After a weekend of strong online sales, retail websites are rolling out the gimmicks on “Cyber Monday” to draw buyers. The sales promotions on the Monday after Thanksgiving got their name from a retail trade group, which promoted the idea that people, upon returning to work, would log onto their computers there and shop. Now it’s about the deals online in the way that Black Friday means a shopping frenzy in stores. In fact, as stores promote Black Friday discounts online, it’s getting harder to tell the difference between the two as sellers try to grab dollars any way and at any time they can. IBM’s Coremetrics predicts the discounts, free shipping offers and other come-ons will make Cyber Monday the busiest online shopping day of the season.
Bargain hunters crowded stores on the day after Thanksgiving–but judging by the latest data, they spent only slightly more than last year. According to the research firm ShopperTrak, retail spending rose just 0.3 percent, to nearly $10.7 billion, on the traditional start of the holiday shopping season. The slim sales increase came despite a 2.2 percent boost in store traffic. Two factors limiting the increase were heavy discounts earlier in November and online shopping, which saw a big rise. ShopperTrak says the total was still a record for the day. And it stands behind its prediction for spending to rise 3.2 percent for the season. The web research company Coremetrics says online merchants saw a 16 percent revenue spike on Black Friday. Meanwhile, PayPal reports an increase of about 27 percent in payment volume compared with last year.
President Barack Obama has announced a two-year pay freeze for federal employees, saying the step is necessary to help bring the federal deficit under control. The freeze would apply to all civilian federal employees but would exclude military personnel. Obama says the sacrifices of limiting government spending must be shared by government workers. The White House says the freeze would save $5 billion over two years. By delaying wage increases, the freeze would save $28 billion over the next five years, the White House says. The chairmen of Obama’s Bipartisan Deficit Commission proposed a three-year freeze in pay for most federal employees as part of its plan to reduce the nation’s growing deficit. The commission’s final report is due to be released later this week.
President Hugo Chavez is promising to build new public housing complexes, boost social programs and renovate the long-neglected Caracas subway–and he needs money. The ambitious plans will squeeze Venezuela’s coffers at a time when oil earnings have slipped and Chavez is sending his foreign allies generous amounts of crude on credit. So he has raised a possibility that once seemed remote: selling off Venezuela’s U.S.-based oil company, Citgo Petroleum. For Chavez, it’s an idea driven both by hard-money realities and by politics. Chavez says the Houston-based company could be worth at least $10 billion. Analysts say it would likely fetch much less–perhaps half that–and it might be hard to find a buyer in a difficult economic climate.
London-based BP announced over the weekend that it has agreed to sell its 60 percent stake in Argentina-based oil and gas producer Pan American Energy for $7.1 billion. The sale to Argentina’s Bridas, which already owns the other 40 percent of Pan American, is part of BP’s plans to sell tens of billions of dollars of assets to help pay for the massive oil spill in the Gulf of Mexico. The deal takes BP within range of its target of $25-30 billion in asset sales by the end of next year. It expects to spend nearly $40 billion to handle the Gulf spill, which was sparked by an April 20th rig explosion that killed 11 workers.
Many Americans are determined not to let higher gas be the grinch that spoils their holiday spending plans. Gas prices on average have risen about 17 cents since Labor Day to $2.86 per gallon because of rising oil prices. The increase amounts to $3 or $4 extra to fill up a car, a bit more for an SUV or a pick-up. Gas prices are already falling because oil prices dropped over the ten days.
The U.N. agency that oversees aviation is pushing new guidelines for cargo security to counter al-Qaida’s new mail-bomb strategy, but is stopping short of calling for 100 percent screening of packages, as pilots and some U.S. lawmakers have urged. The proposed changes concentrate on checking outbound shipments before they even reach the airport. A draft of new guidelines will go out to all 190 member countries in the next few weeks, the agency says. Governments are increasingly worried about cargo security as the holiday season swells the number of packages moving around the world. In October, militants based in Yemen tried to blow up cargo jets with 38 bombs hidden in printer cartridges. The bombs were stopped only because of a tip from Saudi intelligence officials.
As Americans downsize in the aftermath of a colossal real estate bust, at least one tiny corner of the housing market appears to be thriving. A small but growing number of Americans are buying or building homes that could fit inside many people’s living rooms. Jay Shafer, co-founder of the Small House Society, built an 89-square-foot house himself a decade ago and lived in it full-time until his son was born last year. Inside a space the size of an ice cream truck, he has a kitchen with gas stove and sink, bathroom with shower, two-seater porch, bedroom loft and a “great room” where he can work and entertain–as long as he doesn’t invite more than a couple guests. “Living in a small house like this really entails knowing what you need to be happy and getting rid of everything else,” Shafer said.
The Food and Drug Administration would step up food inspections under legislation the Senate is expected to pass. The bill gives the FDA authority to order a recall of tainted products. Current law requires the agency to negotiate with sellers of tainted food to issue a voluntary recall. The bill would also require producers to follow stricter standards. Supporters say passage is critical following large-scale outbreaks of salmonella and e. coli in peanuts, eggs and produce. Those outbreaks have exposed a lack of resources and authority at the FDA as the agency has struggled to contain and trace the contaminated products. The bill would emphasize prevention at the agency to try to stop the outbreaks before they begin. The House must also act before the bill can become law.
A Canadian biotechnology company is seeking U.S. approval of a genetically modified apple that keeps its color when sliced or bitten into. Okanagan Specialty Fruits of Summerland, British Columbia, is seeking approval from the U.S. Department of Agriculture and the Food and Drug Administration to market what it calls an “arctic” apple. The company thinks the modification that keeps the apple from browning could boost sales of sliced apples. Apple industry leaders say it’s too soon to know whether they’d be interested in the new apple. They say they need to know how much it would cost to plant and whether people would buy it. Washington Apple Commission President Todd Fryhover says most people don’t like the idea of genetically modified food. USDA approval can take years.
A national report says a slight increase in charitable giving hasn’t been strong enough to keep up with higher demand for services. But U.S. nonprofit organizations are hoping the uptick is the beginning of economic recovery. About a third of America’s charities reported an increase in donations during the first nine months of 2010, and they say they expect more good news in the fourth quarter. Another third said giving continues to drop and the remaining nonprofit groups are holding steady. The data was collected by a coalition called the Nonprofit Research Collaborative. About seven percent report their organizations are at risk of folding next year. Charitable giving fell by 3.6 percent in 2009. One organization tracking charitable giving reports donations were up 4.3 percent for the three months ending with September 2010.
In the unlikely event that your Christmas list this year includes every item mentioned in “The Twelve Days of Christmas,” be prepared to pay nearly $100,000. Trying to buy the 364 items repeated in all the song’s verses–from 12 drummers drumming to a partridge in a pear tree–would cost $96,824, an increase of 10.8 percent over last year. So says the annual Christmas Price Index, which is compiled by PNC Wealth Management. So you might want to try for one of everything. That would cost only $23,439, or 9.2 percent more than last year.
Wall Street will have plenty of fresh data coming in this week, including any quick reads on the first big weekend of holiday shopping. Tomorrow, the Conference Board releases its monthly consumer confidence report. Also, Standard & Poor’s releases the S&P/Case-Shiller index of home prices. Wednesday brings the Institute for Supply Management manufacturing gauge. Auto manufacturers report on monthly sales figures, and the Federal Reserve’s Beige Book economic survey is due. Friday, the Labor Department releases the monthly jobs report.