Finance and Economic

Berkshire Hathaway Inc.’s energy business agreed to buy an 81-megawatt wind power project from Invenergy Wind LLC to expand production in Illinois.

The Bishop Hill II project, which is under construction, will use 50 General Electric Co. 1.62-megawatt turbines, according to a statement Friday from Berkshire’s MidAmerican Energy Holdings Co. in Omaha, Neb.

Berkshire, led by Warren Buffett, has been expanding renewable production at the energy unit, which also produces power with coal and natural gas. Mid-American has invested about $6 billion in wind generation and built or acquired more than 3,300 megawatts of the renewable energy source in states including Iowa, Wyoming, Washington and Oregon since 2004. Last month, the unit agreed to buy the $2 billion Topaz solar project in California from First Solar Inc payday loans.

Wind “meets current and future energy needs in an environmentally efficient and cost-effective manner,” said MidAmerican Chairman and Chief Executive Greg Abel.

The Bishop Hill II wind project is near the town of Galva, Ill., about 40 miles northwest of Peoria. The project is expected to be in commercial operation in the fourth quarter. A unit of Ameren Corp. in Illinois has agreed to buy electricity from the project under a 20-year power-purchase agreement. Terms of the Invenergy deal weren’t disclosed.

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The number of Americans filing for new jobless benefits dropped to a near four-year low last week, pointing to some building up of momentum in the labor market and the economy.

But the upbeat economic outlook was dampened by other data on Thursday showing a drop in new residential construction in December after hefty gains the prior month.

Initial claims for state unemployment benefits plunged 50,000 to a seasonally adjusted 352,000, the lowest level since April 2008, the Labor Department said.

That was the largest drop since September 2005 and took claims within spitting distance of the 350,000 mark that economists say would signal strong job growth.

The four-week moving average of claims, considered to be a better measure of labor market trends, dropped 3,500 to 379,000 last week. Analysts had expected initial claims to fall only to 385,000.

“We have to see if there are some seasonality issues involved here, but on the surface this number looks to be very positive and is pretty much consistent with other data we’ve seen recently that suggest improvement in underlying fundamentals in the U.S.,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

U.S. stock futures added to gains after the data, while Treasury debt prices widened losses.

Last week’s claims data covered the survey period for January nonfarm payrolls and claims dropped by 14,000 between the December and January survey periods.

Payrolls increased 200,000 in December, with the unemployment rate dropping to a near three-year low of 8.5 percent.

The claims data builds on a rash of stronger-than-expected economic signals and could further temper expectations among some economists that the Federal Reserve could launch a fresh round of bond buying to spur the recovery.

The Fed meets next week and no policy action is expected, outside from the possibility the central bank may signal it will keep overnight rates pressed to zero for longer than had previously been expected.

But with continued signs of stress in the housing market, the U.S. central bank will stay very much in the picture.

Housing starts fell 4.1 percent to a seasonally adjusted annual rate of 657,000 units in December, the Commerce Department said in a separate report guaranteed payday loans. Economists had expected housing starts to fall to a 680,000-unit rate.

Permits for future home construction slipped 0.1 percent to an annual rate of 679,000 units last month.

“Housing continues to bounce along at the bottom, suggesting that housing is not going to recover for several years to come. If we are relying on housing to drive this recovery it seems we will continue on this tepid path for a very long time,” said Lindsey Piegza, an economist at FTN Financial in New York.

INFLATION STILL MUTED

In another report, the Labor Department said its Consumer Price Index was unchanged in December for a second straight month.

Core CPI - excluding food and energy - inched up 0.1 percent after rising up 0.2 percent in November. That was in line with economists’ expectations.

Last month, overall inflation was held back by gasoline prices, which fell 2.0 percent - declining for a third straight month. Food prices rose a modest 0.2 percent after nudging up 0.1 percent in November.

Overall consumer prices rose 3.0 percent year-on-year after increasing 3.4 percent in November. That was in line with economists’ expectations.

Core consumer prices were last month dampened by new motor vehicle costs, which fell 0.2 percent - the third straight month of declines. Prices for used cars and trucks dropped 0.9 percent, falling a fourth month in a row.

Apparel prices slipped 0.1 percent, indicating discounting by retailers to attract holiday shoppers. Apparel prices rose 0.6 percent in November.

But housing costs held up, with owners’ equivalent rent rising 0.2 percent last month, reflecting the rising demand for rental apartments as the weak housing market pushes Americans away from home ownership. This category rose 0.1 percent in November.

In the 12 months to December, core CPI increased 2.2 percent after rising by the same margin in November. This measure has rebounded from a record low of 0.6 percent in October.

The Fed would like to see core inflation at 2 percent or a little under, although the price measure its follows most closely tends to run below the core CPI.

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GROOVY GROVE: One of St. Louis’ newest designated communities, the Grove, has started off the new year with several new business openings and planned openings of several more.

Urban Breath Yoga at 4237 Manchester Avenue opened on Jan. 1, which, yes, was intended to coincide with the need for a place for hangover recovery. Director Cathleen Williams said the studio was previously located in Dogtown, and that she made the new space the main location because it has a larger reception area and additional room for classes.

Located in the same block is No Coast Skateboards, which opened last year and bills itself as the only skater-owned and operated shop in St. Louis. Planning to open soon along the same stretch is the SoHo Restaurant and Lounge, which is described as an upscale restaurant with a rooftop deck for dining and lounging payday loan.

Sameem Afghan Restaurant, which had originally been on South Grand but closed for a couple of years, reopened last week at 4341 Manchester Avenue. Owner Fahime Mohammad also operates Al Waha Restaurant and Hookah Lounge at the old Sameem’s location. He also operates the Kabob Palace catering company in Manchester.

The addition of Afghan cuisine adds another dimension to the variety of international cuisine in the Grove, which also has restaurants offering Baja Mexican, Nepalese, soul food and Spanish tapas. Rounding it off will be O’Shay’s Irish Pub, which is planning a spring opening.

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An email landed in my inbox the other day from a startup called Timehop. In that email, there were pieces of my online life posted a year ago that day.

"Feeling inspired," I had tweeted January 6 , 2010. And then there was a picture I had posted of my best friend sitting at our favorite local restaurant in the East Village, the one that months later closed its doors after 20 years.

The next day, I received an email documenting a tweet I’d sent to another good friend leaving CNN. "We’re losing a good one," I tweeted him in farewell. Later that day, I posted a picture of my favorite building lit by afternoon sunlight in what has now become my old neighborhood.

Nostalgic? Just a bit.

That’s why Timehop is betting our social media history will become more important in a world where much of our lives are documented online.

Sign up and connect your Twitter, Foursquare, Facebook, and Instagram account and every morning a piece of your social media history will land in your inbox showing what you tweeted a year ago on that date, the pictures you posted, and the places you were.

"We’re producing enough content in digital form that we have a digital past," Timehop co-founder Jonathan Wegener said. "You’re following your own life story, which is pretty interesting." Wegener added that Timehop has tens of thousands of subscribers.

The interest in eventually looking back online is part of the reason Facebook overhauled its interface to create Timeline, a new version of the site that would also serve as a digital scrapbook and essentially, a story of our lives.

Until Facebook launched Timeline, it was tough to view your past actions on the service.

"We knew people wanted to dig back in," Meredith Chin, manager of product communications at Facebook said. "We wanted people to be able to see a return on investment they put in over the years and also look back and reflect things that were important to them."

Companies like Foursquare and Twitter don’t allow users an easy way of looking back at old tweets and check-ins, and Timehop hopes to position itself as the place to do that.

"Everyone’s focused on real time and there’s an incredibly powerful product to be built on the past," Wegener said. "That’s the product we’re building."

Code Year draws 200,000 aspiring programmers

Timehop was a spin off of 4SquareAnd7YearsAgo, which was originally built out of a Foursquare hackathon in February of last year. That service simply sent you reminders of your Foursquare check-ins in the past credit reports free.

Wegener was a part of the latest Techstars class, an influential incubator program in New York that matches entrepreneurs with mentors. He was working on another startup called FriendsList, which was meant to take on Craigslist.

Wegener said Timehop was always a side startup but people just latched on to it. So he stopped working on FriendsList and is now working on Timehop full time with two other coworkers. He wouldn’t comment on VC funding.

The service uses the public APIs from social networks like Twitter and Foursquare to collect that data and send it to users in a daily email.

"What’s the point?" you might ask. I thought the same, but in a world where our musings are tweeted and our favorite moments shared on our smartphones, it doesn’t hurt to have a little reminder of where we were a year ago.

Wegener says the gentle digital reminders from the past in a daily email are "emotionally powerful," citing users who are reliving their child’s birth and viewing pictures they posted a year earlier.

But what happens when we don’t want to be reminded of the past? What if the daily reminder mentions an ex-boyfriend or someone who has since died?

Wegener admitted that’s been a problem for Timehop. "We’ve had a surprising number of people unsubscribing due to people not wanting to relive a tough patch of history," he said.

The crew is currently working on a filter that would allow users more control over their reminders and a snooze feature that would turn off the service temporarily.

Wegener, who has spent nearly a year on the project, says the tweets we send, the pictures we post, and the other bits of media we’ve started creating on a daily basis will ultimately gain value.

"The content you create gains value with time. So whether it’s a photograph or tweet, it becomes more emotional with time — it ages like wine," he said.

Of course, the philosophy must be backed by a business plan and it’s not clear whether Timehop will be able to pull that off. Timehop eventually hopes to make money from advertising. Wegener said there is also potential for virtual gifts connected with a service that celebrates the past.

Only time will tell if our digital past will be a success in the future. We’ll sign up for Timehop and check back in a year. 

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Federal Reserve Bank of Chicago President Charles Evans said the drop in the unemployment rate to 8.5 percent may be partially reversed in coming months.

Workers at Top Form International Ltd.

NEW YORK, N.Y.

J.C. Penney Co. named board member Thomas J. Engibous, former head of Texas Instruments, as the department store chain’s new chairman. He succeeds Myron E. Ullman III, former chief executive and chairman, who is finishing up his reign at Penney’s.

The announcement adds the finishing touches to a major management transformation at the mid-price retailer.

Ullman, who became Penney’s CEO in 2004, gave up that title Nov. 1 to Ron Johnson, a former executive at Apple Inc. who took over merchandising and marketing responsibilities and then planned to assume the rest of the responsibilities Feb. 1. During the three-month transition period, Ullman served as executive chairman.

The company said that Engibous will become chairman Jan. 28, which marks the end of Penney’s fiscal year.

Under Ullman, J.C. Penney added popular brands like European clothing line MNG by Mango and Sephora cosmetics. But the department store chain is still struggling to be more inviting. The department store chain posted disappointing holiday sales as it has faced stiff competition from Macy’s Inc. and other clothing sellers.

J.C. Penney reported that revenue at stores open at least a year rose 0.3 percent in December, missing the company’s expectations. This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed. The company also said on Thursday that it expects to lose money in the fourth quarter personal loans for people with bad credit.

Engibous said in a statement on Tuesday that he will help J.C. Penney as it looks to lure more shoppers to its stores.

Engibous is a retired chairman and former CEO of Texas Instruments Inc. He has been a J.C. Penney board member since 1999 and has served as lead independent director and presiding director since 2008.

Johnson said in prepared remarks that Engibous has been invaluable to him in his early days leading the retailer and expects him to assist in the company’s quest to build itself into “America’s Favorite Store.”

The company took one step toward revitalizing itself last month when it announced that it is buying a 16.6 percent stake in Martha Stewart Living Omnimedia Inc. for $38.5 million. Starting in February 2013, mini-Martha Stewart shops will appear inside most of J.C. Penney stores, and the companies will operate a joint website. Later this month, Johnson is expected to unveil plans on a new pricing strategy and other broad-sweeping intitiatives.

J.C. Penney runs more than 1,100 stores in the U.S. and Puerto Rico.

Shares slipped 8 cents to $34.49 in morning trading.

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Canada

U.S. employment likely grew solidly last month, but the jobless rate probably rose from a 2-1/2 year low as improving conditions lured some Americans who had given up looking for work back into the labor market.

The government’s closely watched employment report due on Friday should cement views that economic growth accelerated in the fourth quarter after a tepid performance in the first nine months of 2011.

However, the pace of job creation remains too slow to signal a robust recovery is finally under way. Nonfarm payrolls rose 150,000 last month, according to a Reuters survey, after rising 120,000 in November.

Unusually mild weather during the month may have given employment a boost.

While the unemployment rate is expected to edge up to 8.7 percent from 8.6 percent, the tone of the report will likely be strengthened by upward revisions to the payrolls count for October and November, in keeping with a recent trend.

“Businesses are beginning to feel a little bit better about the future and are hiring, but we cannot get too excited because 150,000 is the minimum we need to keep the job market stable,”

said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo, California.

The economy would need even faster job growth over a sustained period to make a noticeable dent in the pool of 24.4 million Americans who remain either out of work or underemployed 2-1/2 years after the end of the 2007-09 recession.

Job growth has averaged 131,000 over the past 11 months and even if payrolls rise as expected in December, employment will still be 6.1 million below its December 2007 level.

With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds.

Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years.

This should keep alive the possibility of the Federal Reserve embarking on a third round of asset purchases, or quantitative easing, to spur stronger growth.

“We could see QE3 by the middle of the year,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

The employment report will offer little comfort to the Obama administration and could provide Republicans with more ammunition to attack the government’s handling of the economy.

President Barack Obama’s chances of a second term in office could depend on the health of the labor market.

LABOR MARKET TONE IMPROVING

Although the pace of job creation remains mediocre, there is no denying that the market is healing.

Small business hiring is improving and layoffs have subsided, with first-time applications for state unemployment benefits hovering near 3-1/2 year lows.

Over the past several months, the government has consistently revised up earlier payroll counts based on its survey of employers high risk personal loans. In addition, the household survey, from which the unemployment rate is derived, has shown an even more vigorous pace of hiring for each of the last four months.

Economists say the Bureau of Labor Statistics may not be picking up jobs created by small companies and new businesses.

“The payrolls survey has a hard time picking up smaller employers and births of new start-ups, and that’s where we expect to see a lot of job creation,” said Stephen Bronars, senior economist at Welch Consulting in Washington.

“It’s always going to be harder for the BLS to pick up those because they are measuring employment at companies that are included in their survey and those tend to be the bigger, well established companies.”

In Friday’s report, the government will revise the household series going back five years. Analysts will watch this survey closely to see if the recent improvements will hold.

A broad measure of unemployment that includes people who want to work but have stopped looking and those working only part time but who want more work hit a 2-1/2-year low in November.

GOVERNMENT A DRAG

All the anticipated job gains in December will come from the private sector, where payrolls are seen rising 165,000. Government employment is expect to shrink 15,000, weighed down by budget cuts at state and local governments.

However, the worst of the belt tightening is over and some states have reporting increases in revenue.

In November, a measure of the share of industries that showed job gains during the month fell sharply and economists will be watching to see if it recovers.

Job gains in December are expected to come from construction, where unseasonably mild weather has boosted groundbreaking for new homes. Transportation and warehousing payrolls could also benefit from the mild temperatures.

Manufacturing could post a third consecutive month of job gains, but a moderation in retail employment is expected after recording the biggest increase in seven months in November as retailers geared up for a busy holiday shopping season.

Healthcare and social assistance hiring is expected to pick up after adding the smallest number of jobs in five months in November. Temporary hiring — seen as a harbinger of future hiring — is expected to show more gains.

Even though employment probably picked up last month, a modest gain in hourly earnings is likely, indicating that most of the jobs being created are low paying. The high unemployment rate also means wages cannot grow much.

This is a potentially troubling sign for consumer spending, which has been largely supported by a reduction in savings.

The average work week is seen steady at 34.3 hours.

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