Data signaling a possible bottom to the recession
Advertiser News Services
WASHINGTON — Orders to U.S. factories for manufactured goods from computers to aircraft surged in May for a second straight month. And a gauge of business investment rose last month by the most in nearly five years. Together, the data yesterday signal that the recession could be at or near a bottom.
Yet new-home sales fell unexpectedly last month. Economists said the two reports painted a picture of an economy no longer in free-fall, but still unable to mount a sustained recovery from the longest recession since World War II.
The 1.8 percent increase in durable goods orders in May reported by the Commerce Department was far better than the 0.6 percent decline that economists expected. It matched the rise in April, with both months posting the best performance since December 2007, when the recession began.
KEY LENDING RATE KEPT AT RECORD LOW
WASHINGTON — The Federal Reserve indicated yesterday that the weak economy likely will keep prices in check despite growing concerns that the trillions it's pumping into the financial system will ignite inflation.
Fed Chairman Ben Bernanke and his colleagues held a key bank lending rate at a record low of between zero and 0.25 percent. And they pledged again to keep it there for "an extended period" to help brace the economy.
Fed policymakers also dropped language they had used in the statement at their last meeting in April that the weak economy could trigger deflation — a destabilizing and prolonged bout of falling prices and wages.
CITIGROUP HIKES PAY IN LIEU OF BONUSES
NEW YORK — Citigroup Inc. is increasing the base salaries of many employees — reportedly by as much as 50 percent for some workers — as it restructures their compensation amid government restrictions on bonuses.
The higher salaries are not the equivalent of annual raises because bonuses are being lowered, according to a person familiar with the matter.
Employee compensation at financial companies, particularly in the form of bonuses, has brought criticism from members of Congress and the public after the government gave the banks hundreds of billions in bailout dollars. Citi and the other companies who still hold bailout funds face limits on bonuses as part of a new government compensation oversight plan.
The 100 highest-paid employees at Citi will not be part of the bank's revised compensation program because of the government's additional review over that group's pay.