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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Consumer sentiment rebounds this week

U.S. consumer sentiment rebounded sharply in early December, topping all forecasts as households dialed back their year-ahead inflation expectations by the most in 22 years.

The University of Michigan’s consumer sentiment index jumped 8.1 points to a four-month high of 69.4, the preliminary December reading showed.

The median estimate in a Bloomberg survey of economists called for the gauge to edge up to 62.

Consumers see prices rising at an annual rate of 3.1% over the coming year, the lowest level since March 2021.

The 1.4 percentage points decline from the prior month was the largest since October 2001.

They see costs rising 2.8% over the next five to 10 years, matching the lowest since September 2022 and down from last month’s 3.2%, the report showed Friday.

“Overall, consumers feel more confident about the economy than they did over the past few months, which will likely provide some support to spending despite a modestly weakening labor market,” Joanne Hsu, director of the survey, said in a statement.

Nevertheless, “consumers still feel pinched by high prices,” Hsu said.

While the costs of many goods and services remain elevated – keeping sentiment well below prepandemic levels – gasoline prices have steadily fallen since the end of September.

Prices at the pump, which influences Americans’ inflation expectations, are the cheapest they’ve been all year.

Consumers’ perception of their financial situation improved to a three-month high.

Yellow rejects revival effort

Defunct cargo hauler Yellow Corp. rejected a long-shot offer to revive the bankrupt company, a lawyer for the trucking firm said in a letter Thursday.

Yellow has been out of business for several months, is nearing the end of an auction process for its most valuable property, and the competing offer is unlikely to cover the cost of the company’s bankruptcy case, lead bankruptcy attorney Patrick Nash said in the letter, which was seen by Bloomberg News.

The auction is set to bring creditors at least $1.9 billion. That could be enough to pay all the company’s bills and still leave something for shareholders, Nash said.

Nash sent the letter to a lawyer for Next Century Logistics Inc., an entity backed by the head of the Jack Cooper trucking company, Sarah Amico, a person familiar with the transaction said. News of the letter was first reported by The Wall Street Journal.

Amico said she is still pressing a version of her revival plan. She presented an alternate bid to a group representing Yellow’s lower-ranking, unsecured creditors, Amico said in a statement late Thursday.

That offer would put as many as 15,000 former Yellow employees back to work, she said.

“Our plan represented the only opportunity to save tens of thousands of good-paying jobs,” Amico said in the statement.

From wire reports “That always was and continues to be our focus.”

In bankruptcy, a rejected suitor can sometimes appeal to the court for help, although such efforts rarely succeed.

In this case, Next Century would need to win support from creditors and then convince the bankruptcy judge that Yellow was wrong to reject the revival effort.

Yellow auctioned off most of its valuable trucking terminals this week, raising money to pay creditors owed more than $1.2 billion.

Twenty one bidders will split 128 U.S. properties Yellow owns, according to court papers.

The company laid off all of its drivers and began liquidating its trucks and other assets as part of its Chapter 11 bankruptcy filing earlier this year.

As part of the shutdown, Yellow also canceled its trucking contracts.

Getting those agreements back is one of the major hurdles to reviving the company, Nash said in the letter.

Other barriers include the lack of support from creditors including a $700 million loan from the U.S. Treasury issued during the pandemic.

“In our view, the bid contemplates a nonviable enterprise that understates start-up costs of a company that has been wholly nonoperational,” Nash wrote.