WASHINGTON (AP) — Some reward.
Here's the assignment President Barack Obama has won with his re-election: Improve an economy burdened by high unemployment, stagnant pay, a European financial crisis, slowing global growth and U.S. companies still too anxious to expand much.
And, oh yes, an economy that risks sinking into another recession if Congress can't reach a budget deal to avert tax increases and deep spending cuts starting in January.
Yet the outlook isn't all grim. Signs suggest that the next four years will coincide with a vastly healthier economy than the previous four, which overlapped the Great Recession.
Obama has said he would help create jobs by preserving low income tax rates for all except high-income Americans, spending more on public works and giving targeted tax breaks to businesses.
He used his victory speech in Chicago to stress that the economy is recovering and promised action in the coming months to reduce the government's budget deficit, overhaul the tax system and reform immigration laws.
"We can build on the progress we've made and continue to fight for new jobs and new opportunity and new security for the middle class," Obama said.
The jobs picture has already been improving gradually. Employers added a solid 171,000 jobs in October. Hiring was also stronger in August and September than first thought.
Cheaper gas and rising home prices have given Americans the confidence to spend slightly more. Retailers, auto dealers and manufacturers have been benefiting.
That said, most economists predict the improvement will remain steady but slow. The unemployment rate is 7.9 percent. Obama was re-elected Tuesday night with the highest unemployment rate for any incumbent president since Franklin Roosevelt.
Few think the rate will return to a normal level of 6 percent within the next two years. The Federal Reserve expects unemployment to be 7.6 percent or higher throughout 2013.
Economists surveyed last month by The Associated Press said they expected the economy to grow a lackluster 2.3 percent next year, too slight to generate strong job growth. From July through September, the economy grew at a meager 2 percent annual rate.
Part of the reason is that much of Europe has sunk into recession. Leaders there are struggling to defuse a debt crisis and save the euro currency. Europe buys 22 percent of America's exports, and U.S. companies have invested heavily there. Any slowdown in Europe dents U.S. exports and corporate profits.
And China's powerhouse economy is decelerating, slowing growth across Asia and beyond.
Most urgently, the U.S. economy will fall over a "fiscal cliff" without a budget deal by year's end. Spending cuts and tax increases that would total about $800 billion in 2013 will start to kick in. The combination of those measures would likely trigger a recession and drive unemployment up to 9 percent next year, according to estimates by the Congressional Budget Office.
Many U.S. employers are wary of expanding or hiring until that potential crisis is averted. That's why analysts have said resolving, or at least delaying, the fiscal cliff should be the most urgent economic priority for the White House.
In the longer run, analysts are more optimistic. Americans are feeling generally better about the economy. Measures of consumer confidence are at or near five-year highs.
And the main reason unemployment rose from 7.8 percent in September to 7.9 percent in October was that more people felt it was a good time to look for work. Most found jobs. Those who didn't were counted as unemployed. (The government counts people without jobs as unemployed only if they're looking for one.)
A brighter outlook among consumers is due, in part, to a steady increase in home prices after a painful six-year slump. Higher home prices can help create a "wealth effect," making homeowners feel richer and spurring more spending.
Banks are also more likely to lend freely when home prices rise because homes are more likely to hold their value.
Americans have also been shrinking debts and saving slightly more. Household debt as a percentage of after-tax income dropped from about 125 percent before the recession to 103 percent in the April-June quarter, according to the Federal Reserve's latest data. That ratio was roughly 90 percent in the 1990s.
But thanks to record-low interest rates, the cost of repaying those debts has dropped sharply. That, in turn, will free up more money for consumers to spend on cars, appliances and other goods.
Americans paid 10.7 percent of their after-tax income in interest on mortgages, credit cards and other consumer debt in this year's April-June quarter, according to the Fed. That was down from 14 percent at the end of 2007. And it's the lowest proportion since 1993.
"That's 3 percentage points of disposable income that I am no longer using to pay for stuff that I bought earlier but I can instead use to buy stuff now," noted Alan Levenson, chief economist at T. Rowe Price.
Economists note that economic recoveries after financial crises tend to be painfully slow. In part, that's because time is needed for consumers to reduce debts and for banks to recover and lend again.
Paul Ashworth, an economist at Capital Economics, noted that banks have boosted lending for the past 18 months — another sign that the passage of time is helping the economy rebound.
Obama "is going to have an easier time of it ... because we're further along the road to recovery after the financial crisis," Ashworth said.
WASHINGTON (AP) — Some reward.
GM: 110 paid internships
General Motors is kicking the tires on a unique new internship program for Detroit-area high school students.Continued ...
Gas prices rise 10 cents over past week
AAA Michigan says gasoline prices have risen about 10 cents during the past week to a statewide average of about $3.88 per gallon.Continued ...
Couple, resort in Twitter tussle
An Internet entrepreneur and former Wall Street derivatives analyst contends central Idaho’s Sun Valley resort and the Twitter Inc. social media site heisted his handle.Continued ...
Court rules for Fannie Mae, Freddie Mac in Oakland lawsuit
A federal appeals court overturned a lower court ruling and threw out tax claims by Oakland County against the federally charted mortgage giants Fannie Mae and Freddie Mac.Continued ...
Ex-Saab execs arrested on accounting charges
A Swedish prosecutor says three former executives of automaker Saab Automobile AB have been arrested on accounting fraud charges.Continued ...
- Sunday, May 19, 2013
Oryana celebrates 40 years in business
In the early 1970s, a small group of Traverse City families got together to drive to Ann Arbor and purchase the grains and beans they couldn’t find locally.Continued ...
Chamber View: Multiple opportunities for learning
The people who make up our local business community often wear many hats – boss, line worker, ambassador, bookkeeper, mentor … the list goes on.Continued ...
Business Memoranda: 05/19/2013
Custer Workplace Interiors has added Emily Heilig to its northern Michigan sales team.Continued ...
Business in Brief: 05/19/2013
Become a contractor; Solar projec tbeing offered; MMC joins Spectrum. (Plus more)Continued ...
Building Permits: 05/19/2013
Building permits issued in Grand Traverse County:Continued ...
Real Estate Transfers: 05/19/2013
Address, asking price and sold price:Continued ...
The Record: 05/19/2013
Assumed names filed in Grand Traverse County:Continued ...
- Saturday, May 18, 2013
Ag Forum: Chestnuts a growing market
Various species of chestnut are found in Michigan — naturally in the landscape, in green spaces as ornamentals and also planted in orchards for nut production.Continued ...
Futures File: Even with large crop, soybeans shoot higher
Although U.S. farmers are expecting to harvest a large soybean crop this fall, the current supply of soybeans in storage is running low, lifting prices higher. This week, July soybeans shot up 45 cents (+3.2 percent), reaching $14.47 per bushel on Friday morning.Continued ...
Farm Focus in Brief: 05/18/2013
Beverage classes; Weed management; Compost Day. (Plus more)Continued ...
- Friday, May 17, 2013
Festival spotlights science, math
Newton’s Road, a regional nonprofit organization committed to increasing access to and appreciation of learning opportunities in science, technology, engineering and math, continues its Northern Michigan STEaM Film Festival on Saturday.Continued ...
Only 2 of 13 small SUVs do well in crash tests
Only two of 13 small SUVs performed well in front-end crash tests done by an insurance industry group, with several popular models faring poorly in the evaluations.Continued ...
Technology, labor spar on immigration
To the U.S. technology industry, there’s a dramatic shortfall in the number of Americans skilled in computer programming and engineering that is hampering business.Continued ...
Compuware cancels events to honor company co-founder
The wife of a Compuware Corp. co-founder is upset that events to honor her husband’s legacy and the software development company’s history have been canceled.Continued ...
- Thursday, May 16, 2013
Eurozone recession is now longest in currency bloc
The eurozone is now in its longest ever recession — a stubborn slump that has surpassed even the calamity that hit the region in the financial crisis of 2008-2009.Continued ...
State economy still on upswing
Economists say Michigan’s economy is turning around for the fourth straight year in part because the housing sector is on the mend.Continued ...
State’s jobless rate decreases
Michigan’s seasonally adjusted unemployment rate edged down in April by one-tenth of a percentage point to 8.4 percent.Continued ...
Compuware plans IPO for Covisint subsidiary
Software development company Compuware Corp. says it’s planning an initial public offering for its Covisint Corp. subsidiary.Continued ...
House panel set to OK cut in food stamp program
A House committee rebuffed Democratic efforts Wednesday to keep the $80 billion-a-year food stamp program whole, as debate on the farm bill turned into a theological discourse on helping the poor.Continued ...
- Wednesday, May 15, 2013
Wind farms get pass on eagle deaths
It happens about once a month here, on the barren foothills of one of America’s green-energy boomtowns: A soaring golden eagle slams into a wind farm’s spinning turbine and falls, mangled and lifeless, to the ground.Continued ...
- GM: 110 paid internships