In another sign the U.S. economy continues to grow at a brisk pace, a key barometer of future activity rose 0.3 percent, in July, the same pace as in the prior two months, the Conference Board reported today.
The Index of Leading Economic Indicators has registered gains in nine of the last 10 months.
There are concerns that rising interest rates could slow growth later this year, said Ken Goldstein, an economist for the Conference Board, a business-sponsored research group.
"But overall, strength in manufacturing conditions and a robust labor market more than offset the negative contribution of higher interest rates," he said in releasing today's figures.
Construction spending off 0.5%
WASHINGTON (AP) -- Construction spending fell unexpectedly in July, declining 0.5 percent.
The Commerce Department said today that spending fell to a seasonally adjusted annual rate of $695.7 billion. In June, construction spending fell slightly, according to revised figures. Previously the government estimated that spending had actually increased 0.5 percent in June.
July's spending decrease was worse than many analysts' expectations. They were forecasting that spending would actually go up a sizable 0.6 percent.
The construction report showed that spending on all private construction projects fell 0.7 percent in July, following a tiny increase in June. In July, Private construction totaled $545 billion, on a seasonally adjusted annual basis. However, spending on hotels and motels, and office buildings showing increases.
Spending on all residential projects fell 0.8 percent in July to a seasonally adjusted annual rate of $319 billion with spending on single-family homes down while spending on apartments was up.
IRS questions cash-balance pensions
WASHINGTON (AP) -- A new type of pension plan that is increasingly popular among corporations has been questioned in an Internal Revenue Service district memo as possibly violating age-discrimination laws.
The decision by the IRS district office in Cincinnati provided fresh ammunition for critics of "cash-balance" plans, including 40 members of Congress who want the Equal Employment Opportunity Commission and the Labor Department to investigate.
The confidential 1998 memo was released Tuesday by Rep. Bernie Sanders, I-Vt., wo said the decision "reinforces my strong belief that companies, such as IBM, which are converting to cash-balance plans, may be violating federal age-discrimination laws."
Genesee Brewing cutting 50 jobs
ROCHESTER (Bloomberg) -- Genesee Corp., the brewer of Genny Cream Ale and Michael Shea brands, said it will eliminate 50 of 550 jobs at its brewing unit to cut costs in the face of intense competition in the beer market.
The parent company will take a $1.7 million fiscal second-quarter charge to cut jobs at Genesee Brewing. Genesee Corp. expects to reduce its annual payroll by $5 million annually, including 27 jobs eliminated through attrition this year.
Genesee Brewing's sales fell 12 percent in the year ended May 1 amid competition from domestic and imported brands in its New York, Pennsylvania and Ohio markets.
Genesee, the fifth-largest domestic brewer, said last week it expects to decide soon whether to sell its brewing business, align with another brewery or restructure the business through wage and jobs cuts. All of those options still remain, the company said Tuesday.
In other business news
Apple Computer Inc. unveiled what it called the world's first desktop supercomputer, its new G4 model for professionals, in an attempt to further extend the company's technological and financial rebound. The new computers, powered by chips made by Apple, Motorola Inc. and IBM, cost between $1,600 and $3,500 and mark Apple's continuing efforts to gain increased support among business users.
H&R Block Inc. said today it has agreed to buy Olde Financial Corp. for $850 million in cash, expanding its core tax-preparation business into the brokerage industry.
Intel Corp. unveiled a new microprocessor chip today intended for use in devices that route information across the Internet, in an aggressive bid to expand beyond Intel's core business of powering personal computers, where growth has slowed. Intel said it already has lined up several major customers of its Internet chips.