FOOD PRICES
Rising costs cast pall on McDonald’s
NEW YORK | McDonald’s Corp. said Thursday that it expects more price increases for beef and other key ingredients, sending the stock down even as the company reported improved earnings for the first quarter.
The company spent the day emphasizing how sales have increased, beating analysts’ expectations, and showcasing strong demand in Europe and Asia.
But analysts were more concerned about rising food prices, a global trend that is rippling to customers, franchisees and investors everywhere.
The company is considering raising menu prices more, but that could scare off the customers who dine there mainly because of the low cost. It already raised prices 1 percent in early March.
The company said it expects an increase of 4 percent to 4.5 percent in food prices in U.S. and Europe for the year. Mitch Speiser of Buckingham Research noted that McDonald’s had predicted an increase of about 2 percent for U.S. food prices in January.
RECALL
Toyota RAV4s, Highlanders recalled
TORRANCE, Calif. | Toyota recalled more than 300,000 RAV4 and Highlander vehicles Thursday so that it can fix an issue related to their airbags.
The recall includes about 214,000 RAV4s from 2007 and 2008 and approximately 94,000 Highlander and Highlander HV vehicles from 2008. All of the vehicles involved were sold in the U.S. The recall does not include any other Lexus or Toyota vehicles.
Over the past year and a half, Toyota has wrestled with numerous recalls covering a wide range of defects, including faulty floor mats, sticky gas pedals and glitches in braking software, ballooning to more than 14 million vehicles globally.
The company paid the U.S. government a record $48.8 million in fines for its handling of three recalls. Toyota faces dozens of lawsuits from owners in the U.S., including fatalities allegedly linked to defects.
TECHNOLOGY
Amazon failure takes down websites
NEW YORK | Scores of websites and Internet services like Foursquare and Reddit crashed or had limited availability Thursday because of problems at a data center run by Amazon.com.
The problems revealed widespread reliance on Amazon Web Services, which rents out computers and data storage on a self-service basis over the Internet.
AWS is generally considered reliable because it uses vast numbers of computers, spread out in different data centers, making Thursday’s failure unusual.
Amazon said the trouble started early in the morning at a data center in Northern Virginia, but provide no details.
AIRLINES
Spike in fuel prices erases profits
Soaring jet-fuel prices are wiping out profits at the nation’s biggest airlines.
The world’s biggest airline company, United Continental Holdings Inc., said Thursday that it lost $213 million in the first three months of the year after it paid nearly $600 million more for fuel than in the year-ago quarter.
American Airlines posted a $436 million loss. Like other airlines, American uses complex financial transactions to hedge against rising fuel prices. But these hedges only do so much to control the airlines’ single-biggest cost. Hedging saved American Airlines $100 million in the first quarter, but its fuel bill still rose by $351 million.
Even a profit machine like Southwest Airlines Co., and rival low-cost carrier JetBlue Airways Corp., barely rose above break-even after paying to fuel their planes.
The rising costs offset revenue gains that ranged from 9 percent at American to 18 percent at Southwest.
The run-up in fuel prices is reminiscent of 2008, when oil also surged above $100 per barrel. But the airlines are in better shape to withstand an oil shock than they were then.
EMPLOYMENT
Survey: Youth without degrees hardest-hit
The nation’s economic upheaval has been especially hard on young people trying to start their working lives with a high school education or less. Only about a third are working full-time, compared with two-thirds of recent college grads, according to an Associated Press-Viacom poll.
Most say money was a major reason they bypassed college, and the vast majority aspire to more education someday.
Four in 10 of those surveyed whose education stopped at high school are unemployed. Fewer than a quarter have part-time jobs, the poll of 18- to 24-year-olds found.
The Labor Department’s figures document how much harder it’s become for these young adults to find a job since the recession that began late in 2007.
The unemployment rate has been over 20 percent each March for the past three years for high school graduates ages 16-24 who have no college education. That’s up from 10 percent in March 2007 and 14.5 percent a year later.
For college grads that age, March unemployment peaked at 8.5 percent this year. The government’s figures count only those considered actively looking for jobs.
• From wire dispatches and staff reports
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