Business news in brief

Pennsylvania's unemployment rate fell by one-tenth of a percentage point in December to 8.5 percent, the state Department of Labor and Industry said. The change was fueled by three factors: Employers added 4,000 jobs during the month, the number of unemployed people fell by 10,000, and the size of the total workforce fell by 5,000 as some people stopped looking for work. Those people were not counted as unemployed. By sector, the biggest gains in jobs were in professional/business service (up 3,800 jobs) and education/health (up 2,000). Manufacturing lost 1,800 jobs, and construction was down 1,400. - Paul Schweizer

US Airways Group Inc., Southwest Airlines Co., and other airlines at Philadelphia International Airport have reached an agreement in principle to extend their airport leases for two years and to provide $250 million to begin work on a $5.2 billion airport expansion aimed at reducing chronic delays and accommodating growth. US Airways spokesman Todd Lehmacher confirmed Friday that a committee of airlines, led by US Airways, was "finalizing arrangements" on a two-year lease extension that would provide time to "continue in-depth discussions" on the expansion and financial terms of future leases. US Airways and Southwest have expressed concern about the cost, which includes building a new runway, relocating United Parcel Service, and acquiring 72 homes and 80 businesses. - Linda Loyd

US Airways Group Inc. reached a new multiyear agreement for Expedia Inc. to provide consumers fare and flight data, even as the biggest online travel agency is embroiled in a ticketing dispute with American Airlines. US Airways is Philadelphia's dominant carrier. Expedia will work with US Airways, the smallest U.S. full-fare carrier, so fliers can select window and aisle seats for which the airline charges an extra fee, the companies said in a statement Friday. Customers buying a ticket on Expedia now must go to US Airways' website for a so-called Choice Seat. - Bloomberg News

The former owners of the Franklin Mint, Exton, say a Los Angeles law firm has agreed to pay them $25 million to settle a malicious-prosecution lawsuit stemming from a battle over the marketing of Princess Diana memorabilia. Rob Six, a spokesman for former mint owners Stewart and Lynda Resnick, said Friday the couple plan to donate the money to charity. Manatt, Phelps & Phillips sued on behalf of the Diana Princess of Wales Memorial Fund in 1998. The suit accused the Franklin Mint of false advertising and cheapening the princess' memory. It was dismissed and the Resnicks countersued. The memorial fund settled in 2004 for $25 million. Manatt's chief executive officer, William T. Quicksilver, said the law firm still believed it was in the right, but he added, "It was in the firm's best interest to settle this matter and put it behind us." - AP

Shares of J&J Snack Foods Corp. were down Friday, a day after it reported that its net income was flat and that sales edged up slightly in its first quarter. The Pennsauken snack and beverage company reported that it earned $7.1 million, or 38 cents per share, for the quarter, the same as in the prior year. Revenue increased 4 percent to $155.6 million. J&J said that business was strong but that the company's profitability was hampered by higher expenses. Shares closed down $2.71, or 5.8 percent, at $44.42 in Nasdaq trading. - AP

Regulators have closed banks in Colorado, South Carolina, North Carolina, and Georgia, bringing to seven the number of closures for 2011 after last year's total of 157 bank failures. The Federal Deposit Insurance Corp. took over United Western Bank, Denver, with $2.05 billion in assets. It also took over CommunitySouth Bank & Trust, Easley, S.C., with $440.6 million in assets. Regulators also shut Bank of Asheville, Asheville, N.C., with $195.1 million in assets. Also closed was Enterprise Banking Co., McDonough, Ga., with $100.9 million in assets. - AP

Heavy-equipment maker Caterpillar Inc. is urging a stronger trade relationship between the United States and China after the Chinese president's U.S. visit. The Peoria, Ill., company, the world's largest maker of construction and mining equipment, said Friday it signed a memorandum of understanding as part of the U.S.-China Trade and Economic Forum that it hopes will support greater U.S. exports from Caterpillar. China is already one of the largest export markets for Caterpillar products, with more than $2 billion in products delivered there in the last five years. - AP

The nation's labor unions saw another steep decline in membership last year, even as the economy showed signs of recovery and job losses slowed. The Bureau of Labor Statistics reported Friday that unions lost 612,000 members in 2010, dropping the unionized share of the workforce to 11.9 percent from 12.3 percent in 2009. That follows a loss of 771,000 workers in 2008, continuing a steady decline from the 1950s, when more than a third of workers belonged to unions. - AP

Citigroup Inc. is giving its CEO a big raise. The bank is lifting Vikram Pandit's base salary to $1.75 million from just $1 a year effective immediately, according to a filing with the Securities and Exchange Commission. The announcement comes after Citi reported its first full year of profits since Pandit took over the top job in 2007 and the bank exited government ownership. Pandit in 2009 pledged to take a $1 salary until the bank returned to profitability. The government sold the last of its stake in the bank in December for a profit of $12 billion. - AP

The merger of British Airways and Spanish carrier Iberia took effect Friday, creating Europe's third-largest airline in a deal meant to counter a slump in air travel after the global financial crisis. The merger came as BA cabin crews, who have staged rolling strikes in a dispute over working conditions, voted for further walkouts. Shares in British Airways and Iberia both ceased trading, to be succeeded Monday by stock in the new holding company, International Consolidated Airlines Group SA. - AP