Top Obama adviser calls for less regulation

Job seekers filling out applications during a recruiting event sponsored by Chicago's Greater West Town Community Development Project at the Mabel Manning public library in Chicago, Illinois, on Aug 31. 

Jeffrey Immelt believes it will spur growth in stagnant labor market

WASHINGTON - The United States government must reduce business regulation to spur job growth, said Jeffrey Immelt, chief executive officer of General Electric Co and head of President Barack Obama's Council on Jobs and Competitiveness.

"The one thing I hope to get done is to create more jobs," Immelt said in an interview on CNN's Fareed Zakaria GPS, broadcast on Sept 19. "There's got to be some simplification of regulations."

Immelt, named to the council in January to build a bridge between the government and the country's employers, said industry-wide jobs proposals will be ready by the end of this year. Americans' pessimism about the economy has deepened, sending Obama's approval ratings to the lowest of his presidency, as the stagnant labor market limits consumer spending and threatens to trigger another recession.

One way to boost confidence among employers is to "try to see through the eyes of small businesses", which face a bigger hurdle than large companies such as GE, International Business Machines Corp and JPMorgan Chase & Co, Immelt said.

"We're big enough companies that we can muscle through regulatory" pressures, he said. "We can comply. We can do the things we need to do."

"If you're a $50 million business, it's just so much harder," he said. Seen from his perspective, small business "has all the problems GE has, only on steroids".

More certainty

More certainty on tax rates and healthcare policy and building a well-trained workforce would also encourage companies to hire and increase investment, Immelt said. At the same time, for companies to say the lack of these incentives is stopping them from investing is "a crutch".

GE expects to add about 15,000 jobs in the US this year and is investing in the country as well as in overseas markets such as China and India, Immelt said. The businessman is also chairman of GE, based in Fairfield, Connecticut. It is the biggest maker of power generation equipment, medical-imaging machines, locomotives and aircraft engines.

Obama's $447 billion plan includes tax cuts and spending proposals to jump-start job creation. Payrolls were little changed in August and the unemployment rate held at 9.1 percent, Labor Department figures showed. On Sept 2 Obama's disapproval rating reached 50 percent for the first time since he became president of the US, according to a New York Times/CBS News poll conducted from Sept 10 to Sept 15.

Debt, government cuts

While the US needs to reduce its debt and the size of the government, Immelt said, it also needs to spend on improving education, infrastructure and research and development to spur innovation and become more competitive.

"There is a role, I think a small role, to be played by the government in risk-taking, in helping to evolve where we go," Immelt said when asked whether the US government should be as active as the Chinese government has been in a push to compete for market share with GE in wind turbines.

For more than 100 years, the US government has been "a catalyst to drive growth", he said. The National Institutes of Health helped to create the world's best healthcare system and "the nuclear industry was built on the back of the Department of Defense", which also "spawned the Internet", Immelt said.

In China, there is a "system where the government fundamentally runs the play", Immelt said. He said he makes GE executives study China's Five-Year Economic Plans to better understand how to compete and win.

"We do have to recognize that competition has changed, that the biggest competitor plays the game in a very state-driven way," Immelt said on CNN.

In the US, businesses work together and the government and private industry team up to find solutions, he said.

The US has thrived on a "sense of partnership that's very much a part of the American culture", Immelt said, adding he is confident that "will ultimately play out" and work in the nation's favor.

BofA plans 30,000 job cuts

A Bank of America shareholder walks into the corporate headquarters prior to the start of the Bank of America annual shareholders meeting in Charlotte, North Carolina May 11, 2011.

Bank of America Corp said it will cut 30,000 jobs and slash annual expenses by $5 billion, but investors were unimpressed with the plan and the lack of details on how it will be accomplished.
The staff reductions amount to more than 10 percent of the bank's workforce, and come as chief executive Brian Moynihan struggles to fix a bank whose share price has dropped nearly 50 percent this year.

Media reports last week said the bank could cut as many as 40,000 jobs. Many investors had hoped for a more dramatic turnaround plan on Monday, when Moynihan spoke at a financial conference and the bank released its cutback plans.

"It was pretty underwhelming," said Jason Ware, an analyst at Albion Financial Group, referring to the bank's plan.
"They need to address the bigger issues the bank faces," Ware said.
Bank of America was built through decades of acquisitions, many of which were never properly integrated, and some of which have triggered disastrous losses. The $2.5 billion purchase of Countrywide Financial in 2008 has left Bank of America with billions of dollars of bad assets and legal liabilities.
Moynihan said the bank's initial focus is on cutting costs in the consumer bank through measures like combining data centers. He projected $5 billion of annual savings by 2014.
The job cuts will happen over the next several years, with many coming from attrition. The bank signaled its retrenchment last week when consumer banking head Joe Price and retail brokerage head Sallie Krawcheck were let go.

US consumer credit rises for 10th straight month

WASHINGTON - US consumer credit increased at an annual rate of 5.9 percent in July, the tenth consecutive monthly growth, offering some relief to a string of weak economic data in recent weeks, the Federal Reserve reported on Thursday.
The US central bank said that total borrowing in July rose to $2454.5 billion from the revised figure of 2442.5 billion dollars in June.
The Fed said demand for revolving credit, the category that includes credit cards, dropped 5.2 percent in July after rising 3. 9 percent in June.
In July, the borrowing in the non-revolving category which includes auto loans surged at an annual rate of 11.2 percent to 1, 662 billion dollars.
Consumer spending, which accounts for about 70 percent of the overall economic activity, remains the major drive for the US economy.

Obama unveils $447b new job plan

WASHINGTON - US President Barack Obama launched his widely expected new job plan Thursday night at a joint session of the Congress to stimulate recovery and strengthen the country's struggling employment situation.
The efforts to create jobs is "urgent" and the Congress should pass the job plan immediately, Obama said.
The 447-billion-dollar plan, which is called the American Jobs Act, is the third major stimulus package. It would increase and extend a payroll tax cut for workers that goes to Social Security, while providing tax cut to employers.
US economy, grew at only 0.7 percent in the first half year, is expected to remain on a sluggish growing track in the near term. However, unemployment which currently stands at 9.1 percent, is widely projected to keep at a high level through the presidential election year in 2012.

Amazon eyes rosy revenue

A box from Amazon.com is pictured on the porch of a house in Golden, Colorado in this July 23, 2008 file photo. Amazon.com gave a confident revenue forecast that suggested its aggressive expansion into new businesses is paying off, soothing concerns about its slimmed-down profit margin, according to news reports on April 26, 2011.

NEW YORK – Amazon.com gave a confident revenue forecast that suggested its aggressive expansion into new businesses is paying off, soothing concerns about its slimmed-down profit margin.

Shares were down 1.2 percent after Amazon reported a 32.8 percent decline in first-quarter profits. But that was a far cry from the big sell-off when the company last reported quarterly results and shares lost 9 percent.

"The concern that people had, that they were going to spend more than the Street was expecting, happened," said Ken Sena, analyst at Evercore Partners. "But when you look at the kind of growth acceleration they are showing on the top line and surpassing pretty much all Street expectations, I think that clearly shows what they are doing makes sense."

In recent years, Amazon has fought to win market share through its Prime program of low-cost delivery of its retail goods and by offering inexpensive electronic books for its Kindle e-reader.

More recently, it has invested heavily in areas such as "cloud computing" and "music lockers" where fans store their music on Amazon's servers, to take on its rivals Google Inc and Apple Inc.

Amazon expects that its investing to win market share will work. It forecast current-quarter revenue of $8.85 billion to $9.65 billion, above Wall Street expectations of $8.7 billion, according to Thomson Reuters I/B/E/S.

Chief Financial Officer Tom Szkutak told analysts on a conference call that Amazon has to spend money to develop the technology infrastructure and distribution centers and support its growth. Revenues nearly doubled between 2008 and 2010.

For the company's first quarter, which ended March 31, revenue was $9.857 billion, above the average analyst estimate of $9.57 billion and 38.2 percent above a year earlier.

In contrast, data firm eMarketer estimated that US retail e-commerce sales rose 13 percent in the quarter compared with a year earlier.

Amazon's sales increase was led by a 45 percent rise in North America. Growth elsewhere was 27 percent excluding the effect of currency exchange. Szkutak said that would have been 32 percent if not for Japan's massive earthquake last month.

But net income in the first quarter was $201 million, or 44 cents per share -- down from $299 million, or 66 cents per share, a year earlier. That was far below the 61 cents expected by Wall Street, according to Thomson Reuters I/B/E/S.

The company posted an 18.2 percent dip in operating profit for the quarter, reflecting the costs of competing in the highly promotional retail environment, with beefed-up investment in its cloud computing services.

Apple, Google face pressure on location-tracking

SAN FRANCISCO - Apple Inc. and Google Inc. were facing mounting pressure Monday from US lawmakers and consumers after media reports highlighted their location-tracking practices.

The US House Energy and Commerce Committee on Monday sent letters to six developers of mobile device operating systems, including Apple and Google, seeking more information on implications of such tracking for individual privacy and federal communications policy.
In the letter sent to Apple CEO Steve Jobs, the Committee asked him to respond to nine questions no later than May 9, including "What location data do devices running your operating system track, use, store or share?", "Why does the device track, use, store or share that data?", and "How is the data used, stored, or shared and how is it protected?"

Similar letters were also sent to Google, Nokia, Microsoft, Research In Motion and Hewlett Packard. Nokia said the location data it collected was only stored in the device, and sent or collected when the user chose to use such services. Other companies have made no comment on the letters yet.

Also on Monday, Illinois state Attorney General Lisa Madigan called for a meeting with Apple and Google executives on the location-tracking reports, citing her ongoing effort to protect consumers' personal information online.

"I want to know whether consumers have been informed of what is being tracked and stored by Apple and Google and whether those tracking and storage features can be disabled," Madigan said. "It's important that these companies ensure that their users' private information is protected."

Minnesota Senator Al Franken, chairman of the US Senate Judiciary Subcommittee on Privacy, Technology and the Law, announced Monday he had scheduled a mobile privacy hearing for May 10 and had asked Google and Apple representatives to speak at the hearing.

"This hearing is the first step in making certain that federal laws protecting consumers' privacy - particularly when it comes to mobile devices - keep pace with advances in technology," Franken said in a statement.

Two iPhone users have filed a class action suit in Tampa, Florida, accusing Apple of invasion of privacy and computer fraud and seeking a judge's order to bar the alleged data collection.

Apple is also reportedly being investigated by South Korea, France, Germany and Italy over the alleged practice.

Worries on the iPhone tracking issue surfaced last Wednesday when two British researchers announced at a technology conference in California that iPhone has been collecting users' location information and storing the data since June 21, 2010.

Last Friday, The Wall Street Journal reported its security analysts had found that Apple's iPhone and smartphones running Google's Android operating system regularly transmit users' locations back to the two companies, which was part of their race to build databases capable of pinpointing people's locations via smartphones.

The newspaper reported on Sunday its analysts had also found iPhones were collecting and storing users' location data even when location services were turned off.

Google responded to the reports last Friday by saying that "all location sharing on Android is opt-in by the user."

"We provide users with notice and control over the collection, sharing and use of location in order to provide a better mobile experience on Android devices. Any location data that is sent back to Google location servers is anonymous and is not tied or traceable to a specific user," the company said in a statement.

Apple so far has refrained from commenting on the issue. Jobs reportedly responded to the matter Monday when replying to a reader email from MacRumors, a website aggregating Apple-related news.

"We don't track anyone. The info circulating around is false," the website quoted Jobs' email as saying.

Nissan recalls 196,000 SUVs on corrosion risk

DETROIT - Nissan Motor Co Ltd recalled nearly 196,000 older-model Pathfinder and Infiniti QX4 SUVs due to the chance that road salt and water could collect to cause a loss of steering, US safety regulators said.

Affected are 162,658 Pathfinders from model years 1996 to 2004 and 33,333 Infiniti QX4 SUVs from model years 1997 to 2003.

The recall affects Pathfinders and QX4s in 20 cold-weather US states where road salt is used to keep roads clear of snow and ice.

Road salt and melted snow can collect in the strut housing and may cause corrosion that could lead to difficulty in steering and even loss of steering, which could cause a crash, regulators said.

Nissan will inform customers of the recall be mid-May, and its dealers will inspect and fix the issue free of charge.

Efforts to reach Nissan were not immediately successful.