Morning Business Memo…
This is the busiest shipping day of the year for FedEx. The world's second-largest delivery company expects to handle 19 million packages today, up 10 percent from the busiest day last year. "Increased e-commerce spending is directly contributing to record holiday FedEx volumes," the company said in a statement. Online holiday sales are expected to jump 17 percent according to eMarketer. FedEx founder and CEO Fred Smith expects overall retail spending for the holidays to rise between 3.5 to 4 percent, only a modest gain compared with last year.
Don't worry about missing out on shopping bargains. Retailers continue to put many goods on sale. "A lot of times you can find the same goods cheaper a week or two weeks before Black Friday," says Raechel Jackson, senior consultant at Simon-Kucher & Partners. "Obviously there's a huge push and a lot of publicity around the holiday season but this kind of heavy discounting and promotions is happening all the time." Shoppers, she says, have been conditioned to expect deep discounts, which is not a good thing for retailers. "When you have such a focus on price from a retailer's perspective that increases the focus on price from a consumer's perspective."
Motorists can expect more cuts in gasoline prices over the next few weeks. Wholesale costs have been coming down. When the Energy Department issues its weekly summary today, average gasoline prices for unleaded regular are expected to be below $3.40, in line with other current surveys. Motorists in most states are now paying about 10 cents a gallon less than three weeks ago.
The Federal Reserve holds a two-day interest rate meeting this week, and Chairman Ben Bernanke will hold a news conference. On Wednesday, he'll give his assessment of the economy and comment on the outlook. The Fed is widely expected to keep interest rates very low through the end of 2014, and continue its substantial bond buying program.
AIG's big selloff continues. American International Group Inc. says it will sell up to 90 percent of its airplane leasing unit International Lease Finance Corp. to a Chinese group. ILFC will remain based in Los Angeles. The agreement needs approval from U.S. and Chinese regulatory authorities. AIG has been selling off subsidiaries to raise money to pay back the massive $182 billion government bailout during the financial crisis.
Richard Davies, ABC News Radio Business Correspondent