On Thursday February 17, 2011, 6:02 pm EST
Consumers paid more for
most goods in January
WASHINGTON (AP) --
Consumers paid more in January for everything from food and gas to airline
tickets and clothing. The price increases reflect creeping but still-modest
inflation.
The Consumer Price Index
rose 0.4 percent last month, matching December's increase, the Labor Department
said Thursday. Over the past year, the index has risen 1.6 percent.
Core prices, which exclude
volatile food and energy costs, rose 0.2 percent. That's the largest monthly
increase in more than a year. Over the past 12 months, core prices have
increased 1 percent. This is more than December's 0.8 percent annual pace, but
it remains well below the Federal Reserve's comfort zone for inflation of
between 1.5 percent and 2 percent.
Food prices climbed 0.5
percent in January, the most in more than two years. Still, food costs in the
U.S. are still tame compared with the raging inflation in many developing
countries. Those countries are more vulnerable to steep rises in the prices of
corn, wheat, coffee and other commodities.
Leading indicators rise 0.1
percent in January
NEW YORK (AP) -- A private
research group's gauge of future economic activity rose a slim 0.1 percent in
January, significantly slower than in recent months as a measure of the housing
market tumbled.
The rise in the Conference
Board's index of leading economic indicators was the seventh consecutive
monthly advance, but It was slower than a revised 0.8 percent increase in
December and a 1.1 percent advance in November. Those had been the biggest
increases since March.
The January increase was
the slowest since a 0.1 percent rise in August.
The index can swing wildly
from month to month. January's slowdown isn't necessarily a sign that economic
growth will slacken over the next few months.
The main drag on the index
was a more than 10 percent decline in building permits, partly due to a change
in the building code in some big states that had sparked a rush in such
applications in December.
The leading indicators
began moving sharply higher last fall as the stock market rallied, consumers
spent more, the manufacturing sector grew steadily and the jobless rate
dropped.
Oil companies unveil spill
containment system
NEW YORK (AP) -- A group of
oil companies led by Exxon said Thursday it has built a system that can stop an
undersea oil spill within weeks, a critical step toward resuming drilling in
the deepest parts of the Gulf of Mexico.
The group said its
combination of equipment and support vessels can contain a spill similar to
BP's massive gusher, which took almost three months to plug. Some of the
equipment was used by BP in containing its well blowout last year.
Regulators have demanded
that oil companies demonstrate the capability to contain the blowout of an
underwater well before granting permits to drill again in Gulf waters deeper
than 500 feet.
Exxon said this system
meets that demand and should have no trouble gaining government approval. The
group's engineers consulted with regulators during development, Exxon said.
The system is designed to
be fully assembled in two to three weeks after a blowout. It can work at depths
up to 8,000 feet and capture as much as 60,000 barrels of liquid and 120
million cubic feet of gas per day. BP's Macondo well blew out at about 5,000
feet below sea level and spilled an average of 52,400 barrels per day. At its
peak, BP's well spewed 61,900 barrels per day.
Drilling in the Gulf was
suspended last year when the Obama administration imposed a monthslong
moratorium following the BP spill. The ban was lifted in October, but deepwater
drilling has not yet resumed.
Average rate on 30-year
mortgage dips to 5 percent
NEW YORK (AP) -- Fixed
mortgage rates inched down this week, following a dip in Treasury yields.
The average rate on a
30-year fixed mortgage slipped to 5 percent from 5.05 percent last week,
Freddie Mac said Thursday. It hit a 40-year low of 4.17 percent in November.
The average rate on the
15-year fixed home loan also fell to 4.27 percent from 4.29 percent. It reached
3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to
track the yield on the 10-year Treasury note, which slipped this week after the
White House unveiled its $3.7 trillion budget request for the next fiscal year.
The yield had spiked last week on fears of higher inflation.
The recent rise in rates
adds another obstacle for the struggling housing market. Historically low rates
did little to boost sales last year. Potential buyers remain on the sidelines
because of job worries, falling home prices and record high foreclosures.
Unemployment benefits jump
to 410,000
WASHINGTON (AP) -- More
people applied for unemployment benefits last week, one week after claims had
fallen to the lowest level in nearly three years.
The big drop a week earlier
had occurred largely because bad weather in many parts of the country had kept
people from applying for benefits.
The Labor Department said
Thursday that 410,000 people sought unemployment assistance last week, a jump
of 25,000 from the previous week. The rise was much larger than economists had
expected.
Applications are well below
their peak of 651,000, reached in March 2009, when the economy was in the
depths of the recession. Applications below 425,00 are viewed as a signal of
modest job growth but they would need to dip consistently to 375,000 or below
to indicate a significant and steady decline in the unemployment rate.
The big jump in benefit
applications followed a week in which the applications had fallen to a revised
385,000, the lowest level since July 2008. That improvement had reflected
severe winter weather in much of the country that forced the closing of
government offices and prevented people from filing applications for benefits.
Economists had been looking
for a rebound last week as a catch-up from the weather disruptions although the
consensus view had been that claims would only rise to around 400,000.
Obama talks jobs with Jobs,
other tech leaders
WASHINGTON (AP) --
President Barack Obama is assembling the biggest names in Silicon Valley to
confer on jobs and innovation, trying to get leaders from companies like Google
and Apple behind his push to keep spending on high-tech initiatives even as
Republicans are out to slash the budget.
Wunderkind Facebook creator
Mark Zuckerberg, Google chief executive Eric Schmidt, and Steve Jobs, the Apple
founder and CEO who announced last month that he was taking his third medical
leave, are among a dozen business leaders meeting with Obama in California
Thursday evening. Also scheduled to be there: the heads of Twitter, Yahoo,
NetFlix and Oracle, and the president of Stanford University.
The dinner at a private
home in the San Francisco Bay area is closed to the media.
Obama wants to spend
billions on clean energy, education, high-speed Internet and other programs
even as his new budget proposal calls for a five-year freeze on domestic
spending in certain other areas. The approach is getting a frosty reception
from newly empowered Republicans on Capitol Hill, who are pushing steep cuts to
a wide range of programs and balking at new spending.
The president argues that
targeted spending, including education initiatives aimed at producing a more
sophisticated work force, is crucial for job creation and future U.S.
competitiveness with other nations. A stamp of approval from the Silicon
Valley's leading innovators and job creators could help.
At the same time, the
president's meeting Thursday extends outreach to the business community that
he's embarked upon since Democrats suffered steep losses in the November midterm
elections. With unemployment stuck at 9 percent, Obama has been pleading with
corporate America to hire.
111 charged in Medicare
scams worth $225 million
MIAMI (AP) -- Federal
authorities charged more than 100 doctors, nurses and physical therapists in
nine cities with Medicare fraud Thursday, part of a massive nationwide bust
that snared more suspects than any other in history.
More than 700 law
enforcement agents fanned out to arrest dozens of people accused of illegally
billing Medicare more than $225 million. The arrests are the latest in a string
of major busts in the past two years as authorities have struggled to pare the
fraud that's believed to cost the government between $60 billion and $90
billion each year. Stopping Medicare's budget from hemorrhaging that money will
be key to paying for President Barack Obama's health care overhaul.
Health and Human Services
Secretary Kathleen Sebelius and Attorney General Eric Holder partnered in 2009
to allocate more money and manpower in fraud hot spots. Thursday's indictments
were for suspects in Miami, Los Angeles, Dallas, Houston, Detroit, Chicago,
Brooklyn, Tampa, Fla., and Baton Rouge, La.
Spain sells less than hoped
for in bond auction
MADRID (AP) -- Spain has
raised slightly less than it hoped for in 10- and 30-year bond auctions with
interest rates indicating continued investor concern over its debt.
The Treasury said it sold
euro3.5 billion ($4.7 billion) Thursday, less than the targeted euro4 billion.
It raised euro2.8 billion
in 10-year bonds at an average interest rate of 5.2 percent, compared with 5.4
percent in the last such auction in December.
It sold euro997 million in
30-year bonds with the yield up to 6 percent from 5.5 percent in November.
Demand was 1.5 times the
amount offered.
Spain, with 20-percent
unemployment and a swollen deficit after nearly two years of recession, has
been in the market spotlight in recent months amid fears it may need a bailout
like Ireland or Greece.
Risk of foreclosure dips,
but remains elevated
NEW YORK (AP) -- Fewer
Americans fell behind on their mortgage payments in the final three months of
last year, but foreclosures are still rising.
The Mortgage Bankers
Association said Thursday 8.2 percent of homeowners missed at least one
mortgage payment in the October-December quarter. The figure, which is adjusted
for seasonal factors, improved from 9.1 percent in the previous quarter and
from a high of more than 10 percent in the January-March quarter.
The worst delinquency rates
were in Mississippi at 13.3 percent, Nevada at 12 percent and Georgia at 11.9
percent.
The percentage of homes in
the foreclosure process rose to 4.6 percent from 4.4 percent, tying an all-time
high for the survey. Foreclosures are expected to peak this year as 5 million
troubled loans move through the process. Florida and Nevada had the highest
percentage of homes in the foreclosure process at 14.2 percent and 10.1
percent.
California and Florida make
up more than a third of all loans in foreclosure, which is down from nearly 40
percent a year earlier. Still, Florida's foreclosure crisis is one of the most
pronounced in the country. Almost a quarter of Florida homeowners with a loan
are behind on their payments or in the foreclosure process, the worst rate in
the nation.
Typically, the percentage
of seriously delinquent borrowers -- those more than 90 days behind on their
mortgages or in foreclosure -- is just above 1 percent. In the fourth quarter,
that figure was 8.57 percent.
An improving job market is
behind the decline in the delinquency rate, said MBA Chief Economist Jay
Brinkmann. He noted that the private sector added 1.2 million jobs last year
and the number of people applying for unemployment benefits started to fall in
the fourth quarter.
Ex-Chrysler dealers sue
government over closures
WASHINGTON (AP) -- A group
of car dealers who lost their businesses in Chrysler's 2009 bankruptcy have
sued the government, claiming their dealerships were shuttered without adequate
compensation.
Sixty-four former Chrysler
dealers say in the lawsuit filed Thursday that the Treasury Department failed
to compensate them for the dealer closings that were approved by a bankruptcy
judge. The dealers are seeking damages of at least $130 million.
Chrysler closed 789 auto
dealers, or about one quarter of its dealer network in its bankruptcy.
The Treasury Department
declined comment on the lawsuit, which was filed in the U.S. Court of Federal
Claims.
By The Associated Press
The Dow Jones industrial
average rose 29.97 points, or 0.3 percent, to 12,318.1. The Dow has been rising
steadily this month, with only three down days in February. For the month, it's
already up 3.6 percent.
The Standard & Poor's
500 index rose 4, or 0.3 percent, to 1,340.43. The Nasdaq composite rose 6, or
0.2 percent, to 2,831.58.
Benchmark West Texas Crude
for March delivery rose $1.37 to settle at $86.36 a barrel on the Nymex. Brent
crude fell $1.19 to settle at $102.59 a barrel on the ICE Futures exchange, as
some traders took profits after recent gains.
Natural gas for March
delivery lost 5.3 cents to settle at $3.868 per 1,000 cubic feet on Nymex.
Heating oil gave up 4.24
cents to settle at $2.7324 per gallon and gasoline lost 1.70 cents to settle at
$2.5277 a gallon.