- - Wednesday, January 11, 2012

FEDERAL RESERVE

Fed survey: Economy ended 2011 with strength

The final weeks of 2011 were the economy’s strongest since it appeared to be slipping toward recession in late spring.

Consumers spent more freely, factories made more goods, Americans stepped up travel and the auto industry enjoyed its best stretch of the year.

That’s the bright picture the Federal Reserve sketched in a survey released Wednesday. It said all but one of its 12 banking districts experienced some growth from late November through the end of the year.

The Fed noted that some sectors of the economy, notably housing, remain weak.

But overall, the message was encouraging. It comes just six months after the economy nearly stalled under the weight of high food and gas prices and supply disruptions out of Japan that slowed U.S. manufacturing.

The economy and the job market have both picked up since then. And December may end up being the strongest month of last year, an optimistic sign for the economy in 2012.

LAWSUIT

Pepsi Beverages pays $3.1M in racial bias case

Pepsi Beverages Co. has agreed to pay $3.1 million to settle federal charges of race discrimination for using criminal background checks to screen out job applicants, even if they weren’t convicted of a crime.

The Equal Employment Opportunity Commission, which is working to crack down on hiring policies that can hurt blacks and Hispanics, said Wednesday that the company’s policy of not hiring workers with arrest records disproportionately excluded more than 300 black applicants. The policy barred applicants with arrest records even if they had never been convicted of a crime, and denied employment to those arrested or convicted of minor offenses.

Using arrest and conviction records to deny employment can be illegal if it’s irrelevant for the job, according to the EEOC, which enforces the nation’s employment discrimination laws. The agency says such blanket policies can limit job opportunities for minorities with higher arrest and conviction rates than whites.

The company has since adopted a new criminal background policy and plans to make jobs available to victims of the old policy if they are still interested in jobs at Pepsi and are qualified for the openings.

AUTO

450,426 minivans, SUVs recalled by Ford

DEARBORN, MICH. | Ford says it’s recalling nearly half-a-million minivans and SUVs because of a pair of mechanical issues.

The Dearborn-based automaker is recalling 205,896 Freestar and Mercury Monterey minivans made during the 2004 and 2005 model years because their torque converter output shaft may fail and cause a loss of power.

Ford Motor Co. is also recalling 244,530 Escape SUVs made during the 2001 and 2002 model years because of a leaky brake fluid cap. If the fluid leaks, it could corrode electrical connectors and lead to a fire.

Ford says it will inform owners and replace the parts for free.

In the case of the Escape, Ford says there could be a parts delay. If so, owners should park their cars outside until the parts become available.

EUROPE

Monti backs French, German push for financial tax

BERLIN | Italian Prime Minister Mario Monti on Wednesday threw his support behind a new tax on financial transactions, backing a push by Germany and France, but said he would prefer to have it apply across the whole European Union.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have suggested it might suffice to enact such a tax among the 17-nation euro countries. Mr. Monti said he would rather have it applied across the full 27-nation EU, which would be more difficult because of U.K. opposition, but did not rule out a eurozone-only deal.

“We are open to supporting this initiative at the EU level,” Mr. Monti said at a news conference with Mrs. Merkel during his first visit to Berlin since taking over from Silvio Berlusconi in November.

While the Berlusconi government had rejected a new financial levy outright, Mr. Monti has said he was thought it was a good idea, particularly as a means of reducing the tax burden on families.

Mr. Sarkozy, who faces an election in April, has said France could even enact the tax unilaterally, but Germany has been more guarded.

Mrs. Merkel earlier this week, after meeting with Mr. Sarkozy in Berlin, said there’s no agreement yet on a so-called “Tobin tax” inside her own governing coalition. She called for European leaders to clarify their stance on the matter by March.

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