'Slow Crawl' to Prosperity as Jobs Growth 'Dives'

Will Sequester Take a Bite Out of Restaurants' Business?Fred Deluca, Subway founder & CEO, explains how government cuts could impact consumer spending, jobs and the economy.

"It's continuously gotten worse because there's more and more regulation. And it's tough for people to get into business, especially small business," he said. "If I started Subway today, Subway would not exist."

(Read More: Subway 'Wouldn't Exist' If Started Today Due to Regulations: Founder Deluca)

'Little Reason to Hire'

While Main Street has remained under pressure, corporate profits broadly have been rising, and the stock market has reached new highs—making some small-business owners feel even more isolated.

"Once again, our bifurcated economy may have large firms doing well but the Main Street owners not sharing in the gains and finding little reason to take on new employees. Owners are still pessimistic and see little reason to hire," NFIB's Dunkelberg said.

In a separate Labor Department report Thursday on weekly jobless claims, Americans filing new claims for unemployment benefits rose to its highest level in four months last week, again suggesting the labor market recovery lost some steam in March. (Read More: Weekly Jobless Claims Get Weaker as Outlook Dims)

America's Long-Term Unemployed

"For millions of America's workers, the economic recovery remains more theoretical than real," Christine Owens, executive director of the National Employment Law Project, said in a statement.

An unprecedented 4 in 10 jobless workers—nearly 5 million people—have been out of work for 27 weeks—nearly six months—or longer, pushing the average duration of unemployment up to 37 weeks, nearly 16 weeks longer than during the worst of the 1980s downturn, according to the law project's data.

Bottom line: As the recovery tries to gain traction, there may be only modest support from new Main Street jobs—a traditional driver of past recoveries.

(Read More: Little Main St. Hiring, Despite Uptick in Optimism)

—By CNBC's Heesun Wee; Follow her on Twitter @heesunwee

View the original article here

Australian Sunshine Illuminates The Path Toward Massive Solar PV Growth

Global solar insolation average. Notice bright red oval on lower right. (Credit Mines ParisTech/Armines 2006)

Australia is climate change’s canary in a coal mine. It has been suffering heat waves, floods, and wildfires in a climate-fueled “angry summer” that demonstrates how critical reducing carbon emissions really is.

Australians are finding ways to use the sun’s energy to reduce fossil fuel consumption. According to a new report, Australia’s solar photovoltaic market could reach 10 gigawatts in five years:

The Australian solar PV market could tip the 10,000 mewagatt (10 gigawatt) mark as early as 2017, and could reach the “saturation” levels for owner-occupied houses in many areas in coming years, according to a new report.

The five-year forecast prepared by leading market analysts Sunwiz and Solar Business Services says that the Australian solar PV market – currently at 2.5GW – will likely grow to between 6GW and 10GW by 2017.

The actual outcome will depend on the speed of the growth in the largely untapped commercial sector, the pace of large, utility-scale solar farms, and the industry’s ability to penetrate more challenging parts of the residential sector.

That “saturation rate” has already been achieved in some areas of the owner-occupied residential sector — reaching 90 percent in some localities. Nationally, the average penetration rate is 20 percent. Adding apartment buildings into the mix, this share drops to 10 percent, and it is this rental market that offers the most promise for growth in solar installations.

You can see the prime driver of solar PV installation in Australia here:

(Credit reneweconomy.com.au)

The residential market has been, and will continue to be, the main force behind Australia harnessing the sun to power its homes and businesses. Rooftop solar photovoltaic is reshaping peak electricity demand curves, especially during the summer months (the last three months in the Southern Hemisphere). When Australians need electricity the most, solar panels on their roofs are supplying it. Over the last five years, midday electricity demand is down 15% despite higher nighttime demand.

What this means is that rooftop solar PV is reducing overall electricity demand by 3%. There is so much room to grow: As of November, more than 800,000 rooftops across the country hosted solar PV – out of eight million total. For illustration, here’s the most calming video about Australian solar rooftop leasing programs you will ever see:

Solar PV is also getting cheaper, with the price dropping a third in less than a year and a half. The concern going forward is that the easy installations have already happened, rebates are harder to obtain, and the price reductions have slowed.

The growth of the industry as a whole depends upon the participation of the commercial sector, which could reach 350 megawatts next year. If utilities impose higher standing charges, the report’s authors note that this will impact the growth of the commercial sector:

The entire electricity market is at the cusp of a radical evolution which will change the fundamental dynamics of energy generation, ownership, profit structure, competition and pricing — and the role of solar is highly significant.… This issue could be a major stumbling block — or opportunity — for our market, echoing international trends and issues.

New solar and wind power in Australia are cheaper than fossil fuels – even without a price on carbon. Michael Liebreich, chief executive of Bloomberg New Energy Finance puts it succinctly: “The perception that fossil fuels are cheap and renewables are expensive is now out of date.”

Globally, solar PV demand is set to increase from 29 gigawatts last year to 31 gigawatts in 2013. This is largely due to increasing demand from Asia and falling prices for solar PV systems, and despite decreasing demand from Europe, which has faced reduced subsidies. This skyrocketing demand has made prices drop. A report by Clean Edge released this week found that falling prices led to the first PV market contraction in more than 12 years, though installations expanded:

Solar photovoltaics (including modules, system components, and installation) decreased from a record $91.6 billion in 2011 to $79.7 billion in 2012 as continued growth in annual capacity additions was not enough to offset falling PV prices. While total market revenues fell 19 percent – the first PV market contraction in Clean Energy Trends’ 12-year history – global installations expanded to a record of 30.9 GW in 2012, up from 29.6 GW the prior year.

It’s an interesting time in the solar PV world, and homeowners in Australia are leading the way.

jQuery(document).ready(function(){jQuery('#comment_submit').click(function(){if(jQuery('#comment_check:checked').length

View the original article here

Slower Growth of Health Costs Eases US Deficit

A sharp and surprisingly persistent slowdown in the growth of health care costs is helping to narrow the federal deficit, leaving budget experts trying to figure out whether the trend will last and how much the slower growth could help alleviate the country's long-term fiscal problems.

In figures released last week, the Congressional Budget Office said it had erased hundreds of billions of dollars in projected spending on Medicare and Medicaid. The budget office now projects that spending on those two programs in 2020 will be about $200 billion, or 15 percent, less than it projected three years ago. New data also show overall health care spending growth continuing at the lowest rate in decades for a fourth consecutive year.

Health experts say they do not yet fully understand what is driving the lower spending trajectory. But there is a growing consensus that changes in how doctors and hospitals deliver health care — as opposed to merely a weak economy — are playing a role. Still, experts sharply disagree on where spending might be in future years, a question with major ramifications for the federal deficit, family budgets and the overall economy.

Part of the slowdown stems from "the recession and the loss of income and wealth" causing people to cut back on health care, Douglas W. Elmendorf, the director of the Congressional Budget Office, said last week. But he added that a "significant part" of the slowdown "probably arises from structural changes in the health care system."

Some insurers have moved away from simply paying per procedure by giving health care providers financial incentives to reduce complications and rehospitalizations, for instance. Doctors, nurses and hospitals have also taken steps to reduce wasteful treatments. Many of the changes predate the 2010 health care overhaul, but the law has also contributed to the changes by offering some financial incentives, health care experts say.

Even if slower growth persists, the cost of health care poses one of the greatest threats to the country's fiscal health. It threatens to consume a larger proportion of the overall budget, meaning larger deficits, cuts to other programs, higher taxes or some combination of the three. Remaining on a lower cost trajectory would reduce the pressure on Democrats and Republicans seeking to put the country on a sounder fiscal path.

"We're not going from unsustainable to sustainable," said Jared Bernstein of the Center on Budget and Policy Priorities, a liberal-leaning research group in Washington. "Even if the recent changes persist, we're not done in terms of achieving sustainability in health care cost growth, but we have more time to figure out what's working without hacking away at social insurance," added Mr. Bernstein, a former economic adviser to Vice President Joseph R. Biden Jr.

View the original article here

Regulatory reform necessary for economic growth

By Former Sen. Blanche Lincoln (D-Ark.) and Dan Danner, president and CEO, National Federation of Independent Business - 02/11/13 02:30 PM ET

As we survey the horizon and consider the issues that lawmakers today are faced with, the natural conclusion is that the 113th Congress will be another challenging period for our political leaders.

Eleventh-hour deal-cutting, once a rare occurrence, is now standard operating procedure for a broken legislative process. This new regular order of brinksmanship provides little in the way of certainty to job creators; instead, it guarantees that just a few months down the road, Congress will once again return to dramatic 11th bickering, posturing and legislative clashes.

Unfortunately, even the most successful fiscal compromise is no match for the long-term recuperative impact of substantive economic growth on our nation’s budget and deficit issues.

No partisan divide exists when it comes to the question of whether lawmakers should pursue policy that facilitates growth. And one of the surest paths to facilitating growth – and encouraging the stability that investors and job creators need to build that growth – is to reform our arcane and inefficient regulatory system.

Inefficient, redundant and excessive regulations have had a pronounced destabilizing effect on job growth and recovery. The system is grossly outdated, and it is laden with too many regulations that were put in place and long ago forgotten.
Despite this, a tidal wave of new rules are being advanced.  Since Election Day alone, Washington has issued over 800 new rules – that is over 8 new regulations daily.
Unfortunately, many of these proposed new regulations aren’t fully thought through and poorly structured. According to a recent George Washington University and Washington University analysis, in 2012 there were 283,615 full-time government employees dedicated to drafting and enforcing regulations, while fewer than 50 employees at the Office of Management and Budget were responsible for reviewing the new regulatory mandates to ensure they are justified and accurate prior to implementation.
It should not surprise anyone, then, that employers large and small are choosing not to invest, expand and hire because of the uncertainty surrounding the current regulatory system.

Additionally, NFIB’s January Small Business Economic Trends report shows red tape to be the second most important issue facing small business owners today; while a recent NAM NFIB Poll found that two-thirds of respondents say economic uncertainty in the market makes it hard for them to grow and hire more workers causing economic stagnation.

And while sweeping last-minute deals like the one passed as a solution to the fiscal cliff generate headlines, rapidly shifting, unpredictable promulgation of regulations represent a destabilizing factor that have hung over our economy for decades.

Fortunately, the goal of modernizing and improving this system is both politically attainable and broadly supported by the public.

In order to better meet the goals of both preserving and protecting safety and the environment and stabilizing the economic landscape, our regulatory system should be adapted for the 21st Century and seek to be efficient, accountable, and fair:
· Improved risk assessment, for instance, would ensure that the best available scientific data was at the heart of every regulatory push.
· Commonsense cost-benefit analysis can and should be incorporated into the rulemaking process so that regulations strike the right balance between the benefits they bring to society and he costs they impose.
· Regulatory reform should also include an honest and transparent peer review process that ensures objective experts have the ability to shape rules before they are enshrined into law.
· Every rule should be subjected to ongoing review – through the courts and Congressional oversight – in order to ensure that the system functions in a way that is responsive to both needed improvements.
· Federal agencies should prioritize compliance over enforcement and place greater emphasis on promoting compliance than they do on issuing harsh penalties, particularly on small businesses.

?Reforms that meet these goals are within reach.
Political theater, no matter how compelling, will not fix what ails our economy. Growth, driven by small businesses around the nation, will necessarily be the engine that carries our economy beyond the periodic fiscal catastrophes that have defined our recent experience. ??Washington can help spur economic growth today by putting in place a regulatory system that not only allows, but also encourages, a new economic expansion.
Lincoln, a former Democratic Senator from Arkansas, chairs the Small Businesses for Sensible Regulations Coalition. Danner is president and CEO of the National Federation of Independent Business, the nation's leading small business association.

View Comments

View the original article here

Glaxo Expects a Shot of Growth in 2013: CEO

Witty's predicting mid-single-digit declines in 2013, with that already factored into Glaxo's forecast for earnings per share growth of 3 to 4 percent.

Glaxo is also accelerating its "change program" to cut costs. "There are really two major areas of focus of this change program," the CEO said. "One is to make sure we right size our European pharmaceutical business in response to the pricing pressure we've seen from European governments."

The other, Witty said, is to change the company's technology platforms to reduce manufacturing costs, improve the the carbon footprint, cut inventories, and improve cycle time.

The drug company's product pipeline is also filling up, with six new products under regulatory review. Glaxo expects to launch around 15 new products globally over the next three years, according to the company's earnings report. It is also aiming to improve its research and development returns to around 14 percent over the long term.

(Read More: Drug Pipelines Begin to Fill for Big Pharma)

Glaxo is considering selling its sports drinks business as well, but told CNBC that it has no plans to follow some rivals like Pfizer and transform into a less-diversified company. Last week, Pfizer's animal health subsidiary Zoetis raised $2.2 billion in its initial public offering.

Witty said there are strong synergies binding Glaxo's three key divisions — pharmaceuticals, vaccines, and consumer health.

The company's emerging market pharma and consumer business are also strong, Witty said, and now account for about 40 percent of the entire group.

"We are a big believer in bound together synergistic businesses," the CEO said, "We are against diversification for the sake of it."

View the original article here

UPDATE 2-Roche flags further growth as new drugs deliver

* 2012 sales up 7 pct, core earnings up 11 pct

* To pay 7.35 Sfr per share dividend for 2012

* Some investors had speculated about special dividend

* Shares fall 1.3 percent, underperform sector

BASEL, Jan 30 (Reuters) - Swiss drugmaker Roche forecast a rise in sales and profits this year, helped by new cancer medicines it hopes will shield it from the patent expiries ravaging many rivals.

Roche, the world's largest maker of cancer drugs, said on Wednesday it hoped sales would grow in line with 2012, when they rose 7 percent to 45.5 billion Swiss francs ($49 billion).

The Basel-based group also said it was aiming for core earnings, up 11 percent in 2012, to increase ahead of sales.

That assessment was more upbeat than cross-town rival Novartis, which last week guided for a fall in profit in 2013 as it grapples with competition from cheaper copies of its top-selling product.

Roche has been spared the pain from a wave of patent expiries hitting many rivals, as most of its medicines do not face imminent generic competition.

It also has high hopes for new treatments like skin cancer drug Zelboraf and breast cancer medicine Perjeta, and some analysts predicted its guidance for 2013 would prove cautious.

"In our opinion, sales in 2013 should pick up more strongly; we see the guidance as conservative as usual," said ZKB analyst Michael Nawrath.

Roche proposed a dividend of 7.35 francs per share, compared with 6.80 francs a year ago, and pledged to keep hiking shareholder payouts.

This wasn't enough for some investors, though, who had speculated the group might pay a special dividend.

Roche Chief Executive Severin Schwan dismissed this, pointing out the group's net debt to assets ratio of 16 percent was still above its 0-15 percent target range.

At 0900 GMT, shares in Roche, which have gained 9.5 percent so far this year, were down 1.3 percent at 198.8 francs compared with a 0.1 percent weaker European healthcare index.

The group said 2012 core earnings per share reached 13.62 francs, in line with analyst forecasts, helped by cost cutting and sales of its three biggest-selling cancer medicines - Rituxan, Herceptin and Avastin.

DEFEND AND GROW

Some analysts have raised concerns about the loss of market exclusivity on chemotherapy drug Xeloda at the end of 2013 and possible competition for hepatitis C drug Pegasys from other oral treatments, which they say could drag on Roche's medium-term growth.

However, the group is developing follow-on medicines to try and fend off anticipated competition from so-called biosimilar copies of its cancer drugs.

Sales of Perjeta, a treatment for women with a particularly aggressive form of breast cancer, were 56 million francs so far, up from 26 million in the third quarter.

Perjeta is a follow-on to Roche's current second-biggest seller Herceptin and part of its strategy to develop new drugs to extend the longevity of its best-selling brands. It won approval from U.S. regulators in June.

U.S. regulators are expected to decide on Feb. 26 whether to approve another new breast cancer drug called T-DM1, which Roche hopes will be used in combination with Perjeta, giving further protection against the biosimilar threat.

"We do not only believe that we will defend the franchise, we believe that with those two important new medicines we will actually grow the franchise in the medium to long term," Schwan told journalists in Basel.

Roche is hoping to duplicate this defence strategy with GA101 - a treatment for chronic lymphocytic leukaemia which it bills as a better product than its original Rituxan.

Key data due later this year will provide clues as to whether Roche will be able to convince doctors to move patients to GA101 from Rituxan, which had sales of 6.7 billion francs in 2012 but loses patent protection in Europe at the end of 2013.

View the original article here

Actavis, formerly Watson, sees 2013 profit growth

Jan 25 (Reuters) - Actavis Inc, the generic drugmaker previously known as Watson Pharmaceuticals, said on Friday that it expected earnings to rise at least 30 percent in 2013 as it expands globally, but its outlook still came in short of analysts' expectations.

Actavis said it expected earnings to rise to a range of $7.70 to $8.10 per share in 2013. Analysts on average are expecting $8.20 per share, according to Thomson Reuters I/B/E/S.

The third-largest global generic drugmaker changed its name this week from Watson after buying Actavis as part of its strategy to expand in international markets and offer more specialty drugs.

The company, which is holding a meeting with investors on Friday, said it expected 2012 earnings per share to be at the high end of its forecast range of $5.85 to $5.95.

That is in line with analysts' expectations for earnings of $5.93 per share, according to Thomson Reuters I/B/E/S, and represents growth of 25 percent from 2011.

View the original article here

Actavis predicts 2013 profit growth short of St.

PARSIPPANY, N.J. -- Generic drug developer Actavis Inc., formerly named Watson Pharmaceuticals, predicted profit growth for 2013 that was short of Wall Street's expectations.

The Parsippany, N.J., company changed its name to Actavis after buying Swiss drugmaker Actavis Group for about $5.6 billion in October.

Actavis' financial outlook for 2012 was in line with market predictions. The newly combined company said Friday before its investor meeting in New York that it expects 2012 adjusted earnings to be at the high end of a previously forecast range of $5.85 to $5.95, with revenue growing 29 percent to $5.9 billion.

Analysts polled by FactSet expect profit of $5.93 per share on revenue of $5.89 billion.

But its 2013 profit estimate fell short. For this year, Actavis predicted adjusted earnings of between $7.70 and $8.10 per share on about $8.1 billion in revenue.

Analysts expected profit of $8.19 per share on $8.09 billion in revenue.

As part of the name change, the company's New York Stock Exchange ticker symbol switched to "ACT" from "WPI."

The shares, which were inactive in premarket trading Friday, have gained 50 percent in the last 12 months.

View the original article here

Optimer shares rise on Dificid sales growth

NEW YORK -- Shares of Optimer Pharmaceuticals Inc. jumped 10 percent Monday after the drug developer said its fourth-quarter sales of a key drug rose 14 percent from third-quarter levels.

THE SPARK: Optimer said fourth-quarter U.S. and Canadian gross product sales of the antibacterial drug Dificid totaled $21.3 million. For the full year, gross product sales totaled $74.4 million, up from $24.4 million the year before. The drug launched in July 2011.

THE BIG PICTURE: Dificid is a treatment for Clostridium difficile, an infection that usually affects older patients and can cause symptoms ranging from diarrhea to potentially life-threatening inflammation of the colon.

The Food and Drug Administration approved the drug in May 2011. It's also approved in Europe and is sold through a partnership with Japanese drugmaker Astellas Pharma.

In October, the company announced plans to cut the price of Dificid for hospitals by 25 percent. The company said Dificid is effective but hospitals have been deterred from using the drug because of its high cost, and the price cut will help its sales.

Optimer said Monday that increased the wholesale acquisition cost of the drug by about 5.6 percent, effective Jan. 3. But it added that for hospitals, which already receive the 25 percent discount, the price increase will be offset through an additional discount, keeping the net price the same.

The company also said Monday that it will launch a co-pay assistance program for commercially insured patients that will provide up to $200 toward a patient's out of pocket cost for one prescription of up to 20 tablets per calendar year.

THE SHARES: Up 96 cents, or 10 percent, to $10.21 in afternoon trading, after peaking at $10.28 earlier in the day. Over the past 52 weeks, the company's shares have traded between $8.64 and $16.49.

During 2012, Optimer shares lost about 26 percent of their value.

View the original article here

State Spending Not The Path to Growth

I wanted to bring to your attention a short report released by The Buckeye Institute for Public Policy Solutions (full disclosure: I am the president) focused on state spending burdens and their connection, or lack thereof, to economic growth.

Adam Schwiebert, The Diehl Family Fellow at the Buckeye Institute, put together a short policy brief that uses a measurement know as “state spending burden” – comparing combined state and local government spending as a percentage of private sector Gross Domestic Product (GDP) – to look at the connection between spending and growth.  The resulting chart, shown below, highlights that Ohio has a higher level of spending than growth states like Texas, South Dakota and Colorado.

For what Paul Harvey would have called the “rest of the story” keep reading.

You can probably guess where this is headed: States that spend heavily, such as Ohio and Michigan, have not witnessed the strong economic growth that lower spending states have experienced.

Allow me to quote rather extensively from the report:

Spending burdens rise for two reasons: Either the private-sector economy decreases relative to government spending or government spending exceeds private sector growth. Both are true for Ohio.

Over the past two decades, government spending in Ohio has grown far faster than private sector growth. From 1990 to 2009, Ohio state spending outpaced inflation by 41 percent. During that same time, per capita income growth in Ohio averaged only 3.4 percent, tying for 6th lowest in the nation. The end result was a spending burden that grew from 20.74 percent of Ohio’s private-sector economy in 1992 to 26.30 percent in 2009.

Ohio is not alone. Michigan spent heavily over the past two decades and achieved underwhelming economic results. Like Ohio, its spending burden exceeded the national average and reached nearly 27 percent of its private-sector economy by 2009. When government spending grows faster than its tax base, it becomes more burdensome to job creation and only further stifles economic growth.

Other states have followed a different, more prosperous course. Texas, South Dakota, and Colorado are three states that have done a far better job at limiting government spending to the growth rate of the private sector. As a result, the spending burdens for each of these states is at or below 20 percent of their private-sector economies. Despite these restrained spending levels, economic growth has flourished in these states over the past two decades. Per capita income growth averaged 4.0, 4.6, and 4.0 percent in Texas, South Dakota and Colorado, respectively, from 1992 to 2009—far outpacing the anemic growth of Ohio and Michigan.

Chart?  Chart:

The takeaway?  More spending does not equal more growth.  Ohio and Michigan have spent more and yet seen less economic growth and prosperity.  Growth states in contrast have been able to restrain spending and reap the rewards.

This is particular worth highlighting because just as the economy is showing signs of life the calls for more spending are growing in the states.  But states like Ohio and Michigan simply can’t afford to return to the status quo of run away government spending and economic stagnation.

Instead, they must lead the way by relentlessly pursuing structural reforms and holding fast to fiscal discipline.  Only by keeping government limited and focused on its core components can states give the private sector the space it needs to grow and for communities to thrive.

View the original article here