Bernanke: Economic outlook murky

U.S. Federal Reserve Chairman Ben Bernanke gave no hint Thursday whether interest rates will continue to drop. But in a speech in Charlotte, he said the nation's economic outlook is murky, given ongoing stress from the credit crunch and rising fuel prices.
Bernanke discussed the economy during a presentation at the Charlotte Chamber's annual meeting. The chamber also honored him with the organization's Citizen of the Carolinas Award.
The chamber presents the award annually to an individual who has brought positive recognition to the Carolinas. Bernanke is a native of Dillon, S.C., about 120 miles southeast of Charlotte. He was sworn in as Fed chairman in early 2006, replacing Alan Greenspan.
About 2,400 people attended Thursday night's chamber event, held at the Charlotte Convention Center.
The Fed's Open Market Committee, which sets monetary policy and considers raising or lowering interest rates, will meet next on Dec. 11. The committee cut the federal funds rate to 4.75 percent in September and to 4.5 percent Oct. 31. Banks use the federal funds rate to determine the interest they charge on overnight loans to each other.
"How has the economic picture changed in the month since that meeting?" Bernanke said. "As is often the case, the incoming economic data have been mixed."
Several key indicators, such as home construction, remain weak, he said. Household income will continue to grow but at a slower rate.
A combination of high gas prices, the weak housing market, tight credit conditions and declines in stock prices seem likely "to create some headwinds for the consumer in the months ahead," Bernanke said.
On the bright side, the Fed chairman said the labor market remains solid, with the unemployment rate staying at 4.7 percent last month. That's important for maintaining the economic expansion, he said.
At the Fed panel's Dec. 11 meeting, the committee will "have to judge whether the outlook for the economy or the balance of risks have shifted materially," Bernanke said. The Fed will remain "exceptionally alert and flexible as we continue to assess how best to promote sustainable economic growth and price stability."
Bernanke also discussed the Charlotte region's growth and how the area has changed since the days when he would visit his paternal grandparents here 40 years ago. The couple lived on Cumberland Avenue in the Myers Park community.
He said Carolinians are facing the same challenge confronting other areas of the country: replacing jobs in old-line manufacturing industries by creating employment in services such as health care and hospitality. Meanwhile, the region is adapting to globalization and advancing technology, he said.
Work-force quality is the most important factor in an economy's success, Bernanke said. "In a rapidly changing world, economically valuable skills can be maintained only through learning that extends beyond traditional schooling to encompass training and retraining well into the middle years of life."
Charlotte has benefited from its emergence as a financial-services center during the last 10 years, he noted. And an average of 39,000 residents have moved here each year since 1997.
"Thus, like many other vibrant regions of the country, the Charlotte area has grown by developing a high-productivity service economy," Bernanke said.
He cited the construction of the N.C. Research Campus on the site of the former Pillowtex Inc. headquarters and manufacturing site in Kannapolis -- where more than 4,000 workers lost their jobs when the company closed in 2003 -- as an example of the transition.
While Charlotte will continue to woo highly educated and skilled employees from other regions, Bernanke said it remains crucial to improve the skills of other local workers, especially those displaced by declining industries such as textiles.
"Education and skills must be provided flexibly and to people of any age," he said.
Reflecting on his visits here as a child, Bernanke recalled how his "Grandpa Friedman" would take him to Freedom Park to feed the ducks. At the time, the youngster thought the area's name was "Friedman Park."
"I was suitably impressed by the honor the city authorities had apparently given my grandparents," he quipped.
credited by: bizjournals.com

Max Muscle looking to bulk up

Max Muscle, a seller of sports nutrition, weight loss and fitness products, is seeking franchisees to expand its presence nationwide.
The chain, founded Anaheim in 2003, operates more than 125 stores and is looking to add 500 additional locations over the next five years.
The company, which locates its stores near health and athletic clubs, is vying to grab a bigger piece of the $16 billion nutritional supplement market. Max Muscle sells such supplements, as well as athletic apparel and a private line of vitamins and other natural nutrient products under the name Max Nutraceuticals. But its target market is not just bodybuilders, but everyday people.
The chain is seeking regional directors as well as single- and multi-unit franchisees. Investment costs for a Max Muscle franchise range from $158,000 to $285,000 for a single unit, and $100,000 to $500,000 for area development agreements and master licenses.
The rollout coincides with a new store design that features flat-screen televisions, interactive libraries and online nutritional and exercise planning software.
credited by: bizjournals.com

Cessna Skycatcher -- made in China

Cessna Aircraft Co. says the Shenyang Aircraft Corp. will build the company's newest model airplane, the 162 Skycatcher light sport aircraft.
Cessna Chairman, President and CEO Jack Pelton says light sport aircraft need the latest avionics, light-weight equipment, must be safe and reliable and be competitively priced.
"Our solution is to partner with SAC, a company with excellent facilities, state-of-the-art technologies and a workforce highly experienced in aircraft manufacturing," Pelton says.
Cessna is a subsidiary of the Textron Co. (NYSE: TXT). SAC is a subsidiary of China Aviation Industry Corp. 1. It is a government-owned group of aviation manufacturers.
Cessna will design the Skycatcher. It will also conduct testing and send employees to the SAC plant to oversee the manufacturing process. The airplanes will be assembled at the SAC plant in China.
credited by: bizjournals.com

Judge upholds signature revocation law

Leon County Circuit Judge Charles A. Francis rejected Florida Hometown Democracy's challenge to a new law that allows voters to revoke petition signatures on ballot initiatives.
Political action committee Florida Hometown Democracy challenged the constitutionality of the law allowing revocation of petition signatures. Save Our Constitution, the primary opponent of the group's proposed amendment -- which would require local referendums on future land-use changes -- has used the new law to try to cut the number of signatures its supporters have collected to try to get on the November 2008 ballot.
Save Our Constitution, a committee backed by the Associated Industries of Florida and Florida Hometown Democracy's primary opponent, said the ability of voters to take back their signature is necessary, "especially in light of the tactics of the Hometown Democracy group and its mercenary signature-gatherers."
Florida Hometown Democracy and its leader, Leslie Blackner, did not immediately return calls for comment. The group has the option to appeal.
Supporters need 611,000 signatures to get on the ballot and had nearly 394,000 filed with the state as of Tuesday afternoon.
credited by: bizjournals.com