U.s. Economy | featured news

Industrial output unexpectedly fell in October as superstorm Sandy disrupted production, but the underlying tone remained consistent with slowing manufacturing activity.

The Federal Housing Administration, which has played a crucial role in stabilizing the housing market, said it ended September with $16.3 billion in projected losses -- a possible prelude to a taxpayer bailout.

Congressional leaders of both parties will meet with the president in an effort to reach a deal to avoid across-the-board tax increases and spending cuts that could push the economy into recession.

Major banks have announced some 160,000 job cuts since early last year and with more lay-offs to come as the industry restructures, many will leave the shrinking sector for good as redundancies outpace new hires by roughly two-to-one.

The improving housing market is "far from being out of the woods," Federal Reserve Chairman Ben Bernanke said on Thursday, arguing that overly tight lending standards are part of the problem.

Superstorm Sandy drove the number of people seeking unemployment benefits up to a seasonally adjusted 439,000 last week, the highest level in 18 months.

Rising food costs and higher rents offset a drop in gas prices last month, leaving consumer prices only slightly higher in October compared with the previous month.

The housing rebound stems from more people chasing fewer homes. Interest rates remain near record lows, luring buyers. And investors with cash have poured into the market.

Retail sales fell in October for the first time in three months as superstorm Sandy slammed the brakes on automobile purchases, suggesting a loss of momentum in the fourth quarter.

Amid a global fright over Washington's political brinkmanship, U.S. lawmakers return to the capital on Tuesday with a seven-week deadline to reach agreement on scheduled tax hikes and budget cuts that threaten to trigger another recession.