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Pace of growth to slow as housing cools, says Statscan

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Christinne Muschi/christinne muschi The Globe and Mail

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Pace of growth slowing down, says Statscan

Canada's economy will continue to churn out growth, but the pace is set to slow as the housing market cools and the U.S. economy falters, according to a Statistics Canada report released Thursday.

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The agency's leading economic indicator index - a monthly gauge of where the economy appears headed in the coming months - slowed to a 0.4 per cent increase in July, after a gain of 0.7 per cent in June.

July's gain is the smallest recorded in 13 months and follows five steady months of increases closer to 1 per cent.

"The economy is downshifting partly because of the slowing housing market," said Sal Guatieri, a senior economist at BMO Capital Markets.

The slowing U.S. economy is also dragging down Canada's leading economic indicators, Mr. Guatieri said.

"Those are two areas we need to focus on going forward - that Canada's housing market will cool too rapidly because too much demand was pulled forward into earlier this year, and we have to focus on the U.S. situation because there is a higher-than-normal risk of a recession," he said.

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Oil from Gulf spill will be around for a while, new study says

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A 35-kilometre invisible mist of oil is meandering far below the surface of the Gulf of Mexico, where it will probably loiter for months or more, U.S. scientists reported Thursday in the first conclusive evidence of an underwater plume from the BP PLC spill.

The most worrisome part is the slow pace at which the oil is breaking down in the cold, 4.5 C water, making it a long-lasting but unseen threat to vulnerable marine life, experts said.

Earlier this month, top federal officials declared the oil in the spill was mostly "gone," and it is gone in the sense you cannot see it. But the chemical ingredients of the oil persist more than 800 metres beneath the surface, researchers found.

And the oil is degrading at one-tenth the pace at which it breaks down at the surface. That means "the plumes could stick around for quite a while," said study co-author Ben Van Mooy of the Woods Hole Oceanographic Institution in Massachusetts, which led the research published online in the journal Science.

Monty Graham, a scientist at the Dauphin Island Sea Lab in Alabama who was not involved in the study, said: "We absolutely should be concerned that this material is drifting around for who knows how long. They say months in the [research]paper, but more likely we'll be able to track this stuff for years."

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U.S. workplace deaths fall to lowest level since 1992

The number of workers who died on the job fell by 17 per cent last year to the lowest level in nearly two decades, as workers logged fewer hours during the economic recession, the U.S. Labor Department said Thursday.

The 4,340 workplace fatalities recorded in 2009 was the smallest total since the Bureau of Labor Statistics first began tracking the data in 1992. It's the second straight year that fatal work injuries have reached a historic low, following a 10-per-cent drop in 2008.

High unemployment and layoffs in more dangerous industries like construction played a major role in the decrease, the agency said. The construction unemployment rate is 17.3 per cent, nearly double the overall jobless rate of 9.5 per cent.

Workers on average logged 6 per cent fewer hours last year than in 2008. Employees in construction worked 17 per cent fewer hours in 2009 than the previous year.

Workplace suicides declined by 10 per cent to 237 after reaching a historic high in 2008. But that count is still the second-highest total recorded since the agency began tracking workplace deaths.

One of the few sectors where the fatality rate increased was in building and grounds maintenance, where the number of deaths rose 6 per cent.

U.S. jobless claims jump

New applications for unemployment insurance reached the half-million mark last week for the first time since November, a sign that employers are likely cutting jobs again as the economy slows.

The Labor Department said Thursday that initial claims for jobless benefits rose by 12,000 last week to 500,000, the fourth increase in the past five weeks. Wall Street economists forecast that claims would drop.

The four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December. There were no special factors that distorted the numbers, a Labor Department analyst said.

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Intel seeks security

Chip maker Intel Corp. is making a $7.68-billion offer to buy McAfee Inc. , one of the world's best-known providers of security software for personal computers.

The offer of $48 per share represents a 60-per-cent premium over McAfee's stock price at the end of trading on Wednesday McAfee shares surged to $47.42 in premarket trading after the announcement. Intel shares slipped 2.5 per cent to $19.11.

Intel, which is based in Santa Clara, Calif., said the deal highlights "that security is now a fundamental component of online computing."

Excluding costs and other one-time items related to the acquisition, Intel predicts the deal will slightly boost earnings next year and improve after that.

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RIM shopping for mobile ad network

Under pressure in the increasingly competitive wireless market, BlackBerry maker Research In Motion Ltd. is shopping for a mobile advertising network, people familiar with the matter said, the Wall Street Journal reports.

The Journal says that in recent months, the Canadian device maker has held talks with Baltimore-based mobile ad network Millennial Media about a potential acquisition, these people said.

But the talks have stalled over disagreements regarding the value of Millennial, which serves advertisements on its own network of mobile websites, the Journal says. It also brokers ad sales to a group of other mobile ad networks.

Encouraged by the recent sale prices fetched by rivals AdMob and Quattro Wireless, Millennial has asked for between $400-million to $500-million, these people said. RIM has been unwilling to pay such a price, these people added.

RIM is under a growing amount of pressure to respond to Google Inc. and Apple Inc., which purchased AdMob and Quattro, and are making strong inroads in the wireless computing industry.

RIM declined to comment. Millennial also declined comment.

In an interview from early August with The Wall Street Journal, Millennial Chief Executive Paul Palmieri said that the company hopes to make a public offering of shares rather than be acquired. "We are on the path of being an independent company," said Mr. Palmieri.

Retail results don't impress

Sears Holdings reported early Thursday that it had posted a loss in the second quarter as consumers curbed spending in a grim U.S. economy. Earlier this week, the retailer's Canadian unit, Sears Canada, posted a 35-per-cent drop in quarterly profit.

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Staples , the office supply company, saw its second-quarter rise 40 per cent, but cost cuts helped. And revenue was flat as Americans and small businesses spent cautiously. Revenue at stores open at least a year was flat as more customers shopped in stores but spent less.

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Burgers and bonds

McDonald's Corp. , the world's largest restaurant chain, became the first foreign non-financial company to sell yuan-denominated bonds in Hong Kong, Bloomberg News reports.

McDonald's, based in Oak Brook, Ill., sold 200 million yuan ($29-million) of 3 per cent notes due in September, 2013, offer manager Standard Chartered PLC said in an e-mailed statement Thursday.

The issue "opens up more potential issuers to tap this market, especially those who have sizable operations in China," said Arthur Lau, a Hong-based fixed-income fund manager at JF Asset Management Ltd.

Also, McDonald's plans to open 150-175 restaurants in China this year.

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