WASHINGTON – Americans increased their spending at a solid pace for the second straight month in December even though their income was flat.
Consumer spending rose 0.4 percent in December, compared with November when spending had increased an even stronger 0.6 percent, the Commerce Department reported Friday. That was the best gain in five months.
Income, however, showed no gain at all in December after a 0.2 percent rise in November. Wages and salaries were basically flat that month, reflecting a sharp slowing in employment growth.
For all of 2013, income growth was 2.8 percent, the weakest performance since 2009 when income fell 2.8 percent as the country struggled with a deep recession.
Economists are hoping that stronger economic growth will promote stronger employment and income gains this year.
IBM senior managers giving up yearly bonus
ARMONK, N.Y. – IBM CEO Virginia Rometty and the rest of her senior management team are relinquishing their 2013 bonuses as penance for the technology company’s lackluster performance last year.
The decision disclosed in a Friday regulatory filing will result in a substantial pay cut for the affected executives, whose annual bonuses often exceed their salaries.
As CEO, Rometty will be the hardest hit. She received a $3.9 million bonus in 2012 and was eligible for a $4 million payout last year, although it’s unlikely she would have received that much because IBM’s financial results didn’t live up to expectations.
IBM’s revenue slipped 5 percent last year. The company’s earnings dipped by less than 1 percent, thanks to cost cutting.
Rometty still received a $1.5 million salary last year.
Bank of America settlement approved
ALBANY, N.Y. – A New York judge has approved the $8.5 billion Bank of America settlement over investor losses from mortgage-backed securities, concluding that trustee Bank of New York Mellon acted reasonably in most regards.
Critics of the settlement, who formerly included New York Attorney General Eric Schneiderman, argued that it represented only a fraction of the losses.
State Supreme Court Justice Barbara Kapner wrote in her ruling Friday that BNY Mellon “did not abuse its discretion” in entering the settlement agreement and “did not act in bad faith.”
According to court papers, the claims arose from “a massive collapse in value” of mortgage loans in New York trusts in 2007 and 2008.
FDA approves drug to treat sleep disorder
WASHINGTON – U.S. health regulators on Friday approved the first drug to treat a sleep disorder that mainly afflicts the blind.
The Food and Drug Administration cleared Vanda Pharmaceuticals’ Hetlioz capsules for patients who have problems sleeping because they can’t detect light. The condition, called non-24-hour disorder, is estimated to affect up to 100,000 Americans, most of whom are totally blind. These people can find their sleep patterns reversed – sleeping during the day and being awake at night.
Vanda said in a statement it would launch the drug in the second quarter.
The most common side effects of the drug include headache, nightmares, and respiratory and urinary tract infections. The drug labeling warns that Hetlioz causes drowsiness and can interfere with performing basic tasks and mental alertness.