The news at a glance

Economy: An unanticipated slowdown

The U.S. economy “unexpectedly reversed course in the final quarter of 2012,” said Nelson D. Schwartz in The New York Times. The Commerce Department said the nation’s gross domestic product declined at an annualized rate of 0.1 percent from September to December, a steep drop from the 3.1 percent growth rate reported earlier in the year. It was the economy’s worst quarterly performance since the second quarter of 2009. Economists said the surprise contraction was brought on by weaker exports, reduced military spending, and a “steep slowdown in the buildup of inventories” by businesses unsure of how much to invest during the country’s still uncertain recovery.

Those factors “were too much for solid consumer spending to overcome,” said Eric Morath, Sarah Portlock,and Kathleen Madiganin The Wall Street Journal. The economy’s brisker pace during the summer months was likely slowed by the long standoff in Washington over the fiscal cliff crisis. Economists have said payroll-tax increases and budget worries could further hamper the economy this year. Still, the report showed several heartening trends. Personal consumption, the housing market, and business investment all grew in the fourth quarter, while GDP advanced 2.2 percent for all of 2012—“an improvement compared with 1.8 percent growth in 2011.”

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Tech: BlackBerry tries a makeover

Research in Motion this week made a big bid to “refresh its tarnished image,” said Euan Rocha in Reuters.com. The Canadian smartphone pioneer renamed itself BlackBerry and rolled out two BlackBerry 10 devices—one with a stylish new touch screen and another with a physical keyboard—that it hopes will lure back corporate users. The company’s lineup “has competed poorly in recent years” against Apple and Samsung, whose smartphones have devoured BlackBerry’s market share. The company has splurged for a Super Bowl ad to promote its new products and corporate name.

Airlines: Boeing told of faulty batteries

Comments from Japan’s two largest airlines suggest that Boeing knew that battery issues had been plaguing its 787 Dreamliner for months, said Alan Levin and Chris Cooper in Businessweek.com. All Nippon Airways said it swapped out 10 batteries on its 787s last year, but did not inform American authorities. Japan Airlines, the country’s second-largest carrier, said it also replaced several 787 batteries, which were manufactured by a Japanese subcontractor. Boeing posted record profits this week, but told investors that resolving the Dreamliner’s problems was its “first order of business for 2013.”

Markets: Stocks trend toward new highs

The stock market is nearing all-time highs and still climbing, said John Waggoner in USA Today. The Standard & Poor’s 500 index closed above 1,500 last week for the first time since December 2007, while the Dow Jones industrial average is just 2 percent shy of its record level. Better-than-expected corporate earnings, cheaper stock prices, and extra cash on companies’ books have all helped drive the markets and boost investor confidence. “I think this is rational exuberance,” said Robert Turner, chief investment officer at Turner Investments.

Oil: Judge okays BP settlement

BP will shell out $4 billion in criminal fines for its role in the 2010 Gulf of Mexico oil spill, said Terry Frieden in CNN.com. A federal judge last week approved the plea agreement, which amounts to the largest criminal penalty in U.S. history. Under the terms of the agreement, BP will plead guilty to 14 criminal counts, including felony manslaughter charges for the deaths of 11 workers who were on the Deepwater Horizondrilling rig when it exploded.