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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.

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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. 

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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

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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. 

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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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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. 

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Demand for hand sanitizer has gone through the roof since the first cases of swine flu broke out earlier this year, and some makers of the germ-fighting gels are scrambling to keep up.

Market research firm Panjiva recently estimated that 3 million kilograms of hand sanitizer were shipped in the third quarter, compared with 1 million kilograms in the same quarter last year.

Josh Green, chief executive of Panjiva, said concern about the H1N1 virus, also known as the swine flu, is the "most likely explanation" for the surge in volume.

And demand is only expected to rise given the outlook for an exceptionally bad flu season.

In response, the companies that make and distribute Purell, the most popular name-brand hand sanitizer, are ramping up production and urging customers to not hoard the product.

Heavy demand

Johnson & Johnson (JNJ, Fortune 500), which makes Purell and distributes it to retailers, does not provide figures on sales or shipments of items such as hand sanitizer. But the company said demand for Purell has been "heavy" since the first cases of swine flu broke.

"Due to the influenza A (H1N1) virus outbreak this past spring and resurgence this fall, Johnson & Johnson Consumer Companies Inc. has experienced heavy demand on supplies of Purell," said J&J spokesman Marc Boston in a statement.

The company is working to increase production for the remainder of the year and the beginning of 2010, but Boston acknowledged that supplies may be limited in some areas.

"Because of this increase in demand, consumers may currently find limited supplies of Purell Instant Hand Sanitizer at certain retailers," he said.

Don’t stockpile

GOJO Industries, the company that invented Purell and distributes it in professional markets, described the increase in demand as "unprecedented."

The Akron, Ohio-based company said it has been running its plants "24/7" and has hired additional workers to help increase output.

"Even with increased manufacturing capacity, there is a limit to how much we can produce in a short period of time," Mark Lerner, GOJO’s chief operating officer, said in a prepared statement.

GOJO said it will provide U.S. distributors with more than their normal supply of Purell, but warned that it may not ship the full quantity ordered.

Lerner said the backlog is temporary and that GOJO expects to increase overall production "significantly" through 2010. "There is absolutely no need to stockpile product," Lerner said. "In fact, stockpiling could cause an actual shortage which, in turn, could threaten public health."

Nearly 400,000 people worldwide have contracted laboratory-confirmed cases of swine flu and more than 4,700 people have died from the illness since it was first identified in Mexico and the United States in April, the World Health Organization (WHO) said earlier this month.

Many countries have stopped counting individual cases, particularly of milder illness, according to the WHO. That means the total case count could be significantly lower than the number of swine flu cases that have actually occurred. 

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The Obama administration will soon order the nation’s biggest bailed-out companies to drastically cut the pay packages of 175 top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House’s pay czar in June, will demand that each of the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

For the past two months, Feinberg has been reviewing pay plans at Citigroup (C, Fortune 500), AIG (AIG, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, Chrysler, GMAC and Chrysler Financial in an effort to put these firms in a position to pay back bailout money as soon as possible.

Under the plan, which is expected to be officially released by the Treasury Department next week, annual salaries for executives at those seven firms are expected to fall 90%, on average, the official said.

Another source in the Treasury Department told CNN that Feinberg is "trying to strike the balance" between protecting taxpayers and allowing companies to have the ability to "grow their way out of TARP."

Some compensation experts have worried that the firms that have received the most bailout funds could wind up losing top talent to companies that have already paid back the government and are not subject to Feinberg’s pay restrictions, such as JPMorgan Chase and Goldman Sachs.

According to other reports, the plan will come down particularly harsh on embattled insurer AIG. Within AIG’s controversial Financial Products division, the unit that led to the company’s near collapse, no employee is expected to receive more than $200,000 in total compensation, several reports indicated.

The Wall Street Journal also reported Feinberg is expected to demand a series of governance changes at the seven firms — including splitting the role of chief executive officer and chairman.

The Treasury Department had no comment. AIG, Bank of America, Chrysler Financial and GM also declined to comment. Chrysler, Citigroup and GMAC were not immediately available for comment.

But the moves by Feinberg should not come as a major surprise. Last week, outgoing Bank of America CEO Ken Lewis said he would not accept a salary or bonus for 2009, and the bank said the decision came after Feinberg "suggested" it to Lewis.

Lewis’ decision followed an uproar over indications that he is poised to walk away with a minimum of $53 million in pension benefits after he retires.

Lewis’ cash salary has been $1.5 million annually since he took over as CEO in 2001. But he actually made $63 million in pay and perks over the past three years, according to filings — including almost $10 million last year.

Other high-profile CEOs have also taken it upon themselves to act before the government did. Citigroup chief Vikram Pandit, for example, declared earlier this year that he would accept pay of just $1 a year and no bonus until his firm returned to profitability. Just a year ago, Pandit took home $10.8 million in salary, stock and options.

CNN’s Jessica Yellin, Gloria Borger, Miguel Susana, CNNMoney.com’s Jennifer Liberto and Fortune’s Colin Barr contributed to this report.  

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A year after the government applied a tourniquet to the banking industry, the bleeding has slowed — but it hasn’t stopped.

The six biggest U.S. banks will tell investors in coming weeks how they did in the third quarter. Analysts expect four of the six to post profits, and the best-run banks — Goldman Sachs (GS, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) — are likely to more than double last year’s bottom line.

But Wall Street expects profits at both Wells Fargo (WFC, Fortune 500) and Morgan Stanley (MS, Fortune 500) to fall from a year ago. And the biggest beneficiaries of Washington’s too-big-to-fail mindset, Citi (C, Fortune 500) and Bank of America (BAC, Fortune 500), may lose money.

Bank analysts say a severe economic downturn preceded by a long credit boom means stubbornly high losses on home loans, credit cards and commercial properties will be working their way through the system for a while — which translates to uneven profit reports at big banks and, in some cases, failures at smaller ones.

"We’re through the worst of the storm, but we’re not out of the other side of it," said William Schwartz, senior vice president for the U.S. financial institutions group at ratings agency DBRS.

The big banks have been sheltered over the past year by lavish government assistance, ranging from Treasury loans to expanded deposit insurance to federally backed loan guarantees. Some of those props are due to start falling. The Federal Deposit Insurance Corp.’s loan guarantee program, for instance, is due to expire Oct. 31.

In the meantime, bank stocks have rallied off their winter lows — driven in large part by gains that were concentrated in nonbanking businesses such as fixed-income trading and investment banking.

The major bank stocks all posted massive gains in the third quarter, led by a 57% jump at Citi, whose shares continue to fetch less than $5 each, and 30%-plus rises at BofA, Goldman Sachs and JPMorgan Chase.

"The big firms have more revenue streams, so they’re probably a little better off right now than the regionals," said Schwartz.

JPMorgan Chase, which has emerged as a rare beneficiary of the financial crisis via its low-cost, government-assisted acquisitions of Bear Stearns and Washington Mutual, is due to post third-quarter numbers Wednesday morning. Analysts polled by Thomson Financial expect its earnings to rise to 49 cents a share from 11 cents a year ago, as solid performances in fee-based businesses such as mortgage and investment banking offset rising costs in its big credit card book.

Thursday morning will bring reports from another big winner over the past year, Goldman Sachs, and from Citigroup, which continues to struggle under the weight of big loan losses. Analysts expect Goldman to make $4.24 a share for the third quarter, up from $1.81 a year ago. Citi, meanwhile, is expected to lose 21 cents a share, compared with a 60-cent loss last year.

"Citi’s earnings remain under significant pressure near term along with the industry," analysts at JPMorgan wrote in a note to clients last week.

Closing out the week will be Bank of America, which is due to post third-quarter numbers Friday morning. Analysts expect the bank to lose 6 cents a share for the quarter, reversing the year-ago profit of 15 cents.

The numbers will come less than a month after the bank’s longtime CEO, Ken Lewis, quit under pressure from shareholders, as well as legislators who question his handling of BofA’s takeover of Merrill Lynch.

Two other banks dealing with management changes — the investment firm Morgan Stanley, whose CEO John Mack announced plans last month to retire, and West Coast lender Wells Fargo, whose Chairman Dick Kovacevich will step aside Jan. 1 — are expected to post results next week. Both firms are expected to make less money than they did in last year’s third quarter.  

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Soft drink maker Pepsico Inc said on Saturday that Michael White, vice chairman and PepsiCo International chief executive, would retire later this year after nearly 20 years with the company.

White will also leave his seat on the PepsiCo board of directors when he retires, which is the company’s practice.

The component businesses of PepsiCo International will be managed by Zein Abdalla, who becomes CEO of PepsiCo Europe, and Saad Abdul-Latif, who becomes CEO of PepsiCo Asia, Middle East, Africa. Both will report to PepsiCo CEO Indra Nooyi.

“Close to a year ago, Mike shared with me his interest in eventually moving on to ‘the next chapter’ of his life,” Nooyi said in a statement fast payday loan.

“It would be difficult to overstate Mike’s contribution to PepsiCo over two decades,” Nooyi said.

White joined the company in 1990 and has held several senior positions, including CFO of Frito-Lay North America. (Reporting by Kyle Peterson; Editing by Peter Cooney)

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