The European Southern Observatory's plan to begin construction of the world's largest telescope — the European Extremely Large Telescope — will take a big step forward in 2012 now that early funding for the project has been secured.

The European Southern Observatory (ESO) governing body approved the 2012 budget, which paves the way for preparatory work to begin at the planned site of the European Extremely Large Telescope (E-ELT) at the Cerro Armazones mountain in the central part of Chile's Atacama Desert.

The telescope, which represents a joint collaboration between 15 countries, will be the world's largest ground-based optical telescope. Builders selected the observatory's location in Chile because of the optimal weather conditions in the area, where skies are clear overhead roughly 320 nights of the year, ESO officials have said.

The E-ELT's primary mirror will be a staggering 138 feet (42 meters) wide. For comparison, the Keck Observatory in Hawaii has a mirror that measures 33 feet (10 meters) wide, and the Subaru telescope, also in Hawaii, has a primary mirror that is 27 feet (8.2 m) wide.

The ESO governing council's approval of the 2012 budget includes funding for some initial work on the E-ELT project, such as the development of access roads to the telescope site and early construction efforts on one of the telescope's five mirrors. This work is expected to begin in early 2012, ESO officials said in a statement. [Stacking Up the 10 Biggest Telescopes on Earth ]

"The E-ELT is starting to become reality," ESO Director General Tim de Zeeuw said in a statement. "However, with a project of this size it is expected that approval of the extra expenditure will take time. Council at the same time recognizes that preparatory work must start now in order for the project to be ready for a full start of construction in 2012."

The ESO governing body is expected to make a final approval decision for the entire E-ELT project in mid-2012.

Plans for the E-ELT have seen steady progress over the past few months, ESO officials said. In October, ESO reached an agreement with the Chilean government that culminated in support for the project and the donation of land for the mega-observatory.

In that same month, an external review confirmed that the E-ELT could feasibly be built within the proposed budget of about $1.43 billion (1.082 billion Euros). Previous reviews also confirmed that the telescope's design is technically sound, ESO officials said.

Several ESO member states are already financially committed to the project, and funding is expected to be agreed upon between all members by mid-2012, which will enable the council to make its approval decision at that time, ESO officials said.

The E-ELT is expected to be operational early in the next decade, they added.

ESO already has three observatories in Chile, including the Paranal Observatory, which houses the Very Large Telescope, and the La Silla Observatory, which hosts the New Technology Telescope.

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Photos: World's Largest Telescope Being Built in Chile Largest Telescope Mirror Ever: A Look At How Big Cosmic Visions from Paranal Observatory

WASHINGTON (Reuters) – New U.S. claims for jobless benefits rose last week but the underlying trend pointed to an improving labor market, while regional factory data showed the economy gaining momentum as the year ended.

The growth picture was brightened by other data on Thursday showing pending sales of previously owned homes jumped to a 1-1/2 year high in November, adding to signs of a tentative recovery in the housing market.

Indications the economy was wrapping up the year on a much firmer footing than had been previously anticipated leaves it better positioned to deal with headwinds from the festering debt crisis in Europe and fiscal tightening at home.

"The data have maintained their stronger tone and that suggests the economy is on an upswing towards the end of 2011, but they are not pointing to robust growth in 2012," said Conrad DeQuadros, senior economist at RDQ Economics in New York.

Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 381,000, the Labor Department said, above economists' expectations for 375,000.

But the four-week moving average, a better measure of labor market trends, dropped to a 3-1/2 year low.

A separate report showed the Institute for Supply Management-Chicago business barometer was little changed at 62.5 this month from 62.6 in November.

Economists had expected this measure of factory activity in the Midwest region, to fall to 61 in December. A reading above 50 indicates expansion in the region's manufacturing.

"It is possible that supply disruptions within the auto industry had a minor impact on the production component of the survey given the region's significant exposure to the sector," said Brett Ryan, an economist at Deutsche Bank Securities in New York.

"However, today's data highlight continued growth in manufacturing."

With new orders still strong; backlog orders, employment and supplier deliveries rising, the ISM-Chicago survey suggested a modest pickup in national factory activity from November.

The Institute for Supply Management will release its December survey of national manufacturing on Tuesday.

Other data showed the National Association of Realtors' Pending Home Sales Index, based on contracts signed in November, increased 7.3 percent to 100.1, the highest level since April 2010. Economists had expected only a 2 percent rise.

Pending sales lead existing home sales by a month or two.

Recent data on home sales and construction have been fairly upbeat, suggesting an improvement in a sector that has been the economy's weakest link, but prices continue to trend lower.

The economic data offset concerns about Europe and encouraged investors to buy U.S. stocks. Prices for U.S. Treasury debt rose, while the dollar was little changed against a basket of currencies.

LABOR MARKET HEALING

While much of the global economy is slowing and the troubles in Europe are expected to push the region into a mild recession in 2012, activity in the United States has held up relatively well.


Fourth-quarter growth is seen topping a 3 percent annual pace, rising from the July-September period's 1.8 percent rate.


"Unless things take a turn for the worse and we were to have a disorderly outcome in Europe, we wouldn't expect there to be a big impact on the U.S. given that U.S. exports to Europe are quite small as a share of the economy," said RDQ Economics' DeQuadros.


The euro zone crisis has seen banks tighten lending to major financial participants in recent months.


While the Federal Reserve's survey of senior credit officers did not mention Europe directly, it indicated a "broad but moderate tightening of credit terms applicable to important classes of counterparties over the past three months.


In the claims report, the improving labor market tone was captured by the four-week average, which held below the 400,000 mark usually associated with improving labor market conditions for seven straight weeks.


That left some economists anticipating nonfarm employment to increase by at least 150,000 in December, which would be a step-up from November's 120,000 gain.


The better tone should feed into consumer spending, which slowed significantly in November, and support economic growth.


Firming employment, marked by a drop in the jobless rate to a 2-1/2 year low of 8.6 percent in November, is helping to buoy consumer confidence.


"The jobs market is the backbone for consumers ... continued progress in the months ahead will be key to sustained improvement in the collective mood of consumers," said Jim Baird, chief investment strategist at Plante Moran Financial Advisors in Kalamazoo, Michigan.


Weak income growth is restraining consumer spending and households are meeting some of their pent-up demand by reducing savings.


(Editing by Neil Stempleman)

Mexico City – Andrew Holness is already Jamaica’s youngest prime minister. Could he also become the nation’s shortest-serving?
That “first” is up for grabs in today’s race in the Caribbean nation, as he faces opposition leader Portia Simpson Miller, in what is essentially a dead heat.
Both candidates, from the two major parties – the Labor Party (JLP) and the People's National Party (PNP) – are attempting to blame the other for economic woes that have turned Jamaica, the third largest Caribbean nation, into one of the world’s most indebted.
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Once one of the world’s largest sugar producers in the 1800s, this nation – known for its reggae and more recently the deadly violence over the extradition of gang leader Christopher "Dudus" Coke – faces about $18.6 billion in debt, more than 120 percent of its GDP. Unemployment sits at nearly 13 percent.
Prime Minister Holness has only been in office since October, after his predecessor Bruce Golding resigned. "Jamaicans are now safer, our economy is stable with a solid foundation for job creation," the 30-something Holness said before the race.
Ms. Simpson Miller, who was born into a ghetto in Kingston and is known as “Sista P,” is the more charismatic of the two leaders and says she is more in touch with the nation’s poor. She served briefly as prime minister in 2006 and 2007, also as another “first”: Jamaica’s first female prime minister.
Ivelaw Lloyd Griffith, provost and professor of political science at York College of The City University of New York, says that the dead heat is due, in part, to a lack of distinctive ideological polarization between the two main parties. As the two dominant ones, both parties are also well-oiled, with veteran operatives and strong bases of support.
No matter who wins today’s race, the next leader will struggle under the debt and likely be forced to undertake unpopular measures, such as layoffs in the public sector.
Jamaica is most well-known for its tourism. But it moved into the international spotlight after former Prime Minister Golding, in a backtrack, agreed to extradite Mr. Coke to the US on drug-trafficking charges. Seventy-six people were killed as authorities faced Coke’s supporters in the slum where he was hiding out. Jamaica’s gangs have long influenced the political system in so-called “garrison politics” in Jamaica, receiving immunity from politicians in exchange for votes.
The Coke saga could hurt Holness’s bid today, but he might have the upper hand, says Professor Griffith. “Notwithstanding the economic situation, for which they mostly are not responsible, the crime situation has improved appreciably, and tourism has been in a growth mode.”
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HONOLULU – President Barack Obama will travel to Cleveland the day after the Iowa caucuses as he seeks to draw a contrast with Republicans running for president.
The White House says the president's Jan. 4 trip to Ohio will focus largely on the economy.
Republican presidential candidates will face off in the Iowa caucuses on Jan. 3. It's the first nominating contest of the 2012 campaign.
Obama won Ohio in 2008. But the state has been hard-hit economically during the president's term, and is sure to be a political battleground in next year's presidential election.
Obama aides say the president's trip to Cleveland marks the start of an aggressive 2012 domestic travel schedule. Still, aides insist Obama will not fully engage in the presidential race until after Republicans pick a nominee.

ATHENS, Greece – Greek tax officials walked off the job Thursday at the start of a 48-hour strike to protest salary cuts and other austerity measures, as the government struggles to meet revenue targets demanded by the country's international creditors.
Tax offices shut down for the last two working days of the year, prompting hundreds of Greeks on Wednesday to rush to settle last-minute issues before the strike. Many handed over their car license plates, preferring to keep their vehicles off the road rather than paying an increased tax.
The Athens Chamber of Small Industries said it sent a letter to the country's finance minister, Evangelos Venizelos, urging a change in the higher road tax and arguing it was clear the government would be unable to collect the euro1.2 billion ($1.55 billion) it hoped for from the levy.
The chamber said there had been a 30 percent increase in the number of people turning in their vehicle registration plates compared to previous years. That would lead to decreased road tax revenues and hurt the economy through a fall in the consumption of fuel, vehicle spare parts and spending on car maintenance and insurance, it said.
The increase in cars being kept off the road "is a characteristic example of the failure of the implemented policy, the core of which is the achievement of fiscal targets through the constant burdening with taxes and levies of Greek society which is already at its economic limit," the chamber said in a statement.
Greece has been surviving since May 2010 on multibillion euro rescue loans from other eurozone countries and the International Monetary Fund after years of government overspending left it with an unsustainable public debt.
In return for the euro110 billion ($144 billion) bailout, the previous Socialist government imposed harsh austerity measures, increasing taxes and retirement ages, cutting pensions and salaries, and suspending tens of thousands of civil servants on reduced pay.
"As a result of the austerity measures putting some tax officers on reduced pay, we have 5,500 fewer tax office jobs," said tax officers' union head Charalambos Nikolakopoulos.
Tax evasion has been rampant in Greece, despite repeated efforts to crack down on the practice.
The strike comes a day after the sudden resignation of two prosecutors heading the judicial task force charged with fighting tax evasion. The two, Grigoris Peponis and Spiros Mouzakitis, claimed they were being sidelined and implied government interference in their work.
They said the government was "attempting to replace and get rid of" them with a new draft law that would appoint a high court prosecutor in their stead. The finance and justice ministries said the plan aimed to improve the task force's functioning.
The main Supreme Court prosecutor ordered an investigation Thursday into why the two resigned and their allegations of interference, while Prime Minister Lucas Papademos met with top judicial officials.
Papademos, who was appointed to head an interim coalition government in November after a political crisis forced his predecessor to resign, "underlined the need to complete as quickly as possible the investigation that has begun," a statement from his office said.
The repeated rounds of austerity measures have left the country struggling through a deep recession, with the economy projected to contract for a fourth year in 2012. It quickly became clear that the initial bailout would not be enough to prevent Greece from a potentially catastrophic default, and European leaders agreed in late October on a second, euro130 billion bailout for the country.
The new package includes provisions for private creditors to write off 50 percent of the value of Greek bonds they hold, potentially cutting Greece's overall debt by euro100 billion. But the details of this remain to be worked out, and the country is currently involved in tough negotiations.
If the debt writedown goes through and Greece implements all it has pledged to in the way of austerity measures and privatizations, the country is expected to ruce its debt to 120 percent of gross domestic product by 2020, from 161 percent of GDP this year.
____
Nektina Efthymiou in Athens contributed.