American factories increased their production in July after eight straight months of declining output, providing the most solid evidence to date that the moribund manufacturing sector may finally be on the mend. At the same time, inflation remained subdued last month, easing fears — at least for now — that prices would shoot up when the recovery takes hold. Consumer prices were unchanged from June and declined by 2.1 percent compared to July 2008, mostly because of the steep fall in the price of gasoline. With prices held in check, inflation-adjusted wages increased last month for the first time this …

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CHARLOTTE, N.C. (AP) — A federal court froze $1 billion of troubled Colonial Bancgroup Inc.’s assets Thursday in response to a suit filed by Bank of America Corp. Bank of America Corp. sued Colonial for more than $1 billion in cash and loans, and asked the court to prevent Colonial from selling or otherwise disposing of the assets. Bank of America said the U.S. District Court for the Southern District of Florida, in response to a complaint filed Wednesday, granted a temporary restraining order freezing the $1 billion held by Montgomery, Ala.-based Colonial. Court officials could not immediately be reached …

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U.S. industrial production increased in July for the first time since October as automakers returned from their midyear retooling shut-downs and increased output to meet the demand fueled by the “cash for clunkers” program. Output from the nation’s factories, mines and utilities increased 0.5 percent in July, the Federal Reserve reported Friday. It was only the second month that industrial production increased since the deepest, longest postwar recession began in December 2007. The increase in industrial output indicates that the long-awaited economic recovery will arrive during the second half of this year, as many economists have projected. The Dow Jones …

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Stimulus bill spending has slowed to a trickle, despite President Obama’s June order to his Cabinet to speed it up. The average stimulus spending per week has dropped severely, to just $4.2 billion over the past month from $9.7 billion during the prior four months. The government spent $2.9 billion in the week ending Aug. 7. Taxpayer groups say the numbers show spending decisions are random and prove that the $787 billion stimulus program has had no effect on the economy. “This is a typical bureaucracy. They don’t operate in an efficient way. They can’t operate in an efficient way …

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Consumers retrenched last month as sales at U.S. retailers declined in July despite the flurry of late-month auto purchases spurred by the “cash for clunkers” program. The unexpected dip raised questions about the timing of the widely anticipated economic recovery, especially as first-time claims for jobless benefits unexpectedly edged higher last week. After increasing by an upwardly revised 0.8 percent in June and 0.5 percent in May, sales at U.S. retailers declined 0.1 percent in July, the Commerce Department reported Thursday. Compared with July 2008, retail sales last month were down 8.3 percent. Excluding sales of automobiles, which jumped by …

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NEW YORK (AP) — Focused on an economic recovery, investors shook off disappointing news and kept Wall Street’s summer rally going. Investors sent stocks higher for a second day in a row Thursday, giving all the major indexes a moderate boost and adding to the gains that followed upbeat comments from the Federal Reserve a day earlier. Financial, technology and energy companies were among the big winners, while stocks in defensive, or relatively safer, industries like health care fell. Retailers declined after a worse-than-expected report on retail sales. Meanwhile, Treasury prices rose after the government had a successful auction of …

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NEW YORK (AP) | CIT Group Inc. and the Federal Reserve on Thursday announced an agreement that gives the central bank greater oversight of the troubled commercial lender. The agreement calls for CIT to report to the Federal Reserve Bank of New York by Aug. 28 its plans for maintaining sufficient capital and to come up within 75 days with a business plan that includes budgets for the remainder of this year and 2010. CIT must give the New York Fed a plan that, among other things, details the company’s current and future capital requirements and how it will meet …

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The federal government agreed Thursday to allow customers to order cars from factories under the “cash for clunkers” program rather than limit them to the slim pickings on dealer lots. Ford Motor Co. said Thursday it would ramp up North American production 18 percent in the third quarter to help replenish those depleted inventories. Its Focus compact and Escape crossover are two of the top-selling vehicles in the cash for clunkers program. “What they’re announcing today will not be available to dealers until September,” said Edmunds.com analyst Michelle Krebs. Many dealers and analysts expect the program to run out of …

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NEW YORK | Focused on an economic recovery, investors shook off disappointing news and kept Wall Street’s summer rally going. Investors sent stocks higher for a second day in a row Thursday, giving all the major indexes a moderate boost and adding to the gains that followed upbeat comments from the Federal Reserve a day earlier. Financial, technology and energy companies were among the big winners, while stocks in defensive industries such as health care fell. Retailers declined after a worse-than-expected report on retail sales. Meanwhile, Treasury prices rose after the government had a successful auction of 30-year bonds. The …

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WASHINGTON (AP) — Retail sales disappointed in July and the number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly last week. The latest government reports reinforced concerns about how quickly consumers will be able to contribute to a broad economic recovery. “There is really no positive spin to put on these numbers,” Jennifer Lee, an economist with BMO Capital Markets, wrote in a research note. “The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal.” The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a …

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