- The Washington Times - Thursday, June 23, 2011

ECONOMY

Layoffs, housing data point to chronic problems

Sour reports Thursday on the number of people who sought unemployment benefits and buyers of new homes illustrate what Federal Reserve Chairman Ben S. Bernanke acknowledged Wednesday: Many factors weighing on the economy are proving to be more chronic than first imagined.

The poor housing and employment data contributed to a bleak day of economic news. The European Central Bank chief renewed warnings about Europe’s debt crisis and stocks tumbled. And 28 countries agreed to boost global oil supplies. Ultimately, that will provide some relief to consumers who have been paying higher gas prices since January. But it also forced energy stocks lower, contributing to the sell-off on Wall Street.

Applications for unemployment benefits rose last week by the most in a month, a sign that layoffs remain elevated. Applications jumped by 9,000 to a seasonally adjusted 429,000 last week, the Labor Department said Thursday. It was the second increase in three weeks and the 11th straight week that applications have been above 400,000.

GREECE

Banks, low-earners pressed in debt crisis

ATHENSGreece’s beleaguered government said Thursday it will start taxing minimum-wage earners and encourage local banks to help the state delay debt payments for bonds maturing as late as 2015.

Evangelos Venizelos, the country’s new finance minister, also said the government is encouraging a deferment scheme under the so-called “Vienna initiative,” signing up private investors to voluntarily renew their debt holdings as they expire.

The next big challenge for Greece is to have parliament approve a new round of austerity measures before getting the vital next batch of loans, worth 12 billion euros, out of its 110 billion euro rescue fund from eurozone countries and the International Monetary Fund.

IRS

Gas mileage deduction raised

The Internal Revenue Service is increasing the tax deduction motorists can take for using private vehicles for business, a rare midyear move sparked by high gas prices.

Starting July 1, motorists who use their personal vehicles for business will be able to deduct 55½ cents a mile from their taxable income, the agency announced Thursday. That’s an increase of 4½ cents from the first six months of the year.

The rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. Workers who receive the reimbursement don’t have to report it as income, as long as the payments don’t exceed the IRS benchmark.

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