September Job Cuts Are Most in a Decade

American employers cut more jobs in September than at any time in more than a decade, and that was before the terrorist attacks on the World Trade Center and the Pentagon, the Labor Department reported.

Businesses reduced payrolls by 199,000, nearly double the consensus forecast of economists. The reductions, coming atop a loss of 84,000 jobs in August, represent the largest monthly job decline since February 1991, in the midst of the last recession.

Analysts expect the September figures to be followed by several months of additional bad news as layoffs and dislocations caused by the attacks work their way into the national employment statistics.

Peter G. Gosselin

Fed Cuts Benchmark Rate to Four-Decade Low

The Federal Reserve cut the nation’s benchmark interest rate a half-point to a four-decade low of 2.5%, its second effort in a month to protect the already weak U.S. economy from crippling damage stemming from the September terrorist attacks. Major banks quickly cut their prime lending rates from 6% to 5.5%.

The move marked an unprecedented ninth rate cut this year and nudged short-term rates below inflation for the first time since the early 1990s, effectively ensuring the real cost of loans at those rates would be zero.

Analysts said that at least part of the reason the Fed’s recent rate reductions have not carried their expected punch is that corporate America already had over-borrowed and had little appetite for new loans at any price.

Peter G. Gosselin

Airlines’ Next Hope: Fare Sales Fill Planes

Nearly a month after terrorist attacks decimated the air-travel industry, the nation’s airlines went back to an old tactic--fare sales--in a bid to fill their planes.

Fresh from getting a $15-billion federal bailout that is helping them survive an immediate cash crunch, the carriers launched sales offering discounts of as much as 50% for business and leisure seats. But the sales carry many of the restrictions familiar to travelers, prompting some analysts to question why the airlines--which saw their passenger traffic plunge 30% or more last month--aren’t waiving many of those rules to lure more customers.

In the meantime, the airlines continued scaling back their operations to ride out the slump. UAL Corp.’s United Airlines said it’s abandoning its United Shuttle operation, which provides frequent service throughout the West. The airline said most of the 33 cities served by the Shuttle would be folded into United’s regular service or be served by its United Express regional service starting Oct. 31.

James F. Peltz

L.A. County May Lose 41,000 Jobs After Attacks

Local tourism officials project Los Angeles County will lose 41,000 jobs and $2 billion in travel spending in the wake of the terrorist attacks.

Like other major tourist cities, Los Angeles has been hammered by the drop in business and leisure travel. But L.A. is particularly hard hit because of its reliance on foreign tourists, who accounted for nearly one-third of the $13.6 billion spent by visitors in 2000.

About 40% of the county’s unionized hotel workers already have been laid off or have had their hours reduced, and many local hotels are scrambling to fill beds.

Marla Dickerson

Firm to Pay $875 Million for Medicare Fraud

A pharmaceutical company owned by Abbott Laboratories and Takeda Pharmaceuticals of Japan paid a record $875-million penalty and pleaded guilty to criminal charges it engaged in a kickback scheme with doctors to market its prostate drug, Lupron.

Federal prosecutors said that from 1991 to 1998 salespeople for TAP Pharmaceuticals gave urologists free samples of Lupron knowing the doctors would prescribe the freebies for patients and bill Medicare for the drug.

TAP encouraged physicians to use the illicit profits to pay down their past-due Lupron accounts, the government said, noting the scheme cost taxpayers $145 million. The settlement is part of a continuing crackdown on Medicare fraud.

Denise Gellene

Nasdaq Posts Biggest Weekly Gain in 6 Months A strong performance by technology stocks helped Nasdaq to a 7.1% gain, its biggest weekly jump in almost six months.

Blue-chip stocks were less robust, the Dow Jones industrial average and Standard & Poor’s 500 index rising 3.1% and 2.9%, respectively. But investors were heartened that the major indexes managed to patch together their second consecutive winning week--another sign that Wall Street is shaking off the worst effects of the September attacks.

The week’s gains came in the face of worsening economic data and several bits of company-specific bad news, such as Sun Microsystems Inc.’s report of layoffs and a wider-than-expected quarterly loss. Buoying the market were the Fed’s ninth rate cut of the year and talk from the Bush administration of more tax cuts to bolster the flagging U.S. economy.

Martin Zimmerman

Retailers Slashing Prices to Lure Back Customers

Retailers across the country are slashing prices and stepping up promotions, hoping to stem revenue declines that have mounted since the attacks.

Department store operators such as Nordstrom and Federated Department Stores have added or extended sales to make up for lack of traffic since the terrorist attacks.

And auto makers such as General Motors Corp., Ford Motor Co. and DaimlerChrysler are offering more attractive financing after experiencing a sharp drop-off after the attacks. But the companies said sales recovered in the last 10 days of the month to levels comparable to a year ago.

However, some retailers, such as 99 Cents Only Stores and Williams-Sonoma Inc., are benefiting by selling low-price general merchandise, cooking utensils, patriotic craft kits and even TVs to consumers looking to make hunkering down at home more pleasant.

A Times Staff Writer

Sempra, CMS to Build Baja Natural Gas Facility

Lured by the California energy crisis, Sempra Energy and CMS Energy announced a $400-million partnership to build a huge liquid natural gas receiving and storage facility just north of Ensenada in Baja California. It would be the first LNG plant on the Pacific Coast of North America.

Sempra, parent of San Diego Gas & Electric Co., and CMS Energy, which has extensive U.S. and Latin America energy operations, hope to have the plant pumping gas north by pipeline to Baja power plants and California consumers by 2005, although the project has received no permits from the Mexican government.

The facility will receive liquid gas by ship from the Middle East, store and re-gasify it. To win approvals, the partnership hopes to draw on the credibility of CMS Energy of Dearborn, Mich., which operates one of only four LNG terminals in the United States, in Lake Charles, La.

Chris Kraul

Nissan Workers Reject Union Bid in Tennessee

Nissan Motor Co. of Japan turned back a potentially watershed union vote, as workers at its U.S. affiliate’s Tennessee assembly plant voted 2 to 1 to reject representation by the United Auto Workers.

The union, hoping to bolster a membership that has slipped to half its late 1970s peak of 1.5 million, has failed to organize any U.S. factory wholly owned by a foreign manufacturer.

Undeterred, the UAW said it will turn next to Honda Motor Co.’s four automotive and motorcycle factories in Ohio, where the union was snubbed in the 1980s and where the Teamsters union failed in a 1999 organizing bid.

Terril Yue Jones

FTC Won’t Pass Tougher Online Privacy Laws

The new chairman of the Federal Trade Commission said it was premature to pass tougher online privacy legislation, reversing the position of his predecessor. Instead, FTC Chairman Timothy J. Muris said he will focus on enforcing existing privacy laws and beefing up consumer-oriented programs.

Among his proposals is the creation of a mandatory national do-not-call list to help consumers block telemarketing sales pitches. Muris also plans to increase staffing on privacy programs by 50%.

Privacy advocates said they were encouraged by the agency’s commitment to privacy but said new laws are still needed, particularly relating to the Internet.

Business groups, which have been fighting efforts to pass new privacy laws, applauded the FTC’s stance.

Edmund Sanders

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Please see Monday’s Business Section for a preview of the week’s events.