WASHINGTON (AP) — The weakest quarter for the U.S. economy in nearly two years may end up being a temporary lull. Economists think growth has begun to pick up on the strength of a sustained housing recovery and a better job market.
The economy grew at an annual rate of just 0.1 percent from October from December, a government report Thursday showed. That's only slightly better than the Commerce Department's previous estimate that the economy shrank at a rate of 0.1 percent. And it's down from the 3.1 percent annual growth rate in the July-September quarter.
Economists said the weakness last quarter was caused by steep defense cuts and slower company restocking, which are volatile. Residential construction, consumer spending and business investment — core drivers of growth — all improved. Steady job growth will likely keep consumers spending, despite higher Social Security taxes that have cut into take-home pay.
Speedometer top speed often exceeds reality
DETROIT (AP) — The speedometer on the Toyota Yaris says the tiny car can go 140 miles per hour.
In reality the bulbous subcompact's 106-horsepower engine and automatic transmission can't push it any faster than 109.
So why do the Yaris — and most other cars sold in the U.S. — have speedometers that show top speeds they can't possibly reach?
The answer has deep roots in an American culture that loves the rush of driving fast. The automakers' marketing departments are happy to give people the illusion that their family car can travel at speeds rivaling a NASCAR racer. And companies often use one speedometer type in various models across the world, saving them money.
But critics say the ever-higher numbers are misleading. Some warn they create a safety concern, daring drivers to push past freeway speed limits that are 65 to 75 mph in most states.
Weekly US unemployment benefits claims drop to 344,000
WASHINGTON (AP) — The number of Americans seeking unemployment aid fell by 22,000 last week to a seasonally adjusted 344,000, indicating that the job market may be picking up.
The four-week average of applications dropped 6,750 to 355,000, the Labor Department said Thursday.
Stronger hiring is one of the reasons economists expect more growth in 2013 after a disappointing October-December quarter, when the economy barely grew.
Jacob Lew becomes nation's 76th Treasury secretary
WASHINGTON (AP) — Jacob Lew was sworn in Thursday as the nation's 76th Treasury secretary, a day before across-the-board government spending cuts kick in that could slow down the U.S. economy.
Vice President Joe Biden led the brief ceremony at the Oval Office, with Lew's wife and family and President Barack Obama on hand.
After the ceremony Lew walked to the Treasury Department and was greeted by employees who lined the steps of the building.
Penney's shares plunge after 4Q massive loss
NEW YORK (AP) — J.C. Penney is the biggest loser.
Shares of J.C. Penney Co. plunged 17 percent on Thursday, the biggest loser on the Standard & Poor's 500 index for most of the day. The drop comes a day after the department-store chain reported its fourth consecutive larger-than-expected quarterly loss on another steep sales decline
The drop means that Penney shares, which are now trading under $18, have lost nearly 60 percent of their value since January of last year when CEO Ron Johnson announced his plan to ditch hundreds of sales in favor of "everyday low prices."
Sears 4Q loss narrows as company reduces expenses
NEW YORK. (AP) — Sears narrowed its fiscal fourth quarter loss as it reduced expenses and improved sales a little at its namesake stores. The results offer a glimmer of hope for a troubled department store chain that still has a long way to go to turn around its Sears and Kmart stores.
The report follows an announcement last month by Sears Holdings Corp. that its chairman and hedge fund billionaire Edward Lampert would take over as CEO. Investors are concerned whether Lampert will continue to invest in improving the shopping experience at stores.
In his annual letter to investors, Lampert sought to ease worries on Wall Street by promising that the company will continue to invest in technology, bolster its online operations and make other changes to shore up its business.
Barnes & Noble posts 3Q loss as Nook demand slows
NEW YORK (AP) — Physical books may have a longer shelf life than expected. Barnes & Noble posted a third-quarter loss on Thursday, partly because demand for its e-books and Nook e-book readers have plummeted.
Many have predicted the eventual demise of paper books, as e-book readers and e-book demand soared. But that trend appears to be slowing, at least with the Nook, according to Barnes & Noble CEO William Lynch. And digital "cannibalization" — consumers buying e-books instead of paper books — has also slowed.
The company said sales of digital media — including digital books, digital newspapers and magazines, and apps — rose just 7 percent during the fiscal third quarter. Sales had risen 38 percent in the second quarter and 46 percent in the first quarter.
Freddie Mac posts $4.5 billion net income for Q4
WASHINGTON (AP) — Mortgage giant Freddie Mac earned $4.5 billion from October through December, its fifth straight profitable quarter. The government-controlled company credited fewer delinquencies on home loans and rising home prices for the gains.
Freddie says it paid a dividend of $1.8 billion to the U.S. Treasury and requested no additional federal aid.
The fourth-quarter results compared with net income of $619 million in the same quarter of 2011.
Chrysler to add jobs, invest $374 million in Kokomo, Ind., area
KOKOMO, Ind. (AP) — Chrysler is investing millions in the Kokomo, Ind., area as it shifts most of its vehicles to new transmissions that save fuel and better suit the driving habits of Americans.
The automaker will invest nearly $400 million at four plants, adding 1,250 jobs to what it says it the largest transmission factory complex in the world. The plants will make fuel-efficient eight- and nine-speed automatic transmissions.
Chrysler plans to use the new nine-speed transmission in key front-wheel-drive vehicles such as the Dodge Dart compact, which has lagged sales expectations. The transmission also will go into a new Chrysler 200 midsize sedan early next year and the Jeep Cherokee midsize SUV, which will replace the aging Jeep Liberty in the summer.
By The Associated Press(equals)
The Dow Jones industrial average ended down 20.88 points, or 0.2 percent, at 14,054.49. The Standard & Poor's 500 index ended down 1.3 points, or 0.1 percent, at 1,514.68. The Nasdaq composite lost two points, or 0.1 percent, to close at 3,160.19.
Benchmark crude for April delivery fell 71 cents to finish at $92.05 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, fell 49 cents to end at $111.38 per barrel on the ICE Futures exchange In London.
Wholesale gasoline rose half a cent to finish at $3.11 a gallon. Heating oil fell 2 cents to end at $2.96 a gallon. Natural gas rose 5 cents to finish at $3.48 per 1,000 cubic feet.