Auto sales, home prices improve
The U.S. economy is looking more resilient, thanks in part to encouraging signs for the two most-expensive purchases most Americans make: cars and homes.
Cheap loans and a bounty of fuel-efficient models enticed people to buy new vehicles at a brisk pace last month. And the nation enjoyed another year-over-year surge in home prices in August — a sign that the housing industry is making a sustained comeback.
Both trends reflect rising confidence in the economy.
Two surveys last week also reported improving consumer confidence.
Despite the brightening auto and housing industries, the broader American economy still is struggling. It grew at a meager 1.3 percent annual rate in the April-June quarter. Most economists foresee little strengthening the rest of the year.
Hiring remains too sluggish to reduce high unemployment, which is at 8.1 percent. The manufacturing sector is struggling to grow consistently. Workers’ pay is lagging inflation. A dismal European economy has cut demand for U.S. exports.
Feds support suit against JPMorgan
The federal government threw its support Tuesday behind a lawsuit against JPMorgan Chase accusing Bear Stearns, the investment bank JPMorgan bought in 2008, of engaging in massive fraud in deals involving billions in residential mortgage-backed securities.
At a news conference, acting Associate Attorney General Tony West credited a federal-state working group of law-enforcement agencies created by President Barack Obama in 2009 with assembling evidence in the lawsuit brought by the New York attorney general’s office.
The Obama administration has been under heavy political pressure to hold major Wall Street players accountable for the nation’s biggest financial collapse since the Great Depression. Bear Stearns was sold to JPMorgan Chase in 2008.
The lawsuit alleges that Bear Stearns led its investors to believe that the loans in its portfolio of residential mortgage-backed securities had been evaluated carefully and would be monitored. The suit alleges Bear Stearns failed to do either.
American: Seats improperly installed
American Airlines said that improperly installed clamps caused seats to pop loose on two planes during flights, and an inspection turned up four others with the same problem.
The airline said Tuesday that it inspected and fixed the seats on 36 of its Boeing 757 jets and planned to check 11 other planes.
In the past week, rows of seats have come loose on three separate flights, two of which made emergency landings. Federal officials are looking into the matter, which safety advocates consider to be serious.
David L. Campbell, the airline’s vice president of safety, said in an interview that the clamps might have been installed incorrectly during maintenance work by American crews and an outside contractor, Timco Aviation Services. He could not recall a similar problem with any other American planes.
From wire reports