The U.S. trade deficit widened more than expected in September as foreign oil prices rose to the highest level in nearly a year, swamping a fifth consecutive gain in exports. Economists expect a rebounding global economy will keep pushing demand for exports higher, helping to bolster the U.S. recovery. The Commerce Department says the trade deficit jumped 18.2 per cent in September to $36.5 billion. That was the largest deficit since January and more than the $31.7 billion imbalance economists had expected. Exports, which have been rising since may, increased 2.9 per cent to $132 billion, reflecting stronger sales of American autos, aircraft and industrial machinery. Imports rose 5.8 per cent to $168.4 billion, led by a 20.1 per cent jump in oil shipments.
The White House has told domestic agencies to assume their budgets will be frozen or even cut by five per cent as it signals a big push to take on the deficit next year. It's part of a White House drive to stem the flood of red ink after a year of stimulus spending aimed at boosting the economy. As record deficits continue, White House Budget Director Peter Orszag said it's imperative to start curbing the flow of red ink in coming years so as not to erode the fledgling economic recovery. But Orszag says it's a balancing act and that acting too fast could undercut the recovery. Democratic officials say options include caps on the amount of money Congress gets to distribute each year for agency budgets.
The top ExxonMobil executive says a weakening U.S. dollar has added between $20 and $25 to the price of each barrel of crude oil. Rex Tillerson is chief executive of Irving-based ExxonMobil, the world's biggest oil company. Visiting Singapore, he says the price effects of the weakening U.S. dollar is creating a "disconnection" between the price and supply and demand levels. Tillerson says oil demand in the U.S. has remained sluggish despite an economic recovery and a jump in crude prices to $82 last month from $32 in December. He says the price of oil would probably be around $55 a barrel if the dollar hadn't depreciated against the euro during the last 18 months.
The government insurer of bankrupt companies' pension funds says its deficit this year nearly doubled to $22 billion. The weak economy put the Pension Benefit Guarantee Corporation on the hook for pensions from 144 new pension plans during the year. Low interest rates also pushed down its future revenue projections. The PBGC's investments returned 13.2 per cent for the year, pulling it back from a record $33.5 billion deficit in May. Last year's deficit was $11.2 billion. The PBGC is directly responsible for the benefits of 1.5 million workers and retirees. Their benefits are in no immediate danger, but experts warn that the PBGC's mounting shortfall eventually could require a taxpayer bailout.
Business leaders at the Asia-Pacific Economic Cooperation Forum say China, India and other Asian countries are leading the world out of the global economic crisis. Singapore's prime minister says "the next few years' growth will be slow worldwide." But, he says "in the long term, Asia will do well." With American consumers less willing to spend, he says "somebody else has to spend more somewhere else in the world. This has to be in Asia." The global chairman of PricewaterhouseCoopers International says while in the past developed countries have led the way out of recessions, "this time, it's going to be the developing economies." APEC members have set a target of making the region a better place to do business, pledging to improve regulatory conditions in five key areas--from starting a business to enforcing contracts--by 2015.
A family whose members suffered burns when a natural gas pipeline exploded last week in the Texas panhandle are suing the companies involved. The Torres family filed a negligence lawsuit in Potter County against the pipeline's owner, El Paso Natural Gas; its parent company, El Paso Corporation; and the pipeline operator, Atmos Energy. Speakers for the entities declined to comment. The 24-inch pipeline exploded November 5th, shaking homes, melting window blinds and shooting flames hundreds of feet into the air. According to a statement from the family's law firm, the Torres' home is about 100 yards from where the pipeline exploded. Three members of the Torres family were injured in the explosion.
Dell is jumping into the "smart" phone market this month in a deal with China Mobile, the country's biggest wireless carrier. The Dell Mini 3 is a touch-screen phone that uses Google's Android software. Dell says it will also be available in Brazil later this year. Friday's announcement ends more than two years' speculation that Dell would make a mobile phone. Sinking computer prices and the economic downturn have made the PC business less profitable, and Dell has been looking for ways to expand. China Mobile has 500 million wireless customers, but only a fraction have smart phones. Dell's Mini 3 could help keep customers from switching to the smaller China Unicom., the only carrier in China to offer Apple's iPhone.
You may want to check Facebook and Twitter before heading to the mall the day after Thanksgiving. Office supplies chain Staples this week used social media to advertise price cuts of nearly 50 per cent for November 27th on certain laptops, GPS devices and computer monitors, and still other merchants are expected to follow suit. The editor-in-chief of dealnews.com says retailers are smart to use social networking sites because shoppers probably will stick around as followers of the company even after the sale. Deloitte Research says one in five shoppers plan to use the sites in their holiday shopping this season. Hundreds of Black Friday bargains from retailers such as diverse as OfficeMax and Old Navy already are being leaked on deal sites, even though the big sales blitz is still a couple weeks away.
After a slight reprieve in September, U.S. video game sales slumped once again in October, hurt by the economic turmoil that's cutting into consumer spending. Market researcher NPD Group says total sales of video game hardware, software and accessories fell 19 per cent in October from the same month last year, to $1.07 billion. Sales of gaming hardware fell by nearly a quarter to $380.7 million. Software sales declined 18 per cent, to $572.7 million. The Wii from Nintendo was the month's best-selling gaming system, followed by the handheld DS, also from Nintendo. Sony's Playstation 3 was in third place. NPD says the top games includedUncharted 2: Among Thieves andWii Fit Plus. Some of the holiday season's most anticipated games are launching this month.
YouTube says starting next week it will support the same high-resolution video that can now be seen on flat screen TVs. The online video unit of Google says it will support video playback in the full high-definition format known as 1080p, upgrading from the current 720p. After engineers tested its system, YouTube spokesman Chris Dale says the company is not worried about infrastructure problems or higher costs associated with supporting bulkier files. Videos uploaded from regular users will still have a ten-minute limit, although the maximum file size will likely get a boost from two gigabytes. Videos that had already been uploaded at 1080p will be automatically re-encoded to play back at the higher resolution.
J.C. Penney is reporting a 78 per cent drop in its third-quarter earnings because of a big expense to fund its pension plan. However, the department store retailer is boosting its profit and sales outlook as the department store retailer is selling more goods at regular price. The retailer, which is based in Plano, says it earned $27 million for the period ended October 31st. It says that revenue fell 3.2 per cent to $4.18 billion. Analysts expected revenue of $4.18 billion.