Dallas, TX – Southwest Airlines reported better than expected third quarter earnings. On the same day it was announced, the leading economic index was down for the first time in four months. And it wasn't just the U.S. that experienced a decline in manufacturing. I'm Maxine Shapiro with KERA Marketplace Midday.
The loss of factory jobs was unfortunately a worldwide phenomenon. Since 1995, a total of more than 22 million jobs from 20 of the largest world economies were eliminated from the manufacturing sector. The U.S. accounted for 2 million of those eradicated. That's an 11 percent decline, but Brazil, Japan and even China all experienced reductions in manufacturing jobs from 15 to 20 percent. Economists and politicians on one side of the fence are emphasizing the positive rise in productivity. It's wonderful, unless you're one of the 22 million that need to find new skills with no money to learn them. It'll be interesting to see how this plays out in next year's elections.
The highly regarded Conference Board said today U.S. leading economic indicators declined in September, after 4 consecutive months on the upswing. The economy is definitely perking up, but as an economist for the research firm cautiously explained, "The road ahead will likely remain bumpy."
The third quarter was anything but bumpy for Southwest Airlines. Continuing to thumb their nose at the rest of the industry, Southwest's net income swelled 41 percent from a year ago from 9 cents to 13 cents a share. Revenue was up 12 percent. And travel agents - prepare yourselves. Come mid-December, the low-cost carrier will no longer pay commissions for your time and recommendations. This cost cutting measure will save them $40 million a year. With profits like this, I think we in Dallas are forever doomed to use Southwest simply to go to an adjoining state while the rest of America is free to fly about the country. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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