Monday Note: Apr. 29

By
Paul Brandus (Apr. 29, 2013)
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AIR TRAVEL BACK TO NORMAL? 

Air travelers rejoice. Air travel should be back to normal this morning, after the Federal Aviation Administration announced Saturday that it was suspending employee furloughs – that had resulted in flight delays nationwide.

The move came after Congress passed a bill Friday allowing the agency to move money within its budget to prevent the furloughs that had been ordered because of the sequester. “Air traffic facilities will begin to return to regular staffing levels over the next 24 hours and the system will resume normal operations by Sunday evening,” the FAA said in a statement.

The FAA had reduced staff at airport towers by about 10 percent, saying air traffic controllers could not be exempt from its cuts because all federal agencies were required to reduce spending across their budgets.

Both Republicans and Democrats have blamed each other for the FAA furloughs – one of the most visible examples of what President Obama has criticized as thoughtless spending cuts. Obama over the weekend said that same thoughtlessness is hurting citizens in less visible ways too; and he repeated his call for a more “balanced approach” to cutting spending – meaning more thoughtful, targeted spending cuts, along with closing certain tax deductions and loopholes that he says benefit the rich. “We can’t just keep putting Band-Aids on every cut,” he said.

SYRIAN CHEMICAL ATTACK

The administration is cautiously reviewing evidence that the Syrian government used chemical weapons at least twice against its own people. The White House says definitive proof would “cross a red line,” but has been deliberately vague in saying what the U.S. would do.

Key point: What the U.S. has right now is an intelligence assessment – but not solid evidence – that Syria has used chemical weapons.

Obama is reluctant to inject U.S. troops into the situation, as are key Congressional Republicans like Senator John McCain.

There are other angles to consider:

*Some analysts warn that as Syria’s regime crumbles, chemical weapons could find their way into terrorist hands – and possibly wind up in the United States. "The next bomb that goes off in America may not have nails and glass," South Carolina’s Lyndsey Graham told CBS.

*The “red line” – and how and weather the U.S. responds – is also being watched closely in Iran and North Korea. The administration has also issued “red line” warnings to Tehran about its nuclear weapons program.

ECONOMY

The U.S. economy grew at a 2.5% pace in the 1q of 2013, the govt. says. That’s less than the expected 3.0% rate, but more than the 4q pace of 0.4%.

As was the case in the 4q, slowing defense spending was a big headwind. And growth came not because of consumers – who grew cautious – but because of farmers - who filled up silos after last summer's droughts

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This week's main economic event: April jobs & unemployment reports. Analysts predict 7.6% rate, 160K nonfarm jobs created. Broader rate: 13.8%. We’ll get the numbers on Friday AM.

Gasoline Prices Down Again

AAA says the average price of a gallon of regular nationwide fell a penny last week to $3.50. That’s down 13 cents in a month and 31 cents in a year.

PRESIDENT’S WEEK

Just one public event today: remarks at an event marklng the National Academy of Sciences 150th Anniversary.

Tuesday: veterans jobs event

Wednesday: meetings

Thursday/Friday: Mexico & Costa Rica

Sunday, May 5: commencement address Ohio State Univ.

 

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