Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Thursday, September 8, 2011

Stocks drift ahead of Bernanke, Obama speeches

In this Aug. 29, 2011 photo, traders work on the floor of the New York Stock Exchange. Stocks advanced for the second day running Thursday, Sept. 8, 2NEW YORK – Stocks drifted between small gains and losses Thursday ahead of speeches on the economy by Federal Reserve Chairman Ben Bernanke and President Barack Obama that will be closely watched on Wall Street.
Bernanke will detail his outlook for the economy in a speech beginning at 1:30 p.m. EST. Some investors are anticipating that the Fed will soon take additional steps to stimulate the economy at its two-day meeting that begins Sept. 21.
President Obama will lay out his jobs plan at a joint session of Congress tonight. He is expected to announce a $300 billion package that includes tax cuts, additional state aid and spending on infrastructure.
Investors received mixed economic data before the market opened. First-time applications for unemployment benefits rose last week to 414,000. Economists had expected 405,000. The prior week's estimate of new claims was also revised higher.
The weekly report on unemployment applications is an important economic signal for investors. Rising claims can add to concerns that the job market is stalled and the U.S. economy is headed for another recession. Applications need to fall below 375,000 to indicate sustainable job growth. Last week the government reported there was zero job growth in the U.S. economy in August.
Not all of the economic news Thursday was negative. American exports of cars, airplanes and other goods reached an all-time high in July, the Commerce Department reported. Economists said the jump in exports suggest future growth in the U.S. economy.
"The market is sitting around and trying to piece it all together, "said Rob Stein, the founder and global head of asset management at Astor Asset Management. "For all the volatility that we've had recently, the market is going nowhere."
At noon, the Dow Jones industrial average was up 2 points, or less than 0.1 percent, to 11,415. The Standard & Poor's 500 index fell 2, or 0.1 percent, to 1,197. The Nasdaq composite rose 3, or 0.1 percent, to 2,552.
Microsoft Corp. and Cisco Systems Inc. were the biggest gainers in the Dow, rising 2 percent. JPMorgan Chase & Co. and Boeing Co. fell the most, 2.5 percent.

Obama looks to create jobs, put GOP on the spot

Barack ObamaWASHINGTON – Facing a frustrated public and a skeptical Congress, President Barack Obama will pitch at least $300 billion in jobs proposals aimed at getting Americans back to work quickly and forcing Republicans to take a share of the responsibility for solving the country's economic woes.
The underlying political strategy: If Obama can't get his ideas passed heading into his re-election year, he at least hopes to show why he shouldn't take the fall.
In a rare speech Thursday to a joint session of Congress, Obama is likely to offer a package of ideas that would affect people in their daily lives — tax relief, unemployment insurance, spending to support construction jobs, aid to states to keep people in their jobs. Businesses would get their own tax breaks. And he will promise a long-term plan to pay for it all.
Yet all of it ultimately will depend on a Republican-controlled House that has a different economic approach and no political incentive to help a Democrat seeking a second term.
White House officials said Obama would formally send his plan — coined by the administration as the American Jobs Act — to Congress next week.
Obama's chief of staff, William Daley, urged Republican lawmakers to abandon their politically driven refusal to work with Obama and take action on his jobs proposal. Daley declined to provide details of the president's jobs proposal, saying only that it would help teachers, construction workers, first responders and small businesses, and that many of the ideas have been supported by Republicans in the past.
"The only reason some of these people may not support it now is because of the politics that's going on, which is again unfortunate for the American people," Daley said.
He said the jobs programs would be paid for without borrowed money, and hinted that some of the funds would come from higher taxes on wealthier Americans. They "ought to pay a little more," Daley said.
Obama's goal is also to put Republicans on the spot to act — in their face, and in their chamber. Obama is expected to speak for up to 45 minutes, beginning at 7 p.m. EDT.
Given the country's political and economic reality, two key questions hang over the president's speech: Will any of his ideas get approved, and will they actually work?
House Speaker John Boehner, R-Ohio, said he was hopeful that there would be some proposals the White House and Republicans could agree on.
"We know the two parties aren't going to agree on everything, but the American people want us to find common ground and I'm going to be looking for it," Boehner said.
But some other Republicans, including Senate Minority Leader Mitch McConnell, were criticizing the planned proposals even before the president had uttered a word. McConnell, a Kentucky Republican, said Obama seemed determined to simply reintroduce economic policies that haven't worked.
"It's time the president start thinking less about how to describe his policies differently and more time thinking about devising new policies," McConnell said.
A Pew Research poll out this week also found majorities of Republicans, Democrats and independents skeptical that the proposals Obama is expected to discuss would do a lot to create jobs. And a series of new polls by major news organizations finds that the mood is downright dismal about the direction of the country, with Obama's standing and approval on the economy at or near the lowest levels of his presidency.
Yet voters are holding all leaders accountable, supporting the White House's point that Congress is under pressure to act, too. An Associated Press-GfK poll found that more people assign chief blame for the economy to former President George W. Bush and congressional Republicans and Democrats than to Obama.
Democrats familiar with the president's plans say the White House sees the speech as a pivot point after spending the spring and summer focused on negotiations over deficit spending. They say the fall offers the president a window to press congressional Republicans to act on his economic plan — and if they don't, Obama will spend 2012 running against them as obstructionists. Whether that's enough to win over voters is another matter.
Obama's chief campaign strategist, David Axelrod, said the president won't start with ideas that have been "preapproved" by Republicans in Congress.
"Ultimately, the test for any of these ideas: Are they right? Can they help the economy? Can they help get people back to work?" Axelrod told The Associated Press.
The president's plan to pay for his ideas is a political necessity in a time of fiscal austerity. Deficit-boosting stimulus spending is out. But here, too, he is banking on a lot of help.
Obama plans to cover the cost by asking a new congressional supercommittee debt panel to go beyond its target of finding $1.5 trillion in deficit reduction by the end of November, so the extra savings can pay for short-term economic help. That debt panel met for the first time Thursday.
In one upbeat sign for those looking for a Washington compromise, Boehner and House Majority Leader Eric Cantor have told Obama they see potential areas of agreement on jobs — for example, infrastructure, which Obama has pushed repeatedly. Cantor also signaled to reporters Wednesday that he might support a payroll tax cut.
"It is not games and politics for people out across this country. It's real," Cantor said about the state of the economic debate. "The fact that we have had such sustained joblessness in this country, the fact that people are doing anything they can in many instances just to stay afloat and to pay the bills, it's real."
At the heart of Obama's plan will be extending, by one more year, a payroll tax cut for workers that went into effect this year. The president wants the payroll tax, which raises money for Social Security, to stay at 4.2 percent rather than kick back up to 6.2 percent. That tax applies to earnings up to $106,800.
Obama is expected to seek continued unemployment aid for millions of people receiving extended benefits. That program, too, is set to expire at year's end.
Among the other potential proposals by Obama:
_Tax credits for employers who hire.
• A major school construction initiative.
• Aid to local governments to prevent layoffs of teachers and other workers.
_Other tax help for businesses, such as continuing to allow them to deduct the full value of new equipment.
Since Obama took office in January 2009, nearly 2 million Americans have lost jobs. Almost 14 million people are out of work.
The unemployment rate, which stood at 5 percent at the start of the deep recession and 7.8 percent when Obama began in office, is at 9.1 percent. Most troubling is the trend line. After a period of steady if modest job creation, employers have stopped hiring.

Thursday, August 25, 2011

AP-GfK poll: Views on economy, Obama role sour

Barack ObamaWASHINGTON – Americans' views on the economy have dimmed this summer. But so far, the growing pessimism doesn't seem to be taking a toll on President Barack Obama's re-election prospects.
More people now believe the country is headed in the wrong direction, a new Associated Press-GfK poll shows, and confidence in Obama's handling of the economy has slipped from just a few months ago, notably among fellow Democrats.
The survey found that 86 percent of adults see the economy as "poor," up from 80 percent in June. About half — 49 percent — said it worsened just in the past month. Only 27 percent responded that way in the June survey.
That can't be good news for a president revving up his re-election campaign. Yet there are several hopeful signs for Obama.
Despite the perception of a weakening recovery, there has been no significant change in the number of people who say he deserves re-election: 47 percent as opposed to 48 percent two months ago. That's a statistical dead heat with those who favor a change in the White House.

And more Americans still blame former President George W. Bush rather than Obama for the economic distress. Some 31 percent put the bulk of the blame on Obama, while 51 percent point to his Republican predecessor.
"I think Bush had a hand in it, too. Obama's not totally responsible," said Mary Parish, 68, of Troy, Tenn. An independent who voted for Republican John McCain in 2008, she said she doesn't believe Obama has what it takes to heal the economy. "He's a smooth-talking man. But he does not know what he's doing."
Obama also fares better than Congress in the blame department. Some 44 percent put "a lot" or "most" of the blame on Republicans while 36 percent point to congressional Democrats.
The gloomy economic outlook reflected in the poll, which was taken Aug. 18-22, follows a round of bleak government economic reports — on unemployment, the housing market and economic growth that fell below 1 percent for the first six months of the year. It was taken amid heightened worries of a new U.S. recession, fallout from a downgrade of the country's credit rating and a spreading European debt crisis.
As the public's outlook on the economy dips, so has approval for the president's economic stewardship.
More than 6 in 10 — 63 percent — disapprove of Obama's handling of the economy. Nearly half, or 48 percent, "strongly" disapproved. Approval of his economic performance now stands at just 36 percent, his worst approval rating on the issue in AP-GfK polling.
Among Democrats, 58 percent approve of the president's handling of the economy, down from 65 percent in June. Among Republicans, approval dipped to 9 percent from 15 percent.
Just 51 percent consider Obama a strong leader, down from 60 percent in June and 65 percent following the capture and death of Osama bin Laden in May. In June, 85 percent of Democrats in the poll called him a strong leader. Now, the number is down to 76 percent.
Of course, there are limits to what a president can do.
"I think he can nudge it along, but really, it boils down to the private sector," said Dan Elliott, 42, of Hillsboro, Ill., an independent who voted for Obama in 2008 and says he'll probably vote for him again.
Judith Lee, 63, a retired teacher from Great Diamond Island, Maine, said she's a Republican who voted for Obama in 2008 but has been disappointed by his leadership style.
"I don't think he is a very forceful leader," Lee said. "His style of leadership seems to be to look for consensus and ideas from other people, and it seems to have been ineffective. And Congress seems to be deadlocked on problems."
Some 75 percent in the poll said the country is heading in the wrong direction, up from 63 percent in June. Among Democrats, 61 percent chose "wrong direction" — up from 46 percent in June.
And for the first time for Obama in the poll, a majority of all adults said they disapprove of his overall performance — 52 percent, up from 47 percent in June. Among Democrats, approval fell 8 points, to 74 percent from 82 percent in June. Among Republicans, it fell to 11 percent from 22 percent.
Politically, the poll underscores the difficult time ahead for Obama as he seeks re-election in a shaky economy.
Unemployment increased to 9.2 percent in July, up from 9.1 percent in June. And most economists don't expect it to decline much below 8.5 percent by the November 2012 presidential election. No president has won re-election with a jobless rate that high since Franklin D. Roosevelt in 1936.
So why hasn't the rise in pessimism taken more of a toll?
Despite the general rise in gloom, it seems unlikely that liberal Democrats will flock away from Obama even if they have rising doubts about his agenda or economic leadership, analysts suggest. And independents, who helped elect Obama in 2008 and are now being actively wooed by both parties, did not exhibit significant changes in their approval levels.
It was at 44 percent, statistically no different from the 43 percent approval rating among independents in June.
"A lot is out of his hands," said Penny Johansen, 65, a retired legal secretary from Tempe, Ariz. "There is only so much one person can do, and one person cannot be blamed for the acts of others." Politically unaligned, she voted for Obama in 2008 and says she'll probably do so again.
On related economic issues, 59 percent said they disapproved of Obama's handling of tax issues, up from 53 percent in June. And 64 percent said they disapproved of his handling of the annual budget deficit, compared with 63 percent in June.
Sixty percent described the financial situation in their own households as "good," about even with the level in June. Asked if they expected their financial situation to change over the next 12 months, 31 percent said they expected it to get better, 12 percent expected it to get worse and a majority — 56 percent — said they expected it to "stay about the same."
As to creating jobs, some 44 percent said they would trust Democrats to do a better job, while 42 percent said Republicans would.
The AP-GfK poll was conducted Aug. 18-22 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cellphone interviews with 1,000 adults nationwide and has a margin of sampling error of plus or minus 4.1 percentage points.