama has promised the stimulus would save or create 3.5 million jobs by the end of next year, and the data released Friday represented the first head count toward that goal.

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