Unemployment near three-year low

WASHINGTON (Reuters) - U.S. employment growth accelerated last month and the jobless rate dropped to a near three-year low of 8.5 percent, the strongest evidence yet the economic recovery is gaining steam.

Nonfarm payrolls increased 200,000 in December, the Labor Department said on Friday. It was the biggest rise in three months and beat economists' expectations for a 150,000 gain.

The unemployment rate fell from a revised 8.7 percent in November to its lowest level since February 2009, a heartening sign for President Barack Obama whose re-election hopes could hinge on the state of the labor market.

"The labor market is healing, but we still have a long way to go to recoup the losses we have endured. We may be close to a tipping point where gains can become more self-feeding," said Diane Swonk, chief economist at Mesirow Financial in Chicago.

A string of better-than-expected U.S. data in recent weeks has highlighted a contrast between the recovery in the world's biggest economy and Europe, where the economy is widely believed to be contracting.

The jobs data was overshadowed in financial markets by concerns over Europe's debt crisis. U.S. stocks ended mostly down, while Treasury debt prices rose on safe-haven bids.

The dollar rose to a near 16-month high against the euro.

Republican presidential hopefuls have blasted Obama's economic policies as doing more harm than good.

The latest economic signs, however, could offer him some political protection.

The economy added 1.6 million jobs last year, the most since 2006, and the jobless rate, which peaked at 10 percent in October 2009, has dropped 0.6 percentage point in the last four months.

Obama welcomed the news and urged Congress to extend a two-month payroll tax cut through 2012 to help sustain the recovery.

"We're moving in the right direction. When Congress returns they should extend the middle-class tax cut for all of this year, to make sure we keep this recovery going," he said.

Amid tensions, U.S. Navy rescues Iranians from Somali pirates

Just days after Iranian and American military officials traded warnings over a U.S. Navy vessel's departure from the Persian Gulf, the United States Navy has rescued 13 Iranian fishermen and their fishing dhow from Somali pirates in the north Arabian sea, the Pentagon said Friday. And in a side irony that punctuates the rare instance of Iranian-American co-operation, the rescue operation was carried out by a ship belonging to the very U.S. Navy aircraft carrier strike group that Iranian army officials had earlier boasted of evicting from Gulf waters.

"A boarding team from the guided-missile destroyer USS Kidd--part of the John C. Stennis Carrier Strike Group--detained 15 suspected pirates aboard the fishing dhow, the Al Molai, according to a statement today from the U.S. Naval Forces Central Command Public Affairs Office," Bloomberg News' Tony Capaccio reported Friday. "The pirates didn't resist and surrendered quickly in the rescue" operation, which occurred on Thursday.

The Iranian fishermen "were held hostage, with limited rations, and we believe were forced against their will to assist the pirates with other piracy operations," Josh Schminky, a Navy Criminal Investigative Service agent aboard the Kidd, explained in the Navy statement, according to the Bloomberg report.

The Navy has posted an unclassified YouTube video of the rescue operation--seemingly eager to play up the good turn the American Navy has done for the Iranian fishermen. (You can watch the video in the clip above.) Defense Secretary Leon Panetta also called the commander of the USS John C. Stennis' Carrier Strike Group, Rear Adm. Craig Fuller, to congratulate him on the "well executed" rescue operation, Pentagon spokesman George Little said Friday.

Secretary Panetta "said, 'When we get a distress signal, we're going to respond,'" Little relayed in a statement sent to Yahoo News. "'That's the nature of what our country is all about.'"

Not to make too much of the opportunity to win Iranian hearts and minds, of course.

Earlier this week, Iran's Army chief Ataolla Salehi asserted that Iranian military exercises had prompted a U.S. Navy aircraft carrier to vacate the Persian Gulf. And he warned the United States about any plans for the carrier's return.

"Iran will not repeat its warning ... the enemy's carrier has been moved to the Sea of Oman because of our drill," Salehi said on Tuesday, according to a Reuters report. "I advise, recommend and warn them over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once."

Salehi didn't name the American naval vessel in question, "but the USS John C. Stennis leads a task force in the region, and the U.S. Navy's 5th Fleet website pictured it in the Arabian Sea last week," Reuters reported.

Pentagon officials promptly pushed back against the Iranian army chief's warning, stressing that the United States simply wants to ensure open traffic in international waters."We are committed to protecting maritime freedoms that are the basis for global prosperity," the Pentagon's Little said Tuesday. "This is one of the main reasons our military forces operate in the region."

Tensions have been rising between the United States and Iran in recent weeks, with Iranian officials issuing a series of erratic threats about their military capacity to control the Strait of Hormuz, a key global energy transport hub. On Sunday January 1, President Obama signed legislation that could penalize any institution that does business with Iran's Central Bank--a chief source of Iran's revenues for oil exports. European diplomats also said this week that they're preparing a ban throughout the EU on the import of Iranian oil that would go into place at the end of the month.

Iranian officials have given numerous statements the past week indicating they would like to return to international nuclear talks. But EU officials have told Yahoo News that Iran has not yet formally responded in writing to a proposal issued by European Union High Representative Catherine Ashton in October to resume negotiations.

Outcry in Nigeria as fuel prices more than double

LAGOS, Nigeria (AP) -- Irate drivers in Africa's most populous nation paid more than twice the usual price Monday after the government quietly removed a long-cherished consumer subsidy that had kept gas affordable, prompting fears of strikes and unrest.

Gas powers Nigeria's generators because the national electricity supply is sporadic at best, and fuel also keeps engines running in traffic that can snarl for hours. The government's announcement — made over a long holiday weekend — drew outrage.

"This New Year 'gift' by the presidency is callous, insensitive and is intended to cause anarchy in the country," said a joint statement by two unions who said they were planning general strikes and protests in the coming days. "We shall neither surrender nor retreat."

Unrest would only add to Nigeria's security woes: President Goodluck Jonathan already declared a state of emergency over the weekend in parts of the country hit by a growing Islamic insurgency that is fueled in part by widespread poverty.

And the fuel price hike is likely to result in even higher prices in the landlocked and violence-plagued north, as Nigeria's refined oil is mainly imported through ports in the country's south.

Previous attempts to tamper with the subsidy over more than two decades have been met with nationwide protests, compelling even heavy-handed military governments to reduce it instead.

The labor unions also preemptively warned police and security forces "not to accept any order to shoot Nigerians or attack them for publicly resisting these evil hikes in fuel prices."

Tensions already are on the rise in the capital of Abuja, where police officers promptly dispersed a protest using tear gas and arrested five people including a former lawmaker. And at one bus stop in the megacity of Lagos, a conductor pushed a policeman trying to board his bus for free, saying that the hike meant that even uniformed officers would henceforth have to pay.

Many gas stations were shut down altogether on Monday, since gas station owners had only learned about the change at the same time as everyone else.

Signs at a few stations put the cost at $3.50 per gallon (94 cents per liter) — just over double Sunday's morning price of about $1.70 per gallon (45 cents per liter).

While that's cheap by American standards, most Nigerians subsist on just $2 a day and the rising gas prices are expected to force food prices to spiral as well.

"I don't want to lose customers by doubling my rates, so I'll have to bear some of this cost myself," said Yomi Esan, 31, a driver for a taxi chain. "My biggest worry is losing my customers because this is how I feed my family."

Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the United States, but virtually all of its petroleum products are imported after years of graft, mismanagement and violence at its refineries.

The Petroleum Products Pricing Regulatory Agency announced Sunday it was stopping to pay the subsidy on fuel to petroleum importers effective immediately.

The government has said the move will save the country some $8 billion, some of which will be dedicated to much-needed infrastructure projects. Previous attempts to lift the subsidies have been met with nationwide strike actions.

An executive with a top gas station owner, who spoke on condition of anonymity because of the sensitivity of the matter, said the move would push companies to be more efficient so they can cut costs and sell at more competitive prices.

But in a country where few people see any wealth from the country's staggering oil revenues, the subsidy was a rare government benefit and one Nigerians don't want to lose.

Esan, the taxi driver who is afraid to raise his prices, is despondent about his financial future if he stays in Nigeria. He's already started immigration procedures for three other countries.

"I had been saving to buy my own car, but with this, I just want to leave this country," he said.

Hundreds of thousands protest in Syria

Demonstrators protest against Syria's President Bashar al-Assad after Friday prayers in Binsh near Adlb



Hundreds of thousands of Syrians poured into the streets across the nation in the largest protests in months, shouting for the downfall of the regime in a defiant display invigorated by the presence of Arab observers, activists said.

Iran reports nuclear progress

A new medium-range missile is fired from a naval ship during Velayat-90 war game on Sea of Oman near the Strait of Hormuz in southern Iran January 1, 2012. Iran test-fired a new medium-range missile, designed to evade radars, on Sunday during the last days of its naval drill in the Gulf, the official IRNA news agency quoted a military official as saying.



Iran announced a nuclear fuel breakthrough and test-fired a new radar-evading medium-range missile in the Gulf on Sunday, moves that could further antagonize the West at a time when Tehran is trying to avert harsh new sanctions on its oil industry.

Armed Nigeria militia marches through largest city

Unidentified members of Oodua People's Congress militia ride on buses carrying guns and machetes during a protest against Boko Haram in Lagos, Nigeria,Thursday, Dec. 8, 2011. The militia group from Nigeria's southwest walked through the streets of the commercial capital firing rifles as police and security forces fled. The group said they were protesting the rise of Boko Haram, a violent Muslim sect in the country's northeast which they claim are responsible for bombings and assassinations




LAGOS, Nigeria (AP) — The armed militia marched unstopped through Nigeria's largest city, firing shotguns and rifles in the air in what they called a protest against a radical Muslim sect responsible for killings across the oil-rich country.

The demonstration Thursday by members of the Oodua People's Congress highlighted the growing sense of insecurity and widening distrust among Nigeria's more than 160 million people and its major ethnic groups. Men armed with shotguns, rifles and machetes freely roamed the streets of Lagos without a sign of police, while passers-by shouted that their region of Nigeria should be protected — rather than the country as a whole.

"We don't want them to fight here in our Lagos because Lagos is for everybody, not for Yoruba alone, but for everybody," said Chief Orebiyi Ebenezer, a militia leader. "We need peace here in Lagos."

The Oodua People's Congress is a militia made up of Nigeria's Yoruba ethnic group, which dominates the country's southwest. The party takes its name from Oduduwa, the ancestor of the Yoruba race, and formed after military ruler Ibrahim Babangida annulled a presidential election in 1993 that many believe a wealthy Yoruba businessman won.

The group evolved into a quasi-political organization and likely receives the implicit support of major politicians in the region, though its members have been implicated in political violence and thuggery. Rumors abound in Nigeria's southwest that the group maintains a stockpile of firearms in a country where those weapons are strictly regulated by law, if not practice.

Those rumors appeared true as about 100 armed members riding in minibuses and marching by foot came into Lagos on Thursday, home to 15 million people. They fired long rifles and locally made shotguns into the air, unstopped by police as they ended up at Teslim Balogun Stadium, which hosted FIFA's Under-17 World Cup in 2009.

Leke Akintayo, a militia leader, said their protest was a show of force against Boko Haram, a Muslim sect in Nigeria's northeast that has killed at least 388 people this year alone, according to an Associated Press count. The group also claimed responsibility for the Aug. 26 bombing of the United Nations headquarters in Nigeria's capital Abuja as part of its campaign for the implementation of strict Shariah law across the nation.

"We OPC, we still exist," Akintayo said. "They should not fall (under) our hand. ... This is our father's land."

He added: "We are going to retaliate if there is any bomb blast hitting any place. We are ready for them. Anytime, any moment."

How the group would retaliate remains unclear, but Lagos remains a melting pot city for Nigeria's more than 250 ethnic groups. At risk would be those belonging to the Hausa Fulani ethnic group, Muslims who dominate the country's north.

Such ethnic-based violence remains all too common in Nigeria. Since the nation became a democracy in 1999, tens of thousands have died in communal violence that cuts across religious and ethnic lines, but often takes root in political or economic issues.

Different groups in Nigeria's south have claimed they would fight Boko Haram if the government fails to stop the group, including militants in the country's oil-rich and restive Niger Delta. However, Thursday's march represented the first time a militia took the street armed to display and threaten using force to end the violence.

That threat mixed with theater at one point as one man holding a pump-action shotgun walked by journalists and said in Yoruba: "Should we shoot it for you?" He racked a shell into the shotgun and fired as he walked down the busy street filled with uniformed school children trying to get home.

Iran releases video of downed U.S. spy drone–looking intact

Iran's Press TV on Thursday broadcast an extended video tour of the U.S. spy drone that went down in the country--and it indeed appeared to look mostly intact.

American officials have acknowledged that an unmanned U.S. reconnaissance plane was lost on a mission late last week, but have insisted that there is no evidence the drone was downed by hostile acts by Iran. Rather, they said, the drone likely went down because of a malfunction, and they implied the advanced stealth reconnaissance plane would likely have fallen from such a high altitude--the RQ-170 Sentinel can fly as high as 50,000 feet--that it wouldn't be in good shape.

But Iranian military officials have claimed since Sunday that they brought down an American spy drone that was little damaged. And now they have provided the first visual images of what looks to be a drone that at least outwardly appears to be in decent condition, in what is surely another humiliating poke in the eye for U.S. national security agencies.

The Pentagon declined to comment on the released images Thursday, a Defense Department spokesman told Yahoo News. But military analysts said it appeared to them to be the American drone in question.

"I have been doing this for thirty years, and it sure looks like" a stealthy U.S. drone to me," Loren Thompson, a military analyst with the Lexington Institute and consultant to the RQ-170's manufacturer, Lockheed Martin, told Yahoo News in a telephone interview Thursday. "I think we are going to face the high likelihood that Iran has an intact version of one of our most important intelligence gathering tools."

Still, Thompson went on, the intelligence "windfall" to Iran from obtaining the advanced U.S. stealthy drone may be mitigated.

"I don't think the Iranians get as much out of it as they might hope," he said. "It probably came into their hands as a result of a technical malfunction. What that means is they still don't have a real defense against the U.S. flying other vehicles that have similar capabilities, without much fear of interception."

Analysts also noted that the video of the drone released by Iran did not show the drone's underside. "Pretty intact," the Center for Strategic and International Studies' James Lewis said by email. "Interesting that they covered the underside."

The New York Times reported Thursday that--unsurprisingly--the RQ-170 was lost while making the latest foray over Iran during an extended CIA surveillance effort of Iran's nuclear and ballistic weapons program.

"The overflights by the bat-winged RQ-170 Sentinel, built by Lockheed Martin and first glimpsed on an airfield in Kandahar, Afghanistan, in 2009, are part of an increasingly aggressive intelligence collection program aimed at Iran, current and former officials say," the Times' Scott Shane and David Sanger wrote. "The urgency of the effort has been underscored by a recent public debate in Israel about whether time is running out for a military strike to slow Iran's progress toward a nuclear weapon."

Iran in turn has complained that the drone overflights represent an act of aggression and violation of its sovereignty, and summoned the Swiss envoy--who represents U.S. interests in Iran--on Thursday to lodge a protest.

However, while the images of the U.S. drone surely allowed Iran to score another public relations blow against Washington, Iran may find it tough to generate much in the way of international sympathy for being the target of U.S. surveillance.

Last week, Iranian hardliners ransacked the British embassy in Tehran, prompting the United Kingdom to recall its diplomatic staff from Tehran and order Iran's embassy in London closed. Last month, the UN atomic watchdog agency issued a report raising concerns about research Iran is suspected by some nations to have conducted before 2003 on military aspects of its nuclear program. Iran has insisted its nuclear program is for peaceful energy purposes. In October, the United States accused elements of Iran's Qods force of plotting to assassinate the Saudi envoy to the United States. The United Nations General Assembly voted last month in favor of a resolution condemning the Iranian plot.

Amid its growing international isolation, Iran, unsurprisingly, seemed intent to play up the drone incident for all it could.

"China, Russia want to inspect downed U.S. drone," proclaimed a headline from Iran's Mehr news agency Thursday.

The RQ-170 Sentinel, however, reportedly did not use the latest U.S. surveillance technology on board, in part because as a single-engine aircraft, it was thought more likely to occasionally go down.

"The basic principles of stealthy aircraft are fairly well known," Thompson said. "In terms of [the drone's] on-board electronics and information systems, it is fairly routine in combat to require authentication codes to make them hard to unlock."