By Frank James

The commercial real-estate crisis hasn't gotten nearly as much attention as the problems in the residential housing market which literally affect people where they live.

But the widening problems in the commercial sector are expected to put even more pressure on banks as their corporate customers have difficulty repaying their loans, thus slowing down the recovery and perhaps even contribute to a dreaded double-dip recession.

So its useful to see the Huffington Post report that brings more attention to the problem which experts say hasn't yet reached bottom. They expect that to come next year.

As Christine Spolar and Lagan Sebert write for HuffPo:

Financial reports this month from federal regulators and industry analysts detail a new cycle of uncertainty that they fear could cripple the economic recovery. Billions of dollars in commercial debt will have to be paid back or refinanced at a time when property values have plummeted. About $500 billion will come due in 2010 alone and an equal amount every year through at least 2012, according to the Federal Reserve.

Many banks that cater to regional and community developments were largely unscathed by the residential mortgage meltdown. But now they are facing huge numbers of possible defaults by builders who erected thousands of office towers, condominiums and shopping centers with the easy credit available five years ago. With few tenants, those developments are turning into what industry insiders call zombie buildings.

The report is accompanied by a video featuring a Washington, D.C. developer, Jeff Neel, who gives Spolar a tour of a zombie building he built as well as other properties.

Continue reading "New Year Won't Be Happy For Commercial Real Estate" >

Rep. Ron Paul. (Jason Merritt/Getty Images)

By Mark Memmott

As Planet Money's Daniel Costello reports this morning, "Rep. Ron Paul, the Texas Republican and lifelong critic of the Federal Reserve, scored a big win Thursday on Capitol Hill by getting a House panel to pass a bill requiring new reviews of the Fed's interest-rate decisions."

The Wall Street Journal writes that "Mr. Paul's amendment removes restrictions on the Government Accountability Office's auditing authority, giving auditors access to every item on the Fed's balance sheet. He for more than 20 years has championed significantly neutering the Fed."

And The Washington Post adds that on a day when the administration was under attack from several lawmakers over its economic policies:

Perhaps most troubling for the administration was that one of the few measures to succeed Thursday was an amendment by Rep. Ron Paul (R-Tex.) that would subject the Federal Reserve to unprecedented scrutiny. ...

Paul and allies in both parties -- more than 300 members of Congress have endorsed the measure -- are looking to increase oversight of an institution they consider partly to blame for the financial crisis. Federal officials and many private economists worry that the amendment could make future central bank policymakers reluctant to take unpopular steps to prevent inflation or support the economy for fear of second-guessing by Congress and government auditors.

So, the theory in support of the Fed's traditional independence is that it shouldn't be subject to political pressures from the White House or Congress because that could adversely affect its role in setting monetary policy.

The counter-argument is that the unelected officials at the central bank have too much power.

You can read Paul's legislation here.

It's a complicated issue, of course, but we wonder:

(This question will close Sunday at 10 a.m. ET.)

Update at 9:55 a.m. ET. Back in September, Paul was on The Daily Show with Jon Stewart to talk about his book End The Fed:

Also, early in my career -- when I covered economics for USA TODAY -- I found William Greider's 1989 book Secrets of the Temple of enormous help in understanding the central bank and why some have questions about the power it has.

Rep. Brady. (Alex Wong/Getty Images)

By Mark Memmott

There were fireworks today on Capitol Hill when Rep. Kevin Brady, R-Texas, laid blame for the economy's problems on the Obama administration and called on Treasury Secretary Timothy Geithner to "step down from your post."

Geithner ended up telling the congressman that he won't "take responsibility for the legacy of crises you (and, presumably, other Republicans in Geithner's opinion) bequeathed the country."

It all happened at a hearing of the Joint Economic Committee -- while Geithner was appearing before Brady and other members.

Sec. Geithner. (Alex Wong/Getty Images)

By the time the you-ruined-the-economy-NO-YOU-RUINED-THE-ECONOMY exchange finished, the two were talking over each other and Committee Chair Carolyn Maloney, D-N.Y., had to bring things to order.

We'll pass along two things to listen to.

First, a short clip of how the whole exchange finished. It begins with Geithner laying the blame for the economy's problems on the Bush administration and Republicans in Congress:

And, for those who want to get the full effect, here's the entire Brady-Geithner back-and-forth. It begins with Brady making the case that the Obama team has failed so far:

As Politico reported earlier today, Geithner has been taking heat from both liberals and conservatives.

NPR's John Ydstie will have much more about the committee hearing and Geithner on today's All Things Considered. Click here to find an NPR station that broadcasts ATC.

By Mark Memmott

This doesn't mean much to those who've lost jobs -- or, as Frank just reported, are in danger of losing their homes.

But there's another sign that the economy just might be getting better.

The private Conference Board says its widely watched index of leading indicators rose 0.3% in October from September. As Bloomberg News notes, it's the seventh straight increase in the gauge -- which is supposed to forecast how the economy's going to be doing in three to six months.

Dow Jones Newswire adds, though, that the October increase wasn't quite the 0.4% rise that many economists expected.

Planet Money follows the economy here.

By Frank James

In another sign of the severe housing-related financial stress that appears far from dissipating, mortgage delinquencies set a new record in the third quarter of 2009, with 9.64 percent of mortgages on one- to four-unit residential properties in arrears, according to the Mortgage Bankers Association.

In other words, almost one in 10 homeowners is behind on his or her mortgage. This is a rate not seen during all the previous recessions since 1972 which is how far back the MBA's data goes. That's just stunning.

The worrisome trend makes sense when one considers that unemployment has increased to 10.2 percent. Combined with that, many adjustable-rate mortgages are resetting to significantly higher interest rates making what were once affordable mortgages for some homeowners now unaffordable.

The MBA noted that the increase in delinquencies is no longer about subprime mortgages going belly up. The story now is that owners who once had excellent credit and were able to obtain prime mortgage loans are falling behind in their payments and pushing up delinquency rates.

Here's part of the MBA's discussion of the problem from its press release:

The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.

The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, an increase of 17 basis points from the second quarter of 2009 and 150 basis points from one year ago. The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.

Continue reading "Mortgage Delinquencies Set New Record" >

Slimming down. (David Silverman / Getty Images)

By Mark Memmott

Internet icon AOL plans to cut about a third of its staff.

In an SEC filing made public today, the company says a proposed restructuring "if approved ... will include the reduction of approximately a third of the Company's current employee base, which will be conducted on a voluntary and involuntary basis."

The Dow Jones newswire says the company "told employees Thursday that it will ask for 2,500 volunteers to be laid off as part of a restructuring effort to reduce its workforce by one-third, according to a spokeswoman."

In the SEC filing, AOL adds that:

The goal of the Restructuring is to reduce ongoing annual operating costs by approximately $300 million. If the Restructuring is approved, the Company expects to incur restructuring charges of up to $200 million.

As the Associated Press notes "the job cuts still need approval from the new AOL board. Time Warner, the New York media conglomerate, said this week that it will spin AOL off to investors Dec. 9."

Bloomberg News points out that AOL's operating revenue fell 50% in the third quarter, "as advertising revenue slumped 18%."

By Mark Memmott

At least they didn't go up:

There were 505,000 "first-time" claims for unemployment insurance benefits last week, unchanged from the week before, the Employment and Training Administration says.

The "four-week moving average" of claims declined by 6,500, to 514,000.

Planet Money follows the economy here.

By Mark Memmott

For anyone who's out of work, "nothing matters until you have a job," Vice President Joe Biden conceded on last night's The Daily Show with Jon Stewart. And, unfortunately, "jobs are going to lag behind growth in this country by somewhere between 12 to 18 months," Biden added.

Here's part one of Biden's appearance:

Part two is here.

By Mark Memmott

Higher prices for used cars and gasoline nudged its consumer price index up 0.3% last month, the Bureau of Labor Statistics just reported.

But over the past year, consumer prices have fallen 0.2%, BLS added.

In another sign that any economic recovery remains weak, the Commerce Department just announced that so-called housing starts fell 10.6% in October from September. Construction began on an estimated 529,000 single-family homes and apartment buildings (that's an "annual rate").

Planet Money tries to figure out how the economy is doing here.

By Mark Memmott

Another sign that the economy's hoped-for recovery is slow at best?

The Federal Reserve just reported that industrial production rose only 0.1% in October from September.

Digging deeper into the report, the Fed says production at factories slipped by 0.1% and output at mines fell 0.2%. The gains were all at utilities, which saw their output grow 1.6%.

Planet Money follows the economy here.

By Mark Memmott

Wholesale inflation remained mostly in check last month, the Bureau of Labor Statistics just reported.

Its "producer price index" went up just 0.3% from September. Higher costs for food and energy were a major factor: Without those volatile sectors, wholesale prices dropped 0.6%.

The slight increase was also partly a bounce back from September, when wholesale prices fell 0.6%. Over the past year, wholesale prices have fallen 1.9%.

Planet Money follows the economy here.

Bernanke sees slow growth ahead. (Mark Lennihan/AP)

By Mark Memmott

"The recent pickup reflects more than purely temporary factors and that continued (economic) growth next year is likely," Federal Reserve Chairman Ben Bernanke is telling members of the Economic Club of New York this hour.

"However," Bernanke adds, according to the text of his prepared remarks, "some important headwinds -- in particular, constrained bank lending and a weak job market -- likely will prevent the expansion from being as robust as we would hope."

On a subject of much attention in financial markets recently, Bernanke has this to say about the dollar, which he notes has been falling against other currencies:

The Federal Reserve will continue to monitor these developments closely. We are attentive to the implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability. Our commitment to our dual objectives, together with the underlying strengths of the U.S. economy, will help ensure that the dollar is strong and a source of global financial stability.

The other economic news of the day is from the Commerce Department, which says that retail sales rose 1.4% in October from September.

Planet Money follows the economy here.

By Frank James

The recession appears to have come to an end in the 16 European nations that use the euro currency exclusively.

The European Union reported Friday third quarter growth of four tenths of one percent collectively in the economies of Belgium, Germany, Ireland, Greece, Spain, France, Finland, Italy, Cyprus Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia and Slovakia.

That compared with a second quarter decline of 0.2 percent for those 16 nations.

The third quarter in the U.S. grew at a 3.5 percent rate after several quarters of decline. So with a few exceptions, the world appears to be collectively shaking of the effects of the global economic downturn.

By Mark Memmott

With the nation's jobless rate already at 10.2% and expected by many economists to go at least slightly higher, President Barack Obama just announced that his administration is convening a jobs "forum" next month at the White House.

It will gather business owners, economists and other experts, to discuss "any demonstrably good idea" on how to get job growth going again.

The president said that:

"The economy's now growing again for the first time in more than a year."

"But even though we've slowed the loss of jobs ... the economic growth we've seen has not yet led to the job growth that we desperately need."

Obama made the announcement just before his scheduled departure on a 10-day trip to Asia.

Update at 10:07 a.m. ET.

Here's an audio excerpt, at the point where the president speaks about the importance of being open to good ideas:

And here's audio of his entire statement:

Our friends at Planet Money follow the economy's ups and downs here.

By Mark Memmott

The number of people filing first-time claims for jobless benefits fell by 12,000 last week, to 502,000, the Employment and Training Administration just announced.

According to the Associated Press, the decline was "more than expected" and may be "evidence the job market is slowly healing as the economy recovers." It's also "the fewest claims since the week ending Jan. 3."

Another interesting bit of data: "The 4-week moving average" of the number of people collecting benefits was 5,790,750, a decrease of 100,750 from the preceding week's revised average of 5,891,500.

Planet Money follows all things economic.

By Mark Memmott

Good morning.

The latest stories about the investigation into last Thursday's shooting rampage at Fort Hood in Texas, which left 12 soldiers and one civilian dead, include:

-- ABC News -- Senior Official Says Investigators Are Looking At More Connections Between Suspect And Radicals: "A senior government official tells ABC News that investigators have found that alleged Fort Hood shooter Nidal Malik Hasan had 'more unexplained connections to people being tracked by the FBI' than just radical cleric Anwar al Awlaki. The official declined to name the individuals but Congressional sources said their names and countries of origin were likely to emerge soon."

-- Los Angeles Times -- "Military Not Told About Fort Hood Supsect's E-Mails": "Two high-profile anti-terrorism task forces did not inform the Defense Department about contacts between a radical Islamic cleric and the Army psychiatrist accused of killing 13 people in last week's rampage at Ft. Hood, a senior Defense official said Tuesday."

On Morning Edition today, NPR's Mara Liasson reported about President Barack Obama's speech at the service held yesterday on Fort Hood and NPR's Wade Goodwyn reported about the service itself.

Other news making headlines this morning includes:

-- The Wall Street Journal -- "Obama Receives New Afghan Option": " President Barack Obama on Wednesday will consider a new compromise plan for adding troops to Afghanistan that would deploy 30,000 to 35,000 new forces, including as many as 10,000 military trainers, over the next year or more."

-- The New York Times -- "Three Top Obama Advisers Favor Adding Troops In Afghanistan": "Defense Secretary Robert M. Gates, Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, and Secretary of State Hillary Rodham Clinton are coalescing around a proposal to send 30,000 or more additional American troops to Afghanistan, but President Obama remains unsatisfied with answers he has gotten about how vigorously the governments of Afghanistan and Pakistan would help execute a new strategy, administration officials said Tuesday."

-- The Washington Post -- "In Afghanistan, Taliban Surpasses Al-Qaida": "As violence rises in Afghanistan, the power balance between insurgent groups has shifted, with a weakened al-Qaida relying increasingly on the emboldened Taliban for protection and the manpower to carry out deadly attacks, according to U.S. military and intelligence officials."

-- The New York Times -- "Blackwater Said To Pursue Bribes To Iraq After 17 Died": " Top executives at Blackwater Worldwide authorized secret payments of about $1 million to Iraqi officials that were intended to silence their criticism and buy their support after a September 2007 episode in which Blackwater security guards fatally shot 17 Iraqi civilians in Baghdad, according to former company officials. ... Stacy DeLuke, a spokeswoman for the company, now called Xe Services, dismissed the allegations as 'baseless' and said the company would not comment about former employees."

-- Richmond Times-Dispatch -- At End, D.C. Sniper Said Nothing: John Allen Muhammad, "the man who played God with sniper fire seven years ago, ending 10 lives in Virginia, Maryland and Washington, was quietly executed by injection last night. ... Given the chance to make a last statement, Muhammad stared stoically at the ceiling and did not move a muscle."

-- Morning Edition -- Budget Director Orszag Makes Case That Deficit Spending Now Is Helpful, But 'Walk Down' Is Needed In Next Few Years. NPR's Steve Inskeep speaks with federal budget director Peter Orszag about the "extraordinarily challenging" problem of running up huge deficits now -- which, he argues, is necessary -- and then reversing course once the economy is healthy again. This all "keeps me up at night" worrying, Orszag admits:

The Dow Jones Industrial Average on Monday closed at its highest level in 13 months as some observers warned of a new asset bubble. (Mario Tama / Getty Images)

By Frank James

The Dow Jones Industrial Average closed 204 points higher Monday, finishing at its highest level in more than a year.

The surge came on the news that the G20 nations would continue to stimulate their economies. Commodities like gold and oil also rose, with gold selling for more $1,100 an ounce and crude oil rising 2.6 percent.

The rise in stock and commodity prices was more proof that the "giant pool of money" examined on NPR's This American Life program is still searching for places to invest in order to get the highest gains in a low-interest rate world.

The Wall Street Journal wrote of the "continued flow of easy money" as contributing to the higher asset prices as the dollar fell lower.

Continue reading "Dow Surges To Highest Level In More Than A Year" >

By Mark Memmott

Last month's 10.2% unemployment rate -- the first time that statistic has been in double-digits since 1983 -- is a "sobering" reminder that the economy faces many challenges, President Barack Obama just said:

As Obama says, he also today signed into law an extension of unemployment benefits for almost two million people.

By Mark Memmott

The nation's unemployment rate jumped to 10.2% in October from 9.8% in September, the Bureau of Labor Statistics just reported. The jobless rate hasn't topped 10% since 1983. Employers shed 190,000 jobs from their payrolls.

We'll pass along more on this as the news develops. Planet Money follows the economy as well.

Update at 11:15 a.m ET: Christina Romer, chair of the president's Council of Economic Advisors, has issued a statement that says, in part:

"Today's employment report contained both signs of hope for recovery and painful evidence of continued labor market weakness.

"Payroll employment declined 190,000 in October, continuing the steady trend of moderating job loss that began last spring. ...

"(But) having the unemployment rate reach double-digits is a stark reminder of how much work remains to be done before American families see the job gains and reduced unemployment that they need and deserve."

Update at 9:10 a.m. ET: Economist Hugh Johnson tells NPR's Dave Mattingly that while the employment news is disappointing, he does not think the jobless rate will go up much more:

Update at 8:37 a.m. ET. BLS says:

-- The largest job losses over the month were in construction, manufacturing, and retail trade.

-- The number of unemployed persons increased by 558,000 to 15.7 million.

-- About 2.4 million persons were marginally attached to the labor force in October, reflecting an increase of 736,000 from a year earlier. ... Among the marginally attached, there were 808,000 discouraged workers in October, up from 484,000 a year earlier.

-- Total nonfarm payroll employment declined by 190,000 in October. In the most recent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009. Since December 2007, payroll employment has fallen by 7.3 million.

Economists will likely say that last data -- about the trend in job losses -- is important. The labor market usually "lags" the rest of the economy. If indeed the recession is easing or perhaps even over, it still could be a while before the labor market picks up. A slowing of job losses could be a sign that things may soon start getting a little better.

By Mark Memmott

The killings Thursday at Fort Hood in Killeen, Texas, where the death toll now stands at 13, continue to dominate the news this morning.

We just updated that story here. And NPR.org has much more coverage, starting here.

A news conference is expected to begin at the post around 7:30 a.m. ET. Check back with us for news from that.

Here are a few other stories to note:

-- The Associated Press -- Jobless Rate Likely Rose Again In October: The Bureau of Labor Statistics releases its October employment report at 8:30 a.m. ET. In advance, the AP writes that:

The nation's economy probably lost a net total of 175,000 jobs in October, pushing the unemployment rate to 9.9%, according to a survey of Wall Street economists by Thomson Reuters.

Watch for the BLS report to be posted here.

-- Morning Edition -- "Karzai Must Kick Out 'Cronies' To Succeed, Sen. Kerry Says". Afghan President Hamid Karzai "needs to seize this opportunity in a very clear and tangible way" to institute reforms and improve Afghanistan's government, Senate Foreign Relations Committee Chairman John Kerry, D-Mass., told host Renee Montagne:

Related story by BBC News -- "Brown Warns Karzai On Corruption": British Prime Minister Gordon Brown "has told Afghan President Hamid Karzai he will not put UK troops 'in harm's way for a government that does not stand up against corruption.' "

-- The Associated Press -- "Texas Sect Member Guilty Of Sexual Assault Of Minor": "After being duped by false leads and chastised by a court for its handling of polygamist sect children, the state of Texas has won a criminal conviction in its first trial of a sect member charged with sexually assaulted an underage girl. Raymond Jessop, 38, was convicted late Thursday for having sex with the teen with whom he had a so-called spiritual marriage. He faces up to 20 years in prison when the jury reconvenes Monday to begin deciding his sentence."

By Frank James

Trying to understand the big picture or context of economic statistics can be difficult for the average news consumer because the data come out from different government agencies and the statistical tables and language used are economist-friendly but can leave lay people confused.

For that reason, the Economic Policy Institute, a liberal Washington think tank which focuses on issues of work and wages for low and middle-income Americans, has launched a new, interactive website http://www.economytrack.org/ meant to make it easier for us non-economist to see trends in data and compare various statistics like how the 2008-2009 recession compares with past downturns or the employment situation in the states. It's useful and well done. Definitely worth spending time on.

By Mark Memmott

Sales results at some of the nation's biggest retailers may bode well for the always-crucial holiday shopping season, NPR's Scott Neuman reports:

It wasn't exactly a spending spree, but consumers spurred by early holiday discounts and a gradually improving economy helped push many retailers to better-than-expected sales for the month.

According to a Thomson Reuters survey, eight retailers posted results that beat Wall Street estimates. Five others missed their sales forecasts.

Among the winners were Costco, whose club store sales rose 5%, while the clothier The Gap, boosted by its discount Old Navy outlets, posted a 4% gain.

But Children's Place Retail Stores, teen fashion outlet Wet Seal and Stage Stores, an apparel and accessory retailer, all reported declines.

The October figures follow better-than-expected September numbers and could be a good sign for holiday shopping.

And here's the audio version of Scott's report. He just filed it for the NPR Newscast:

By Mark Memmott

American businesses boosted their productivity at a 9.5% annual rate in the third quarter, the Bureau of Labor Statistics just reported.

The Associated Press notes that it's the fastest growth in productivity in six years, and came as " labor costs continued to drop sharply" -- a factor that "will bolster companies' profits but continue to saddle workers with stagnant incomes."

In better news on the employment front, BLS also says that 512,000 people filed first-time claims for jobless benefits last week. That was down by 20,000 from the previous week.

The week's big news about the economy, of course, will be tomorrow's report from the Labor Department on the October unemployment rate and how many jobs businesses (presumably) cut last month. It's due at 8:30 a.m. ET.

In September (according to BLS' preliminary estimates) the jobless rate was 9.8% and businesses shed 263,000 jobs.

Planet Money tracks the economy here.

By Mark Memmott

"Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up," Fed policymakers just declared, in a statement that also says they're leaving their target range for short-term interest rates at an already record low 0% to 0.25%.

That's what they had been expected to do.

According to the Fed:

Continue reading "Fed: 'Economic Activity Has Continued To Pick Up;' No Change In Rates" >

By Mark Memmott

The morning-after punditry is in full-swing now that the smattering of elections across the nation are over. As we wrote, Republicans had a good day -- winning the governors' mansions in New Jersey and Virginia. But Democrats managed to take advantage of a split with the GOP to take a New York congressional seat that had been in Republican hands since before the Civil War.

NPR's Political Junkie blog will have much more about the election results as the day continues.

Among the other stories making headlines:

-- The Guardian -- "British Soldiers Killed In Attack By Afghan Policeman": "Five British soldiers have been killed and several others injured in a gun attack by a 'rogue' Afghan policeman in Helmand province, the Ministry of Defense said today. The soldiers -- three from the Grenadier Guards and two from the Royal Military police -- were killed by gunshot wounds suffered in the attack, which happened in the Nad-e'Ali district yesterday."

NPR's Soraya Sarhaddi Nelson reports from Kabul: The Afghan police officer ran from the scene, and "the feeling is that he's crossed over and joined the Taliban."

-- BBC News -- "Iran Police Clash With Protesters": "Police have clashed with opposition supporters in the Iranian capital, Tehran, witnesses and state media say. Police used tear gas and batons, said witnesses. Unconfirmed reports said the authorities had also opened fire."

Related conversation on Morning Edition -- Protests Were Widespread Despite Government's Warning: Borzou Daragahi of the Los Angeles Times talks with host Steve Inskeep about this 30th anniversary of the takeover of the U.S. embassy in Tehran, and the remarkably different (anti-government) kind of protests that occurred today:

-- Morning Edition -- Secretary Clinton Says Her Comments About Israeli Settlements Did Not Create A "Long-Term Problem". The secretary of State spoke with NPR's Jackie Northam:

-- CNN International -- "Israel Detains Ship Loaded With Weapons": "The Israeli Navy detained a ship loaded with weapons that was traveling about 100 miles west of the country's coast and headed to Syria, Israeli officials said Wednesday. The ship was detained on Tuesday and was escorted to an Israeli port to be searched, an Israel Defense Forces statement said."

-- The Wall Street Journal -- "Fears Of A New Bubble As Cash Pours In": "Concerns are mounting that efforts by governments and central banks to stoke a recovery will create a nasty side effect: asset bubbles in real-estate, stock and currency markets, especially in Asia."

Related news to watch for today: Federal Reserve policymakers end two-days of meetings. They're expected to say this afternoon that they aren't going to adjust short-term interest rates, which it how is holding between zero and 0.25%.

-- The Times of London -- "German Government Blasts 'Unacceptable' GM U-Turn": "Germany's Economic Minister today branded a decision by America's General Motors to scrap the sale of its European business as 'totally unacceptable.' ... British unions were delighted with the decision, which was announced late yesterday after a GM board meeting in Detroit."

Related story by The Detroit News -- "GM Calls Off Sale, Keeps Opel": "General Motors Co.'s board of directors Tuesday voted to keep its German carmaker, Adam Opel GmbH, instead of selling it to Canada's Magna International Inc. and its Russian partner, Sberbank. The board based its decision, in part, on an improved business environment in Europe and GM's overall financial health and stability since emerging from bankruptcy court after receiving about $50 billion in federal aid."

By Mark Memmott

As he opened a meeting with his Economic Recovery Advisory Board at the White House a short time ago, President Barack Obama said his administration's "overriding focus" now is creating jobs. And, Obama added:

"Having brought the economy back from the brink, the question is how are we going to make sure that people are getting back to work and able to support their families. It's not going to happen overnight, but we will not rest until we are succeeding in generating the jobs that this economy needs."

Obama cautioned, however, that the employment news is likely to get worse before it gets better:

"We anticipate that we're going to continue to see some job losses in the weeks and months to come. As I said before, there is a -- always a lag of several months between businesses starting to make profits again and investing again, and then actually rehiring again.

"But I want to emphasize I am confident that having moved the economy on the right track, that if we apply some good common sense and some -- and reinvigorate that sector of our economy that's based on innovation and dynamism and entrepreneurship, that there's no reason why we're not going to be able to not only create jobs, but the kind of sustainable economic growth that everybody is looking for."

Here's the audio of the president's opening statement:

Volcker and Obama. (Pablo Martinez Monsivais / AP)

The board is chaired by former Federal Reserve chairman Paul Volcker. The members include:

-- Richard Trumka, secretary-treasurer, AFL-CIO.
-- Laura D'Andrea Tyson, dean, Haas School of Business at the University of California at Berkeley; chair of the Council of Economic Advisers in the Clinton administration.
-- Jeffrey R. Immelt, CEO of General Electric.

By Mark Memmott

Two more pieces of positive news to add to the sometimes conflicting economic signals of recent months.

-- The private Institute for Supply Management says its index of activity in the manufacturing sector rose to 55.7 in October from 52.6 in September. It's the third straight that the index, designed to gauge the factory sector's health, went up. Any reading above 50 is supposed to indicate that the manufacturing sector is expanding. (Click here for an Associated Press story.)

-- The Commerce Department says construction spending went up 0.8% in September from August. The increase was well above economists' forecast of a 0.3% rise. One cautionary note: Commerce now says construction spending rose just 0.1% in August, not the 0.8% it earlier estimated. (Click here for an Associated Press story.)

Stocks are trading higher in New York.

Planet Money follows the economy here.

By Mark Memmott

In a document just posted at whitehouse.gov, the Obama administration makes the case that not only has the $787 billion economic stimulus plan already saved or created more than 1 million jobs, but it also has put the economy on track to meet the president's pledge to save or create 3.5 million jobs by the end of next year.

From that White House report:

Today's release by the independent Recovery, Accountability, and Transparency Board shows that recipients of a subset of Recovery Act funds have reported creating or saving 640,329 jobs so far. Since this reporting is based on only a portion of the Act's funds -- about $160 billion, which represents less than half of the money put to work so far -- it represents a subset of the jobs created or saved. This number also leaves out indirect jobs: employment created as a result of ARRA funds money spent by direct recipients. ...

Since, as noted above, the recipient reporting represents less than half of the obligations plus tax cuts so far, we can get a rough sense of its comparability to the more comprehensive estimates above by doubling the recipient-reported job creation of 640,329, yielding a jobs number -- almost 1.3 million. ...

Given that more than half of Recovery Act funds have yet to be obligated, the fact that many funded projects have a lot more hiring to do, and the fact that these reports account for around 640,000 jobs through the end of September despite all the omissions just noted, we are solidly on track to meet our goal of 3.5 million jobs saved or created by the end of next year.

Earlier, Vice President Joe Biden said the administration isn't satisfied, however. "We still got a long way to go, folks," the vice president said:

The details on where the jobs have been created are supposed to posted soon at Recovery.gov.

When the day started, the White House was signaling it would report that 1 million jobs had been saved or created so far by the stimulus plan.

By Mark Memmott

After getting a big boost in August from the government's "cash for clunkers" car program, consumer spending dropped 0.5% in September, the Commerce Department just reported. It's the largest decline in nine months.

In the same release, Commerce said Americans' personal income was nearly unchanged last month.

Keep in mind: While Commerce said yesterday that gross domestic product grew at a 3.5% annual rate in the third quarter, a sign that the recession might be over, other key indicators -- such as consumer spending -- also have to flashing green for the economy to really be on the mend.

Check Planet Money for more on the economy's ups and downs.

By Mark Memmott

Good morning.

If you've been wondering how many jobs the White House thinks have been created or saved by this year's $787 billion stimulus program, keep an eye on Recovery.gov. The administration plans to release its latest numbers on just that subject today.

NPR's Scott Horsley and Politico's Mike Allen say that administration officials have sent reporters an e-mail to say that they anticipate reports from state and local governments, businesses and organizations "will credit the Recovery Act with directly creating or saving about 650,000 jobs." The e-mail says that number stems from about half of the stimulus spending so far, meaning the program has likely "created or saved at least 1 million jobs."

CNN is also already reporting the news will be that 650,000 jobs were saved or created by about $150 billion in the funding so far. That's the number The Wall Street Journal is citing as well.

We'll pass along more news as it comes in -- as well as the inevitable second-guessing and analysis from various quarters.

Update at 1:25 p.m. ET. The White House has now posted some of the details behind the job estimates.

It states that:

Today's release by the independent Recovery, Accountability, and Transparency Board shows that recipients of a subset of Recovery Act funds have reported creating or saving 640,329 jobs so far. Since this reporting is based on only a portion of the Act's funds -- about $160 billion, which represents less than half of the money put to work so far -- it represents a subset of the jobs created or saved. This number also leaves out indirect jobs: employment created as a result of ARRA funds money spent by direct recipients. ...

Since, as noted above, the recipient reporting represents less than half of the obligations plus tax cuts so far, we can get a rough sense of its comparability to the more comprehensive estimates above by doubling the recipient-reported job creation of 640,329, yielding a jobs number -- almost 1.3 million. ...

Given that more than half of Recovery Act funds have yet to be obligated, the fact that many funded projects have a lot more hiring to do, and the fact that these reports account for around 640,000 jobs through the end of September despite all the omissions just noted, we are solidly on track to meet our goal of 3.5 million jobs saved or created by the end of next year.

Update at 12:45 p.m. ET: At the White House a moment ago, Vice President Joe Biden just remarked that "I can say without fear of being contradicted by any responsible source that so far" the stimulus has saved or created more than 1 million jobs.

Here's audio of the vice president:

Update at 8:05 a.m. ET. More from CNN:

"We're solidly on track to create or save 3.5 million jobs by the time this program winds down," administration economist Jared Bernstein told CNN on Friday. "There's a lot more ammunition in that Recovery Act. The stimulus package is absolutely working, both in GDP terms and in terms of saving or creating jobs."

Among the other stories making headlines this morning, as we just reported it looks like there's a deal in place to end the political crisis in Honduras and return ousted president Manuel Zelaya to office.

Other news:

-- Morning Edition -- "Afghan Decision Will Come With A Price Tag". NPR's David Welna reports that the high financial cost of any surge in the number of U.S. troops in Afghanistan is putting some Democrats in a tight spot:

-- The Washington Post -- "Dozens In Congress Under Ethics Inquiry": "House ethics investigators have been scrutinizing the activities of more than 30 lawmakers and several aides in inquiries about issues including defense lobbying and corporate influence peddling, according to a confidential House ethics committee report prepared in July."

Related story by The Associated Press -- Ethics Committee Says No Inferences Should Be Drawn: "The House ethics committee announced Thursday it is investigating two California Democratic lawmakers (representatives Maxine Waters and Laura Richardson), but its embarrassed leaders then had to explain that other members -- named in a confidential memo that leaked out -- may have committed no wrongdoing."

Update at 8:25 a.m. ET: A statement from the committee.

-- The Associated Press -- "Search Is On For Mid-Air Collision Survivors In California": "The U.S. Coast Guard and Navy were searching early Friday for as many as nine people off the Southern California coast following a collision between a Coast Guard plane and a Marine Corps helicopter, officials said. The crash was reported at 7:10 p.m. Thursday, about 50 miles off the San Diego County coast and 15 miles east of San Clemente Island, Coast Guard spokeswoman Petty Officer Allyson Conroy said."

-- The New York Times -- "Iran Rejects Deal To Ship Out Uranium, Officials Report": " Iran told the United Nations nuclear watchdog on Thursday that it would not accept a plan its negotiators agreed to last week to send its stockpile of uranium out of the country, according to diplomats in Europe and American officials briefed on Iran's response."

-- The Associated Press -- "France's Jacques Chirac Ordered To Stand Trial": "Former French President Jacques Chirac has been ordered to stand trial in an alleged corruption scandal dating back to his tenure as Paris mayor, a judicial official said Friday. A magistrate has ordered Chirac to stand trial on charges of 'embezzlement' and 'breach of trust,' the official said."

Frank Browning reports on the story for NPR from Paris:

-- World Series -- Yankees Win Game 2 By 3-1 Score; Series Tied At 1-1; Resumes Saturday.

They'll play in Philadelphia on Saturday. (Chris McGrath/Getty Images)

By Frank James

FDIC Chair Sheila Bair listens to an aide during Wednesday's House Financial Services Committee. (Brendan Smialowski / Getty Images)

Sheila Bair, chairwoman of the Federal Deposit Insurance Commission, just won't get with the program whether she's working alongside a Republican or Democratic administration.

Bair made a point of not falling into line when the Treasury Secretary was Hank Paulson under the Bush Administration. Then she pushed for more more taxpayer dollars to be directed to homeowners defaulting on their mortgages instead of all the money going to financial institutions.

On Wednesday, she was publicly disagreeing with Paulson's successor, Treasury Secretary Tim Geithner.

Continue reading "FDIC Head Differs With Geithner On Handling Failed Big Banks " >

The ups and downs from 2007 on. (Bureau of Economic Analysis)

By Mark Memmott

The U.S. economy grew at a 3.5% annual rate in the third quarter, the Bureau of Economic Analysis just reported.

If that estimate survives revisions in coming months, it would mark the first GDP growth after four straight quarterly declines and could signal the end of the recession that officially began in December 2007.

The GDP figures are not the sole measure of the economy's health, however. Economists will still be watching employment, spending, production and other indicators before deciding if the recession really has ended.

For more on the economy, see Planet Money.

Update at 9:40 a.m. ET. The White House just released this statement from Council of Economic Advisers Chair Christina Romer:

"Data released today by the Commerce Department show that real GDP grew at an annual rate of 3.5% in the third quarter of the year. This is in stark contrast to the decline of 6.4% annual rate just two quarters ago. Indeed, the two-quarter swing in the rate of growth of 9.9 percentage points was the largest since 1980. Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter. This suggests that in the absence of the Recovery Act, real GDP would have risen little, if at all, this past quarter.

"After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction. However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered. The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP. And it will take sustained, robust GDP growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve."

Update at 8:40 a.m. ET: Bloomberg News is saying that the GDP growth was "propelled by stimulus-driven gains in consumer spending and home building." Reuters says the growth "was generally broad-based, with solid gains in consumer spending, exports and investment in home-construction." The Wall Street Journal cautions that "a weak labor market is expected to keep the recovery subdued."

Update at 8:35 a.m. ET: The Bureau of Labor Statistics just reported that 530,000 people filed first-time claims for jobless benefits last week. The decline of 1,000 from the previous week was less than the 10,000-drop that many economists had expected, the Associated Press says.

By Mark Memmott

An Associated Press report that "President Barack Obama's economic recovery plan overstates by thousands the number of jobs created or saved through the stimulus program" has generated a sharp response from the White House.

The AP story, White House adviser Ed DeSeve says in a statement:

Draws misleading conclusions from a handful of examples. It looks at only a small portion of the data -- an initial upload of data representing just two percent of Recovery Act spending -- that was made publicly available before a full review of its accuracy could be done. Virtually all of the errors found by the AP had already been found by our review, and were already corrected in an update to be loaded onto Recovery.gov this week.

Tomorrow, more than 100,000 recipient reports will be posted on Recovery.gov. Unlike the small number of reports reviewed by AP, these reports have been reviewed for weeks, errors have been spotted and corrected, and additional layers of review by state and local governments have further improved the data quality. As a result, whatever problems the early and partial data had, the full data to be posted on Friday will provide the American people with an accurate, detailed look at the early success of the Recovery Act.

Tune in tomorrow to see what the White House posts.

By Mark Memmott

A we await word on whether the U.S. economy really has started growing again, there's this sobering story in The Wall Street Journal about a very telling indicator that's signaling times still aren't very good:

A coveted visa program that feeds skilled workers to top-tier U.S. technology companies and universities is on track to leave thousands of spots unfilled for the first time since 2003, a sign of how the weak economy has eroded employment even among highly trained professionals.

As the Journal says, "the program, known as H-1B, has been a mainstay of Silicon Valley and Wall Street, where many companies have come to depend on securing visas for computer programmers from India or engineers from China."

Morning Edition's Steve Inskeep summarizes the story here:

By Mark Memmott

One report that's going to get a lot of attention this morning is the Commerce Department's preliminary estimate on gross national product growth -- yes, we said growth -- in the third quarter.

Commerce will post the report here at 8:30 a.m. ET, and we'll pass along the news as fast as possible.

As NPR's Giles Snyder reports, even though economists expect that Commerce will say there was some GDP growth after four straight quarters of decline, that doesn't necessarily mean the recession is over. The GDP report is just one of many indicators that economists look at when determining whether a recession has or has not ended. Among the others are employment, production and spending:

And, as The Wall Street Journal and NPR's John Ydstie say, the economy's not expected to start roaring anytime soon. Here's a conversation John had this with Morning Edition's Steve Inskeep earlier today:

As always, Planet Money will be following the economic news as well.

By Frank James

Rep. Barney Frank, chair of the House Financial Services Committee, and the Obama Administration, are out with their proposal for dealing with financial institutions that up till now have been viewed as too-big-to-fail, that have posed such a systemic risk to the entire financial system that they hitherto were saved at all cost.

One of Frank's and the administration's goals is to make sure that in the future these financial giants are allowed to fail if they must but that the costs are borne by the financial firms themselves and not taxpayers.

So under the proposal, if a formerly too-big-to-fail firm is allowed to fail but requires massive infusions of cash for its obligations to be resolved in an orderly way before its doors close, the money for that would come from other financial firms, specifically the largest banks, those with at least $10 billion in assets.

An excerpt from the committee's summary:

Costs to resolve a failing firm will be repaid first from the assets of the failed firm at the expense of shareholders and creditors, and to the extent of any shortfall, from assessments on all large financial firms. In this instance we follow the "polluter pays" model where the financial industry has to pay for their mistakes--not taxpayers.

You can go all the way to the bottom of the top 50 bank-holding companies and not get to $10 billion in assets. For instance, Webster Financial Corp. based in Waterbury, Conn. was number 50 on the Federal Reserve's list of bank-holding companies and it had about $17.5 billion in assets as of Sept. 30, 2009.

Continue reading "Too-Big-To-Fail Banks Could Fail In New Congress-Obama Plan" >

By Mark Memmott

Sales of newly built one-family houses fell 3.6% in September, the Census Bureau and Department of Housing and Urban Development report.

They tumbled to an annual rate of 402,000.

The decline was a surprise, the Associated Press says. Economists had thought sales were up at least modestly last month.

One bit of good news, according to AP:

The median sales price of $204,800 was off 9.1% from $225,200 a year earlier, but up 2.5% from August's level of $199,900.

Planet Money has much more about the economy.

By Mark Memmott

Orders for so-called durable goods rose 1% in September, their biggest increase in the past year and a half, the Census Bureau just reported. Durables are things like aircraft, cars and machinery that are supposed to last three years or longer.

As the Associated Press notes, demand for machinery "offset weakness in commercial aircraft and autos."

Planet Money follows the economy here.

By Frank James

With all the unemployed people desperate for work, a story about people who are ambivalent about returning to the workplace after lengthy unemployment because of the loss of time with the family or exercise time probably won't gather a lot of sympathy.

Still, it is true that for some who have a severance they can live off or a working spouse who can carry the financial load for a while, unemployment does provide time to shift to a more relaxing gear which a return to work can disrupt.

The Wall Street Journal examines the way a return to the workforce can ruin your groove.

Last July Ben Wallace spent a week at Boy Scout Camp with his then 9-year-old son. The two fished, canoed, sat around the campfire, and bonded with dozens of other scouts and parents--something he wouldn't have had time for if he had been employed.

"It was one of the best weeks we've spent together," says the 40-year-old, who left a vice-president role at an oil-and-gas company in June 2008 to start his own business, just before the economy tanked. During the nine months he was out of an office, Mr. Wallace spent time with his sons and found time to exercise...

... Mr. Wallace, 40, began spending much more time with his two boys while he tried to start his own business--and then when he was interviewing and negotiating for a full-time job. During the nine months he was unemployed, he spent many afternoons hanging out with his sons after school. He also dedicated upward of an hour each day to exercise. He lost 25 pounds and shaved almost 30 points off of his cholesterol level.

But then, in March Mr. Wallace started a job at Penneco Oil Co. in Delmont, Pa., as a chief operations officer. His bank account is fatter--but so is he, having gained back 15 pounds. "I'm finding less time now," says Mr. Wallace, who has traded running and weight-lifting for walking the dog.

Continue reading "Unemployment's Upside For Some Makes Return To Work Tough: WSJ" >

By Mark Memmott

If consumers aren't feeling too great that's not good news for the economy, because it's our spending on goods and services that drives a little more than two-thirds of all business.

Well, we consumers aren't feeling so hot.

The Conference Board says its widely watched consumer confidence index fell almost 6 points this month, to 47.7. In boom times, that index has often been much closer to 100.

As often happens, though, there's another economic indicator out this morning that tells a slightly brighter tale. The S&P/Case-Shiller Hope Price Indices shows prices were higher in August (compared to July) in most cities -- the fourth straight month the indices have risen.

Still, "average home prices across the United States are at similar levels to where they were in the autumn of 2003," S&P/Case-Shiller says.

For more economic news and analysis, see Planet Money.

By Frank James

There are those who have fought the good fight on behalf of millions of people who will never know their names. Brooksley Born is one such.

Brooksley Born receiving her JKF Profile in Courage award from Caroline Kennedy in May 2009. (Lisa Poole / AP Photo)

Called "The Warning" the documentary explains how Born sounded the alarm in the late 1990s about the risks that innovative but poorly understood financial products called over-the-counter derivatives were creating for the world's financial markets.

They were among the "toxic assets" that nearly destroyed financial giant American International Group (AIG) and created panic in so much of the financial sector last year.

While Born's role as a regulator who wanted to shed light on the so-called "dark market" has been known for some time, the documentary has the first extended public interview she has given on her experience trying to regulate the OTC derivatives market. There's also a small appearance by Adam Davidson of NPR's Planet Money blog and podcast.

Continue reading "'Frontline's' Must-See Look At Woman Who Gave Early Wall Street Alarm" >

A job fair in Philadelphia. More to come? (Matt Slocum/AP)

By Mark Memmott

While some statistics have signaled that the U.S. economic recession might be over, the things that matters most to most people -- jobs -- haven't been coming back. The nation's unemployment rate last month was 9.8% and most economists expect it will hit 10% or a bit above in coming months.

So some news today from the National Association for Business Economics should be welcome: NABE says its latest survey of 78 top economists shows:

Respondents expecting their firms to add employees over the coming six months exceeded the number expecting job cuts for the first time since the recession began.

Translation: There's hope in the survey on the employment front, for the first time since December 2007 -- the start of the recession.

USA TODAY says the survey "provides fresh evidence that a fitful recovery is underway."

Planet Money follows the economy here.

By Mark Memmott

Home resales hit a two-year high last month, the National Association of Realtors reports.

According to NAR:

Existing-home sales -- including single-family, townhomes, condominiums and co-ops -- jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

The Associated Press says "buyers scrambled to complete their purchases before a tax credit for first-time owners expires." It adds that "the median sales price was $174,900, down 8.5 percent from a year earlier, and slightly lower than August's median of $177,300."

Bloomberg says that the share of sales stemming from "foreclosures or otherwise distressed properties" was 29% last month, vs. 31% in August.

More such signs went up in September. (Michael Conroy/AP)

Sobering news for the Bank of England. (Oli Scarff/Getty Images)

By Mark Memmott

A 0.4% decline in Britain's gross domestic product in the third quarter means the U.K.'s economy has now shrunk for six consecutive quarters -- something that the BBC says hasn't happened since that country began keeping such records in 1955.

The U.K. Office for National Statistics' GDP report is posted here. It says that "the decline in output was due to decreases in all component aggregate series." Translation: All sectors of the U.K. economy remained weak.

Note: That 0.4% drop is not an "annual rate," as quarterly changes in GDP are expressed in the U.S.

NPR's Larry Miller reports from London that analysts had thought GDP grew in the quarter, but flat retail sales and weaker-than-expected results at hotels and restaurants helped bring the economy down:

By Frank James

Halloween is apparently coming early for the financial-services sector. At least, that's the way a lot of bank executives are likely to view federal moves to restrain some of their industry's pay packages.

Federal Reserve Chairman Ben Bernanke wants to rein in excessive risk-taking fueled by pay packages. (Mark Wilson / Getty Images)

Not only is the Obama Administration cracking down on executive pay at the seven financial firms that received the most federal bailout money, the Federal Reserve said Thursday it planned to review the pay and compensation policies at the thousands of banks it oversees to try and derail the process of bank executives taking excessive risks in order to earn big bonuses.

Under the central bank's proposal, it would have special reviews of the top 28 too-big-to-fail financial firms, putting their pay and compensation policies under special scrutiny because a major mistake by any of those companies could have severe consequences for the entire system.

The pay policies at the rest of the thousands of banks not considered too-big-to-fail would be assessed as part of the regular bank examination process.

An snippet from the Fed's press release:

"Compensation practices at some banking organizations have led to misaligned incentives and excessive risk-taking, contributing to bank losses and financial instability," Federal Reserve Chairman Ben S. Bernanke said. "The Federal Reserve is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system."

Continue reading "Federal Reserve Unveils Plan To Police Bank Pay " >

By Mark Memmott

If one barometer that's supposed to tell us how the economy will be doing in coming months is right, then things should slowly keep getting better (at least statistically).

The private Conference Board says its "Leading Economic Index" rose 1% in September. The index, which is based on such indicators as unemployment insurance claims, building permits and consumer confidence, has now risen for six straight months. As the Associated Press notes, that's "a sign the economy will keep growing next year."

Planet Money follows the economy's ups and downs.

By Mark Memmott

Another day, another economic indicator that signals things still aren't so great:

"In the week ending Oct. 17, the advance figure for seasonally adjusted initial claims was 531,000, an increase of 11,000 from the previous week's revised figure of 520,000," the Employment and Training Administration says. "The 4-week moving average was 532,250, a decrease of 750 from the previous week's revised average of 533,000."

Planet Money follows the economic news here.

By Mark Memmott

By insisting that the salaries of executives at bailed-out financial firms be slashed, the federal government is telling them "guys ... you can't party on like it's 2007," the head of the panel that oversees the bailout program said this morning.

Elizabeth Warren spoke on CBS-TV's The Early Show.

Here's her conversation with CBS' Harry Smith:

Watch CBS News Videos Online

By Frank James

A year after many Americans learned to their dismay that some financial firms were deemed too-big-to-fail, hence the need to bail them out to the tune of hundreds of billions of taxpayer dollars, we find some of the same firms are even larger.

As the latest report from Neil Barofsky, the inspector general for the federal bailout fund says:

The firms that were "too big to fail" last October are in many cases bigger still, many as a result of Government-supported and sponsored mergers and acquisitions...

Which is why it's worth noting that two legendary former Federal Reserve chairman, Alan Greenspan and Paul Volker, and the man who currently holds the British post equivalent to a Fed Chair, Mervyn King, the Bank of England's governor, are all talking about the need to break up the behemoth financial institutions.

Continue reading "Too-Big-To-Fail Banks Get Even Bigger Despite Warnings" >

By Frank James

Reading the Federal Reserve's latest report on the nation's economic activity, the so-called Beige Book, put me in mind of the old blues tune performed by The Doors called "Been down so long." The opening lyrics: "I've been down so (bleep) long, that it looks like up to me."

That's pretty much where we are with this economy. Fed officials have noticed some modest increases in economic activity but the gains are coming off some really weak data from preceding periods. So the economy appears to be improving but it would be hard not to considering where it was.

An excerpt from the Fed's summary:

Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels. Leading the more positive sector reports among Districts were residential real estate and manufacturing, both of which continued a pattern of improvement that emerged over the summer. Reports on consumer spending and nonfinancial services were mixed. Commercial real estate was reported to be one of the weakest sectors, although reports of weakness or moderate decline were frequently noted in other sectors.

Continue reading "Economy Down So Long, It Now Looks Like Up To Some" >

By Mark Memmott

This won't come as news, unfortunately, to many folks:

"In September, nonfarm payroll employment decreased in 43 states and the District of Columbia and increased in 7 states," the Bureau of Labor Statistics just reported.

The seven where the number of jobs actually went up from August:

-- Delaware

-- Indiana

-- Nevada

-- New Hampshire

-- New Mexico

-- South Carolina

-- Utah

Keep in mind, though, that BLS says "over the year, nonfarm employment decreased
in all 50 states and the District of Columbia." So, while there were a few small job gains in seven states from August to September, no states were better off than they were a year ago.

The highest unemployment rate again was Michigan's 15.3%. The lowest was again North Dakota's 4.2%.

Nationally, the jobless rate last month was 9.8%.

If you like to follow the economic news, check out Planet Money.

Sign of life in September. (Don Ryan/AP)

By Mark Memmott

Inflation remained in check and the housing sector showed some signs of life last month, two fresh reports show.

-- The Bureau of Labor Statistics says wholesale prices fell 0.6% in September from August. Falling energy costs were the major factor.

-- The Census Bureau says housing starts rose 0.5% last month from August. Even with that modest gain, home construction was still down 28.2% from a year earlier.

For much more on how the economy's doing, see Planet Money.

Federal Reserve Chair Ben Bernanke on Monday told a San Francisco audience that the U.S. must cut its deficits and Asians must consume more. (Mark Wilson / Getty Images)

By Frank James

Federal Reserve Chairman Ben Bernanke told a San Francisco audience during a Monday speech that the U.S. and Asian nations must reverse their long-term behavior patterns for the sake of the global economy -- Americans must cut their federal deficits, Asians must consume more.

Only by doing so will the U.S. be able to shrink its trade deficits which require vast amounts of borrowing from abroad, especially China, to finance.

A snippet of Bernanke's speech:

The United States must increase its national saving rate. Although we should deploy, as best we can, tools to increase private saving, the most effective way to accomplish this goal is by establishing a sustainable fiscal trajectory, anchored by a clear commitment to substantially reduce federal deficits over time.

For their part, to achieve balanced and sustainable growth, the authorities in surplus countries, including most Asian economies, must act to narrow the gap between saving and investment and to raise domestic demand. In large part, such actions should focus on boosting consumption. Admittedly, just as increasing private saving in the United States is challenging, promoting consumption in a high-saving country is not necessarily straightforward.

One potentially effective strategy is to reduce households' precautionary motive for saving by strengthening pension systems and increasing government spending on health care and education. Of course, such measures are likely to improve welfare and productivity as well as to contribute to more balanced, robust, and sustainable economic growth.

Continue reading "Bernanke: U.S. Must Cut Deficits; Asians Must Consume More" >

By Mark Memmott

More numbers from the Obama administration this morning on how many jobs it estimates have been "saved or created" so far by the $787 billion stimulus plan signed into law early this year:

250,000 "teaching or other education jobs" the Associated Press says.

Last week, the administration said that 30,000 jobs had been directly saved or created thanks to about $16 billion worth of contracts that are part of the $787 billion package.

Recovery.gov is the administration's official website for stimulus-related news.

By Mark Memmott

There's no better sign that consumers aren't yet ready to say the economy's getting better, even if many indicators are pointing up, than this news from Reuters:

U.S. consumer sentiment fell unexpectedly this month on persistent worries that the "dismal" state of personal finances would not recover quickly from the worst recession in decades, a report showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for October fell to 69.4, from September's 73.5.

That was below economists' median expectation of a steady reading of 73.5, according to a Reuters poll.

"While consumers still anticipated gains in the general economy and now think that the unemployment rate is close to its cyclical peak, there has been no improvement in consumers' dismal assessments of their personal financial situation," the report said.

Check Planet Money for much more about how the economy is doing.

Update at 11:40 a.m. ET. As NPR's David Kestenbaum reported on Morning Edition, one reason consumers aren't feeling so great may be that we're experiencing another "jobless recovery":

By Mark Memmott

Production went up again at the nation's factories in September, the Federal Reserve just reported. The 0.7% increase from August was the third straight month that production increased and, Reuters writes, means that output grew at a 5.2% in the third quarter -- the largest quarterly rise since first-quarter 2005.

Much of the increase in September came in the auto sector. Its output went up 7.4% last month and about 11% in both July and August.

The news adds to other recent signs that the recession, which officially began in December 2007, has ended -- though any recovery has so far been modest at best. For much more on the economy's ups and downs, see Planet Money.

By Mark Memmott

The first data have been posted online by the Obama administration about how many jobs it says have been created or saved by this year's economic stimulus plan.

The tally: 30,383 jobs saved-or-created thanks to $16 billion in federal contracts.

For those who like averages, that's about $527,000 per job.

(Update at 12:45 p.m. ET: Elizabeth Oxhorn, a spokeswoman for the White House on issues related to the stimulus plan, e-mails to tell us that the $16 billion includes money spent on equipment and supplies -- money that presumably helped save or create some jobs at the businesses that produced those goods. The 30,383 jobs reported about today are those of workers whose paychecks came directly from part of that $16 billion. Bottomline: She makes the case that additional jobs were saved or created indirectly by that spending on equipment and supplies. That would, of course, lower the average-per-job dollar amount.)

The $16 billion represents 2% of the more than $780 billion stimulus package. In a statement, White House economist Jared Bernstein cautioned that it's "too soon to draw any global conclusions from this partial and preliminary data."

But he added that:

The direct count by Recovery Act recipients of jobs created or saved from this small percentage of the Recovery Act exceeds our projections. All signs -- from private estimates to this fragmentary data -- point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months, a much needed lift in a very difficult period for our economy.

A broader report from the Obama team about the package's effects is due on Oct. 30.

There's an AP story here.

By Mark Memmott

Another big profit's been posted by one of the big investment banks: Goldman Sachs Group says it earned $3.03 billion in the third quarter.

And in the firm's report, CEO Lloyd Blankfein says that "although the world continues to face serious economic challenges, we are seeing improving conditions and evidence of stabilization, even growth, across a number of sectors."

Meanwhile, Citigruop says it earned $101 million in the quarter. While much less than what Goldman earned, Citigroup had been one of the banks that was hit hardest by the recession and financial crisis.

Yesterday, JPMorgan Chase & Co. said it earned $3.6 billion in the quarter; news that help spark a stock market rally and send the Dow Jones industrial average above the 10,000 mark for the first time in just over a year. Trading is just underway today, and the Dow is down a bit -- to 9,996.

By Mark Memmott

The good news that consumer prices have fallen 1.3% over the past year means it's now official -- there will be no cost of living increase this coming year in the amount of money that those who receive Social Security get. The Social Security Administration confirmed that this morning.

Until now, payments had been adjusted upward for inflation every year since 1975.

President Barack Obama has proposed giving more than 50 million people payments of $250 each to make up for the lack of a cost of living increase. That's about $13 billion. According to the Associated Press:

Obama did not offer any alternatives to finance the payments. A senior administration official said Obama was open to borrowing the money, increasing the federal budget deficit. The official, who requested anonymity, was not authorized to speak on the record.

By Mark Memmott

The number of people who filed first-time claims for unemployment insurance benefits declined to 514,000 last week, the lowest level since January, the Employment and Training Administration just reported.

It's the fifth decline in six weeks. There were 524,000 such claims the previous week.

The Associated Press calls the news another sign that "the labor market is slowly improving." The wire service also notes that:

The tally of people continuing to claim benefits dropped by 75,000 to 5.99 million, its first time below 6 million since the week of March 28.

Planet Money follows the economy's ups and downs here.

By Mark Memmott

Consumer prices rose only 0.2% in September from August, the Bureau of Labor Statistics just reported, and have fallen 1.3% over the last 12 months.

While energy prices edged up last month, a drop in food costs kept inflation at the consumer level in check.

Planet Money follows the economy here.

By Mark Memmott

There have been more attacks on military sites in Pakistan today, as we just reported, and a loud explosion has been heard in the city of Peshawar. We'll keep an eye on events there as the day continues.

The economy will be in the news again this morning. At 8:30 a.m. ET, the Bureau of Labor Statistics releases the September consumer price index -- the most-watched measure of inflation at the consumer level. And at 9:30 a.m. ET, stocks resume trading on Wall Street. Will the Dow Jones industrial index move even higher after cracking the 10,000 mark yesterday?

Also today, President Barack Obama visits New Orleans for the first time since taking office last January. At an early afternoon town hall meeting, he'll get a chance to hear directly from residents about how the long, slow recovery from 2005's Hurricane Katrina is going.

The Times-Picayune asked locals about what things they think the president should see. As the newspaper says:

Though most New Orleans-area residents were heartened by the news that Obama would be making his first presidential visit to the region Thursday, nine months into his first term, there also has been carping that his itinerary is on the light side.

From WWNO in New Orleans, Eileen Fleming reports that some local officials wish Obama was spending more than a few hours in their battered region:

Other stories making headlines include:

-- The Associated Press -- "Italy Denies Paying Off Taliban In Afghanistan": "The Italian government denied a newspaper report Thursday that its secret services paid the Taliban thousands of dollars to keep an area in Afghanistan controlled by the Italians safe. Premier Silvio Berlusconi's office called the report in the Times of London 'completely groundless.' The defense minister said the paper published 'rubbish.' "

Times of London -- "Berlusconi Attempts To Duck Afghanistan Bribe Scandal": "Silvio Berlusconi today sought to duck the blame for a series of secret Italian payments to Taliban fighters that left French soldiers exposed in Afghanistan. The Italian prime minister denied any knowledge of money paid to Afghan warlords in an apparent attempt to divert attention over the clandestine deals to his predecessor's administration. The Times has learned that when French soldiers arrived to assume control of the Sarobi area, east of Kabul, in mid-2008, they were not informed that the departing Italians had kept the region relatively peaceful by paying local Taliban fighters to remain inactive.

Update at 9:25 a.m. ET. The Associated Press now reports that:

In Kabul, a U.S. spokesman for NATO forces in Afghanistan denied the allegations. "We don't do bribes," Col. Wayne Shanks said. "We don't pay the insurgents."

-- Morning Edition -- Zazi Allegedly Made Contact With Top Al-Qaida Operative. "The man arrested last month for allegedly plotting to blow up targets in New York contacted one of Osama bin Laden's right-hand men, U.S. intelligence officials say." NPR's Dina Temple-Raston reports:

-- The New York Times -- "Public Option Is Next Big Hurdle In Health Debate": "As the White House and Congressional leaders turned in earnest on Wednesday to working out big differences in the five health care bills, perhaps no issue loomed as a greater obstacle than whether to establish a government-run competitor to the insurance industry."

-- NPR News -- Foreclosures Rose 5% From Summer To Fall. NPR's Jack Speer reports:

Carmax reports that online searches for sports cars rose 6 percent in September over August. Is it a sign of good times to come? (Steve Helber / AP Photo)

By Frank James

Carmax, the U.S.'s largest retailer of used cars, reported Wednesday that searches for sports cars on its website increased six percent in September over August.

The top five searches were for the Ford Mustang, Chevrolet Corvette, Nissan 350Z, Chevrolet Camaro and BMW M3 in that order.

Some observers are suggesting this could mean the economy is really heading up with consumers ready to spend.

Of course, it could also mean there's a lot of wistful dreaming out there which is free, after all, compared to purchasing even a used car.

By Mark Memmott

The Dow Jones industrial average just crossed an important "psychological barrier" by closing above the 10,000 mark for the first time since early October 2008.

As NPR's Kevin Whitelaw wrote earlier, the stock market's recent good ride could be a sign that the economy's on the mend as well.

By Mark Memmott

All right everyone, here's a way to sort-of bet on the stock market without risking a dime.

Just put on your old Lou Rukeyser wig and cast a vote. Will the Dow Jones industrial average close above 10,000 today?

The Dow hasn't even touched that level since Oct. 6, 2008. Right now, it's about 150 points away -- and some good earnings reports have fueled an early rally.

We'll know who's right at 4 p.m. ET.

Update at 4 p.m. ET: The Dow did it. The numbers aren't quite finished cooking yet, but it looks to have finished the day around 10,015 -- up nearly 150 points today.

Update at 3:55 p.m. ET: With five minutes to go in today's trading, the Dow's at 10,020.

Update at 3:40 p.m. ET: Twenty minutes to go and the Dow's at 10,026. And get your votes in now -- we're going to close the poll at 3:45 p.m. ET.

Update at 3:10 p.m. ET: It's back above 10,000. But will it stay there?

Update at 3 p.m. ET: The index has been bouncing around between 9,980 and 9,995 for an hour or so. Meanwhile, NPR's Kevin Whitelaw writes that the Dow's recent strong run underscores "a growing sense among economists and U.S. companies that a real (economic) recovery may finally be under way."

Update at 1:35 p.m. ET: Don't get too excited just yet, but the Dow briefly touched 10,001.58 a short time ago before slipping back below the 10k mark.

Update at 10:15 a.m. ET. And while we all have the market on our minds, here's a quick quiz about the Dow Jones industrial average:

By Mark Memmott

A sharp drop in auto sales after the expiration of the "cash-for-clunkers" program sent retail sales overall down 1.5% in September from August, the Commerce Department just reported.

It was the biggest drop in nine months. But outside the auto sector, sales were up 0.5% for the month, Reuters says. Sales (excluding autos) were up 1% in August from July.

Planet Money follows the economy's fortunes here.

Update at 10:15 a.m. ET: The other major economic indicator of the morning has now been released. Commerce says businesses' inventories shrank 1.5% in August from July. It's the 13th straight monthly decline.

By Mark Memmott

They're not the official arbiters and they aren't saying that everything's fine or that many folks aren't still hurting.

But the National Association for Business Economics' latest survey of 44 "professional forecasters" shows that they believe "the great recession is over," NABE announced this morning.

In a statement, NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University, says:

"The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines. The NABE panel upgraded the economic outlook for the next several quarters, compared with the previous survey.

"Following a sharp 6.4% (annual rate) contraction in the first quarter of this year and another 0.7% drop in the second quarter, NABE forecasters expect real GDP to rise at an above trend 2.9% rate in the second half. The more-than-three-year downturn in the housing market is very close to coming to an end, with substantial growth (from a low base) expected for next year.

"According to the survey, the key areas of concern involve the large increases in federal debt and unemployment rates that are expected to remain very high through next year. The unemployment rate is forecast to rise to 10% in the first quarter of next year and edge down to 9.5% by the end of 2010. Inflation is expected to remain contained throughout 2010. The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation."

Your vote?

Planet Money follows the economy here.

Update at 12:05 p.m. ET. Reaser tells the Associated Press that the recovery is likely to be slow:

Ostrom. (Indiana University/Getty Images)

By Mark Memmott

For the first time since the award was first given out in 1969, the Nobel Prize in economics has gone to a woman.

Americans Elinor Ostrom of Indiana University and Oliver Williamson of the University of California, Berkeley, are sharing the honor and the $1.4 million that comes with it, the Nobel Committee announced this hour.

The Committee says that Ostrom, born in 1933 in Los Angeles:

Challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories.

It says that Williamson, born in 1932 in Superior, Wis.:

Has argued that markets and hierarchical organizations, such as firms, represent alternative governance structures which differ in their approaches to resolving conflicts of interest.

The shorthand, according to the Associated Press, is that they are being honored for "their work in economic governance."

A record five women won Nobel prizes this year.

We'll be updating this post as the day continues, so be sure to hit your "refresh" button to get our latest additions.

Update at 1:10 p.m. ET. Ostrom just spoke with Michele Norris of All Things Considered. She told Michele that as a young woman, she wasn't allowed to study trigonometry because she was going to be "barefoot and pregnant in the kitchen":

Ostrum also explained the relevance of her work to the world at large:

Much more from their conversation is due on today's edition of ATC. Click here to find an NPR station near you.

Williamson. (Justin Sullivan/Getty Images)

Update at 11:35 a.m. ET: UCBerkelyNews writes that Williamson, a professor emeritus of business, economics and law, studies "how varying organizational structures for markets and institutions affect economic activity." His work, "is said to have influenced everything from electricity deregulation in California to investment in Eastern Europe to human resource management in the technology industry."

Update at 11:25 a.m. ET: We kid you not, the Nobel Prize Committee's online audio interview of Ostrom was done by a man named Adam Smith, who is editor-in-chief of Nobelprize.org. Ostrom says she hopes being the first woman to win the award will help raise the profile of other women in her profession. On her work, Ostrom says she considers her work to be about "political economy. ... I've crossed disciplines, there's no question about it" because it involves people being involved in their own governance.

At the Indianapolis Star, her work is described this way:

Elinor Ostrom's field of expertise -- the economics of common pool resources -- sounds tough for a layman to digest.

It isn't. The first woman to win a Nobel economics prize, announced today, emphasizes in her work, for example, how pools of users manage natural resources as common property, such as how lobster fishermen in Maine in the 1920s came together to self-police the industry due to too many of the sea creatures being captured threatened their extinction.

Update at 9:25 a.m. ET. On Morning Edition, NPR's Jim Zarroli told host Steve Inskeep that the two winners brought "economic governance" from the fringe to the forefront of economic research:

Update at 8:29 a.m. ET. At The Wall Street Journal's Real Time Economics blog, Phil Izzo writes that:

The committee said that the decision wasn't influenced by the financial crisis, but it's hard to look at the research and not see some connection to concerns raised by the Great Recession.

Bloomberg News says that Ostrom told reporters that "My first reaction was a great surprise and appreciation. ... There are many people who have struggled mightily and to be chosen for this prize is a great honor."

By Mark Memmott

"The U.S. trade deficit unexpectedly narrowed in August as exports posted a small gain and imports fell on a big drop in demand for foreign oil," the Associated Press writes.

The wire service adds that:

The Commerce Department says the trade deficit declined 3.5% to $30.7 billion, surprising economists who had expected higher oil prices to push the imbalance to $33 billion. Oil prices did shoot up, but the volume of shipments dropped sharply in August.

Commerce has posted its report here.

Planet Money follows the economy's ups and downs.

By Frank James

The Obama Administration's $75 billion federal program to help distressed homeowners remain in their homes is gaining momentum, according to administration officials, hitting a major benchmark weeks before its Nov 1 deadline, with more than 500,000 loan modifications underway.

An excerpt from the Treasury Department's press release:

The goal of 500,000 trial loan modifications by November 1 initially set in July pushed servicers to ramp up program implementation and sustain a faster pace of modifications; trial modifications are now being issued at a faster rate than new homeowners are becoming eligible. Still, the Administration believes that more can and should be done to assist struggling homeowners and to stabilize the housing market. As part of a continued effort to improve program performance, senior Treasury and HUD officials held the next in a series of meetings with servicers this afternoon, with discussion focused on improving servicer efficiency and responsiveness to borrowers during the modification process.

While the administration was trumpeting beating its self-imposed deadline, some might argue that it had set the bar low. Also, the half million homeowners helped so far came nowhere near the eight to nine million homeowners facing foreclosure Obama said earlier this year he hoped to help.

Continue reading "Federal Mortgage Aid Beats Deadline; Millions Of Homeowners Still Unaided" >

By Mark Memmott

There was a larger than expected drop last week in the number of people filing first-time claims for jobless benefits, the Employment and Training Administration just reported.

Claims fell by 33,000 from the week before, to 521,000. They haven't been lower since January. And economists had thought the number would be closer to 540,000.

Planet Money follows the numbers that tell the economy's story.

By Frank James

There's very good news for those who heat their homes or businesses with natural gas or propane. Average household costs for heating with those fuels is expected to be 12 and 14 percent lower, respectively, than last year, according to the U.S. Energy Information Administration's "Short-Term Energy and Winter Fuels Outlook."

iStockphoto.com

Costs are also supposed to be lower, on average, for those who heat with electricity and heating oil though by only two percent. About 80 percent of the heating oil usage is in the Northeast while 59 percent of electricity heating occurs in the South.

Among the assumptions behind the report: that this winter will be warmer than last, with the Midwest forecast to be four percent warmer than last year, for instance.

By Mark Memmott

African-Americans and other minorities are much more likely than whites to say that "President Obama's economic stimulus package" has been a good thing, a poll released today by the ethnic news media co-op New America Media shows.

NAM, a collaborative effort of 2,000 ethnic news organizations enlisted pollster Sergio Bendixen to do a national survey over three weeks from late August through mid-September. Some of the results:

Continue reading "Poll: Stimulus Gets Highest Grade From Blacks; Lowest From Whites" >

By Frank James

Gourmet, the nation's oldest food magazine, will be no more, publishing its last issue in November, Conde Nast said today.

Gourmet was started in 1941, not exactly an auspicious year to start a magazine considering the Great Depression still hadn't ended and World War II was about to start. It survived the war and all the economic downturns since then but like many a publication had trouble coping with the Internet and changing consumer behavior.

An excerpt from an NPR.org story:

"We're all stunned, sad," Gourmet's editor, Ruth Reichl, posted on Twitter.

Conde Nast had no comment. But in a memo to staff on Monday, Conde Nast CEO Charles Townsend said the closures were required "to navigate the company through the economic downturn and to position us to take advantage of coming opportunities."

The decision comes at the end of a three-month study by consultants from McKinsey & Co. on ways Conde Nast can reduce costs. Gourmet's ad pages were down 50 percent in the second quarter from the same period last year, according to the Publishers Information Bureau. Gourmet had a circulation of 980,000 last year.

All Things Considered also has a piece on the end of Gourmet, featuring Lynne Rossetto Kasper, host of public radio's The Splendid Table.

By Mark Memmott

An index that's supposed to measure how the service sector is doing has moved into positive territory for the first time in about a year, the Institute for Supply Management reported this morning.

Its "Non-Manufacturing Index" rose 2.5 percentage points in September, to 50.9%. Any reading above 50% is supposed to signal that the service sector is growing. For 11 previous months, the index had been under 50%.

The gauge is based on surveys of purchasing and supply executives about such indicators as orders and employment.

But, "even with the overall month-over-month growth reflected in the report this month, respondents' comments vary by industry and remain mixed about business conditions and the overall economy," Anthony Nieves, chair of the institute's Non-Manufacturing Business Survey Committee, says in a statement.

By Mark Memmott

New orders for manufactured goods dropped 0.8% in August from July, the Census Bureau says, as a sharp decline in orders for aircraft pulled down the factory sector after four straight months of increases.

Excluding the transportation sector, orders were up 0.4%.

The other big economic news of the day has been the rise in the nation's jobless rate, to 9.8% in September from 9.7% in August, as employers cut 263,000 jobs from their payrolls.

By Mark Memmott

Coming off today's news that the nation's jobless rate edged up to 9.8% last month, here's a two-question pop quiz:

(Data courtesy of the Bureau of Labor Statistics.)

By Mark Memmott

The nation's unemployment rate rose to 9.8% in September from 9.7% in August, the Bureau of Labor Statistics just reported.

Businesses cut 263,000 jobs from their payrolls.

We'll have more about the report shortly.

Planet Money will also be following the news.

Update at 11:15 a.m. ET: NPR's Laura Conaway points out that the length of the average job search, now 26.2 weeks, is the longest it has been since BLS started keeping records in 1948.

Update at 8:35 a.m. ET. The Associated Press writes that:

The uptick in the jobless rate is "evidence that the longest recession since the 1930s is still inflicting widespread pain." The job loss total was "above Wall Street economists' expectations of 180,000 job losses, according to a survey by Thomson Reuters."

Also, AP notes:

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17%, the highest on records dating from 1994.

One thing to keep in mind: Economists say that the labor market always "lags" the rest of the economy. Employers remain reluctant to hire until they're absolutely, positively sure that things are getting better.

By Mark Memmott

Good morning.

It's already been a busy morning, there's much more news expected as the day gets going and there are several interesting stories from overnight to pass along. So let's get right to it.

As we just reported, President Barack Obama has made his in-person pitch to the International Olympic Committee on behalf of Chicago's bid for the 2016 Summer Games. The IOC's decision is due around 12:30 p.m. ET.

While Air Force One was still on the ground in Copenhagen, Obama met with the top commander of U.S. and NATO forces in Afghanistan, Gen. Stanley McChrystal. The general has said he needs more troops. Obama is reviewing U.S. strategy in Afghanistan.

Coming up at 8:30 a.m. ET, the Bureau of Labor Statistics reports on September job losses and that month's unemployment rate. As NPR's John Ydstie told Morning Edition's Steve Inskeep, economists say it's likely the jobless rate inched up from August's 9.7%.

As for other stories making headlines, they include:

-- The Associated Press -- 3,000 May Be Trapped Under Quake Rubble In Indonesia: "Indonesia's Health Ministry says nearly 3,000 people may still be trapped under rubble after a powerful earthquake two days ago. Priyadi Kardono, a spokesman for the ministry's Disaster Management Agency, said Friday 715 people have been confirmed dead and 2,400 hospitalized."

Related story from BBC News -- "Indonesia Awaits World Quake Aid": "International rescue teams are heading to Indonesia in a last-ditch effort to free trapped earthquake survivors. Experts from the U.K., Australia and South Korea were en route to Sumatra, hit by a 7.6-magnitude quake two days ago. Others pledged emergency cash. More than 1,000 people are already known to have died, the U.N. says, with thousands thought to remain trapped. But one survivor was found on Friday: a young woman pulled, barely conscious, from within a collapsed school."

-- The Wall Street Journal -- "Comcast, NBC In Deal Talks": "Talks to merge Comcast Corp.'s cable networks and General Electric Co.'s NBC Universal are the latest sign of a big shift in television, with cable channels becoming more valuable than broadcast networks and companies rethinking their strategies for making and delivering content to consumers in a digital era."

-- Las Vegas Review-Journal -- Reid Says Health Care Legislation Will Have "Public Option": "Any health insurance reform bill that lands on the desk of President Barack Obama will include a so-called 'public option,' Sen. Harry Reid, D-Nev., said Thursday. What that public option will be remains unclear. 'We are going to have a public option before this bill goes to the president's desk,' (the Senate majority leader) said during a conference call with Nevada residents."

Contributing: Chinita Anderson of Morning Edition.

Ford and other car makers saw their September sales drop with the end of the "Cash for Clunkers" program.(Bill Pugliano / Getty Images)

By Frank James

September auto sales fell back to Earth from the summer's higher levels, confirming what some analysts had warned of, that the federal government's "Cash for Clunkers" program was a huge sugar rush for the economy that, once worn off, would return the car industry to its previously groggy state.

Ford reports its September sales fell 5.1 percent from a year-ago. Chrysler said its sales fell 42 percent.

(General Motors and Toyota's sales reports were expected later Thursday.)

Despite the drop, some Ford lines did well. Sales for its new Taurus were up 60.1 percent. Sales of its Fusion hybrid vehicle rose 9 percent year to year. The F-Series truck, one of Ford's most popular vehicles, rose 3.5 percent.

But sales of the large Expedition SUV's sales fell 35 percent. And Ranger sales fell 47.6 percent.

Continue reading "Ford, Chrysler September Sales Fall With End Of 'Cash For Clunkers'" >

By Mark Memmott

The "cash-for-clunkers" program to spur auto sales helped push consumer spending up 1.3% in August from July, the Commerce Department's Bureau of Economic Analysis just reported.

Reuters says it's "the largest (monthly) gain since October 2001."

As we reported earlier, though, the economic data remain choppy. The number of people filing first-time claims for jobless benefits rose more than expected last week.

Check Planet Money for more on the economy's ups and downs.

By Mark Memmott

The number of people filing first-time claims for jobless benefits rose to 551,000 last week from 534,000 the week before, the Employment and Training Administration just reported.

The increase was more than economists expected and is a sign, according to the Associated Press, that "employers are reluctant to hire and the job market remains weak."

Planet Money follows the economy's ups and downs.

By Frank James

Forbes is out with its list of the richest 400 Americans and the theme of this year's list is that the rich are just like so many of the rest of us -- they have less money than they did.

(Forbes uses the word "poorer" but I have to quibble with that word being used for this lot who still sit atop a pile of billions of dollars in assets. So what if the pile is somewhat lower; we're still talking billions.)

As Forbes reports:

America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400, our annual tally of the nation's richest people, has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion.

Faltering capital markets and real estate prices, along with divorce and fraud, pushed the fortunes of 314 members down and drove 32 plutocrats off the rankings.

Hurt the most: Warren Buffett, America's second-richest citizen. The Oracle of Omaha dropped $10 billion from his personal balance sheet as shares of Berkshire Hathaway fell 20% in 12 months. He is now worth $40 billion.

Beating out Buffett for the 16th straight year as America's richest man is Microsoft co-founder Bill Gates. Sluggish Microsoft shares and declining outside investments pushed the software visionary's net worth down $7 billion in 12 months.

Rounding out the top 10 on The Forbes 400: Oracle founder Larry Ellison ($27 billion); Wal-Mart heirs Christy Walton ($21.5 billion), Jim C. Walton ($19.6 billion), Alice Walton ($19.3 billion), and S. Robson Walton ($19 billion); media maven Michael Bloomberg ($17.5 billion) and energy titans Charles and David Koch ($16 billion each).

The 10 richest Americans lost a combined $39.2 billion in the past 12 months, a 14% decline.

It's fairly astounding that Buffet could lose $10 billion in wealth and still be the second wealthiest American. That's one heck of a cushion he has.

GM announced on Wednesday that the sun will be setting on its Saturn unit after Penske Automotive dropped plans to buy the subsidiary. (Bill Pugliano / Getty Images)

By Frank James

It appears that car maker Saturn will soon be history.

Penske Automotive announced Wednesday afternoon that it's dropping its planned purchase of Saturn from General Motors Co. because a plan fell through to have a third company make the cars after GM stopped. Penske didn't name the third company.

Quickly responding, GM said it's closing its Saturn unit. This from a GM press release with a statement from GM CEO Fritz Henderson:

As a result of PAG's decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.

Penske, which operates auto retailers, blamed the board of the third company for rejecting the manufacturing agreement and bringing down the entire deal.

Continue reading "Carmaker Saturn To Close After Penske Exits Deal" >

By Mark Memmott

Things were a bit better in the second quarter than we thought, the Commerce Department just reported.

It says that: "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.7% in the second quarter of 2009, (that is, from the first quarter to the second quarter), according to the 'third' estimate released by the Bureau of Economic Analysis."

In its previous estimate, Commerce pegged the decline as having been at a 1% annual rate.

It left unchanged its estimate of what happened in the first quarter, when GDP dropped at a 6.4% annual rate.

For much more on the economy, see Planet Money.

Federal Deposit Insurance Corp Chairman Sheila Bair explains her agency's funding challenges to the media at an August 2009 news conference. (Gerald Herbert, file / AP Photo)

By Frank James

The federal agency that insures that bank depositors don't lose their money when a bank becomes insolvent needs some financial assistance itself because of all the failed banks it's had to move in to clean up.

So the Federal Deposit Insurance Corp. is planning on asking banks to prepay their insurance premiums to the fund earlier than scheduled.

By doing so, the FDIC believes it can take in about $45 billion which should allow the agency to maintain the level of cash it will require to do step in and protect insured deposits through 2010. The FDIC wants to receive early the premiums due for this year's fourth quarter all the way through 2012.

According to FDIC officials, bank failures are expected to peak this year and next, so it projects it will need the money more in the near-term than further out. It even suggests that it might be able to reimburse premiums in the out-years so long as its projections hold.

Continue reading "FDIC To Banks: Speed Up Future Premium Payments To Buoy Insurance Fund" >

By Mark Memmott

As our friends at Planet Money report, the Conference Board's Consumer Confidence Index slipped by a point this month -- yet another sign that while the economy may technically be doing better, that doesn't mean everyone feels very good.

Maybe this will cheer some folks up: At least things seem a lot better than they did one year ago today, when the Dow Jones industrial average plunged a record 777.68 points.

As of this moment, the Dow is up a bit more than 11% in the past year.

By Mark Memmott

The general headline is this: "U.S. Income Gap Widens As Poor Take Hit In Recession."

Both The Washington Post and The Atlanta Journal-Constitution dig beneath the latest Census Bureau figures, though, to look at how the recession has caused great financial pain for some previously comfortable families.

The Post says "awkward scenes are playing out" at charities around Washington, D.C., "as they struggle to help the still upward-spiraling number of formerly middle-class people knocking on their doors." Here's one of those awkward scenes the Post describes:

"What group are you with?" the donor asked the woman, who promptly burst into tears. With her Toyota Sequoia and quilted Vera Bradley bag, she had been mistaken for a volunteer -- rather than a client waiting to take home a bag of potatoes.

"I'm a mother of four just trying to feed my kids," the woman sobbed to the donor, who was taken aback, then sympathetic.

The Journal-Constitution writes that:

The recession's victims increasingly look like you and your neighbors.

Nearly 26,000 metro Atlanta families -- with two parents and at least one kid -- dropped below the poverty line in 2008, up a chilling 19 percent from the year before.

And the number of families receiving food stamps and other bare-bones public assistance rose 21 percent in the 20-county metro area, according to U.S. Census Bureau data released today.

By Mark Memmott

The value of Americans' homes showed some improvement again in July, according to a closely watched index.

Standard & Poor's just released its latest S&P/Case-Shiller Home Price Indices and says that:

Although still negative, the annual rate of decline of the 10-City and 20-City Composites improved compared to last month's reading. This marks approximately six months of improved readings in these statistics, beginning in early 2009.

"The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets" David M. Blitzer, chairman of the Index Committee at Standard & Poor's, says in S&P's news release.

Translation: Home prices -- as measured by where they were a year earlier -- aren't down by as much as they recently were. And in some places, prices are actually starting to go up again.

By Mark Memmott

There's word from Iran as the day begins that it has test-fired a long-range missile capable of reaching Israel and U.S. bases elsewhere in the Middle East. NPR's Carl Kasell introduces this report:

Sticking with news about Iran, The New York Times reports that the Obama administration "is scrambling to assemble a package of harsher economic sanctions against Iran over its nuclear program that could include a cutoff of investments to the country's oil-and-gas industry and restrictions on many more Iranian banks than those currently blacklisted, senior administration officials said Sunday."

Also this morning, the death toll continues to climb in the Philippines, where at least 140 people have died after a tropical storm caused massive flooding.

As for other stories making headlines, they include:

-- The Washington Post -- "U.S., Allies Vow Support For Karzai": "The United States and NATO countries fighting in Afghanistan have told President Hamid Karzai's government that they expect him to remain in office for another five-year term and will work with him on an expanded campaign to turn insurgent fighters against the Taliban and other militant groups."

Related story by CBS News' 60 Minutes -- Gen. Stanley McChrystal lays out his case for more troops.

-- USA TODAY -- "Confidence, Optimism Grow In Pockets Of U.S.": In communities such as Paris, Ill., unemployment remains high but some people are heading back to work. And "there is growing confidence as workers who are getting paychecks spend money, spreading optimism to small-business owners and city leaders."

-- Morning Edition "Honduras Restricts Liberties To Prevent Rebellion". NPR's Jason Beaubien reports from Tegucigalpa that the current government is allowing warrantless arrests and has banned "unauthorized" public meetings as ousted president Manuel Zelaya remains holed up in the Brazilian embassy (ME co-host Renee Montagne introduces his report):

-- The Associated Press -- "Merkel Vows Quick Deal On German Coalition": "Chancellor Angela Merkel has vowed to press ahead quickly with forming a new center-right German government following her election victory. Sunday's election gave the conservative Merkel a second four-year term. It allows her to dump her 'grand coalition' with the center-left Social Democrats and form a new government with the pro-business Free Democrats."

-- The New York Times Safire Was "Oracle Of Language": "William Safire, a speechwriter for President Richard M. Nixon and a Pulitzer Prize-winning political columnist for The New York Times who also wrote novels, books on politics and a Malaprop's treasury of articles on language, died at a hospice in Rockville, Md., on Sunday. He was 79." He was, among many other things, "an unofficial arbiter of usage."

Related story on Morning Edition -- It Was "Hard Not To Love" Safire. NPR's David Folkenflik reports:

Contributing: Chinita Anderson of Morning Edition.

By Frank James

During his news conference this afternoon at the end of the G-20 summit in Pittsburgh, President Barack Obama challenged those who protested against the world leaders to read the communique issued by the participating G-20 nations to see how much the officials care about real people.

Here's the communique.

He was hoping they'd be impressed by lines like the following one:

The process of recovery and repair remains incomplete. In many countries, unemployment remains unacceptably high. The conditions for a recovery of private demand are not yet fully in place. We cannot rest until the global economy is restored to full health, and hard-working families the world over can find decent jobs.

I doubt if too many protesters will be assuaged by this and the rest of the communique.

By Mark Memmott

For the second time in the past three months, orders for so-called durable goods have fallen.

The Census Bureau just reported that such orders fell 2.4% in August from July. They had risen 4.8% in July from June.

The Associated Press starts its report with this:

Orders for goods expected to last at least three years fell unexpectedly in August due mainly to a sharp drop in demand for commercial aircraft.

According to the AP, economists thought orders had gone up slightly last month.

Planet Money is tracking the economy here.

By Mark Memmott

There was a 21,000-decrease last week in the number of people filing first-time claims for unemployment insurance, the Employment and Training Administration just reported:

In the week ending Sept. 19, the advance figure for seasonally adjusted initial claims was 530,000, a decrease of 21,000 from the previous week's revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week's revised average of 564,500.

The Associated Press sums up the significance of that news with this:

The number of newly laid-off workers seeking unemployment benefits fell for the third straight week, evidence that layoffs are continuing to ease.

Bloomberg News says it's "another sign firings are slowing as the economy pulls out of the recession."

The Wall Street Journal, though, says that the news "still leaves claims at a fairly high level, reinforcing the view shared by most economists that the job market will take longer to heal."

For much more on the economy's ups and downs, see Planet Money.

By Mark Memmott

From The Arizona Republic this morning there's one of those not-rare-enough stories about the difficulty some local jurisdictions are having in actually spending the millions of dollars in federal economic stimulus funds they're getting.

"Officials in Maricopa County have failed so far to obligate nearly all its $105 million in stimulus money for road projects and will spend millions of that money on consultants to help meet federal deadlines," the Republic reports.

Among the problems:

-- Maricopa County officials aren't familiar with federal environmental regulations. So they're having to bring in consultants, which could cost more than $15 million.

-- The county's projects haven't gone through all the necessary state and local approval processes, meaning they aren't "shovel-ready."

By Mark Memmott

One subject of debate as Congress considers an overhaul of banking and financial services regulations is whether the Federal Reserve should be turned into something of a "super regulator"; a plan the Obama administration favors.

In a conversation this afternoon, Senate Banking, Housing & Urban Affairs Committee Chairman Chris Dodd told All Things Considered host Robert Siegel about why he opposes giving the Fed superpowers. Basically, the Connecticut Democrat thinks the central bank needs to remain focused on its traditional mission -- setting monetary policy -- and that it would be dangerous to do anything that might threaten the Fed's independence:

Much more from Robert's conversation with the senator is due on today's edition of ATC. Click here to find an NPR station near you.

Planet Money is one place to go for more coverage of all things financial.

The Federal Reserve left a key interest alone Wednesday. D. (Charles Dharapak / AP Photo)

By Frank James

In a move that unlikely caught anyone by surprise, Federal Reserve officials left the key federal funds interest rate at its current target, 0 percent to 1/4 percent.

In explaining its action, the Fed noted that the economy is rebounding but added that consumers are still squeezed by slow income growth, reduced housing values and the inability to get loans. With consumers representing about 70 percent of the economy, the central bankers were signaling that the economy was still facing a significant drag.

The federal funds rate is the rate banks charge each other for overnight loans. It is seen as a bellwether for many of the other interest rates throughout the economy. The Fed last changed the key rate in December when it lowered it from one percent to the present level.

An excerpt from its statement:

Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

Continue reading "Federal Reserve Leaves Key Interest Rate Alone" >

AIG's common shares have become the darling of speculators, thanks to U.S. taxpayers whose money has kept the company afloat. (Henny Ray Abrams / AP Photo)

By Frank James

In the financial world, one person's disaster is another's opportunity and American International Group Inc. was certainly a disaster for its shareholders who lost billions of dollars in wealth last year before the too-big-to-fail company was rescued from the brink of insolvency by a federal government takeover.

But there are those in the Wall Street ecosystem who see opportunity in the company's shares: short-term traders who are making continuous bets on AIG's stock and some appear to be making significant money.

As The Wall Street Journal reports:

At a traders meeting before the market opened on Monday, Scott Redler, chief strategist at hedge fund T3 Capital Management, noted that AIG's stock hadn't moved much for days and was ripe for a breakout. Whether it headed up or down, he said, the traders should be ready.

AIG shares, trading below $40 at the opening bell, climbed within 15 minutes to $41, then above $42. "This thing's going to $45," T3 President Marc Sperling said, watching his six computer monitors. "It's on every trader's radar screen across the country."

AIG shares rose 21% for the day, and T3's traders did "great," said Mr. Redler. Since Aug. 5, the shares -- deemed highly risky by most analysts -- have more than tripled. "The stock paid the traders' bills all summer," Mr. Redler said.

Continue reading "AIG, Saved By U.S. Taxpayers, Is Favorite Of Speculators" >

By Mark Memmott

Reports are coming out of Hong Kong about former Alaska governor Sarah Palin's first major speech since leaving office in July, a paid address she gave today to a group of financial industry executives .

The first headline from Bloomberg News is that the 2008 GOP vice presidential nominee "Attacks Fed On Hong Kong Visit, Wants 'Responsible China' ".

According to Bloomberg:

Palin criticized (President Barack) Obama's plan to give the (Federal Reserve) powers to monitor risks to the financial system. A meltdown last year led to $1.6 trillion of bank losses and writedowns and triggered a global recession.

"How can we think that setting up the Fed as monitor of systemic risk in the financial sector will result in meaningful reform," she said. "The words 'fox' and 'henhouse' come to mind."

Reporters weren't allowed in the room, but did interview attendees afterward.

The New York Times says that Palin:

Said she was speaking as "someone from Main Street U.S.A.," and she touched on her concerns about oversized federal bailouts and the unsustainable American government deficit. She did not repeat her attack from last month that the Obama administration's health care proposals would create a "death panel" that would allow federal bureaucrats to decide who is "worthy of health care."

The Associated Press says it obtained a video showing part of the speech, and that Palin told the group: "I'm going to call it like I see it and I will share with you candidly a view right from Main Street, Main Street U.S.A. ... And how perhaps my view of Main Street ... how
that affects you and your business."

There's nothing yet about the speech at Palin's Facebook page, which she's been using in recent months to post her thoughts about current events.

By Frank James

The Census Bureau has released what it calls its American Community Survey data for 2008, an incredible array of data that, when analyzed using data software, reveals an interesting snapshot of the nation based on a survey of about three million addresses.

The agency released the data under an embargo, meaning that journalists weren't supposed to publish or broadcast their reports until just after midnight Tuesday.

But someone broke the embargo, meaning he or she put the information out earlier than the Census Bureau directed. It's like going offsides in football.

So the Census Bureau has advised all other journalists that we have the green light to report on the data.

The Associated Press had a story all ready to go and now we can post it. The AP sifted the data and talked with demographers and has determined that a major theme revealed by the data is the recession's effect on the American population.

A lengthy excerpt of AP's story:

The recession is profoundly disrupting American life: More people are delaying marriage and home-buying, turning to carpools yet getting stuck in ever-worse traffic, staying put rather than moving to new cities.

A broad array of U.S. census data, for release on Tuesday, also shows a dip in the foreign-born population last year, to under 38 million after it reached an all-time high in 2007. This was due to declines in low-skilled workers from Mexico searching for jobs in Arizona, Florida and California.

Health coverage swung widely by region, based partly on levels of unemployment. Massachusetts, with its universal coverage law, had fewer than one in 20 uninsured residents - the lowest in the nation. Texas had the highest share, at one in four, largely because of illegal Hispanic immigrants excluded from government-sponsored and employer-provided plans.

Demographers said the latest figures were striking confirmation of the social impact of the economic decline as it hit home in 2008. Findings come from the annual American Community Survey, a sweeping look at life built on information from 3 million households.

Continue reading "Census Data Show Recession's Impact: Delayed Marriages, Less Relocating" >

By Mark Memmott

If the Conference Board's Leading Economic Index is doing its job, maybe the economy is indeed getting better.

The private research group says its index, which is supposed to signal how things will be in six to nine months, rose 0.6% in August from July. It's the fifth month in a row that the index went up.

According to the board, the index was pushed higher by data on how long it's taking suppliers to make deliveries, the "spread" between long- and short-term interest rates, rising stock prices, increases in building permits and an improvement in "consumer expectations."

Over at Planet Money, Laura Conaway says the report could be a sign of "brighter times ahead."

By Mark Memmott

Good morning.

The lead headline on the front of The Washington Post is getting quite a bit of attention. "McChrystal: More Forces Or 'Mission Failure' ", it reads, and the story starts this way:

The top U.S. and NATO commander in Afghanistan warns in an urgent, confidential assessment of the war that he needs more forces within the next year and bluntly states that without them, the eight-year conflict "will likely result in failure," according to a copy of the 66-page document obtained by The Washington Post.

The New York Times summarizes the news with this:

The top military commander in Afghanistan warns in a confidential assessment of the war there that he needs additional troops within the next year or else the conflict "will likely result in failure."

The Post has put a copy of McCrystal's assessment online here.

Update at 8:45 a.m. ET: In that copy of the assessment put online by the Post, McChrystal writes that "success is achievable, but it will not be attained simply by trying harder or 'doubling down' on the previous strategy. Additional resources are required, but focusing on force or resource requirements misses the point entirely. The key take away from this assessment is the urgent need for a significant change to our strategy and the way that we think and operate."

McChrystal also says that:

"Our campaign in Afghanistan has been historically under-resourced and remains so today. ... Resources will not win this war, but under-resourcing could lose it. ... Ideally, the (Afghan National Security Force) must lead this fight, but they will not have enough capability in the near-term given the insurgency's growth rate. In the interim, coalition forces must provide a bridge capability to protect critical segments of the population. The status quo will lead to failure if we wait for the ANSF to grow."

On Morning Edition, NPR Pentagon correspondent Tom Bowman told host Steve Inskeep that it's no surprise that Gen. Stanley McChrystal wants more troops for the war in Afghanistan -- and notes that there's growing opposition in Congress to the idea of sending more combat forces:

Sticking with news about the war on terror, there's more to report about the arrests of three men over the weekend in connection with a cross-country probe into a possible plot to bomb transportation hubs in New York City. On Morning Edition, NPR's Dina Temple-Raston told guest host Linda Wertheimer that law enforcement officials feared the plotters "actually had the capacity and expertise to launch a credible attack." So far, the men have been charged with lying to authorities:

As The Denver Post reports, "today, 24-year-old Najibullah Zazi and his father, Mohammed, 53, are scheduled to make initial appearances in federal court." The third man facing charges is New York imam Ahmad Wais Afzali.

One more story to pass along, from Sunday's Los Angeles Times: "CIA Expanding Presence In Afghanistan".

As for other stories making headlines this morning, they include:

-- The Hill -- "Obama Frames G-20 Meeting As Debate Over Future Global Economy": The G-20 summit of world leaders in Pittsburgh on Thursday and Friday "is shaping up as a debate over what the world economy of the future should look like." On Sunday, President Barack Obama "made it clear he wants to talk about fostering a new era in global economic affairs."

Related story by Politico -- Highlights From Obama's Sunday TV Marathon.

Related story on Morning Edition -- At U.N., Obama Will Continue Effort To Mend Fences. NPR's Michele Kelemen looks ahead to the president's appearance this week at the United Nations:

-- The Wall Street Journal -- "IRS Extends Deadline To Declare Foreign Accounts": "In an effort to keep its doors open to tax evaders, the Internal Revenue Service will extend until Oct. 15 its limited amnesty program for U.S. taxpayers with undeclared income on foreign accounts, according to government officials. The special voluntary disclosure program was to have ended Wednesday. It began in March after UBS AG in February turned over the names of more than 250 account holders as part of a criminal settlement."

-- BBC News -- Thai King In Hospital; Condition Stable: "The 81-year-old king of Thailand has been admitted to hospital suffering from a fever. Doctors said King Bhumibol Adulyadej, the world's longest-serving monarch, had shown signs of fatigue and was being treated with antibiotics. ... Prime Minister Abhisit Vejjajiva told reporters there was 'nothing to be concerned about.' "

-- NPR News -- "FCC Chief Seen Edging Toward 'Net Neutrality' Rules". "A speech scheduled for Monday by Federal Communications Commission Chairman Julius Genachowski is being closely watched by both sides of a debate over 'network neutrality' -- a term describing a world in which Internet service providers can't charge different rates for different levels of service." NPR's Laura Sydell reports:

Finally, if you're looking for a lively minute-by-minute recap of last night's Emmy Awards, check out Planet Money.

Contributing: Chinita Anderson of Morning Edition.

By Mark Memmott

The experts always say that employment "lags" behind other economic indicators, so let's hope this just-released news is not a sign that the economy's still on the downslope rather than slowing moving up:

"In August, nonfarm payroll employment decreased in 42 states and the District of Columbia and increased in 8 states," the Bureau of Labor Statistics says. In July, 25 states lost jobs.

Here's where things were worse and better in August, BLS adds:

Continue reading "Employment Declined In 42 States Last Month" >

Employees at a tire factory in Hefei, in central China's Anhui province, Tuesday, Sept. 15, 2009. (AP Photo)

By Frank James

U.S. consumers in the market for low-priced car tires will be seeing higher prices, thanks to the tariffs President Barack Obama placed on Chinese tire imports in response to administration claims that Chinese tire manufacturers have exported so many tires to the U.S., they've "disrupted" the market.

NPR's Frank Langfitt reports on All Things Considered the suspicions that the administration's action is really a response to political, not trade, pressures.

Frank goes to where the rubber meets the road, tire retailers, to get their take on the effect the tariffs will have.

Here's an excerpt of his report:

FRANK: Kevin Hanagan runs a car repair and tire service in Gaithersburg, Maryland. A customer is hunting for trailer tires.

HANAGAN TO CUSTOMER: Carlisle's we can do for $86 a piece. And you may want to buy them today because our wonderful president imposed a 35 percent tariff on these Chinese tires. So they will be going up.

FRANK: Suppliers tell Hanagan they'll be raising prices by up to twenty percent.

So, earlier this week, he bought hundreds of Chinese-made tires to beat the tariff.

HANAGAN: There was a panic buying with me, hoard what you can, while you can. So we wouldn't be caught empty handed.

FRANK: Hanagan says he supports American workers. But he says the tariff will just raise prices for his most cost-conscious customers.

HANAGAN: "Who's going to get hurt by this tariff? Joe the plumber. The average dude who wants to buy some tires.

Continue reading "Obama's China Tire Tariff Smells Like Politics To Some" >

By Mark Memmott

Two more positive signs about the economy:

-- The Census Bureau says construction of new homes -- so-called housing starts -- rose 1.5% in August from July. The Associated Press says home building is now at the highest level it's been since last November and is 24.8% above the low it hit in April.

-- The Employment and Training Administration says that the number of people filing first-time claims for jobless benefits declined last week, to 545,000 from 557,000 the week before. Many economists had thought claims went up last week.

As always, Planet Money is following the economy's ups and downs.

By Mark Memmott

Another sign that the worst may be over for the economy:

The Federal Reserve says output at the nation's factories, mines and utilities rose 0.8% in August from July -- and that it went up 1% in July, twice the previous estimate of growth that month.

Among the parts of the industrial sector that made good gains in August: Motor vehicles. Output at auto factories rose 5.5% -- an increase that came on top of a robust 20.1% gain in July.

Earlier today, the Bureau of Labor Statistics reported that consumer prices rose 0.4% in August from July.

By Mark Memmott

The prices consumers pay for goods and services increased 0.4% in August from July, the Bureau of Labor Statistics just reported. Over the last year, prices have declined 1.5%.

Excluding volatile food and energy costs, prices rose 0.1% last month, BLS says.

The numbers are pretty much in line with economists' expectations, the Associated Press says.

By Mark Memmott

Driven higher by rising gas prices, inflation shot up at the wholesale level last month, the Bureau of Labor Statistics just announced. According to BLS, wholesale prices rose 1.7% in August from July.

The good news: Excluding food and energy costs, so-called core prices went up just 0.2%. While it's obviously true that higher food and energy prices are a burden on most people, economists like to watch the core rate because it can serve as something of a guide for where inflation is headed. The scant increase is a signal that inflation remains in check.

In other economic news, the Commerce Department just reported that retail sales rose 2.7% in August from July. Driving much of the increase: The "cash-for-clunkers" program that spurred car sales.

By Mark Memmott

President Barack Obama was on Wall Street today -- one year after the collapse of Lehman Brothers and the start of the financial service industry's meltdown -- to make the case for further reform of the financial regulatory system.

We live-blogged the speech in this post. Just click the "play" button below and our updates should flow in automatically:

By Mark Memmott

Good morning.

Though health care remains atop the agenda in Washington, financial regulation will be competing for the spotlight today.

As this timeline shows, it's the one-year anniversary of Lehman Brothers' collapse. And as NPR's John Ydstie reports, "a year ago this week the global financial system teetered on the edge of collapse":

President Barack Obama will be on Wall Street today to deliver what the White House is billing as a "major speech on the financial crisis." That happens at noon ET. We'll "live-blog" the highlights, and NPR's Neal Conan will be on many NPR member stations anchoring coverage of the president's address.

Related story by Bloomberg News -- "Stiglitz Says Bank Problems Bigger Than Pre-Lehman": " Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc."

Related story by The Wall Street Journal -- "Government's Trial And Error Helped Stem Financial Panic": "It was only a year ago that the world economy was enveloped in a financial panic of such dimensions that, if one believes Federal Reserve Chairman Ben Bernanke, it threatened to produce a calamity as bad as the Great Depression. Today, the economy is far from vigorous. Unemployment remains high. Huge swaths of the financial system remain on government life-support. But the global recession appears over, and now forecasters are arguing over the pace and sustainability of recovery."

As for the other stories making headlines this morning, they include:

-- The Washington Post -- Poll Signals That "Reform Opposition Is High But Easing": "President Obama continues to face significant public resistance to his drive to initiate far-reaching changes to the country's health-care system, with widespread skepticism about central tenets of his plan, according to a new Washington Post-ABC News poll. But after a summer of angry debate and protests, opposition to the effort has eased somewhat, and there appears to be potential for further softening among critics if Congress abandons the idea of a government-sponsored health insurance option, a proposal that has become a flash point in the debate."

Related report by CBS News Face the Nation -- Sen. Snowe Says Public Option Blocks Consensus: "Moderate Republican Senator Olympia Snowe, R-Maine, said a public option in the health care bill is 'universally opposed by all Republicans in the Senate' and called it 'a roadblock to building the kind of consensus that we need to move forward,' on Face the Nation Sunday."

-- Morning Edition -- "U.S.-China Trade Frictions Escalate":

-- The Associated Press -- "Bin Laden Reportedly Calls Obama 'Powerless' ": "In an audio message posted on militant websites, a man thought to be al-Qaida leader Osama bin Laden says President Barack Obama is "powerless" to stop the war in Afghanistan. The voice also asserts that the new U.S. president is following the policies of his predecessor, George W. Bush. The terrorist-monitoring group SITE Intelligence has more on the message here.

Related story on Morning Edition -- "Timeline Of Afghan War's Progress Differs In U.S., Kabul":

-- New Haven Register -- Body Found May Be That Of Missing Graduate Student: " A body believed to be that of missing Yale graduate student Annie Le was found Sunday hidden inside a wall at 10 Amistad St., the building where she was last seen alive. It was supposed to be the day she would marry her college sweetheart and celebrate at a reception in a tony section of Long Island."

-- The Associated Press -- Kanye West Disrupts MTV Video Music Awards; Later Apologizes For Interrupting Taylor Swift's Acceptance Speech:

And he's due on the new Leno show tonight. (Scott Gries / PictureGroup/AP)

Related story on Morning Edition -- "NBC Gambles Big With Jay Leno In Prime Time":

By Frank James

I'll say right off the bat, I'm not one of those people who lives for Fashion Week in New York. If anything, I'm fashion weak.

But that doesn't mean I couldn't appreciate a New York Times piece about the impact the recession is having on high-end fashion designers.

The decision by consumers to forgo many purchases, especially of goods not considered necessities, is hurting the fashion business as women opt for low-end dresses, when they purchase clothing at all.

An excerpt:

Here is the reality: More and more people shop at H & M and other purveyors of cheap chic. Factories offering fine craftsmanship in Italy and New York are closing as business moves to China. Consumers do not see longevity in the clothes they buy. "I think the true designer business is in trouble, no question about it," said a senior buying executive at Macy's, declining to speak on the record because of the company's policies.

With shoppers afraid to spend, department stores cut orders for fall goods by 30 percent. For next spring -- the collections being shown during New York Fashion Week through Sept. 17 -- little improvement is seen.

"In my 40 years in fashion, I've never seen women scared to shop -- at all price levels," said Vera Wang, who sells $1,000 dresses at stores like Bergdorf Goodman and also has a low-priced line at Kohl's

Continue reading "High-Fashion Designers Ripped By Recession " >

By Frank James

My fellow Two-Way blogger Mark blogged earlier that the Associated Press was reporting that the Council of Economic Advisors would have a study out saying that the administration's $787 billion economic stimulus made for one million more jobs in the U.S. economy than would have been true with no stimulus.

The CEA report is out now and, to be precise, it says there were one million more jobs in August than there would have been without the stimulus.

Also, the CEA says its analysis suggests the gross domestic product was 2.3 percentage points higher in the second quarter than it would have been otherwise.

Since the economy shrank by 1.0 percentage point according to the federal Bureau of Economic Analysis, the CEA is basically saying it would have seen a 3.3 percentage point decrease without the stimulus. Oh, and there was even more good news: the bounce should be even bigger on the third quarter.

Continue reading "Stimulus Boosted Economy Big Time: White House Economists " >

By Mark Memmott

A much-anticipated report from the Council of Economic Advisers says that the economic recovery package signed by the president earlier this year has saved or created more than 1 million jobs, the Associated Press reports.

According to AP, it was told about the report's conclusions by an official who has seen it.

Of course, since February the U.S. economy has actually shed about 2.5 million jobs. The gist of the report, AP says, will be that without the recovery package the number would have been far worse.

Christina Romer, chair of the CEA, is due to release the report this afternoon.

As AP notes: "President Barack Obama has promised that his $787 billion stimulus plan will create or save 3.5 million jobs by the end of next year."

By Mark Memmott

The negative effects of the recession showed up in the nation's poverty rate last year.

According to the Census Bureau:

The nation's official poverty rate in 2008 was 13.2%, up from 12.5% in 2007. There were 39.8 million people in poverty in 2008, up from 37.3 million in 2007.

Census also says that:

The increase in the poverty rate between 2007 and 2008 was the first statistically significant annual increase since 2004. The 2008 poverty rate (13.2 percent) was the highest since 1997.

Earlier, we noted that Census also says the number of people without health insurance passed 46 million in 2008.

The full report is here.

By Mark Memmott

The nation's trade deficit expanded to $32 billion in July from $27.5 billion in June, the Census Bureau reported a short time ago.

And because both imports (up 4.7%) and exports (up 2.2%) rose, the news could be another sign that the economy is on the mend. Rising imports could be an indication that demand is on the upswing, and rising exports are welcome news for U.S. manufacturers.

Sticking with good news, we should note that yesterday the Federal Reserve reported that "economic activity continued to stabilize in July and August," which is Fed-speak for things are getting better.

By Mark Memmott

The number of people filling first-time claims for unemployment insurance benefits fell by 26,000 last week, to 550,000, the Employment and Training Administration just announced. It said that:

In the week ending Sept. 5, the advance figure for seasonally adjusted initial claims was 550,000, a decrease of 26,000 from the previous week's revised figure of 576,000. The 4-week moving average was 570,000, a decrease of 2,750 from the previous week's revised average of 572,750.

ETA also said the number of people collecting the benefits declined by 159,000 in the most recent week, to 6.1 million.

By Mark Memmott

Good morning.

There's news from Afghanistan this morning that New York Times reporter Stephen Farrell, who along with his interpreter had been held captive by militants since Saturday, was freed by British commandos.

But the interpreter, Sultan Munadi, and one British commando were killed during a firefight. Farrell's kidnapping had not been reported prior to the raid that freed him. He is the second Times reporter in recent months to have been kidnapped in Afghanistan. In June, reporter David Rohde and interpreter Tahir Ludin escaped from their captors after being held for seven months.

Update at 8:40 a.m. ET: The BBC adds that two civilians also died during the raid.

The main story of the day, though, looks to be President Barack Obama's prime-time address to a joint session of Congress.

The Wall Street Journal says Obama "will press for a government-run insurance option in a proposed overhaul of the U.S. health-care system that has divided lawmakers and voters for months."

On Morning Edition a short time ago, White House spokesman Robert Gibbs told NPR's Renee Montagne that Obama believes the so-called public option is "a valuable tool" and something "he'd like to see." Gibbs did not directly answer Renee's question about whether the president would veto a health care overhaul bill that doesn't include that option. "We're not going to accentuate the negative," Gibbs said:

Staying with health care for a moment:

-- The New York Times' Prescriptions blog offers its advice on how to watch tonight's presidential address. Among the things to look for: "Any sign that he is now willing to let Democrats go it alone, maybe by using a controversial procedural tactic known as budget reconciliation."

-- On Morning Edition, NPR's Mara Liasson said the president's goal remains the same -- to find some consensus so that a health care overhaul bill can be passed this year:

-- NPR's Richard Knox takes a look at a key Republican, Sen. Olympia Snowe of Maine:

-- Former Alaska governor and 2008 Republican vice presidential nominee Sarah Palin takes aim at the president's health care "bureaucratization" again in an op-ed piece published by The Wall Street Journal. She once again brings up the "death panels" that she has warned about before (panels the president and his supporters say don't and won't exist).

For much more about Obama's speech and the health care debate, see this story by NPR's Liz Halloran.

There will, of course, be many ways to watch and monitor the president's address, which is set to begin at 8 p.m. ET. It will be broadcast by all the cable news networks, on many NPR stations, and at NPR.org.

We will "live-blog" the speech, using a "Cover It Live" box that lets you -- the readers -- discuss the address as it's happening. We're hoping to have Ken Rudin of NPR.org's Political Junkie blog and Scott Hensley of NPR.org's Health Blog join us. As the time draws near, come back here if you want to follow along.

As for other stories making headlines, they include:

-- Morning Edition -- "High Court Weighs Upending Campaign-Money Rules": "The justices of the U.S. Supreme Court have returned early from their summer recess to hear arguments in a case that could rip apart the legal underpinnings of the nation's campaign finance laws. For more than a century, for all practical purposes, those laws have barred corporations from spending money on candidate elections. Wednesday's argument is a double first: The first argument to be heard by Justice Sonia Sotomayor, and the first time new U.S. Solicitor General Elena Kagan will argue a case before the Supreme Court." NPR's Nina Totenberg reports:

Related story by On the Media -- The case goes well beyond Hillary: The Movie, the film that kicked off the legal debate:

The Supreme Court hears the case at 10 a.m. ET. Audio of the argument is scheduled to be released by late morning.

-- Variety -- Columnist Army Archerd, A "Defining Voice" In Show Business, Has Died: "Showbiz has lost one of its defining voices, one who honed his craft in the bygone era of close-knit Hollywood and evolved through the many iterations of the industry. Army Archerd, who became an industry institution and beloved figure in his more than half a century at Daily Variety, died Tuesday in Los Angeles. He had a rare form of mesothelioma cancer, thought to be the result of his exposure to asbestos in the Navy during WWII. He was 87."

One more story to watch for today: The Federal Reserve releases its latest "beige book" review of how the economy is doing at 2 p.m. ET.

By Frank James

The U.S. may be number one in the eyes of American patriots, but in its latest ranking of economic competitiveness, the World Economic Forum gives another nation the premier spot for the first time -- Switzerland -- with the U.S. now coming in second.

An excerpt from the WEF report:

Switzerland overtakes the United States this year as the world's most competitive economy.This is explained by the fact that Switzerland's performance has remained relatively stable, whereas the United States has seen a weakening across a number of areas...

Referring to the U.S., it continues:

... Although the country is very competitive overall,there are some weaknesses in particular areas that have deepened since our last assessment. Some aspects of the institutional environment could be strengthened, with particular concerns on the part of the business community about the government's ability to maintain arms-length relationships with the private sector (48th), and in the perception that the government spends its resources wastefully (68th).

There is also increasing concern related to the functioning of private institutions, with a measurable weakening of the assessment of auditing and reporting standards (down from 20th last year to 39th this year), perhaps not unexpected in the context of recent turmoil and scandals within the financial sector in particular.

Continue reading "Switzerland Tops U.S. For First Time In Economic Competitiveness Ranking" >

By Mark Memmott

Cheap is coming back and that's a good thing, journalist Lauren Weber argues.

Author of the new book In Cheap We Trust, she talked with Morning Edition's Steve Inskeep about why she believes the old American virtue of thriftiness has been on the rise and is just what the economy needs:

There's more about Weber's theory here, including an excerpt from the book. The premise got us wondering about Two-Way readers:

Cheap is a popular word in the news media these days, by the way.

Check out Wired magazine's recent piece on "The Good Enough Revoultion: When Cheap And Simple Is Just Fine."

And The Wall Street Journal wrote last week that "Home Barbering Grows In Recession, With Hairy Results."

Our friends at Planet Money follow trends like this all the time.

By Mark Memmott

The nation's unemployment rate rose to 9.7% in August, the Bureau of Labor Statistics just reported. That's up from 9.4% in July and puts the jobless rate at a 26-year high.

Employers shed 216,000 jobs, BLS says -- a figure well below the 250,000 or so that many economists expected.

We'll have more from the report shortly.

Update at 9:30 a.m. ET. Over at Planet Money, Laura Conaway notes that:

-- "The labor force grew by 73,000 people last month, which shows that some of those who'd dropped out of looking went back to the hunt." That could partly explain the increase in the jobless rate.

-- Stocks are higher despite the news for two reasons. "First, the pace of decline seems to be slowing. ... Second, investors want the Federal Reserve to keep interest rates low. As long as unemployment is growing, consumer demand should remain flat."

Update at 8:50 a.m. ET. Economist Hugh Johnson at Johnson Illington Advisors in Albany, N.Y., just told NPR producer Dave Mattingly that even if the economy is on the mend, the employment picture isn't likely to get much brighter until the middle of next year:

Update at 8:40 a.m. ET. From the BLS report:

-- In August, the number of persons working part time for economic reasons was little changed at 9.1 million. These individuals indicated that they were working part time because their hours had been cut back or because they were unable to find a full-time job. The number of such workers rose sharply in the fall and winter but has been little changed since March.

-- The number of discouraged workers in August (758,000) has nearly doubled over the past 12 months.

-- Construction employment declined by 65,000, in line with the trend since May. Monthly losses had averaged 117,000 over the 6 months ending in April.

-- Manufacturing employment continued to trend downward, with a decline of 63,000.

-- Employment in health care continued to rise in August (28,000), with gains in ambulatory care and in nursing and residential care.

-- In August, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 6 cents, or 0.3%, to $18.65. Over the past 12 months, average hourly earnings have risen by 2.6 percent, while average weekly earnings have risen by only 0.8% due to declines in the average workweek.

By Andrea Hsu

Though the latest jobless figures show that times still aren't very good, more than 130 million Americans still have jobs. Some people go to work because they love what they do. Others do it solely for the paycheck. Most of us are probably somewhere in between.