Americans scaled back spending in October
WASHINGTON Americans cut back on spending last month while their income remained flat. The weakness in part reflected disruptions from Superstorm Sandy that could slow economic growth for the rest of the year. The Commerce Department said Friday that consumer spending dropped 0.2 percent in October. It was the weakest figure since May, and it compared with a 0.8 percent spending increase in September. Income had risen 0.4 percent in September. Work interruptions caused by the storm reduced wages and salaries in October by about $18 billion at an annual rate, the government said. The storm affected 24 states, with the most severe damage in New York and New Jersey. Consumers may also be scaling back on spending because of fears about the “fiscal cliff.” That’s the name for automatic tax increases and spending cuts that will take effect in January if Congress and the Obama administration fail to strike a deal by then.
Coffee prices expected to drop with plentiful harvests
The price of coffee is plummeting on expectations that bountiful harvests in Brazil and Central America will add to already ample global supplies. Coffee for March delivery fell 3.7 percent Friday to end at $1.506 per pound. The price has fallen nearly 34 percent this year. Reports indicate that crop development has been good in Brazil. Central America’s harvest is under way. Analysts say investors are selling holdings to lock in profits.
Congress urged to continue Mortgage Debt Relief Act
WASHINGTON Congress has been urged to extend a $1.3 billion federal tax break on write-offs of mortgage debt that may expire at the end of the year even as lenders are increasingly cutting loan principal to help troubled borrowers. The Mortgage Debt Relief Act of 2007 enables borrowers to avoid paying income taxes on the amount of principal that’s forgiven as part of a loan modification or during a short sale in which they sell their homes for less than they owe. If the measure expires, homeowners would have to count such debt reduction as money they earned. Whether Congress will act by the end of the year remains to be seen. The fate of tax break is largely bound up in the negotiations over the fiscal cliff. Though Democrats and some Republicans have called for the extension, the debt forgiveness measure would probably come as part of a broader package of tax-law changes.
FedEx plans to raise shipping rates
MEMPHIS FedEx Corp. says that it is raising its shipping rates for ground and home delivery services in January by an average of 4.9 percent. The shipping company said Friday that the new rates will take effect on Jan. 7. Its SmartPost rates also will go up. FedEx, which is based in Memphis, Tenn., announced earlier this year that it would increase its shipping rates for FedEx Express by an average of 3.9 percent for U.S. domestic, export and import services. Those hikes also take effect on Jan. 7. FedEx Freight raised its rates 6.9 percent in July.
Bangladeshi workers protest outside factory
DHAKA, Bangladesh Hundreds of garment workers protested Friday outside a Bangladeshi factory where 112 people were killed by a fire, demanding compensation for their lost salaries. About 300 workers chanted “Want Justice” and “Want Compensation” in front of the closed Tazreen Fashions Ltd. factory in a Dhaka suburb. The factory was making clothes for Wal-Mart, Sears, Disney and other major global retailers, though the companies said they did not know there clothes were being made there.
The Associated Press and Bloomberg contributed.