Friday, December 7, 2018

Business news in brief - Northwest Arkansas Democrat-Gazette

30-year mortgage rate drops to 4.75%

WASHINGTON -- U.S. long-term mortgage rates fell this week amid a steep decline in stock prices.

Continued slides in the stock market and tumbling oil prices have been pushing mortgage rates lower, although home borrowing rates remain much higher than a year ago. Mortgage giant Freddie Mac -- the Federal Home Loan Mortgage Corp. -- said Thursday that the average rate on the benchmark 30-year, fixed-rate mortgage dipped to 4.75 percent from 4.81 percent last week. The key rate stood at 3.94 percent a year ago.

The rate on 15-year fixed-rate loans declined to 4.21 percent from 4.25 percent the previous week. The average rate for five-year adjustable-rate mortgages fell to 4.07 percent from 4.12 percent last week. The fee remained at 0.3 point.

The fall in mortgage rates "is a welcome relief to prospective homebuyers who have recently experienced rising rates and rising home prices," Freddie Mac chief economist Sam Khater said.

Thursday's broad decline came as news of the arrest of a senior Chinese technology executive overshadowed some positive comments on trade from Beijing, threatening to worsen U.S.-China trade tensions.

With stocks sliding, traders continued to channel money into bonds -- a signal that they see weakness in the economy ahead. The yield on the key 10-year Treasury note, which tends to influence mortgage rates, dropped to 2.86 percent Thursday morning from 2.92 percent on Tuesday as bond prices rose.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

-- The Associated Press

Survey: 179,000 jobs added last month

WASHINGTON -- U.S. businesses hired new workers at a solid pace in November, adding 179,000 jobs, according to a private survey.

The report comes as other data also suggest the U.S. economy remains healthy, even as the financial markets have gyrated over concerns about a trade conflict with China and slowing global growth.

Payroll processor ADP said Thursday that last month's job gains slowed from October's strong showing of 225,000. Still, November's hiring is enough to lower the unemployment rate over time.

Job gains were strong in health care, which added 37,000 jobs, and in hotels and restaurants, which gained 26,000. Professional and technical services, which include high-paying jobs such as accountants and engineers, added 25,000. Construction gained 10,000 positions while manufacturing added just 4,000.

The report Thursday arrives a day before the government releases its official jobs numbers. Economists forecast that they will show employers added 195,000 jobs, and the unemployment rate will remain at a five-decade low of 3.7 percent, according to data provider FactSet.

The ADP numbers frequently diverge from the government's figures.

Ahu Yildirmaz, vice president of the ADP Research Institute, said that most of the job growth occurred among midsized businesses, with 50 to 499 employees.

-- The Associated Press

Productivity growth revised up to 2.3%

WASHINGTON -- U.S. productivity grew at an annual rate of 2.3 percent in the July-September quarter, slower than the previous quarter but still an improvement over the weak annual gains of the past decade. Labor costs rose at a modest pace in the third quarter.

The third-quarter gain in productivity was revised up slightly from an initial estimate a month ago of a 2.2 percent gain, the Labor Department said Thursday. It marks a more modest advance than the second quarter's 3 percent annual rate of increase. Labor costs were up at a 0.9 percent annual rate in the third quarter after a decline at a 2.8 percent rate in the second quarter.

Productivity, the amount of output per hour of work, has been weak throughout the current expansion.

It rose last year by just 1.1 percent. Over the past decade, productivity has hovered at an average annual rate of 1.3 percent, just about half the 2.1 percent gains in the seven decades starting in 1947. The period from 2000 to 2007 saw even stronger annual gains of 2.7 percent.

-- The Associated Press

Fiat Chrysler reportedly plans SUV plant

Fiat Chrysler will open another assembly plant in the Detroit area, according to a person familiar with the automaker's plan.

The source said the plant will produce SUVs but did not specify when it will open or how many jobs it will create. The person spoke on condition of anonymity because the plan has not been made public.

Fiat Chrysler declined to comment Thursday.

The Detroit News reported Thursday that the company plans to reopen a former engine plant on the city's east side to make Jeep Grand Cherokee SUVs with three rows of seats starting with the 2021 model year. The plant will employ 100 to 400 people, the newspaper said. The Mack Avenue Engine II plant has been shuttered since 2012.

Fiat Chrysler has seen strong sales of light trucks and SUVs including its Jeep and Ram models, helping boost November U.S. sales to more than 181,000 vehicles, its best November in 17 years. Sales of the Ram line jumped 44 percent, but sales of Chrysler cars and minivans slumped 21 percent.

-- The Associated Press

Hobby Lobby finalizes campus purchase

OKLAHOMA CITY -- Arts and crafts chain Hobby Lobby has completed its $8 million purchase of a bankrupt Catholic university's campus near Oklahoma City, which it has agreed to lease out to another Christian college.

Documents filed in federal bankruptcy court Tuesday in Oklahoma City finalized the sale of the more than 70-acre St. Gregory's University campus, buildings and other property in Shawnee to Hobby Lobby Stores Inc., which made the offer in September.

Nearly $4.8 million will be paid to Catholic Order of Foresters, an insurance company; the Citizens Potawatomie Community Development Corporation; and the Citizens Potawatomie Nation to settle claims against the university. The remaining money will be divided among other debtors.

St. Gregory's, which was the only Catholic university in Oklahoma, was established in 1875 and closed last year because of financial problems after it failed to secure a $12.5 million U.S. Department of Agriculture loan.

Hobby Lobby has agreed to lease the campus to Oklahoma Baptist University, a private Christian college in Shawnee that plans to use classrooms and labs in one building for science classes and a performing arts center for its theater, instrumental and choral programs.

-- The Associated Press

Business on 12/07/2018



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