Tooth Fairy inflation: Price of a tooth nears $4

NEW YORK — Days of finding a quarter under your pillow are long gone. The Tooth Fairy no longer leaves loose change.

Kids this year are getting an average of $3.70 per lost tooth, a 23 percent jump over last year's rate of $3 a tooth, according to a new survey by payment processor Visa Inc., released Friday. That's a 42 percent spike from the $2.60 per tooth that the Tooth Fairy gave in 2011.

Part of the reason for the sharp rise: Parents don't want their kids to be the ones at the playground who received the lowest amount.

"A kid who got a quarter would wonder why their tooth was worth less than the kid who got $5," says Kit Yarrow, a consumer psychologist and professor at Golden Gate University.

To avoid that, Brian and Brittany Klems asked friends and co-workers what they were giving their kids. The Klems, who have three daughters and live in Cincinnati, settled on giving their six-year-old daughter Ella $5 for the first tooth that fell out, and $1 for any others. They say that $5 was enough without going overboard. They didn't want other families to think they were giving too much.

Then Ella found out that one of her friends received $20 for a tooth.

"I told her that the Tooth Fairy has only so much money for every night, and that's how she decides to split up the money," says Brian Klems, 34, a parenting blogger and author of "Oh Boy, You're Having a Girl: A Dad's Survival Guide to Raising Daughters."

Confused about what to give?

Ask other parents what they're giving, says Jason Alderman, a senior director of financial education at Visa. That can at least get you in the ballpark of what your kids' friends are getting, he says. Alderman gave his two kids $1 a tooth.

"I think we we're on the cheap side," he says. Other families gave about $5 a tooth. One family gave their kid an antique typewriter. "I have no idea how they got that to fit under the pillow," he laughs.

Visa also has a downloadable Tooth Fairy Calculator app that will give you an idea of how much parents in your age group, income bracket and education level are giving their kids, says Alderman. The calculator is also available on the Facebook apps page.

How much kids are getting from the Tooth Fairy depends on where they live. Kids in the Northeast are getting the most, according to the Visa study, at $4.10 per tooth. In the west and south, kids received $3.70 and $3.60 per tooth, respectively. Midwestern kids received the least, at $3.30 a tooth.

Then there are the heavy hitters.

After losing her first tooth, 5-year-old Caroline Ries found a $100 bill under her pillow, along with a brand new My Little Pony toothbrush and a tube of toothpaste.

But there was a catch.

Her mother, Nina Ries, also left a note saying that the $100 had to go straight to Caroline's college fund. The Tooth Fairy would give her another $20 to spend anyway she likes if she brushes her teeth every day after lunch for a month. She did, and 30 days later Caroline found $20 under her pillow.

Ries, a 39-year-old lawyer and owner of Ries Law Group in Santa Monica, Calif., says that $120 is a lot to give, but she believes that she is teaching her daughter that education and taking care of your teeth is important. Ries says her friends give their kids about $20 a tooth.

That's way more than the $1 Ries used to get for losing her teeth as a child.

"It's incredible inflation," she says.

The Visa survey results are based on 3,000 phone interviews conducted in July.

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Tooth Fairy Calculator: https://apps.facebook.com/449594221747991/

Follow Joseph Pisani at http://twitter.com/josephpisani.

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Weighing Yellen vs. Summers for Federal Reserve

WASHINGTON — Lawrence Summers is the White House insider with a direct line to President Barack Obama. Janet Yellen is the Federal Reserve veteran with a long list of congressional patrons.

The two Ivy League-trained economists have emerged as leading contenders to replace Ben Bernanke as chairman of the Fed, the nation's central bank. Obama could announce his nominee in the coming weeks.

As presidential nominations go, the top Fed post ranks higher than Cabinet secretaries without the longevity of Supreme Court justices. Fed chairmen serve four-year terms but their stints don't coincide with presidential terms and the Fed's independence is jealously guarded.

The central bank wields extraordinary influence over the lives of millions of Americans. Its two main missions are fostering maximum employment and stabilizing prices. With its power to regulate the supply of money and set interest rates, it influences economic activity, hiring and inflation. It also is the leading regulator of banks and plays a crucial role as the country's lender of last resort when banks can't get their money elsewhere.

So in the aftermath of a calamitous financial crisis in 2008 and with national unemployment still high at 7.4 percent, the selection of a successor to Bernanke has assumed all the drama of a high-stakes Washington moment.

A look at Summers and Yellen and their experience and stand on some issues:

EXPERIENCE

Summers has held numerous public policy posts, beginning as a member of the Council of Economic Advisers under President Ronald Reagan in 1982. But he has not worked inside the Fed. He was chief economist at the World Bank from 1991 to 1993. Under President Bill Clinton, Summers served as deputy secretary and then secretary of the Treasury. He was president of Harvard University from 2001 to 2006. Obama appointed him to serve as the director of the National Economic Council in 2009, a post he held until November 2010. He is a professor of economics at Harvard. He also has ties to Wall Street, having consulted for Citigroup and the exchange company Nasdaq OMX.

Early in her career, Yellen worked as an economist at the Fed and was a business and economics professor at the University of California, Berkeley, when she became a member of the Fed's board of governors in 1994. Clinton selected her to chair his Council of Economic Advisers from 1997 to 1999. She was president of the San Francisco Federal Reserve Bank, one of 12 Federal Reserve districts. In 2010, Obama selected her as vice chair of the Fed's board of governors, a position she has held since.

REGULATION

Summers helped the Obama administration devise the proposals that eventually would shape the financial regulation bill that Congress passed and Obama signed into law in 2010, much of it over the objections of big banks. That aggressive stance is in contrast to Summers' support for legislation during the Clinton administration that allowed commercial banks to engage in investment banking, a deregulatory step that permitted banks to buy and sell of mortgage backed securities and other financial instruments that increased their exposure to risk. Summers' critics say his Wall Street work and his stance in the 1990s suggest he would be a less than enthusiastic regulator. But his backers say his support for a regulatory overhaul after the financial crisis belies those concerns.

Yellen has advocated tough regulations since her time at the San Francisco Fed. She is credited for issuing early warnings that the housing bubble and unregulated financial practices threatened the economy. As the Fed's vice chair she has called for additional financial system safeguards. In a speech in June she said it might be necessary to require banks to set aside more capital than the increases that have been proposed to reduce the threat they might pose to the broader financial system. Some lawmakers have called for a return to pre-Great Depression restrictions separating commercial banks from investment banks. "I am not persuaded that such blunt approaches would be the most efficient ways to address the too-big-to-fail problem," she told an international monetary conference in Shanghai, China.

MONETARY POLICY

Summers has been a strong advocate of a direct infusion of government spending to respond to the recession through taxpayer financed stimulus programs. But even if he believes that the Fed's massive bond purchases that have had the effect of pumping hundreds of billions of dollars into the economy aren't as effective in kick starting a recovery, his backers insist there will be continuity with the current policy no matter whom Obama chooses for the post. What's more, massive fiscal stimulus is highly unlikely given opposition from congressional Republicans to increased spending.

Yellen's approach to monetary policy is described as "dovish," meaning she is more inclined to focus on meeting the Fed's maximum employment goal. In a speech in March she acknowledged the inflation risks and costs associated with expanding the money supply, but she argued that "insufficiently forceful action to achieve our dual mandate also entails costs and risks." She added: "At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more-rapid growth in employment."

X-FACTOR

Inside the White House, Summers is the favorite. As director of Obama's National Economic Council, Summers led the president's crisis brain trust that forged both a response to the economic collapse and the financial meltdown with a combination of stimulus spending and regulatory proposals. At Treasury under Clinton, Summers helped manage the Mexican peso crisis in 1995 and then the Asian currency crisis of 1997-98. That experience, no doubt, is a factor in Obama's consideration. Obama admires his intellect, and advisers see him as the candidate with the best experience to deal with international economic crises that still could erupt and threaten the United States' modest recovery.

His supporters rave about his intellect while conceding he can be prickly and supercilious and is better known for winning arguments than building consensus. Still, they say he managed to successfully lead a White House economic team, many of whose members remain loyal admirers. And while he would be new to the Fed, Summers has allies such as Federal Reserve Board member Jeremy Stein who could smooth his way in the consensus-oriented Federal Open Market Committee that sets monetary policy for the central bank.

Yellen would be the first woman to chair the Fed, a historical achievement that is not lost on the White House and that has prompted leaders of some women's groups to rally to her side. The gender issue is all the more prominent because Summers was forced to resign as president of Harvard in 2006, in part because of comments he made raising questions about whether women were skilled in math and science. Moreover, Obama did select her to be the Fed board's vice chair in 2010.

She also has won powerful backing from Senate Democrats, particularly more liberal senators. In a letter urging Obama to nominate Yellen, about 20 Democratic senators said her experience setting monetary policy would lend continuity to the board. "The substantial size of the Federal Reserve's balance sheet, combined with the delicate state of the recovery," they wrote, "makes Governor Yellen's familiarity with the Fed process and communications skills that much more important."

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Report: GE to spin off consumer finance business

General Electric Co. plans to spin off the U.S. consumer lending business of its finance arm with an initial public offering of stock that could come early next year, according to The Wall Street Journal.

The newspaper also said Friday that the Fairfield, Conn., conglomerate is considering smaller spinoffs or asset sales, but it has started preliminary work on the IPO. The paper cited unnamed sources familiar with the matter.

The consumer finance business provides store credit cards to about 55 million people for retailers like Wal-Mart Stores Inc. It accounts for $50 billion of GE Capital's $274 billion in outstanding loans, according to the report.

Aside from its finance business, GE sells a wide variety of industrial equipment and appliances around the world. This includes jet engines, medical diagnostic equipment, oil and gas drilling equipment and washing machines.

GE representatives did not immediately return calls early Friday morning from The Associated Press seeking comment.

Shares of GE climbed 23 cents to $23.34 before markets opened. That put the stock up 11 percent so far this year.

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US consumer spending up weak 0.1 percent in July

WASHINGTON — U.S. consumers barely increased their spending in July as their income grew more slowly, held back in part by steep government spending cuts that reduced federal workers' salaries. The tepid gains suggest economic growth is off to a weak start in the July-September quarter.

The Commerce Department said Friday that consumer spending rose just 0.1 percent in July from the previous month. That's slower than June's 0.6 percent increase. Consumers cut their spending on long-lasting manufactured goods, such as cars and appliances. Spending on services was unchanged.

Income rose 0.1 percent in July following a 0.3 percent June gain. Overall wages and salaries tumbled $21.8 billion from June — a third of the decline came from forced furloughs of federal workers.

Consumers' spending drives roughly 70 percent of economic activity. The weak spending report led some economists to sound a more pessimistic note about economic growth in the current July-September quarter. It follows July data showing steep drops in orders for long-lasting manufactured goods and new-home sales.

"This is a disappointing report on a number of levels," said James Marple, senior economist at TD Economics. "Prospects for a pickup in economic growth in the third quarter hinge on a broad-based acceleration in spending by households and business to offset the ongoing drag from government. The data for the first month of the quarter are not following this script."

Several analysts said that economic growth is unlikely to match the 2.5 percent annual rate reported Thursday for the April-June quarter. That was more than twice the growth rate in the first quarter and far above an initial estimate of a 1.7 percent rate for April through June.

Marple predicts third-quarter growth will fall around 2 percent, perhaps even lower.

The Federal Reserve will consider the consumer spending and income data at its September meeting, when it decides whether to begin slowing its $85 billion a month in bond purchases. The bond purchases have helped keep long-term borrowing rates low.

But the most critical factor that the Fed will weigh is the August employment report, which will be released next Friday. It's the final jobs report before the Fed meets.

Another concern is that rising interest rates could dampen consumer spending, particularly on homes and cars. Mortgage rates have already risen more than a full percentage point since May.

In July, the savings rate was unchanged at 4.4 percent of after-tax income. That was the smallest since the rate had been 4.3 percent in March.

The small rise in spending was driven by a 0.8 percent gain in purchases of nondurable goods, such as clothing. Purchases of durable goods such as autos fell 0.2 percent and purchases of services such as utilities and doctor's visits were unchanged in July.

A price gauge tied to consumer spending was up a small 0.1 percent in July compared to June. Prices excluding volatile food and energy are up just 1.4 percent compared to a year ago, significantly below the Federal Reserve's 2 percent target for inflation.

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Dunkin' Donuts criticized for 'racist' ad campaign

BANGKOK — A leading human rights group has called on Dunkin' Donuts to withdraw a "bizarre and racist" advertisement for chocolate doughnuts in Thailand that shows a smiling woman with bright pink lips in blackface makeup.

The Dunkin' Donuts franchise in Thailand launched a campaign earlier this month for its new "Charcoal Donut" featuring the image, which is reminiscent of 19th and early 20th century American stereotypes for black people that are now considered offensive symbols of a racist era.

In posters and TV commercials, the campaign shows the woman with a shiny jet black, 1950s-style beehive hairdo holding a bitten black doughnut alongside the slogan: "Break every rule of deliciousness."

Human Rights Watch said it was shocked to see an American brand name running an advertising campaign that would draw "howls of outrage" if released in the United States.

"It's both bizarre and racist that Dunkin' Donuts thinks that it must color a woman's skin black and accentuate her lips with bright pink lipstick to sell a chocolate doughnut," said Phil Robertson, the deputy Asia director for Human Rights Watch. "Dunkin' Donuts should immediately withdraw this ad, publicly apologize to those it's offended and ensure this never happens again."

The campaign hasn't ruffled many in Thailand, where it's common for advertisements to inexplicably use racial stereotypes. A Thai brand of household mops and dustpans called "Black Man" uses a logo with a smiling black man in a tuxedo and bow tie. One Thai skin whitening cream runs TV commercials that say white-skinned people have better job prospects than those with dark skin. An herbal Thai toothpaste says its dark-colored product "is black, but it's good."

The CEO for Dunkin' Donuts in Thailand dismissed the criticism as "paranoid American thinking."

"It's absolutely ridiculous," said CEO Nadim Salhani. "We're not allowed to use black to promote our doughnuts? I don't get it. What's the big fuss? What if the product was white and I painted someone white, would that be racist?"

Salhani said that the Thai franchise of Dunkin' Donuts operates independently of the American operation and that doughnut sales have increased about 50 percent since the campaign was launched around two weeks ago, which he attributed to curiosity about the new advertisements.

"Not everybody in the world is paranoid about racism," said Salhani, a Lebanese expatriate in Thailand who said his teenage daughter was the model featured in the campaign. "I'm sorry, but this is a marketing campaign, and it's working very well for us."

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Perez: Fast food strikes show need for wage hike

WASHINGTON — The recent spate of fast-food worker strikes is another sign of the need to raise the minimum wage for all workers, Labor Secretary Thomas Perez said in an interview with The Associated Press.

"It's important to hear that voice," he said of worker protests demanding higher pay that have steadily grown in size. The latest protests were Thursday in cities including New York, Chicago and Detroit.

Perez's comments came in a wide-ranging interview, his first since taking the helm of the agency a little over a month ago following a contentious confirmation process.

He compared the recent protests to the demands of demonstrators in the 1963 March on Washington who sought a national minimum wage to give workers better living standards.

While he declined to address fast-food workers' demand to raise wages to $15 an hour, Perez said he is taking a lead role in President Barack Obama's push to boost the federal minimum wage from $7.25 to $9 an hour. Obama has called for the wage hike in several recent speeches on the economy, but Congress has not acted.

"For all too many people working minimum wage jobs, the rungs on the ladder of opportunity are feeling further and further apart," Perez said.

Perez, who previously served as the nation's top civil rights enforcer, said late Wednesday he sees many parallels between his former job and his new post as Labor secretary. His primary role, he said, will be as an advocate for workers.

That means continuing the work of his predecessor, Hilda Solis, in cracking down on companies that violate labor laws and making sure there's a "level playing field" for employers who follow the rules.

Senate Republicans who opposed Perez's confirmation had complained that his record of vigorous enforcement of civil rights laws at the Justice Department foreshadowed an overly activist approach at Labor. But Perez said he's made a point of meeting with business leaders and stressed that his previous tenure as head of Maryland's Department of Labor, Licensing and Regulation showed an even-handed approach that won praise from business groups like the Maryland Chamber of Commerce.

Perez said job creation is a focus and that he views the Labor Department as "the quarterback in the workforce system," bringing together workers, businesses and labor unions together to build a "demand-driven" workforce that has the skills needed to meet employer needs.

The unemployment rate of 7.4 percent remains stubbornly high four years after the recession officially ended. And employers added just 162,000 jobs in July, the fewest in four months. The economy's subpar growth and modest consumer spending are making many businesses cautious about hiring.

Some critics have said Obama's health care law has prompted employers to hire more part-time workers or cut back workers' hours to avoid providing health insurance for permanent, full-time workers. Part-time work has made up 77 percent of the job growth so far this year.

But Perez defended the law, saying 90 percent of jobs created since Obama signed the health care measure into law in 2010 are full time.

"The data belies the notion that the Affordable Care Act is leading to this wholesale restructuring of the workplace," he said.

Perez says employers tell him what they want most from the Labor Department is help getting workers necessary training. Also a priority: an overhaul of immigration laws as a means to grow the economy.

"I talked to one CEO of a large manufacturer, and he said that too many people walking through the door who want a job don't have the skills necessary to do the job," Perez said.

Labor officials have been meeting for the past month with business leaders from different sectors to determine how they can partner with colleges and other training programs to get skilled workers. Perez said he sees future job growth being particularly strong in manufacturing, health care and the restaurant industry.

He also praised partnerships between unions and employers that have led to better training and job creation in the culinary sector in Nevada and the health care sector in New York.

Perez has won enthusiastic support from Democrats, unions and labor advocacy organizations. Those groups praised new labor regulations issued this week that require government contractors to set new goals for hiring veterans and disabled workers. Business groups say the regulations on disabled workers clash with current federal disability law and have threatened to challenge the rules in court.

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Follow Sam Hananel on Twitter: http://twitter.com/SamHananelAP

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Markets rebound as Syria jitters ease

LONDON — Indications that a U.S.-led military intervention in Syria may not be happening imminently allowed investors to regroup Thursday, helping to shore up stock markets. Commodities, such as oil and gold, drifted lower after racing ahead in the first half of the week as worries over an attack escalated.

However, the prospect of an immediate multinational response appears to have diminished, with President Barack Obama giving the impression Wednesday that he had not yet decided to back a military strike.

The U.K. government also backed down on a parliamentary vote to authorize British participation in any strike against Syria until UN inspectors reveal their findings on the apparent chemical attack in the suburbs of Damascus that has been blamed on the government of President Bashar Assad. The report is expected within a week.

"What seems like a delay in U.S. and allied military action in Syria is providing temporary relief for the equity markets that endured weakness earlier in the week," said Neil MacKinnon, global macro strategist at VTB Capital.

In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 6,465 while Germany's DAX was steady at 8,159. The CAC-40 in France was 0.2 percent higher at 3,966.

In the U.S., the Dow Jones industrial average was up 0.1 percent at 14,833 while the broader S&P 500 index rose the same rate to 1,636.

An upward revision to second-quarter U.S. economic growth to an annualized rate of 2.5 percent from the previous estimate of 1.7 percent had little impact on trading as it was largely due to an improvement in the country's trade balance — there were more exports relative to imports than previously thought.

Up until this week, the main focus of attention through the summer months has been whether the Federal Reserve will start to reduce its monetary stimulus as soon as next months. A run of largely solid economic figures had raised the likelihood of that happening but recently the data have been a little bit more mixed.

The Fed is currently buying $85 billion worth of financial assets a month in an attempt to lower borrowing rates and shore up the U.S. economy.

The money has been one of the reasons why stock markets around the world have recovered over the past few years following the global financial crisis so the prospect of a reduction in the stimulus, or so-called tapering, has been met with concern by a number of investors even though it would indicate economic conditions getting back to normal.

"As investors weigh the near-term risk posed by potential military intervention in Syria and the uncertainty surrounding the timing and magnitude of the Fed's next move, the potential for volatility to re-emerge in the capital markets also appears to be on the rise," said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Earlier in Asia, Japan's Nikkei 225 index rose 0.9 percent to close at 13,459.71 while South Korea's Kospi advanced 1.2 percent to 1,907.54. Hong Kong's Hang Seng rose 0.7 percent to 21,704.78 and Australia's S&P/ASX 200 gained 0.1 percent to 5,092.40.

Elsewhere, there was a reverse of the trends that had dominated much of the week, particularly in commodity markets. The price of benchmark oil was down 72 cents at $109.39 a barrel, On Wednesday, the contract closed at $110.10 a barrel, its highest finish since May 3, 2011.

Gold prices were also a tad softer — down 0.6 percent at $1,410 an ounce — after racing up to three-month highs on the back of worries over Syria. Gold often garners support through its status as a safe investment at a time of geopolitical uncertainty.

In the currency markets, the euro was down 0.7 percent at $1.3246 while the dollar rose 0.5 percent to 98.24 yen.

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Pamela Sampson in Bangkok contributed to this report.

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US banks earn record $42.2B in 2nd quarter

WASHINGTON — U.S. banks earned more from April through June than during any quarter on record, aided by a steep drop in losses from bad loans.

The Federal Deposit Insurance Corp. says the banking industry earned $42.2 billion in the second quarter, up 23 percent from the second quarter of 2012.

Banks' losses on loans tumbled 30.7 percent from a year earlier to $14.2 billion, the lowest in six years. And bank lending increased 1 percent from the first quarter. Greater lending helps boost consumer and business spending, leading to more jobs and faster economic growth.

Still, the report shows that the largest banks continue to drive the industry's profits while smaller institutions have struggled.

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Applications for US unemployment aid fall to 331K

WASHINGTON — The number of Americans seeking unemployment benefits remained near the lowest level in more than five years last week, a sign that companies are cutting few jobs.

First-time applications for benefits fell 6,000 to a seasonally adjusted 331,000, the Labor Department said Thursday. The four week average, a less volatile measure, inched up 750 to 331,250 after falling to its lowest level since November 2007 the previous week.

Applications for unemployment benefits reflect layoffs. At the depths of the recession in March 2009, they numbered 670,000. The average has fallen 10 percent this year.

All told, nearly 4.5 million people received unemployment benefits in the week that ended Aug. 10, the latest period for which figures are available. That's about 30,000 more than in the previous week.

The figures "signal no let-up from the recent pace in employment growth, which has been strong enough to keep unemployment trending down," said Jim O'Sullivan, an economist at High Frequency Economics. "If anything, claims are suggesting further acceleration."

Though employers are cutting few jobs, most have yet to start hiring aggressively. Fewer layoffs can increase net job gains, even if hiring doesn't rise much.

Employers have added an average of 192,000 jobs a month since January. That's enough to gradually lower the unemployment rate, which fell to 7.4 percent in July.

The economy is growing at a pace that might be too weak to accelerate hiring. It expanded at a 2.5 percent annual rate from April to June, the government said Thursday. That's up sharply from the government's previous estimate of 1.7 percent.

Growth may not be picking up much in the current July-September quarter. Manufacturing and housing, two key sectors, have shown signs of weakening. Rising interest rates may be slowing the housing recovery, which could lead to fewer construction jobs. Sales of new homes plummeted in July to their lowest level in nine months.

And a measure of pending home sales — which reflects the number of people who sign contracts to buy homes — fell in July. That suggested that final sales could slow in the coming months.

U.S. factories received fewer orders in July for long-lasting goods, a sign of less-than-robust manufacturing output. Businesses cut back on orders for computers, electrical equipment and other costly items.

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Stocks edge higher following economic data

NEW YORK — Stocks moved higher Thursday as investors weighed a pair of positive economic reports against worries about Syria.

The Dow Jones industrial average added 28 points, or 0.2 percent, to 14,851 in the first half-hour of trading. The Standard & Poor's 500 index was up three points, or 0.2 percent, at 1,638 and the Nasdaq composite rose 19 points, or 0.6 percent, to 3,613.

Dow component Verizon Communications was the biggest gainer in both the Dow and the S&P 500 after Britain's Vodafone confirmed it's in talks with Verizon to sell its 45 percent stake their joint venture, Verizon Wireless.

Verizon rose $1.91, or 4.1 percent to $48.46. The U.S.-listed shares of Vodafone rose $2.47, or 8.4 percent, to $31.88 on the news.

A lot of traders' attention was on economic data that came out before the opening bell. The U.S. economy grew at a 2.5 percent annual rate from April through June, much faster than previously estimated, the Commerce Department said. The figure was revised up from 1.7 percent as more U.S. companies exported goods and imports declined.

Also, the Labor Department said the number of people who filed for unemployment benefits last week fell to 331,000, the fewest in five years.

"It does support our belief that August was another month of steady employment growth," economists with the investment bank RBS wrote in a research report.

While lower unemployment claims and an upward revision on GDP are both positive signs, most of Wall Street's attention is focused on next week, when the August jobs report will be released. The Federal Reserve is expected to decide the fate of its massive bond-buying program in mid-September, and the August jobs report will be the last bit of heavy economic data the central bank will have to work with before making its decision.

The yield on the benchmark 10-year Treasury note rose to 2.81 percent from 2.77 percent on Wednesday following the stronger economic reports.

Traders also continue to focus on Syria, where a U.S-led military strike could arrive in the coming days. British Prime Minister David Cameron's office laid out the legal justifications for a military strike Thursday, while France's defense minister said the French military was ready to commit forces with the approval of President Francois Hollande.

Investors worry that a limited tactical strike against Syria could drag the U.S. and its allies into Syria's civil war, or worse, set off a regional conflict in an area where so much of the world's oil is located.

The price of crude oil fell 74 cents, or 0.7 percent, to $109.40 a barrel in early trading. Oil had gone as high as $112 a barrel earlier this week.

In other corporate news, teen clothing store operator Guess jumped $3.11, or 11 percent, to $30.52 after the company reported second-quarter profit and revenue late Wednesday that blew past market expectations. The retailer also raised its full-year profit forecast.

Campbell Soup fell $1.44, or 3 percent, to $43.25 after posting a loss for its fiscal fourth quarter, stung by a charge related to the potential sale of its European simple meals business. Its earnings topped Wall Street's estimates but revenue missed expectations.

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