BUSINESS DIGEST | Wages barely grow in first quarter

Wages barely grow in first quarter

MINNEAPOLIS

Full-time workers took home only a buck a week more in wages during the first quarter than a year earlier, according to a government report issued Tuesday.

The report from the U.S. Bureau of Labor Statistics found that median weekly wages rose to $755 a week, not adjusted for seasonal fluctuations. That’s up from $754 a week a year earlier.

It was the slowest wage growth in recent years, despite indications that the economy is recovering from the recession. A year ago, first-quarter wages were up 2.2 percent from the same period in 2009.

Jeanne M. Boeh, chairwoman of Augsburg College’s Economics Department, also pointed out that the gain isn’t enough for workers to keep up with their rising share of health-insurance costs and rising gasoline prices.

“The numbers are actually worse than they appear because these are nominal wages and don’t reflect disposable income,” Boeh said.

Boeh said that if gas prices stay where they are, consumers are poised to pay $100 billion more at the pump, provided consumption levels stay the same.

IBM earnings up 10 percent

NEW YORK

IBM Corp. on Tuesday reported stronger-than-expected net income and revenue for the first quarter, helped by the weak dollar and strong performance from its hardware division.

The computer and consulting-services company also raised its full-year forecast for operating earnings by 1 percent. However, the stock retreated, possibly in reaction to a decline in new contract signings in the outsourcing business.

Net income rose 10 percent to $2.86 billion, or $2.31 per share. In the year-ago period, IBM earned $2.6 billion, or $1.97 per share.

Excluding mostly acquisition-related charges, earnings were $2.41 per share, beating the average analyst estimate as polled by FactSet of $2.29.

Revenue rose 8 percent to $24.6 billion. The increase would have been 5 percent at constant currency rates. Analysts expected $24.02 billion, or about a 3 percent increase at constant currencies, IBM said.

Toyota extends production cuts

DETROIT

Toyota Motor Corp. has extended production cuts at its North American factories into early June as it struggles to deal with parts shortages caused by the earthquake that hit Japan.

The disruptions caused by the March 11 earthquake and tsunami continue to spread. Toyota has warned dealers to expect shortages well into this summer and has changed paint colors on many models because of chemical shortages from a supplier. Even U.S. automakers are feeling the pain, trimming production schedules at many plants. Ford has stopped making trucks in “tuxedo black” because of a pigment shortage.

Despite the disruptions, Toyota promised no layoffs and said it would be ready when parts start flowing again.

Vindicator wire reports