Economy

With two-thirds of the year now over, nothing is resolved about the economy, the housing market, the credit markets or the stock market. What a way to get back to work on Tuesday after summer vacation. As the curtain comes up on the final four months of 2008, here's a look at some of the key issues that will preoccupy investors: The U.S. economy.. Recession? Depression? Recovery? None of the above? The script that many analysts wrote for the domestic economy at the start of this year was for a first-half slowdown or even contraction (recession)

Los Angeles has one of the highest levels of income inequality in the nation, but that's due in part to a relatively strong local economy that's stoking the fortunes of higher-income people, according to a new study. Of the 50 largest U.S. cities, L.A. has the ninth-highest level of income disparity, according to the analysis by the Brookings Institution, a Washington think tank. The top three are Atlanta, San Francisco and Miami. Inequality has become a flash point nationwide as the wealth of top earners surges while the middle and lower classes grapple with stubborn income stagnation.

Expanding your business in a down economy can be difficult. In many cases it requires you to think differently and more creatively, as well as to re-evaluate your strengths and weaknesses, experts say. In the end, this can be a great time to reconnect with customers and find new opportunities that you may not have explored during better times. "In a robust economy it's easy to become complacent," said small-business expert Rhonda Abrams, president of the Planning Shop, a Palo Alto-based publisher of books for entrepreneurs.

WASHINGTON - Brutal winter weather contributed to a downturn in job growth and other economic data, raising questions about the strength of the recovery and testing the Federal Reserve's resolve in unwinding its key bond-buying stimulus program. Fed policymakers will have another month of data to consider when they next meet in mid-March. But if the views of John C. Williams are any indication, the Fed is likely to hold course. As president of the Federal Reserve Bank of San Francisco, one of the Fed's 12 district banks, Williams has a seat at the mahogany table where top Fed officials meet regularly to discuss the economy and make policy decisions.

The country's prime minister said Canadians don't need a Parliament that acts like the U.S. Congress and panics like the U.S. Treasury Department. Prime Minister Stephen Harper criticized the way the U.S. has managed the credit crisis a day after political rivals said during a debate that the Canadian leader was out of touch with the seriousness of Canada's slowing economy. The Conservative Party leader said he needs a strong mandate from voters in the Oct. 14 national elections so he can deal with the economy.

Under fire for his assertion that the American economy is fundamentally sound, John McCain moved Tuesday to assure voters of his empathy and accused Barack Obama of attempting to take political advantage of the roiling Wall Street crisis. Obama on Tuesday castigated McCain as having been "scornful" of the very Wall Street regulations he was now espousing, and he launched television ads mocking McCain's Monday statement. The Arizona senator spent seven national TV interviews and two campaign events seeking to make it clear that he understood the depth of concern about the rocky economy.

Imagine a world where prices of all sorts of goods and services just keep moving down. Your weekly grocery bill shrinks. Your hairstylist gladly accepts 15% less, just to get the business. At long last, movie theaters even stop gouging you on popcorn. Good times? Sure — until your employer cuts your salary or fires you to cope with the need to reduce prices. Suddenly, the economy is in the grip of a vicious spiral, as falling consumption forces prices lower, driving unemployment up, which in turn drives consumption and prices down further.

The federal deficit will dip below $1 trillion for the first time in five years, a substantial improvement in the fiscal outlook, but one that masks a persistent budget gap that will probably worsen later this decade, according to the Congressional Budget Office. The last two years of budget battles between the White House and congressional Republicans, coupled with the recovering economy, have slowed the government's gush of red ink. But steps to reduce the deficit have acted as a drag on the economy, slowing the recovery, the budget office said.

The Fourth of July weekend seems like a good time to examine some of the heat and rhetoric lately surrounding one of the basic building blocks of our society: immigration. There is widespread concern that too many immigrants are coming in and, worse, that waves of unskilled workers will form a permanent underclass and change the historic dynamic of American society. These are serious matters. Immigration is part of the DNA of America, and it's as necessary today as ever.

Worried by the worsening economy, Kristen Olson decided she'd better start saving money. She tallied her expenses and was walloped by sticker shock: She and her roommates were spending $900 a year for cable TV. "I'm not watching $900 worth of cable," said the 25-year-old advertising account coordinator, who lives in North Hollywood. She's trying to persuade her roommates to drop the service.

The severe weather that has hit much of the country this winter has cost the economy nearly $50 billion in lost productivity and 76,000 jobs, according to a new survey. The debilitating effects of Old Man Winter hit factory production, which last month fell the most since the Great Recession ended, the Federal Reserve said Friday. Manufacturing output dropped 0.8% in January compared with the previous month, the first decline since July and the biggest falloff since May 2009.

The recent Congressional Budget Office report on healthcare reform has lots of good news. Insurance premiums are lower than anticipated, the Affordable Care Act will cost $9 billion less than previously estimated and the provision designed to buffer insurance companies from risk will actually raise revenue, not function as any sort of federal government bailout. But the good news has not gotten much attention because the CBO also projected that, within the next several years, healthcare reform may reduce employment and worker hours by the equivalent of about 2 million full-time positions.

EAST LANSING, Mich. - Keen not to let a rare legislative accomplishment go unnoticed, President Obama jetted to an agricultural research hub here Friday to sign into law a long-delayed farm bill and tout the importance of rural America to the economy. In a brief trip to Michigan State University, Obama cited the bill as a victory for his economic agenda and a hopeful sign he could "break the cycle of short-sighted, crisis-driven, partisan decision-making. " His message, however, was undermined by the release of a weak jobs report and a snub from Republican lawmakers who were invited to the unusual outside-Washington signing ceremony but did not attend.

WASHINGTON - The U.S. economy should grow at a solid rate over the next few years, but the labor market will continue to recover only slowly, according to new projections by the Congressional Budget Office. In its latest budget and economic outlook, the CBO on Tuesday forecast that economic growth will rise to 3.1% this year, boosted by gains in housing construction and business investment. And growth in economic output is projected to speed up to 3.4% in each of the next two years.

WASHINGTON - President Obama's healthcare law will reduce the ranks of the uninsured by about 13 million this year and 25 million once it is fully phased in, but will prompt some people to work less because of the availability of insurance subsidies, the Congressional Budget Office said Tuesday. The latest projections by the nonpartisan budget analysts inspired new talking points for both sides in the deeply polarized debate over the Affordable Care Act, popularly known as Obamacare.

Children are enjoying hikes in their allowances as the fortunes of their parents brighten. From 2011 to 2013, the percentage of parents giving their children between $11 to $30 a week climbed significantly, thanks in part to an economic rebound, according to data analyzed by T. Rowe Price for Reuters. At the same time, more budget-conscious mothers and fathers who only shelled out up to $10 a week dropped sharply. Some children are seeing even bigger boosts to their spending money.

The poor economy is taking a toll even on the dead, with an increasing number of bodies in Los Angeles County going unclaimed by families who cannot afford to bury or cremate their loved ones. At the county coroner's office -- which handles homicides and other suspicious deaths -- 36% more cremations were done at taxpayers' expense in the last fiscal year over the previous year, from 525 to 712.

Education has long been preached as a way to keep kids away from drugs. It's the walk to school that has Supt. Tom Barnett worried. This hardscrabble Northern California town has become a hotbed for medical marijuana farming. Kids stroll much of the year past pungent plants flourishing in gardens and alleys. The red-and-black-clad Timberjacks football team moved its halftime huddle on a recent Friday night to avoid the odor of marijuana smoke wafting over the gridiron from nearby houses.

WASHINGTON -- Consumer confidence slipped this month amid concerns about whether the recent upturn in momentum can be sustained, according to data released Friday. The consumer sentiment index from the University of Michigan and Thomson Reuters dropped to 81.2, from 82.5 the previous month. The reading was in line with economists' projections. The January figure was well above the 73.8 level recorded for the same month a year ago, and confidence was slightly improved from the preliminary January number.

WASHINGTON -- The U.S. registered solid economic growth in the final three months of last year, buoyed by rising exports and the biggest increase in consumer spending in three years, the Commerce Department said Thursday. The economy's 3.2% annualized growth rate in the fourth quarter was in line with analysts' expectations and suggests that there was good momentum heading into this year. The pickup in personal spending was particularly encouraging as that accounts for more than two-thirds of American economic activity.