Business and Finance

The operator of Japan’s tsunami-hit nuclear plant is making final preparations to launch a crucial system to treat highly radioactive water that has hampered efforts to achieve the primary goal to cool and stabilize the damaged reactors.

More than 100,000 tons of radioactive water have pooled across the Fukushima Dai-ichi power plant, and it could overflow within a couple of weeks if action is not taken.

Operator Tokyo Electric Power Co. said workers Thursday made final tests on a treatment system ahead of full operation planned for Friday. TEPCO plans to eventually reuse the water, some of it temporarily stored in tanks, as core coolant.

Three reactor cores melted after the March 11 tsunami knocked out power and destroyed critical cooling systems.

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Fed up with managed care and yearning to spend more time with patients, a small group of physicians in the St. Louis area are focusing their practices on personalized care

Inflation in Germany, Europe’s largest economy, accelerated more than initially estimated in April after energy costs surged.

The inflation rate, calculated using a harmonized European Union method, jumped to 2.7 percent from 2.3 percent in March, the Federal Statistics Office in Wiesbaden said today. That’s an upward revision from the first estimate of 2.6 percent on April 27. From March, consumer prices rose 0.3 percent, more than the 0.2 percent initially reported.

The price of crude oil rose above $113 a barrel in April, helping to drive euro-area inflation to 2.8 percent. The European Central Bank, which aims to keep inflation just below 2 percent, last month raised its benchmark interest rate for the first time in almost three years. With economic growth gathering speed, the ECB is concerned workers will demand compensation for higher food and energy costs, entrenching faster inflation.

“All the signs are that inflation risks are increasing,” Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt, told Bloomberg Television. “It’s a clear signal for the ECB to deliver a series of rate hikes.”

Wholesale prices rose 0.2 percent in April from March and 9.2 percent from a year earlier, the statistics office said in a separate release. Energy costs were the main driver of consumer- price inflation, with light heating oil up 26.7 percent in the year and fuel 12 percent more expensive.

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Wages in New Zealand rose in the first quarter at the slowest pace in nine months, signaling an easing of inflation pressures before a February earthquake disrupted hiring and hurt growth.

Wages for non-governmental workers excluding overtime increased 0.4 percent from the fourth quarter when they gained 0.6 percent, Statistics New Zealand’s labor cost index released in Wellington today showed. The median forecast in a Bloomberg News survey of five analysts was for a 0.6 percent advance.

Wage gains have been limited in the past two years with a jobless rate near an 11-year high, while economic growth was slowed by an earthquake Feb. 22 in Christchurch that killed more than 170 people. Central bank Governor Alan Bollard last week kept the official cash rate at a record-low 2.5 percent and said the level was appropriate “for some time” given the outlook for core inflation.

“The Reserve Bank will remain comfortable that temporarily higher headline consumer-price inflation will not spill into higher wages,” said Mark Smith, an economist at ANZ National Bank Ltd. in Wellington. “We are unlikely to see a broad-based pick up in wage growth until later this year.”

Currency Reaction

New Zealand’s dollar was little changed after the report. It bought 80.40 U.S. cents at 12:16 p.m. in Wellington from 80.60 cents immediately before the release.

The postal survey was based on wages prior to the temblor, the statistics agency said. The response rate from Christchurch was lower than usual, it said.

Annual wage growth accelerated to 2 percent from 1.9 percent in the year through December, today’s report showed. The central bank forecast wages to rise 2.2 percent for the year through March.

Consumer prices rose 4 cash advance flexible payments.5 percent in the year ended March 31 buoyed by a sales tax increase in October. Excluding the higher tax, inflation was 2.6 percent in the year and much of that reflected food and fuel price rises, according to a government report on April 18.

Economic growth may be as slow as 1 percent in 2011, the Treasury Department said in a report yesterday. Twelve of 17 economists surveyed by Bloomberg predicted the cash rate will be unchanged until 2012. Four forecast the first increase in the fourth quarter and one expected a third-quarter move.

The jobless rate probably fell to 6.7 percent in the first quarter from 6.8 percent in the final three months of 2010, according to a Bloomberg survey of nine economists ahead of a May 5 government report. The rate reached a 10-year high of 7 percent in late 2009.

Hourly Earnings

Average ordinary-time hourly earnings for non-governmental workers rose 0.3 percent in the quarter, the statistics agency said in its quarterly employment survey, also published today.

Demand for labor was steady in the first quarter, the survey also showed. The number of full-time equivalent employees rose 0.3 percent from the fourth quarter as full-time work in manufacturing and construction increased, while part-time jobs declined, led by retailing and hospitality.

Filled jobs fell 0.7 percent from the fourth quarter, led by a seasonal drop in education positions, the statistics agency said. Filled jobs dropped 0.2 percent from the year-earlier quarter.

Total weekly paid hours rose 0.7 percent from the fourth quarter, the report showed.

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Manufacturing in the U.S. unexpectedly accelerated in January at the fastest pace in more than six years, reinforcing forecasts the economic recovery will strengthen in 2011.

The Institute for Supply Management’s factory index rose to 60.8, exceeding the most optimistic forecast in a Bloomberg News survey of economists and the highest level since May 2004, figures from the Tempe, Arizona-based group showed today. Readings greater than 50 signal growth.

Stocks rose, extending a global rally, as factory reports from China to Europe bolstered the outlook for American companies like Caterpillar Inc. The ISM’s employment gauge climbed to the highest level since 1973, indicating manufacturers may be more willing to hire as sales pick up.

“Businesses have figured out the economic recovery has legs so they’re growing more confident about expanding production and new orders and increasing hiring,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Manufacturing is making a very decent contribution to growth.”

The Standard & Poor’s 500 Index gained for the seventh day in the last eight, rising 1.7 percent to 1,307.59 at the 4 p.m. close in New York. The yield on the benchmark 10-year note increased to 3.44 percent from 3.37 percent late yesterday.

Estimates for the factory index in the Bloomberg survey of 78 economists ranged from 56 to 59.5.

Figures from the Commerce Department showed housing remains the economy’s weakest link. Construction spending in December fell 2.5 percent, the biggest drop since July, bringing the value of all projects to the lowest level in a decade.

Europe and China

Manufacturing in the U.K. grew at a record pace last month, while industry also expanded in China. The U.K. gauge, based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply, climbed to 62 in January from 58.7 a month earlier.

A reading of 52.9 for a purchasing managers’ index released by China’s logistics federation on its website exceeded the 50 level dividing expansion and contraction. A measure from HSBC Holdings Plc and Markit Economics rose to 54.5 in January.

The ISM’s measure of new orders, jumped in January to 67.8, the highest since January 2004. The employment gauge increased to 61.7 from 58.9 in the prior month.

The jobs data “sets us up for a good number for January payrolls,” Silvia said. Economists project a 10,000 increase in factory employment last month, according to the median forecast in a Bloomberg survey before the Labor Department’s Feb payday loans in 1 hour. 4 report. All payrolls may have climbed 140,000.

‘Stronger Every Day’

General Electric Co. last month posted its third straight quarter of profit growth, beating analysts’ estimates, driven by a rebound in its finance unit, health-care and transportation divisions.

“The environment continues to improve,” Jeffrey Immelt, GE’s chief executive officer, said on a Jan. 21 conference call. “The economy can get a little bit stronger every day.”

Caterpillar, the world’s largest maker of construction equipment, posted fourth-quarter profit that topped analysts’ estimates as sales advanced in China, Australia and Latin America.

The Peoria, Illinois-based company last week said sales climbed 62 percent to $12.8 billion from the year-ago quarter. The company said 2011 sales will exceed $50 billion, compared with $42.59 billion in 2010.

‘More Positive’

“Over the past quarter, we’ve become somewhat more positive about economic growth in the developed economies of North America, Europe, and Japan,” Mike DeWalt, director of investor relations at Caterpillar, said on a Jan. 27 teleconference. “And we’re now expecting the U.S. economy to grow about 3.5 percent in 2011.”

Manufacturing, which accounts for about 11 percent of the economy, led the recovery from the recession as businesses rebuilt stockpiles slashed during the slump. Rising exports have also spurred output.

Further gains may come from a pickup in consumer spending, which accounts for about 70 percent of the U.S. economy. Household purchases rose at a 4.4 percent pace in the fourth quarter, the fastest since the first three months of 2006, while the economy grew at a 3.2 percent rate, the Commerce Department reported last week.

Economists last month boosted forecasts for growth this year, reflecting a pickup in consumer spending and passage of an $858 billion bill extending tax cuts for two years. The legislation also continued emergency unemployment insurance benefits through 2011, trimmed payroll taxes and included accelerated tax depreciation for equipment purchases.

Auto dealers are also seeing improved demand. Car sales in December rose to a 12.53 million unit pace, the highest since the government’s cash-for-clunkers program in August 2009, according to industry data.

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Taiwan’s top smartphone maker HTC said Friday its fourth-quarter earnings more than doubled from a year earlier amid strong demand in global markets.

Net profit for the October-December quarter surged to New Taiwan dollars 14.59 billion ($500 million), up 160 percent from a year earlier, and a 31 percent increase from the third quarter, the company said in a statement.

Unconsolidated revenue totaled NT$104 billion in the final quarter, up from NT$41.07 billion the year before.

HTC experienced fast business growth last year on the strength of its design and production of the first handset based on Google Inc.’s Android operating system.

HTC shipped 24.6 million handsets in total last year, up 111 percent from 2009. First quarter sales are expected to reach 8.5 million handsets this year, officials said.

It’s 4th-generation smartphone _ launched late last year _ will be marketed by U.S. carriers Verizon and AT&T, officials said.

Peter Chou, HTC chief executive, said the company began building its brand awareness globally in 2009 to seize on last year’s “explosive growth” in smartphone demand.

To meet expected double-digit world market growth in 2011, Chou said HTC will double its monthly capacity in its Shanghai factory to 2 million handsets and will consider outsourcing if that becomes necessary.

Chou also said that HTC will branch out into tablet computers, but declined to give details.

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Of all the efforts to grow our region’s economy, none looms larger than The Big Idea.

That’s what business leaders call their bid to lure Chinese cargo flights

Irish Finance Minister Brian Lenihan won the backing of lawmakers in the first votes on his 6 billion-euro budget ($8 billion) to tackle what he called the “worst crisis in our history.”

Lawmakers late yesterday passed an initial series of votes on the budget in parliament in Dublin. Lenihan said the spending and tax plan for 2011 was the first step to get Ireland “back firmly on our own feet.”

The government is under pressure to pass the legislation to secure an 85 billion-euro bailout as the fiscal squeeze threatens to prolong a slump that has seen the economy shrink 11 percent over the past three years. The budget, the fourth since October 2008, adds to austerity measures of about 14 billion euros as the government seeks to reduce the country’s deficit.

“The Irish situation is pretty drastic,” Charles Dumas, research director at London-based Lombard Street Research Ltd., said in a Bloomberg Television interview. “They won’t get the deficit improvement they’re hoping for because they are hammering the economy.”

Lenihan said he’ll cut the salaries of government ministers by 10,000 euros and cap state salaries at 250,000 euros. Internet gambling will be taxed and child benefit payments will be cut by 10 euros per child.

Under the budget changes, a married couple with two children earning a combined 92,000 euros will lose 2,830 euros a year, or 4 percent of their income. A single person earning 52,000 euros loses 1,295 euros, also 4 percent of their income.

‘Everybody Pays’

“Over the next four years, further reductions in social welfare spending are unavoidable if we are to reduce the budget deficit,” Lenihan said in his budget speech to lawmakers. “Everybody pays, and those who can pay most, will pay most.”

The government faces at least three more votes, including a separate ballot on welfare cuts before the budget is approved.

Irish bonds were little changed in London today. They have risen in the past week, narrowing the yield premium over German bunds, Europe’s benchmark, to 507 basis points as of 7:48 a.m., the lowest in a month. The premium reached a euro-era record 680 basis points on Nov. 30.

Ireland agreed on the aid package with the European Union and the International Monetary Fund on Nov. 28 after borrowing costs soared on investor concern the cost of rescuing lenders including Anglo Irish Bank Corp. would overwhelm the state. About 35 billion euros is earmarked for the banks, which pushes the potential cost of rescuing lenders to as much as 83 billion euros, more than half the size of the economy.

‘Real Problem’

“Since Ireland’s real problem is one of excessive bank debt, and is a sovereign problem only in so far as the government has guaranteed the banks, tightening the squeeze on the electorate will not resolve the underlying issues,” said Peter Dixon, an economist at Commerzbank in London. “We have not heard the last of Ireland’s fiscal woes.”

The government sees the deficit falling below the EU limit of 3 percent of gross domestic product in 2014 from about 12 percent this year, according to budget documents. Including the cost of the bank rescue, the deficit will amount to 32 percent of GDP this year. The debt-to-GDP ratio will rise to 103 percent in 2013 before starting to decline, the documents show.

Cowen has said he will hold elections as early as February, once he’s secured support for the budget. He said he will lead the party into the election, even as opinion polls show his Fianna Fail party is set to lose power after 14 years.

Fine Gael and Labor will probably form the next government, according to the polls. Both parties have said they’ll seek to re-open the aid deal that Ireland agreed with the EU and IMF.

The budget “needed to have credibility,” said Eoin Fahy, an economist at Kleinwort Benson Investors in Dublin. “It seems to have met that objective although the banking system and the political system remain the great unknowns.”

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The unemployment rate in North Dakota is 3.7 percent, and “if it wasn’t for cable news, we probably wouldn’t have any idea that the rest of the country was any different,” said Doug Johnson, co-owner of crop insurer TCI Insurance in West Fargo, who added six new employees this year.

As businesses across the U.S. struggle to recover from the deepest recession since World War II and the national jobless rate remains stuck at 9.6 percent, Johnson has benefited from his location in the northern Great Plains, where a boom in commodities, such as wheat and soybeans, is helping to create jobs, lift farmers’ incomes and fuel demand for goods ranging from Deere & Co. tractors and Agco Corp. combines to dinners at local restaurants.

The agricultural Midwest — particularly North and South Dakota, Kansas and Nebraska — has been leading the U.S. economic recovery as its banks, businesses and households avoided the worst of the housing bubble’s collapse and the financial crisis that followed. Now the region is getting a further boost from record exports of commodities, driven by demand in China and Russia and a declining dollar. U.S. farm shipments next year may surpass the 2008 record of $115.3 billion, Joe Glauber, the U.S. Department of Agriculture’s chief economist, said last month.

“This has been the brightest spot in the U.S. economy throughout the recession, the only part of the country that has held up reasonably well,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The rise in commodities prices has been a very significant tailwind for the entire region,” as strong demand worldwide drives sales of products, including agricultural equipment, financial services and fertilizer.

“It goes beyond the farm itself,” Zandi said.

‘Pretty Optimistic’

Ray Gaesser, 58, who grows soybeans and corn near Corning, Iowa, says he installed new drying and grain-handling equipment this month and may buy tractors, combines or planters next year.

“We are in a cycle that is good for agriculture right now,” he said. “We are pretty optimistic.”

North Dakota and two other states in the region had the lowest unemployment rates in the U.S. during September, with South Dakota at 4.4 percent and Nebraska at 4.6 percent. These are also the three states with the largest share of gross domestic product from agriculture: 10.9 percent for North Dakota, 9.4 percent for South Dakota and 6.8 percent for Nebraska, according to data from the Bureau of Economic Analysis.

Job Creation

North Dakota and Nebraska will help lead the nation in job creation next year, according to Moody’s, which estimates their nonfarm payrolls will grow by 1.53 percent and 1.35 percent, the third and seventh best rates in the country.

“Obviously the economy in North Dakota did not put a stop to our plans” for expansion, said Johnson, who now employs 23 people at his crop-insurance company.

Farmers have done “extraordinarily well,” Ann Duignan, an analyst at JPMorgan Chase & Co. in New York, said in an interview. “With high commodities and low inputs, you’re looking at significant margins and that means a big splurge of spending into the yearend.”

Duignan recommended farm-equipment manufacturers Agco, Deere and CNH Global NV in a Nov. 9 report to clients. Moline, Illinois-based Deere, the world’s largest maker of farm machinery, is “the No. 1 brand of choice in the crop segment” and best positioned to benefit from the strength in U.S. agriculture, she said. “They’re the ones who are making the money.”

Rising Earnings

Deere reported a 47 percent jump in fiscal third-quarter earnings on Aug. 18 as net income climbed to $617 million, beating analysts’ estimates. The company earned about 65 percent of its revenue and 80 percent of its operating income from the U.S. and Canada in 2009, according to data compiled by Bloomberg.

CNH, an Amsterdam-based unit of Italian automaker Fiat SpA that makes Case and New Holland farm equipment, got 43 percent of its revenue from the U.S. and Canada, while North America accounted for 22 percent of Duluth, Georgia-based Agco’s revenue.

“We’re setting up for a very interesting 2011,” Duignan said. “Overall it’s going to be a good year for farmers.”

Agriculture fared better than other sectors of the U.S. economy during the recession, as an expanding world population and growth in emerging economies supported demand for crops. China was a net importer of corn last year for the first time since 1996, even as its government sold state-owned inventories.

Declining Dollar

The U.S. dollar has declined 7.3 percent in the second half of the year as food prices surged after cold in China, drought in Russia and parts of Europe, and flooding in Canada damaged harvests. The spot price of corn has gained 46 percent since July 1, wheat is up 28 percent and soybeans have risen 25 percent, according to the USDA. The S&P GSCI Agriculture Index added 41 percent, compared with the 17 percent advance in the broader S&P GSCI Index of 24 commodities.

Farmland values also are rising. Land prices in some areas of the Federal Reserve Bank of Kansas City’s district — which includes Kansas, Nebraska, Wyoming and parts of Missouri — increased as much as 12 percent in the third quarter from a year earlier, the biggest jump since the fourth quarter of 2008, the Fed bank said Nov. 12.

That may be prompting some speculation, as people see land as “an inflation hedge,” Thomas Hoenig, the bank’s president, said Oct. 25 in a speech in Lawrence, Kansas. Buyers are thinking “you can’t go wrong with land,” he cautioned. “I don’t want to see that.”

Farm Incomes

Farm incomes climbed this year to $77.1 billion, 19 percent higher than the 2000-2009 average of $64.8 billion, the USDA forecast in August.

The increase “is absolutely very important to the broader economy,” said Ernie Goss, a professor of economics at Creighton University in Omaha, who conducts monthly surveys of Midwestern banks and supply managers. “Truck sales are up because farmers are buying trucks. That benefits local auto dealerships. And that creates spending money at the local Pizza Hut.”

While agriculture accounts for 1 percent of the more than $14 trillion U.S. economy, its impact may be 10 times greater when related businesses such as farm supplies, grain handling and food making are included, Jason Henderson, an economist at the Kansas City Fed, said in an October interview.

Other parts of the country are still lagging behind farming areas, according to Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago.

Industrial Midwest

While “the agricultural side of the Midwest is doing well,” the plains states “are very, very different than the industrial Midwest,” she said.

Unemployment in Michigan is 13 percent, the second highest after Nevada at 14.4 percent. The jobless rate in the Detroit metro area has stalled above 13 percent for 21 months.

Consumers in farming areas are in the best shape, according to an index of financial distress that includes credit, housing, and employment compiled by Atlanta-based CredAbility, which provides nonprofit credit counseling. Four of the five states with the most favorable conditions in the third quarter were North Dakota, South Dakota, Nebraska and Wyoming.

That coincides with the Fed districts that had the lowest unemployment rates in September: 7.2 percent for Kansas City and 6.2 percent for the Minneapolis district, which includes the Dakotas.

Fewer Loan Extensions

With incomes climbing, farm-credit conditions improved in the third quarter, according to a report from the Kansas City Fed. More district bankers noted higher loan-repayment rates and fewer loan renewals and extensions, the bank said. Average farm- loan interest rates fell to 6.7 percent, the lowest since the survey began in 1976, and collateral requirements eased.

“The housing debacle and morass was not nearly as significant in this part of the country,” Goss said. “The banking problems were not nearly as great. There was irrational exuberance on the East and West coasts; that was not here.”

Baker Implement Co., a 150-employee farm-equipment dealer in Kennett, Missouri, has hired six or seven employees in the past two years and may add a similar number during the next year, said President Paul Combs, 45. His business sells tractors, combines, cotton pickers, sprayers, planters and hay equipment.

“We are in a boom” as farmers “put money back into our communities,” he said. “To the extent the agriculture sector does well, though it is a small part of the economy, it is a big part of our economy down here.”

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A new gaming center founded by a service-disabled veteran will open on Oct. 16 in Albuquerque.

Ares Wargames is at 3301 Menaul NE and is the brainchild of Sean Scott. It’s a hybrid computer and retail store, as well as social experience with themed events on a weekly basis. There also will be a regular group that meets to talk animation and anime.

Scott was at West Point, after graduating from Eldorado High School in Albuquerque, when he was struck by lightning during a conditioning drill. He was pronounced dead on the operating table, but was revived.

He suffered severe burns over half his body and the loss of an eardrum, but he recuperated enough to graduate and was sent to active duty in the Korean Demilitarized Zone and to Germany, before his honorable discharge in 2004.

After returning to Albuquerque and working, Scott went to the Department of Veterans Services to get help starting a business.

The Ares Wargames facility is about 4,000 square feet and has free Wi-Fi. It has more than 260 games for sale, including interactive music games, competitive fighting games, sports and franchise games.

Sundays and Wednesdays are set aside for gamers who want to play Battletech. Tuesdays are for those interested in graphic novels and anime. On Fridays, the theme is magic. On Saturdays it’s fantasy and the Flames of War league. And Mondays are set aside for Monday Night Football – on multiple screens.

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