US economy, though sluggish, may now be sturdier
WASHINGTON (AP) — Out of a seemingly hollow recovery from the Great Recession, a more durable if still slow-growing U.S. economy has emerged.
That conclusion, one held by a growing number of economists, might surprise many people. After all, in the five years since the recession officially ended, Americans’ pay has basically stagnated. Millions remain unemployed or have abandoned their job searches. Economic growth is merely plodding along.
Yet as the economy has slowly healed, analysts say it has replaced some critical weaknesses with newfound strengths. Among the trends:
— Fewer people are piling up credit card debt or taking on risky mortgages. This should make growth more sustainable and avoid a cycle of extreme booms and busts.
Get paid for posts? Social networking’s new twist
SAN FRANCISCO (AP) — Facebook and most other social networks are built on the premise that just about everything should be shared —except the money those posts produce.
At least two services are trying to change that. Bubblews, a social network that came out of out of an extended test phase last week, pays users for posts that attract traffic and advertisers. Another company, Bonzo Me, has been doing something similar since early July.
Bonzo Me is paying its users up to 80 per cent of its ad revenue for the most popular posts.
Meat supplier in China scandal has global reach
NEW YORK (AP) — It isn’t a household name, but the company at the centre of a food scandal in China helps make some of the world’s most popular foods, including the Big Macs and Quarter Pounders served at McDonald’s locations.
OSI Group, a privately-held company based in Aurora, Illinois, was thrust into the spotlight this weekend when a Chinese TV station reported that one of its Shanghai plants repackaged old beef and chicken and slapped new expiration dates on them. The scare has ensnared chains including McDonald’s, KFC, Burger King and Starbucks, all of which got ingredients from a unit of OSI (pronounced OH-see) in the region called Husi Food Co.
SEC votes to end $1 a share for some money funds
WASHINGTON (AP) — Regulators have voted by a narrow margin to end a longtime staple of the investment industry — the fixed $1 share price for money-market mutual funds — at least for some money funds used by big investors.
The idea is to minimize the risk of a mass withdrawal from the funds during a financial panic.
The Securities and Exchange Commission also is letting all money funds block withdrawals when their assets fall below certain levels or impose fees for withdrawals.
The new rules were adopted Wednesday on a 3-2 vote, culminating several years of regulatory haggling and false starts. They were opposed by one Democratic and one Republican commissioner.
Retail trade group reduces annual sales forecast
NEW YORK (AP) — The nation’s largest retail trade group has pared its annual sales forecast because of slower-than-expected growth during the first half of the year tied to winter storms and lingering economic woes.
The Washington-based National Retail Federation said Wednesday that it now expects retail sales to rise 3.6 per cent this year to $3.19 trillion, instead of its original prediction of a 4.1 per cent increase, released in early February.
The figures include sales in stores and online but exclude automotive sales and sales at gas stations and restaurants. Online sales, which account for about 6 per cent of total sales, are expected to rise about 10 per cent this year, according to the National Retail Federation.
Former trader gets 2 years in prison for fraud
NEW HAVEN, Conn. (AP) — A federal judge sentenced a former Wall Street trader to two years in prison on Wednesday for securities fraud, saying he took advantage of a government bailout program.
The judge also fined Jesse Litvak $1.75 million.
Litvak was found guilty in March of securities fraud, Troubled Asset Relief Program fraud and making false statements to the federal government. He was the first person convicted of a crime related to the program that used bailout funds in the financial meltdown to restart trading markets for mortgage-backed securities.
Fair Trade brings big sales and a clear conscience
NEW YORK (AP) — Brooklyn Roasting Co. has a booming business based on helping people thousands of miles away.
Ninety per cent of the coffee the New York-based company sells is Fair Trade — certified as produced by people who are treated and paid well.
Being socially responsible pays off for Brooklyn Roasting, which sells to restaurants, food stores and the public through its website. Sales of its Fair Trade coffee, which comes from Mexico, Peru, Indonesia and Ethiopia, have soared from $900,000 in 2011 to $4.4 million last year. They are expected to reach $6 million in 2014.
European carriers suspend more Tel Aviv flights
BERLIN (AP) — Air France and Germany’s two largest airlines on Wednesday cancelled more flights to Tel Aviv because of safety concerns amid the fighting between Israel and Hamas.
Lufthansa and Air Berlin extended their cancellations through Thursday and Air France said it was suspending its flights “until further notice.”
The European Aviation Safety Agency late Tuesday said it “strongly recommends” that airlines refrain from operating flights to and from Tel Aviv. It said it would “monitor the situation and advise on any update as the situation develops.”
EASA acted after the U.S. Federal Aviation Administration prohibited American-based airlines from flying to the airport following a Hamas rocket explosion nearby. The FAA was expected to issue a new statement later Wednesday.
New safety rules proposed to curb oil train fires
WASHINGTON (AP) — Thousands of older rail tank cars that carry crude oil would be phased out within two years under U.S. regulations proposed Wednesday in response to a series of fiery train crashes over the past year, including a runaway oil train that exploded in the Quebec town of Lac-Megantic, killing 47 people.
Accident investigators have complained for decades that the cars are too easily punctured or ruptured, spilling their contents, when derailed.
The phase-in period for replacing or retrofitting the DOT-111 tank cars is shorter than the Canadian government’s three-year phased plan. However, regulators left open the question of what kind of tank car will replace the old ones, saying they will choose later from among several proposals.
Senate bill targets companies that move overseas
WASHINGTON (AP) — The Senate voted Wednesday to advance an election-year bill limiting tax breaks for U.S. companies that move operations overseas. But big hurdles remain.
The Senate voted 93-7 to begin debating the bill, which would prevent companies from deducting expenses related to moving operations to a foreign country. The bill would offer tax credits to companies that move operations to the U.S. from a foreign country.
Senate Democratic leaders say the bill would end senseless tax breaks for companies that ship jobs abroad.
Most Republicans joined Democrats in voting to take up the bill. But Republican senators are unlikely to support final passage of the bill without significant changes.
Agents get subsidized ‘Obamacare’ using fake IDs
WASHINGTON (AP) — Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama’s health care law, congressional investigators said Wednesday.
The weak link seemed to be call centres that handled applications for frazzled consumers unable to get through online.
The nonpartisan Government Accountability Office told a House committee that its investigators were able to get subsidized health care under fake names in 11 out of 18 attempts — even after HealthCare.gov’s much maligned online system flagged some applications as problematic.
The GAO is still paying premiums for the policies, even as the Obama administration attempts to verify phoney documentation.
By The Associated Press=
The Dow Jones Industrial average fell 26.91 points, or 0.2 per cent, to 17,086.63. The S&P 500 rose 3.48 points, or 0.2 per cent, to close at 1,987.01. The Nasdaq composite rose 17.68 points, or 0.4 per cent, to end at 4,473.70.
The benchmark U.S. oil contract for September delivery gained 73 cents to $103.12 a barrel on the New York Mercantile Exchange. Brent crude for September delivery, a benchmark for international oils, rose 70 cents to $108.03 on the ICE Futures exchange in London. Wholesale gasoline fell 2 cents to $2.86 a gallon. Heating oil rose 2 cents to $2.875 a gallon. Natural gas fell 1 cent to $3.76 per 1,000 cubic feet.