AP Features, September 6th, 2007
Worker productivity rebounded, growing at the fastest pace in nearly two years, while wage pressures eased sharply in the spring _ developments that should reduce inflation worries.
The Labor Department reported Thursday that productivity, the amount of output per hour of work, jumped to an annual growth rate of 2.6 percent in the April-June quarter, even better than the 1.8 percent increase that was originally reported.
Wage pressures, as measured by unit labor costs, slowed to an annual growth rate of 1.4 percent, slower than the initial estimate that labor costs were rising at a 2.1 percent rate.
Rising wages are good for workers, but if those gains are not accompanied by increased productivity, they can trigger unwanted inflation. If productivity is growing, it allows businesses to pay their workers more out of the increased output rather than by raising prices.
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NEW YORK (AP) _ Wall Street shook off early uncertainty to close moderately higher Thursday as a series of mixed economic reports managed to make investors more optimistic about the chances for an interest rate cut.
The market was uneasy after the Mortgage Bankers Association said homeowners beginning the foreclosure process in the second quarter reached a record 0.65 percent. It was the third consecutive quarter that the figure reached an all-time high. Though investors want growth to be slow enough to merit a rate cut when the Federal Reserve meets Sept. 18, they don't want to see the economy weaken to the point of recession.
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DETROIT (AP) _ Toyota's top North American executive is defecting to Chrysler, a move that stunned the auto industry and gives a highly regarded leader and consummate salesman the chance to turn things around at the struggling U.S. automaker.
Chrysler LLC said Thursday that Jim Press will become its vice chairman and president, in charge of the automaker's sales and marketing operations. Press will resign Sept. 14 from Toyota Motor Corp., where he has served as the first non-Japanese president and chief operating officer for Toyota in North America since 2006. Before that, he was head of Toyota's North American sales during the company's rapid expansion.
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NEW YORK (AP) _ Consumers undeterred by escalating credit problems and a weakening housing market went on a back-to-school buying spree last month, helping many retailers rebound from July's disappointing sales. But analysts are still worried that economic concerns might curtail shopping in the critical months ahead.
As the nation's retailers reported better-than-expected sales results Thursday, winners crossed all sections of the industry and included Wal-Mart Stores Inc., Target Corp., Pacific Sunwear of California and Saks Inc. Among the handful of disappointments was Kohl's Corp.
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SAN JOSE, Calif. (AP) _ Apple Inc. CEO Steve Jobs apologized and offered $100 credits Thursday to customers who shelled out $599 for the most advanced model of the iPhone, only to have the company unexpectedly slash the price $200 in a push to boost holiday sales.
In a letter on the company's Web site, Jobs acknowledged that Apple disappointed some of its customers by cutting the price of the iPhone's 8-gigabyte model and said he has received hundreds of e-mails complaining about the price cut.
But Jobs added that "the technology road is bumpy," and there will always be people who pay top dollar for the latest electronics but get angry later when the price drops.
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NEW YORK (AP) _ Lehman Brothers Holdings Inc. and National City Corp. said Thursday more than 2,000 workers will be laid off as the financial institutions scale back their struggling mortgage businesses.
The moves represent just the latest wave of layoffs in the mortgage industry, which is suffering from decaying credit quality, slipping home prices, and a drainage of demand among investors and banks for home loans.
Two weeks after closing its BNC Mortgage LLC subsidiary, Lehman Brothers said it is winding down some of its U.S. and U.K. home lending businesses. The Wall Street brokerage is laying off 850 people, closing its Korean mortgage business and folding its businesses in the U.S., Japan and Europe into a single unit called Lehman Mortgage Capital.
Scaling down the business will cost Lehman Brothers $20 million after taxes, the company said.
National City, which is based in Cleveland, said laying off 1,300 workers and scaling back its mortgage business will cost about $200 million before taxes.
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WASHINGTON (AP) _ Homeowners, struggling to deal with sharp increases in their adjustable mortgage payments, got hit with a record number of foreclosure notices in the spring as the crisis in subprime lending intensified.
The problem was the most severe in the industrial Midwest and former housing boom areas such as California and Florida, but economists warned the situation will get worse in coming months as an estimated 2 million adjustable rate mortgages taken out with low introductory interest rates reset to much higher rates.
The crisis is most severe in subprime mortgages, loans provided to borrowers with weak credit, but it is now spreading to other types of mortgages, according to a quarterly report released Thursday by the Mortgage Bankers Association.
That report showed the number of homeowners who got foreclosure notices in the April-June quarter hit an all-time high of 0.65 percent, up from 0.58 percent in the first three months of the year. It marked the third consecutive quarter that a new record has been set.
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DETROIT (AP) _ Delphi Corp. announced Thursday it has signed comprehensive settlement and restructuring agreements with former parent General Motors Corp. _ a major milestone in its nearly two-year quest to emerge from bankruptcy protection.
The Troy-based auto parts supplier also filed its reorganization plan with the federal bankruptcy court in New York on Thursday. The plan still needs the court's approval.
Delphi's agreement with GM resolves all outstanding issues between the automaker and supplier, including a lawsuit filed by Delphi to terminate supply agreements with GM and potential claims and disputes stemming from Delphi's spinoff.
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TRENTON, N.J. (AP) _ In a major legal victory for Merck & Co. in its massive Vioxx litigation, New Jersey's Supreme Court on Thursday rejected a potential class-action lawsuit that could have cost the drugmaker up to $18 billion.
New Jersey's highest court, reversing two lower-court decisions, ruled a nationwide class was not appropriate. The lawsuit had been brought by a union health plan on behalf of all insurance plans that paid for prescriptions for the withdrawn painkiller _ roughly 80 percent of all Vioxx sold.
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DETROIT (AP) _ Contract talks between the United Auto Workers and the Detroit Three could run beyond a Sept. 14 deadline because so many issues are unsettled, including the companies' desire to pay the union to take over retiree health care, a person briefed on the bargaining said.
General Motors Corp., Ford Motor Co. and Chrysler LLC have proposed making lump- sum payments to the UAW in exchange for being relieved of liability for much of their collective $90 billion in unfunded long-term retiree health care costs. The union would then set up trust funds to pay all future costs from those funds and investment income.
But as of Thursday, the UAW had yet to give its position on the trusts, referred to as Voluntary Employees Beneficiary Associations, according to the person, who asked not to be identified because the talks are private.
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By The Associated Press
The Dow Jones industrial average rose 57.88, or 0.44 percent, to 13,363.35, after earlier wobbling in and out of positive territory.
The Standard & Poor's 500 index rose 6.26, or 0.43 percent, to 1,478.55, and the Nasdaq composite index rose 8.37, or 0.32 percent, to 2,614.32.
Light, sweet crude for October delivery rose 57 cents to settle at $76.30 a barrel on the New York Mercantile Exchange after rising above $77 earlier. October gasoline futures fell 2.48 cents to settle at $1.9717 a gallon, reversing an early gain of more than 3 cents.
Heating oil futures added 3.69 cents to settle at $2.1368 a gallon, while natural gas futures fell 15.5 cents to settle at $5.65 per 1,000 cubic feet.
In London, October Brent crude rose 43 cents to settle at $74.77 a barrel on the ICE Futures exchange.
