By Sangwon Yoon & Sungwoo Park

North Korea fired its sixth short-range missile in three days, demonstrating its military capabilities in defiance of global sanctions while stopping short of rekindling the tensions of past months.

Kim Jong Un’s regime fired a projectile into waters off its eastern coast between 11 a.m. and noon and another between 4 p.m. and 5 p.m. today, South Korean Defense Ministry spokesman Kim Min Seok said in Seoul. The North, which launched a short-range missile yesterday after firing three on May 18, today said it is exercising its right to test-fire rockets as part of regular military drills.

The launches follow months of North Korean threats that have moderated since the U.S. and South Korea intensified diplomatic efforts this month to ease tensions and boost Chinese participation in global sanctions that target the North’s nuclear weapons program. The U.S. Defense Department’s top spokesman said the use of short-range missiles may not represent a breach in what he called a “provocation pause.”

“I think we can safely say we remain in a period of tensions that are relatively small-scale by comparison” with those of recent months, George Little, the spokesman, told reporters today at the Pentagon. “We are keeping an eye out. We are monitoring what is happening,” and “we hope that over time the North Koreans continue to look hard at the need for peace and stability on the peninsula.”

North Korea has warned of nuclear strikes since testing an atomic device in February.

‘Closely Monitoring’

While South Korea sees no unusual North Korean troop movements, the military is “closely monitoring the situation” and is ready to respond to any escalation, Defense Ministry spokesman Kim said. Earlier this month, the North threatened to retaliate against joint U.S. and South Korean naval drills.

“The North is likely testing these missiles as an armed protest against the recent military drills jointly conducted by the U.S. and South Korea,” said Yang Moo Jin, a professor at the University of North Korean Studies in Seoul.

The South Korean won ended today little changed after earlier touching a four-week low against the dollar. The Korea’s benchmark Kospi stock index lost 0.2 percent even as Asian stocks rose. Defense-related shares rose, with naval ship equipment maker Speco Co. gaining 5.6 percent, electronic warfare equipment maker Victek Co (065450). rising 3 percent and armored vehicle maker Firstec Co (010820). adding 1.2 percent.

Deterrence Cited

North Korea’s official Korean Central News Agency today said the missile exercises are to boost deterrence against rising threats from the U.S. and South Korea.

Kim’s regime tested an atomic weapon in February, then threatened preemptive nuclear strikes against South Korea and the U.S. in retaliation for annual drills that ended last month. The warnings led the U.S., South Korea and Japan to boost defenses and raised concern in China, the North’s biggest ally.

“Safeguarding peace and stability on the Korean peninsula is inevitable and what everyone wants,” Chinese Foreign Ministry spokesman Hong Lei said today. “We hope under the current circumstances all parties will do things that will ease tensions and improve relationships.”

Rocket Range

North Korea’s Musudan rocket has a range of 3,000 miles (4,827 kilometers) to 3,500 miles -- which is a potential threat to Guam, a U.S. territory, though not to Hawaii or the U.S. mainland, according to testimony before Congress given in April by Admiral Samuel Locklear, head of the U.S. Pacific Command. The North doesn’t have the ability to launch a nuclear-armed missile, President Barack Obama said on April 16.

“Using short-range missiles is a relatively restrained move by North Korea’s standards,” Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong, said by phone May 18. “Unlike in April when it was sending out hostile messages almost every day, North Korea has been more restrained in the past few weeks.”

While the Obama administration has said it would seek to increase pressure on North Korea should it test a missile or nuclear device, previous United Nations measures have failed to deter the Kim regime. The UN Security Council twice this year tightened existing penalties passed in 2006 and 2009 against weapons development, financial transactions and travel.

Little, the Pentagon spokesman, said today that North Korea’s launches of short-range missiles “do not necessarily violate” international obligations.

Aid Talks

South Korea yesterday urged the North to accept its calls for working-level talks on bringing completed goods to the South from the Gaeseong industrial zone, according to Unification Ministry spokesman Kim Hyung Suk. The North demanded that the South express its willingness to resolve a dispute over the zone, according to a statement carried today by KCNA.

The jointly-run factory park in the North Korean border city of Gaeseong has been shuttered since the North decided on April 8 to withdraw all its workers from the complex.

The U.S. and South Korea have repeatedly called on China, the North’s biggest trading partner, which has shielded the nation from stronger United Nations actions, to make greater efforts to enforce sanctions targeting the North’s nuclear weapons program. A Chinese state bank closed the account of a North Korean lender earlier this month, signaling a possible change in stance.

U.S. President Barack Obama said on Thursday that he did not know about the Internal Revenue Service Inspector General's report on the agency's targeting of conservative groups for extra scrutiny before it was leaked to the press.

Obama said in a news conference in the White House Rose Garden that he was committed to fully fixing problems at the IRS, saying any employees involved in targeting conservative groups would be held accountable for their "outrageous'' actions.

Obama also addressed the crisis in Syria.

He said he reserves the right to resort to a range of both diplomatic and military options if he receives conclusive proof that the government of Syrian President Bashar al-Assad had used chemical weapons in the country's civil war.

Obama, at a joint news conference with Turkish Prime Minister Tayyip Erdogan, said there was evidence of chemical weapons use in Syria but that it is important to get "more specific information'' to confirm that before deciding how to respond.

By Joshua Zumbrun

U.S. households reduced debt during the first quarter by 1 percent to the lowest level since 2006, resuming a deleveraging trend in the wake of the financial crisis, according to the Federal Reserve Bank of New York.

Household debt fell to $11.2 trillion in the first quarter compared with a peak burden of $12.7 trillion in the third quarter of 2008. Consumers reduced debt by $110 billion after increasing their borrowing by $31 billion in the fourth quarter of 2012, while delinquency rates fell “across the board,” the Fed district bank said in a statement. Student debt bucked the trend, rising to a record $986 billion.

“Household deleveraging has resumed its previous trajectory,” Wilbert van der Klaauw, a senior vice president and economist at the New York Fed, said today in a statement. “We’ll look to see if this pace of debt reduction and delinquency improvements will persist.”

Consumers are repairing their post-crisis balance sheets as the Fed tries to spur the expansion and enliven the job market by holding the main interest rate at zero and buying $85 billion in bonds every month. More than four years of record stimulus have yet to reignite household borrowing, and the unemployment rate has exceeded 7 percent since December 2008.

Households in the first quarter improved their debt payment patterns as delinquency rates on mortgages fell to 5.4 percent from 5.6 percent, on home equity loans to 3.2 percent from 3.5 percent, on credit cards to 10.2 percent from 10.6 percent and on student loans to 11.2 percent from 11.7 percent, according to the New York Fed.

‘Deleveraging Cycle’

“We’re much closer to the end of the deleveraging cycle than the beginning,” said Gennadiy Goldberg, U.S. strategist at TD Securities Inc. in New York. “If the housing recovery continues at the current pace, deleveraging could end very soon.”

Falling delinquencies have helped bolster bank shares. The KBW Bank Index of 24 financial institutions has risen 32 percent during the past year compared with a 23 percent gain for the Standard & Poor’s 500 Index. The S&P 500 rose 1 percent to 1,647.72 at 12:10 p.m. in New York trading.

Mortgage debt led the decline, falling to $7.93 trillion from $8.03 trillion, along with credit card balances, which decreased $19 billion to $660 billion, according to the Fed regional bank.

The largest increase in lending occurred in student loans, according to the New York Fed survey. Total student debt rose to $986 billion in the first quarter from $966 billion in the fourth quarter of last year.

Random Sample

The statistics are based on figures from a nationally representative random sample provided by the Equifax Inc. credit bureau.

Student lending has surpassed credit cards, auto loans and home equity loans in recent years and is now the largest form of consumer debt after mortgages.

A panel of bankers that advise the Fed warned last year that patterns in student lending resemble the mortgage crisis that helped lead to the worst recession since the Great Depression.

“Recent growth in student-loan debt, to nearly $1 trillion, now exceeds credit-card outstandings and has parallels to the housing crisis,” the Federal Advisory Council said in minutes of a Feb. 3, 2012 meeting, that were obtained by Bloomberg News through a Freedom of Information Act request.

The bankers said student lending shares features of the housing crisis including, “significant growth of subsidized lending in pursuit of a social good.” In this case, the focus is on higher education rather than expanded home ownership.

Bank Easing

The deleveraging coincided with bank easing on the standards and terms for many types of loans, according to a separate quarterly Fed survey of senior loan officers. Demand for business loans increased, while “on the household side, the survey results were more mixed,” the Fed said last week in a description of the April 2-16 survey.

Banks in the U.S. have boosted lending as the economy gains strength. The total value of loans at U.S. banks climbed 3.7 percent in the past year to $7.3 trillion in April, according to a separate Fed report on the assets and liabilities of commercial banks. Lending to businesses has led the way, with commercial and industrial loans climbing to $1.55 trillion in April, an increase of 10 percent from a year earlier.

By Jermaine Taylor

As close to 2 million college students prepare to graduate, a study finds that many of them face what it calls a "unique paradox." While the young people are qualified—even overqualified, in many cases—to enter the workplace, most of them feel ill-suited to tackle the harsh realities of an evolving job market.

The wide-ranging study was conducted by the consulting firm McKinsey & Co. in conjunction with online student hub Chegg. It involved more than 4,900 graduates, most of whom finished college between 2009 and 2012, and suggests that graduates are growing increasingly disillusioned with the employment outcomes of their education.

In what may be the most troubling finding, more than half (53 percent) of participants said that they would "do things differently if they had to do it all over again," choosing a different major or a different school.

This "should be an alarming call to action for all of us," said André Dua, a director at McKinsey and lead author of the study. "We need to have a national discussion about how to better prepare students."

The study comes on the heels of the publication of the book "Is College Worth It?", by former Secretary of Education William Bennett. In it, he questions the value of attending the vast majority of colleges. According to Bennett, only 150 of America's 3,500 colleges are actually worth attending.

(Read More: Former Ed Secretary: Only 4 Percent of Colleges Worth the Money)

Indeed, the McKinsey study found that a disturbing one-third of graduates "did not feel college prepared them well for employment."

Students 'Flying Blind'

Half of graduates said when evaluating a school before applying, they didn't consider graduation or employment rates, or the starting salaries of alumni—essentially "flying blind" through the admissions process, the study said.

Many policymakers and the Obama administration have begun calling on colleges to collect and publish such information. But many schools remain reluctant and argue that the value of an education shouldn't be reduced to a simple analysis of results, pointing to cumulative earnings over time of those with a college degree.

Others said that such information would unfairly bias applicants and damage enrollment because of something schools can't legitimately be expected to control: the economy.

Still, some consumer advocates are dubious.

"If someone's borrowing money to pay for college, there's a fair presumption that they will earn enough money to pay it back," said Mark Kantrowitz, publisher of Edvisors.com and an expert on financial aid. "It's important that students and their families be able to make a more informed decision about the trade-off between college affordability and college quality."

(Read More: Forget Financial Aid, Soon-to-Be College Students Need Financial Ed)

"It's unconscionable," said Amy Laitinen, deputy director for higher education at the New America Foundation, a Washington think tank. "This is one of the biggest investments students are ever going to make, and they have little to no information about what the return on their investment will be."

Education to Employment

"We think this all points to the need for a systems approach to the 'education to employment' challenge we face," said McKinsey's Dua. It's critical to arm students with the information they need to make better college and career decisions, particularly given the realities of a shifting labor market, he said.

"We need to educate high school students before they even think about college," said Dua, adding that all colleges need "to integrate work experience into student life."

(Read More: Student-Loan Borrowers Reluctant to Make Big Purchases)

But implementing such a change will be a challenge, according to Kantrowitz.

"If you think of a college as a business, they're all about selling you on enrolling," he said. "It takes a lot of courage for a college to focus on what's in the student's best interest, as opposed to their own financial interests."

Still, said Laitinen of NAF, our ability to meet the challenge will mean the difference between success and failure for a generation of students.

"You wouldn't go to buy a car without doing basic research," she said. "But here we are spending tens of thousands of dollars on a school, and we know almost nothing about it—other than maybe the mascot."

There are signs that policymakers are listening.

The Student Right to Know Before You Go Act, co-sponsored by Sens. Ron Wyden (D-Ore.), Marco Rubio (R-Fla.) and Mark Warner (D-Va.), aims to press colleges receiving federal funds to provide students and their families with data on graduation and employment rates.

"It's really exciting," Laitinen said of the bill, citing the strong bi-partisan support it's received so far.