St. Louis Federal Reserve President James Bullard said on Friday the U.S. economy appears to be gaining momentum that will make further Fed purchases of bonds unnecessary.
“The economic news and economic data, including today’s data, has been surprising to the upside,” Bullard said in a Bloomberg News interview. “I need to see significant deterioration in the economy and some threat of deflation or inflation moving significantly below our inflation target before I would consider more” central bank stimulus, or quantitative easing, he said.
The government earlier in the day said employers added 243,000 jobs in January and that the jobless rate dipped to 8.3 percent, a three-year low.
Bullard, who does not have a vote on the Fed’s policy-setting Federal Open Market Committee this year, is seen as a policy centrist.
The Fed last month said it would likely hold interest rates at rock bottom levels until late 2014. Fed Chairman Ben Bernanke was cautious about recent improvement in the U.S. economy and left the door open to new bond purchases to boost growth.
The Fed cut rates to near zero more than three years ago and has bought $2.3 trillion worth of bonds to spur economic activity.
Bullard said economic conditions are different now than when the Fed launched its last bond buying initiative in late 2010. At that time, inflation was so low policymakers were concerned the economy was at risk of tipping into a dangerous deflationary spiral, but that is not now the case, Bullard said.
“Inflation is coming down but at least for now it is above our inflation target” of 2 percent, he said. “We will see how things develop. But I am also more bullish on the economy as a whole. I do think we have momentum coming out of 2011.”
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Brooke Gray could be either of two things: an insufficiently educated opportunist, trying to pass herself off as an equine dentist, or a young woman dedicated to horses, performing an age-old practice for an honest wage.
A circuit court judge recently said the former. Her attorney, a St. Louis-based litigator with a history of challenging the government’s licensing power, says the latter — and believes the judge’s ruling could limit everyone from cattle hands to dog groomers.
A Clinton County Circuit Court judge ruled in December that Gray had to stop a practice called “teeth floating” after the Missouri Veterinary Medical Board, which oversees veterinary licenses in the state, sued Gray because she does not have a veterinary license.
Her attorney plans to appeal the ruling, saying that Gray is merely practicing something that unlicensed lay people have done for hundreds of years.
“Up until 15 years ago no one in Missouri considered these animal husbandry practices veterinary medicine,” said Gray’s attorney, David Roland, who helms the libertarian Missouri Freedom Center. “That’s how animal agriculture has always been done.”
Roland calls Gray’s case “the tip of the iceberg” and says it could have ramifications for anyone who wants to perform “basic animal husbandry” without a license.
But state law, veterinarian groups and the board say veterinary practices are regulated for a reason: to protect animals and their owners from untrained, unskilled workers. They say the practice of teeth floating, which often requires sedation, should be done either by, or under the supervision, of a licensed veterinarian.
“The public seems to think the licensing board is there to protect veterinarians,” said Bruce Whittle, chair of the equine committee for the Missouri Veterinary Medical Association, the group that represents the state’s vets. “It’s to protect the public against veterinarians that are doing harm.”
Gray, who lives north of Kansas City, grew up on an Iowa farm and always wanted to work with horses. So, about eight years ago, she got two months of training at an equine dentistry school in Idaho, then moved to Missouri and opened B & B Equine Dentistry.
She built a steady clientele floating horses teeth, which involves filing down the sharp points that emerge on the enamel. Sharp edges can make it difficult for the horse to eat. Her customers, she says, liked her work.
“I’ve never had a complaint from a client,” Gray said.
She did, however, get a complaint filed against her from a local Clay County vet, David Leighr, whose clients told him that Gray was improperly sedating horses and, in some cases, extracting teeth. Under state law, sedation by anyone other than an owner or licensed vet is illegal, while extraction is a surgical practice, which makes it a veterinary practice, and therefore also illegal for someone to perform without a license.
“One of my clients told me that Brooke had sedated an animal and hit a vein,” Leighr said. “Brooke also had them sign a piece of paper that said she was not responsible for anything that happens. A vet doesn’t do that. That raised a red flag with me.”
When asked if she had extracted teeth, Gray said: “I’ve taken some things out of horses mouths that didn’t belong there.” When asked if she had sedated horses, she said: “I’ve been informed not to say anything about the sedation issue.”
Leighr called the board, and eventually, it began to pursue the matter.
After sending two cease-and-desist letters, the board sued Gray to make her stop. She didn’t. So in September, the matter went to trial.
Roland says he believes the board pursued the case on behalf of veterinarians who felt they were in danger of losing income to untrained teeth floaters, not because they were concerned about animal welfare.
“One of the quirks of the law is that it’s not illegal to do the work on the animals,” he explained. “But if they get paid for it, it’s a criminal offense. So this is not a health issue.”
Several states, he said, have recently changed laws to allow teeth floating by nonvets, and he’ll push for Missouri to do the same.
He also points to a number of cease-and-desist letters sent by the board aimed at stopping everything from branding to pet grooming practices. These, he says, are evidence the state is trying to regulate practices that should not require licensing.
“This is an issue that’s been gaining momentum for a couple of years,” he said.
Gray believes the board is merely requiring a costly education — vet school runs an average of $150,000 — for something she specifically trained to do.
But veterinarians, including Leighr — a fourth-generation vet who said news coverage of the issue in his practice area had cost him business — maintain this issue centers on animal welfare and training.
“Her attorney is trying to convince the public that lay professionals have been doing this for years and that it’s safe,” he said. “I don’t think it’s safe. … And the fact that’s she’s using sedation and there’s no oversight makes it even less safe.”
“I went to school for eight years,” Leighr added. “I’ll put my records out there all the way back to high school, and I challenge her to do the same.”
Gray said she would continue floating teeth, only under the supervision of vets, until the appeal is resolved. That, Leighr insisted, is all he’s wanted all along.
“I said to her: ‘You can do this all day long by having a vet present,’” he said. “Missouri is full of vets retiring every day. They’d be tickled to death to get in the truck with you and go on a farm call.”
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Corn traders are bullish for a fifth consecutive week on speculation that dry weather in South America is damaging crops, boosting demand for U.S. supplies at a time when stockpiles are predicted to shrink to a 16-year low.
Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world
The number of Americans filing for first-time unemployment benefits took an upswing just before Christmas.
About 381,000 people filed initial jobless claims in the week ended Dec. 24, the Labor Department said Thursday. That was more than economists had expected and marked an increase of 15,000 from the prior week, when claims had fallen to their lowest level since April 2008.
The Labor Department adjusts the figures to account for seasonal trends, but still, the holidays can sometimes distort the numbers slightly. Economists look to the four-week average to smooth out volatility. In the latest report, that number decreased to 375,000, its lowest level since mid-2008.
"Around the holidays, initial claims tend to be volatile, so I think we don’t have to read too much into the small rebound today," said Aichi Amemiya, an economist with Nomura cheap pay day loans. "We believe the labor market continues to improve."
Meanwhile, continuing claims — which include Americans filing for their second week of claims or more — increased 34,000 to 3,601,000 in the week ended Dec. 17, the most recent data available.
Investors seemed to shrug off the numbers, optimistic that next week’s monthly jobs report will show employers ramped up their hiring slightly in December.
Economists surveyed by Briefing.com predict the report will show employers added 150,000 jobs in December, up from 120,000 the month before. The unemployment rate, however, is expected to rise from 8.6% to 8.7%, as discouraged workers re-enter the labor force to look for jobs again.
Brazil’s second largest airline says it has agreed to sell a minority stake in the company to Delta Air Lines.
GOL Linhas Aereas Inteligentes SA says in a regulatory filing with the Brazilian Securities and Exchange Commission on Wednesday that Delta Air Lines Inc. will pay $100 million for a “strategic minority interest” of GOL’s preferred shares.
Gol says the investment will be in the form of American Depositary Shares.
In February, Atlanta-based Delta and Gol entered into a code-sharing agreement that enable Delta to sell seats on 56 GOL flights between Rio de Janeiro or Brasilia and 15 Brazilian destinations.
(This version CORRECTS airline as Delta Air Lines)
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A tax cut that reaches 160 million Americans and government aid for the long-term unemployed will expire at the end of the year _ sucking $165 billion out of the economy next year _ unless Congress takes action.
Economists hoped the so-called congressional supercommittee would decide whether to extend both measures. But the committee couldn’t even agree on how to reach its main goal, cutting $1.2 trillion from the federal budget deficit.
If the tax cut goes away, the average family would pay about $1,000 more in taxes next year, the equivalent of an extra tank of gas every two weeks. Someone earning $100,000 would pay $2,000 more.
And if long-term unemployment benefits are allowed to expire, about 6 million people would lose weekly checks averaging about $300. For most of the long-term unemployed, that is their main source of income.
“There’s an awful lot of uncertainty ahead,” said Michael Hanson, senior U.S. economist at Bank of America Merrill Lynch.
Both changes would leave Americans with an estimated $165 billion less to spend. The Federal Reserve expects the economy to grow only 2.7 percent next year, and economists say the expiration of the two programs could reduce growth by a full percentage point.
The government said Tuesday that the economy grew at a 2 percent rate in July, August and September, down from earlier estimates of 2.5 percent.
To bring unemployment down significantly, the economy has to grow more than twice as fast as it grew this summer.
Congress could extend the tax cut and unemployment benefits when it returns from Thanksgiving recess next week. But the same partisan philosophical differences that sank the supercommittee could complicate the debate.
At the same time, Congress may be unwilling to force what is essentially a tax increase on tens of millions of Americans just as an election year begins.
Both measures were part of a deal struck in December 2010 by President Barack Obama and Republicans in Congress.
The cut applies to the tax that pays for Social Security. The tax applies to the first $106,800 a person makes in a year. The deal lowered the rate paid by individuals to 4.2 percent from 6.2 percent for this year. Companies also pay a 6.2 rate on their payroll.
Some Republicans have indicated they could support extending the tax cut, but there would almost certainly be a fight over how to pay for it. Without spending cuts or other tax increases, renewing the Social Security tax cut would swell the deficit cash advance in one hour.
Obama, as part of his jobs bill in September, Obama proposed lowering the rate further, to 3.1 percent, and cutting the employer portion to 3.1 percent up to the first $5 million on their payrolls.
Cuts at that level would pump almost $250 billion more into the economy compared with last year, when individuals and employers both paid the 6.2 percent rate.
Obama, speaking Tuesday in New Hampshire, urged Republicans to continue the tax break.
“Don’t be a Grinch,” the president said. “Don’t vote to raise taxes on working Americans during the holidays.”
On Monday, White House press secretary Jay Carney suggested that renewing or deepening the tax cut could be paid for by raising taxes on the wealthy. Republicans have refused to consider doing so.
Most states provide up to 26 weeks of unemployment benefits. The deal extended benefits to up to 99 weeks in states with the highest unemployment rates.
Unless that is renewed, almost 2.2 million people out of work will lose benefits by the first week in February. About 6 million people would lose weekly benefits by the end of the year.
Just the uncertainty of not knowing what Congress will do could cause businesses to hold back on hiring and investment, and therefore drag down economic growth, Hanson said.
Most economists would like to see lower budget deficits, but most would like the government to reduce the deficit gradually, to avoid hurting the weak economy. And they would all prefer robust economic growth to solve the problem.
The supercommittee’s failure triggers $1 trillion in automatic cuts in government spending beginning in 2013. Congress could undo them, but then credit rating agencies might downgrade the government’s long-term debt, as Standard & Poor’s did in August.
An even bigger hurdle looms at the end of 2012. That’s when the tax cuts passed during the Bush administration are set to expire. Losing those tax cuts would cost taxpayers up to an additional $4 trillion over 10 years.
Combined, all those factors would reduce growth in 2013 by between 1.5 and 3.5 percentage points, Douglas Elmendorf, director of the Congressional Budget Office, estimated last week.
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