U.S. budget deficit rose in December
The federal budget deficit increased in December and for the third month is running ahead of last year's pace. The deficit totaled $14.4 billion in December, the Treasury Department reported Wednesday. That compares to a small surplus of $1.9 billion in December 2014. For the first three months of this budget year, the deficit stood at $215.5 billion, an increase of 22 percent over the same period a year ago. For the entire year, private economists are forecasting a slight improvement from last year's deficit of $438.9 billion, which had been the lowest annual deficit in eight years. Continued gains in employment are expected to boost federal tax receipts.
Survey: Economy expands, wages stay flat
The U.S. economy expanded across most of the country in the past six weeks as the job market showed strength that is failing to stoke broad wage pressures, a Federal Reserve survey showed. The central bank's Beige Book economic survey, which is based on reports from late November to early January by regional Fed banks, showed that two of the 12 Fed districts posted "moderate" growth and seven described the expansion as "modest." Boston contacts were described as "upbeat," while the New York and Kansas City Fed districts reported "essentially flat" economic activity. The report released Wednesday in Washington underscores the challenge facing Fed policymakers heading into their meeting later this month: The labor market is strengthening without triggering signs of higher wages or inflation more broadly.
GM boosts 2016 outlook, hikes dividend
General Motors said Wednesday it will not only earn a bigger profit this year than previously expected, but it also will boost a stock repurchase program from $5 billion to $9 billion and raise its quarterly dividend from 36 to 38 cents per share. The automaker's top executives — Chief Executive Mary Barra, President Dan Ammann and Chief Financial Officer Chuck Stevens — presented their 2016 outlook at the Deutsche Bank auto industry conference in Detroit. Specifically, they indicated GM expects to earn between $5.25 and $5.75 per share this year, up from previous guidance of between $5.00 and $5.50 per share. Expanding the share repurchase program by $4 billion comes about 10 months after the first $5 billion was initiated in response to pressure from a group of four hedge funds who argued that GM's shares were undervalued. Since the start of that program GM has bought back $3.5 billion of its own shares.
GoPro's tough quarter leads to more cuts
Wearable camera maker GoPro said it will eliminate about 100 jobs after its fourth-quarter sales fell far short of its expectations. GoPro said fourth-quarter revenue was $435 million instead of the $500 million to $550 million it forecast in October. The company lowered the price of its new Hero4 Session camera after it said it made the product too expensive. That reduced its fourth-quarter revenue by $21 million. The San Mateo, Calif., company had around 1,500 employees at the end of 2015 after hiring more than 500 people that year. It is cutting 7 percent of its jobs, or around 100 positions. GoPro Inc. has dropped 71 percent in the past 12 months and finished at $14.61 Wednesday. The stock fell 28 percent in aftermarket trading.
SoundCloud reaches a deal with Universal
SoundCloud, a streaming music platform that has become home to garage bands and other artists who don't mind releasing tracks online for free, said Wednesday that it had reached a licensing deal with Universal Music Group. The deal opens up opportunities for Universal artists like Lana Del Rey and Imagine Dragons to share revenue from a new subscription platform SoundCloud is rolling out later this year. SoundCloud, with 175 million monthly listeners, signed Warner Music Group in late 2014 shortly after beginning to place some ads on its platform. Only invited artists are entitled to share ad revenue. As yet, SoundCloud has not signed the last of the three majors, Sony Music Entertainment.
Limo involved in fatal fire recalled
A specialty-car manufacturer is recalling the limousine model involved in a 2013 fire that killed five nurses on a San Francisco Bay-area bridge. Accubuilt is recalling about 1,000 limousines manufactured between Jan. 2, 1998, and July 21, 2005, because a rubbing drive shaft may increase the risk of fire. It's unclear if the recall is a result of the California fire in a 1999 Lincoln Town Car limo. A representative of the Lima, Ohio-based company did not return a call for comment Wednesday. The California Highway Patrol said the blaze broke out on the San Mateo-Hayward Bridge because of a catastrophic failure of the rear suspension system.