U.S. economic growth may not top 2 percent this year and a third round of quantitative easing by the Federal Reserve would have little effect, said Martin Feldstein, a professor of economics at Harvard University.
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Ever since oil was discovered in the North Sea off the British coast in December 1969, the Scottish National Party claimed it for Scotland.
Now in power and closer than ever to a referendum on whether to break from the U.K. after more than 300 years, the SNP government in Edinburgh led by Scottish First Minister Alex Salmond is counting on tax revenue from the oil industry as a key pillar of the economy along with financial services.
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A U.S. official has urged Romanians to avoid the violence that has tarred a week of anti-government protests that have swept the country, injuring more than 60.
U.S. State Department spokeswoman Victoria Nuland said in comments broadcast Friday by Romanian media that Washington supported people’s right to protest and express their views “peacefully.”
“But we call on both protesters and authorities to refrain from any violence,” she added.
A majority of the protests have been peaceful, but riot police official Aurel Moise said 100 protesters had been questioned Thursday on suspicion of throwing stones and using iron fences to break through police lines.
Police used tear gas after protesters started a fire and set up a barricade. Five people were injured.
Builders began work on fewer houses than forecast in December, capping the worst year on record for single-family home construction and signaling recovery in the industry will take time.
Housing starts dropped 4.1 percent to a 657,000 annual rate last month, reflecting a slump in multifamily dwellings, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, were little changed.
Four years after housing helped spark the last recession, falling home prices and ongoing foreclosures are hampering an industry-wide recovery. For all of 2011, work was started on 428,600 single-family homes as construction competed with the surfeit of previously owned dwellings.
Employment grew solidly last month and the jobless rate dropped to a near three-year low of 8.5 percent, offering the strongest evidence yet of an acceleration in economic activity.
Nonfarm payrolls increased 200,000 last month, the Labor Department said on Friday, the most in three months and way above economists’ expectations for a 150,000 gain.
The economy needs to sustain the current pace of job creation to signal a robust recovery is finally under way.
The unemployment rate dropped from a revised 8.7 percent in November, which was previously reported as 8.6 percent. The jobless rate is now the lowest since February 2009.
“This highlights that the U.S. economy is on its way to recovery even as strains in Europe persist,” said David Watt, senior currency strategist at RBC Capital in Toronto.
Stocks index futures extended gains on the data, while prices for Treasury debt fell. The dollar rose against the euro.
Signs the labor market is gaining traction could offer some comfort for the Obama administration, whose economic policies are constantly attacked by the Republicans.
The state of the labor market could determine whether President Barack Obama gets re-elected in November.
The report cemented views that growth in the fourth quarter accelerated after a tepid performance in the first 9 months of the year.
A string of better-than-expected U.S. economic indicators in recent weeks has highlighted a contrast between the recovery in the world’s biggest economy and Europe, which is already widely believed to be in recession and probably faces worse to come.
Though the payrolls count for October and November was revised to show 8,000 fewer jobs created than previously reported, there is no denying the labor market is recovering.
The separate household survey, from which the jobless rate is derived, showed gains in employment and a modest decline in the labor force, helping to lower the jobless rate.
A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, dropped to an almost three-year low of 15.2 percent from 15.6 percent in November.
Still, the economy needs even faster pace of job growth over a sustained period to make a noticeable dent in the pool of the 23.7 million Americans who remain either out of work or underemployed since the end of the 2007-09 recession business card design.
With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds.
Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years.
This should keep alive the possibility of the Federal Reserve embarking on a third round of asset purchases, or quantitative easing, to spur stronger growth.
GOVERNMENT A DRAG
All the job gains in December came from the private sector, where payrolls rose 212,000 - the most in three months. Government employment contracted 12,000.
For all of 2011, the private sector added 1.9 million jobs, while government employment fell 280,000.
A measure of the share of industries that showed job gains during the month rebounded after falling sharply in November.
There were job gains in construction, where unseasonably mild weather has boosted groundbreaking for new homes. Construction payrolls increased 17,000 after falling 12,000 in November.
Transportation and warehousing also got a boost from the mild temperatures, with employment jumping 50,200.
The bulk of the transportation increase came from the courier and messenger industry, which rose 42,000, probably reflecting gains from online purchases during the holiday season.
Manufacturing jobs rose 23,000, the largest gain since July. Factory employment rose 225,000 last year.
Retail employment rose 27,900 after hefty gains in November as retailers geared for a busy holiday shopping season.
Healthcare and social assistance increased 28,7000 after rising 20,200 in November. But temporary hiring - seen as a harbinger of future hiring - fell 7,500 in December after gaining 11,200.
Even though employment picked up last month, hourly earnings rose a modest four cents, indicating that most of the jobs being created are low paying. The high unemployment rate also means wages cannot grow much.
This is a potentially troubling sign for consumer spending, which has been largely supported by a reduction in savings.
The average workweek rose to 34.4 hours from 34.3 hours in November.
The endgame at hand, House Republicans struggled Thursday to pass legislation to prevent a looming government default while slicing nearly $1 trillion from federal spending. Senate Democrats pledged to scuttle the bill _ if the GOP could get it through the House _ in hopes of forcing a final compromise.
As afternoon debate headed toward evening, GOP leaders ordered an unexplained halt on the measure as Speaker John Boehner summoned a string of recalcitrant rank-and-file Re(publicans to his office.
Asked what he and Boehner had talked about, Rep. Jeff Flake, R-Ariz., said, “I think that’s rather obvious. .. There’s negotiations going on.”
It wasn’t clear how long the delay might last, although a spokesman for Boehner said the vote was still expected to take place later in the evening.
The White House quickly taunted Boehner’s Republicans.
“Clock ticks towards August 2, House is naming post offices, while leaders twist arms for a pointless vote. No wonder people hate Washington,” White House Communications Director Dan Pfeiffer tweeted.
Earlier, Boehner had exuded optimism.
“Let’s pass this bill and end the crisis,” said the president’s principal Republican antagonist in a new and contentious era of divided government. “It raises the debt limit and cuts government spending by a larger amount.”
President Barack Obama has threatened to veto the measure, and in debate on the House floor, Rep. Debbie Wasserman Schultz of Florida savaged it as a “Republican plan for default.” She said the GOP hoped to “hold our economy hostage while forcing an ideological agenda” on the country.
Despite the sharp rhetoric, there were signs that gridlock might be giving way.
“Around here you’ve got to have deadlock before you have breakthrough,” said Sen. Kent Conrad, D-N.D. “We’re at that stage now.”
Wall Street suffered fresh losses as Congress struggled to break its long gridlock. The Dow Jones industrial average was down for a fifth straight session.
The Treasury Department moved ahead with plans to hold its regular weekly auction of three-month and six-month securities on Monday. Yet officials offered no information on what steps would be taken if Congress failed to raise the nation’s $14.3 trillion debt limit by the following day.
Without signed legislation by Aug. 2, the Treasury will not have enough funds to pay all the nation’s bills. Administration officials have warned of potentially calamitous effects on the economy if that happens _ a spike in interest rates, a plunge in stock markets and a tightening in the job market in a nation already struggling with unemployment over 9 percent.
White House press secretary Jay Carney outlined White House compromise terms: “significant deficit reduction, a mechanism by which Congress would take on the tough issues of tax reform and entitlement reform and a lifting of the debt ceiling beyond … into 2013.”
The last point loomed as the biggest obstacle.
The House bill cuts spending by $917 billion over a decade, principally by holding down costs for hundreds of government programs ranging from the Park Service to the Agriculture Department and foreign aid.
It also provides an immediate debt limit increase of $900 billion, which is less than half of the total needed to meet Obama’s insistence that there be no replay of the current crisis in the heat of the 2012 election campaigns.
An additional $1.6 trillion in borrowing authority would be conditioned on passage of at least $1.8 trillion in further savings to be recommended by a newly created committee of lawmakers. Those deficit reductions would presumably come from cuts to benefit programs such as Social Security and Medicare, as well as an overhaul of the tax code generating additional government revenue.
The GOP bill’s $917 billion in upfront spending cuts was trillions less than many tea party-backed rank-and-file Republican lawmakers wanted, but a total that seemed nearly unimaginable when they took power in the House last winter with an agenda of reining in government. Numerous Republicans grumbled that the legislation didn’t cut more deeply, and Boehner and the rest of the GOP leadership have spent their week cajoling reluctant conservatives to provide the votes needed to pass it.
By most accounts, they were succeeding.
“It gives us a little bit of heartburn because it doesn’t go big enough,” said Rep. Sean Duffy, R-Wis., a first-term lawmaker who said he would vote for the bill as the best one available.
Another first-term Republican, Rep. Martha Roby of Alabama, said the bill was “far from perfect. But I don’t have the luxury of writing the plan by myself, and neither does Speaker Boehner.”
While the White House and Democrats objected to the House bill, they readied an alternative that contained similarities.
Drafted by Senate Majority Leader Harry Reid, it provides for $2.7 trillion in additional borrowing authority for the Treasury. It also calls for cuts of $2.2 trillion, including about $1 trillion in Pentagon savings that assume the end of the wars in Iraq and Afghanistan.
Even before the House voted, Reid served notice he would stage a vote to kill the legislation almost instantly.
“No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now,” he said.
With the House and Senate focused on debt-limit legislation at opposite ends of the Capitol, eleven religious leaders protesting budget cuts were arrested in the Rotunda midway between the two chambers.
Democratic Rep. Chellie Pingree of Maine said on the House floor that they were praying for those who will be “hurt the hardest” by the bill being considered.
Rep. David Dreier, R-Calif., countered that he, too was praying _ to avoid a default.
The day’s events marked the climax of a struggle that began last winter, when the Treasury Department notified Congress it would need additional borrowing authority, and Boehner said any increase would have to include steps to reduce future spending.
At first the White House balked at the terms, then relented. That gradually morphed into a series of bipartisan negotiations, one led by Vice President Joe Biden, then another by Obama, and finally, a round of golf that led to stab at a “grand bargain” between the president and Boehner.
Boehner announced last Friday he was calling off the talks, setting in motion a frantic week of maneuvering as the default deadline grew near.
The Canadian Radio-television and Telecommunications Commission has struggled for years to deal with an issue that lies at the heart of Internet services in Canada: how can it foster greater competition from independent Internet providers while also addressing telecom and cable company concerns about network congestion.
In 2009, the CRTC believed it found the right solution. It established Internet traffic management guidelines (often referred to as net neutrality rules) that created limits on how Internet providers could throttle or limit download speeds and it encouraged providers to use
Australia’s tax on carbon emissions will cost Qantas 110 million to 115 million Australian dollars ($118 million to $123 million) for the 2013 financial year and lead to an increase in passenger fares, the airline said Monday.
The flagship Australian carrier is one of the first of the nation’s major companies to release details of the financial impact of the tax, which will force the 500 worst polluters to pay AU$23 for every ton of carbon they emit.
The government released details of the tax on Sunday, saying it would help Australia lower its massive carbon emissions. Australia is one of the world’s worst greenhouse gas polluters because of its heavy reliance on coal for electricity.
The government is granting AU$9.2 billion in compensation over the next three years to industries affected by the tax, but Qantas said airlines are exempted from that assistance. The tax goes into effect on July 1, 2012.
Qantas said it would pass the costs onto its customers, with the tax adding an average of AU$3.50 to the price of a domestic flight ticket in the financial year ending June 30, 2013. The carbon tax does not apply to international flight fuel.
Qantas shares were down 2.5 percent to AU$1.95 in early afternoon trading.
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