In today's news: Oil prices may be coming back down to earth, Americans spent a record amount on gas last month, the United States may soon steal manufacturing jobs from China, mortgage rates drop, and AIG is too big to fail but not too big to lose lots of money.
Oil prices are finally coming back to reality, but only because Americans are buying a lot less of it now. “Oil tumbled almost 10 percent Thursday on signs that demand for fuel in the U.S. is weakening,” USA Today reports. “Some analysts said the lack of any terrorist retaliation for the killing of Osama bin Laden also led oil prices lower.”
AT THE PUMP: Your monthly gasoline bill: $368
Meanwhile, the average American household spent a whopping $368 on gasoline in April. “That’s more than double what the average American family spent just two years ago,” CNN reports, “when gas prices were hovering around $2.05 a gallon.
MANUFACTURING: ‘Made in the U.S.A.’ may be staging comeback
Is it possible that manufacturing jobs might move from China back to the good ol’ U.S.A.? “Wages in China are still a fraction of what U.S. workers earn,” MSNBC reports. “But that difference is expected to narrow, with the Chinese worker earning about 17 percent as much as his or her U.S. counterpart four years from now. Factoring in higher U.S. productivity rates, the weaker U.S. dollar and other factors, such as shipping costs, that difference could narrow further.”
Fixed mortgage rates are falling, some to levels not seen since 2005. But it’s not exactly helping the housing market, at least not yet. “Low rates have done little to boost home sales, which are far below the level that economists consider healthy,” USA Today reports. “Still, most sales occur between April and August.”
BAILOUT UPDATE: AIG slips back into the red
Anyone who hated AIG for the way it spent its federal bailout dollars may feel vindicated by this news: “AIG reported a first quarter loss Thursday, moving the insurer back into the red after the bailout,” CNN reports. That’s especially bad news, because “the Treasury Department owns a 92 percent stake in AIG, the result of a 2008 bailout.”