On Friday January 7, 2011, 5:40 pm EST
Slow growth in jobs
underscores challenge ahead
WASHINGTON (AP) -- The U.S.
economy is steadily adding jobs, but still just barely enough to keep up with
the growth of the work force. The weakness underscores the nation's struggle to
get back to something resembling normal employment.
The economy added 103,000
jobs in December, a figure that fell short of what most economists were hoping
for. The unemployment rate did come down, to 9.4 percent from 9.8, but that was
partly because people gave up looking for work.
Over the past three months,
the economy has added an average of 128,000 jobs a month. That's just enough to
keep up with population growth. Nearly twice as many are generally needed to
significantly reduce the unemployment rate.
All told, employers added
1.1 million jobs in 2010, or about 94,000 a month. The nation still has 7.2
million fewer jobs today than it did in December 2007, when the recession
began.
Bernanke: 4-5 years to
reach normal unemployment
WASHINGTON (AP) -- Federal
Reserve Chairman Ben Bernanke sketched a more optimistic view of the economy
Friday but said the Fed's $600 billion bond-buying program is needed because
unemployment will likely stay elevated for up to five more years.
Bernanke told the Senate
Budget Committee that there's rising evidence that a
"self-sustaining" recovery is taking hold. He said he expects
stronger growth because consumers and businesses will boost spending this year.
Bernanke spoke an hour
after the government released a disappointing employment report. Employers
added only 103,000 jobs in December. The unemployment rate fell to 9.4 percent
partly because people gave up looking for jobs. Many economists had forecast
much bigger job gains and were looking for a signal that businesses were
stepping up hiring.
Court rules against banks
in pivotal mortgage case
BOSTON (AP) -- The highest
court in Massachusetts has ruled against U.S. Bancorp and Wells Fargo & Co.
Friday in a widely watched mortgage foreclosure case that could have serious
implications for the nation's largest banks.
The Supreme Judicial Court
affirmed a lower court judge's ruling invalidating two mortgage foreclosure
sales because the banks did not prove that they actually owned the mortgages at
the time of foreclosure.
Last fall, the banking
industry's foreclosure machine came under intense scrutiny with the revelations
that low-level employees called "robo signers" powered through
hundreds of foreclosure affidavits a day without verifying a single sentence.
At the time, analysts warned that the banks' allegedly fraudulent document
procedures could imperil their ability to prove that they owned the mortgages.
The Supreme Judicial Court
found that the banks, who were not the original mortgagees, did not make a
required showing that they held the mortgages at the time of foreclosure. As a
result, the court found, the banks did not demonstrate that the foreclosure
sales were valid to convey title to the properties.
Consumers boost borrowing
in November
WASHINGTON (AP) --
Americans increased the amount of money they borrowed in November, mostly to
buy cars and attend college. But the second straight month of gains barely
raised consumer credit above its lowest point in four years.
Consumer debt rose $1.3
billion in November, the Federal Reserve said Friday. That follows a revised $7
billion increase in October.
The increase pushed overall
borrowing to an annual rate of $2.4 trillion. That's not much higher than the
$2.39 trillion rate from September -- the lowest point since January 2007. It's
6.9 percent below the $2.58 trillion high point hit in July 2008.
The figures are not
adjusted for inflation.
Households have been
borrowing less and saving more since the recession began in December 2007. This
has been a major factor holding back overall economic growth because it has
dampened consumer spending. Consumers account for 70 percent of total economic
activity.
Many analysts said they
expect limited increases in the amount of money people borrow when unemployment
remains high and job growth is slow.
Eurozone Q3 economic growth
lower than thought
LONDON (AP) -- Economic
growth in the 16 countries that used the euro in the third quarter of 2010 was
weaker than previously estimated as investment declined and households held
back on spending, official figures showed Friday.
Eurostat, the EU's
statistics office, said eurozone output rose by only 0.3 percent during the
quarter. That's down on the previous estimate of 0.4 percent and way below the
1 percent growth recorded in the second quarter.
The revision means that the
eurozone grew by half the United States' 0.6 percent rate and far less than
Japan's 1.1 percent.
The most marked slowdown in
growth was seen in Germany. Though Europe's biggest economy grew by a
still-healthy 0.7 percent during the third quarter, that was only a fraction of
the 2.3 percent recorded in the second quarter, when its exports surged on a
rebound in global trade.
Lower growth was recorded
all round the 16-country single currency bloc but Greece was the only one still
in recession -- its economy shrank a further 1.3 percent during the quarter,
worse than earlier expected.
Portugal's debt worries
worsen as bond yields rise
LISBON, Portugal (AP) --
Portugal's bond yields rose to euro-era record highs on Friday, driven by
market fears about the debt-laden country's economic health and wider concerns
about the eurozone's financial stability.
Investors are worried the
government won't be able to meet its debt obligations and may need a bailout
like those provided to Greece and Ireland last year.
Borrowing rates edged up
across much of the rest of Europe after a eurozone growth figure was revised
down, but traders were by far most worried about Portugal -- its 10-year
government bond yield spiked above 7.1 percent.
The nervousness triggered a
steep drop in Portuguese share prices. The Lisbon benchmark stock index closed
down 3 percent, dragged lower by a sharp fall in shares in Portuguese banks
which are exposed to national debt.
Portugal is one of the
17-nation eurozone's smaller members, accounting for less than 2 percent of the
bloc's gross domestic product. But its difficulties could stoke the continent's
debt crisis, especially by placing pressure on its much larger neighbor Spain,
which also has debt problems.
Obama sets mission for new
team: Accelerate growth
WASHINGTON (AP) -- His
presidency tied to the fate of the economy, Barack Obama is revamping his
economic policy team and signaling cooperation to ascendant Republicans and the
business community at a pivotal moment in the nation's recovery and Washington
politics.
The president is
surrounding himself with veterans of the Clinton administration. Chief of staff
William Daley, economic overseer Gene Sperling and recently confirmed budget
director Jacob Lew form an inner circle with a history of bipartisanship and
experience in the art of the deal.
Automakers again tout small
cars at Detroit show
DETROIT (AP) -- A new Prius
wagon, a small Ford minivan and a Volkswagen sedan won't be the sexiest cars at
the Detroit auto show. But car makers are counting on them being winners this
year if more buyers start choosing small size and fuel efficiency over
horsepower and heft.
The show opens to the
public Jan. 15. The car industry was sobered by the economic crisis, and it's
betting buyers were, too, especially with gas prices and U.S. fuel economy
standards rising.
Unlike the past, Detroit
car makers won't be left behind if higher pump prices convince drivers to buy
more fuel-efficient vehicles. The companies already have stylish, well-made
small cars in showrooms and will display new ones at the upcoming show.
By The Associated Press
The Dow Jones industrial
average fell 22.55 points, or 0.2 percent, to close at 11,674.76.
The Standard & Poor's
500 index fell 2.35, or 0.2 percent, to 1,271.50. The Nasdaq composite fell
6.72, or 0.3 percent, to 2,703.17.
Benchmark crude for
February delivery fell 30 cents to settle at $88.03 per barrel on the New York
Mercantile Exchange. Prices ended the week at the lowest level since Dec. 17.
In other Nymex trading for
February contracts, heating oil fell 2.49 cents to settle at $2.4863 per
gallon, and gasoline dropped 2.99 cents to settle at $2.4131 per gallon.
Natural gas gave up 1.2 cents to settle at $4.422 per 1,000 cubic feet. In
London, Brent crude lost $1.19 to settle at $93.33 per barrel.