Finance and Economic

The government sent out an additional 2.4 million stimulus payments, totaling $1.5 billion, since July 11, according to a statement from the Treasury department.

A total of $93.4 billion has been sent out to 114.8 million tax filers since the program was started in the spring, and the government is still working to distribute more checks.

By July 11, the government had mailed out 112 million stimulus payments totaling $92 billion. Those checks went to people whose 2007 tax returns were processed by April 15.

The government was still working to distribute stimulus checks to tax filers who obtained an extension on their 2007 tax return and to those Americans who qualify for a stimulus check, but may not normally file a tax return, according to Nancy Mathis, spokesperson for the IRS.

Roughly 10 million Americans requested an extension to file their tax return. The government is working to contact another 5.2 million - primarily retirees and veterans - to determine if they qualify, said Mathis.

The government said that tax filers who obtained an extension for the 2007 tax year must file by Oct. 15 in order to get a stimulus payment in 2008 free credit report online. If filers fail to get their tax return in by Oct. 15, there will still be an opportunity in 2009 to get the stimulus payment.

The stimulus program was enacted earlier this year in the wake of a slowdown tied to the credit crisis and the end of the housing boom.

The program did juice the economy. On Thursday, the Commerce Department said GDP, the broadest measure of the nation’s economic activity, stood at an annual rate of 3.3% in the second quarter, adjusted for inflation. This reading was revised higher from an initial estimate of 1.9% growth.

To qualify for a stimulus payment, individuals and households must file a 2007 income tax return. Single taxpayers with adjusted gross income of less than $75,000 last year will get checks of as much as $600. Joint filers with adjusted gross income of less than $150,000 were eligible for a rebate of up to $1,200.

In addition, parents will also receive $300 per child under 17; there is no cap on the number of qualifying children eligible. 

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An index of manufacturing in the U.S. fell in August for the first time in three months as companies slowed production and cut payrolls in the face of weakening consumer spending.

The Institute for Supply Management's factory index fell to 49.9 last month from 50.0 the prior month, the Tempe, Arizona- based group reported today. The ISM gauge has hovered near 50, the dividing line between expansion and contraction, for the past year.

Manufacturers are receiving fewer orders as tumbling home prices and expensive gasoline weigh on consumer demand. Surging exports are keeping factories from stumbling as the broader economy slows.

“Manufacturing has been rather flat,'' said Norbert Ore, chairman of the ISM survey, in a conference call from Atlanta. “It's a consistent story of slow contraction that's been going on for quite some time.''

The ISM index was projected to remain unchanged at 50, according to the median of 72 economists' forecasts in a Bloomberg News survey. Estimates ranged from 48.5 to 52.

The purchasing managers' gauge of new orders for factories increased to 48.3 from 45 the prior month, when it reached its lowest level since October 2001. The production measure dropped to 52.1 from 52.9.

Export Orders Jump

Orders from overseas have helped some companies withstand slower U.S. sales. The group's export gauge jumped to 57 from 54 the prior month.

The employment index dropped to 49.7 from 51.9 in July, further signs of weakness in factory employment. Ford Motor Co., the second-largest U.S. automaker, last month said it would lay off 300 workers at a Michigan engine factory as demand dwindles for vehicles equipped with V-8 engines because of gasoline prices.

The purchasing managers' index of prices paid dropped to 77 from 88.5.

A government report today showed construction spending in the U.S. fell more than economists forecast in July as work slowed on homes, power plants and factories, a government report showed payday loan.

Construction Spending Declines

The 0.6 percent decrease followed a revised 0.3 percent gain that initially was reported as a 0.4 percent drop, the Commerce Department said today in Washington. Private residential projects declined 2.3 percent in July to the lowest level since March 2001, the start of the country's last official recession.

The economy will grow at an average 0.7 percent pace in the second half of the year, economists surveyed by Bloomberg News forecast in the first week of August. Last week, the government reported the economy grew at a better-than-forecast 3.3 percent annual rate in the second quarter, following 0.9 percent in the first three months of the year.

The smallest trade deficit in eight years was the biggest contributor to growth last quarter. The smaller gap added 3.1 percentage points to growth, the most since 1980. That is likely to diminish as overseas economies slow and the dollar strengthens.

Manufacturers have also turned cautious as consumer spending weakens with the fading effects of tax rebate checks. Tumbling house prices and gasoline that topped $4 a gallon two months ago are also holding back consumer demand.

The auto industry is at the forefront of the manufacturing slump. Sales of cars and light trucks in July slid to a 12.5 million annual rate, the lowest level since 1993, according to industry figures.

General Motors Corp. Chief Executive Officer Rick Wagoner said Aug. 16 he's not yet seeing signs of a recovery in the U.S. economy or in vehicle sales.

The sluggish economy helped push GM, the world's largest automaker, to a $15.5 billion loss in the second quarter. “It still feels to me like we're in it,'' Wagoner said of the economic slowdown.

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Gasoline prices rose for the first time in more than a month, according to a nationwide survey of gas station credit card swipes Friday.

The average price of regular unleaded gasoline rose nine-tenths of a cent to $3.669 a gallon from $3.66 a day earlier, according to motorist group AAA and the Oil Price Information Service.

The price increase is the first in more than 40 days since falling from a record high of $4.114 a gallon set July 17.

Gas prices had been following an 18% decline in the price of crude oil - the main ingredient of gas.

Overall, gas prices have fallen off their highs in recent weeks 24 hour payday advances. But prices at the pump are still 33% above the same time last year, when a gallon of gas cost $2.769. 

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Rising corporate debt delinquencies and the first sovereign credit default in two years are kindling investor concerns that more emerging market borrowers could fail to repay their debt.

As the global credit crunch trundles past its first anniversary, some firms and governments are faltering on rising refinancing costs and heightened investor risk aversion.

Seychelles failed to service a privately placed 55 million euro note last month and now teeters on a default of its $230 million global bond due this October.

The tiny island-nation’s debt woes have emerged as sovereign default risk premiums for Argentina, Ecuador and Pakistan soar.

“With the deteriorating global growth environment, you have to believe some countries may get into trouble,” Angus Halkett, Deutsche Bank emerging markets strategist.

The level of distressed emerging sovereign debt — defined as bonds trading at spreads over U.S bad credit payday loans. Treasuries of above 1,000 basis points — remains relatively low.

By mid-August, it amounted to $3.3 billion or 2.1 percent of outstanding sovereign bonds versus 1.6 percent in June 2007 before the onset of the liquidity crunch.

Investors say sovereign debt default risks remain low. 

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