Tax changes will bring delays
Some taxpayers will be unable to file returns until mid-to-late February because of recent tax breaks approved by Congress in its lame-duck session, the IRS said Thursday.
Congress approved tax breaks for higher-education tuition, state and local sales taxes and out-of-pocket expenses for teachers in kindergarten through high school.
The IRS will need the extra time to reprogram its computers, but the delays will be minimal for taxpayers who itemize deductions and normally have to wait for financial documents.
"The majority of taxpayers will be able to fill out their tax returns and file them as they normally do," said IRS Commissioner Doug Shulman. "We will do everything we can to minimize the impact of recent tax-law changes on other taxpayers. The IRS will work through the holidays and into the New Year to get our systems reprogrammed and ensure taxpayers have a smooth tax season."
New-home sales rise 5.5 percent
Construction of new homes increased in November, but not enough to signal better times are ahead for the battered housing industry.
The Commerce Department says sales of new homes rose 5.5 percent last month to a seasonally adjusted annual rate of 290,000 units. That gain came after sales had fallen to the second-lowest level in 47 years in October.
Economists think it could take three years to get back to a more normal rate of 600,000 sales per year, given a continued glut of unsold homes and falling prices.
Traffic upgrade hit by high costs
A new high-altitude air-traffic-control system is taking longer than expected to bring online and at higher costs than planned, a U.S. government watchdog said on Thursday.
The Federal Aviation Administration has already spent $1.8 billion on the system aimed at providing faster routes and safely packing more planes into the high-altitude cruising phase of flight.
Transportation Department Inspector General Calvin Scovel said it could take between three and six years and up to $500 million more to finish the project managed by the FAA and its contractor, Lockheed Martin Corp.
Significant problems with software designed for managing flight data led to radar-related failures, misapplication of flight data, and other issues at a test site in Salt Lake City, according to Mr. Scovel's report.
Fewer people seek benefits
Economic reports Thursday suggest employers are laying off fewer workers, businesses are ordering more computers and appliances, and consumers are spending with more confidence.
The latest data confirm that the economy is improving, even though too few jobs are being created to lower the 9.8 percent unemployment rate.
The number of people seeking benefits edged down by 3,000 to a seasonally adjusted 420,000, the Labor Department said Thursday. That was the second drop in three weeks.
Weekly unemployment applications at around 425,000 signal modest job growth. But economists say applications would need to dip consistently to 375,000 or below to indicate a significant decline in unemployment. Weekly applications peaked during the recession at 651,000 in March 2009.
The four-week average, a less-volatile measure, rose slightly to 426,000. The average had fallen for six straight weeks to the lowest level in more than two years.
Agency releases Schorr files
Newly released FBI files depict the Nixon White House role in ordering an investigation into newsman Daniel Schorr, whose tough reporting got him on the president's infamous enemies list.
According to one section among hundreds of pages from Schorr's FBI file, the Nixon White House had the bureau conduct a background investigation in 1971. The White House said it was considering Schorr for a presidential appointment in the environmental area. A day later, the investigation was canceled by the White House.
The 93-year-old Schorr died in July after a six-decade career with CBS and other media. He thought the White House tried to intimidate him for his hard-hitting coverage of the Nixon administration.
Durable-goods orders up, except transport
Orders for long-lasting manufactured goods outside of the volatile transportation category rose by the largest amount in eight months in November. Factories saw demand increase for computers, appliances and heavy machinery.
Total orders for durable goods dropped 1.3 percent, the Commerce Department reported Thursday. That decline reflected sagging demand for aircraft and autos. But excluding transportation, orders rose 2.4 percent, the best showing since last March.
The widespread gain outside of transportation was an encouraging sign that factories will be ramping up production and hiring more workers in coming months.
Manufacturing has been one of the standout performers so far in this recovery. U.S. businesses are getting a boost from strong foreign demand. The rise in exports has been helped by a falling dollar, which makes U.S. goods cheaper in other countries.
Part of the strength in November came from a 2.6 percent rise in orders for nondefense capital goods excluding aircraft. This category is seen as a good proxy for business-investment plans. The big increase, the best gain since August, was a sign that businesses remain optimistic enough about the future to expand and modernize.
From wire dispatches and staff reports