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Market News (01/07/2013)

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MADISON, Wis. (1/7/13)

  • U.S. employers ended 2012 by adding 155,000 jobs in December, keeping the slow growth pace of the past two years, said the Labor Department Friday (The New York Times and The Wall Street Journal Jan. 4).  December's increase follows a revised upward gain of 161,000 in November. The unemployment rate held at 7.8%. Economists surveyed by Dow Jones Newswires had expected a gain of 160,000 in payrolls and a 7.7% jobless rate, said the Times, while 52 economists surveyed by Bloomberg had projected a 152,000 increase (Bloomberg.com Jan. 4). Health care, food services, construction and manufacturing gained the most, with the latter two areas boosted by rebuilding after Hurricane Sandy. During 2012, roughly 1.8 million jobs were added in the U.S.  At the current pace of job growth, it will take seven years for the unemployment rate to return to pre-2007 levels, said the TimesAnnual hourly earnings rose 2.1% from December 2011 to $23.73, the largest gain in one year, said Bloomberg. The average work week climbed six minutes--to 34.5 hours …
  • Factory orders in the U.S. were basically flat during November, with orders for manufactured goods increasing a less-than-expected $211 million to reach $477.7 billion, reported the Commerce Department Friday (Moody's Economy.com and The Wall Street Journal Jan. 4). Economists surveyed by Dow Jones Newswires had projected a 0.1% increase.  Orders for durable goods--or goods meant to last at least three years--rose 0.8% after a slight revision upward from 0.7% and shipments of durable goods rose 1.6% from October. Nondurable goods orders declined 0.6%. Core capital goods orders increased 2.6%, a revision downward from earlier estimates of a 2.7% gain. Shipments for November were revised up to a 2% gain instead of the previous estimate of a 1.8% gain …
  • The Economic Cycle Research Institute's (ECRI) Future Inflation Gauge was 104 in December,near its recovery period high of 104.7 set in March 2011, according to Moody's Economy.com (Jan. 4).  The figure is up from the revised 102.6 reading for November, which had originally been estimated at 102.5. The December reading is at a still-low level and consistent with Moody's view that inflation does not pose much threat in 2013 to the U.S. economic recovery. Inflation has been well-contained the past year, said Moody's, noting the gauge tends to lead changes in inflation by nine to 12 months. Headline inflation, measured by the personal consumption expenditure price index, will accelerate slowly and barely breach the Federal Reserve's 2% target later this year, Moody's added …

News of the Competition (01/07/2013)

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MADISON, Wis. (1/7/13)
  • Some community banks are increasing CEO salaries and compensation before the financial institutions file their proxy statements. Glacier Bancorp in Kalispell, Mont., and F.N.B. Corp. in Hermitage, Pa., are among the financial institutions whose boards have approved salary hikes for their top executives (American Banker Jan. 4). CEO compensation increased in 2012 from a year earlier at Pulaski Financial in St. Louis and Meta Financial in Sioux Falls, S.D., according to disclosures. Bank CEO salaries could increase up to 4% this year, according to a survey by the consulting firm Pearl Meyer & Partners …
  • Treasury Inspector General Eric Thorson gave JPMorgan Chase & Co. a Jan. 11 deadline to turn over documents to the Office of the Comptroller of Currency (OCC) investigating the bank's ties to Bernard Madoff's Ponzi scheme or risk sanctions for blocking the agency's oversight (Bloomberg Jan. 4). JPMorgan contends the information is protected by attorney-client privilege. In a letter sent Dec. 21 to JP Morgan, the inspector general said the OCC could not do its work if banks were allowed to withhold information on that basis. In March 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars …
  • In an e-mail sent to its customers, PNC Bank apologized for disruptions caused both by the ongoing cyberattacks on its website and the bank's own attempts to block the attacks. The e-mail advises customers experiencing problems to use other channels, such as branches, ATMs, or phone banking (American Banker Jan. 4). PNC's website has been hit with a volume of traffic "consistent with threatened cyberattacks," according to the e-mail. The banks' efforts to fend off the attacks may also have blocked access to "a small percentage" of legitimate customers, the e-mail said. PNC reassured its customers that their accounts and personal data are safeguarded by encryption software …