Stories Report on Business is following today :

Economies show signs of life

The Canadian and U.S. economies are rebounding from the deep recession. Statistics Canada said this morning the economy expanded by 0.4 per cent in November from October, marking the third consecutive month of growth. Notably, gains were broad based with growth in most industries. “The Canadian economy does indeed appear to be gathering momentum, despite some recent disappointments on the employment front,” said BMO Nesbitt Burns deputy chief economist Douglas Porter. “While much of the growth in November was concentrated in a few sectors, most industries were on the plus side as the recovery broadens and puts down firmer roots.”

The expansion was led by mining, energy and wholesale trade, with added strength from the real estate industry, the bond market and mutual funds, which boosted the financial sector. Manufacturing stalled, and retail trade and utilities dipped.

In the United States, the government reported the economy grew at an annual pace of 5.7 per cent in the fourth quarter, better than expected and the fastest growth in more than six years. While the showing was strong, the United States is still dealing with a jobs crisis economists fear will restrain growth. “All things considered, this was a very strong report and is the first GDP report in 2009 to really elicit any semblance of a ‘wow’ factor,” said TD Securities economics strategist Ian Pollick. “Having said that though, it is quite obvious to us that the rebound during the quarter was not a function of some new-found economic dynamism, but rather it was the slowing pace of inventory liquidation that really dealt the winning hand.”

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Canada’s economy picks up steam

U.S. economy roars to life

Toyota’s troubles deepen, but fix seen soon

Japan’s auto heavyweights Toyota Motor Corp. TM-N and Honda Motor Co. HMC-N are struggling today to deal with recall issues. In what was described as an unusual move, Henry Waxman, the chairman of the U.S. House Energy and Commerce Committee, said he plans a hearing next month to look at how Toyota responded to the issues that have dogged the auto maker this week, sticking gas pedals and floormats. “Like many consumers, I am concerned by the seriousness and scope of Toyota’s recent recall announcements,” Mr. Waxman’s statement said.

Toyota said today it has figured out a fix for the problem.

Separately, Honda announced a recall of almost 650,000 of its Fit/Jazz and City vehicles related to a window switch, following the death of a child last year in a car fire. Toyota has already taken a hefty knock over its massive recall and unprecedented shutdown of sales and production of eight models, and there are growing questions about the solid reputation of Japanese auto makers. “The Japanese have built their image on reliability, the fact that they make bullet-proof vehicles,” analyst Carlos Da Silva of HIS Global Insight told the Reuters news agency. “It’s not that their vehicles are worse than the others, the recalls are just showing that their vehicles are like the others. The race to cost cuts and the competition between all the brands is so fierce that even the mighty Japanese are doing things that are not as reliable as they were.”

Read

Toyota faces probe, Honda recalls models

As Toyota falters, Detroit eyes gains

Toyota woes imperil Japan’s recovery

Spain unveils austerity plan

Spain’s embattled government announced plans today to slash spending by almost €50-billion. Finance Minister Elena Salgado unveiled an four-year goal of cutting Spain’s deficit to 3 per cent of gross domestic product, the EU limit, by 2013, from 11.4 per cent where it now stands. Spain has been battered by the recession, struggling under ballooning debt and staggering unemployment. Spain also plans to raise its official retirement age to 67 from 65. While that may not be an odd decision given how the country’s population is aging, the timing of the announcement can’t possibly be seen as optimal given the country is battling an unemployment rate of almost 19 per cent. Employment Minister Celestino Corbacho told public television, in advance of a cabinet meeting, that the measure would be phased in from 2013 to 2025. Spain’s National Statistics Institute projects the number of working age people in the country will equal those 65 and older by 2049. Spain today reported a jobless rate of 18.8 per cent, with more than 1 million jobs lost last year.

Related: Greece’s woes threaten EU stability

India tightens monetary policy

India’s central bank is following the lead of its Chinese counterpart and tightening monetary policy by boosting the reserve requirements of the country’s commercial banks. The Reserve Bank of India left its benchmark interest rate unchanged, but it will curb lending somewhat by increasing the reserve requirement by three-quarters of a percentage point, which was more than markets expected. India’s economy, like that of China, is surging, and the central bank now projects economic growth of between 6 per cent and 7.5 per cent in its fiscal year ending in March. Also a warning shot is its forecast of inflation of 8.5 per cent by March. Read the story

Bankers feeling defensive, Flaherty says

Finance Minister Jim Flaherty says bankers have “some work to do in terms of repairing their reputation.” He told Bloomberg News today in an interview in Davos that bankers should be working with governments to effect necessary change and that “I think they recognize that change is necessary.”

Here’s one way to spur the dialogue: Mr. Flaherty’s British counterpart, Chancellor of the Exchequer Alistair Darling told reporters in Davos, prior to a meeting with bank chiefs at the World Economic Forum, that bankers should stop feeling sorry for themselves and work with governments. “It’s in their interest to get off the front pages and do what they’re supposed to do, provide credit to the economy.”