Higher prices for food are about to get worse
WASHINGTON (AP) _ Americans are noticing higher prices at the grocery store, and it's about to get worse.
Food prices at the wholesale level rose last month by the most in 36 years. Cold weather accounted for most of it, forcing stores and restaurants to pay more for green peppers, lettuce and other vegetables, but meat and dairy prices surged, too.
The big questions are how long food prices will keep rising and how high they'll go.
The impact is already visible. Wendy's, paying higher prices for tomatoes, now puts them on hamburgers only by request. Starbucks and Dunkin' Donuts have raised prices because they pay more for coffee beans. Supermarkets warn customers that produce may be of lower quality, or limited.
Food prices rose 3.9 percent last month, the most since November 1974. Most of the increase was because harsh winter freezes in Florida, Texas and other Southern states, which damaged crops.
At the same time, global prices for corn, wheat, soybeans, coffee and other commodities have risen sharply in the past year. That's raised the price of animal feed, which has pushed up the cost of eggs, ground beef and milk.
Rebuilding northeast Japan to take years, billions
TOKYO (AP) _ It took only minutes for the earthquake and tsunami to devastate Japan's northeast. Rebuilding will take years _ if it can be afforded.
The relentless wall of water that the quake unleashed killed thousands, swept away whole towns, inundated roads and knocked ports, oil refineries, steel plants and factories out of action.
Experts say the cost of the destruction likely exceeds that of the catastrophic 1995 Kobe earthquake _ estimated by Standard & Poor's to have totaled $159 billion.
The four most severely affected prefectures (states) _ Iwate, Miyagi, Fukushima and Ibaraki _ are home to industries from farming to auto parts to electronics and make up some 6 percent of Japan's economy.
Hundreds of thousands of people have spent five nights with little food, water or heating in near-freezing temperatures as they dealt with the loss of homes and loved ones.
The biggest port on the northeast coast, Sendai, has been destroyed. It handled mainly container shipments of exports including rubber and marine products, office machinery, paper goods and auto parts. Three others _ Hachinohe, Ishinomaki and Onahama _ were severely damaged and will likely be out of commission for months.
Gov't panel issues mixed final verdict on bailouts
WASHINGTON (AP) _ The government's bailout of banks, auto makers and insurers helped prevent a more severe economic crisis, but might have sowed the seeds of the next one, a congressional watchdog group said Wednesday in its final report.
The Congressional Oversight Panel said that the government's rescue fund may have prevented an economic depression by sending billions of dollars to companies crippled in financial crisis that erupted in 2008. But little has been done to aid to homeowners facing foreclosure or others far from Wall Street, it said.
Current account deficit falls in fourth quarter
WASHINGTON (AP) _ U.S. businesses sold more industrial supplies, chemicals and farm products in the final three months of last year, pushing the deficit in the broadest measure of foreign trade down for the first time since the spring of 2009.
The current account trade deficit fell 9.7 percent to $113.3 billion in the October-December period, the Commerce Department reported Wednesday. It marked the first drop in the deficit after five consecutive quarterly increases and pushed the trade gap to its lowest point since early 2010.
While the fourth quarter deficit shrank, economists expect that the first quarter deficit will widen significantly, reflecting surging oil prices.
The devastating earthquake in Japan is expected to have only a modest impact on the trade deficit this year. It will likely lower imports from Japan at least temporarily while boosting U.S. exports of goods needed in the rebuilding effort.
Dollar reaches 16-year low against yen
NEW YORK (AP) _ The dollar dropped below its lowest point in almost 16 years late Wednesday amid a nuclear crisis in Japan, debt woes in Europe, tension in the Middle East and weak economic reports at home.
The dollar plunged to 76.53 Japanese yen late Wednesday, falling far below the April 1995 low of 79.75 yen, as leaks of radioactivity from a stricken Japanese nuclear plant have deepened the Asian country's woes following last week's massive earthquake and tsunami.
The dollar was worth 80.83 yen late Tuesday.
Many analysts have said they expected the Bank of Japan to try to weaken the yen if the dollar dropped below 80 yen. A strong yen hurts the Asian country's exporters, potentially deepening any hit to the economy from the earthquake and lingering nuclear crisis.
New-home construction plunges in February
WASHINGTON (AP) _ Builders broke ground last month on the fewest homes in nearly two years and cut their requests for permits to start new projects to a five-decade low. The decline in construction activity is the latest evidence that the housing industry is years away from a recovery.
Home construction plunged 22.5 percent in February from January to a seasonally adjusted 479,000 homes, the Commerce Department said Wednesday. It was the lowest level since April 2009 and the second-lowest on records dating back more than a half-century.
The decline followed a surge in highly volatile apartment construction in January, which pushed the overall construction rate up to more than 600,000 units _ the fastest rate in 20 months. Still, the building pace has been far below the 1.2 million units a year that economists consider healthy.
Single-family homes, which make up roughly 80 percent of home construction, fell 11.8 percent in February. Apartment and condominium construction dropped 47 percent, reversing much of January's gains.
UK unemployment up to 8 pct as 2.5M out of work
LONDON (AP) _ Britain's unemployment rate has risen to 8 percent as the number of people out of work reached a 17-year high of more than 2.5 million.
The Office for National Statistics said the rate for the November-January period rose from the 7.9 percent rate reported last month for the October-December period.
Total pay was up 2.3 percent compared with a year earlier, well below the current inflation rate of 4 percent.
The agency noted that the number of people aged 65 or above who are working rose by 56,000 in the three months to 900,000, the highest figure since the current data series began in 1992.
Portugal borrowing costs rise after downgrade
LISBON, Portugal (AP) _ Portugal's borrowing costs rose in a bond sale Wednesday after its credit rating was cut and amid fears a political standoff could derail its recovery plan and Europe's efforts to contain the debt crisis.
Investors demanded a 4.3 percent interest rate to take on euro1 billion ($1.4 billion) in 12-month Treasury bills. That is up from 4 percent two weeks ago and only 1 percent a year earlier.
The auction came a day after Moody's downgraded the country's credit rating, adding pressure on the beleaguered minority government which is battling to avoid taking a bailout like Greece and Ireland did last year.
Last weekend's surprisingly broad EU plan to deal with the debt crisis was greeted positively in the markets in the early part of the week. But pressure on Portugal remains, and its bailout could trigger a renewed deterioration in eurozone markets and destabilize other, bigger nations. Spain, Belgium and Italy are also weighed down by large debts.
Netflix vying for first rights to new TV series
SAN FRANCISCO (AP) _ Netflix Inc. is trying to buy the Internet streaming rights to a 26-episode drama starring Kevin Spacey before the series is shown on a television network.
If the deal is completed, it would mark a bold step in a new direction for Netflix's popular video subscription service. Netflix currently boasts more than 20,000 titles in its streaming library, but most of them are previously aired TV series and older movies.
Should it win rights to "House of Cards," Netflix would emerge as an even more serious threat to pay-TV channels such as HBO. Netflix began the year with 20 million subscribers. Some analysts believe that by the end of this year the service could be as large as HBO, which is believed to have about 28 million subscribers.
By The Associated Press
The Dow Jones industrial average fell 242.12, or 2 percent, to 11,613.30. It was the worst drop since Aug. 11. The Dow has now lost 3.6 percent over the past three days, its worst three-day loss since last July.
The S&P index fell 24.99, or 1.9 percent, to 1,256.88. The Nasdaq composite index fell 50.51 or 1.9 percent, to 2,610. It is now down 1.4 percent for the year.
Benchmark crude for April delivery gained 80 cents to settle at $97.98 per barrel on the New York Mercantile Exchange. Oil rose as high as $99.60 earlier in the session. In London, Brent crude rose $2.10 to settle at $110.62 per barrel on the ICE Futures exchange.
In other Nymex trading for April contracts, heating oil added 4.34 cents to settle at $2.9972 per gallon and gasoline futures gained 4.08 cents to settle at $2.8437 per gallon. Natural gas was down 0.3 cent to settle at $3.938 per 1,000 cubic feet.