Entries in Economy (101)


Americans Earning a Bit More, But Spending Cautiously

Comstock/Thinkstock(NEW YORK) -- Monday’s income and outlays report from the Bureau of Economic Analysis is about as expected, with not much good news but no major bad news.
American incomes increased 0.4 percent, according to the report. If this trend continues, maybe the strength of the consumer will continue to buoy the economy in the future.
But spending dropped compared to a month ago.  This may be because spending had been pushed up earlier in the year because of warm weather.
The personal savings rate edged up to 3.8 percent last month from 3.7 percent in February.
While the U.S. economy isn’t in a recession, the recent batch of data does not show a robust recovery.
Copyright 2012 ABC News Radio


GDP Rose 2.2% in First Quarter

Comstock Images/Thinkstock(WASHINGTON) -- The U.S. economy expanded at an annualized rate of 2.2 percent in the first quarter, a slower pace than expected, keeping the recovery on track, but failing to generate enough activity to knock down the jobless rate significantly.

This first estimate will be revised later, but economists in various surveys had expected gross domestic product growth -- the output of all goods and services, from cars to electricity to manicures -- at 2.5 percent to 3.2 percent annualized.

“In reviewing the numbers, the fear now is that we may be running out of runway before the onset of another recession.  We will not be surprised to see continued growth in GDP given the fact that privately held companies continue to grow at a healthy rate,” said Brian Hamilton, CEO of Sageworks.  “However, what is becoming slightly concerning is that the unemployment rate is not decreasing at a fast enough rate.”

GDP growth was 3 percent in the final three months of 2011.  Much of the growth in the October to December quarter was due to businesses aggressively restocking their supplies.

Historically, Hamilton noted, it has taken approximately 12 to 20 months for unemployment to fall in an expansion to roughly pre-recession levels.

”Right now, we are into the 34th month of the recovery, and, yet, unemployment remains too high.  If we don’t get employment up, we may be bumping into the next recession, during which time we cannot expect job growth,” he said.

Copyright 2012 ABC News Radio


Prom Spending Jumps 33 Percent Nationwide

Digital Vision/Thinkstock(NEW YORK) -- Many segments of the U.S. economy continue to struggle in the wake of the recent recession, but the prom industry is booming, according to a new national survey by Visa Inc.

The survey finds American families with teenagers will spend an average of $1,078 each on a prom in 2012, a 33.6-percent increase over the $807 spent last year.

Families in the Northeast will spend twice as much on a prom as every other region of the country.

Jason Alderman, senior director of Global Financial Education, Visa Inc., says, “Prom season spending is spiraling out of control as teens continuously try to one-up each other.”

Alderman adds, “It’s important to remember that the prom is a high school dance, not a wedding, and parents need to set limits in order to demonstrate financial responsibility.”

The survey also reveals that parents are planning to cover 61 percent of prom costs while their teens are only covering the remaining 39 percent.

“One of the reasons that prom spending may be running amok is that parents are paying the vast majority of costs, giving teens little incentive to economize,” says Alderman.

Other notable survey results:

  • Northeastern families will spend an average of $1,944.
  • Southern families will spend an average of $1,047.
  • Western families will spend an average of $744.
  • Midwestern families will spend an average of $696.

Prom spending broken down by family income:

  • Parents who make under $20,000 will spend an average of $1,200.
  • Parents who make $20,000-$29,999 will spend an average of $2,635.
  • Parents who make $30,000-$39,999 will spend an average of $801.
  • Parents who make $40,000-$49,999 will spend an average of $695.
  • Parents who make over $50,000 will spend an average of $988.
  • Parents who make over $75,000 will spend an average of $842.

The Visa Inc. survey is based on 1,000 telephone interviews.

Copyright 2012 ABC News Radio


On Swing State Stop, Obama Hails Two Years of Job Gains

The White House(PRINCE GEORGE, Va.) –   President Obama Friday hailed two straight years of private-sector job growth under his administration, calling the February jobs report the latest sign “the economy is getting stronger.”

“Day by day we’re creating new jobs.  But we can’t stop there, not until everybody who’s out there pounding the pavement and sending out their resumes has a chance to land one of those jobs,” he said in a speech at a Rolls-Royce Crosspointe jet engine disc manufacturing facility in Prince George County.

The Labor Department reported Friday that employers added 233,000 jobs last month, and revised figures of the reported job gains in January up by 41,000 and by 20,000 for December.

“The key now, our job now, is to keep this economic engine churning,” Obama said. “We can’t go back to the same policies that got us into this mess.”

The burst of positive economic news added to Obama’s swagger as he toured the factory, located just south of Richmond. He also addressed supporters before heading south for two campaign fundraisers set to net at least $2.8 million for the 2012 campaign.

In his speech, Obama highlighted a new $1 billion proposal – part of his 2013 budget blueprint -- to create a series of regional manufacturing institutes aimed at linking manufacturers and academic experts to make the U.S. more competitive.

He also touted a broad resurgence in the American manufacturing sector, which he has made a major plank in the argument that his economic plan is working, especially in key manufacturing states.

Manufacturers added nearly 400,000 jobs since Obama took office, completing the first full year of consecutive job gains since 1997.

“This facility is part of the evidence of what is going on around the country,” Obama told the crowd. “When I come to places like this and see the work that is getting done, it gives me confidence that better days are ahead.”

Friday’s jobs news, which reverberated across the political spectrum, included a mix of accolades for Obama.

The leader of the nation’s largest union, Richard Trumka of the AFL-CIO, hailed it as a “tribute to the leadership of the President.” SEIU president Mary Kay Henry said the numbers mean “we must redouble our efforts to re-elect President Obama.”

But Republicans, while welcoming the job gains, highlighted the nation’s persistently high unemployment rate -- which was unchanged last month at 8.3 percent -- and the 12.8 million Americans still looking for work, according to government statistics.

“Millions of families continue to feel the pain of the sluggish Obama economy and the rising cost of gas, groceries and health care,” said Republican National Committee chairman Reince Preibus in a statement.

As the November election nears, voters in swing states like Virginia will weigh the trend lines on jobs against those other economic pressures.

The latest polls in Virginia, which Obama carried with 52.6 percent of the vote four years ago, show a bright horizon for the president.

Seventy-eight percent of Virginia voters in the most recent Marist/NBC poll believe economic conditions will either stay the same or get better over the year ahead, while just 19 percent believe the next 12 months will mean more bad economic news.

“I thought it would take him a lot longer to get where he was now,” said James Hubbard, Jr., 60, a Virginia native.  “I’m pleased with the fact that he’s starting to turn things around earlier.”

Said Karen Saunders of Chester, Va., “Hopefully… there are more jobs coming. I think he’s done a lot, actually, but I think there’s more that needs to be done.”

Copyright 2012 ABC News Radio


Former Comptroller General Warns of Greek Scenario in US

iStockphoto/Thinkstock(NEW YORK) -- Former U.S. Comptroller David Walker has warned that the U.S. could slide into a debt scenario similar to what Greece is experiencing.

“The truth is if you count total U.S. government debt as compared to many of the European nations that are in the news, we’re already worse than they are, and we’re two years away from where Greece was when it had its crisis,” Walker said in a recent interview with

But he said that the size and economic power of the U.S. means it would have more time to right itself before disaster.

Walker served as U.S. comptroller general from 1998-2008, heading the Government Accountability Office under Presidents Bill Clinton and George W. Bush.

He’s been warning of fiscal troubles since 2007, when he told CBS’s Steve Kroft in a 60 Minutes segment, “I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility.”

In this election year, Walker’s current message is simple: A broken political process is driving the U.S. toward fiscal ruin.

Walker is pushing to “shake up” that system, serving on the leadership board of Americans Elect, the group that aims to put an Internet-nominated presidential candidate on the November ballot in every U.S. state. The group told ABC News in an editorial meeting last month that it would almost certainly achieve that goal.

The former federal auditor said he wanted to see a repeat of Ross Perot’s independent 1992 presidential run.

“We don’t get enough specificity with regard to what people are proposing to do in order to make sure the type of debt crises that are occurring in Europe won’t reach our shores,” Walker told CYInterview’s Chris Yandek and Jay Bildstein.

“We’ve got more time than those countries in Europe, because of who we are and what our position is in the world, but we don’t have unlimited time, and it’s really important that this year’s presidential campaign place a lot of attention on the issue of fiscal responsibility and sustainability as Ross Perot did 20 years ago with significant positive impact,” Walker said.

Copyright 2012 ABC News Radio


Obama Pitches Economic Agenda to Business Leaders

SAUL LOEB/AFP/Getty Images(WASHINGTON) -- President Obama pitched his economic agenda to some of the nation’s most high-powered CEOs Tuesday night, touting his proposals to boost job creation and calling for tax reform to aid the economic recovery.

“The economy is getting stronger, and the recovery is speeding up. And the question now is, how do we make sure that it keeps going?” the president told members of the Business Roundtable, an association of chief executive officers of leading U.S. companies.

Obama outlined his administration’s efforts to bring jobs back to the U.S. and jumpstart manufacturing. “I think we have to focus on our core strengths: American manufacturing; American energy; American innovation; the best skills and education for American workers,” he told the roughly 100 business executives gathered at the Newseum in downtown Washington, D.C. The execs included Jamie Dimon of JP Morgan Chase, Brian Moynihan of Bank of America, Ursula Burns of Xerox Corp, and Indra Nooyi of PepsiCo.

Obama said he will go anywhere in the world to open new markets for American goods, pointing to his efforts to secure Russia’s invitation into the World Trade Association.

“Given the number of planes that I’ve been selling around the world, I expect a gold watch upon my retirement,” the president joked to Business Roundtable Chairman and Boeing CEO Jim McNerney, who introduced Obama at Tuesday night’s event.

The president also said he was not giving up on his call to rebuild America’s infrastructure. “I make no apologies for being chauvinistic when it comes to wanting to have the best airports, the best roads, the fastest broadband lines, the best wireless connections here in the United States of America. And now is the time for us to do it,” he said.

Obama said the nation would have to “deal with revenue,” noting, “that’s something that the American people instinctually understand -- that if we do this in a balanced way, we can solve our problems.”

The president said the nation needs to reform its tax system to better reward companies that invest in the U.S. “That is going to be a difficult task. Anybody who has been involved in tax discussions in any legislature, but especially Congress, knows that it’s like pulling teeth. But it is the right thing to do for us to become more competitive,” he said.

The president’s policies have not always been warmly received by the association. In 2010, then chairman Ivan Seidenberg, chief executive of Verizon, accused the president of creating a “hostile environment” for investment and job creation.

Copyright 2012 ABC News Radio


US Economy Grew 3% in Fourth Quarter of 2011

Comstock Images/Thinkstock(WASHINGTON) -- The Commerce Department announced on Wednesday that the U.S. economy grew at a slightly faster pace during the last three months of 2011 than had previously been reported.

The agency said the country's gross domestic product (GDP) increased at an annual rate of 3 percent in last year's fourth quarter, up from the previous estimate of 2.8 percent.  The revised figure marks the strongest growth in a year and a half.

The increase was boosted by rising consumer incomes and a higher savings rate.

Copyright 2012 ABC News Radio


Economy to Grow Slow But Steady in 2012, Survey Finds

Comstock Images/Thinkstock(NEW YORK) -- Economists are becoming more confident that the United States will avoid another recession anytime soon, but they’re still cautious about this year’s rate of growth.

The latest quarterly survey from the National Association for Business Economics forecasts 2.4 percent growth this year.

“This is not gangbusters,” economist Richard DeKaser says of the NABE report.  “But it is solid and probably more important is that people are feeling more confident about their forecast.”

The survey says one big difference this year compared to 2011 is an improving jobs market.

“Businesses were able to get away without hiring because productivity was so strong,”  DeKaser said.  “That’s not the case anymore.  So we're seeing even moderate GDP gains translate into more jobs."

Copyright 2012 ABC News Radio


More Vacations in 2012 Despite Economic Uncertainty

John Foxx/Thinkstock(NEW YORK) -- People intend to travel more this year than last, according to Travelocity’s annual Traveler Confidence Report, released this week.

Fifty-three percent of respondents to the survey, released Tuesday, said they plan to travel more in 2012 than in 2011 despite a lack of confidence in the state of the economy. That’s an 18 percentage point increase as compared with 2011.

“Our findings are really encouraging for us and our supply partners,” Carl Sparks, president and CEO of Travelocity Global told ABC News. “I’m particularly pleased that respondents are planning vacations with longer durations and that are further away from home this year versus last.”

Of those that plan to travel more, two-thirds are planning on spending more, as well. The remaining one-third who plan to travel more without spending more will do so by increasing comparison shopping, booking vacation packages and opaque hotels -- booking a hotel without knowing the name before the booking transaction is complete -- and using flash sales to save on hotel stays.

Seventy-nine percent of respondents anticipate spending the same or more on flights in 2012. Travelocity data shows air fares for the first three months of 2012 are up nine percent on both domestic and international flights as compared to last year.

Copyright 2012 ABC News Radio


Obama and Romney Advisers Square Off on the Economy

Creatas Images/Thinkstock(WASHINGTON) -- The chief architect of President Obama’s economic plan and Republican rival Mitt Romney’s top economic strategist squared off Sunday in a preview of the likely fall debate on the economy, challenging each other on whether the president’s policies have helped or hurt the economic recovery.

The monthly jobs report released Friday showed greater-than-expected growth, with 243,000 new jobs added in January, as the unemployment rate dipped to 8.3 percent. That powered the stock market to its highest closing level since the 2008 financial crisis.

Lawrence Summers, former director of President Obama’s National Economic Council, told ABC News on Sunday that he “was surprised by how favorable these numbers were.” He added that the report showed more promising signs than in the past year, crediting President Obama’s policies for the growth.

“If you look beneath the surface of this one, almost every indicator within it is favorable.” Summers said. “Employment is up. Labor force participation did not decline. This was unemployment reduction generated by more jobs.”

“A ton of this is coming from the president’s policies,” Summers added. “It’s coming from the program he put in place to contain what was a situation worse than the Great Depression in 2009 and the steps going forward that the president proposes are the right ones.”

Romney economic adviser Glenn Hubbard, currently dean of the Columbia Business School, said that while it was a good report, he noted that growth at the same level will be needed for two years to return to pre-recession levels. He said the president’s policies have not done enough, citing underemployment and fewer people looking for work.

“The question is, could we have done much better? And could we have done it in such a way that would have had better fiscal consequences?” Hubbard asked. “How do we grow faster and create jobs more? The president’s agenda is squarely against that.”

To continue growth, Summers pushed for Congress to follow President Obama’s call to extend the payroll tax cut and unemployment insurance extension through the year.

“This is no time for complacency,” Summers said. “That’s why every day that the Congress fails to extend the payroll tax cut, every day that the Congress fails to extend the unemployment insurance is a day we’re taking more risk than we need to with this economy.”

Summers also said Republican calls to repeal new financial regulations were “dangerous and inappropriate.”

“Surely, this is the time when we need to protect the economy from the kind of mistakes that took place in the financial sector before,” Summers said.

Hubbard countered that “the jury’s still out” on whether not making the extensions would harm the economic recovery, instead calling for long-term reforms of entitlements and the tax code.

“I think there’s a serious debate over the payroll tax and the unemployment insurance benefits, but there also needs to be a serious debate on what we can do in tax policy, in health care, in regulation and financial reform to actually create jobs,” Hubbard said. “The administration’s been standing in the way.”

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Copyright 2012 ABC News Radio

ABC News Radio