The Federal Reserve sent its clearest signal to date Wednesday that it will keep interest rates super-low to support the U.S. economy even after the job market has improved.
The Fed said it plans to keep its key short-term rate near zero until the unemployment rate reaches 6.5 percent or less — as long as inflation remains tame. The unemployment rate is now at 7.7 percent.
That plan adds detail to what the Fed said before. It expects to keep interest rates low until at least mid-2015. It's the first time the Fed is making it clear to investors and consumers that it will link its actions to specific economic markers.
US economy could withstand brief fall off 'cliff'
It's the scenario that's been spooking employers and investors and slowing the U.S. economy: Congress and the White House fail to strike a budget deal by New Year's Day. Their stalemate triggers sharp tax increases and spending cuts. Those measures shrink consumer spending, stifle job growth, topple stock prices and push the economy off a "fiscal cliff" and into recession.
The reality may be a lot less bleak.
Even if New Year's passed with no deal, few businesses or consumers would likely panic as long as an agreement seemed likely soon. And tax increases and spending cuts could be rolled back after Jan. 1.
The impact of tax increases would be felt only gradually. Most people would receive slightly less money in each paycheck, if payroll tax cuts vanish.
Small businesses already slipping off the 'cliff'
Going over the fiscal cliff could have a range of negative ramifications for small businesses.
If people have to pay higher taxes, they will likely spend less. Businesses will hold off on hiring or making investments that could help them expand. Federal budget cuts will put billions in government contracts in jeopardy.
Economists and lawmakers warn that without an agreement, the U.S. could slip back into a recession. And they say that small businesses have the most to lose.
American Airlines rolls out new fare structure
American Airlines is changing the way it charges you to fly.
American will charge up to $88 more per round trip for passengers who want a basic ticket that includes checking baggage or changing a reservation. Currently the airline levies separate fees for those and other extras for everyone except premium passengers.
American says the new fare structure is a response to customer complaints about fees for changing reservations. American will still sell a basic fare without protection against add-on fees for the "passenger who is just looking for the cheapest way to get to where they've got to go."
Your drink: now the most pleasant part of flying
Airlines have found a way to take the edge off the stress of flying and make a few extra bucks along the way with fancy new cocktails, craft beers and elegant wines.
The drinks advertised in the back of in-flight magazines — or on sleek seatback touchscreens — are starting to resemble those at the hottest nightclubs.
Flying isn't what it used to be. Long lines, ever-changing security rules and limited overhead bin space have all made traveling much more stressful. It's no wonder many passengers look for a little escape. Airlines — who created much of this anxiety — are happy to oblige.
Most Googled in 2012: Whitney, PSY, Sandy
The world's attention wavered between the tragic and the silly in 2012. Along the way, millions of people searched the Web to find out about a royal princess, the latest iPad, and a record-breaking skydiver.
Whitney Houston was the "top trending" search of the year, according to a Google report. People searched for news about Houston's accidental drowning in a bathtub in February.
Korean rapper PSY's "Gangnam Style" music video trotted into second spot. The video is approaching a billion views on YouTube.
Superstorm Sandy, which knocked out power and flooded parts of the East Coast in the midst of a U.S. presidential campaign, was third.
US budget deficit reaches $172B in November
The federal government's budget deficit widened in November compared to October, a sign that the nation is on a path to its fifth straight $1 trillion-plus deficit.
The budget gap rose to $172 billion in November, up from $120 billion in October, the Treasury Department said Wednesday. The November deficit was also 25 percent higher than the same month last year.
The government finished the 2012 budget year with a deficit of $1.1 trillion. President Barack Obama and Congress are under pressure to curb the deficit as part of a budget deal to prevent tax increases and deep spending cuts from kicking in Jan. 1.
Facebook poised to roll out more privacy controls
Facebook is trying to make its privacy controls easier to find and understand in an effort to turn the world's largest social network in to a more discreet place.
The most visible, and perhaps most appreciated, change will be a new "privacy shortcuts" section that appears as a tiny lock on the right-hand side at the top of people's news feeds. This feature offers a drop-down box where users can get answers to common questions such as "Who can see my stuff?"
Other updates will include a tool that enables individuals to review all the publicly available pictures identifying them on Facebook and suggestions on how to request that an embarrassing or unflattering photograph be removed.
Facebook also plans to plant a privacy education page at the top of its users' news feeds within the next month or so to help them better manage their online identities.
Avon to cut 4 percent of jobs in global restructuring
Avon Products plans to cut about 1,500 jobs and exit two Asian markets, as the struggling beauty products seller begins a broad restructuring plan in an effort to turn around results.
The job cuts amount to almost 4 percent of its workforce and mark one of the first major moves by CEO Sheri McCoy. McCoy was brought on in April to replace longtime CEO Andrea Jung at Avon, a direct seller of beauty products like Skin So Soft lotion and Mark cosmetics.
Avon said the job cuts span all regions and functions. The 1,500 cuts include 100 employees in Vietnam and South Korea, which Avon will exit entirely.
Avon said in November that it would embark on a plan to save $400 million in three years.
By The Associated Press(equals)
The Dow Jones industrial average fell 2.99, or 0.02 percent, to 13,245.45. The S&P 500 rose 0.64 point, or 0.04 percent, to 1,428.48.The Nasdaq composite index fell 8.49 or 0.3 percent, to 3,013.81
Benchmark crude rose 98 cents to close at $86.77 a barrel in New York. Brent crude, used to price international varieties of oil, rose $1.33 to $108.02.
Heating oil rose 4 cents to $2.97 a gallon. Natural gas fell 3 cents to $3.38 per 1,000 cubic feet. Wholesale gasoline rose 4 cents to $2.65 a gallon.