The economy grew at a 2.2 per cent pace in the third quarter, as the recovery got off to a weaker start than previously thought. The Commerce Department's new reading for the July-to-September quarter was slower than the 2.8 per cent growth rate estimated a month ago. Economists were predicting that figure wouldn't change. The main factors behind the downgrade: consumers didn't spend as much, commercial construction was weaker, business investment in equipment and software was a bit softer and companies cut back more on inventories.
Home resales surged to the highest level in nearly three years, reflecting an extraordinary level of federal support that has pulled the housing market back from the worst downturn since the Great Depression. The National Association of Realtors says sales rose 7.4 per cent to a seasonally adjusted annual rate of 6.54 million in November, from a downwardly revised pace of 6.09 million in October. Sales were 44 per cent above last year's levels, a record jump. They had been expected to rise to an annual pace of 6.25 million, according to economists surveyed by Thomson Reuters. The median sales price was $172,600, down 4.3 per cent from a year earlier, and up 0.2 per cent from October.
According to the weather research firm Planalytics, the weekend snow storm that socked much of the East Coast may have put at least a $2 billion dent in "Super Saturday" sales on the last weekend before Christmas. Mall traffic was down ten per cent on Saturday--but it had surged 65 per cent Friday night as more people went out in advance of the storm. The International Council of Shopping Centers-Goldman Sachs index is reporting that for the week ended Saturday, sales rose just 0.4 percent better from the same period last year. Stores are counting even more on a final spending surge in the final days before Christmas. The research firm says retailers with must-have items, and one-stop shops like Walmart, are in the best position to recover the lost sales. But not all shopping was lost. Shoppers kept spending online, as retailers offered new discounts and expedited shipping.
A new spill has occurred in Alaska's Prudhoe Bay oil field. The Department of Environmental Conservation says the spill was discovered Monday by a BP oil field operator doing a routine inspection. State officials announced the spill this morning. They say the spill was at a drill site and was coming from a six-inch pipeline carrying a mixture of oil, water and natural gas. The cause and amount of the spill are not known at this time. BP operates the Prudhoe Bay oil field _ North America's largest oil field. Last month, one of the North Slope's biggest spills of 46,000 gallons of oil, water and natural gas was reported at another BP-operated oil field. That spill occurred when an 18-inch line split.
President Barack Obama says businesses have "enormous opportunities" to start growing and hiring again if they can get the capital they need as the nation emerges from recession. "We feel very optimistic that the worst is behind us," the president said. The president spoke after meeting with leaders of a dozen small and community bankers. He lauded the smaller banks for their support of a priority of his, financial regulatory reform. And he said community lenders are largely not responsible for the risky behavior they helped crash the U.S. financial system. Obama said White House efforts will be geared toward ensuring banks are regulated fairly, but not too restrictively, so they can help businesses grow.
President Obama says he and the First Lady have relatives who are unemployed and suffering because of the economic crisis, but he's confident that 2010 will be a better year for the American people. During an interview on the Tom Joyner Morning Show, Obama said being part of the African-American community means that no matter how well you do, there is likely someone in your family who is hurting. Obama says his first priority this year was stabilizing the economy, which is slowly starting to grow again. Still, the president says a full recovery is not coming as fast as he would like, particularly in the area of job growth. The country's unemployment rate stands at ten per cent.
Several OPEC ministers say the oil producing group has decided to hold its output targets unchanged and wants members to adhere more closely to their quotas. Oil ministers from Angola, Algeria, the United Arab Emirates and Libya all said the group has decided to hold steady its production quotas. The decision was widely expected as the 12-member Organization of the Petroleum Exporting Countries has voiced comfort with current oil prices and is wary of taking a step that could shock the market and undercut the ongoing fragile global economic recovery. "Yes, we are talking about compliance. We are calling for member compliance," said Shukri Ghanem, the head of Libya's National Oil. And that country's de facto oil minister. Ghanem said there would be "no change" with quotas.
The University of Houston is partnering in a $10.7 million smart grid demonstration project award from the Department of Energy. The funds will be used to manufacture a transformer for electric utilities that will boost the reliability of the nation's power grid. Other participants include Waukesha Electric Systems, SuperPower, Oak Ridge National Laboratory and Southern California Edison.
A federal judge has appointed a Houston lawyer to monitor an east Texas company cited for discriminating against black employees. Tony P. Rosenstein of the Houston firm Baker Botts will serve as an ombudsman to investigate complaints from Lufkin Industries employees. The publicly-traded company manufactures oil field equipment and industrial gearboxes. The appointment was detailed in an injunction issued by U.S. District Judge Ron Clark of Beaumont as part of the resolution of black workers' class-action lawsuit against Lufkin Industries. Company president and chief executive Jay Glick declined comment. Clark ruled last June that Lufkin Industries' black employees are due $5.5 million in back pay and interest. The ruling cited the 107-year-old company for unlawful discrimination in awarding promotions.
The Justice Department says giving American Airlines, British Airways and other partners antitrust immunity to work closer together on coordinating flights could cause fares to rise up to 15 per cent on some trans-Atlantic routes. The agency wants the Department of Transportation to impose conditions on a grant of immunity to protect competition. One suggestion it made in papers filed this week is to require the partner airlines to divest some takeoff and landing slots. Justice says the proposed agreements would result in competitive harm on certain trans-Atlantic routes serving 2.5 million passengers annually. Fares between six pairs of cities, including Boston and London, could be affected. Delta Air Lines already has antitrust immunity as part of its trans-Atlantic joint venture with Air France-KLM.