Can crime reduction save Camden?

One of New Jersey’s most notoriously dangerous cities is looking to clean up its image.

In May 2013, Camden’s 141-year-old police force came under county control and was revamped in a bid to make one of the most crime-ridden U.S. cities safer. That appears to already be working. In the past year, homicides declined 20 percent along with an overall drop in crime.

Indeed, a study released in 2012 in an urban economics journal reinforced the significant relationship between changes in crime rates and property values. In Camden, there have already been several initiatives to initiate this shift. For instance, realtors cite a boom in the healthcare industry within the city, with schools like Rowan University expanding in the downtown area. In addition, the city started programs like the “Live Where You Work” initiative to offer economic assistance to working-class home buyers.

While the latest American Community Survey lists the median value of owner-occupied units in the city of Camden at $90,000, a recent search on Trulia.com showed much lower property values for vacant homes. One listing was priced at $19,900 for a 1,600 square-foot, single-family unit in Parkside, located in the eastern part of the city.

However, just a few miles north in the up-and-coming downtown area known as Cooper Grant, the situation is almost Brooklyn-esque: a 1,600 square-foot apartment costs renters over $2,000 a month. This central waterfront area is located near the Benjamin Franklin Bridge, which connects to downtown Philadelphia in 3.2 miles.

“Ever since the police officers got their beats, their presence has definitely been more visible,” said Jeff Pierson, a real estate agent at Dennis J. Zisa & Associates.

Pierson added that the real estate market in Camden is doing better since the restructuring of the police force a year ago, although he couldn’t quantify just how much it has improved because some of the negotiations with investors are still pending.

But turning Camden around won’t be easy. For years, it has been notorious for its high crime rate, recently cited as the most dangerous city in the United States by the FBI. In a city with just over 77,000 people, the chances of one being the victim of a violent crime were one in 39, compared to one in 345 in the rest of the Garden State.

With such high crime statistics and a low budget, city officials announced in 2012 that the department would be dissolved. A total of 270 officers were laid off from the city police force and a new, smaller unit was added to the Camden County Police Department Metro Division. The new contract for officers may look attractive at first glance, but critics say that it is an aggressive attack on unions because this deal does not allow for collective bargaining.

Eugene O’Donnell, a professor at John Jay College of Criminal Justice is both a former prosecutor and former New York City cop, told NPR that the Camden plan is a disguised attempt to trample a police union and undo years of collective bargaining.

Despite the contention regarding the implications of the contract, Camden residents and businesses welcome the city’s revamped law enforcement.

In December, New Jersey Governor Chris Christie announced that the new police department and the state takeover of the school district in Camden were the two keys to bringing the crime-stricken city back. But he did not say how long it would take for changes to come, or where they would occur first. One of Camden’s biggest hurdles is bringing back a strong tax base. Since 1990, the city’s population has declined by 11 percent. For Camden-based businesses like Powell-Peters Real Estate, crime reduction is just a small part of the problem.

“As someone who’s been in the business for a long time, sales are really slow here. Mortgage rates may be good, but the people who live here can’t even qualify because of their credit,” said an employee of Powell-Peters.

While the city is showing signs of gentrification in some areas, the reduction in crime is keeping the locals happy. Raymond Gramenzi, who has owned Harry’s Plumbing in the southern part of Camden for over 28 years, welcomes the new police force.

“It’s been a blessing. When I would come into my store I’d see drug dealers and prostitutes in the empty lots, but not anymore,” said Gramenzi.

He added that while his business had not really suffered, sales have been on the rise. Recently, his business was almost robbed. By the time he got off the phone with the police dispatcher, there were officers already at his door.

“Whatever they’re doing, they should keep it up,” he said.

Post-Grad Doom? Some Graduates Are Smiling

College Jobs—Enterprise

Post-Grad Doom? Some Grads Are Smiling

By Patrick Gillespie

Rohan Mohanty will leave the college life in two weeks. He’ll listen to Vice President Joe Biden’s commencement address at the University of Delaware, and few days later, he won’t dread his post-grad life. He’ll start his job as an operations analyst at JP Morgan in Delaware.

Mohanty, a finance major, says he and many of his business-school friends have jobs before graduation. His engineering friends have found jobs too. Even his friends without jobs are optimistic—they’re patient and pointing at Mohanty’s early success as a preview of theirs to come.

“I think it’s a reflection that they’re waiting for the right opportunity shows that they’re optimistic about it,” Mohanty, 22, says. “I think if they were pessimistic about it, they’d probably jump at the first thing that was offered to them.”

Mohanty, a Kingston, R.I. native, and some of his peers are bucking the pessimistic outlook on the job market for this year’s college graduates. They’re employed or they’re optimistic they will be soon.

A larger economic trend could be developing that may be helping their outlook. Baby Boomers, many who delayed retirement, are leaving the workforce in growing numbers, opening up college-level jobs that many recent graduates haven’t found since the recession began. This generational turnover of degree-requiring jobs could solve the underemployment issue many graduates face.

With the cost of a degree going up, the value of higher education is questioned now more than ever before. This year’s college graduates face a myriad of issues—student-loan debt and underemployment to start—but there’s some signs for hope.

Degree holders only had a 3.3 percent unemployment rate in April, down from 3.6 percent a year ago, according to the Bureau of Labor Statistics’ establishment survey. That’s close to half the national total unemployment rate.

Adjusted for inflation, college graduates make about $10,000 more than they did nearly thirty years ago, and consistently have salaries much higher than people with only a high school diploma, according to Census Bureau data.

An overwhelming amount of American universities—public and private—have a positive, 30-year return on investment (ROI), according to data from Payscale.com. ROI is the total cost of four years of college divided by the estimated, cumulative income of a graduate over 30 years. The data suggests most graduates’ degrees will more than compensate them for the educational investment they made. (It’s worth noting that collecting accurate income data from college graduates is difficult and the numbers are subject to graduates’ honesty).

News is especially good for engineering students. Last year’s engineering graduates had some of the highest starting salaries of any college graduates, according to Payscale.com.

Although unemployment for college graduates is declining, underemployment—working a job that doesn’t require a college degree—is an increasing trend, according to a report by the Center for College Affordability, a non-profit based in Washington.

Upcoming graduates say the difference between finding a college-level job and being underemployed depends more now than ever on one’s college major.

“For every finance-related job to which I applied, the first question in interviews was always, ‘Why didn’t you study finance in school?’—even though economics is closely related to finance,” says Matthew Infante, an economics major and soon to-be graduate at Boston College. “One’s major matters a lot.”

Mohanty, 22, agrees with Infante, who received a job offer in November working in finance (he declined to say where).

“I think [finding a job] is a lot harder if you have another major besides business or engineering,” Mohanty, who also accepted his job offer in November, says.

There were 13 million more college graduates in 2010 than there were degree-requiring jobs. according to the Center for College Affordability. One in every hundred taxi drivers was a college graduate in 1970. Today, on average, 15 drivers have a degree.

Between 2010 and 2020, Richard Vedder, the author of the report, and his colleagues estimate a 31 percent boost in the number of college graduates, from 61 million to 80 million. Vedder reports that the increased number of college-level jobs will only rise about 15 percent in the same time.

“Maybe one in three will get a job that’s kind of cool, and two out of three will find themselves underemployed,” says Vedder, the Center’s director. “A few will find themselves downright unemployed.”

The laborforce particpation rate declined signficantly in April. That’s considered a bad indicator, except that it may suggest Baby Boomers—many who delayed retirement—are finally leaving the workforce, says economist Justin Wolfers, a fellow at the Brookings Institute. A generation of post-recession graduates could find the college-level jobs some have waited years to find.

“Over a run of months or even a run of years, labor force participation is declining,” says Wolfers. “The deeper question there is whether it’s declining due to demographic change—changes like the Baby Boomer finally getting around to retiring.”

Accompanied by a slowly improving economy, a generational turnover of jobs may hint at the optimism this year’s graduates have.

Katie Zubrow, another senior at Delaware, applied for about fifteen jobs. She had two interviews, and she’s still looking for a job. But she’s not sweating it. She returned from spring break and decided that if her interviews didn’t work out, she would enjoy the summer and resume her job search in August.

“I was like, ‘Okay I don’t have one [job] yet, I have a few interviews lined up, but I can wait a little. I just really want to relish my last month here,” says Zubrow, 22.

Zubrow, a communications major, will graduate with Mohanty at the end of the month and says her peers are not as concerned about finding full-time work right after graduation as last year’s class was.

Mohanty knows other non-business-or-engineering majors who, like Zubrow, are taking time off, working a summer job and

“There have been things in the news that say the economy is getting better, and I think people are pretty confident—they have internships, they have other experience, they can rely on that,” says Mohanty. “They’re confident, and they’re just waiting for the right opportunity to come up.”

Rental Companies Cash In on Luxury Market

In a sign of just how hot the luxury auto market has become, car rental companies are cashing in on the thriving segment by adding more exotic vehicles to their fleets.

Rental companies began offering more luxury vehicles and car clubs featuring exotic autos, on the East and West Coasts in the early 2000s, as consumer demand revved up for high-end vehicles. Enterprise, the car rental giant, launched its exotic collection in West Los Angeles in 2006. The company now has 14 locations nationwide.

“We are always looking at opportunities to expand into markets where there is consumer interest and demand,” said Gregory Phillips, a spokesman for Enterprise-Rent-A-Car.

Rental companies say the expansion into the luxury segment is because of the increasing sales of luxury cars. New upscale cars reached record sales in 2013 with 5.4 million units sold. BMW led all high-end manufacturers, selling almost 1.7 million vehicles—a 9 percent increase compared with 2012.

 

Luxury sales 2013

“Companies are riding that trend and purchasing more exotic vehicles to rent,” said Haig Stoddard, an analyst for WardsAuto, a company that provides data analysis on the auto industry. “More people are coming back into the market after sitting out for several years because of poor economy and they want to drive luxurious vehicles.”

He said the luxury car segment has always stayed afloat no matter how shaky the economy. Yet, outlook for 2014 sales look even more promising with the uptick in consumer spending.

The rental market and car clubs appeals to the driver who want to drive exotic cars once in a while without footing the bill to purchase and maintain them. And, people who are on a budget can still enjoy the thrill of cruising in the latest Chevrolet Corvette or Lamborghini.

Some offers are as low as $99 for middle-income Americans, “to get behind the wheel of an exotic vehicle,” said Rob Ferretti, the chief operating officer at Gotham Dream Cars in Englewood, N.J. But that’s only for a brief drive, he emphasizes. It can still be relatively expensive to take a rare exotic for longer than a couple of hours.

“It’s not going to be as long as it would if you spent a few thousand for the weekend,” Ferretti added. “But we did adjust our business model to accommodate the larger volume of customers that don’t have the expendable cash to spend on a weekend rental.”

When the franchise first opened, the only type of vehicle in its fleet were Ferraris’ which rented for about $4000 a day. The company offers both rentals and memberships. While memberships start at a prohibitive price point– $18,000 to be exact, rentals for its multi-million dollar collection typically range from $400-$3,000 for a day’s drive. The affordability is what Ferretti said is attracting average-income consumers.

Applications to join the Classic Car Club in Lower Manhattan piled up so quickly this year that memberships were capped for the first time since the company opened its doors in 2005.

“People have more disposable income because the economy is picking up and they want to get the experience of driving their dream car,” said Jon Harper while on the phone heading upstate in a 1974 BMW race car.

Harper, a 25, year-old car enthusiast says he is lucky enough to work at Classic Car Club of Manhattan where he has driven every car in the 40-vehicle fleet. Harper said he does a little bit of everything at the club,but his duties mainly consist of content creation for the company’s website. His love of vintage vehicles and many other upscale cars was fueled long before he began working for the company three years ago.

“I’ve always been a car nut,” he said. “Since I was a kid I always wanted to work with and sell nice cars.”

The club, a car-sharing business for its private and corporate members, offers a mix of exotics and classics. The types of cars on the showroom floor have gotten more diverse over the years, and so have its members.

“We do our best to accommodate guys who love cars, but can’t afford to take out a specific type of vehicle,” Harper said. “And we help out with financial planning for people who can’t pay for an annual membership in one lump sum.”

Members do not only include investment bankers and CEO’s, but mid-level managers too.

The members can pay up to $13,000 a year for a platinum level membership without the hassles of expensive insurance and maintenance that come with owning high-end cars.

“The beauty about the company is that we take care of all of that. We have our own in-house repair shop, so it’s one less worry for our members which makes our company more attractive,” Harper said.

Meanwhile, Enterprise is adding to its collection to coax more clientele. Their most recent addition was the Tesla Model S— an all-electric, eco-friendly vehicle that is becoming a popular request for many car enthusiasts.

“We will continue to leverage our manufacturer relationships to ensure we have a wide selection of luxury vehicles to meet and exceed our customers’ expectations,” Phillips said.

Go here to see about some additional perks that comes with being a member at Classic Car Club

The writer is dead, long live his books!

New York- One of the best ways for a well-known writer to sell more books isn’t to go on more talk shows or do a signing at a book fair. Those may be the best tactics for writers still in the middle of their creative careers. But for a writer at the top of his game, the answer is simpler, if irreversible: all he has to do is die.

The day after Gabriel Garcia Marquez passed away, “One Hundred Years of Solitude” —considered the writer’s masterpiece— was No. 1 in sales on Amazon.com, The Associated Press reported. That’s quite a feat, considering that the book has sold more than 30 million copies in 37 languages since it was published more than 40 years ago.

The death of the Nobel prize-winning Colombian author had the same effect as a publicity campaign. Not surprisingly, the author’s face was on the front page of many newspapers, including The New York Times the same day Amazon.com showed a spike in the sales of his books.

“When a favorite author dies it’s very personal to readers,” wrote Josh Marwell, president of sales at HarperCollins Publishers, via email. “They are moved to reconnect to books that have made profound differences in their lives. For new readers these sad events and the attention around them are occasions to experience an author they have, for whatever reason, not yet read.”

 

deblasio_tweet_gabo

 

“Dear Gabo*, you once said that life is not what one lived, but what one remembers…” *“Gabo” was Gabriel Garcia Marquez’s nickname.
“Dear Gabo*, you once said that life is not what one lived, but what one remembers…”
*Gabriel Garcia Marquez’s nickname.

 

An English print edition of “One Hundred Years of Solitude”, released by HarperCollins in 2006, sold more than seven times as many copies the week Garcia Marquez died than it did the week before —it went up from 335 copies to 2420— according to data gathered by Nielsen BookScan.

Although book sales are commonly tracked by their ISBN numbers, there is surprisingly little data about the phenomenon of an increase in sales after a writer’s death. Scott Turow, the crime novelist who is president of The Authors Guild, wrote in an email that he had no information to confirm this. Anthony Marx, president and CEO of the New York Public Library, said he couldn’t think of anyone who knew about this topic.

Yet people who track book sales have noticed it.

“It’s just something that happens,” says Michael Norris, a media consultant in Stanford, Connecticut. “It happens like the sunrise happens.”

When people read about an author’s death, they go and look for his or her books, says Norris. “The works feel like the immortal extension of that writer’s voice,” he says. Yet his most memorable case of a run on books had to do with an author better known for other things than his pen: John Paul II.

According to Norris, after a writer dies many factors are involved in determining what happens to his work. Sometimes, a publisher may not have the right to do reprints, thus limiting the supply to those books that are already in circulation. On other occasions, a new edition may come out —with a new afterword, for instance– sparking interest among readers.

“We often set up special displays for our customers to respectively commemorate the life of someone who has passed,” wrote a spokesperson for Barnes & Noble via email —Garcia Marquez’s best-known novel soared to No. 3 in BarnesandNoble.com the day after the writer died.

Today, social media also play an important role in bringing consecrated authors back to the limelight as news about them spreads. Garcia Marquez’s death became known through a tool that did not exist more than eight years ago: it was first made public on Twitter by Fernanda Familiar, a spokeswoman for the writer’s family. A month later, her tweet —which does not have a hashtag—has been retweeted more than 4,000 times, a number that has not been matched by the official Nobel Prize twitter feed on its announcements of literature laureates in the past years.

 

“Gabriel Garcia Marquez dies. Mercedes and her sons, Rodrigo and Gonzalo, allow me to make this information public. What deep sadness…”
“Gabriel Garcia Marquez dies. Mercedes and her sons, Rodrigo and Gonzalo, allow me to make this information public.
What deep sadness…”

 

More than market specialists, booksellers are the people who have witnessed firsthand the phenomenon of the increase of book sales after an author’s death.

“We bought copies of ‘One Hundred Years of Solitude’,” says Fred Cisterna, a bookseller in the Brooklyn neighborhood of Williamsburg who has been in the business 14 years. “We made sure to order them because we knew people would ask.”

Cisterna works in Spoonbill & Sugartown Booksellers, a neighborhood bookshop that sells both new and used books. He says that before Garcia Marquez died, they didn’t have copies in stock of his most famous novel since November. After the writer died, they ordered 12 copies. The order arrived the last week of April and the shop sold 10 copies in a fortnight.

In normal circumstances, the store “might have sold one or two copies in that same period,” he said.

 

U.S. Job Growth Surges, but Long-Term Unemployed Remains High

The labor market appears to be rebounding from sluggish economic activity in the first quarter. U.S job growth increased at its fastest pace in two years in April, but the surge hasn’t helped the long-term unemployed.

In April, the economy added 288,000 jobs— far outpacing economists’ forecasts. Despite the unequivocal employment jump that signals more Americans are entering the workforce, demand for workers is still lacking to compensate for people who were laid off or couldn’t find jobs during the Great Recession.

The job report reveals that businesses are putting more people on their payroll, but “workers aren’t being hired quick enough to make up for the excessive inventory of people that have been unemployed for the past five years,” said Gary Burtless, senior fellow, at the Brookings Institute, an economic policy think-tank based in Washington D.C.

“New jobs are being created for new people, he said.  And we are only gradually dwindling down that number of excess unemployed workers.”

At the current job-creation rate, closing the gap for jobs lost will continue to be prolonged,  even as the amount of jobless workers trend downward.

Unemployment  fell to 6.3% from 6.7% —the lowest since the economic crisis in 2008, the Labor Department said on Friday. The drop, however, is because the labor force–that is, people working and actively looking for jobs fell sharply.

“If people were dropping out of the labor force because they had given up, that would concern me,” said Thomas Perez, U.S Secretary of Labor.

Perez added that the decline in labor force participation isn’t because workers are “discouraged,” rather that seasonal workers and recent college graduates aren’t entering at high numbers.

The Federal Reserve may have lifted their eyebrows at the job creation numbers. After GDP tumbled to its lowest in two years– rising a mere 0.1 percent on Wednesday this week, the burst in employment may keep them on track for scaling back on quantitative easing. However, the extent of slack in the labor market and long term-unemployment is high and remains at the top of their agenda.

“It has been bouncing around for the last six-months or so, but it has basically been flat,” Perez said, referring to the fluctuations in labor force participation.

But the shrinking labor force isn’t the only thing the Fed will be pragmatic about.

Wages stayed flat for the month of April. Average hourly earnings increased only 1.9 percent over the past year. Stagnant wages, experts say, indicate that the employment-to-population ratio aren’t moving in tandem, which is why earnings growth has been static–specifically for middle-wage workers.

“If there is tightness in the job market, we’d expect to see an acceleration in wages,” Burtless said. “There is a shortage in demand for workers and that results in excess unemployment and sluggish wage growth.”

Economists are also suggesting a higher rate of inflation is essential to speed up the recovery. And raising prices on goods will encourage Americans to spend more, said Justin Wolfers, a senior fellow at Brookings Institute and Op-Ed contributor for the New York Times.

“There is no inflationary pressure anywhere in the economy,” Wolfers said. “The fact that inflation isn’t re-emerging indicates that there is lackluster economic growth.

The frigid winter ravaged most of the nation had slowed GDP precipitously, yet the outlook for 2014 still remains at 3 percent. Experts suggest one policy solution  to generate stronger growth is to raise wages.

“To stimulate growth is by consumption and the way you stimulate consumption is to put money in people’s pockets,” Perez said.

The payroll services company, Automatic Data Processing reported on Wednesday, a seasonally adjusted gain of 220,000 private-sector jobs. Private sector and professional service jobs have been resilient, and the manufacturing sector accelerated as well.The average number of hours worked per week last month bounced back significantly following the harsh winter months.

The food industry also contributed to the robust job growth. Restaurants and bars added 333,770 job in the past year.

“There is a mix of full-time and part-time employees, and we do plan on bring in more people in the summer, said Dave Hunt, an independent restaurant owner in Washington Heights in New York City.

Hunt said he felt the effect of bitter winter months on his business, and had to offer more specials on the menu as traffic in his Irish pub slowed. But he remains optimistic now that more people are coming through the doors as temperatures start to warm.

“We lost about 20 percent in revenue last year, so we had to cut back on staffing,” said Peter Walsh, the co-owner. “Business is picking back up now and it seems like people have a lot more disposable income.”

The mediocre increase in GDP in the first quarter was primarily reflected from personal expenditures. Retail sales had its best performance since September 2012, and buyer optimism remains at its highest level in six years.

But, despite strong job growth and growing consumer sentiment, the economic recovery has yet to regain solid momentum.

“Long term unemployment rate is still twice as high as one would expect from a prolonged recession, so we need to pick up the pace in order to get back to the level of full employment,” said Perez.

 

 

 

April Auto Sales Looking Solid Amid Improved Economic Growth

U.S. auto sales are on track to rise in April. And not just because of warmer weather. Consumer confidence is up and so are employment numbers.

Sales are expected to rise 8 percent compared to a year ago. Economists polled recently by Bloomberg forecast the annualized sales rate at 16.2 million—just below last month’s rate, which topped estimates.

“We are seeing improvement in the labor market and that means higher income for households,” said Millan Mulraine, senior economist for TD Securities. “People will feel confident to purchase these big-ticket items because of the improvement in employment.”

The economy added 192,000 jobs last month and jobless claims plummeted to nearly a seven-year, according to the U.S Labor Department. As jobless claims continue to inch downward, as expected, combined with strong manufacturing data, car companies will need more manpower to ramp up production on vehicles as demand pours in.

The warmer temperatures are playing a role too.

During the especially frigid winter months hitting most of the nation, “businesses were reluctant to hire because of depressing economic activity,” said economist, Russell Price at Ameriprise Financial.

But the uptick in labor force participation, along with acceleration in wages “means that the rest of the economy is improving for both consumers and companies,” he added.

Indeed, most sectors are re-accelerating. Retail sales, which encompass the auto industry, posted a 1 percent increase last month–the biggest gain the market has seen since September 2012. Consumer confidence remains at its highest level, despite a slight dip to 82.3 from 83.9 a month earlier. The solid retail numbers and growing buyer optimism in the economy has auto manufacturers’ remaining upbeat for strong annual sales.

So, if the April numbers come in high, as expected, is it time for companies to put a lid on hefty discounts?

Incentives offered in the first quarter were the highest they’ve been since the recession in 2007.

“Automakers were determined to make sure March sales momentum continued in April, putting sales back on track for 2014,” Larry Dominique, president of ALG and executive vice president of TrueCar, said in a statement.

Manufacturers are still flirting with high incentives because inventories have yet to go down to the normal daily supply. And, old models are still taking up space on lots that companies are desperate to get rid of, said Joshua Shapiro, chief economist at MFR.

Analysts’ say that automakers should start to scale back on robust incentives soon, but don’t expect them to disappear altogether.

“ Consumers are still very price sensitive, so people are still going to hold on tight to their wallets,” Shapiro said. “We need to see the labor market continue to improve, so consumers will have more income growth and the ability to spend.”

The Cassette Tape Underground Resurgence

Brooklyn, NEW YORK- Last September, the first international Cassette Store Day was held to celebrate the fiftieth anniversary of this technology. In New York City, obscure labels released cassettes of obscure bands in small numbers to celebrate the occasion, garnering attention from the media. Yet, cassettes on the independent music scene are not something new.

Small bands and labels haven’t abandoned tapes. In fact, cassettes are flourishing in the niche market of indie music, unbeknown to systems that track mainstream music sales.

“Our tapes have always done well for us,” says Sean Ragon, 33, owner of Heaven Street, a record and cassette store in Williamsburg, Brooklyn. “We carry a lot of things that are DIY [do it yourself], that are home-made by people, and as a result we have a lot of tapes.”

Heaven Street opened two years ago and is well known for its cassettes. Ragon says tapes have become “trendy” again, not only because it is easy for bands to produce them at home. He says that unlike CD-R’s, tapes are not perceived as tacky and disposable.

 

Cassette shelf in Heaven Street, Saturday, April 5, 2014, in Brooklyn, New York. (Camilo Gomez)
Cassette shelf in Heaven Street, Saturday, April 5, 2014, in Brooklyn, New York. (Camilo Gomez)

 

These artisanal objects do not have bar codes and are not counted by information and sales tracking systems such as Nielsen SoundScan. Since no large record label company has released new cassette tapes in years, SoundScan no longer includes cassette tape sales in its year-end reports —in fact, it stopped doing so at the turn of the century.

In 2013 the number of cassettes sold in the U.S. was 54,000 according to SoundScan —a drop in the ocean of 289.4 million albums, both digital and physical, sold that year. Still, this is only a partial count, since sales of homemade cassettes by small labels are not being tracked. Cassette tapes, although visible in shops like Heaven Street that cater to a niche audience, appear to be inconspicuous in the mainstream.

Still, new releases are only a fraction of the market for cassette tapes. In secondhand music shops old tapes are also in demand. Rainbow Music 2002 Ltd, a small store in Manhattan’s East Village, has cassettes stacked to the ceiling. There is barely room to move around and clients have to walk inside one at a time. A 72-year-old man perches on top of a chair searching among his wares. He calls himself “The Birdman.”

“The Japanese are very heavy into rap cassettes,” he says. “That’s the main thing they buy as much as I can find for them.” Some things are not on the Internet or are too expensive, he adds. “On the internet maybe they sell for more. I don’t charge more. I charge a set price.”

He sells each cassette for a couple of dollars.

 

Rainbow Music 2002 Ltd, Saturday, April 5, 2014, in Manhattan, New York. (Camilo Gomez)
Rainbow Music 2002 Ltd, Saturday, April 5, 2014, in Manhattan, New York. (Camilo Gomez)

 

There is now a renewed interest for cassettes among members of a generation that was not even born during their heyday in the 1980s.

Adam Jurs, 22, is a barista and amateur musician who lives in Bushwick. He says that he became a frequent user of cassette tapes after a band that he likes began releasing albums in this format. In 2011 he bought the Coma Cinema album “Blue Suicide”.

“Once I got it in the mail, I rummaged through thrift stores, found a way to play it and it was awesome,” he says. “Since then, a lot of artists I was into started releasing cassettes, and I got into having cassettes kind of out of nowhere.”

The paradox of this indie music resurgence of cassettes is that the tapes are not known for sound quality. Chad Bernhard, 41, a musician and sound engineer, was surprised when he received an order for five cassettes of his band, Things Outside the Skin, from “a guy in Australia.”

“I don’t understand why people still want them,” he says.

Retail Sales Expected to Rebound but not Make Up for Winter Slump

As warmer weather approaches, economists are expecting retail sales to rebound. Yet, experts predict that next Monday’s advanced retail sales report, released by the Census Bureau and the Department of Commerce, will not show that March’s retail sector has made up for sales lost during earlier months.

Economists estimate that the increase will be of around 0.8 percent from the previous month —better than February’s 0.3 percent, though not a spectacular rebound considering that retail sales decreased during both December and January.

“A serious drain in household spending power was an increase in heating costs,” says Louis Crandall, chief economist at Wrightson ICAP LLC, a research firm.

The winter’s unusually cold weather created a spike in heating costs for consumers who were then left with less money to spend. Furthermore, the soft employment growth in the past months has had a negative effect on retail sales because it means there are less people out spending their money.

Crandall says that it will “take an extra month or two” for retail sales to look healthier. And although he says he expects growth to resume in the retail sector, he does not expect it to “snap back”.

The strongest sector in the retail sales report will probably be auto sales. Already, automakers have reported a strong increase in their March sales after a weak start of the year. This suggests that low sales in previous months were caused by the cold weather.

“Auto sales were unusually weak in December and January,” says Stephen Stanley, chief economist at Pierpont Securities LLC. However, he says that March made up for what was lost before. He expects Monday’s indicator on retail sales to show a 0.5 percent total increase. Still, the number will probably be much lower when excluding auto sales —only 0.1 percent, he says.

According to the government’s job report for March, there was little change in employment in retail trade. This suggests that the retail sector is not expecting a major increase in activity in the short-run that would warrant increasing the number of jobs. With better weather, however, economists expect a recovery in the sector, though not a jump like the one that auto retail sales have experienced.

“I don’t expect that to carry over to other sectors,” Crandall says.

Auto Sales Spring Forward

Auto sales picked up speed in March after winter’s deep freeze.

Industry sales far outpaced analysts’ expectations. The 16.3 million units easily topped the 15.8 million annualized sales rate that was forecasted. Total vehicle sales rose 6 percent, leaving automakers to breathe a sigh of relief after two months of quiet showrooms.

 

But consumers return to the marketplace to purchase a new vehicle as temperatures started to warm up, wasn’t the only factor that contributed to the sales surge.

“Incentives are the highest they’ve been since the recession,” said Haig Stoddard, an industry analyst at WardsAuto.com. Towards the end of the month, Stoddard said there was a big rush to buy cars. Consumers pounced on aggressive incentives that were advertised at dealerships, via the web and radio.

Pandora Media Inc. launched its in-car automotive ads in January of this year. The internet radio giant began partnering with automakers in 2010 to increase revenues from the market. When winter snow storms and blizzards hammered the east coast– advertisements slowed, along with car sales. Now, local manufacturers and dealers are streamlining discounts and incentives to be broadcasted.

“We expected to see a stronger push from companies in this area,” said Lauren Hirsch, senior account executive at Pandora. “Cars were frozen to dealers lots in this region, so we are seeing more and bigger incentives being offered from manufacturers and their dealer networks,” she said.

The overall stronger than expected growth signals a good sign for companies that are predicting annual sales to surpass last year annualized rate. Sales were almost back to pre-recession levels, matching the best month since the economy tanked in 2008.

“These impressive numbers indicate that automakers have recouped losses from January and February, said Douglas Porter, an economist at BMO Capital Markets. “March sales will set the pace for the rest of the year, which seems relatively positive at the moment.

Most companies posted an increase in sales, aside from Hyundai/Kia and Volkswagen. Both manufacturers continue to slip in market share and sales because of the lack of new models and popularity in brands.

Nissan, Toyota, Ford and General Motors all saw increases greater than anticipated. And, six Chrysler vehicles set record-breaking sales numbers.

Chrysler posted double-digit gains for the second consecutive month, as demand continues to build for it’s popular Jeep Grand Cherokee. Sales increased 13 percent, making it the best March sales since 2007. The company’s Ram pick-up truck also outsold its rival, GM’s popular full-size pickup—the Silverado.

General Motor recalls for fatal ignition problems didn’t dampen the companies sales, even after analysts’ predicted only an 0.8 percent gain. The company was the last to announce it earnings, but sales were up 4 percent.

Kelley Blue Book analyst, Alec Gutierrez, said that recalls tend to play a very little role in sales performance. He added that consumers aren’t looking at the company unfavorably, but “that doesn’t mean it won’t have a long term-impact.”

As of now, the outlook for the 2014 annual sales looks promising. With consumer confidence hitting a six- year high last month, people are more likely to come to the marketplace.

“Loans are more flexible, even for people who don’t have great credit. “Increasing consumer confidence means purchases on big ticket items.”

Escalating Discounts Leave Auto Dealers Uneasy

Automakers are reacting to dismal winter sales by extending discounts through April, leaving dealers with clogged inventories worried that price cuts will be at the expense of their profits.

When snow and ice storms ravaged several eastern states, Nissan salesman, John Foley expected foot traffic, along with sales to slow at his dealership in Chesapeake, Virginia. But the 2013 models that are sitting on his lot is becoming harder to sell as new units with discounts attached start to roll in.

We have to reduce levels now,” said Foley, whose inventory has surpassed the industry normal 60-day supply. “The longer a car is in stock, the more we’ll have to discount it.”

The average inventory for the month of February reached 75 days, according to industry analysts’ at WardsAuto.com. Now, car companies intend to shake off sluggish winter sales with more aggressive incentives to offset their loss as temperatures start to rise.

Incentives range from robust discounts to low interests rates. But not everyone think this is a serious problem, given that inventories have become unseasonably high.

“This is a ‘temporary phenomenon’,” said senior economist, Russell Price at Amerprise Financial. “It’s just the matter of time that they have to maintain discounts to get levels back down to what is normal for this time of the year,” he said.

This brings little comfort to Foley as his profits are feeling squeezed because of the excessive incentives.

“There is a lot of pressure from the manufacturer to buy more cars and Nissan has a very aggressive growth plan they are committed to.” “We have to get rid of our aged inventory, so you find yourself taking deals that you wouldn’t normally take,” Foley said, adding that dealers are forced to lure in customers with additional discounts on top of automaker deals.

The Incentive Game

Most companies reasoning behind discounts is to clear out the remaining stock in order ramp up production for newer models. And, oftentimes, dealers are offered incentives that can potentially enhance profits margins, depending on their sales performance.

Aaron Montgomery, a former franchise dealer left the new vehicle industry for the used auto market, said big incentives is a “dangerous game that has eroded dealers profits.”

“I was around when things got really ugly,” he said, recalling the auto crisis in 2008 and discounts and rebates skyrocketing. “Once you have gone to those high incentives, it’s hard to get away from it because consumers will expect them—that will cripple dealers.”

Winners and Losers

With incentives at the highest they’ve been since the recession, analysts’ say they result in increased sales, but automakers should be cautious.

“Overall, there is pricing pressure on everyone,” said Haig Stoddard of Wardsauto.com. “Since incentives will be going on through April, if credit companies are offering low interests rates, the manufacturer will be hurt depending on how big the incentives is.”

Almost all manufacturers are offering deep discounts and robust rebates on new brands. Typically, incentives tend to be higher for domestic brands. General Motors (GM), Ford and Chrysler have historically offered the biggest incentives. GM average incentive is roughly $3500—the highest of all automakers

The average incentive per vehicle for the industry is around $2,800 per car for—up 8 percent from last year in April, according to TrueCar. The Ford Focus is among the most discounted cars on the market, with a 16.7 percent discount off the retail price.

For April, Nissan is averaging $2,200 per vehicle.  Nissan has priced down every model, except for its newest sport utility vehicle– the Nissan Rogue. But hefty discounts can also strain auto dealers who are in markets where consumer demand for certain types of models are weak.

“They will price a car that will be harder to sell in one market than another,” Foley said, that certainly doesn’t make for a happy marketplace.”

As ongoing incentives have created an atmosphere where customers are negotiating even steeper discounts, auto dealers should brace themselves for the months ahead.

“Very rarely do you see customers come in willing to pay the sticker price,” he said. “But, sometimes there is just too much money on the line and you just can’t miss deals.”

Measuring the Economy