Economy

Consumer spending and personal incomes show weak gains; core durable goods orders fall

Dec 23rd, 2011 | By

Both the spending and income gains fell below expectations. Economists have said that solid increases in spending could boost economic growth in the final three months of what has been a disappointing year. Paul Ashworth, chief U.S. economist at Capital Economics, called the consumer spending figure disappointing. He said it would probably mean lower economic growth than had been expected. Rather than grow at an annual rate of up to 3 percent in the October-December quarter, the economy will likely expand at a rate of about 2.5 percent this quarter, Ashworth says. That would still be an improvement from the
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Stocks edge higher as economic hopes persist, despite mixed data on spending, investment

Dec 23rd, 2011 | By

In another worrying sign, a measure of business investment decreased for the second straight month. Business investment has been a pocket of strong demand and spending amid a sluggish recovery. Companies bought more long-lasting manufactured goods, but the result was skewed by strength in the volatile aerospace industry. Markets have risen this week after a string of reports lifted hopes for economic growth in the fourth quarter ending next week. New claims for unemployment benefits fell last week to the lowest level since April 2008, long before anyone realized the nation was in a recession. The Dow Jones industrial average
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Overnight deposits at European Central Bank hit year high in sign of mistrust

Dec 23rd, 2011 | By

It’s a sign of mistrust in the interbank lending market where banks raise operating funds, suggesting they are depositing money with the central bank at low interest rates because they are afraid to lend it to other banks — for fear they won’t get paid back. Europe is suffering from a debt crisis marked by concerns that heavily indebted governments such as Italy may be unable to pay off their bonds. That means trouble for banks because they typically hold government bonds. The large deposits come despite Wednesday’s massive central bank credit operation, in which the ECB let banks borrow
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Initial jobless claims go down despite jobs being scarce

Dec 23rd, 2011 | By

It beats the massive job cuts of 2009, but there are frustratingly few signs that the job market will return to health anytime soon. “It’s Groundhog Day,” said Heidi Shierholz, an economist at the Economic Policy Institute. “It’s the same thing, over and over. We’re not backtracking or contracting. It’s just static, not losing ground but also not digging out of it.” The Labor Department reported Thursday that 364,000 people last week filed initial claims for jobless benefits — the lowest figure since spring 2008. The revised number for the previous week was 368,000. The numbers can be particularly volatile
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Wonkbook: Mitt Romney is winning the payroll tax fight

Dec 22nd, 2011 | By

The conventional wisdom in Washington is that Republicans are losing the payroll tax fight, and bad. And, for the moment, that’s true. The issue has pitted Senate Republicans against House Republicans, business conservatives against tea partiers, and everybody against Speaker John Boehner. But the fact of the matter is, not all Republicans are losing this one. Mitt Romney, in particular, owes Boehner — and his more intransigent members — a fruit basket. Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks at the Stage Restaurant in Keene, NH., Wednesday, Dec. 21, 2011. Romney is kicking off a three day bus
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Oil rises above $99 in Europe as traders eye possible improving US crude demand, EU debt woes

Dec 22nd, 2011 | By

The Post MostMost-viewed stories, videos, and galleries in the past two hours Most Popular Gingrich, the anti-conservative House Republicans face pressure on extension of payroll tax cut In Kansas, Gov. Sam Brownback puts tea party tenets into action with sharp cuts The best way to end the payroll tax standoff After payroll-tax debacle, GOP goes into damage-control mode Top Videos Two women kiss at Navy ship’s return Obama goes Christmas shopping in Virginia FedEx worker throws box over fence Gingrich trims the Judicial branch Gingrich to gay voter: Support Obama Top Galleries Notable deaths of 2011 Wonkblog: Economic experts explain
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Get ready for Too-Big-to-Fail envy

Dec 22nd, 2011 | By

Regulators across the globe have been trying to rein in banks that have gotten so big, risky, and complex that they could bring down the whole financial system. In the United States and Europe, big banks that regulators consider systemically risky are now increasingly subject to regulation. But it turns out that there’s an upside to being labeled “too big to fail.” (GETTY IMAGES) In early November, the G-20 designated 29 financial institutions as “systemically important financial institutions,” or G-Sifis, that would be required to hold higher levels of capital, which could affect some of these banks’ returns. But there’s
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Stocks open higher after unemployment claims drop, encouraging economic growth numbers

Dec 22nd, 2011 | By

(Richard Drew, File/Associated Press) – FILE – In this Dec. 20, 2011 file photo, traders John Panin, center, and Robert Charmay, right, work on the floor of the New York Stock Exchange. European markets bounced back Thursday, Dec. 22, 2011, as the traditional holiday slowdown began in earnest, rising a day after investors were rattled by the European Central Bank’s huge loans to bolster the continent’s banks.



Italy government wins confidence vote as Senate backs austerity package

Dec 22nd, 2011 | By

The Post MostMost-viewed stories, videos, and galleries in the past two hours Most Popular Gingrich, the anti-conservative House Republicans face pressure on extension of payroll tax cut In Kansas, Gov. Sam Brownback puts tea party tenets into action with sharp cuts The best way to end the payroll tax standoff After payroll-tax debacle, GOP goes into damage-control mode Top Videos Two women kiss at Navy ship’s return Obama goes Christmas shopping in Virginia FedEx worker throws box over fence Gingrich trims the Judicial branch Gingrich to gay voter: Support Obama Top Galleries Notable deaths of 2011 Wonkblog: Economic experts explain
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Allowing payroll tax cuts to expire could harm economic recovery

Dec 22nd, 2011 | By

The economy is in a delicate spot, barely growing fast enough to keep the unemployment rate from rising. A tax increase in 2012 could slow economic growth enough to make the jobless rate rise again. At the least, the tax increase could make the economy more vulnerable to outside shocks, such as last year’s spike in oil prices or new financial turmoil in Europe. “We’re right on the knife’s edge, and when you’re operating this close to the edge, the last thing you need is a wind to come along and push you over,” said Stuart Hoffman, chief economist at
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