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Wednesday
Jan262011

CBO Projects Record Deficit 

Photo Courtesy - Getty Images(WASHINGTON) -- The non-partisan Congressional Budget Office predicted Wednesday this year’s federal budget deficit will come in at $1.5 trillion, a new record. 

“For 2011, the Congressional Budget Office projects that if current laws remain unchanged, the federal budget will show a deficit of close to $1.5 trillion, or 9.8 percent of GDP,” the CBO said in a new report.

Senate Budget Committee chairman Kent Conrad called the projections a “wake-up call to the nation.”

“CBO’s report should be another wake-up call to the nation,” Conrad said in a paper statement. “In the near-term, due to passage of the tax extension package and the slow pace of the economic recovery, CBO is now expecting to see deficits of more than $1 trillion a year continuing through at least 2012. And as disturbing as those near-term deficits are, the long-term outlook is even worse. It is the deteriorating long-term outlook that is the biggest threat to the country’s economic security.”

“The fiscal challenge confronting us is enormous,” Conrad said. “To solve this problem, it will require real compromise and a great deal of political will. We need everyone at the table. And we need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground. We can’t continue to put this off. We need to reach an agreement this year. The President’s Fiscal Commission provided a model for a bipartisan way forward. Now it is up to the Administration and members on both sides of the aisle in Congress to come together to finish the job.”

On the jobs front, CBO projected that the unemployment rate will fall to 9.2 percent in the fourth quarter of 2011 and 8.2 percent in the fourth quarter of 2012.

Copyright 2011 ABC News Radio

Wednesday
Jan262011

Cable Providers to Hike Prices as Early as February

Photo Courtesy - Getty Images(NEW YORK) -- TV viewers may have to pay a little more to watch their favorite shows, as cable providers across the U.S. begin to raise prices.

DirecTV customers will see a price hike of around four percent starting Feb. 10.  For customers that are a part of an introductory plan, monthly plans will remain the same, but old customers will be shelling out more money for the cable provider's various plans.  The lowest package will jump from $39.99 to $44.99.

Moreover, Time Warner customers are expected to see a seven percent increase and Cablevision will raise rates to around three percent, according to the TheStreet.com.

DISH Network prices will also hit a high with some customers paying 12 percent more beginning in February.

Copyright 2011 ABC News Radio

Wednesday
Jan262011

Toyota Issues Recalls of Nearly 1.7 Million Vehicles Worldwide

Photo Courtesy - Ted Aljibe/AFP/Getty Images(TORRANCE, Calif.) -- Toyota Motor Corp. announced three separate recalls Wednesday affecting close to 1.7 million vehicles sold in the U.S. and worldwide.

The Japanese automaker issued a voluntary safety recall for nearly 245,000 Lexus models sold in the U.S. between 2006 and 2008, citing a problem with the installation of fuel pressure sensors.  Toyota says the pressure sensors may not be sufficiently tightened, posing a risk for fuel leakage if the sensors loosen over time.  The vehicles affected include Lexus GS and IS models.

Owners of the affected models will be notified of the recall by mail.  If a fuel leak is found, Lexus dealers will make the proper repairs free of charge.

Worldwide, Toyota is recalling about 1.3 million vehicles sold in Japan over a problem with a fuel delivery pipe and high-pressure fuel pump check valve.  The models affected by this recall include the Noah subcompact, RAV4 sport-utility vehicle, and Wish cars.

The automaker is also recalling 141,000 Avensis cars sold in Europe and New Zealand citing irregular fuel pipes that increase the likelihood of cracks and further leakage.

No accidents related to any of these leakage problems have been reported so far, according to Toyota spokesman Paul Nolasco.

Copyright 2011 ABC News Radio

Wednesday
Jan262011

Nevada Had Highest Jobless Rate in 2010; North Dakota Had Lowest

Photo Courtesy - ABC News(WASHINGTON) -- Sixteen states experienced an increase in unemployment during 2010, even as the overall national unemployment rate went down by half a percentage point, according to the Bureau of Labor Statistics' latest state and regional unemployment report.

Released Tuesday, the report found Nevada topped the national unemployment list last year with a 14.5 percent rate -- the highest level of unemployment in the state’s history.  California came in second place on the list with 12.5 percent and Florida closely followed in third with 12 percent.

North Dakota was the best place in the nation by jobless rates with 3.8 percent.  Nebraska with 4.4 percent and South Dakota 4.6 percent came in a close second and third with their low rates.

Of note, half of the country -- 25 states -- reported unemployment rates significantly lower than then 9.4 percent national average.  Seventeen states had rates that were statistically at the national average, while the eight remaining states were statistically higher than the average.

Copyright 2011 ABC News Radio

Tuesday
Jan252011

Jobs: What Does It Cost to Add a Worker?

Photo Courtesy - Getty Images(NEW YORK) -- There is a cacophony of voices shouting about jobs -- politicians, traders, economists, business leaders all yammering on about needing more and what it'll take to get unemployment down. With all the rhetoric, not many Americans know what it takes to fund a new job. What does it really cost to add a worker to a company's payroll? Well, here it is:

$40,630.20 (BASIC WAGE; the average weekly earnings for a private sector worker according to the Bureau of Labor Statistics is $781.35 x 52 weeks)

+ $17,064.68 (BENEFIT and TAX COST; the BLS says that for every $1 in wages, employer costs for taxes and benefits are $0.42 )

= $57,967.88 (TOTAL ANNUAL DIRECT COSTS to employers for the average worker)

And this number doesn't include the cost of rent, telephone/Internet, computer, training, etc. for the average worker -- it's just the direct costs of employing someone. Experts say these other costs can add thousand of dollars more per year, depending on the industry and job requirements.

So what does all of this mean? That it's expensive to "add a job."

But what does it cost to add enough new jobs to cut the unemployment rate to six percent, where we were in the middle of 2008?

Today we have 14.5 million unemployed folks in the U.S. To get to six-percent unemployment, we'd have to find work for 5.3 million of those unemployed people.

5,300,000 (NEW JOBS needed to bring unemployment to 6 percent)

x $57,967.88 (TOTAL ANNUAL DIRECT COSTS per new worker)

= $307.2 billion (ANNUAL COST OF NEW WORKER PAYROLL)


To absorb just the average direct costs of these new workers, we would have to add 2.1 percent to the U.S. gross domestic product. And that's not including the profits the private sector would require to justify adding the workers to their payrolls -- we're not running a charity here, after all.

Talk about jobs is cheap. Adding a job is not.

Copyright 2011 ABC News Radio

Tuesday
Jan252011

Bailout Watchdog Warns of 'Recipe for Disaster'

Photo Courtesy- Getty Images(NEW YORK) -- In a new quarterly report to Congress, bailout watchdog Neil Barofsky warns that the problem of “too big to fail” has not yet been solved, even with the Wall Street reform law signed last summer.

“These institutions and their leaders are incentivized to engage in precisely the sort of behavior that could trigger the next financial crisis, thus perpetuating a doomsday cycle of booms, busts, and bailouts,” Barofsky says.
 
Barofsky, the Special Inspector General for TARP (SIGTARP), also refers to an interview with Treasury Secretary Timothy Geithner last month, during which the Treasury boss acknowledged that “in the future we may have to do exceptional things again” if the government faces a financial crisis as severe as the 2008 one.

“To the extent that those 'exceptional things' include taxpayer-supported bailouts,” Barofsky says, “his acknowledgement serves as an important reminder that TARP’s price tag goes far beyond dollars and cents, and that the ultimate cost of TARP will remain unknown until the next financial crisis occurs.”

Barofsky also disapproves of the Treasury's mortgage modification program known as HAMP. He cites that 2.9 million homes received foreclosure filings in 2010, while Treasury’s “anemic” program only led to 522,000 permanent loan modifications.

Barofsky does, however, approve of TARP's work. “While Treasury’s ultimate return on its investment depends on a host of variables that are largely unknowable at this time, TARP’s financial prospects are today far better than anyone could have dared to hope just two years ago,” he says.

Copyright 2011 ABC News Radio

Tuesday
Jan252011

Government Report: Financial Crisis was 'Avoidable'

Photo Courtesy - Getty Images(WASHINGTON)  – A report due out Thursday has concluded that the financial meltdown could have been avoided, reports The New York Times, which got an early look at the findings.

The congressional inquiry has concluded that the 2008 crisis was caused by a combination of failures in government regulation and overly risky behavior on Wall Street.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the Financial Crisis Inquiry Commission wrote. “If we accept this notion, it will happen again.”

Among those blamed in the report include Federal Reserve chairmen Alan Greenspan and Ben Bernanke, as well as the Bush administration for what the commission called an “inconsistent response” to the crisis.

The report is expected to be released Thursday in the form of a 576-page book based on 19 days of hearings and interviews from over 700 witnesses.
 
Copyright 2011 ABC News Radio

Tuesday
Jan252011

Americans to Spend Big on Super Bowl

Photo Courtesy - Getty Images(NEW YORK) – A new survey suggests that Americans won’t just be watching the Super Bowl, a.k.a. the big game, but spending big money on everything from food to fan apparel in preparation.

AdAge reports that consumer spending for the Super Bowl is expected to reach $10.1 billion, according to the survey from the Retail Advertising and Marketing Association.

The figure would represent the largest spending for Super Bowl Sunday in the history of the survey.

"The consumer is feeling more optimistic," said Mike Gatti, executive director at RAMA. "Spending is starting to come back, and it's on these little splurgy things. It's not crazy. But people are saying we're going to crack open the wallet and do something."

Eighty-three percent of those surveyed said they would be purchasing Super Bowl-related items. The average amount that will be spent rose from $64 per person in 2010 to $71.51 this year.

Copyright 2011 ABC News Radio

Tuesday
Jan252011

Amazon Testing New, Free Grocery Service

Photo Courtesy - Amazon.com(SEATTLE) – A new service being tested by Amazon could allow consumers to receive weekly grocery deliveries free of charge.

The program, called AmazonTote, has undergone internal testing by Amazon employees in Seattle for the past six months. Tote, which is linked to Amazon’s current grocery service, Fresh, would allow users to schedule weekly grocery deliveries right to their door without a delivery charge, according to the Financial Times.

Fresh currently operates in the Seattle area and allows users to order everything from fresh produce to beauty supplies.
 
The new service could put Amazon in further competition with big retailers such as Target and Walmart.

Copyright 2011 ABC News Radio

Tuesday
Jan252011

Insurers Use Facebook to Monitor Fraud, Risky Behavior

Photo Courtesy - Getty Images(DES PLAINES, Ill.) – Insurance companies have become just the latest agency to monitor what you write and post on Facebook.

According to the Los Angeles Times, insurance companies are using Facebook and other social networking sites to guard against insurance fraud.

Investigators can use the sites to “look out for things that don't add up," said Frank Scapili, spokesman for the National Insurance Crime Bureau, “like someone who claimed they hurt their back too badly to work and then bragged on Facebook about running a marathon."

Some insurance companies also use the sites to monitor “high-risk” behavior such as skydiving. They also look out for keys to a person's character, such as photos of a person drinking.
 
Copyright 2011 ABC News Radio







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