Midway negotiations end as one bidder drops out and Chicago Mayor Emanuel calls it quits. Also this week in the economy: unemployment falls for the wrong reasons; Beige Book reveals modest to moderate economic growth; and Yahoo! picks a new logo.
Charles Rex Arbogast/AP/File
Midway leasing talks end: Chicago pulled out of talks aimed at leasing the city's second-busiest airport after one bidder dropped out. The bids didn't meet expectations. "At the end of the day, those thinking of investing in Midway just did not clear the bar I set for the city, which I believe is a high bar," Chicago Mayor Rahm Emanuel said, according to Reuters. The city needs to do something to raise cash, since it faces a huge pension bill starting in 2015. Under Former Mayor Richard J. Daley, the city privatized its parking meters and Skyway toll bridge. Those deals were criticized for not bringing the city enough revenue. But Mayor Emanuel's press secretary left the door open to a possible Midway Airport leasing deal down the line.
Unemployment rate falls: The US unemployment rate notched down to 7.3 percent in August, the Labor Department reported Friday, but the drop was due more to people giving up their job search than a surge in jobs. In all, the economy added 169,000 jobs for the month, below expectations, and previous months totals were revised downward. The weak report threw some doubt into whether the Federal Reserve would remove some of its extraordinary support for the economy starting later this month. Another concern, as reported by Monitor reporter Mark Trumbull, the gap between the unemployment rates for men and women is growing again.
Jobless claims fall (again): The number of initial unemployment claims by US workers fell by 9,000 to 323,000 claims last week, bringing the four-week moving average down to 328,000. “A claims level of 328K ... has historically been consistent with a stronger labor market environment than other evidence is pointing to,” MFR Inc. economist Joshua Shapiro wrote in an e-mailed analysis. “Possible explanations include that businesses are laying off fewer workers but hiring also remains sub-par, that the claims data will rebound, or that the labor market really is better than most other data would indicate. Time will tell what the answer is.”
Beige Book report released: The Federal Reserve's latest Beige Book report, which covered the period from July 9 to Aug. 26, suggested that the US economy continued to grow at a “modest to moderate” pace. Manufacturing, housing, and consumer spending showed improvement in most regions, hiring increased modestly, and lending activity dropped off. Economists are divided over whether the report suggests that the Fed's Federal Open Market Committee (FOMC) which sets interest rates, will taper its stimulus activity this month, as many think. “The degree to which the Fed considers anecdotal evidence from its regional contacts with regard to monetary policy action is unclear,” Erik Johnson, an economist for IHS Global Insight, wrote via e-mailed analysis. “Our view remains that the unemployment rate will dictate the Fed’s quantitative easing.”
But Barclays economist Cooper Howes countered: “This report is consistent with our expectations of a tapering of asset purchases at the September FOMC meeting,” in an e-mailed report.
Construction spending improves: Spending on construction ticked up 0.6 percent in July. Core construction spending, which includes single-family, multifamily, state and local government, and private nonresidential building, increased by 0.5 percent. Spending on single- and multi-family homes increased, though the pace has slowed for both.
Yahoo! logo revealed: After a month of daily teases, the new Yahoo! logo was unveiled Thursday. CEO Marisa Mayer had a big hand in the design, including the decision to “tilt the exclamation point by nine degrees, just to add a bit of whimsy,” as she explained in a post on her Tumblr page. Yahoo! stock climbed 16 cents Thursday on the news.