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Economy growing but recovery could be at risk

WASHINGTON – Fueled by government stimulus, the economy grew last quarter for the first time in more than a year. The question now is, can the recovery last?

Federal support for spending on cars and homes drove the economy up 3.5 percent from July through September. But the government aid — from tax credits for home buyers to rebates for auto purchases — is only temporary. Consumer spending, which normally drives recoveries, is likely to weaken without it.

If shoppers retrench in the face of rising joblessness and tight credit, the fragile recovery could tip back into recession.

For the Obama administration, the positive report on economic growth is a delicate one: It wants to take credit for ending the recession. On the other hand, it needs to acknowledge that rising joblessness continues to cause pain throughout the country.

Millions of Americans have yet to feel a real-world benefit from the recovery in the form of job creation or an easier time getting a loan. Even those with jobs are reluctant to spend. The values of their homes and 401(k)s remain shrunken.

President Barack Obama called the report "welcome news" in remarks prepared for a small-business group but acknowledged that "we have a long way to go to fully restore our economy" and recover from the deepest business slump since the 1930s-era Great Depression.

"The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well," Obama said.

The rebound reported Thursday by the Commerce Department ended the record streak of four straight quarters of contracting economic activity.

The news lifted stocks on Wall Street. The Dow Jones industrials average gained about 150 points in afternoon trading and broader indices also rose.

But whether the recovery can continue after government supports are gone is unclear. Many economists predict economic activity won't grow as much in the months ahead as the bracing impact of the government's $787 billion package of increased government spending and tax cuts fades.

The National Association for Business Economics thinks growth will slow to a 2.4 percent pace in the current October-December quarter. It expects a 2.5 percent growth rate in the first three months of next year, although other economists believe the pace will be closer to 1 percent.

Christina Romer, Obama's chief economist, has acknowledged that the government's stimulus spending already had its biggest impact and probably won't contribute to significant growth next year.

For the third quarter, government support proved crucial. Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes. A jump in spending on big-ticket manufactured goods largely reflected car purchases spurred by the government's Cash for Clunkers program.

Spending on housing last quarter was positive for the first time since the end of 2005. The government's $8,000 tax credit for first-time home buyers supported the housing rebound. Congress is considering extending the credit, which expires Nov. 30.

Federal government spending rose at a rate of 7.9 percent in the third quarter, on top of a 11.4 percent growth rate in the second quarter. And businesses boosted spending on equipment and software at a 1.1 percent pace, the first increase in nearly two years.

Third-quarter activity also was helped by increased sales of U.S.-made goods to customers overseas, as economies in Asia, Europe and elsewhere improved. The cheaper dollar is aiding U.S. exporters, making their goods less expensive to foreign buyers. Exports of U.S. goods soared at an annualized rate of 21.4 percent in the third quarter, the most since the final quarter of 1996.

Businesses, meanwhile, reduced their stockpiles of goods less in the third quarter, after slashing them at a record pace in the second quarter. With inventories at rock-bottom levels, even the smallest increase in demand probably will prompt factories to boost production. This restocking of depleted inventories is expected to help sustain the recovery in the coming months, economists said.

Still, with unemployment at a 26-year high of 9.8 percent and credit hard to get, the recovery faces obstacles.

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WASHINGTON – After months of struggle, House Democrats rolled out sweeping legislation Thursday to extend health care coverage to millions who lack it and create a new option of government-run insurance. A vote is likely next week on the plan largely tailored to President Barack Obama's liking.

Speaking on the steps of the Capitol, Speaker Nancy Pelosi said Congress was at a "historic moment" with lawmakers "on the cusp of delivering on the promise of making affordable, quality health insurance available to every American."

Officials said the measure, once fully phased-in over several years, would extend coverage to 96 percent of Americans. Its principal mechanism for universal coverage is creation of a new government-regulated insurance "exchange" where private companies would sell policies in competition with the government. Federal subsidies would be available to millions of lower-income individuals and families to help them afford the policies, and to small businesses as an incentive to offer coverage to their workers.

Large firms would be required to cover workers, and most individuals would be required to carry insurance.

The ceremony marked a pivotal moment in the Democrats' yearlong attempt to answer Obama's call for legislation to remake the nation's health care system by extending insurance, ending industry practices such as denying coverage on the basis of pre-existing medical conditions, and slowing the growth of medical spending nationwide.

Across the Capitol, Senate Democrats, too, are hoping to pass legislation by year's end. Legislation outlined by Majority Leader Harry Reid earlier this week would include an option for a government-run plan, although states could drop out if they wished, a provision not in the House measure.

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Death toll past 100 in Baghdad bombings

Baghdad, Iraq (CNN) -- At least 132 people were killed and 520 wounded in twin suicide car bombings in central Baghdad Sunday, officials said -- the deadliest attack on civilians in Iraq this year.

Two car bombs detonated in quick succession near Iraqi government buildings about 10:30 a.m. Sunday, as the Iraqi work week began, an Interior Ministry official said.

Among the wounded were three American security contractors, the U.S. Embassy told CNN. The embassy would not give any more details.

One of the bombs exploded outside Baghdad's governorate building. The second was outside the Justice Ministry, about 500 meters (1,600 feet) away. The Ministry of Municipalities and Public Works, which is about 50 meters from the Justice Ministry, also sustained severe damage.

Iraqi Prime Minister Nuri al-Maliki surveyed the carnage shortly after the explosions.

"The cowardly attack that took place today should not affect the determination of the Iraqi people from continuing their battle against the deposed regime and the gangs of criminal Baath party and the terrorist al Qaeda organization, who have committed the most heinous crimes against the civilians,'" al-Maliki said in a statement.

Plumes of smoke billowed from the sites of the attacks as victims fled, some with blood streaming down their faces. The streets were strewn with debris, including charred cars and chunks of concrete from damaged buildings. Some government buildings and others in the area were heavily damaged.

The bombings came a day after the U.S. ambassador to the United Nations, Susan Rice, visited the country for the first time, and on the same day Iraqi officials were due to try to break a logjam holding up a new election law. Iraqis are supposed to go to the polls January 16, but parliament still has not passed the legislation, putting the balloting in limbo. The original deadline for parliament to pass the law was October 15, because Iraq's electoral commission says it needs 90 days to organize the process.

Iraq's parliament failed Wednesday to reach agreement on a new electoral law, so the issue was supposed go to the Political Council for National Security on Sunday. It is not clear if the bombings will derail the political council's discussions.

Al-Maliki vowed to punish "the enemies of the Iraqi people who want to spread chaos in the country and derail the political process and prevent the parliamentary elections from taking place as planned" in January.

He said holding the elections as scheduled would send the strongest response and message to the "enemies of the political process who are supported from the outside."

Susan Rice, the ambassador, completed a two-day visit to Iraq on Saturday that included a condolence stop at the Foreign Ministry, where a huge bombing killed more than 100 in August.

Security was tightened around Baghdad in the wake of the August 19 attack, which Iraqis dubbed "Bloody Wednesday." Blast walls were erected around the city and more checkpoints were set up.

Iraqi journalists grilled officials on TV on Sunday, demanding to know how the new attacks could have taken place given the new security measures.

An Iraqi official said the government was working to bolster security, but regional cooperation was needed to help fight suicide bombers.

"We are calling on international and U.N. envoys to come and find out why Iraq is being targeted this way," said Ali al-Dabbagh, the Iraqi government spokesman.

The spokesman said Iraq's setbacks are mainly caused by a fledgling intelligence that has "not been completed."

The European Union condemned "this terrorist attack" and sent its condolences to the families of the victims, the Swedish presidency said in a statement.

The Foreign Ministry, near the site of Sunday's blasts, was one of six places attacked on August 19. That day's attacks killed at least 100 people and wounded hundreds more. The area is close to the heavily guarded Green Zone that also houses the U.S. Embassy.

The August attacks shook confidence in the abilities of Iraqi security forces who took over securing urban areas from U.S. troops over the summer.

The Iraqi government has blamed Syria for harboring former Baath party members, who it said planned the August attacks, and asked for their handover.

Relations between the two neighbors were strained after the bombings. Each withdrew its ambassador from the other's country.

Security in the capital was tightened after the August bombings, and a decision to normalize the situation in Baghdad by taking down blast walls was reversed and checkpoints increased.

Iraqi and U.S. officials have warned of a possible increase in violence ahead of the country's national elections.

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Pilot who overshot airport denies crew was napping

MINNEAPOLIS – The first officer of the Northwest Airlines jet that missed its destination by 150 miles says there was no fight in the cockpit, neither he nor the captain had fallen asleep and the passengers were never in any danger.

But in an interview with The Associated Press two days after he and a colleague blew past their destination as air traffic controllers tried frantically to reach them, pilot Richard Cole would not say just what it was that led to them to forget to land Flight 188.

"It was not a serious event, from a safety issue," Cole said in front of his Salem, Ore., home. "I would tell you more, but I've already told you way too much."

Air traffic controllers and pilots tried for more than an hour Wednesday night to contact Cole and the flight's captain, Timothy B. Cheney, of Gig Harbor, Wash., using radio, cell phone and data messages. On the ground, concerned officials alerted National Guard jets to prepare to chase the airliner from two locations, though none of the military planes left the runway.

"We were not asleep; we were not having an argument; we were not having a fight," Cole told The Associated Press.

He would not discuss why it took so long for the pilots to respond to radio calls, "but I can tell you that airplanes lose contact with the ground people all the time. It happens. Sometimes they get together right away; sometimes it takes awhile before one or the other notices that they are not in contact."

The Minneapolis Star Tribune, citing an internal Northwest document it said was described to the newspaper, reported that Cheney and Cole began what was to be a five-day flying stint Tuesday with a flight from Minneapolis to San Diego. The newspaper said the pair had a 19-hour layover before Wednesday's return flight.

A police report released Friday said the pilots passed breathalyzer tests and were apologetic after the flight. The report also said that the crew indicated they had been having a heated discussion about airline policy.

But aviation safety experts and other pilots were deeply skeptical they could have become so distracted by shop talk that they forgot to land an airplane carrying 144 passengers. The most likely possibility, they said, is that the pilots simply fell asleep somewhere along their route from San Diego.

"It certainly is a plausible explanation," said Bill Voss, president of the Flight Safety Foundation in Alexandria, Va.

Unfortunately, the cockpit voice recorder may not tell the tale.

New recorders retain as much as two hours of cockpit conversation and other noise, but the older model aboard Northwest's Flight 188 includes just the last 30 minutes — only the very end of Wednesday night's flight after the pilots realized their error over Wisconsin and were heading back to Minneapolis.

Cheney and Cole have been suspended and are to be interviewed by National Transportation Safety Board investigators next week. The airline, acquired last year by Delta Air Lines, is also investigating. Messages left at Cheney's home were not returned.

FAA spokesman Tony Molinaro said in general, an unsafe condition created by a pilot could lead to the suspension of the person's pilot license and possibly a civil penalty.

With worries about terrorists still high, even after contact was re-established, air traffic controllers asked the crew to prove who they were by executing turns.

"Controllers have a heightened sense of vigilance when we're not able to talk to an aircraft. That's the reality post-9/11," said Doug Church, a spokesman for the National Air Traffic Controllers Association.

NTSB spokesman Keith Holloway said fatigue and cockpit distraction will be looked into. The plane's flight recorders were brought to the board's Washington headquarters.

The pilots were finally alerted to their situation when a flight attendant called on an intercom from the cabin.

Voss said a special concern was that the many safety checks built into the aviation system to prevent incidents like this one — or to correct them quickly — apparently were ineffective until the very end. Not only couldn't air traffic controllers and other pilots raise the Northwest pilots for an hour, but the airline's dispatcher should have been trying to reach them as well. The three flight attendants onboard should have questioned why there were no preparations for landing being made. Brightly lit cockpit displays should have warned the pilots it was time to land.

"It's probably something you would say never would happen if this hadn't just happened," Voss said.

___

AP Airlines Writers Joshua Freed in Minneapolis and Harry R. Weber in Atlanta and AP Writers Joan Lowy in Washington, Amy Forliti in Minneapolis and Dave Koenig in Dallas contributed to this report. Cain reported from Salem, Ore.

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U.N. slams North Korea over human rights

UNITED NATIONS (CNN) -- Nearly 40 percent of North Koreans are starving, and a shortfall in international aid means that a fraction of those people will receive food donations, a U.N. rights expert said.

The World Food Programme will be able to reach fewer than 2 million of the communist country's 9 million hungry people, said Vitit Muntarbhorn, the U.N. special human rights investigator for North Korea.

Aid has been limited by global reaction to North Korea's recent nuclear and missile tests and the government's priorities are misguided, he said.

"The country is not poor, and yet the money is not spent on the people," Muntarbhorn told reporters Thursday after delivering his latest report before the U.N. General Assembly.

"People should be entitled to a fair share of the budget and the benefits from trade in terms of access to sustainable development."

North Korea's exports amounted to several billion dollars last year. The country also has a greater abundance of natural resources than its southern neighbor, Muntarbhorn said.

He urged the U.N. Security Council to step up as North Koreans face worsening conditions.

The United Nations regards the North Korean government as one of the most restrictive and repressive in the world. The Security Council has slapped the reclusive nation with multiple sanctions, though the United Nations does not tend to intervene in a country's humanitarian affairs.

"Let's make good use of the international system," Muntarbhorn urged. "I need the Security Council."

Muntarbhorn, who has been denied access to North Korea for six years, described a downturn of human rights in that society, saying that North Koreans live in constant fear of abduction, arrest, abuse and even public execution.

He reported that women continue to be highly discriminated against -- they are barred from trading and are forced to wear skirts and dresses even while bicycling as necessary transportation.

Freedom of information also remains restricted. Communication has progressed somewhat, now that cell phones are legal -- even to the non-elite -- but Muntarbhorn said phones are not permitted near the border. Possessing a computer is illegal for North Koreans.

Currently, there is no U.S. aid going into North Korea, though the World Food Programme is allowed access under the watch of North Korean military. According to North Korean military rules, food organizations must announce their visit a week before arrival.

The North Korean constitution recently was amended to acknowledge human rights, and references to communism were removed, Muntarbhorn said.

However, he said, the government has replaced communism with "their own brand of socialism," which ranks government authority very high and regular citizens very low.

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Airliner overshoots airport; controllers feared hijacking

WASHINGTON (CNN) -- A Northwest Airlines flight from San Diego, California, to Minneapolis, Minnesota, overshot the Minneapolis airport by about 150 miles Wednesday evening, and federal investigators are looking into whether the pilots had become distracted, as they claimed, or perhaps fallen asleep.

Air traffic controllers lost radio communication with the Airbus A320, carrying 147 passengers and an unknown number of crew, when it was flying at 37,000 feet, according to the National Transportation Safety Board. There was no communication with Flight 188 for more than an hour as it approached the airport, the board said.

When air traffic controllers finally made contact with the pilot, his answers were so vague that controllers feared the plane might have been hijacked, according to a source familiar with the incident.

The controllers in Minneapolis, Minnesota, ordered the pilot to make a series of unnecessary maneuvers to convince them the pilots were in control of the flight, the source said, adding that fighter jets were poised in Madison, Wisconsin, but were never deployed.

Controllers tracked the aircraft on radar as it flew over its intended destination -- Minneapolis-St. Paul International/Wold-Chamberlain Airport -- and continued northeast for about 150 miles over the next 16 minutes. The airport's controllers then re-established communication with crew members, who said they had become distracted, the safety board said.

"The crew stated they were in a heated discussion over airline policy and they lost situational awareness," the board said in a news release.

A federal official, who asked not to be identified, told CNN that air traffic controllers in the Denver, Colorado, area had communicated with the pilot, but the pilots were "nonresponsive" during a subsequent communication. The plane was handed off to controllers in Minneapolis as a NORDO, the designation for "no radio communications."

The Federal Aviation Administration contacted the airline and had its dispatcher try to reach the pilots, the federal official said.

Doug Church, spokesman for the National Air Traffic Controllers Association, said numerous controllers were involved in efforts to contact the plane, including text messages, and that "concern escalated" as the pilot neared the airport "without making any effort to descend."

Ultimately, controllers contacted two other Northwest planes, asking them to try to reach Flight 188 through its last known frequency. One of those planes succeeded, prompting the pilot to contact Minneapolis, Church said.

"It was pretty good ATC (air traffic control) detective work," he added.

An NTSB spokesman said the agency is examining all possible explanations for the incident, including whether the pilots might have fallen asleep.

The safety board said it is scheduling an interview with the crew and has secured the plane's cockpit voice recorder and flight data recorder for examination. The recorders capture cockpit conversations and other noises.

Reported instances of two pilots falling asleep are rare. In August, the safety board concluded its investigation into a February 13, 2008, incident in which two pilots aboard a Go airlines flight fell asleep and traveled 26 miles beyond the destination of Hilo, Hawaii, before waking and contacting air traffic controllers.

Northwest Airlines is part of Delta Air Lines, which issued a statement Thursday, saying it is "cooperating with the FAA and NTSB in their investigation, as well as conducting our own internal investigation. The pilots have been relieved from active flying pending the completion of these investigations."

It said Flight 188 landed safely in Minneapolis just after 9 p.m.

Delta suffered another major embarrassment this week when a Delta pilot landed a passenger jet on a taxiway at Atlanta-Hartsfield International Airport instead of the runway. The NTSB also is investigating that case.

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‘Doomsday’ blast kills 41 near Pakistan bazaar

Suicide car bombing levels passing minibus, injures more than 100

PESHAWAR, Pakistan - A suicide car bomber detonated his vehicle along a road near a well-known market in Pakistan's northwest city of Peshawar on Friday, killing 41 people and underscoring militants' ability to strike in major cities despite U.S.-backed military offensives pressuring their networks.
The attack in the Khyber Bazaar area came as Pakistan's army prepares for another major operation in the al-Qaida and Taliban stronghold of South Waziristan tribal region. The militants have threatened bombings if the army doesn't back off, but the U.S. has continued to prod Pakistan to take action against insurgents using its soil to fuel the insurgency in neighboring Afghanistan.
Television footage showed the charred skeleton of a bus flipped on its side in the middle of a major road. Twisted remains of a motorbike lay alongside the bus. A nearby vehicle was in flames.
Noor Alam saw the vehicle explode, and suffered wounds on his legs and face.
"I saw a blood soaked leg landing close to me," Alam told The Associated Press at the overwhelmed Lady Reading hospital. "I understood for the first time in my life what a doomsday would look like."
Blast levels passing minibusPeshawar Police Chief Liaqat Ali Khan said the attacker was in a car packed with "a huge quantity of explosives and artillery rounds." A minibus apparently carrying passengers nearby was also leveled in the blast.
It came days after a suicide attack killed five at a U.N. office in the capital, Islamabad and two weeks after another explosion killed 11 in a Peshawar commercial area.
It was the deadliest attack in Pakistan since a suicide bomber demolished a packed mosque near the northwestern town of Jamrud in March, killing about 50.
Provincial Health Minister Syed Zahir Ali Shah said 41 people were killed and more than 100 wounded Friday.
"Death has to come one day, but we will keep chasing these terrorists, and this attack cannot deter our resolve," Provincial Information Minister Mian Iftikhar Hussain said as he visited the bloody scene.
Arrest in attack on U.N. officesAlso Friday, Interior Minister Rehman Malik said a suspect had been arrested in Monday's suicide attack at the office of the U.N.'s World Food Program in Islamabad. Malik says the man was alleged to have given the attacker shelter, but gave few details.
Militants in Pakistan also have targeted trucks carrying supplies for U.S. and NATO forces in Afghanistan.
Early Friday, militants ambushed a tanker carrying fuel for the Western troops at a gas station near Peshawar, torching it, said Fazal Rabi, a police official. No injuries or deaths were reported.
U.S.-Pakistan tensions risingThe attacks come amid growing tensions between the U.S. and Pakistan over a multibillion-dollar U.S. aid package that is aimed at helping Pakistan's economy and other nonmilitary sectors.
Pakistan's army has raised concern over strings attached to the aid, bolstering critics who say it will invite U.S. interference.
The debate over the proposal also has exposed rifts between Pakistan's military and its weak civilian government.
The government has hailed the package, which would provide $1.5 billion a year over the next five years. But the measure, which awaits President Barack Obama's signature, makes U.S. aid contingent on whether Pakistan's government maintains effective control over the military, among other conditions.
The army, which has ruled Pakistan for around half its 62-year existence, raised "serious concern" over the conditions, while the government said nothing in it was against Pakistan's interests.

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