Friday Financial Five – April 18th, 2014

Friday, April 18, 2014

Dan Forbes, GoLocalWorcester MINDSETTER™

The IRS starts the fiscal year off right

Thanks to higher tax rates and an improving economy, Fiscal Year 2014 is shaping up to be very good for everyone’s favorite government agency, the Internal Revenue Service. According to the Congressional Budget Office’s projections , receipts from October 2013 to March 2014 are $1,300 billion. That’s over $100 billion more than the same period in Fiscal Year 2013, or a roughly 10 percent increase. The extra revenue included a $92 billion increase in personal income tax withholdings, a $17 billion increase in corporate tax income, and $12 billion more in receipts from the Federal Reserve.

Colleges feeling the pinch

There are signs that the demand for college, replete with ever increasing costs and options, may be reaching a tipping point. In many areas, tuition rose over three times that of overall inflation in recent years and only recently shown any sign of a slowdown. This Bloomberg article details the growing trend of colleges that are being downgraded by Moody’s or closed altogether. For those institutions subject to downgrades or dwindling enrollment, the students face the real possibility of receiving a diploma from an institution that may not exist in the near future.

CPI sees a small increase

Speaking of inflation, as the story goes, the country will continue to experience depressed price increases in accordance with a stagnated recovery following the most recent recession. The recent Department of Labor numbers show a 0.2 percent increase in the Consumer Price Index for March. The cost of food and clothing was on the rise while gasoline decreased by almost 2 percent. Overall, there has been a 1.5% increase in prices year over year, still well below the historical average.

Employment numbers fail to impress

March’s employment numbers show total payrolls up 192,000 for the month. The unemployment rate remains stuck at 6.7%, but the positive news is that most of the gains were realized in the private sector. To really jump-start the recovery, the goal should be for 200,000 or more new jobs to be added each month. Each state’s primary focus should be removing barriers for small businesses to create and grow job numbers.

Genworth’s annual cost of long term care

Genworth, one of the country’s leaders in Long Term Care insurance, has produced the 2014 Cost of Care Survey. With just a quick glance, it’s apparent that care costs in the Northeast are trending much higher than the rest of the country, with the average private room in a Rhode Island or Massachusetts nursing home coming in at over $100,000 annually. The huge expense associated with caring for an aging population may drive more retirees to the Midwest. Why pay $130,000 annually for a private room in New York when you can get one in Oklahoma for $57,000?

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected] .

Related Slideshow: 10 Biggest Manufacturers in Central MA

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St. Gobain Ceramic

Worcester, Northborough

Number of Employees: 1,250-5,498

Saint-Gobain Ceramic Materials division manufactures a wide range of high value components for industrial markets, including grains and powders, fine ceramics, photonics, scintillation and quartz products and refractories used in the steel market or glass furnaces.

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St. Gobain Abrasives

Number of Employees: 1,000-4,999

Worcester

Saint-Gobain Abrasives is the largest global abrasive supplier for bonded, coated, non-woven and superabrasives as well as diamond and equipment products for the industrial, construction, automotive repair and do-it-yourself markets.

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Metso Automation

Shrewsbury

Number of Employees: 500-999

Metso is a leading process performance provider, with customers in the mining, construction, and oil & gas industries. They focus on the development of intelligent solutions that improve sustainability and profitability. Metso employs around 16,000 professionals in 50 countries.

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Wyman-Gordon

North Grafton

Number of Employees: 500-999

Originally founded in Worcester in 1883, Wyman-Gordon is a worldwide leading manufacturer ofmetal and composite material parts used in aerospace turbine engines, land-based gas turbines, and power plants.

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Polar Beverages

Worcester

Number of Employees: 500-999

Based in Worcester, Polar Beverages is the largest independent soft-drink bottler in the country. It manufactures fruit-flavored sodas, ginger ale, seltzer, drink mixers, and spring water.

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Nypro

Clinton

Number of Employees: 500-999

Founded in 1955, Nypro provides an array of global solutions in product design, production, tooling and distribution for the Healthcare and Packaging industries. Nypro was the first manufacturer to fully automate all factories with robots and automation.

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FLEXcon

Spencer

Number of Employees: 500-999

Headquartered in Spencer, FLEXcon is a worldwide manufacturer of pressure-sensitive film products, which are used for indoor and outdoor advertising, safety/hazard labels, bar coded labels, primary labels, and product identification.

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GKN Sinter Metals

Worcester

Number of Employees: 250-499

GKN Sinter Metals is the world's leading supplier of metal powder precision components. Their global production and sales network employs approximately 6,500 associates in more than 30 facilities on five continents. With a history dating back to the 1930s, GKN currently has production sites in Germany, Italy, South Africa, India, China, Brazil, Argentina, Canada and the USA.

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Dexter-Russell, Inc.

Southbridge

Number of Employees: 250-499

Founded in Southbridge in 1818, Dexter-Russell, Inc. is the largest and oldest manufacturer of professional cutlery in the United States. It was originally known as the Harrington Cutlery Company.

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IPG Photonics

Oxford

Number of Employees: 250-499

IPG Photonics is a leading developer and manufacturer of high-performance fiber lasers and amplifiers for diverse applications in numerous markets. IPG offers a diverse lines of low, mid and high-power lasers and amplifiers are used in materials processing, communications, medical and advanced applications.