U.S. consumer in the slow lane (Reuters)

(Reuters) ? It's up to the consumer to drive the U.S. economy and lift world growth in 2012, and the outlook is far from encouraging.

Over the past three and half years, growth in U.S. consumer spending has averaged a paltry 0.2 percent adjusted for inflation, the weakest in the post-World War II period, Morgan Stanley says.

While the employment picture is gradually brightening, wage growth is going in the opposite direction, keeping a lid on consumer behavior. Over the past year, pay for blue-collar workers adjusted for inflation fell 12 cents from the previous year, according to the Bureau of Labor Statistics. That was the steepest decline since the stagflationary days of 1980.

Pay for all workers has fallen 16 cents this year in real terms.

Consumer buying power, modest over the holiday season, remains constrained by heavy debt loads. Total U.S. household debt as a percentage of disposable personal income is down from its 2007 peak at 130 percent, but it remains well above its 1970-2000 average of 75 percent.

As a result, Stephen Roach, non-executive chairman of Morgan Stanley, sees U.S. consumption remaining anemic for years to come. That will place a drag on global growth, especially in Asia, a big manufacturer of U.S. consumer goods.

"With retrenchment and balance-sheet repair only in its early stages, the zombie-like behavior of American consumers should persist," Roach said.

Consumer spending rose 1.7 percent in the third quarter, far below the 3.6 percent it averaged in the decade before the 2007-2008 recession. So it is hard to see world growth accelerating significantly until the U.S. consumer, who drives over 70 percent of U.S. GDP growth, revives.

There are other factors holding Americans' spending in check. The Federal Reserve last week reported early signs of tightening credit conditions, and government stimulus spending dries up this year. At the same time, uncertainty persists over the payroll tax cut and jobless benefits, which currently add 0.50-0.75 percentage point to GDP but are set to expire in February.

On top of that, businesses are pulling back on capital expenditure as tax breaks expire, while exports wane as a growth driver amid the upheavals from Europe. Most economists expect at best only modest U.S. economic growth around 2 percent in 2012 despite a recent batch of encouraging data.

"The year ahead is fraught with risks," said Tom Porcelli at RBC Capital Markets. "In fact, consumer fundamentals are decidedly weaker than this time last year."

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If the U.S. employment report, due on Friday, shows marked improvement, it would lift optimism. But most economists expect only gradual gains of 150,000 new jobs added in December, up from 120,000 the prior month.

Although the average pace of job growth has nearly doubled over the past three months compared with the prior period, it remains well below the 200,000-250,000 mark viewed as healthy labor market conditions.

Wages may rise too. They are forecast to have climbed 0.2 percent in December after a drop in November. But buying intentions remain weak. The Conference Board reported in its U.S. consumer confidence survey for December that even though overall sentiment has improved, those in the market for big-ticket items like cars or houses mostly plan to buy used, not new -- a sign of extremely cautious attitudes.

That would explain why analysts forecast no acceleration in new car and truck sales data for the United States, due on Wednesday. They are seen holding steady at a 13.6 million annualized rate in December. Likewise, the ISM manufacturing index is expected to have ticked up only a slightly, to 53.2 from 52.7 in November.

"Still muddling through," is how Macroeconomic Advisers summarized the economic outlook for 2012.

A recent growth spurt might have given the U.S. economy some resiliency to withstand a euro-zone recession, weakening stock prices, rising credit costs, fiscal drag and a higher dollar. But the United States, and with it the world economy, remain vulnerable to shocks in the year ahead.

(Reporting By Stella Dawson; Editing by Dan Grebler)

Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20120101/bs_nm/us_economy_global_weekahead

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Romney says he would veto DREAM Act

SIOUX CITY, Iowa (AP) ? Republican presidential candidate Mitt Romney said Saturday that he would veto legislation that would allow certain illegal residents to become American citizens.

"The answer is yes," Romney said during a campaign stop here in western Iowa, when he was asked if he would refuse to sign what's known as the DREAM Act.

Romney has said before that he would oppose the legislation, which would legalize some young illegal immigrants if they attend college or serve in the military. But Saturday was the first time he's explicitly said he would veto it.

Democrats immediately seized on Romney's remarks. "Wrong on principle and politics," David Axelrod, the Obama campaign's top political adviser wrote on Twitter in response. The Democratic National Committee called Romney's stance "appalling" in a written statement.

Immigration is likely to be a key issue in the general election, particularly in swing states like Florida, Nevada and Colorado, which have significant Hispanic populations.

Romney said he would support provisions of the bill that allow people to earn permanent residency if they serve in the military.

"I'm delighted with the idea that people who come to this country and wish to serve in the military can be given a path to become permanent residents of this country," Romney said in Iowa.

He was campaigning just three days before the state's Republican caucuses. A new poll shows Romney leading the field of GOP presidential candidates.

The most recent version of the DREAM Act would have provided a route to legal status for immigrants who were brought to the United States before age 16, have lived in the country for five years, graduated from high school or gained an equivalency degree and who joined the military or attend college.

It targeted the most sympathetic of the estimate 10 million to 12 million illegal immigrants living in the United States ? those brought to the country as children, and who in many cases consider themselves American, speak English and have no ties to their native countries.

Critics of the bill called it a backdoor to amnesty that would encourage more foreigners to sneak into the United States in hopes of eventually being legalized.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/89ae8247abe8493fae24405546e9a1aa/Article_2011-12-31-Romney-Dream%20Act/id-bbb200f53bf04d75b23834e731aa34ea

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Michele Bachmann (R-Mars): 'Biblically Qualified to Be President' (Little green footballs)

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Romney looks to fend off Santorum, Paul; win over skeptical conservatives (Star Tribune)

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Boeing wins $3.48 billion U.S. missile defense contract (Reuters)

(Reuters) ? Boeing Co beat out Lockheed Martin to retain its position as the prime contractor for the U.S. long-range missile shield, the Pentagon said on Friday.

The U.S. Defense Department said it was awarding Boeing a $3.48 billion, seven-year contract to develop, test, engineer and manufacture missile defense systems.

A team led by Lockheed Martin Corp and Raytheon Co had vied with Boeing to expand and maintain the Ground-based Midcourse Defense, or GMD, hub of layered antimissile protection.

Boeing partnered with Northrop Grumman Corp to retain the work.

"We believe the government conducted a fair and open competition, making the right decision for the future of the program," Norm Tew, Boeing vice president and program director of GMD, said in a statement.

Lockheed said it was "honored" to have participated on the bid, a company spokesperson said in a statement on Friday.

The GMD contract's value to Boeing will have been about $18 billion from January 2001, when it formally became the system's prime contractor, through the end of this year, Boeing has said.

GMD uses radar and other sensors plus a 20,000-mile fiber optic communications network to cue interceptors in silos at Fort Greely, Alaska and Vandenberg Air Force Base, California.

The shield has been shaped initially to guard against ballistic missiles that could be fired by Iran and North Korea. It is the only U.S. defense against long-range missiles that could be tipped with chemical, biological or nuclear warheads.

(Writing by Patrick Temple-West; reporting By Jim Wolf and Karey Wutkowski; Editing by Steve Orlofsky)

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Study: Indoor Tanning Linked With Early Onset of Skin Cancer (Time.com)

Given that indoor tanning beds were officially classified as a human carcinogen in 2009 -- up there with cigarettes and asbestos -- it should be fairly obvious that frequent tanning-booth exposure would increase your risk of skin cancer.

Indeed, the evidence linking indoor tanning with melanoma, the deadliest form of skin cancer, and squamous cell carcinoma, one of the more common forms of the disease, is "convincing," according to the World Health Organization's International Agency for Research on Cancer. But the research concerning tanning beds and basal cell carcinoma, the third and most frequent major type of skin cancer -- which accounts for some 80% of all skin cancer cases in the U.S. -- has thus far been inconsistent. (See pictures of a photographer's intimate account of her mother's cancer ordeal.)

Basal cell carcinoma, a slow-growing cancer, has traditionally been a disease of middle age. But it's been appearing with increasing frequency in people under 40, especially in women -- a demographic that also happens to like indoor tanning -- suggesting a link. So researchers at the Yale School of Public Health sought to study the association.

The study included 376 people under 40, who had been diagnosed with basal cell carcinoma between 2006 and 2010. They were matched with a control group of 390 dermatology patients who were diagnosed with minor skin conditions like cysts and warts. All participants had skin biopsies, and all were drawn from a Yale University database.

The researchers interviewed each participant about their UV exposure -- both in tanning beds and outdoors. They also asked about their history of sunburns, sunscreen use, family history of melanoma and non-melanoma skin cancers, and their self-reported eye, skin and hair color.

The conclusion: people who had ever used a tanning booth were 69% more likely to develop early-onset basal cell carcinoma than never tanners. Those who used tanning booths more regularly -- for at least six years -- were more than twice a likely to develop basal cell carcinoma, compared with never tanners.

The study found that women were far more devoted than men to indoor tanning, which might help explain why 70% of all early onset basal cell carcinomas occur in females. The authors concluded that about 27% of cases of early onset disease -- including 43% of cases in women -- could be prevented if people simply stopped using tanning booths.

That's a tall order, considering that some 30 million Americans use indoor tanning beds each year. Policy changes, such as the recent California ban on teen tanning, may help, the authors suggest. So would behavioral interventions aimed at women -- at least one study in 2010 found that the best way to get young women to tan less was to warn them about the skin-wrinkling effects of tanning-bed exposure, not the risk of skin cancer.

"Importantly, indoor tanning is a behavior that individuals can change. In conjunction with the findings on melanoma, our results for [basal cell carcinoma] indicate that reducing indoor tanning could translate to a meaningful reduction in the incidence of these two types of skin cancer," said Leah M. Ferrucci, first author of the paper and a postdoctoral fellow at the Yale School of Public Health, in a statement.

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Obama delays request for $1.2T debt limit increase (AP)

HONOLULU ? President Barack Obama is delaying his request for another $1.2 trillion increase in the nation's debt limit at the request of congressional leaders.

It's basically because of a technicality.

The White House had been ready to ask for the increase Friday because the government is within $100 billion of exhausting its current borrowing authority. Congress would then have 15 days to reject the request, though Obama would veto any objections in order to ensure that the government does not default on its obligations.

But with Congress not due to return to Washington until mid-January, a bipartisan group of lawmakers asked Obama to delay his request so they would be in session during the 15-day period allowed for objections.

"The administration is in discussions with leaders in both houses to determine the best timing for submission of certification and any subsequent votes in the two houses," White House spokesman Josh Earnest said Friday.

Kevin Smith, a spokesman for Speaker John Boehner, said the House leadership preferred not having to call members back to Washington early to vote on the increase request, but would have done so if necessary.

A senior White House official said Obama will make his request within days. The Treasury Department will use accounting measures to ensure that the nation does not reach its debt limit before the $1.2 trillion increase is finalized, said the official, who requested anonymity because the person lacked authority to speak publically.

The debt limit is the amount the government can borrow to finance its operations. It has soared because the government has run record deficits over the past decade. The borrowed money has helped pay for two wars, stimulate the nation's economy after the worst recession since the Great Depression and keep intact broad tax cuts initiated during the Bush administration.

Obama's request to increase the nation's borrowing authority would boost the debt limit to a record $16.4 trillion. The president and Congress agreed to raise it to that level in three steps as part of the August deal that was struck hours before a threatened government default.

Officials say the $1.2 trillion increase should be enough to allow the government to keep borrowing until the end of 2012, or just after the presidential election.

Congress agreed to raise the debt limit by $400 billion in August and by another $500 billion in September. House Republicans voted against the second increase, but failed to block it because the Senate approved it. The increases are scheduled to take effect unless both chambers vote against them.

The White House announced the delay in the debt limit request from Hawaii, where the president is on vacation.

Source: http://us.rd.yahoo.com/dailynews/rss/obama/*http%3A//news.yahoo.com/s/ap/20111230/ap_on_go_pr_wh/us_obama_borrowing_limit

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