CANBERRA, Australia —

But he said the United States will keep sending a clear message that China needs to accept the responsibilities that come with being a world power.

"It's important for them to play by the rules of the road," Obama said during a joint news conference with Australian Prime Minister Julia Gillard.

Obama and Gillard announced a joint security pact that would increase U.S. military presence in Australia, a move widely viewed as an attempt to address China's growing aggressiveness in the region.

About 250 U.S. Marines with begin a rotation in northern Australia starting next year, with a full force of 2,500 military personnel staffing up over the next several years.

"This rotational deployment is significant because what it allows us to do is to not only build capacity and cooperation between our two countries, but it also allows us to meet the demands of a lot of partners in the region that want to feel that they're getting the training, they're getting the exercises, and that we have the presence that's necessary to maintain the security architecture in the region," Obama said.

Officials in both countries have emphasized that the agreement does not create a permanent U.S. presence or military base in Australia.

Obama sidestepped questions about whether the security agreement was a direct attempt to counter China's growing military aggressiveness.

China claiming dominion
But the U.S. and smaller Asian nations have been growing increasingly concerned about China claiming dominion over vast areas of the Pacific that the U.S. considers international waters, and reigniting old territorial disputes, including confrontations over the South China Sea.

China's defense spending has increased threefold since the 1990s to about $160 billion last year, and its military has recently tested a new stealth jet fighter and launched its first aircraft carrier.

Obama arrived in Australia Wednesday afternoon following the Asia-Pacific economic summit he hosted in Hawaii last week.

A central part of the summit was an agreement for a transpacific trade bloc that includes eight countries in addition to the United States.

The agreement sets standard rules for commerce. Obama said that while the U.S. is not intentionally excluding China from the agreement, joining the pact with require Beijing "to rethink some of its approaches to trade."

The U.S. has accused China of undervaluing its currency to Chinese exports cheaper and U.S. exports to China more expensive.

China had a $273 billion trade surplus with the U.S. last year and U.S. lawmakers say the imbalance hurts American manufacturers while taking away American jobs.

U.S. officials have also pressed China to end unfair discrimination against the U.S. and other foreign countries and to end measures that undercut its intellectual property.

By msnbc.com news services

Consumers paid less for gas and cars in October, according to a new government report issued Wednesday.

The Labor Department said October’s Consumer Price Index (CPI) showed prices declined by 0.1 percent in the month, roughly matching analysts’ expectations. It was the first decline in the CPI in four months, although prices outside of food and energy posted a slight increase.

Another report Wednesday showed U.S. industrial output rose more than expected in October as factory and mining production expanded strongly, suggesting the economy was gaining steam. Positive reports could be further evidence that the U.S. economy is not in danger of slipping back into another recession.

“The data is relatively upbeat in the U.S., which contrasts with the situation in Europe,” said Omer Esiner, senior market strategist at Commonwealth Foreign Exchange in Washington, D.C. “Obviously the debt ceiling is front and center, but the data here [are] improving, which should provide a bit more tail wind for the dollar.”

The CPI measures changes in the price level of consumer goods and services purchased by households.

The Associated Press and Reuters contributed to this report.

Given what we know about the poverty rate and the current state of the economy, it should come as no surprise that more people are relying on food stamps these days.

But you may be surprised to find who receives food stamps, and where they live.

A new report from the Carsey Institute, which researches vulnerable children, youth and families, finds that 14.6 percent of rural households were relying on the Supplemental Nutrition Assistance Program in 2010.

That’s nearly the same as the percentage of households in inner urban areas who use the food and nutrition program for low-income households, also known as SNAP.

Both urban and rural households have seen SNAP use increase sharply between 2007, when the recession began, and 2010, as the nation struggled with a weak economic recovery.

Suburban households are less likely to receive SNAP benefits, but usage is on the rise. About 9 percent of suburban households received SNAP in 2010, up from 5.4 percent in 2007.

Jessica Bean, a vulnerable families research associate with the Carsey Institute, said she thinks rural residents have traditionally been less likely to collect SNAP benefits because they live in remote areas where it’s hard to access social services and are more concerned with the social stigma.

In a rural area, she said, “When you go into the grocery store and you pull out your food stamps card, everybody knows you.”

Carsey’s research also showed that the program is often helping out working poor families.

About three-fourths of households who receive SNAP benefits have at least one adult in the household who is working, according to Bean. Still, the median household income for SNAP recipients was about $18,000 in 2010, compared to an overall median income of around $50,000.

The average SNAP benefit is about $290 a month.

The program is also disproportionately helping single-parent families. Four in 10 single mothers with children are using the SNAP program, according to Bean’s research, while 1 in four single dads with kids are relying on them.

 Just 1 in 10 married couples with children are using the government-funded food benefit.

The stock market mostly recovered from investors’ fears about Europe’s debt crisis Monday. After trading lower for most of the day, the major indexes ended slightly higher.

The Dow rose 85.15 points, or 0.7 percent, to close at 12,068.39. The Dow closed near its highest point of the day and had down as many as 102 points shortly after midday.

The Standard & Poor's 500 index rose 7.89, or 0.6 percent, to 1,261.12. Last week the S&P had its first down week since September. The Nasdaq rose 9.10, or 0.3 percent, to 2,695.25.

Italian Prime Minister Silvio Berlusconi, under pressure from markets and rebels in his party, fought to hang on to power and denied reports he would resign. Party rebels threatened to bring down his government in a backlash over its failure to adopt reforms to defuse a debt crisis.

Italy's borrowing rates spiked Monday to the highest level since the country adopted the euro. Unlike Greece, Portugal or Ireland — all of which received financial lifelines — Italy has too much debt to be rescued by its European neighbors. Prime Minister Silvio Berlusconi has rejected suggestions that he resign to make way for more cost-cutting.

Italy’s public debt, by percentage, is one of the largest of any country in the world.

"As soon as Greece looks like we can now sort of digest the risk right off the issues, in comes the 800-pound gorilla into the room. Italy is a much, much larger concern, with issues that have been lingering for decades," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"This is not something you can cordon off. Italy is central to the European zone and it is going to force the European Union to recalibrate everything that has been taken for granted thus far in the conversation."

Monday is a relatively quiet day for economic and corporate news in the U.S. The Federal Reserve will report in the afternoon on how much consumers borrowed in September. Economists expect consumers took out an additional $5.4 billion in loans, a sign that households could be more confident in the direction of the economy.

"Every day it seems like it's the butting of heads between whatever the latest rumor is out of Europe with good economic data and corporate earnings," Karyn Cavanaugh, a market strategist with ING Investment Management, told the Associated Press. "It's overshadowing the fact that earnings are on track to be the best year ever."

Adam Parker, of Morgan Stanely, discusses how the escalating sovereign debt crisis in Europe has impacted U.S. earnings on CNBC.

NEW YORK — Stocks slid ahead of a confidence vote for Greece's embattled prime minister Friday. Investors are worried that the country might not go through with an austerity program needed to prevent a messy default on its debt. The Dow Jones industrial average was down about 60 points at the closing bell.

Groupon Inc. jumped 38 percent to $27.45 on its first day of trading. The initial public offering of the company, which pioneered online group discounts, priced at $20 a share late Thursday. Social networking site LinkedIn Inc. dropped 6.5 percent to $81.77 after posting its first quarterly loss since going public.

A report on the U.S. job market was mixed. The government said 80,000 jobs were created last month. That was a drop from the 158,000 added in September. On the positive side, the unemployment rate fell to 9 percent from 9.1 percent, the first decline since July.

The release of the Labor Department's monthly employment report is usually a key focus for investors, but this time the unfolding drama over containing Europe's debt crisis was again driving the action.

Greek Prime Minister George Papandreou's government faces a vote of confidence later Friday that could determine whether he stays in office. Papandreou stunned financial markets and European leaders on Monday with a call for a popular vote on an unpopular package of austerity measures. The vote was scrapped Thursday, but markets are still unnerved by the political turmoil in Greece, which threatens to hobble Europe's efforts to control its debt crisis.

"Unless the jobs number came out with a huge surprise one way or the other, it's just a momentary diversion from where the market focus has been, and will continue to be for the foreseeable future, until there is a resolution in Europe," said Brad Sorenson, head of market analysis at Charles Schwab.

The austerity measures are needed to prevent Greece from defaulting on its debt, which would throw the European financial system into turmoil. Investors are worried that if Greece defaults it could cripple European banks and cause fiscal strain on much larger European countries like Italy, which are too big to bail out. Greece, Ireland and Portugal — all relatively small countries — have received financial lifelines from international lenders.

According to preliminary calculations, the Dow Jones industrial average was down 61 points, or 0.51 percent, at 11,983.47. The index is down more than 2 percent for the week after steep declines Monday and Tuesday.

The S&P 500 fell 7.91, or 0.63 percent, at 1,253.24. The Nasdaq composite shed 11.82, or 0.44 percent, to 2,686.15.

In U.S. corporate news, MF Global CEO Jon Corzine stepped down Friday. The securities firm filed for bankruptcy protection Monday after being brought down by bets on European debt.

Starbucks Corp. jumped 7 percent to $44.28 after the company's quarterly results beat Wall Street's expectations. Advanced Micro Devices Inc. fell 1 percent to $5.69 after the chip maker said it would cut 1,400 workers because of a weak market for computers and manufacturing delays.