The Obama administration says the federal deficit hit a near-record $1.3 trillion for the just-completed budget year. That means the government had to borrow 37 cents out of every dollar it spent as tax revenues continued to lag while spending on food stamps and unemployment benefits went up as the economy slowly pulled out of recession. The eye-popping deficit figures provide Republican critics of President Barack Obama's fiscal stewardship with fresh ammunition less than three weeks ahead of the midterm Congressional elections. the deficit was $122 billion less than last year, a modest improvement.
The Commerce Department says that business inventories rose 0.6 percent in August after a 1.1 percent rise in July, increasing for an eighth consecutive month in August even though overall sales slowed significantly. Total business sales were up a slight 0.1 percent following a much stronger 0.8 percent advance in July. The continued strong gains in inventories are seen as an encouraging sign that the economic recovery will continue. Inventory rebuilding has provided critical support as the economy struggles to emerge from a deep recession. Increased orders to fill empty store shelves have translated into higher production at the nation's factories.
Consumer prices rose slightly last month, driven up by higher costs for gasoline and food. But excluding those volatile categories, prices were flat. The Labor Department says the consumer price index rose by 0.1 percent in September, after a 0.3 percent rise in August. Economists polled by Thomson Reuters expected a larger increase. Outside of food and energy, core consumer prices were unchanged for the second straight month. And in the past 12 months, core prices rose by only 0.8 percent, the smallest yearly gain in more than 49 years. The sluggish economy is keeping a lid on prices. Consumers are holding back on spending, with unemployment high and wages stagnant. That makes it difficult for retailers to pass on any price increases.
Retail sales posted a third monthly increase in September as solid gains at auto, furniture and hardware stores helped to offset weakness at clothing and department stores. The Commerce Department says retail sales rose 0.6 percent in September. That followed an even better 0.7 percent August increase, the biggest advance since March. Excluding autos, sales rose 0.4 percent in September after a one percent August gain. The string of increases in retail sales since July followed declines in May and June. Those had raised worries that the country could be in danger of toppling back into recession. Economists caution that while the economy is growing, it will be sub-par as long as households face high unemployment and weak income growth.
The government says there will be no increase in social security benefits next year, the second year in a row without an increase for more than 58 million retirees and disabled Americans. The Social Security Administration says that inflation has been too low since the last increase in 2009 to warrant one for 2011. The announcement marks only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year. The cost-of-living adjustments, or colas, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s. House Speaker Nancy Pelosi has said the chamber will vote next month on legislation providing onetime $250 payments to social security recipients.
Anchorage is among U.S. metropolitan centers ranked as the best for creating and sustaining jobs. The Milken Institute's best performing cities 2010 report ranks Alaska's largest city 8th among the nation's 200 largest metro areas. Fairbanks was 34th among smaller cities ranked by the economic think tank. Among large urban centers, Texas took five of the top ten spots, with the Killeen-Temple-Fort Hood area ranked first, followed by the Austin-Round Rock area in second, the McAllen-Edinburg-Mission area in fourth, El Paso in ninth and the Houston-Sugar Land-Bayton area in tenth place. Huntsville, Alabama, ranked third, followed by Washington state's Kennewick-Richland-Pasco area in fifth place, the greater Washington, D.C. area in sixth and North Carolina's Raleigh-Cary area in seventh.
A judge presiding over more than 300 lawsuits arising from the Gulf Coast oil spill says the first federal trial involving damage claims could be held next summer. U.S. District Judge Carl Barbier says the first “test trial” for claims filed against BP by individuals and businesses under the 1990 Oil Pollution Act could start as early as June 2011. A BP lawyer objected to scheduling a trial that soon. But Barbier said if he were to accept the company's timetable, the first trial wouldn't begin until 2013 or 2014. Barbier has scheduled a separate trial in February 2012 to assign percentages of fault to BP and other companies sued in connection with the rig explosion and fire that led to million gallons of oil spilling into the Gulf.
About 150 NRG and Reliant employees this weekend are helping repair the homes of three low-income seniors. Volunteers are replacing siding and trim, painting and making repairs to the homes, rebuilding a collapsing carport and replacing doors, window panes and screens. Since 2002, employees have repaired more than 50 homes of low-income Houston seniors. The group Rebuilding Together-Houston’s Volunteer Home Repair Program has completed improvements to more than 16,000 Houston homes.
Texans whose homes were built with corrosive drywall from a Chinese manufacturer could get their homes fixed. The manufacturer, along with suppliers, builders and insurers, has agreed to repair up to 300 homes in four states and possibly thousands more damaged by the drywall. In the pilot program, up to 300 homeowners in Florida, Louisiana, Alabama and Mississippi whose homes had drywall manufactured by Knauf Plasterboard Tianjin will get their homes fixed. Homeowners in Texas, North Carolina and Virginia could be added soon. Knauf and the other companies have agreed to replace drywall, wiring, fire and alarm systems, and fixtures in damaged homes. Many more of the 2,000 to 3,000 homes built with Knauf drywall might be fixed under similar terms if the pilot program is successful.
Gasoline prices have jumped in Texas and nationwide because of the rise in crude oil prices. The weekly AAA Texas price survey finds the average per-gallon price of unleaded regular rose by four cents across Texas to $2.67. The national average leaped seven cents to $2.83. An auto club statement said retail gasoline prices are climbing because oil prices have gone up. Also, fall maintenance at many U.S. oil refineries has reduced gasoline production. The cheapest average gasoline prices in Texas is $2.61 per gallon in Galveston, while the most expensive is an average of $2l7 per gallon in Amarillo.
The Obama administration has decided to launch an investigation into various Chinese practices that a major U.S. union says are robbing American workers of jobs in the burgeoning field of clean energy such as solar and wind power. U.S. trade representative Ron Kirk said in announcing the decision that the administration considered the whole area of green technology as vitally important to America's future economic prospects. The United Steelworkers Union filed a 5,800-page petition last month contending that the Chinese government was giving Chinese companies unfair advantages over U.S. firms through the use of government subsidies that are prohibited under global trade rules.
Federal Reserve Chairman Ben Bernanke says the central bank is prepared to take steps to rejuvenate the economy through the purchase of Treasury bonds but is wrestling with how big the program should be. Bernanke also says the Fed could use its communications powers to prevent the United States from slipping into a deflationary spiral. But Bernanke says the Fed must proceed cautiously in deciding how big a program to buy Treasury debt should be. Bernanke said it is a challenge for Fed policymakers to determine the size of the program and how the debt purchases would be paced. Many economists predict the Fed will announce a new program at its next meeting November 2nd-3rd.
Venture capitalists poured less money into U.S. startups in the third quarter and split this among more companies, signaling that investors are trying to be more economical with their funds. Startup investments declined seven percent to $4.8 billion in the July-September period, compared with $5.2 billion invested during the same three-month period in 2009. A total of 780 startups received funding during the quarter--nine percent more than the 716 companies that took slices of the investment pie last year. The study, which was conducted by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, said that much of the decline stemmed from a drop in large investments in clean technology.
General Motors is recalling more than 300,000 Chevrolet Impala sedans because the seat belts may fail to restrain people in the front seats during a crash. The National Highway Traffic Safety Administration says on its website that the front-seat belt webbing may not be secured properly to a lap belt anchor on the side of the seat near the doors. The recall affects Impalas from the 2009 and 2010 model years. Dealers will inspect how the belts are anchored. The will reinstall the anchors if needed at no cost to the owners. Owners can contact Chevrolet at 1-800-630-2438.
LONDON (AP) _ PERSON WITH KNOWLEDGE OF DECISION TELLS AP: LIVERPOOL COMPLETES SALE TO RED SOX OWNERS. Liverpool co-owner Tom Hicks has told the Associated Press that “the British establishment” conspired against his attempts to block the club's sale to the owners of the Boston Red Sox. Hicks says Royal Bank of Scotland refused to allow him to repay Liverpool's debts to prevent the proposed $476 million sale to New England sports ventures, which he says undervalues the club. RBS was partly nationalized in 2008, with the British government taking an 84 percent stake after it was brought to the brink of collapse by the global economic crisis. Hicks and co-owner George Gillett, Jr., tried to prevent three English Liverpool directors from agreeing to a sale to NESV. Hicks called it “a conspiracy of the British establishment and our own employees.” They say they will pursue $1.6 billion in damages.