Despite healthy income gains, consumer spending slowed slightly in November and many retailers are expressing disappointment with the holiday shopping season.
Consumer spending rose 0.4 percent in November to $5.59 trillion at a seasonally adjusted annual rate, the Commerce Department said today. That was down from a 0.5 percent gain a month earlier and below analysts' expectations of another 0.5 percent increase in November.
At the same time, personal incomes increased jumped 0.8 percent to a $7.03 trillion rate, up from $6.97 trillion in October, when they advanced 0.6 percent. It was the biggest increase since a 1 percent gain in June 1996.
Meanwhile, the Labor Department reported that first-time claims for jobless benefits plunged by 13,000 to 307,000 last week. It was the latest sign of a tight job market. Many analysts had expected only a slight 1,000 drop.
Microsoft says product in compliance
WASHINGTON (AP) -- Microsoft Corp. denied it was flouting a court order to offer computer makers Windows 95 software without its Internet Explorer on Tuesday, accusing the government of saddling consumers with an inferior product.
The Justice Department's antitrust division showed its ignorance of software design when it obtained a Dec. 11 order to force the software manufacturer to remove its Internet browser from the latest version of Windows 95, Microsoft argued in court papers. Doing that without disabling Windows is impossible, Microsoft said.
And the Justice Department's proposal to remedy that problem shows that "poorly informed lawyers have no vocation for software design," Microsoft said in a legal brief dripping with sarcasm.
Microsoft argues that the latest version of Windows 95 that includes the web browser is one product. The Justice Department accuses Microsoft of illegally "tying" two separate products together.
Sears won't budge on retiree benefits
CHICAGO (Chicago Tribune) -- Sears, Roebuck & Co. Chief Executive Arthur Martinez tried to ease the anger of Sears retirees with a Tuesday teleconference. But in the end, his message was the same one that set them off in the first place: Drastic cuts in retiree life insurance aren't going to be reversed, and retirees need to accept that and get on with their lives.
That was an unwelcome message to the almost 300 presidents of Sears retiree clubs around the country who were invited by Martinez to listen and participate in the call.
Martinez took almost 20 questions from retirees in the allotted hour. At one point, he found himself under personal attack as an outsider who didn't understand Sears' culture, according to several retirees who participated in the call.
Another club president asked Martinez how the company could afford a helicopter to shuttle him between his home and office but couldn't afford to continue benefits promised to retirees for decades.
Yields decline on 5-year T-notes
WASHINGTON (AP) -- Yields on five-year Treasury notes fell in Tuesday's auction to the lowest level in 10 months.
The high yield was 5.685 percent, down from 5.769 percent at the last auction on Nov. 25.
The notes will carry a coupon interest rate of 5 5/8 percent with each $10,000 in face value selling for $9,974.20.
In other business news
Ocean Energy Inc. and United Meridian Corp. agreed to merge, creating a $3.1 billion firm and the nation's ninth largest independent oil and gas company. The boards of Ocean Energy of Baton Rouge and United Meridian of Houston approved the agreement calling for a stock-for-stock transaction. The new company, Ocean Energy Inc., will have its headquarters in Houston.
Mazda is recalling about 355 Mazda B4000 pickup trucks that may have flexible fuel lines too close to the exhaust manifold. The 1998-model trucks will be inspected, and if necessary, a retaining clip will be installed on the fuel line to prevent it from contacting the exhaust manifold.
Merrill Lynch & Co. and four other investment firms have agreed to pay $3.1 million in damages to Orange County bondholders who sued them after the county's 1994 bankruptcy.
Chicago billionaire Sam Zell is giving $10 million to the Wharton School of the University of Pennsylvania to endow the Wharton Real Estate Center, the school revealed Tuesday.
A Florida investment group led by billionaire sports magnate Wayne Huizenga has purchased a $288.5 million stake in the Arizona Biltmore resort.