Lenon’s main business news

August 7, 2010

Jobless claims jump to 3-month high

Filed under: business — Tags: , — Moon @ 3:45 am

The number of Americans filing for initial unemployment insurance jumped last week to the highest level in 3 months, the government said Thursday.

There were 479,000 initial jobless claims filed in the week ended July 31, up 19,000 from a upwardly revised 460,000 the previous week, the Labor Department said. The weekly figure is the highest since the week ended April 10, when 480,000 initial claims were filed.

The number of claims was higher than the 455,000 claims expected in a consensus estimate of economists surveyed by Briefing.com.

The 4-week moving average of initial claims, which is calculated to smooth out volatility, was 458,500, up 5,250 from the previous week’s upwardly revised average of 453,250.

"The job market is pretty muted," said Doug Roberts, chief investment strategist at Channel Capital Research. "It’s not getting much worse, but it’s not getting any better either."

Roberts said the monthly employment report will provide a clearer picture of trends in the labor market, but it’s clear that a long road still lies ahead of a jobs recovery.

"The government has been driving the improvements we’ve seen in unemployment so far, so as soon as it stops spending, we’ll be back to where we were before," Roberts said.

As census jobs and the stimulus continue to fade, Roberts said jobless claims will increase.

Continuing claims: The government said 4,537,000 people filed continuing claims in the week ended July 24, the most recent data available. That’s down 34,000 from the preceding week’s upwardly revised 4,571,000 claims.

Economists surveyed by Briefing.com were looking for 4,530,000 ongoing claims.

The 4-week moving average for ongoing claims climbed by 25,750 to 4,575,500 from the preceding week’s upwardly revised 4,549,750.

State by state: Jobless claims in 19 states declined by more than 1,000 in the week ended July 24, the most recent state data available. Claims in California dropped the most, by 19,107, which the state attributed to fewer layoffs in the service industries.  

Source

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July 20, 2010

No pay cut for California workers - for now

Filed under: business — Tags: , , — Moon @ 8:36 pm

A judge on Friday ruled against California Gov. Arnold Schwarzenegger’s request to force the state controller to cut 200,000 state employees’ pay to minimum wage temporarily.

The ruling was a boost for State Controller John Chiang, who for weeks has refused to carry out the cuts.

But the fight isn’t over yet. Sacramento County Superior Court Judge Patrick Marlette scheduled another court session for July 26, a spokeswoman for Chiang’s office said.

Schwarzenegger moved in July to cut 200,000 state workers’ wages to $7.25 an hour starting Aug. 1. But Chiang said he would not make the cuts and would wait until he completed an appeal of another court’s ruling on a similar pay cut order from 2008.

Schwarzenegger’s office sued Chiang last week in an effort to force him to make the cuts, but Chiang promptly filed a cross-complaint alleging that the order violates federal and state law.

The judge said he ruled for Chiang "because the issue of cutting workers’ pay needed more consideration and the controller shouldn’t be forced to make the cuts immediately," according to Chiang’s spokeswoman.

In his refusals, Chiang has also said the payroll computers aren’t equipped to make the cuts, but the court declined to rule on that subject. Chiang’s spokeswoman said Marlette wants that issue to be resolved before the end of August.

"We are confident we will continue to win on the merits of this case, as we already have done twice," Schwarzenegger’s spokeswoman said in a statement. "We hope the legislature passes a budget by then so we don’t have to pay our employees minimum wage."

Marlette’s office did not have comment late Friday.

California budget stalemate: The move to cut paychecks stems from a larger fight over how to close a $19.1 billion budget shortfall. California’s fiscal year began July 1, and Schwarzenegger and the legislature have yet to agree on a budget.

State workers have gotten caught in the crossfire. Schwarzenegger’s proposed salary reductions would cut across all job types and pay scales, though affected workers would receive back pay when the budget is passed.

Republicans want severe cuts to state social services such as welfare and Medicare, instead of hiking taxes. But Democrats oppose the program cuts and instead want tax increases on industries such as oil production. 

Source

April 16, 2010

Earth City-based project makes pig manure hit the road — as asphalt

Filed under: business — Tags: , , — Moon @ 7:48 pm

EUREKA — For now and into the foreseeable future, a portion of the road leading to Six Flags St. Louis will be paved with a lot more than good intentions.

It will be covered as well with serendipity, ingenuity, creative persistence and … recycled swine manure.

All that ingenuity has gone into a project believed to have created the first asphalt ever produced from the stuff. And one thing’s for sure:

The witnesses lining the bright stretch of North Outer Drive along Interstate 44 — particularly those with noses and an abiding interest in sustainable technology — won’t soon forget the moment the red dump truck deposited a 15-ton load of the designer asphalt into a road paver late Wednesday morning.

"Whew!" gasped a worker with Pace Construction Co., the St. Louis County road contractor that joined forces with Innoventor, the Earth City-based engineering and design firm that perfected the process of converting the animal waste into a bio-oil used in asphalt binder.

To others, the air swelled with the sweet smell of potential for new manufacturing opportunities, jobs and, possibly, profits. How big is that potential? Nobody knows yet.

"If this works out, it’s a win-win situation for everyone," said Karlton Krause, a hog producer from northern Iowa. "For farmers, it produces revenue. And at the same time, it helps clean the environment. We’re taking a waste product and finding a value-added purpose for it."

The road leading to Six Flags, such as it, began 10 years ago when neighbors started raising a stink over the odors at the hog farm operated by Kent Schien’s in-laws in Barry, Ill., east of Hannibal, Mo., about 125 miles from St. Louis.

Schien, Innoventor’s founder and chief executive, is among the legions of former McDonnell Douglas engineers who left the aerospace giant to start their own companies.

A native of Barry himself, Schien understood the pitfalls of alienating the folks next door in a small town where, as likely as not, the neighbors were also cousins, aunts and uncles.

He turned the problem over to his engineers, who soon developed a technique to "scrub" animal odor as it moved outdoors through fans installed on the outer walls of swine sheds.

Schien was justifiably proud of the company’s accomplishment — until he ran into an acquaintance, also a prominent hog producer. The acquaintance praised the invention for removing the stink. But, he pointed out, an air scrubber is not a revenue generator.

What farmers really needed, he suggested, was an invention capable of turning swine waste — up to 8 pounds of it a day per animal — into a money-maker.

Seeking an answer, Schien returned to his alma mater, the University of Illinois, where an agricultural engineering professor named Yuanhui Zhang was developing a process to transform pig manure into bio-oil.

About three years ago, Schien wedded Zhang’s research with the Innoventor team and put Rick Lux, an engineer with a background in biofuels, in charge of the project.

Lux tackled the mission on two fronts: the former Earth City warehouse space that Innoventor converted into an office, adorned with the names of inventors such as the Wright Brothers and Louis Pasteur. And Rick Rehmeier’s hog farm, outside Augusta, which became an off-site laboratory where the team discovered situations and problems they never expected to encounter.

"I don’t think I ever had a class (in engineering school) that ever covered that," said engineer Gary Winkler, referring to the hog manure pit now integrated into his professional life on line pay day loans.

The objective, Lux understood, was to turn time on its head by compressing the process that created crude oil from decomposed critters that died ages ago.

To reach that goal, the team drew on chemistry, engineering and innate common sense in developing a multiple-stage system that ultimately moved the manure into a reactor, which applies heat and pressure to the waste material.

"Instead of taking 10,000 years, they can (produce bio-oil) in about an hour," said Michael Formica, chief environmental counsel with the National Pork Producers Council.

As Lux and the engineers grappled with the biggest obstacle standing between Innoventor and success — pig hair and dander that constantly "chewed up" grinders and pumps — it seemed they might not be able to improve on Mother Nature’s timeline.

By this winter, though, Innoventor was ready to move to the next phase.

The team got a big boost when tests conducted on the paving material received a passing grade as a "lower-grade asphalt binder" from John Wenzlick, a research engineer with the Missouri Department of Transportation.

And Wednesday morning came the biggest test of all.

The sun was still coming up when Lux pulled into the lot of an asphalt plant operated by Pace Construction in a limestone quarry about six miles from Six Flags, the bed of his Innovator pickup truck loaded with 20 gallons of the bio-oil.

Five hours later, a chute beneath a Pace silo dropped a batch of pig asphalt into the red dump truck operated by Mike Cain of Dittmer, Mo.

As Pace employees shoveled the asphalt into buckets for testing in an on-site lab, Cain asked a reporter to confirm the reason the load was drawing so much attention. He got the confirmation; it was exactly what he thought it was.

He sniffed the air. "Smells nasty," the driver continued. "But I live in the country; I’m used to it."

Within minutes, Cain was backing his truck up to the paver.

In the coming weeks and months, MoDOT and Innoventor intend to keep a close eye on the 500-foot stretch where history, of a kind, was made Wednesday morning. The state will monitor wear and tear on a road subjected to a lot of traffic in the seasons when the amusement park is open for business.

Lux and Innoventor see the earlier blessing by MoDOT as permission to move their work to a larger platform.

"We’ll keep going ahead," he said, as workers tamped down the still-fresh asphalt with rolling machines. "We’ve shown this stuff can be processed at the farm, processed at an asphalt plant and put down on a road."

Other parties will be keeping an eye on what Innoventor has wrought as well.

The U.S. Environmental Protection Agency has an obvious interest in what Glenn Curtis, the chief of wastewater and infrastructure management for the Kansas City field office, calls a "fairly unique concept."

And Formica, with the Pork Producers Council, believes it is important to ascertain whether the value of manure-generated bio-oil offsets the cost the electricity, conventional fuel and other expenses needed to produce the substance.

As for Schien, he is making plans to manufacture the prototype on Rehmeier’s farm for use at hog production facilities across the nation.

The plant, he says, will be located in the place where it all began: Barry, Ill.

Source

April 11, 2010

Maui Four Seasons loan transferred

Filed under: business — Tags: , , — Moon @ 5:33 am

A $250 million loan on the Four Seasons Resort Maui at Wailea was transferred Wednesday to a special servicer after owner MSD Capital LP, owned by billionaire Michael Dell, defaulted on the note, according to Fitch Ratings.

The special servicer, which refers to companies that specialize in dealing with loans in default, is CWCapital Asset Management LLC.

The note is part of a whole loan balance of $425 million that was split into two mortgages, according to the Wall Street Journal. The loan was 30-days delinquent as of March 12.

The loan was provided by Deutsche Bank in December 2006, when the property’s value was appraised at $600 million. The value is now estimated at around $190 million, according to Fitch.

New York-based MSD Capital, the firm that handles investments for Dell, bought the resort and its 380-room hotel on 15 oceanfront acres of Maui’s coastline for $280 million in June 2004.

Source

January 29, 2010

Spain Jobless Rises to 18.8%, Highest in Euro Region

Filed under: business — Tags: , , — Moon @ 11:45 pm

Spain’s unemployment rate, the highest in the euro region, rose more than economists expected in the fourth quarter, threatening to delay recovery from the worst recession in six decades.

The jobless rate rose to 18.8 percent from 17.9 percent in the previous quarter, the National Statistics Institute said today in an e-mailed statement. The active population fell as immigrants left the labor market. The rate had been expected to climb to 18.5 percent, according to a Bloomberg News survey of five economists.

Reeling from the collapse of a debt-fueled construction boom as well as the global crisis, Spain’s unemployment rate has more than doubled in two years and joblessness among young people has surged beyond 40 percent. The greatest job losses in the euro region are eroding support for the Socialist government of Prime Minister Jose Luis Rodriguez Zapatero, re-elected in 2008 on pledges of full employment, even after his stimulus programs put more than 400,000 people back to work.

“This is going to make the recovery more difficult,” said Estefania Ponte, an economist at Fortis Bank in Madrid. “The most important factor for private consumption is the labor market, and if there’s no improvement in the labor market, it’s very difficult for consumption to recover.”

Construction Workers

About half a million construction workers joined the jobless ranks in the two years to December as the decade-long building boom came to an end, Labor Ministry data show. Ford Motor Co. announced 600 job cuts last year in Spain, once the motor of job creation in the euro region, and olive-oil bottler SOS Corporacion Alimentaria SA also reported plans for layoffs.

The government’s 8 billion-euro ($11.2 billion) works program, which employed builders to widen sidewalks and install cycle routes, ended last month and is being replaced this year with a program half its size. Monthly jobless figures for January will be published on Feb. 2.

“It’s quite a risk,” said Giada Giani, an economist at Citigroup Global Markets in London, who expects unemployment to reach 20 percent this year. “With no pickup in employment, wages slowing and inflation picking up, the overall impact on real disposable incomes for households is likely to be felt more in 2010 than last year.”

People’s Party Gains

The opposition People’s Party extended its lead over the ruling Socialists and would win 43.6 percent of the vote if elections were held now, a poll published in El Mundo newspaper showed on Jan. 2. Unemployment is Spaniards’ main concern, according to the latest survey from the state-run Center for Sociological Research.

While the International Monetary Fund expects the 16-nation euro area, the U.S. and the U.K. to expand this year, it forecasts Spain will contract 0.6 percent in 2010. The budget deficit probably grew to 11.2 percent of economic output in 2009, according to a European Commission forecast, as job losses mounted and the government extended benefits for the long-term unemployed.

The Cabinet today plans to discuss spending cuts of as much as 50 billion euros by 2013, the deadline set by the commission to bring the shortfall within the EU’s 3 percent limit, said an official at the prime minister’s office who declined to be named in line with policy.

Source

December 23, 2009

Citadel Broadcasting files for bankruptcy

Filed under: business — Tags: , — Moon @ 7:57 pm

Citadel Broadcasting Co., the third-largest radio group in the United States, filed for Chapter 11 bankruptcy Sunday.

The company, which has stations in 25 states, listed liabilities of $2.5 billion on assets of $1.4 billion, according to court papers filed with the Southern District of New York.

Citadel has been saddled with debt for some time and it had been widely reported in recent months that the company could be headed toward bankruptcy.

More than 60% of the company’s secured lenders backed Citadel’s pre-negotiated bankruptcy, which will allow it to extinguish $1.4 billion of debt and convert its $2.1 billion secured credit facility into a new term loan.

Chief Executive Farid Suleman said in a statement that "business will continue as usual" and Citadel would work hard to emerge from bankruptcy "as quickly as possible."

The company said Sunday that it had reached a deal with its lenders to gain access to over $36 million of cash plus cash flow from operations to help it through the restructuring process.

According to Sunday’s filing, the three largest unsecured creditors were JPMorgan Chase (JPM, Fortune 500) (with an unspecified amount owed), Wilmington Trust Corp. (WL) (with a $49.2 million claim) and The Walt Disney Co. (DIS, Fortune 500) (with a claim of $11.2 million).

Citadel had reported a third-quarter loss of $21 million and a 14% drop in revenue for the three months ended Sept. 30. The company’s stock was delisted earlier in the year and last month Citadel warned, in a regulatory filing, that it expected sales would continue to decline through the end of the year.

The company comprises 165 FM stations and 58 AM stations. Programming includes syndicated radio properties like ABC News Radio, The Mark Levin Show and The Huckabee Report.

Citadel’s attorney was unavailable for immediate comment. 

Source

December 6, 2009

TSX tumbles as commodities punished

Filed under: business — Tags: , , — Moon @ 1:54 am

The Toronto stock market closed lower Friday as strength in the greenback punished commodity stocks and Royal Bank lost ground even as the bank met expectations in its latest earnings report.

The S&P/TSX composite index dropped 125.75 points to 11,510.8, weighed down by a sharp decline in the gold sector. The TSX finished up 46.39 points, or 0.4 per cent, on the week

The U.S. dollar posted gains as the U.S. Labor Department said 11,000 people lost their jobs last month, far below the 120,000 that had been expected. The jobless rate came in at 10 per cent, down from 10.2 per cent in October.

"This may be the point where people really start to feel good about the economy and the people who have been calling for the sky to fall will start changing their mind," said Paul Thornton of Investor Boot Camp Online.

In Canada, 79,100 jobs were created last month while the unemployment rate moved down one-tenth of a point to 8.5 per cent in November, according to Statistics Canada. Economists had been looking for a drop in employment of 43,000.

The rising greenback reversed early Canadian dollar gains, with the loonie down 0.28 of a U.S. cent to 94.53 cents (U.S.).

Shares of Royal Bank fell $1.50 (Canadian), or 2 payday loans with no fax.6 per cent, to $55.98 after it reported its fourth-quarter profit rose 10 per cent from a year ago to $1.2 billion. Overall, the financial services sector in Toronto was down 0.56 per cent.

The Dow Jones industrial average closed up a slight 22.75 points to 10,388.9 – for a gain of 78.98 points or 0.77 per cent this week – as the latest sign of economic strength raised worries about higher interest rates. The Nasdaq composite index climbed 21.21 points to 2,194.35, while the S&P 500 index rose 6.06 points to 1,105.98 as U.S. markets also suffered from lower commodity stocks.

The gold sector was a major weight on the TSX, down 5.5 per cent as the February bullion contract on the Nymex lost $48.80 (U.S.) from its most recent record close to $1,169.50 an ounce.

The TSX energy sector dropped 0.76 per cent as the December crude contract on the New York Mercantile Exchange fell 99 cents to $75.47 a barrel. The decline followed two days of losses resulting from a report Wednesday that showed a big build-up in crude inventories in the U.S. last week.

The Canadian Press

Source

November 17, 2009

Dollar slips as risk demand rises

Filed under: business — Tags: , — Moon @ 11:15 pm

The dollar slipped on Monday as traders took a lack of agreement on currencies among Asian and U.S. leaders as a cue to sell the greenback, even as speculation of a near-term yuan appreciation cooled.

The U.S. currency also came under selling pressure with European shares rising and gold hitting a fresh record high, suggesting an increase in risk appetite.

The United States and China failed to reach an agreement over currencies at a summit of the Asia Pacific Economic Cooperation (APEC) forum in Singapore over the weekend, resulting in the omission to a reference to "market-oriented exchange rates" from the communique.

Analysts said the APEC meeting offered little new direction on currencies, which traders took as a green light to keep the dollar’s ongoing downtrend intact on the view that U.S. interest rates will stay low as those in other countries eventually rise.

"There were no comments against the weak dollar (from APEC), and that’s giving the market free rein to sell the dollar," said Ante Praefcke, currency strategist at Commerzbank in London.

The disagreement between Washington and Beijing comes as U.S. President Barack Obama visits China this week. The yuan’s peg to the dollar keeps the Chinese currency weak against its U.S. counterpart, and any yuan appreciation is seen weakening the dollar.

The dollar was down roughly 0.5% to 74.990, near a 15-month trough hit last week.

The euro rose 0.4% to $1.4975, edging closer to the psychologically key $1.50 level. Market participants said the euro was supported by a 0 installment payday loans.7% rise in European shares in early trade.

The dollar slipped 0.3 % to ¥89.50.

Traders offered limited reaction to data showing Japan’s economy grew at the fastest pace in more than two years in the third quarter as stimulus lifted consumer spending and capital spending rose.

U.S. retail sales awaited

Trading ranges were small as the market watched comments from the International Monetary Fund on Monday saying a stronger yuan was part of the reforms Beijing needed to boost domestic consumption.

Also on Monday, a Chinese Commerce Ministry official said the country should keep the currency stable as it was beneficial to a global recovery.

Traders were also looking at flow direction, watching for yen outflows from Japanese investment trusts launching on Monday and Tuesday, as well as looking for signs of yen repatriation from U.S. Treasury coupon flows which fell due on Nov. 15.

A final reading of euro zone inflation for October is due to be released later Monday, but with little in the way of economic data or events in the European session, analysts said the market would be watching U.S. retail sales due later in the day.

A Reuters poll showed expectations for sales to rise in October, reversing a fall the previous month, and analysts said a strong reading boost risk appetite, which may push the dollar lower. 

Source

November 6, 2009

Hyatt stock rises 12 percent in NYSE debut

Filed under: business — Tags: , , — Moon @ 11:20 am

Hyatt Hotels Corp shares climbed 12 percent in their debut on Thursday as investors bet the company’s strong balance sheet means it will be able to grow at a rapid pace when the industry eventually rebounds.

Hyatt’s initial public offering comes as lodging stocks are on the mend. The Dow Jones U.S. Hotels index has shot up 55 percent this year on signs of an economic recovery.

The company sold 38 Class-A million shares at $25 apiece on Wednesday, to raise $950 million for the controlling Pritzker family. The company’s market capitalization after its first day of trading was $1.06 billion.

In trading on Thursday, shares rose as high as $28.25 and closed at $28 on the New York Stock Exchange.

Hyatt’s IPO is the second-largest on the NYSE this year after Banco Santander. Ancestry.com Inc also went public on the Nasdaq and its shares closed more than 5 percent higher to $14.20.

“Finally we had two deals that were a lot better quality than what we had been seeing in the last several weeks,” said Scott Sweet, a senior managing partner at advisory firm IPO Boutique. “It gives quality deals (next week) momentum.”

Discount retailer Dollar General and youth clothing chain rue21 Inc are slated to go public next week.

Little more than half of Hyatt’s shares exchanged hands Thursday, Sweet said. Typically 80 percent of shares or more trade in a stock’s debut online payday advance.

“Goldman did a good job locking these shares up and putting it in good hands that are likely to hold,” Sweet said. “That would account for the reasoning behind why this stock has continued to advance from $27 to $28.”

The company’s underwriters, led by Goldman Sachs Group Inc, will have one month to exercise an option to buy more shares. If so, that fresh capital will go straight to Hyatt.

FIVE TIMES THE CASH

Hyatt’s debut may also be good news for privately-held Hilton Worldwide, should owner Blackstone Group decide to try and exit it in the future. Blackstone is in talks over reducing debt at the chain, according to a source.

Sluggish corporate demand has forced hotels to lower room rates and next year is unlikely to bring much reprieve. Both Marriott International Inc and Starwood Hotels & Resorts, have forecast a lackluster 2010.

But analysts expect the industry to rebound sharply in the subsequent three years as the supply of new rooms slows and business demand recovers.

“People are assuming that there’s going to be significant recovery in the outer years,” said John Arabia, a lodging analyst with Green Street Advisors. “That’s the only way we can make sense of these share prices.” 

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October 29, 2009

Consumers: Current economy at 26-year low

Filed under: business — Tags: , , — Moon @ 2:45 am

A key measure of consumer confidence continued to slip in October, with consumers’ gauge of the current economic situation falling to a 26-year low, a research group said Tuesday.

The Conference Board, the New York-based research group said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September.

Economists were expecting the index to increase to 53.5, according to a Briefing.com consensus survey. The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation’s economic activity.

The index component that evaluates consumers’ judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.

"Consumers’ assessment of the present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment," said Lynn Franco, director of the Conference Board Consumer Research Center.

Employers continued to cut jobs from their payrolls in September, as the unemployment rate rose to 9.8% and hit another 26-year high in September, according to a report from the Labor Department earlier this month.

The percentage of those claiming that jobs are currently hard to get reached new high of 49.6%, while the number of consumers claiming that jobs are "plentiful" hit a new low at 3.4%.

"It is surprising how uniformly weak this report was," said Mark Vitner, an economist at Wells Fargo. "The expectations had gotten ahead of themselves. Everyone thought that economy would follow the rebound in the stock market. But now that the rebound has leveled off, folks doubt whether conditions will get better savings account payday advance."

Recovery isn’t near for consumers. The expectation index, which measures consumers’ outlook over the next few months, declined to 65.7 from 73.7 last month. Similarly, the percentage of those expecting the job market to improve edged lower to 16.3% from 18%.

The number of consumers expecting their incomes to increase also fell to 10.3% from 11.2%, suggesting that shoppers will likely limit their holiday spending, said Franco. The average amount consumers spend on holiday-related shopping will drop by $22.27 to $682.74, said the National Retail Federation in a report last week.

The outlook for business conditions also grew more pessimistic in October, with the percentage of consumers expecting conditions to worsen climbing to 18.3% from 14.6%.

The overall index remains at historically low levels. A reading above 90 indicates the economy is solid, and 100 or above signals strong growth.

Vitner expects the main index to hover around 50 for the next several months.

"We need to see a real improvement in employment conditions. Layoffs need to stop rising and hiring needs to pick up," he said. "The soonest that we think that consumers’ confidence will see a sustained rise would be late spring of next year."

Economists predict GDP, the broadest measure of economic activity, rose at an annual rate of 3.2% in the third quarter of this year after a 0.7% drop in the second quarter. The government will release its advance third-quarter GDP report Thursday. 

Source

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