Consumer confidence in the economy retreated in October, giving up some of its strong summer gains, a private research group reported today.
The Conference Board's Consumer Confidence Index fell by 5.6 points to 106.2 this month. The index jumped 5 points in August and 6.9 points in July, hitting a six-year high before weakening slightly in September.
Many economists had expected the October figures to be virtually unchanged from a month ago.
Consumer confidence is watched closely for indications of consumer spending, which accounts for about two-thirds of the nation's economy.
Growth in employment costs slows
WASHINGTON (Reuters) -- U.S. workers' compensation rose 0.6 percent in the third quarter after a 0.8 percent gain in the previous three-month period, reflecting lower growth in both pay and benefits, the Labor Department said today.
In the second quarter, wages and salaries rose 0.9 percent and benefit costs rose 0.7 percent, the department said.
In the past 12 months, the department's Employment Cost Index rose by 2.8 percent, little changed from the 2.7 percent gain of the previous 12-month period.
AOL changes pricing, hires exec
NEW YORK (AP) -- America Online today introduced a $19.95 flat-rate pricing plan for its online computer service in its most aggressive response to date to the growing competitive threat of the Internet and rival online services
The nation's largest online service also shook up its corporate structure, creating three separate divisions and naming Robert Pittman, the chief executive of Century 21 Real Estate, to head its core online service. It also is taking $460 million in charges this year as it restructures.
America Online shot higher on the news, rising $1.37 1/2 to $26 a share on the New York Stock Exchange. Investors have been waiting for the Dulles, Va.-based company to forcefully acknowledge the intense threat to its business.
Mazda accused of false advertising
MINNEAPOLIS (AP) -- Mazda Motor of America Inc. was accused by 14 states Monday of running misleading advertisements that promised customers no-money-down leases.
In separate lawsuits, the states allege Mazda's advertising campaign is deceptive because consumers must pay as much as $900 in up-front fees on the Mazda leases advertised as "zero down."
"You don't have to be a financial genius to know that zero down and $900 down have different implications for family budgets," said Minnesota Attorney General Hubert Humphrey III, whose office led the investigation.
Jay Amestoy, a spokesman for Mazda, said company officials were surprised by the lawsuits because Mazda is still negotiating with the attorneys general, the Federal Trade Commission and the Federal Reserve Board.
Yields increase on Treasury bills
WASHINGTON (AP) -- Interest rates on short-term Treasury securities rose in Monday's auction to the highest level since late September.
The Treasury Department sold $14.2 billion in three-month bills at an average discount rate of 5.04 percent, up from 5.01 percent last week.
An additional $14 billion was sold in six-month bills at an average rate of 5.15 percent, up from 5.12 percent.
The Federal Reserve said Monday that the average yield for one-year Treasury bills rose to 5.56 percent last week from 5.55 percent the previous week.
In other business news
Sun Microsystems Inc. today unveiled the long-awaiting stripped-down network computer it claims will cost companies up to 80 percent less to own and operate than a personal computer connected to a network.
The Bank of Canada Monday cut its key bank rate to 3.50 percent from 3.75 percent, the lowest short-term interest rate level in 33 years.
Merrill Lynch & Co. said Monday its chairman, Daniel Tully, will retire next year and be replaced by David Komansky, who is currently president and chief operating officer.
Attorneys who have worked on a settlement with Prudential Insurance Co. of America over misleading sales practices could get as much as $90 million in fees, officials said Monday.