Pacific Northwest income growth lags nation

Economy

Personal-income growth in Washington lagged much of the nation in the first quarter of 2008, according to data released Thursday by the federal Bureau of Economic Analysis.

Total personal income — total income received by all persons from all sources — rose at a seasonally adjusted annual rate of 0.78 percent, the bureau reported. That was down from 1.5 percent in the fourth quarter of 2007 and ranked 38th in the nation.

Total U.S. personal income rose 1.1 percent in the first quarter.

Last quarter was the first time in a year Washington personal-income growth ran behind the country as a whole.

Banking

Frontier Financial reduces dividend

Frontier Financial on Thursday became the latest local bank to slash its dividend in response to the housing slump.

Everett-based Frontier, parent of Frontier Bank, cut its quarterly payout to 6 cents a share, from 18 cents a share last quarter. The dividend is payable July 22 to shareholders of record as of July 8.

Frontier has regularly increased its dividend for years. But the deflated housing market has caused mortgage defaults to jump, forcing banks large and small to set aside more money to cover bad home loans. As a result, many banks have cut their dividend to preserve capital.

"We expect to significantly increase our loan-loss provision in the second quarter as a precaution for potential loan losses in the future," Frontier Chief Executive John Dickson said in a statement.

Aerospace

Northrop delays groundbreaking

Northrop Grumman announced Thursday it has postponed the June 28 groundbreaking for two facilities in Mobile, Ala., designed to produce Air Force tanker planes based on the Airbus A330.

The move came a day after the Government Accountability Office (GAO) sustained Boeing's protest of the Air Force tanker award to Northrop and its partner, Airbus parent EADS (European Aeronautic Defence & Space).

No new date has been set for the groundbreaking.

Telecommunications

Trial begins in suit against Boeing

ICO Global Communications Holdings, which in 2004 abandoned its plan to build a satellite-based global telecommunications network, seeks $2.7 billion from Boeing for breaching a contract to provide the satellites.

"The evidence will show that Boeing purposefully and intentionally set out to destroy ICO," Barry Lee, a lawyer for the satellite-services provider, said Thursday at the start of a jury trial in state court in Los Angeles.

ICO, whose chairman is Craig McCaw, in 1995 signed a contract for 12 satellites with Hughes Electronics' satellite unit, a business Boeing acquired in 2000.

ICO paid Hughes and Boeing more than $2 billion for satellites and launches, and only one satellite ever reached orbit, Lee told jurors. Another one had to be destroyed shortly after liftoff and the 10 remaining satellites are sitting in storage, the lawyer said.

Boeing lawyer Brad Brian said in his opening statement that ICO gambled on a market for satellite phones that didn't materialize and is now trying to blame Boeing for its mistakes.

Technology

Resolute Solutions names chief exec

Resolute Solutions, a Bellevue technology consulting company, has named Frank Costa as its chief executive. He replaces John Fallou, company founder.

Before joining Resolute, Costa served as president and CEO of Perlego Systems, a Gig Harbor mobile-device-technology company, and was also CEO at Seattle-based Active Voice.

Nation and World

Conference Board

Economy limping along, data show

The economy, hobbled by higher fuel and food prices, tighter credit and a depressed housing market, is limping along at a snail's pace, a private business group said Thursday.

The New York-based Conference Board said Thursday its economic indicators rose 0.1 percent in May, matching expectations of economists surveyed by Thomson/IFR.

The increase in the indicators, a measure of future economic activity, equaled April's 0.1 percent advance. The Conference Board revised March's number down from 0.1 to zero.

The index is designed to forecast economic activity in the next three to six months based on 10 components, including stock prices, building permits and initial claims for unemployment benefits.

Apple milestone

5 billion songs sold through iTunes

Apple said it passed another online-music milestone Thursday in announcing that it has sold more than 5 billion songs through its iTunes Music Store.

The sales figures suggest demand for digital music is showing no signs of slowing.

Apple hit the mark of 5 billion songs sold four months after it reached sales of 4 billion songs. In April, data from retail research firm NPD Group showed that the company had displaced Wal-Mart as the No. 1 music retailer in the United States.

Apple opened up the iTunes store in April 2003. It sold its 1 billionth song in February 2006; it reached the 2 billion mark in January 2007, and by July 2007 Apple had sold more than 3 billion songs.

The music sales continue to grow even as sales of Apple's iPod music players appear to be reaching a plateau. When the company reported its second-quarter results in April, iPod sales had risen just 1 percent from the prior year.

Apple shares rose $2.15 Thursday to close at $180.90.

Compiled from The Associated Press, Bloomberg News and Seattle Times staff