Finance news. My opinion.

Acknowledging that nonprofits are not immune to these more challenging economic times, the United Way Capital Area said Friday it has laid off about 10 percent of its more than 70 employees.

The Austin nonprofit says it was forced to make cut the seven employees because of the slumping economy’s effect on its budget.

“We are tightening our budget belt on the operations side to avoid impacting our agency grant commitments,” says David Balch, president of United Way Capital Area. “We greatly regret the loss of valuable staff and thank them for being part of our family here, and will do all that we can to assist our colleagues in finding other positions.”

The nonprofit says it’s offering severance pay and associated benefits to the employees that have been laid off.

United Way also said Friday that its grants for upcoming 2008-2009 fiscal year will total $3.9 million to 36 Central Texas nonprofits, up from $3.4 million this year. The group says it wants to “assure the community that our proposed investment … is paramount.”

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Good Eats, the start-up grocer that had planned to lease space where Corti Brothers grocery has operated for years on Folsom Boulevard in East Sacramento, plans to announce Wednesday that it will "back away" from its effort to locate there to give the Corti family a chance to resolve things with the building’s landlord.

In an open letter to grocer Darrell Corti and residents of East Sacramento, Good Eats partners Michael Teel — the former chief executive of the Raley's Inc. grocery chain — and Michael Ashker said they reached the decision after meeting with Corti last Friday.

"We have always held Mr. Corti and Corti Brothers in highest regard and our intention remains to find ways to work together with Darrell Corti," the letter states.

The partners said the possibility of opening their own store at the Corti site at 5810 Folsom Boulevard began when approached by a real estate broker last October about leasing there and were told that Corti Brothers would not be renewing its lease. Negotiations began in earnest in April after the landlord confirmed that Corti wasn’t renewing, they said. They signed a lease agreement in July.

Corti, president of Corti Brothers, has said that he learned without warning in early July that he had lost the month-to-month lease for the store. He said he planned to close the Folsom Boulevard location Sept. 30, but that the store was profitable and would seek a new location.

It's unclear, however, whether the decision by Ashker and Teel means the Good Eats deal for that site is dead or on hold.

A separate Good Eats kitchen is opening at Folsom Boulevard and Seville Way, the partners stated.

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• Job growth in Florida was only 0.5 percent in 2006-2007, down from a high of 4 percent in 2004-2005 and compared with 1 percent for the U.S. in 2006-2007.

• The industry with the biggest job loss was construction, down 8.3 percent in 2007. The biggest gainers were services such as personal services and health care.

• Unemployment was 4.1 percent in 2007, up from 3.2 percent in 2006.

• Hispanics, and men, were the groups that saw the largest increases in unemployment in 2007.

• Underemployment, including people who are not working enough hours and who are discouraged from looking for work, was 8 percent in 2007, but for African-Americans the figure was 11.3 percent and 10 percent for Hispanics.

• Fifteen percent of the unemployed have been without work for at least half a year.

• In the U.S. as a whole fewer people are in the labor force now than in 2000, before the last recession. However, in Florida, labor force participation has increased. The exception was African-Americans, who never recovered the labor force participation rates they had in 2000.

• Job growth, unemployment, and related statistics have worsened in 2008, so the current situation for workers is much worse than indicated by these annual figures for 2007. As of July 2008, Florida unemployment was 6.1 percent, which was 2 percent higher than a year earlier.

• Workers wages in Florida did not grow at all in 2007, and for the nation actually fell.

• Florida’s median wage, $14.70 per hour in 2007, fell from 27th place in the nation’s states in 2006 to 30th place last year.

• African-Americans and Hispanics have been losing ground compared with non-Hispanic Whites. In 1979, African-Americans and Hispanics made over 80 percent of what Whites made, but by 2007 the figures dropped to less than 77 percent.

• Wage inequality is still extremely high in the state. In 1979 a high wage earner at the 10th percentile earned 2.92 times what the bottom a low-wage worker at the 20th percentile earned. In 2000, the ratio grew to 3.48 and in 2007 it was 3.55.

• Median household income in Florida in 2007 ($45,794) was 91 percent of the corresponding U.S. figure, and the median four-person family income ($68,494) in Florida was 93 percent of U.S. norms. This is in line with historic Florida performance on these measures.

• Official poverty in Florida in 2007 was 12.5 percent, up one percent from the year before, and identical to the U.S. poverty rate of 12.5 percent.

• In 2007, Florida had the 3rd highest percentage (20.2 percent) of residents without healthcare coverage among the 50 states. It ranked 46th in private sector employer-provided health insurance. The state ranks extremely badly on these measures.

• In 2007 Florida ranked 50th of the 50 states in private sector pension coverage.

• Private sector unionization of Florida workers was only 2.5 percent in 2007, contributing to lower wages, wage inequality, and lower rates of healthcare coverage and pension benefit coverage.

• From 2000 to 2007 the Miami-Ft.Lauderdale and Tampa Bay metropolitan areas had the 2nd and 3rd highest rates of inflation among major metropolitan areas in the nation.

• Miami-Ft. Lauderdale ranked 9th in the country for cost of living in 2007.

• Floridians pay an average of 7.4 percent in state and local taxes, ranking 47th in the nation. However, because so little of Florida’s taxes can be deducted on a federal tax return, the total tax burden for Florida residents is actually higher than it is for a typical U.S. resident.

• Ninety percent of Floridians drive a car, truck or van to work, and almost 80 percent commute alone. With rising gas prices, this puts a heavy financial burden on working people.

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U.K. house prices posted the biggest annual decline in August since at least 2002 as reduced mortgage lending deepened the property slump in London, Rightmove Plc said.

The average asking price for a home fell 4.8 percent from a year earlier to 229,816 pounds ($426,929), Britain's most-used property Web site said in a statement today. On the month, home values fell 2.3 percent, the most since December, led by London.

“The lack of mortgage finance is central to the problem,'' Miles Shipside, commercial director of Rightmove, said in the statement. “London, in particular, appears to be having its own special summer sale, with over 21,000 pounds off in a month.''

Bank of England Governor Mervyn King said last week that the housing market faces “a significant adjustment'' as banks ration loans for homebuyers. Falling prices may exacerbate the economic slowdown as the threat of a recession looms and unemployment rises the most in 16 years.

Prices in London fell 5.3 percent on the month and 3.8 percent from a year earlier. Each of the 32 districts in the capital showed a decline, and the biggest drop was in the southwest area of Wandsworth, where values fell 7.9 percent. Hackney, in east London, was the best performer, with a 0.6 percent decline.

The stock of unsold property per real estate agent rose for a seventh month to 78, from 77 in July. The number of transactions may reach the lowest since 1959, Rightmove said.

Market `Standstill'

Banks have starved the market of loans after more than $500 billion in losses and writedowns worldwide from the U.S. mortgage market collapse. U.K. mortgage approvals fell to the lowest since at least 1999 in June, the Bank of England said July 29. The Royal Institution of Chartered Surveyors said last week that the housing market is at a “virtual standstill.''

King said on Aug. 13 that “there is a feeling of chill in the economic air'' and that “the British economy is going through a difficult and painful adjustment'' that “cannot be avoided.''

Weakness in the housing market may “amplify'' the impact of the lending squeeze on household spending, the central bank said last week. Retail sales probably fell for a second month in July, dropping 0.2 percent, according to the median forecast of 32 economists in a Bloomberg News survey. The government's statistics office will release that data on Aug. 21.

Britain's gross domestic product will either stagnate or contract in the next two or three quarters, meaning the economy may fall into a recession, the British Chambers of Commerce said in forecasts released today.

Company Confidence

Confidence on business prospects fell to the lowest level in at least 6 years, according to a survey of more than 200 companies released by Lloyds TSB Group Plc today. The index of sentiment on the next 12 months fell to 22 in July, the lowest since the survey began in 2002, from 32 in June.

The economy probably grew 0.1 percent in the second quarter, less than previously estimated and matching the slowest pace since the aftermath of the last recession in 1992, the median forecast of 34 economists surveyed by Bloomberg News shows. The statistics office will publish the figures on Aug. 22.

The central bank kept its benchmark interest rate at 5 percent on Aug. 7 for a fourth month, as policy makers weighed the risk of accelerating inflation against the threat of a recession. Minutes of their meeting, showing how the panel voted, will be released on Aug. 20.

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Confidence in the global economy rose from a 10-month low in August as the retreat in oil prices made Americans less pessimistic, a survey of Bloomberg users on five continents showed.

The Bloomberg Professional Global Confidence Index climbed to 14.1, from 10.3 in July, which was the lowest reading since the survey began in November. This increase was led by a 5.5- point increase to 18.2 among U.S. respondents, while the Western European measure rose 3.4 points to 12.9. A reading below 50 indicates negative sentiment.

The $30 drop in crude-oil prices in the past month is easing pressure on the Federal Reserve to raise interest rates and leaving consumers with more cash just as the impact of tax rebates fades. But the outlook the remains bleak as expansions in the U.K. and euro region stall, while Japan's economy contracts.

“As oil prices come off, people just feel a bit better about the outlook for economic growth, and it's positive for consumer confidence,'' said Prakriti Sofat, an economist at HSBC Holdings Plc in Singapore, who participated in the survey. “We still do think the external environment has become less favorable and exports in a lot of the Asian economies are feeling the pressure.''

Confidence in the global economy was lower in Asia than in Europe and North America, with the index almost unchanged at 8. The survey, conducted between Aug. 4 and Aug. 8, collated the responses of about 3,000 Bloomberg users around the world. It included questions about the outlook for participants' own economies and their regions, as well as for bonds, currencies, stocks and interest rates over the next six months.

Spanish Housing Slump

Respondents in Japan were the most pessimistic about the global outlook. Participants in Spain, where second-quarter growth was the weakest in 15 years because of a housing slump, were the gloomiest about their economy, with a reading of 2.4, followed by the U.K. Participants in Brazil remained the most optimistic about their economy, at 60.4.

Faltering economic growth in Europe has prompted participants in the region to erase expectations of an interest- rate increase. The gauge in Germany fell to 42.7 from 61.6, signaling respondents in Europe's biggest economy now anticipate that the European Central Bank may cut its key rate in the coming six months. The gauges also declined in France, Italy and Spain.

By contrast, users in the U.S. say the Federal Reserve's next move is more likely to be an increase than a cut, with the index unchanged at 57.3.

Trichet's Prediction

European Central Bank President Jean-Claude Trichet said last week that euro-area growth will be “particularly weak'' through the third quarter. The economy probably contracted in the second quarter for the first time since the creation of the euro, according to a separate survey of economists.

In the U.K., the index for the Bank of England's benchmark rate fell to 46 from 51.2, also indicating participants expect a reduction in interest rates there.

The U.S. slowdown is aggravated by the credit crisis triggered by the worst homebuilding slump in a quarter century. More banks made it harder for businesses and consumers to borrow money as defaults and delinquencies on home loans soared, the Fed's quarterly Senior Loan Officer Survey showed this week.

Fed policy makers, who kept the benchmark rate at 2 percent Aug. 5 after cutting it at a record pace between September and April, said “markets remain under considerable stress.''

A separate Bloomberg survey of 50 economists published on Aug. 11 forecast U.S. growth will average an annual 0.7 percent from July through December, half the pace of the first six months.

Dollar Sentiment Reversal

As the outlook for ECB rates changes, participants in the U.S. and Europe reversed their predictions of a dollar decline. In the U.S., the index rose to 57.5, while the euro gauge dropped below the 50 breakeven point in Germany and France.

The euro has fallen 6 percent in the last three weeks and declined below $1.50 this week for the first time in more than five months.

“It's no longer the case that the U.S. is slowing down in isolation,'' said Paresh Upadhyaya, who helps oversee about $50 billion in currencies as a senior vice president at Putnam Investments in Boston. “Markets are pricing in weaker global growth and the possibility of other central banks joining the Fed in the easing cycle. The fundamentals are in place for a gradual improvement in the dollar.''

Weakness in Japan

Respondents in Japan became more pessimistic about their own economy. The world's second-largest economy contracted in the second quarter, bringing the country to the brink of its first recession in six years, the Cabinet Office in Tokyo said yesterday. The government this month said the economy is “deteriorating,'' acknowledging for the first time that the country's longest postwar expansion has probably ended.

“While the Americans may be doing the dance of joy around a cheaper tank of oil, the rest of the world has a lot more to worry about,'' said Song Seng Wun, an economist at CIMB-GK Securities Pte. in Singapore. “Asian policy makers are more concerned that weakening energy and commodity prices are a reflection of slower economic growth momentum, implying a deteriorating outlook.''

The next survey will be conducted Sept. 8 to Sept. 12.

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Intel Corp. is expected to release details Monday about a new chip aimed at the gaming market dominated by Nvidia Corp. and Advanced Micro Devices Inc.

Santa Clara, Calif.-based Intel (Nasdaq:INTC) says the technology, code-named Larrabee, will be available in late 2009 or in 2010.

Where Intel now offers quad-core processors and plans to offer eight-core processors based on its Nehalem architecture, Larrabee is expected to have 12 to 48 such calculating engines.

Santa Clara-based Nvidia (Nasdaq:NVID) sells a chip with 240 processors. Sunnyvale, Calif.-based AMD (NYSE:AMD) has one with 800 processors.

Intel, which has major operations in Chandler, is revealing information about its new chip just ahead of next week’s Siggraph 2008 show, which will bring an estimated 30,000 computer graphics and interactive technology professionals to Los Angeles from six continents.