Dollars & Sense

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Worker productivity rose early in year

Worker productivity increased at a faster pace in the first three months of this year than had been estimated, wage pressures moderated and an important measure of business activity showed the service sector skirted recession in May. The Labor Department reported Wednesday that productivity rose at an annual rate of 2.6 percent from January through March, faster than the government's first estimate of 2.2 percent a month ago. The Institute for Supply Management said its nonmanufacturing index stood at 51.7 in May -- better than expected and close to April's 52 figure.

Smucker's is buying Folgers for $2.95B

Jams and jellies maker J.M. Smucker is buying coffee provider Folgers from consumer products company Procter & Gamble in a $2.95 billion, all-stock deal, the biggest ever for Smucker's. The deal announced Wednesday will nearly double the size of Smucker's. Folgers will become the 10th No. 1-ranked brand in the Smucker's stable that includes its namesake jams, Eagle Brand condensed milk, Hungry Jack pancake mix and two earlier acquisitions from P&G, Jif peanut butter and Crisco cooking oil.

Airfares are soaring

Many major carriers have more than doubled or even tripled their cheapest U.S. fares from last summer's fares. That's on top of new fees for checking luggage and other services. Tom Parsons, chief executive of the discount travel site Bestfares.com, looked at the lowest fares for nonstop travel in July. Parsons said that for situations in which major carriers offer nonstop flights and low-fare competitors offer only one-stop service, fares are as much as 365 percent higher than a year ago.

Price leap doubted

Federal Reserve Chairman Ben Bernanke said Wednesday that he does not believe the United States will see the out-of- control prices seen with 1970s oil shocks. His assessment came in a speech delivered Wednesday to graduating students at Harvard University, where he earned a bachelor's degree in economics in 1975. "We see little indication today of the beginnings of a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward," Bernanke said.

Coming Friday

Ed McMahon, Johnny Carson's sidekick on "The Tonight Show," is fighting to avoid foreclosure on his Beverly Hills home.