UPI NewsTrack Business

U.S. markets turn up on GDP news

NEW YORK, Oct. 29 (UPI) -- U.S. markets turned higher Monday after the Commerce Department said the gross domestic product rose 3.5 percent in the third quarter.

It was the first rise in the nation's economic output since the second quarter of 2008 and better than expected. The consensus forecast called for a rise of 3.2 percent.

In late morning trading, markets turned higher after losses in three of the past four trading sessions. The Dow Jones industrial average gained 0.65 percent, 58.31 points, to 9,821.10. The Standard & Poor's 500 added 0.75 percent, 7.84, to 1,050.47. The Nasdaq composite index rose 0.71 percent, 13.30, to 2,072.91.

The benchmark 10-year Treasury fell 12/32 to yield 3.458 percent.

The euro rose to $1.4783 from Wednesday's $1.4717. Against the yen, the dollar rose to 91.21 yen from Wednesday's 90.79 yen.

In Tokyo, the Nikkei 225 index fell 1.83 percent, 183.95, to 9,891.10.

Growth report signals end of recession

WASHINGTON, Oct. 29 (UPI) -- The U.S. Department of Commerce said the economy grew 3.5 percent in the third quarter, the first gain since the second quarter of 2008.

Forecasters had predicted growth of about 3.2 percent in the quarter ending Sept. 30, driven largely by federal stimulus spending and increased business investment. The Los Angeles Times reported that the economy has contracted for four consecutive quarters but growth in the most recent quarter suggests the worst recession since the Great Depression has passed, economists said.

Lynn Reaser, an economist and president of the National Association for Business Economics, told the newspaper the U.S. economy is "on the start of a recovery track and one that is sustainable."

The economy has more than 3.5 percent to make up, having dropped 6 percent last fall and winter and unemployment is lagging in the recovery, the Times said.

Forecasters expect weak growth in the next two quarters and no substantial improvement in hiring until mid-2010, the Times said.

The third quarter's growth came with a hint of inflation, which rose 1.6 percent after rising 0.5 percent in the second quarter. But such a gain is likely to ease fears of deflation more than spark fears of high inflation, as unemployment remains high at 9.8 percent.

States fear end of stimulus funds

WASHINGTON, Oct. 29 (UPI) -- Declining state tax collections are adding to fears of what will happen when federal stimulus money ends, government watchdogs said.

"It's hard to imagine what happens when (federal) stimulus money runs out," Craig Thiel, a budget expert at the Citizens Research Council of Michigan told USA Today.

State revenue collections fell 15 percent in the first half of the year and dropped 8.3 percent on average in the third quarter among eight states that report monthly, the newspaper reported Thursday.

In New York, tax collections in the third quarter dropped 8.9 percent. In Ohio, tax collections were off 12.1 percent July through September, although the state managed to hold the total revenue drop to 2.5 percent.

Revenue in Ohio was propped up by $363 million in federal stimulus funds.

"It's financial disaster in as far as the eye can see, and it gets worse when the stimulus runs out," said E.J. McMahon, director of the Empire Center for New York State Policy.

Most of the federal stimulus funds will run dry at the end of 2010, the newspaper said.

Canadian average weekly pay up to $828

OTTAWA, Oct. 29 (UPI) -- Canadians' average year-over-year non-farm weekly earnings rose 2 percent to $828 in August, Statistics Canada reported from Ottawa Thursday.

Although the average weekly income rose marginally from $824 in July, payroll employment fell 0.8 percent, or 110,200 jobs in August, the agency said.

"In August, 216 of 305 industries covered by the survey posted (employment) losses," StatsCan said. "This was the largest number of industries with declining payroll employment since January 2009, when 229 industries shed jobs."

Half of the drop in August came from a loss of 54,400 jobs in educational services, backed by widespread losses across the goods and service sectors.

Employment increases were reported in traveler accommodation, up 2,800, and scheduled air transportation, which added 2,500 jobs, the report said.