September 27, 2023

Trade Data From China Suggests More Stability

BEIJING — Surprisingly strong rebounds in China’s exports and imports in July offered some hope that the economy might be stabilizing, government data showed Thursday, after more than two years of slowing growth, although an imminent rebound still looks improbable.

Data from the Customs Administration showed exports had risen 5.1 percent in July from the same month last year. Analysts had expected a 3 percent rise. It was a sharp turnaround from June, when exports had declined for the first time in 17 months.

Exports to the United States rose at an annual rate of 5.3 percent and those to Europe were up 2.8 percent, as China’s two biggest markets posted their strongest gains since February. Shipments to Southeast Asia were also up.

Imports fared even better, with a 10.9 percent jump from a year earlier, more than five times what analysts had forecast. The surprising strength in imports left China with a smaller-than-expected trade surplus of $17.8 billion.

“July seems to reflect a return to a ‘normal,’ relatively uninspiring trend,” analysts from Moody’s said in a note. “In other words, while the worst seems to be over, the upturn will be relatively flat.” Exports in the three months ended July 31 posted the slowest annual increase since October 2009, a Reuters calculation showed.

Imports of crude oil and iron ore rebounded from multimonth lows to record highs last month, as more raw materials were shipped in to rebuild depleted stocks, and soybean purchases hit a record for a second month.

A steadying of the economy would be a relief to China’s leaders, who have scrambled to shore up growth in the past couple of months. There had been concerns that a sharp slowdown could derail their attempts to shift the economy to being driven more by consumption than debt-funded investment and manufacturing.

Asian stocks rebounded on the data on hopes that Chinese demand might have found a floor.

China’s trade performance has whipsawed this year after figures were inflated by companies reporting fake deals to disguise illicit cash transfers, and then subsequently deflated by the government as it quashed the fictitious transactions.

Analysts said the July data probably had minimal distortions, but some cautioned against concluding that the upbeat performance had been driven by an actual improvement in final demand.

Commodity imports rose sharply last month, with iron ore purchases jumping 17 percent from June. Some commodity analysts said July shipments may have been inflated by unprocessed deals from June.

“I would think it has something to do with the fact that the June number was low and there was some catch-up tonnage coming through,” said Graeme Train, analyst with Macquarie in Shanghai.

Soy imports also hit a record high for the second straight month, though again analysts said that was partly due to delayed shipments finally arriving from congested Brazilian ports.

Crude oil imports, on the other hand, were likely lifted by refiners replenishing stocks after a three-month lull and as some new refineries started business.

“The monthly data is very volatile. I wouldn’t read too much into it and say that domestic demand is strong,” said Zhang Zhiwei, an economist at Nomura in Hong Kong.

Exports to the United States rose an annual 5.3 percent and those to Europe were up 2.8 percent, as China’s two biggest markets posted their strongest gains since February. Shipments to southeast Asia were also up on the year.

With the United States economy showing signs of a gradual recovery, Ting Lu, an economist at Bank of America-Merrill Lynch, said Chinese exporters could benefit further in coming months.

The trade figures were seen as a positive sign for industrial output data on Friday, with economists expecting production to show an annual rise of 9 percent in July.

Fixed asset investment is forecast to have risen 20 percent in the first seven months of the year, in line with growth in the first six months, while inflation is forecast to have quickened to a five-month high of 2.8 percent.

Top leaders in Beijing have made clear they will accept a slowdown in growth as they restructure the Chinese economy, but have indicated that annual growth should not be allowed to slip below 7 percent.

The economy has slowed in nine of the past 10 quarters, but the government has stressed it is confident of meeting its 7.5 percent growth target this year — the lowest in 23 years.

Article source:

US Airways Reports Sharply Higher Profits

Fewer empty seats made the difference in the last three months as revenue set a record.

Airlines successfully raised fares five times last year but have struggled to do so lately. Two attempts led by United Airlines this month failed after other airlines did not match the increases. For US Airways, one measure of fares, called passenger yield, the average fare paid per mileage, declined slightly in the fourth quarter.

The US Airways president, Scott Kirby, noted that full planes and improved demand typically lead to fare increases. There were fewer empty seats in the final quarter of 2012 — occupancy rose 2 percentage points to 83.9 percent. January bookings are up 8 percent from a year ago, Mr. Kirby said.

“While it’s taking some time, I expect that this strong environment will lead to improving yields across the industry,” Mr. Kirby said in a conference call with analysts.

Even without higher fares, having more passengers increased US Airways profits. Revenue for each seat flown one mile — an important performance indicator for airlines — rose 2.2 percent. US Airways’ net income for the quarter was $37 million, or 22 cents a share, compared with $18 million, or 11 cents a share a year earlier. Excluding onetime items, net income was 26 cents per share, 7 cents higher than analyst forecasts, according to FactSet.

Revenue rose 3.9 percent compared with a year earlier, to $3.28 billon.

US Airways is in merger talks with American Airlines, but it did not discuss the topic on Wednesday, citing a nondisclosure agreement. American and its parent, the AMR Corporation, have been operating under bankruptcy protection since November 2011. Last week AMR reported a loss for the fourth quarter, excluding onetime items, of $88 million, an improvement of $121 million from a year earlier.

Article source:

Economic View: Fed Monetary Policy Drives Best at Higher Speeds

First, what has the Fed done recently? Until September, its bond-buying program was explicitly limited in size and duration. Fed policy makers then replaced it with an open-ended program, whose pace was to be determined by progress in healing the labor market. And they adopted simpler, more positive explanations for their actions — jettisoning the gloomy, expectations-killing language that cited wretched economic prospects to justify every expansionary move.

Then, in December, the Fed surprised markets by replacing its somewhat confusing predictions for interest rates with numerical guidelines. It said it would keep the rate it controls — the federal funds rate — near zero at least until the unemployment rate fell below 6.5 percent or inflation rose above 2.5 percent.

Under the circumstances, it was significant that the policy makers took these actions at all. The economic data that came out before the September meeting were actually better than expected. And, based on forecasts released after the meeting, members of the Fed’s policy-making committee were slightly more optimistic about prospects for employment and output growth than they had been three months before. That they nevertheless adopted a more expansionary policy can be read as an admission that they hadn’t been doing enough earlier.

The pledge to keep rates low, even if inflation edged above 2 percent, is particularly consequential. For the last several years, the Fed has acted as if 2 percent were not just a target but a ceiling that should never be breached. But coming out of a terrible recession, with unemployment excruciatingly high, a period of very rapid growth is needed to repair the damage — and it wouldn’t be surprising for such growth to push inflation a bit over 2 percent. A Fed acknowledgment that 2.5 percent inflation would be tolerable for a short while isn’t a sign that it has lost its commitment to price stability. Instead, it’s a strong statement that it is committed to ensuring a faster recovery.

The more positive language, along with the “we’ll do whatever it takes” approach to bond buying, seems designed to reassure Americans that conditions will improve. This, too, is important. With short-term rates close to zero, the Fed’s main tool is expectations management. If it can persuade people to expect more growth — and yes, a little more inflation — it may help encourage companies to stop sitting on cash and start investing again.

The new policies are improvements, but I don’t want to oversell them. As I suggested in a previous column, a more definitive policy shift — like adopting a new target for monetary policy — would likely have a greater impact on expectations and in stimulating the recovery.

And the new policy’s numerical parameters are too conservative. According to the Fed’s own assessments, normal unemployment over the longer run is well below 6.5 percent. If inflation remains low and unemployment gets down to 6.5 percent, there’s no reason to rush to raise interest rates.

The most pressing problem, though, is that the Fed’s commitment to its new policies appears shaky. Soon after the December meeting, some members of the policy-making committee spoke out against the action — killing some of the positive buzz created by the policy statement and by a spirited news conference by the Fed chairman, Ben S. Bernanke. Also, the minutes of the December meeting showed that some who had voted for the new guidance on the fed funds rate were skeptical about the complementary action on bond-buying.

No one of the Fed’s recent actions is particularly powerful on its own, but together they create a sense of aggressive expansion and commitment to recovery. If the Fed now stops some of them, giving the public a mixed message, the positive effect on expectations could easily evaporate.

So why has the Fed moved slowly, and why are some policy makers threatening to undo the recent actions? In a recent paper, Prof. David Romer of the University of California, Berkeley (my husband), and I found that pessimistic views about the effectiveness and costs of expansionary actions have played a major role in limiting Fed moves over the last few years. Policy makers worry that such actions will do little good and that they could cause inflation, distortions in financial markets and losses on the Fed’s portfolio.

I can’t say for sure that those views are wrong today. We just don’t have enough experience with situations like the current one to have conclusive evidence one way or the other.

But our paper shows that in two periods when the Fed made terrible errors, the same kinds of pessimistic views were present. Faced with the Great Depression of the early 1930s and the high inflation of the early and late 1970s, monetary policy makers did little because they were convinced that action would be ineffective.

Subsequent events proved both decisions wrong. In the 1930s, a propitious gold inflow allowed the administration of Franklin D. Roosevelt to conduct monetary expansion without the Fed. Real interest rates plummeted, expectations improved and investment spending and consumer purchases of durable goods took off — jump-starting the recovery. At the end of the 1970s, a new Fed chairman, Paul A. Volcker, concluded that monetary policy absolutely could reduce inflation, and he led the Fed to raise interest rates to historic highs. The recession that followed was painful, but inflation did come down — and it has been low ever since.

WHEN monetary policy makers meet again at the end of this month, they should keep these historical lessons in mind. At the very least, the Cassandras on the committee might want to reread the policy record from the 1930s. The degree to which some of them sound like their Depression-era counterparts might shock them — and give them pause.

The Fed’s new more aggressive policy shows every sign of being helpful, and there are no indications that the feared costs are materializing. So rather than trimming the policy before it can bear fruit, why not give it a chance?

Even better, why not give it some extra oomph? Rather than just continuing the bond-buying program, accelerate it somewhat. Instead of just reiterating the numerical guidelines on the funds rate, policy makers could follow the suggestion of Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, that they lower to 5.5 percent the unemployment level at which the Fed starts to consider raising interest rates. And if Mr. Bernanke wanted to be truly aggressive, he could broach the idea that in a weak economy, a strong dollar isn’t necessarily desirable.

The important thing is that hypothetical fears shouldn’t stop the Fed’s evolution. History is on the side of doing more, not standing on the sidelines.

Christina D. Romer is an economics professor at the University of California, Berkeley, and was the chairwoman of President Obama’s Council of Economic Advisers.

Article source:

Off the Charts: Industrial Production Sags, and Even Germany Is Affected

Figures reported this week showed that industrial production in the euro zone fell 2.5 percent in September from the previous month, the largest monthly decline since January 2009, during the worst part of the credit crisis. Production in Germany was off 2.1 percent.

Although the figures are seasonally adjusted, they can be volatile. But the longer-term trend was poor even before the September figures came in.

The accompanying charts show year-to-year changes in industrial production, using three-month moving averages to smooth out some volatility, among advanced economies as a group, in the euro zone and five major countries.

The Dutch government compiles industrial production figures from around the world. In August, the total for advanced economies was lower than it had been a year earlier, something that had not happened since 2009, although the three-month average, as shown in the chart, remained a little higher.

The September figures for some countries will not be out until the end of this month, but it seems likely they will show a drop as well.

“Germany has slowed because weak global demand, particularly for the major machinery that Germany exports, is creating lower demand for Germany’s exports,” wrote Greg Jensen of Bridgewater Associates, a hedge fund and advisory firm. He said German companies were accumulating large inventories and their profits were suffering.

There are exceptions to the world pattern. Chinese industrial production continues to rise at a rate of more than 9 percent a year. While that is down from last year, it remains good. On Friday, the Federal Reserve reported that industrial production in the United States slipped in October by 0.4 percent, the second decline in the last three months, although the Fed said it would have been close to unchanged but for the effects of Hurricane Sandy. The annual growth rate is down to less than 3 percent.

But the declines have spread to some developing countries. Brazil’s production is running about 3 percent below that of a year earlier, and Indian production is basically flat compared with a year earlier.

It is not clear how much of the weakness in industrial production represents a real weakening of demand and how much reflects inventory issues. During the credit crisis, production fell much more rapidly than final demand, as companies found it hard to get financing and worried that their customers would be unable to pay for what was being shipped. Much of the revival in 2010 reflected pent-up demand, and some of the current slowing may simply show that depleted inventories have been replenished.

But the declines also provide an indication of continuing problems, particularly in some of the European countries most in need of a growing economy.

Greece’s industrial production was never large to begin with, but it is now lower than at any time since the figures began to be compiled in 1995, and is down about a third from its peak, set back in 2000.

Italian production appeared to recover in line with that of other countries in 2010, but has since weakened appreciably. For much of this year, it has been down more than 6 percent from the previous year. Spain’s production has fallen almost as rapidly.

Floyd Norris comments on finance and the economy at

Article source:

Preoccupations: Volunteer Work as a Path to Full-Time Employment

After graduating from the University of Denver in June 2010, I thought that volunteering, in addition to being worthwhile in its own right, would give me a leg up in the frustrating job market. I was working at Starbucks, and my applications for other jobs were getting me nowhere.

In offering my time to the Firelight Foundation the next February, I hoped that I’d eventually be offered a job. Firelight helps grass-roots organizations in Africa improve the well-being of children, especially those suffering from the effects of H.I.V., AIDS and poverty in sub-Saharan Africa.

Firelight happens to be based in my hometown, but it was also a perfect match for my career goals. I’d been interested in Africa ever since my first-grade teacher gave a presentation on the subject. I still have a picture from that day that shows me holding an African shield and spear — and beaming. Africa also played a role in my choice of international studies as a major. During my senior year, I spent a semester in Uganda with a program that offered college credit.

I reduced my hours at Starbucks and gave two days a week to Firelight, helping with grant applications. Three months later, Firelight offered me a three-month temporary job that allowed me to become more involved in reviewing such applications. I hoped the contract would be extended and was disappointed when it wasn’t, so I decided to take some time off to help my sister with her wedding plans.

That time gave me an opportunity to reflect, and three weeks later I decided that I wanted to return to Firelight. I knew that there was no guarantee I’d get a permanent job there, but I thought the organization was such a good fit for me. I reasoned that even if I didn’t get a job, I was gaining experience in the field, and I was meeting people who might help me get a paid position elsewhere. And I still wanted to make an impact in the world beyond serving coffee. My heart has always been with Africa, so I couldn’t see myself not volunteering at Firelight.

The organization took me back and added some responsibilities in line with my future goals. For example, I helped with donor prospecting and research so I could learn about grant writing. Six months later, a program assistant moved on and I was offered her position, so my plan ultimately worked.

Now I’ve taken on even more responsibility. I work more closely with the organizations that receive our grants and work with us as partners, and I speak directly to the consultants with whom we contract for mentoring and training groups in Africa.

I have especially liked working with the Imvani Women’s Support Group in Malawi, which helped women establish a bakery in their village. The proceeds have allowed them to pay the staff, to send children to school and to reinvest in the business to open another bakery.

I’M not saying it’s an easy path from volunteer to full-time employee. It took me a year, which some job hunters might not see as a long time, but I had been out of school a year and a half by then. For me, one real benefit of volunteering was that it gave me an opportunity to build a relationship with the staff over time.

If you’re hoping to turn volunteering into a job, you have to be willing to sacrifice. I had to move home after college because I couldn’t afford an apartment on my Starbucks salary. I did what I had to do. When it seemed that things might not work out, I tried to keep a good outlook.

Since getting a full-time position, I’ve moved into an apartment. In my work, I now supervise Firelight volunteers. It felt weird to be a volunteer one day and to be supervising them the next. But since I’ve been in their position, I can give them hope.

As told to Patricia R. Olsen.

Article source:

Media Decoder Blog: Pandora Posts a Loss but Continues to Expand

A year after going public, the popular Internet radio service Pandora is still expanding rapidly, with growth in audience size and revenue. But Pandora Media, the company behind it, continues to post a loss, as its revenue has not kept up with music royalties and other costs.

Pandora, which lets users create free music streams tailored to their tastes, had $101.3 million in revenue for the three months that ended July 31, a 51 percent increase from the same period last year. That was slightly better than the $100.9 million that analysts had expected, according to Thomson Reuters.

Its results helped Pandora’s shares rise 9 percent in after-hours trading on Wednesday. The stock had closed at $10.08, down 1 percent for the day. The stock is down 37 percent from its opening price in July 2011.

Pandora now has 54.9 million listeners each month. In the last three months they listened to 3.3 billion hours of music, up 86 percent from last year.

Revenue related to use of the service on mobile phones — which counts advertising as well as some revenue from paid subscriptions — was up 86 percent to $59.2 million. A majority of the listening to Pandora is done on mobile phones, although the company has struggled to increase the amount of money it can make from mobile advertising.

“This quarter demonstrated that our mobile monetization strategies are working,” Joe Kennedy, the company’s chairman and chief executive, said in a statement.

But Pandora had a net loss of $5.4 million, or 3 cents a share, for the quarter, its sixth quarterly loss in two years. For the same period last year, the company lost $3.2 million, or 4 cents a share.

Pandora’s largest expense is music royalties, which increase with each listener. For the quarter, it paid $60.5 million, or slightly less than 60 percent of its revenue, in royalties to record labels, artists and music publishers. Its current fee structure is based on a negotiated discount to a rate set by federal statute. And although the next round of royalty negotiations is not expected to begin until 2014, Pandora has already begun lobbying in Washington over its rates.

To offset rising royalty costs, Pandora has been building up local advertising sales teams around the country, and also pushing to be included in ad networks that would put its service into direct competition with terrestrial radio stations.

After withdrawing from many foreign countries several years ago because of music licensing problems, it is now taking its first steps to return to overseas markets, starting with Australia and New Zealand. A regulatory filing last month suggested that Pandora is paying lower royalty rates there than it does in the United States.

“Our dream,” Mr. Kennedy said in a conference call with investors, “is to one day have billions of people listening to Pandora around the world.”

Article source:

EBay Reports Stronger Earnings

SAN FRANCISCO — EBay’s net income soared in the fourth quarter, in large part because of the sale of its remaining investment in Skype and continued success of PayPal.

But financial results released Wednesday by the company showed that eBay’s core retailing business, what it calls Marketplace, finally seems to be making the turnaround that John Donahoe, eBay’s chief executive, has been promising investors. Four years ago, he outlined a plan to revive the company’s marketplace business by investing in new technologies, freshening the Web site and recasting it as an online outlet mall rather than a flea market.

In the fourth quarter, its marketplace business pulled in $1.7 billion in revenue, a 16 percent jump from the same period a year ago and four times faster than the same quarter a year ago. “EBay’s results look workmanlike and impressive,” said Jordan Rohan, an analyst at Stifel Nicolaus.

“We’re gearing our whole company to help retailers in this new multichannel world. EBay marketplace is one part of that equation,” Mr. Donahoe said in an interview after the announcement. “But the simple fact is that more and more people are using our mobile payment systems.”

The payments unit, which consists almost entirely of PayPal, was responsible for more than 36 percent of the company’s fourth-quarter revenue — $1.24 billion — which grew 28 percent from the same period a year ago.

EBay said net income in the fourth quarter rose to $1.98 billion , or $1.51 a share, from $559 million, or 42 cents a share in the same quarter a year ago. Excluding Skype and other items such as stock-based compensation expenses, eBay reported profit of $788.6 million or 60 cents a share, for the three months ending Dec. 31.

The company said revenue climbed 35 percent to $3.4 billion from the same period in 2010. But income and revenue were higher than the consensus estimates of analysts.

EBay’s future growth will continue to depend on the success of PayPal, and particularly its new mobile payment business. Last year, the company projected that its mobile payment volume would hit $1.5 billion in 2011. It later increased that estimate to $3 billion, but Wednesday reported it was $4 billion for the year, more than five times its payment volume in 2010. The company now projects that mobile payment volume will reach $7 billion in 2012.

But the company’s earnings report comes on the heels of news this month that Scott Thompson, PayPal’s president, left the company to join Yahoo as its chief executive. Under Mr. Thompson’s leadership, PayPal more than doubled its user base and revenue. And Mr. Thompson’s departure came as eBay faces new competition in the mobile space. Mobile payment start-up Square, Google’s mobile payment product, Google Wallet, and Isis, a joint mobile payment venture by ATT, T-Mobile and Verizon, all recently entered the mobile payment space.

“Scott’s departure was a surprise,” Mr. Donahoe acknowledged in an earnings call. “But PayPal has never been stronger and PayPal leadership has never been stronger.”

Mr. Donahoe, who will serve as interim president, said he will worry about succession in February.

“The whole organization is really focused on our 2012 plan,” he said. “We won’t skip a beat.”

But the company advised investors that the current quarter’s results would be lower than analyst forecasts. For the current quarter, eBay said it expected revenue between $3.05 billion and $3.15 billion , slightly below analyst estimates of $3.18 billion. The company said that was because it plans to make investments this quarter in data centers and infrastructure for the year. For the full year, eBay said it expects revenue in the range of $13.7 billion to $14 billion , at or slightly higher than the $13.7 billion analysts have forecast.

Article source:

The Haggler: Korean Air and the Canceled Ticket

Q. In early September, I saw a good deal on a round-trip fare from San Francisco to Palau, in the South Pacific, on Korean Air. I booked two tickets for February — one for me, one for my girlfriend — for $510 apiece. In the weeks that followed, we booked hotels and planned activities, and I bought an underwater camera. We were looking forward to a great vacation.

But on Nov. 7 — a full 64 days after our initial reservations — Korean Air e-mailed to say that our tickets had been canceled.

“At the beginning of September, an erroneous fare was briefly published for travel on Korean Air from North America to Palau,” the e-mail read. “We regret to inform you that Korean Air is unable to honor this erroneous fare for travel and has canceled all tickets, including yours.”

 We were offered a refund for the tickets and other “travel related” expenses, as well as a $200 voucher to be used on Korean Air flights. It also offered to book the same seats at the best price for the itinerary in the past year. With that $200 voucher, this basically amounted to an added charge of about $360 a ticket, or a 70 percent increase. We think that Korean Air’s offer is inadequate. Quite simply, at the price it now wants us to pay, we would not have booked this trip. Meantime, we’ve passed up other options and Korean Air has had our money for three months.

What’s troubling is that this “mistake” fare was up on a travel site for at least four days. I know because we slept on it before booking, and over the next couple of days tried to persuade our friends to come with us. Then there’s this question: Why did it take Korean Air two months to figure out that it had posted an erroneous fare? The cynic in me thinks that Korean figured that the longer it waited to cancel our tickets, the more likely we’d be to cough up an additional $360.

Christopher Schneider

Austin, Tex.

A. The Haggler received a handful of e-mails that told essentially the same story, in the course of about three days. This seemed a strange coincidence until a bit of Googling revealed that an oddly named blog, “Leighrowan’s Posterous,” had posted a terrific tirade about this fare mix-up. It ended with a “media tool kit” that urged those affected to write mature but adamant letters: “Use spell-check, write clearly, use as few words as possible and make your point as quickly as possible.”

Oh, Leighrowan Posterous — that is poetry! Haggler correspondents, please memorize that sentence.

The Haggler’s e-mail address was one of several media contacts listed, which explained the sudden influx. Leighrowan speculated that “300+” people had been affected, though exactly how that number was derived was unclear. What is certain is that “the Palau 300” sounds better than “the Palau 300+.” Leighrowan, as well as others on different blogs, claimed that what Korean Air had done was A.) post a fare intended only for travel agents, and B.) totally bogus.

Several bloggers and commenters made the point that airlines charge hefty fees whenever passengers alter booked tickets. So “why should an airline be allowed to unilaterally cancel valid tickets because it’s no longer in their best interest to honor them?” asked Brian Kelly, who blogs as the Points Guy. “I understand this may be legally allowed via the contract of carriage that they created, but it still doesn’t make it right.”

The Haggler was soon e-mailing with Penny Pfaelzer, a publicist for Korean Air. She forwarded a response that basically outlined the offer that Mr. Schneider had detailed above. Plus this: “Korean Air’s ultimate goal is always customer satisfaction, and we have paid great attention to making sure our passengers are dealt with fairly. While we regret that the above arrangements might not be acceptable to everyone, it is our hope that they will be acceptable to most of our affected passengers.”

The Haggler then forwarded to Ms. Pfaelzer another e-mail from another member of the Palau 300, Spencer Fox. He unfavorably compared Korean Air’s response to that of British Airways when it found itself in a similar pickle in 2009. The company posted United States-to-India fares for $40, though only for a few minutes. When the fares lingered for two hours on a few travel Web sites, about 1,200 people pounced. British Airways quickly canceled the tickets and coughed up $300 vouchers for everyone. It later offered to cover travel-related costs, like cancellation fees.

It seems that Korean Air was working from the British Airways playbook, but as Mr. Fox noted, the Palau fare was not a self-evident error. Yes, $510 for a round-trip ticket to the South Pacific is very cheap, but not what you’d call obvious-error cheap. And Korean Air took far longer to cancel and make amends.

Let’s just say that none of Mr. Fox’s arguments moved the suits at Korean Air. Ms. Pfaelzer forwarded another e-mail stating that the company wouldn’t customize a solution for travelers who didn’t like the original offer.

 “The airline acknowledges that there will be passengers who will be unhappy with the outcome,” the e-mail said. “But it also feels it has done everything it can do create a fair and equitable solution.”

The deal on the table seemed, after this correspondence, like the company’s final offer. Until Mr. Schneider wrote last week to say that he’d recently called Korean Air and that it had quoted him a price that would cost him an additional $200, instead of an additional $360. He says he has still not decided whether to take the offer.

“Better, but not ideal,” he wrote.

E-mail: Keep it brief and family-friendly, and go easy on the caps-lock key. Letters may be edited for clarity and length.

Article source:

U.S. Trade Deficit Narrows, as Imports Fall


The United States trade deficit narrowed in October to its lowest point of the year as Americans bought fewer foreign cars and imported less oil. Exports of American-made autos also fell.

The Commerce Department said Friday that the trade deficit shrank 1.6 percent, to $43.5 billion. That’s down from September’s revised figure of $44.2 billion.

American exports slipped 0.8 percent, to $179.2 billion, the first drop after three months of gains. Shipments of industrial supplies, like natural gas, copper and chemicals, fell. Exports of autos and agricultural goods also dropped.

Imports fell 1 percent to $222.6 billion, reflecting a 5 percent decline in oil imports. The average price of imported oil fell for the fifth consecutive month to $98.84, the lowest since March.

A lower deficit can boost economic growth because it typically means foreign nations are buying more American goods. That can lead to more jobs and higher consumer spending, which fuels 70 percent of economic activity.

The deficit shrank every month in the July-September quarter, as exports grew. That contributed almost a half-point to the economy’s 2 percent annual growth rate in the quarter.

Rising consumer demand in the United States could push imports higher, particularly as the holiday shopping season gets under way. Retailers reported that shoppers got off to a robust start over the Thanksgiving holiday weekend. And consumer confidence rose sharply last month, though it is still below levels that are consistent with a healthy economy.

There are also signs hiring is picking up. The number of people seeking unemployment benefits last week fell to its lowest level in nine months. That suggests companies are more confident about the economy’s growth and are laying off fewer workers.

In October, Congress approved free-trade agreements with South Korea, Colombia and Panama, after four years without any new trade deals. The Obama administration says the three deals will boost United States exports by $13 billion a year.

The politically sensitive trade deficit with China narrowed in September after setting an all-time high in August. So far, it is on track to set a record as the highest imbalance the United States has ever recorded with a single country.


Article source:

Pandora Gains on Subscriptions and Mobile Ads

In its first quarterly earnings since going public, Pandora Media, the company behind the Internet radio service, reported increased revenue on Thursday, as well as growth in subscriptions and mobile advertising.

For the three months that ended July 31, its fiscal second quarter, Pandora reported $67 million in revenue, up 117 percent from the same period a year ago. That beat the expectations of most analysts, who had predicted $60 million to $61 million. It was the company’s sixth consecutive quarter of triple-digit growth in revenue, measured year-over-year.

Pandora posted a net loss of $1.8 million, or 4 cents a share.

Advertising was $58.3 million of Pandora’s revenue for the quarter. Ads for mobile devices, where the majority of the service’s listening takes place, represented about half that amount. It was the first time mobile ad revenue had reached that level, the company said, although it has not disclosed the ratio in the past.

Last month, Pandora said that more than 100 million users had signed up for the service, and in a conference call with analysts on Thursday, Steven M. Cakebread, the chief financial officer, said that 37 million users tuned in at least once a month. For the quarter, Pandora users listened to a total of 1.8 billion hours of music, up 125 percent over the same period last year.

The company’s greatest expense is “content acquisition,” or royalties paid to music companies, and for the quarter Pandora paid $33.7 million for content, about half of its revenue.

Pandora raised $235 million in its stock offering on June 15, with shares initially priced at $16. On Thursday, the stock closed at $12.47, up 40 cents, or 3.31 percent, for the day.

Article source: