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The economic recovery turns 2: Feel better yet?
WASHINGTON (AP) ? This is one anniversary few feel like celebrating.
Two years after economists say the Great Recession ended, the recovery has been the weakest and most lopsided of any since the 1930s.
After previous recessions, people in all income groups tended to benefit. This time, ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven't kept up with prices at the grocery store and gas station. The economy's meager gains are going mostly to the wealthiest.
Workers' wages and benefits make up 57.5 percent of the economy, an all-time low. Until the mid-2000s, that figure had been remarkably stable ? about 64 percent through boom and bust alike.
Executive pay is included in this figure, but rank-and-file workers are far more dependent on regular wages and benefits. A big chunk of the economy's gains has gone to investors in the form of higher corporate profits.
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US auto sales up in June, but Japan still hurting
DETROIT (AP) ? Gas prices hit a sweet spot for automakers last month. They fell far enough to spur pickup truck sales, yet remained so high that small cars sold well, sometimes just hours after reaching dealers' lots.
That made June a good month for General Motors and Ford, which have traditionally relied on truck sales and now have strong line-ups of smaller, fuel-efficient models as well.
Toyota and Honda couldn't take advantage, however. Their sales plummeted more than 20 percent each as they ran short of cars because of the ongoing problems from the March earthquake in Japan.
Those declines ? and the continuing weakness in the U.S. economy ? meant sales grew more slowly in June than they might have. U.S. sales rose 7 percent to 1.05 million. Analysts had expected a double-digit gain.
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Treasury confirms deadline for raising debt limit
WASHINGTON (AP) ? Congress has one month to raise the nation's borrowing limit or the government will default on its debt, the Treasury Department said Friday.
Treasury officials confirmed the Aug. 2 deadline in a monthly update that assesses the nation's borrowing situation. The United States reached the $14.3 trillion limit in May. Higher revenue and accounting maneuvers have allowed the government to keep paying its bills in the interim.
Treasury Secretary Timothy Geithner urged Congress to raise the limit and "avoid the catastrophic economic and market consequences of a default crisis."
President Barack Obama and Congressional Republicans are engaged in tough negotiations over resolving the issue. Republicans are demanding deep spending cuts as a condition of increasing the limit. But Republicans will not support tax increases, which Democrats say must be part of any deal.
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Factories busier in June after spring slump
NEW YORK (AP) ? Factory activity picked up in June after a sluggish May, helped by lower gas prices and some easing of supply disruptions.
The Institute for Supply Management, a trade group of purchasing executives, said Friday that its index of manufacturing activity rose to 55.3. The sector has now grown for 23 straight months. Last month's growth was the slowest in 20 months.
The stronger reading was an optimistic sign that the economy could be strengthening after a spring slump.
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Construction spending falls 0.6 percent in May
WASHINGTON (AP) ? Builders began work on fewer projects in May, led by steep declines in apartment construction and less spending by state and local governments.
Construction spending declined 0.6 percent in May to a seasonally adjusted annual rate of $757.9 billion, the Commerce Department said Friday. That put overall spending barely above an 11-year low hit in February. And it is roughly half the $1.5 trillion pace considered healthy by most economists.
Analysts say it could be another four years before construction returns to healthier levels. The weak construction spending data showed Americans are reluctant to both build and buy.
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Call it an Independence Day discount.
NEW YORK (AP) ? Gasoline prices usually peak in the summer. This year, however, they peaked on May 5. The subsequent slide in pump prices has made gasoline an average 24 cents per gallon cheaper than what it was on Memorial Day.
The national average now stands at $3.55 per gallon. That's the cheapest gasoline has been since late March. It's still higher for this time of year than any other year except 2008, however.
Prices have persistently declined since May, following a similar drop in oil prices.
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J&J wins US approval for new blood thinner
WASHINGTON (AP) ? Johnson & Johnson said Friday that U.S. regulators have approved its new type of blood thinner shown to reduce deadly blood clots in patients who have undergone knee and hip replacements.
The Food and Drug Administration decision makes rivaroxaban the first U.S.-approved drug that works by blocking a clotting protein called factor Xa. That's in contrast to older blood thinners that work by preventing platelets from sticking together.
The once-a-day pill will serve as an alternative to the popular injection Lovenox, which is the standard treatment for patients who have undergone orthopedic surgery. The drugs had similar results in head-to-head trials, including similar rates of side effects such as major internal bleeding. J&J said its new drug would be priced similarly to Lovenox, which is marketed by French drugmaker Sanofi-Aventis SA.
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Consortium prevails over Google for Nortel patents
NEW YORK (AP) ? A consortium that includes leading smartphone makers Apple and Research In Motion prevailed over Google this week with a $4.5 billion cash bid for about 6,000 patents and patent applications from bankrupt telecom-equipment maker Nortel Networks Corp.
The group offered about five times more than Google's initial bid of $900 million. Phones running Google's Android system compete with Apple's iPhone and RIM's BlackBerry devices.
Nortel's patents cover many technologies, including data networking, semiconductors and wireless systems known as fourth generation, or 4G. Nortel said the portfolio "touches nearly every aspect of telecommunications and additional markets ... including Internet search and social networking."
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`FarmVille' creator Zynga to go public
LOS ANGELES (AP) ? Zynga, the online game maker behind "FarmVille" and other popular Facebook pastimes, is going public, the latest in a crop of high-valued Internet IPOs expected after LinkedIn Corp. showed that the online networking craze is a hot commodity on Wall Street.
Zynga Inc. hopes to raise up to $1 billion in an initial public offering that follows LinkedIn's sizzling stock market debut last month. The amount of money Zynga is seeking in its IPO will likely change as its bankers determine how many shares should be sold and at what price. That process typically takes three to four months.
There's pent-up demand for the stock of large social media companies because so few of them have gone public, even as they have been steadily expanding their reach for several years. The opening of the floodgates could culminate next year in a long-awaited IPO of Facebook, the biggest social network of them all.
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AP Source: Google among firms looking to buy Hulu
LOS ANGELES (AP) ? Search giant Google Inc. is one of about a dozen companies involved in talks to potentially buy online video site Hulu, a person familiar with the matter said Friday. As the owner of YouTube, it would be a strategic buy for the Silicon Valley technology company, which has had a rocky relationship with Hulu's Hollywood owners.
Hulu has begun presenting its financial information to many prospective bidders, but it's too early to declare a front-runner, said the person, who spoke on condition of anonymity because the discussions are confidential.
The online video service began seeking bidders early last week after an unsolicited offer prompted Hulu's board to look for other interested parties.
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By The Associated Press(equals)
The Dow rose 168.43 points, or 1.4 percent, to 12,582.77, on Friday. The Standard and Poor's 500 index gained 18.94, or 1.4 percent, to 1,339.67. The Nasdaq composite added 42.51, or 1.5 percent, to 2,816.03.
Benchmark West Texas Intermediate for August delivery lost 25 cents to $95.17 per barrel Friday on the New York Mercantile Exchange.
In London, Brent crude fell $1.22 to $111.32 per barrel on the ICE Futures Exchange.
In other Nymex trading for August contracts, heating oil dropped 2.2 cents to $2.9295 per gallon and gasoline futures gave up 1.35 cents to $2.9557 per gallon. Natural gas fell 3.5 cents to $4.358 per 1,000 cubic feet.
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