(Reuters) – Two top Federal Reserve officials painted a picture of cautious optimism on Friday for the U.S. economy in 2013, helped by stronger global growth as the central bank aggressively prints money to curb the nation’s lofty rate of unemployment.

The Fed this week decided to keep buying bonds at a $85 billion monthly pace, and hold interest rates near zero until the jobless rate falls to 6.5 percent, so long as inflation does not threaten to rise above a threshold of 2.5 percent.

U.S. unemployment edged up 0.1 percentage point to 7.9 percent in January, and the economy shrank slightly in the final quarter of 2012.

But New York Federal Reserve President William Dudley and St. Louis Fed chief James Bullard, who both voted in favor of the U.S. central bank’s policy decision this week, saw reasons to be cheerful about the year ahead.

Their remarks are the first public comments by Fed policy-makers since the central bank issued a statement on Wednesday outlining its decision to keep in place an unprecedented level of monetary stimulus, which has tripled its balance sheet to almost $3 trillion since 2008.

“I think a lot of uncertainties that were around this economy in 2012 have come off the table,” Bullard told Bloomberg Television in an interview.

“The (U.S.) election has come off. Some of the fiscal risk that was in the U.S. has come off. The European situation has settled down a lot. China looks like it will have a better year. Emerging markets generally…will have a better year,” he said.

U.S. lawmakers on Thursday voted to allow the federal government to keep borrowing money until at least May 19, averting a potential collision with the U.S. debt limit that could have caused the nation to default on its debt obligations.

Politicians had already sidestepped potential tax hikes on all Americans at the start of 2013 by agreeing to raise taxes only on families who make more than $450,000 a year.

SLOWING BOND PURCHASES?

Bullard, who is viewed as a centrist on the Fed’s 19-member policy committee, said that continued improvements in the labor market during the course of the year would put the Fed “in a position to slow down or stop the purchases.”

A closely watched employment report released by the U.S. government earlier on Friday showed that 157,000 new jobs were created in January, while the previous two months’ scale of employment creation was also revised higher. U.S. stocks rallied on the news.

“Things aren’t perfect. But things are definitely improving, and that will actually be helpful for the U.S. outlook,” Dudley told the New York Bankers Association in a speech that was mostly focused on revamping the wholesale funding market.

“If the rest of the world gets healthier, the demand for U.S. goods and services will increase and that will provide support to our own economy,” he said.

With the Fed forecasting unemployment to decline only slowly over the next two years, economists do not expect it to begin raising interest rates until 2015 and see bond purchases continuing for the rest of this year and possibly into 2014.

However, minutes of the Fed’s December 11-12 meeting, which were released with a three-week lag, showed that several policymakers wanted to slow or halt the buying well before the end of 2013.

Bullard, who had opposed the third round of bond purchases when it was announced in September, said he voted to back its continuation at the most recent meeting because it was a decision to keep policy steady.

“I felt that was probably the right thing to do at this meeting and so I was in agreement with the chairman and the majority in this case,” he said.

However, he made clear that the central bank’s policy committee continued to wrestle with quantitative easing.

Nor was there any consensus on providing markets with more clues on when the purchases will end, beyond current Fed guidance that it will look for a substantial improvement in the labor market outlook in weighing when to stop.

“I don’t think we have any more agreement among members at this point,” he said.

Some Fed officials favor adopting numerical economic thresholds to guide expectations of when buying will end. But Fed-watchers doubt the committee will be able to quickly come to a consensus over this matter, and it may prove impossible.

(Reporting By Alister Bull)

(Reuters) – Banks eased credit standards somewhat over the last three months and reported stronger demand for loans and residential mortgages, according to the Federal Reserve’s latest quarterly Senior Loan Officer Survey, which was released on Monday.

The January report, based on responses from 68 domestic banks and 22 U.S. branches of foreign firms, also asked if domestic banks had tightened lending standards to European competitors, but found that only 10 percent had done so.

Signs of improved access to lending and stronger demand for debt would chime with more upbeat U.S. economic data on consumer and business spending, and brighter news from the nation’s battered housing market.

But U.S. officials have been frustrated by the difficulty experienced by some households and businesses in obtaining credit, despite ample bank liquidity and overnight interest rates that the Fed has held near zero since late 2008.

“Modest fractions of domestic banks reported having eased their standards across major loan categories over the past three months on net,” the Fed said. “Domestic respondents indicated that demand for business loans, prime residential mortgages, and auto loans had strengthened.”

The Fed has flooded the economy with money via three rounds of bond purchases, tripling its balance sheet to almost $3 trillion since 2008. But growth remains fragile and U.S. gross domestic product actually shrank slightly in the fourth quarter of last year.

Commercial loan standards were eased almost entirely because of greater competition for business, the Fed said, while stronger demand was driven by customer investment in plant or equipment, and the need for finance related to mergers and acquisitions.

Credit standards for residential mortgages had not changed, but demand was higher, according to the survey, as was demand for car loans. U.S. auto sales rose 14 percent in January, according to data released last week.

In addition to its regular assessment of lending conditions, the Fed also asked survey participants three specific questions, including queries about commercial real estate, or CRE, and the outlook for credit quality.

“Respondents indicated that they had eased selected CRE loan terms over the past 12 months,” the Fed said, adding that “moderate to large fractions of banks expect improvements in credit quality in most major loan categories.”

It also asked about lending to European banks. In addition to revealing that only a small portion of domestic banks had tightened loan standards to European counterparties, most also said they experienced a drop in competition from this source.

Europe has been battered by a prolonged sovereign debt crisis, although strains have eased somewhat following policy responses last year led by the European Central Bank.

(Reporting By Alister Bull; Editing by Neil Stempleman)

By BILL VLASIC

Published: February 1, 2013

DETROIT — American automakers said new-vehicle sales in the United States rose sharply in January, raising expectations that the industry’s steady recovery would accelerate in 2013.

The advance could help researchers better understand the role of proteins in disease.

By Susan Young on February 1, 2013

Two reports published online in Science on Thursday open up the possibility that researchers may be able to determine the structure of individual proteins in living cells. Although the work is still in early stages, the potential is that researchers could get a better handle on the role of proteins in disease.

Physicists in the U.S. and Germany report important steps toward magnetic resonance imaging, or MRI, of molecules in two separate studies. In both reports, the researchers show how specially modified diamond flakes can be used as nanoscale magnetic field detectors. These tiny sensors can elucidate the structure of single organic molecules. With nanoscale MRI, researchers may one day be able to directly image proteins and other molecules at the atomic scale.

“If you can see on single molecule scale what is going on, and understand more details about what is happening, you may be able to find exactly what the problem is and target it specifically,” says Texas A&M University electrical engineer Philip Hemmer, who was not involved in the study but wrote a perspective on the work for the same issue of Science.

Currently, researchers have limited tools to study the molecular structure of proteins. X-ray diffraction can give them an atomic-level view of some proteins, but many copies of the protein must be crystallized into a rigid lattice, a process that does not work for all proteins and results in an averaging of protein shape. Conventional MRI, which can be used by doctors to peek inside the body, doesn’t let researchers see anything smaller than a few micrometers in size because the detectors aren’t sensitive enough to pick up magnetic field signals from very small structures. The authors of one of this week’s studies, led by Daniel Rugar, manager of nanoscale studies for IBM Research, had previously reported a method to study single molecules at the nanometer level, but that technique required ultra-cold cryogenic conditions, which precludes studies on living cells.

To develop a method that works at ambient temperatures with single, unmodified molecules, Rugar’s team, as well as a group based Stuttgart, Germany, takes advantage of defects in flakes of diamond that behave as tiny magnetic field sensors.  The teams show that they can detect atomic sizes as small as five nanometers. Both groups examined a plastic-like organic polymer called PMMA, and the Germany-based team also looked at molecules within oils and other liquids.

Friedemann Reinhard, a coauthor on the Germany-based study, says that today’s results are a step toward a new technique that could determine the three-dimensional structure of a specific protein, perhaps even while it acts in a larger biological structure. Such studies could help identify differences in proteins, including spotting misbehaving proteins that might be implicated in triggering disease. Indeed, directly seeing the structure of a single protein has long been a dream of biologists. Says Reinhard: “It finally might be feasible.”

(Reuters) – U.S. small businesses boosted employment in January by the most in nine months, helped by the transportation and real estate sectors, the National Federation of Independent Business said on Thursday.

The NFIB said the net change in employment per firm rose to 0.09 this month from 0.03 in December.

January’s reading was the highest since April 2012.

The NFIB survey was released a day ahead of the government’s monthly payrolls report. Analysts polled by Reuters expect non-farm payrolls to have increased by 160,000 in January, a lackluster rate although marginally higher than in December.

The jobless rate is seen holding steady at 7.8 percent.

(Reporting by Jason Lange; Editing by Leslie Adler)

(Reuters) – Employment grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views the economy’s sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.

Other data on Friday also suggested the recovery was intact, with factory activity hitting a nine-month high in January on strong new order growth. Consumer confidence perked.

Employers added 157,000 jobs to their payrolls last month and there were 127,000 more jobs created in November and December than previously reported, the Labor Department said.

The closely watched report showed an increase in hourly earnings and solid gains in construction and retail employment.

The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent.

“This is actually a really good number when you take into account the net upward revision,” said Terry Sheehan, an economic analyst at Stone & McCarthy Research Associates in Princeton, New Jersey.

The Institute for Supply Management said its index of national factory activity rose to 53.1 last month, the highest level since April, from 50.2 in December. That offered hope manufacturing will continue to support the economy.

U.S. stocks rose on the fairly upbeat reports and the dollar advanced against the yen. U.S. Treasury debt prices were trading higher as the rise in the unemployment rate suggested the Federal Reserve would maintain its easy monetary policy stance.

OUTPUT CONTRACTION SEEN AS A FLUKE

Coming on the heels of data on Wednesday showing a surprise contraction in gross domestic product in the fourth quarter, the reports should ease any worries the economy was at risk of recession, even though the unemployment rate ticked up.

GDP contracted at a 0.1 percent annual rate in the fourth quarter, largely because of a sharp slowdown in the pace of inventory accumulation and a plunge in defense spending.

A monster storm that hit the East Coast in late October also weighed on output, a drag that should lift this quarter.

“This shows that underneath the surface, the fourth-quarter economy was really pretty good despite all the defense cuts. I think the private sector is leading the way,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

Fed officials said on Wednesday that economic activity had “paused,” but they signaled optimism the recovery would regain speed with continued monetary policy support. The Fed left in place a monthly $85 billion bond-buying stimulus plan.

Economists polled by Reuters had expected employers to add 160,000 jobs and the unemployment rate to hold steady at 7.8 percent last month.

The Labor Department also published benchmark revisions to payrolls data going back to 2008. It said the employment level in March 2012 was 422,000 higher on a seasonally adjusted basis than previously reported. Average job growth in 2012 was raised to 181,000 a month from 153,000.

It also introduced new population factors for its survey of households from which the unemployment rate is calculated. This had a negligible effect on the major household survey measures.

MODEST JOB GROWTH

Economists say employment gains in excess of 250,000 a month over a sustained period are needed to significantly reduce unemployment.

Though the unemployment rate dropped from a peak of 10 percent in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects.

The share of the working age population with a job has been below 60 percent for almost four years.

All the job gains in January were in the private sector, where hiring was as broad-based as it was in December and declines in public sector employment remained moderate.

Steady job gains could help the economy weather the headwinds of higher taxes and government spending cuts. A payroll tax cut expired on January 1 and big automatic spending cuts are set to take hold in March unless Congress acts.

The goods-producing sector showed a third month of solid gains, with manufacturing employment advancing for a fourth straight month. Construction payrolls increased 28,000, adding to December’s healthy 30,000 gain.

Construction jobs are expected to rise further as the housing market recovery gains momentum. Housing is expected to support the economy this year, taking over the baton from manufacturing.

Within the vast private services sector, retail jobs increased by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months.

Education and health payrolls added 25,000 jobs in January after employment grew by the most in 10 months in December.

Government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace is moderating as local government layoffs, outside education, subside.

Average hourly earnings rose four cents last month. Hourly earnings have been rising steadily. They were up 2.1 percent in the 12 months through January.

“It may be that we are now getting to a point in the labor market where we are going to see an upward creep in average hourly earnings,” said John Ryding, chief economist at RDQ Economics in New York.

“That’s going to be good for the consumer and they need help because they are being whacked by the payrolls tax increase.”

The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.

(Additional reporting by Ellen Freilich and Steven C. Johnson, and Leah Schnurr in New York; Editing by Andrea Ricci)

Researchers at Oak Ridge National Laboratory have developed a solid electrolyte to replace flammable ones used in lithium-ion batteries

By Kevin Bullis on January 25, 2013

(Reuters) – Foreign innovators who want to set up new companies in Canada will be able to immigrate under a new start-up visa program that Citizenship and Immigration Minister Jason Kenney said on Thursday was the first of its kind in the world.

The new program, to be launched on April 1, is part of a government push to better align the immigration system with Canada’s economic goals. Last year, the government revamped the skilled worker program to try to make it meet employers’ needs more nimbly.

“Our new start-up visa will help make Canada the destination of choice for the world’s best and brightest to launch their companies,” Kenney said in a statement.

“Recruiting dynamic entrepreneurs from around the world will help Canada remain competitive in the global economy.”

Under this program, would-be immigrants would require the support of a Canadian venture capital fund or angel investor group, which would invest in new companies started by the immigrants.

Once candidates for the program are identified by these groups, the government would try to clear them for entry into Canada within weeks.

The goal is to unite Canadian money and foreign brains. An initial source of candidates could be frustrated foreigners in the high-tech sector in the United States who have not been able to land resident status there.

The Canadian start-up visa would grant permanent resident status, which can then lead to citizenship.

For now, Ottawa will work with two umbrella groups that will identify which members of their associations will be eligible to participate in the program. They are Canada’s Venture Capital & Private Equity Association (CVCA) and the National Angel Capital Organization.

“Through this program, we want to attract high-quality entrepreneurs from around the globe and help build best-in-class companies in Canada,” said Peter van der Velden, president of CVCA and managing general partner of Lumira Capital, which helps build health and life-science companies.

Kenney has put a moratorium on issuing on Canada’s existing entrepreneur visa, which only required an immigrant to hire one person for one year.

(Reporting by Randall Palmer; Editing by Peter Galloway)

(Reuters) – Factory activity grew the most in nearly two years in January and the number of new claims for jobless benefits dropped to a five-year low last week, giving surprisingly strong signals on the economy’s pulse.

Financial information firm Markit on Thursday said its preliminary Purchasing Managers Index for manufacturing rose to 56.1 this month, its best showing since March 2011. A reading above 50 indicates expansion.

A separate report from the Labor Department showed initial claims for state unemployment benefits fell by 5,000 to 330,000, the lowest since January 2008 when the 2007-2009 recession had just begun.

Together, the data suggest the economy entered the new year with some underlying momentum despite an ongoing political battle in Washington over fiscal policy.

“The economy is structurally doing a little bit better,” said Michael Strauss, an economist at Commonfund in Wilton, Connecticut.

Analysts polled by Reuters had expected Markit’s “flash” factory gauge to slip and looked for claims to rise to 355,000.

The unexpectedly strong U.S. data helped U.S. stocks to rise, reversing early declines caused by disappointing revenues reported by Apple Inc. Better-than-expected economic news from the euro zone and China also supported stocks.

Economists have cautioned about reading too deeply into this month’s figures on jobless claims, which tend to be volatile around this time of the year because of large swings in the model the government uses to iron out seasonal fluctuations.

Still, claims have fallen for two straight weeks, suggesting employers do not yet see tax hikes enacted this month as a big threat to consumer demand.

A four-week moving average for new claims, meant to provide a better sense of underlying trends, fell 8,250 to 351,750, the lowest since March 2008.

The data helped the dollar extend gains versus the yen, while U.S. Treasury debt prices fell.

PRE-RECESSION LEVEL

Claims are now at roughly the same level they were in much of 2006 and 2007. They started trending higher around December 2007, the month the recession began.

However, while employers have pulled back on layoffs, they have only added jobs at a lackluster pace.

Analysts polled by Reuters expect the government’s employment report due on February 1 will show 165,000 jobs were added to payrolls this month, up from 155,000 new positions in December. The unemployment rate is expected to hold steady at 7.8 percent.

Like the claims data, Markit’s factory report also offered support for the idea that the labor market recovery was gaining traction with new jobs in the sector being created at the fastest pace in nine months.

A Markit subindex showed factory output grew at its fastest pace since March 2012, while new orders also rose. The new orders gauge hit 57.7, its highest level since May 2010.

Improved economic conditions in China and some parts of Europe helped boost orders from abroad, but firms largely tied the growth surge to higher demand from U.S. customers.

“It is the domestic market that is clearly providing the main impetus to the upturn,” said Markit chief economist Chris Williamson.

Aggressive monetary stimulus from the Federal Reserve and a last-minute deal by Congress to reduce the size of the tax hike gave a boost to business confidence, Williamson said.

A third gauge of economic health released on Thursday also beat analysts’ forecasts. The private Conference Board’s Leading Economic Index gained 0.5 percent to 93.9 last month, pointing to an improvement in growth.

(Additional reporting by Steven C. Johnson and Richard Leong in New York; Writing by Jason Lange and Tim Ahmann; Editing by Andrea Ricci)

(Reuters) – A gauge of business investment plans improved in December, a sign companies were betting the economy will pick up despite fears over tighter fiscal policy.

The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for investment plans, edged up 0.2 percent last month.

Many economists expected businesses to invest more timidly late last year because of uncertainty over government spending cuts and tax increases, which had been scheduled to kick in this month. Congress ultimately struck a last-minute deal to avoid or postpone most of the austerity measures.

Despite the uncertainty, Monday’s data pointed to growing economic momentum as companies sensed improved consumer demand.

“It certainly seems to us that companies are slowly but surely expanding,” said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York.

In a further sign of business confidence, the November reading on capital spending plans was revised higher to show a 3 percent gain, up from the 2.6 percent rise reported a month ago.

A second report showed a measure of upcoming home resales took a breather in December, declining 4.3 percent. Still, the housing sector posted a rebound last year and economists expect it will add to growth again in 2013.

The business spending data pushed down prices for U.S. government debt, while giving the dollar a lift against the yen. But stock prices opened lower.

New orders for overall durable goods – long lasting factory goods from toasters to automobiles – jumped 4.6 percent in December, beating economists expectations of a 1.8 percent gain.

The gains were broad based, with orders for machinery, cars and primary metals all increasing.

“There’s a lot more confidence,” said Wayne Kaufman, an analyst at John Thomas Financial in New York.

Orders surged for civilian aircraft and military goods, although those two categories tend to be quite volatile.

Despite the stronger-than-expected demand at the nation’s factories, economists think economic growth cooled in the fourth quarter as companies slowed the pace at which they re-stocked their shelves.

Analysts polled by Reuters expect a report on gross domestic product due on Wednesday will show the economy expanded at a mere 1.1 percent annual rate in the fourth quarter, down from a 3.1 percent rate in the previous three months.

However, Monday’s report on new orders for long-lasting factory goods suggested businesses are feeling stronger demand from consumers, and are responding by buying more machines to meet that demand. TD Securities economist Millan Mulraine said capital investment likely added to economic growth in the fourth quarter.

(Additional reporting by Lucia Mutikani in Washington, and by Leah Schnurr and Ryan Vlastelica in New York; Editing by Neil Stempleman)