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Janet Yellen, the Federal Reserve's powerful vice chair, is by far the most likely candidate to replace Ben Bernanke when his second term at the helm of the U.S. central bank ends early next year, according to a Reuters poll of economists. The poll found that an overwhelming 40 of 44 economists said Yellen, the former president of the San Francisco Federal Reserve Bank, will take over for her boss in February 2014. Support for her nomination was strong but less decisive, with 23 of 38 economists backing Yellen's bid for the top job. Yellen, a 66-year old economist who is seen as a monetary policy dove, has held the No. 2 spot at the central bank since 2010. She has been a forceful advocate of the aggressive steps taken under Bernanke to spur U.S. economic growth and boost employment.   "If President Obama nominates Janet Yellen, it would be a feather in his cap, as the first president to nominate a female Fed chairman," said Ellen Zentner, an economist at Nomura.

U.S. chief executives expect to hire more workers in the next six months and that sales will improve modestly, a tepid if slightly optimistic reading of the economy, a Business Roundtable survey has found. The group's CEO Economic Outlook Index, released on Wednesday, rose to 84.3 in the second quarter from 81 in the first quarter and 65.5 in the fourth quarter of 2012. Any reading above 50 indicates expectations of economic growth. The increased corporate optimism came as consumers are spending more on cars and other goods. Roughly 32 percent of CEOs said they expected to hire more workers in the next six months, a slight improvement from prior surveys. But about 26 percent expected to cut jobs, a 1 percentage point increase from the last survey.   The unresolved U.S. debt crisis and an "uncertain political environment" were holding back the American economy, the Business Roundtable said. "Overall, CEOs see the U.S. economy still on a slow road to recovery,&q

U.S. state and local governments finally appear to be collecting enough in taxes to raise spending and give the broader economy a bit of a lift after several years of being a drag. While progress in patching up budgets has been uneven across the country, a growing economy has led to higher tax revenues in most states and made officials more confident they can increase spending on infrastructure and education, if only a little.   Late last year, states' tax revenues surpassed the peaks they reached before the 2007-09 recession, even when adjusted for inflation. And now government finances across the country appear to be on the mend. Local governments hired about 12,000 education workers in the year through May, which was the first increase after nearly four years of substantial declines. In Virginia, the state government last month passed a law to direct sales tax revenues, which are rebounding, toward transportation infrastructure. The state now estimates it will have about $

The U.S. government posted a budget deficit of $139 billion in May, 11 percent higher than a year ago and above economists' expectations, partly because of temporary calendar adjustments, the Treasury Department said on Wednesday. _0"> May has had a deficit for 54 out of the last 59 years, a Treasury official said, as it is typically the month when the government refunds tax payments to U.S. citizens.   But so far this fiscal year, which began in October, the government budget deficit has shrunk faster than expected, standing at $626 billion at the end of May, 26 percent lower than the deficit in May 2012. That is largely due to a 15 percent increase in tax receipts compared to last year, at $1.8 trillion, while spending has increased by only 1 percent. Revenues have been boosted because payroll tax cuts expired, taxes went up on richer Americans, and the economy has started to recover. The Congressional Budget Office last month estimated the United States is on track

Banks seized more U.S. homes in May as a greater number of Americans found themselves entering the foreclosure process, suggesting lenders were drawing down the pipeline of distressed properties, a report from RealtyTrac showed on Thursday. _0"> Banks repossessed 38,946 homes, an increase of 11 percent from the previous month. The number of homes hit with default notices for the first time grew by 4 percent. Among the five lenders involved in last year's national mortgage settlement, all but Citigroup ( id="symbol_C.N_0"> C.N ) saw an increase in repossessions. "It could be a sign of a trend we're expecting, which is that eventually, the banks are going to pull the trigger and complete these distressed loans that have been sitting in limbo for some time," said Daren Blomquist, vice president at RealtyTrac. Overall foreclosure activity - which includes default notices, scheduled auctions and bank repossessions - was seen on 148,054 properties

Salvaging a free-trade deal between Canada and the European Union after four years of talks will require skillful pasture politicking to pacify beef and dairy cow farmers who see more risk than opportunity. The difficulties underline how challenging bilateral and regional trade deals are to reach, and how groups like farmers can punch above their weight. Canada's Conservative government has made trade a priority, but has yet to deliver a major deal. For the EU, a deal with Canada would be a first with a country in the G7 group of industrialized nations and a possible template for a EU-U.S. agreement. Privately, sources close to the talks say the two sides are not far apart. But after months of deadlock and with trade talks with other partners on the horizon for both sides, the potential $28-billion accord could just as easily fall apart in weeks.   A deal would offer new markets for Canadian grains, beef and pork and for European cheese, as well as give EU companies more free

Retail sales rose more than expected in May as households stepped up purchases of automobiles and bought other goods, suggesting the economy was squeezing out of a recent soft patch. _0"> The Commerce Department said on Thursday retail sales increased 0.6 percent after edging up 0.1 percent in April. Economists polled by Reuters had expected retail sales, which account for about 30 percent of consumer spending, to rise 0.4 percent last month. So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, increased 0.3 percent after rising 0.2 percent in April. The increase in core sales offers hope consumer spending probably would not slow too much in the second quarter, after spending fell in April for the first time in a year.   Coming on the heels of data last week showing a steady pace of job gains and a jump in consumer confidence, the retail sales report

The number of Americans filing new claims for jobless benefits fell last week, nearing its lowest level in five years in a sign of resilience for the U.S. labor market. _0"> Initial claims for state unemployment benefits declined 12,000 to a seasonally adjusted 334,000, the Labor Department said on Thursday. That was the smallest number of first-time applications since early May and near levels last seen the early days of the 2007-09 recession. Many economists believe growing confidence in America's economic recovery has led U.S. employers to exit a long cycle of elevated layoffs. Moreover, it has been difficult to discern any increase in layoffs due to Washington's embrace of harsher fiscal austerity this year. At the same time, firms have been shy to step up the pace of hiring and the country's unemployment rate is expected to end this year above 7 percent.   The jobless claims reading beat the expectations of economists polled by Reuters, who had expected

Business inventories rose in April, but with goods taking longer to sell businesses could slow their pace of stock accumulation to prevent an unwanted piling up of merchandise. _0"> The Commerce Department said on Thursday inventories increased 0.3 percent after edging down 0.1 percent in March. The rise was in line with economists' expectations. Inventories are a key component of gross domestic product changes. Retail inventories, excluding autos - which go into the calculation of gross domestic product - rebounded 0.4 percent. That followed a 0.7 percent fall in March.   Inventories added more than half a percentage point to first-quarter GDP growth, which advanced at a 2.4 percent annual rate. Estimates for growth in the April-June period currently range below a 2.0 percent pace. Business sales fell 0.1 percent in April after declining 1.2 percent the prior month. At April's weak sales pace, it would take 1.31 months for businesses to clear shelves. That was t

Federal Reserve Chairman Ben Bernanke will deliver his semi-annual testimony to the U.S. Congress on July 17 and 18, a congressional aide said on Thursday. _0"> Bernanke will testify on monetary policy before the House Financial Services Committee on July 17 at 10.00 a.m. (1400 GMT) and then appear before the Senate Banking Committee the next day. The chairman will read a prepared statement on both occasions and then answer lawmakers' questions. (Reporting By Alister Bull; Editing by James Dalgleish)

This time, the Fed is serious. That's the judgment of U.S. government bond investors who believe the Federal Reserve is close to paring back its $2.5 trillion, 4-1/2-year bond purchase program, and it's causing turmoil in the U.S. Treasury market.   Trading in Treasuries has turned notably more volatile in recent days and volatility may continue as traders try to adjust to a marketplace in flux. In the last six weeks, benchmark 10-year U.S. Treasury note yields have surged to 2.19 percent, from 1.60 percent at the beginning of May. As a result the market has seen a sharp outflow from bond funds and notable lack of demand in Treasury bond auctions. The fund outflows and the rise in volatility offer a worrying glimpse of how markets are likely to behave as the Fed works to scale back its enormous monetary stimulus of the U.S. economy. "When you see the volumes and the movements developing in different markets, then it shows you that the transition from accommodation t

Retail sales rose more than expected in May and first-time applications for unemployment benefits fell last week, signs of economic resilience in the face of belt-tightening in Washington. The data on Thursday suggested rising home prices and steady job gains, which hoisted consumer confidence to multi-year highs in May, was starting to create a virtuous cycle in which gains in spending were forcing employers to keep hiring.   Policymakers at the Federal Reserve have helped the process with a muscular easing of monetary policy that pushed mortgage rates to record lows earlier this year. "The economy is showing more evidence of the positive feedback loop, particularly through the housing channel, but we still have this push and pull of monetary policy and fiscal policy," said Robert Dye, chief economist at Comerica in Dallas. Retail sales increased 0.6 percent after edging up 0.1 percent in April, the Commerce Department said. Economists had expected sales to rise 0.4 pe

This time, the Fed is serious. That's the judgment of U.S. government bond investors who believe the Federal Reserve is close to paring back its $2.5 trillion, 4-1/2-year bond purchase program, and it's causing turmoil in the U.S. Treasury market.   Trading in Treasuries has turned notably more volatile in recent days and volatility may continue as traders try to adjust to a marketplace in flux. In the last six weeks, benchmark 10-year U.S. Treasury note yields have surged to 2.19 percent, from 1.60 percent at the beginning of May. As a result the market has seen a sharp outflow from bond funds and notable lack of demand in Treasury bond auctions. The fund outflows and the rise in volatility offer a worrying glimpse of how markets are likely to behave as the Fed works to scale back its enormous monetary stimulus of the U.S. economy. "When you see the volumes and the movements developing in different markets, then it shows you that the transition from accommodation t

Most U.S. states are set to end the current fiscal year in solid financial shape, but their recoveries could be derailed by an array of threats and increasing demands on their spending, according to a survey released on Thursday. Bringing welcome relief after years of budget shortfalls, states' revenues have risen steadily over the last year. Many states are set to finish fiscal 2013 "with modest surpluses," according to a twice-yearly survey of state budgets by the National Governors Association and the National Association of State Budget Officers.   Still, spending remains below the levels reached before the 2007-09 recession and many states are constrained by obligations for health care and pensions. All states except Vermont must balance their budgets each fiscal year. "There may be surpluses here and there that look good on paper," Dan Crippen, the executive director for the governor's group, said. "But the future is not very bright." F

The current account deficit widened in the first quarter to $106.1 billion, a government report showed on Friday. _0"> The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, fell from a downwardly revised $102.3 billion in the fourth quarter. Most of the widening came from a drop in the U.S. surplus on income and an increase in government transfers, the Commerce Department said.   That represented 2.7 percent of gross domestic product, hovering near the 2.6 percent recorded in the prior three-month period. As a share of GDP, the current account deficit was close to the record low in the second quarter of 2009. Economists polled by Reuters expected the fourth-quarter current account gap to narrow slightly to $109.7 billion from a previously reported $110.4 billion for the third quarter. In the first quarter, the deficit on goods increased to $179.1 billion from $182.4 billion in the

Industrial production was unchanged in May, the Federal Reserve said on Friday, compared with forecasts for a light increase after gains in manufacturing and mining were offset by a sharp drop in the output of utilities. _0"> Analysts had expected a 0.2 percent rise in May industrial output following a revised 0.4 percent decline the previous month. Factory output rose 0.1 percent, matching expectations, while mining advanced 0.7 percent. But utilities output slumped by 1.8 percent.   Industrial capacity utilization, a measure of how fully firms are deploying their resources, edged down to 77.6 percent from 77.7 percent in April, a rate that lies 2.6 percentage points below its estimated long-run average. Analysts had forecast capacity utilization to come in at 77.9 percent. (Reporting by Timothy Ahmann; Editing by Chizu Nomiyama)

Consumer sentiment retreated this month after reaching its highest in nearly six years in May, a survey released on Friday showed, as household optimism about employment and housing faded slightly. _0"> The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment fell to 82.7 in June, below a near six-year high of 84.5 in May. Economists polled by Reuters had expected it to hold at 84.5 this month. June's reading, however, was the second highest in the last eight months, suggesting Americans were far from gloomy about their long-term prospects. While the barometer of current economic conditions fell to 92.1 from 98.0, a gauge of consumer expectations edged up to its highest since November at 76.7 from 75.8. Confidence eroded most among lower-income households, which were "more likely to report worsening overall financial prospects" than higher-income households, survey director Richard Curtin said in a statem

A measure of future U.S. economic growth rose to its highest in more than two years in the latest week, while the annualized growth rate also accelerated, a research group said on Friday. _0"> The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 131.3 in the week ended June 7, its strongest since April 2011, from a revised 131.0 the previous week. That was originally reported as 130.9. The index's annualized growth rate increased to 6.6 percent from a revised 6.4 percent a week earlier, which was originally reported as 6.3 percent.   (Americas Economics and Markets Desk; Editing by James Dalgleish)

Foreign investors dumped U.S. government debt in April and were net sellers of all long-dated U.S. securities for the third consecutive month, the U.S. Treasury said on Friday. Selling was heavily concentrated in Treasury bonds and notes, with overseas investors unloading $54.5 billion, the first net outflow in seven months. Private investors alone sold $30.8 billion - the largest one-month outflow on record.   Overall, foreigners sold $37.3 billion in long-term U.S. securities, the largest outflow in at least three years. March's outflow was revised slightly to $13.4 billion. "Demand for U.S. securities was much weaker in April," said Gennadiy Goldberg, U.S. strategist at TD Securities. He said the scope of Treasury sales was "somewhat surprising given the fresh bout of European uncertainty observed in the month," referring to a European Union rescue of Cypriot banks. Official investors, including central banks, were also net Treasury sellers in April. Ch

Consumer sentiment edged off a six-year high in June while manufacturing output picked up a bit last month after two straight months of declines, suggesting the economy remains on a moderate growth path. While other data on Friday showed wholesale prices jumped in May as gasoline and food prices rebounded, underlying inflation pressures were muted. The reports come ahead of a Federal Reserve meeting next week where policymakers will discuss whether and when to start scaling back their $85 billion a month pace of bond buying. Though the economy is showing resilience in the face of tighter fiscal policy in Washington, the pace of growth is unspectacular and inflation is well below the central bank's 2 percent target. "The Fed is likely to maintain its current pace of securities purchases until later in the fall. There is no sign of inflation and growth is still moderate," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.   The Thomson

The International Monetary Fund urged the United States on Friday to repeal sweeping government spending cuts and recommended that the Federal Reserve continue a bond-buying program through at least the end of the year. In its annual check of the health of the U.S. economy, the IMF forecast economic growth would be a sluggish 1.9 percent this year. The IMF estimates growth would be as much as 1.75 percentage points higher if not for a rush to cut the government's budget deficit.   The IMF cut its outlook for economic growth in 2014 to 2.7 percent, below its 3 percent forecast published in April. The Fund said in April it still assumed the deep government spending cuts would be repealed, but it had now dropped that assumption. Washington slashed the federal budget in March, adding to the drag on the economy created by tax increases enacted in January. The IMF said the United States should reverse the spending cuts and instead adopt a plan to slow the growth in spending on gove

Since Ben Bernanke unleashed a bombshell on May 22 by suggesting the U.S. Federal Reserve could before long start to pull back on its massive monetary stimulus, big stock and bond markets have been feeling the pain. Rather than run for cover, a number of big money managers have seen the sell-off as a chance to invest cash in a broad array of assets at lower prices. They believe the gloom may be overdone, an overreaction to the concerns that the Federal Reserve won't be throwing money at the economy forever. The U.S. economy has posted solid if still sluggish growth figures this year, and jobs growth has improved. The euro zone debt crisis has abated somewhat, with the monetary union no longer expected to drag so heavily on world growth. And despite the jitters, global central banks are far from ending easy money policies, pumping money into markets around the world. Traders with big investors like Pacific Investment Management Company and Loomis Sayles & Company are takin

Cinven Ltd is in exclusive talks to buy CeramTec, the industrial ceramics unit of U.S. chemicals maker Rockwood Holdings Inc ( id="symbol_ROC.N_0"> ROC.N ), for close to 1.5 billion euros ($2 billion), three people familiar the matter said on Friday. Cinven beat rival private equity firm BC Partners Ltd in the final bidding for CeramTec, the people said. A deal could be announced in the next few days, they added, but cautioned the talks could still fall apart.   BC Partners had offered just over 1.4 billion euros, one of the people said. The people spoke on condition of anonymity because the talks are confidential. Cinven and BC Partners declined to comment, while Rockwood could not immediately be reached for comment. Rockwood shares jumped on the news and ended trading on Friday up 2 percent at $66.56. Germany -based CeramTec, founded in 1903, makes ceramics used in thousands of products from water treatment filters to electronic components in factory robots. It is

Brazil's Banco BTG Pactual SA agreed to buy 50 percent of the African operations of Petroleo Brasileiro SA, the state-run oil giant said on Friday, expanding the high-flying investment bank's role as a backer of cash-squeezed Brazilian companies. BTG Pactual ( id="symbol_BBTG11.SA_0"> BBTG11.SA ) agreed to pay $1.53 billion for 50 percent of Petrobras' ( id="symbol_PETR4.SA_1"> PETR4.SA ) African unit, Petrobras Oil & Gas BV, which has offices in Angola, Benin, Gabon and Namibia and operations in Nigeria and Tanzania, the statement said.   Petrobras is trying to sell oil fields, exploration rights, refineries and other assets in the United States, Japan, Argentina , Peru and other countries to help finance a $237 billion, five-year investment plan, the world's largest corporate spending program. It tried to sell the Nigerian assets alone for as much as $5 billion, Reuters reported on March 13. "The operations represent an importa