Business memo 05/19/03

Wholesale prices take record plunge in April

WASHINGTON -- Wholesale prices plunged by a record 1.9 percent in April as the end of the Iraq war removed pressures on energy costs, which posted their largest drop in nearly 17 years. Operating capacity at big industry nosedived to the lowest ebb since 1983.

The big drop in the Producer Price Index, which measures the prices of goods before they reach store shelves, marked an about-face from March when higher energy prices, stoked by the war, helped to catapult wholesales prices up by a hefty 1.5 percent, the Labor Department reported.

Thursday's report makes clear that inflation isn't a problem for the economy, but it might intensify fears about whether the United States is heading down a path of a destabilizing fall in prices.

Dell Computer sees first-quarter profits

ROUND ROCK, Texas -- Dell Computer Corp., a bellwether of the technology industry, said Thursday that first-quarter profits jumped 31 percent on strong sales.

The company said second-quarter increases should also be strong, with sales volumes to rise 25 percent over last spring.

Dell said it earned $598 million, or 23 cents per share, compared to $457 million, or 17 cents per share, a year earlier. The results matched the expectation of analysts surveyed by Thomson First Call.

Revenue rose 18 percent, to $9.53 billion from $8.07 billion a year ago.

Dell said its worldwide shipments in the quarter rose 29 percent from a year earlier while the rest of the industry experienced a 1 percent decline. The increase was 40 percent in the Asia-Pacific region, including Japan.

Gas prices continue steady decline

WASHINGTON -- Gasoline prices dropped to just under $1.50 a gallon nationally this week reflecting a steady decline that the government says is likely to continue well into what is expected to be a heavy summer driving season.

The nationwide average of regular grade gasoline dipped to $1.496, the lowest since January, according to a survey by the American Automobile Association. It had been at a record high of nearly $1.73 a gallon in mid-March.

The price decline, reflecting lower crude oil prices and a growth in gasoline inventories in recent weeks, came despite growing demand and expected heavy highway travel this summer.

Earlier last week, the government's Energy Information Administration put gasoline prices nationwide at $1.49 with expectations that prices would continue to decline in coming weeks, averaging about $1.46 over the summer months.

That would be about 10 cents a gallon higher than last year's summer average, but dramatically lower than the record high of $1.73 reported by the EIA on March 17.

Number of personal bankruptcies sets record

WASHINGTON -- The record-setting pace of new personal bankruptcies continued this year, with their number rising 7.4 percent in the 12 months ended March 31, according to data released Thursday.

"There is still a big slug of individuals with problem debt still working their way through" the bankruptcy court system, said Samuel Gerdano, executive director of the American Bankruptcy Institute, a group of bankruptcy judges, lawyers and experts.

As is normally the case, most bankruptcy filings were by individuals.

-- From wire reports