All about business

The U.S. economy continued to improve modestly in February despite uncharacteristically severe weather in many regions of the country, the latest Federal Reserve report on economic conditions reports.

Nine of the Fed’s 12 regional banks — including the New York Bank which encompasses Buffalo and Upstate — reported in the U.S. central bank’s Beige Book survey that economic activity improved last month.

Two districts, St. Louis and Atlanta, reported a more mixed performance and one district, Richmond, Va., was snowed under by winter storms.

The survey is a collection of anecdotes compiled by the Fed to give policy makers a feel for conditions across the country as they prepare for the next meeting on March 16 to plot monetary policy strategy.

Among the survey’s findings: Credit conditions have not improved and businesses still are unable to obtain credit, which is a critical factor behind the sluggish pace of growth creditreport.

Also, loan demand remains weak and banks are sticking to tight standards.

There were no signs in February of an improving labor market, though the pace of layoffs slowed.

Consumers appeared somewhat more willing to spend, the survey found, and demand for services was generally positive.

Manufacturing activity was stronger, but worries persisted about whether it was a result of customers restocking their shelves and unlikely to result in sustained improvement.

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By the time it marks its first year this May, Branson Airport will be reachable by air service from seven cities — compared with one today.

Earlier this month, Denver-based Frontier Airlines announced new flights between Denver and Branson beginning in April. Then last week, Branson Airport officials announced that scheduled charter flights will begin serving five new markets in May on the newly minted Branson AirExpress.

"Things are expanding and growing like we hoped they would," said Branson Airport Director Jeff Bourk.

The $155 million privately developed airport opened last May. AirTran Airways would not discuss passenger loads on its daily flights between Atlanta and Branson, but spokesman Christopher White said the airline was "very happy" with its first year of service.

Bourk said AirTran provided a link to the eastern United States through its Atlanta hub, and Frontier will provide low-cost flights to destinations west of the Ozark entertainment venue. The new charter service, by contrast, will be more of a regional feed from Houston; Austin, Texas; Terre Haute, Ind.; Des Moines, Iowa; and Shreveport, La.

"Scheduled public charters are not unique," Bourk said last week. "What makes it unique is the relationship between … our community here and their airports out there and their communities."

Introductory fares on Branson AirExpress will start at $39 one way for the Terre Haute, Shreveport and Des Moines markets, and $49 one way for Austin and Houston travelers. It will be operated by ExpressJet Airlines using 50-seat Embraer ERJ-145 jets.

Terre Haute, which has been without commercial air service for more than a decade, is looking forward to the business, said airport director Dennis Wiss.

"No. 1, it’s activity," Wiss said. "We need the activity at the airport. We stand to make a small amount of revenue. If this model works, we hope to expand and add more flights."

In Des Moines, airport officials helped put Branson AirExpress in touch with Prairie Meadows Racetrack and Casino, which will help "mitigate some risk," said Roy Criss, a spokesman at Des Moines International Airport payday loans with no fax.

Branson provided data showing about 1,200 Iowans visit the Missouri resort area each week during its peak season from May 17 to Dec. 11, Criss said. To make the air service profitable, he said, it would have to capture only one-sixth of that, or 200 passengers a week.

A secondary benefit is that travelers would be able to connect through Branson to cities such as Austin and Houston, he said.

If the Branson charter service demonstrates strong demand, Bourk said, a commercial airline could step in and take over one or more of the routes.

"We are not an airline," he said. "That is a very important distinction. We are trying to prove these routes to other airlines. If somebody wanted to come in and take the Houston route, a major airline, we would be happy to see that happen."

The Branson Airport opened during one of the worst commercial aviation slumps in U.S. history. But Bourk said the low fares and the affordable nature of Branson had helped offset the recessionary effects.

Branson airport officials expected as many as 300,000 passenger boardings in the first year of operation. Airport officials did not provide actual figures by late Friday.

Meantime, passenger numbers have climbed 55 miles away at Springfield-Branson National Airport.

In 2009, passenger numbers grew 4 percent at Springfield-Branson, despite an 11 percent cut in its flight schedule. No other airports in the region were seeing growth, said airport spokesman Kent Boyd.

Boyd credits low fares, the growth of Allegiant Air in the market, the relatively strong performance of the southwest Missouri economy and the heightened awareness of the new passenger terminal at the airport.

Bourk said Springfield-Branson served business travelers "very well," but it is not the type of service that will bring leisure travelers into the market.

He is hoping the new charter service will help to do that.

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Seven years and two jail convictions later, the Pentagon on Wednesday unveiled its latest attempt to get a $35 billion contract for refueling planes off the ground.

But within moments, the proposal was at risk of a crash and burn after a major contractor considered withholding its bid because it believed the terms unfairly favored its competitor.

And with thousands of jobs at stake for Alabama, the state’s two senators weighed in as well, saying the latest proposal appeared to do little to satisfy Northrop Grumman Corp.’s concerns that the terms were skewed against its larger, more expensive plane.

On Wednesday, the Pentagon publicly released its final bid request for the job flexcheck cash advance. The bid involves building 179 tankers, but the job could be expanded. A final contract is to be awarded in September.

Northrop said in a statement that it would review the complex proposal before commenting. A Northrop pullout would leave Boeing Co. as the lone bidder on one of the most protracted and expensive contracts in Pentagon history.

The Pentagon’s senior leaders on Wednesday defended the proposal.

"We believe that both offers are in a position to win," Air Force Secretary Michael Donley said.

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Oil prices rebounded Friday on supply concern following strikes at French refineries, and after a report showed a dip in U.S. inflation.

What prices are doing: Crude oil for March delivery rose 75 cents to settle at $79.81 a barrel on Friday. Prices had fallen as low as $77.76 earlier in the session.

On Thursday, oil rose to its highest level in five weeks after an inventory report showed a larger-than-expected inventory drop in supplies of some refined products.

The oil market was closed Monday in the United States in observance of Presidents Day, but prices rose steadily throughout the remainder of the week. From Tuesday to Friday, crude prices gained 3.6%.

What’s driving prices: A stronger dollar kept oil prices in check early Friday, a day after the Federal Reserve raised the discount rate by a quarter percentage point to 0.75%.

But later in the session, reports surfaced about an intensifying strike at French oil giant Total SA, which began shutting operations and warned of fuel shortages. Workers have been on strike for three days to protest Total’s permanent closure of oil processing at a plant in Flanders.

A Friday morning economic report also helped put a floor under prices. The Consumer Price Index, the government’s key inflation reading, showed prices rose just 0.2% in January. The core inflation rate fell a seasonally adjusted 0.1%.

Gas prices: The national average price for a gallon of regular unleaded gasoline rose to $2.623, up 0.9 cents from the previous day’s price of $2.614, according to motorist group AAA. 

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President Obama announced Tuesday over $8 billion in federal support for two new nuclear power plants in Georgia, setting the stage for what could be the first completed reactor in this country in over three decades.

The money, coming in the form of loan guarantees, is going to build two new reactors at Southern Company’s Vogtle plant facility, located some 170 miles east of Atlanta.

In announcing the grant at an electrical worker’s union hall in Maryland, Obama used to occasion to tout the benefits of nuclear power.

"Nuclear energy remains our largest source of fuel that produces no carbon emissions," said the president. "To meet our growing energy needs and prevent the worst the worst consequences of climate change, we’ll need to increase our supply of nuclear power. It’s that simple."

But Obama’s speech made clear the move is also deeply political.

The money is part of $18.5 billion in loan guarantees for nuclear power approved under the 2005 energy bill. This grant is the first slice of money to be awarded.

President Obama has increased the amount of money available for nuclear loan guarantees to over $54 billion in his 2011 budget.

The increased funding is part of an effort to win Republican support for the president’s overall energy plan, which includes building more nuclear plants as well as making fossil fuels more expensive in an effort to cut greenhouse gases and make renewable energy more competitive.

"Those who have long advocated for nuclear power, including many Republicans, have to recognize that we will not achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable," Obama said. "As long as producing carbon pollution carries no cost, traditional plants that use fossil fuels will be more cost-effective than plants that use nuclear fuel."

Passing legislation to make fossil fuels more expensive and clean energy more profitable is a centerpiece of the Obama administration’s domestic agenda.

A bill designed to do just that narrowly passed the House last summer, but faces stiff opposition in the Senate from lawmakers that are concerned about its cost to the economy, or don’t believe in global warming. The Senate is expected to take up the matter sometime this year.

The Georgia plant

Southern Company is one of a handful of power producers that has been vying for this federal funding over the last few years.

Preliminary construction work on new reactors has already begun at a few sites around the country, including the Georgia plant. But the U.S. Nuclear Regulatory Commission hasn’t issued a final permit at any of the facilities.

Winning the government loan backing is a major breakthrough for Southern, and underscores just how expensive and risky building a new nuclear facility is.

Nuclear plants have been subject to massive cost overruns in the past, and without government support even those in the industry recognize a new plant would not be built.

The Georgia expansion is estimated to cost $14 billion, and is scheduled to be completed in 2017.

When originally built late 1980s, the plant was expected to have four reactors and cost $975 million, according to the Atlanta Journal Constitution. The final price tag for two reactors was $9 billion.

The new construction in Georgia is expected to create 3,500 jobs building the plant and 800 permanent jobs once the facility is complete, according to a Southern Company press release.

Each new reactor is expected to produce 1,100 megawatts of electricity, enough to power over 800,000 homes.

Too expensive?

Opponents of nuclear power claim the plants are too expensive to build, and fear government support will distort the power market in this country for years to come.

They also fear the plants will be the target of a terrorist attack, and say there is still no plan for what to do with the waste.

Supports contend the plants will get far cheaper after the first few are built, and will be a good source for clean, domestic power.

The Energy Department has stopped building a permanent waste disposal site at Nevada’s Yucca mountain, but says the waste can be safety stored on-site in pools or concrete bunkers for many decades until another site is found.  

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Kinder Morgan Energy Partners LP, one of the nation’s largest pipeline companies, agreed to buy four terminals from St. Louis-based Slay Industries for $98 million.

The assets include a river terminal in Sauget, a liquid bulk terminal and a warehousing distribution center in St. Louis and a terminal in Muscatine, Iowa.

The purchase gives Kinder Morgan a toehold in the St. Louis terminal market and "unparalleled access to major markets via rail and waterway," Jeff Armstrong, president of the company’s terminals business, said Wednesday in a statement.

Houston-based Kinder Morgan and Slay Industries also formed a joint venture at Slay’s Kellogg Dock coal terminal in Modoc, Ill., and new North Cahokia terminal in Sauget, which includes 175 acres for development.

Slay Industries was founded 90 years ago as Slay Motor Freight and generates annual revenue exceeding $125 million, according to the company’s website.

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Job hunters may be better off being unemployed and searching for permanent work rather than taking temporary positions, a new study contends.

“It’s not that temp work is bad, per se,” said David Autor, who co-wrote the study. “It’s that people who are successful as temps, would tend to be far more successful in direct hire jobs. It’s the opportunity cost rather than direct harm.”

Autor, an economist at the Massachusetts Institute of Technology, and colleague Susan Houseman carried out a broad study of outcomes for 37,000 job seekers. The study group comprised clients of Work First, a public job-placement service operating in Detroit whose goal is to get people off welfare.

Applicants were randomly assigned to jobs; some were temporary positions doled out by agencies, others were direct hires to participating companies. All the jobs were relatively low-wage, low-skill labour.

Autor found that those workers who lucked into direct-hire employment, on average, earned 30 to 50 per cent more over the next two years than workers who took temp jobs. They found that earnings for temp workers tended to jump at the outset but then settled back when those jobs ended after a few days or weeks.

“The average outcome is that people placed in temp jobs do less well than they would have if they had just spent the extra time to search for a direct-hire position,” Autor said from his office at M.I.T. on Monday.

“Holding the temp job has two consequences: First of all, it’s very difficult to search for a job while you’re working. Second, when you’re connected to a temp agency, you may have the illusion a job is about to show up. They say, ‘We’ll call you when we have something.’ I wouldn’t call it ‘complacency,’ but it may create the sense that you’re doing something when you’re not payday loans guaranteed no fax.”

At the root of all this is the onerous nature of the job hunt itself.

“We know from all kinds of studies that people … hate searching for work. They hate it much more than working.”

Temp work, it seems, jolts people out of a job-hunting state of mind while offering no long-term benefits.

“Direct-hire placements give people stability. Stability is very valuable,” Autor said. “People often talk about the benefits of flexibility and so forth. Most of those benefits are actually for the employer rather than the employee.”

One of his conclusions is that government should not be in the business of trying to place people in temp jobs.

“You don’t need a government agency to connect you to a temp agency. Everybody knows where they are,” Autor said. “What is hard is connecting workers directly to employers.”

The participants in the study were a very particular kind of worker – one with little training. But Autor believes the study’s findings apply to a broad economic spectrum.

He is very careful not to suggest that people who need to put food on the table should be turning down any sort of job. But he gently suggests that the goal should be a successful job search, not a short one.

“What I’d like (job seekers) to take from this is that although temporary work sometimes leads to a direct-hire position, that’s probably not the most fruitful way to get them, relative to the sort of painful work of a direct-hire search,” Autor said.

“Don’t view temp work as the on-ramp into the labour market.”

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SHANGHAI—Google is investigating whether one or more employees may have helped facilitate a cyber-attack from China that the U.S search giant said it was a victim of in mid-December, two sources told Reuters on Monday.

Google, the world’s most popular search engine, said last week it may pull out of the world’s biggest Internet market by users after reporting it had been hit by a “sophisticated” cyber-attack on its network that resulted in theft of its intellectual property.

The sources, who are familiar with the situation, told Reuters that the attack, which targeted people who have access to specific parts of Google networks, may have been facilitated by people working in Google China’s office.

“We’re not commenting on rumour and speculation. This is an ongoing investigation, and we simply cannot comment on the details,” a Google spokeswoman said.

Security analysts told Reuters the malicious software (malware) used in the Google attack was a modification of a trojan called Hydraq. A trojan is malware that, once inside a computer, allows someone unauthorised access. The sophistication in the attack was in knowing whom to attack, not the malware itself, the analysts said.

Local media, citing unnamed sources, reported that some Google China employees were denied access to internal networks after Jan. 13, while some staff were put on leave and others transferred to different offices in Google’s Asia Pacific operations. Google said it would not comment on its business operations.

TALKS SOON

Google, which has denied rumours that it has already decided to shut down its China offices, said on Monday it contacted the Chinese government last week after the announcement.

“We are going to have talks with them in the coming few days,” Google said.

Google is also still in the process of scanning its internal networks since the cyber-attack in mid-December.

China has tried to play down Google’s threat to leave, saying there are many ways to resolve the issue, but insisting all foreign companies, Google included, must abide by Chinese laws.

Washington said it was issuing a diplomatic note to China formally requesting an explanation for the attacks.

The Google issue risks becoming another irritant in China’s relationship with the United States. Ties are already strained by arguments over the yuan currency’s exchange rate, which U.S. critics say is unfairly low, trade protectionism and U.S. arms sales to Taiwan.

Washington has long been worried about Beijing’s cyber-spying programme. A congressional advisory panel said in November the Chinese government appeared increasingly to be penetrating U.S. computers to gather useful data for its military.

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The National Hockey League said Friday night it has signed a letter of intent to sell the financially struggling Phoenix Coyotes to a new ownership group from Toronto.

"The NHL and Ice Edge Holdings announced today that they have entered into a letter of intent to proceed in attempting to document and close a proposed transaction pursuant to which Ice Edge would purchase the Phoenix Coyotes’ franchise. While much remains to be done, the NHL looks forward to working closely with Ice Edge to bring the sale to conclusion as expeditiously as possible. Ice Edge has committed to keep the Coyotes in Glendale, Arizona," NHL Commssioner Bill Daly said in a statement.

The Coyotes are in Chapter 11 bankruptcy and were bought by the NHL in October for $140 million.

Ice Edge investors include Canadians and Americans. The group wants to keep the team in Arizona but previously had talked about playing some home games in Canadian cities without NHL teams.

Ice Edge needs to finalize the purchase of the Coyotes from the NHL and then will work on an arena lease deal with the city of Glendale. The Phoenix suburb owns Jobing.com Arena where the Coyotes play.

"The city of Glendale is pleased that the National Hockey League has concluded the initial negotiations for the sale of the Coyotes and is entering into a letter of intent with Ice Edge Holdings to immediately assume operations of the team Faxless payday loans. The transfer of ownership and possession to Ice Edge Holdings is a major and final step in establishing the long-term presence of hockey in Glendale, Arizona," Glendale said in a statement.

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The Toronto stock market closed lower, led by losses in the telecom sector as a new company joins the wireless wars.

The S&P/TSX composite index fell 40.64 points to 11,423.93.

Industry Minister Tony Clement overruled an earlier decision by the Canadian Radio-television and Telecommunications Commission and gave the green light to Globalive Wireless Management Corp. The company will join BCE Inc. (TSX: BCE), Rogers Communications (TSX: RCI.B) and Telus Corp. (TSX: T) in providing cellphone service no fax payday loans.

The Canadian dollar was down 0.85 of a cent to 94.35 cents US. Crude closed 67 cents lower at US$69.87 a barrel.

Solid retail data sent the Dow Jones industrial average up 65.67 points to 10,471.5.

The Nasdaq composite index dipped 0.55 of a point to 2,190.31 while the S&P 500 index climbed 4.07 points to 1,106.42.

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