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US economy adds 74K jobs, rate falls to 6.7 pct.

Updated: Friday, January 10, 2014 |
WASHINGTON (AP) - U.S. employers added a scant 74,000 jobs in December, the fewest in three years. The disappointing gain ends 2013 on a weak note after recent economic reports had raised hopes for a strong finish.

The Labor Department says the unemployment rate fell from 7 percent in November to 6.7 percent, the lowest level since October 2008. But the drop occurred partly because more Americans stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.

Cold weather may have slowed hiring. Construction firms cut 16,000 jobs, the biggest drop in 20 months.

December's hiring is far below the average gain of 214,000 jobs a month in the preceding four months. But monthly gains averaged 182,000 last year, nearly matching the previous two years.
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Last Update on March 02, 2015 18:30 GMT

CONSUMER SPENDING

WASHINGTON (AP) -- Consumer spending fell for a second consecutive month in January, weakness that was expected to be temporary. Income grew, reflecting strong job gains during the month.

The Commerce Department says consumer spending fell 0.2 percent in January following a 0.3 percent drop in December. Economists had expected a dip, reflecting a big drop in gas prices during the month. That decline should prove to be a positive for the economy going forward, giving consumers more money to spend on other goods.

Income grew 0.3 percent in January as wages and salaries increased a strong $42.4 billion. Analysts expect that solid job gains and low unemployment will bolster consumer spending and lift economic growth this year to what they predict will be the fastest pace in a decade.

ECONOMY-MANUFACTURING

WASHINGTON (AP) -- U.S. factories expanded last month at the weakest pace in a year, with orders, hiring and production all growing more slowly.

The Institute for Supply Management, a trade group of purchasing managers, says its manufacturing index slipped to 52.9 in February from 53.5 in January. It was the fourth straight drop and the lowest reading since January 2014. Still, any reading above 50 signals expansion.

Measures of production and employment fell sharply, though they remained in expansionary territory. That suggests that factories are still adding jobs but at a slower pace than in January.

U.S. manufacturers have been held back in recent months by weak growth in China, Europe and Japan. That's been partly offset by strong consumer demand in the United States.

CONSTRUCTION SPENDING

WASHINGTON (AP) -- U.S. construction spending fell in January, reflecting weakness in spending on office buildings and other nonresidential projects and in government activity.

The Commerce Department says construction spending fell 1.1 percent in January following a revised 0.8 percent increase in December.

Spending on home construction rose 0.6 percent but spending on nonresidential projects dropped 1.6 percent, reflecting declines in hotels, office buildings and the category that covers shopping centers. Spending on government projects also declined in January, falling 2.8 percent.

Private economists had predicted a small overall gain in January.

HP'S BIG ACQUISITION

SAN FRANCISCO (AP) -- Hewlett-Packard is buying wireless networking company Aruba Networks for about $2.7 billion, the biggest acquisition by HP in recent years.

Palo Alto, Calif.-based HP said the deal will boost its commercial technology business as it prepares to split into two companies, one focused on selling commercial computer systems and the other selling personal computers and printers.

Aruba, based in Sunnyvale, Calif., makes wi-fi networking systems for shopping malls, corporate campuses, hotels and universities.

HP is paying $24.67 in cash for each Aruba share. That is slightly below its close of $24.81 on Friday.

The deal announced Monday is HP's biggest since CEO Meg Whitman launched a turnaround effort aimed at reorganizing in the face of declining revenue.

GREECE-BAILOUT

MADRID (AP) -- Spain's economy minister says eurozone nations are negotiating a third bailout for financially strapped Greece that would give the country as much as 50 billion euros ($56 billion).

Luis de Guindos also says that "Greece will not leave the eurozone" because that would not be good for the country or the other 18 countries that also use the common euro currency.

De Guindos says that the bailout would provide between 30 billion euros and 50 billion euros.

He spoke Monday at an economic conference in the city of Pamplona and his comments were sent via email to media outlets.

De Guindos says "the central scenario for Greece is a deal on the basis of the current bailout, and new conditions to be set with flexibility."

MORGAN STANLEY-NY LAWSUIT

NEW YORK (AP) -- Morgan Stanley, which agreed to a $2.6 billion settlement with the federal government last week, says it expects to be sued by New York Attorney General Eric Schneiderman over subprime mortgage bonds.

The bank says it was told about the lawsuit in January and that it will involve about 30 subprime securities. Morgan Stanley say the lawsuit will say that it misrepresented or omitted important information related to loans and the properties securing them.

On Wednesday Morgan Stanley said it would pay $2.6 billion to settle with the federal government over its role in the mortgage bubble and subsequent financial crisis. Wall Street banks have paid tens of billions in similar settlements over the last two years, and Morgan Stanley has reached smaller settlements with federal and state agencies.

EUROPE-GM CROPS

BRUSSELS (AP) -- The European Union is giving member states the power to ban the cultivation of genetically-modified crops even if they have been approved by the bloc's food safety authority.

The 28 EU member states on Monday approved the rule that national governments can have the final say in the matter -- a move that goes counter to many EU initiatives, which traditionally seek a common stance on EU policies.

Mute Schimpf of Friends of the Earth Europe says the new law "is a massive opportunity for national governments to shut the door on biotech crops in Europe."

Only one GM crop -- corn -- is planted in the EU so far, predominantly in Spain. Under the rules, governments would still have to consult biotech companies when banning a crop.

FRANCE-OBSOLETE APPLIANCES

PARIS (AP) -- France is ordering manufacturers to inform consumers how long they can expect their TV, cell phone or other appliance to last -- before they buy it.

A new French government decree that came into effect this week aims at fighting so-called planned obsolescence. That is when companies design strategies to limit the life span of appliances, so that consumers will have to replace them.

The measure requires manufacturers to inform vendors how long spare parts for an appliance will continue to be produced. The vendor is then required to inform the buyer, in writing. Violators face up to 15,000 euros ($16,800) in fines.

A similar French measure coming into effect next year will require manufacturers to replace or repair faulty appliances for free for the first two years after purchase.

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