Solid hiring provides little boost to wages — yet
WASHINGTON (AP) — Healthy job growth in the United States has reached a level of consistency unseen in nearly two decades.
In the same week that voters signalled discontent with the U.S. economy, the government issued a report that showed employers have added at least 200,000 jobs for nine straight months — the longest such stretch since 1995.
Combine it with an unemployment rate that has slid to 5.8 per cent — the lowest since 2008 — and the picture that emerged Friday was of a job market gaining increasing distance from the recession that officially ended nearly 5 1/2 years ago.
The job gain for October was a solid 214,000, on top of a combined 31,000 more in August and September than the government had previously estimated.
Judge approves bankruptcy exit plan for Detroit
DETROIT (AP) — A judge cleared Detroit to emerge from bankruptcy Friday, approving a hard-fought turnaround plan with a fervent plea to the people of this one-time industrial powerhouse to “move past your anger” and help fix the Motor City.
The plan calls for cutting retiree pensions by 4.5 per cent, erasing $7 billion of debt and spending $1.7 billion to demolish thousands of blighted buildings, make the city safer and improve long-neglected basic services.
Federal Judge Steven Rhodes praised decisions that settled the most contentious issues in the bankruptcy case, including a deal to prevent the sell-off of world-class art at the Detroit Institute of Arts and a consensus that prevented pension cuts from getting even worse for thousands of retirees. He said the pension deal “borders on the miraculous,” though he acknowledged the cuts could still cause severe misfortune for some.
Yellen pledges clear signals for rate policies
PARIS (AP) — Federal Reserve Chair Janet Yellen said Friday that the Fed is striving to clearly communicate its intentions on interest rates in order to minimize surprises that could disrupt financial markets both in the United States and globally.
She said central bank policymakers understand that moving from a period of very low interest rates to more normal rates will lead to more volatility in financial markets.
But she said the normalization of rates will be an important sign that economic conditions are “finally emerging from the shadow of the Great Recession.”
Yellen’s comments came in a speech at a conference sponsored by the Bank of France. The Fed last week ended its bond-buying program but its first increase in rates is not expected until mid-2015.
US consumer borrowing up $15.9 billion to record
WASHINGTON (AP) — U.S. consumers increased their borrowing in September with gains in credit card debt and auto and student loans.
The Federal Reserve says overall borrowing rose $15.9 billion following a $14 billion gain in August and a $22.8 billion July increase. The gains have pushed total consumer debt to a record level of $3.27 trillion.
The category that includes credit cards showed a $1.44 billion increase in September after having dropped by $201 million the previous month. The category that covers auto loans and student loans increased $14.48 billion after a $14.23 billion increase in August.
Rising levels of consumer borrowing coupled with strong employment growth are viewed as good signs that consumers are confident about taking on more debt to boost purchases.
Regulators cite lenders for risky loans
WASHINGTON (AP) — Federal regulators say they’re concerned about a continued heavy risk in large loans made by banks and other financial institutions, with the amount of risky loans remaining at double the levels before the financial crisis.
The Federal Reserve and other agencies say that a large portion of the risk comes from loans made to investment firms for financing takeovers of companies. Those loans, called leveraged loans, accounted for 22.6 per cent of total large loans outstanding and 74.7 per cent of the loans deemed risky by the regulators, according to the agencies’ latest annual review.
The review found “serious deficiencies” in credit standards for making leveraged loans and in managing their risk.
Overall, the review found that $340.8 billion, or 10.1 per cent, of big loans outstanding were deemed risky — enough for the examiners to criticize them in writing to the lenders. That’s about double the levels preceding the crisis that struck in 2008.
A new Supreme Court challenge for ‘Obamacare’
WASHINGTON (AP) — The Supreme Court agreed Friday to hear a new challenge to President Barack Obama’s health care law — a case that threatens subsidies that help millions of low- and middle-income people afford their health insurance premiums.
The justices said they will review a federal appeals court ruling that upheld the Internal Revenue Service’s regulations that allow health-insurance tax credits under the Affordable Care Act for consumers in all 50 states. Opponents argue that most of the subsidies are illegal.
The long-running political and legal campaign to overturn or limit the 2010 health overhaul will be making its second appearance at the Supreme Court. The justices upheld the heart of the law in a 5-4 decision in 2012.
The case probably will be argued the first week in March, with a decision expected by late June.
AT&T says it will buy Mexico’s Iusacell for $1.8B
NEW YORK (AP) — AT&T is buying Mexican wireless company Iusacell for $1.8 billion and plans to grow in Mexico.
The Dallas company said Friday that Iusacell has 8.6 million subscribers under the Iusacell and Unefon brand names. AT&T had 116.6 million subscribers as of June 30.
AT&T values the deal at $2.5 billion when debt is included.
The company sees potential for growth in Mexico because of its rising population and middle class, even as the proportion of Mexican people with wireless service lags other Latin American countries, according to AT&T.
Ford replaces European chief executive amid losses
MILAN (AP) — U.S. carmaker Ford on Friday replaced its European boss amid widening regional losses and two years into a turnaround plan aimed at returning the division to profitability.
Ford’s global marketing chief, Jim Farley, will take over as head of European operations, based in Cologne, Germany, switching roles with outgoing European chief executive, Stephen Odell, who was named to the marketing job, the automaker said in a statement.
Ford hasn’t turned a pretax profit in Europe since 2010, the year Odell took over as the region plunged into a recession that provoked the region’s biggest car market contraction ever. The carmaker is forecasting a $1.2 billion loss in Europe for 2014, following widening third-quarter losses, and no longer is predicting a return to profit next year.
OK given to restart nuclear plant in Japan
TOKYO (AP) — A governor gave final approval Friday for a nuclear power plant to restart in southern Japan, the first to resume operations under new safety rules imposed in the wake of the 2011 Fukushima Dai-ichi meltdowns caused by an earthquake and tsunami.
Kagoshima Gov. Yuichiro Ito said the two reactors at the Sendai Nuclear Power Station would be restarted despite concerns among some local residents.
The Sendai reactors are expected to go back online early next year following on-site checks by regulators. Japan’s Nuclear Regulation Authority gave them passing grades in July under stricter safety requirements that factored in the lessons of the Fukushima meltdowns.
By The Associated Press=
The Dow Jones Industrial average gained 19.46 points, or 0.1 per cent, to 17,573.93. The Standard & Poor’s 500 index eked out a gain of 0.71 point to end at 2,031.92. The Nasdaq composite fell 5.94 points, or 0.1 per cent, to 4,632.53.
Benchmark U.S. crude added 74 cents to close at $78.65 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for oil used by many U.S. refineries, rose 53 cents to close at $83.39 a barrel in London. Wholesale gasoline rose 0.5 cent to close at $2.135 a gallon. Heating oil rose 4.1 cents to close at $2.500 a gallon. Natural gas rose 0.8 cent to close at $4.412 per 1,000 cubic feet.