The number of people seeking jobless benefits jumped sharply last week, after two straight weeks of declines. The Labor Department says that initial claims for unemployment aid rose by 20,000 to a seasonally adjusted 457,000 for the week ending October 30th. Wall Street analysts polled by Thomson Reuters had expected a smaller rise. The increase comes after claims fell in four of the previous five weeks. Those drops had brought claims to their lowest level since July and raised hopes the job market was improving. Instead, claims have risen back above the 450,000 level they have fluctuated around all year. They will need to drop below 425,000 to signal sustained job gains.
Productivity showed a modest rebound in the July-September quarter while labor costs fell slightly. The Labor Department says productivity grew at an annual rate of 1.9 percent in the third quarter, a rebound from a decline of 1.8 percent in the second quarter. That was the biggest drop in nearly four years. Labor costs fell at a 0.1 percent rate in the third quarter after having risen 1.3 percent in the second quarter. Even with the gain in productivity, the efficiency of U.S. workers is still growing at a much weaker pace than last year. Economists see that as an encouraging sign that companies will have to step up their hiring of laid-off workers.
Retailers are reporting solid revenue gains for October. But it took heavy discounting on coats and other cold-weather items to get shoppers to spend amid unusually warm temperatures. Analysts are concerned about the holiday shopping season as shoppers, grappling with job worries, are likely to wait until the last minute to get the best deals. As retailers report their figures, the bright spots are Costco Wholesale and Limited Brands, both of which are reporting bigger increases than Wall Street analysts expected. Target and Macy’s both reported gains slightly above estimates. The figures are based on revenue at stores opened at least a year and are considered a key indicator of a retailer’s health.
Neiman Marcus reports that revenue in stores open at least one year rose 11.5 percent in October. The Dallas-based high-end retailer cited strong sales in women’s fine apparel, accessories, shoes, designer handbags and jewelry. The figure includes revenue at the company’s namesake stores as well as its Bergdorf Goodman stores. Revenue was strongest in the northeast, southeast and Texas. Total revenue during the four-week period also rose 11.5 percent to $306 million.
The Justice Department says a Swiss freight company and five oil service companies agreed to pay more than $156 million in criminal fines and relinquish nearly $80 million in profits for their roles in foreign bribes. In court documents filed in Houston, Panalpina World Transport, of Basel, Switzerland, and its U.S. subsidiary agreed to criminal fines of almost $70.6 million. It also will give up $11.3 million in profits to settle with the Securities and Exchange Commission. Panalpina admitted paying $27 million in bribes during 2002-2007 to officials of Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. The service companies agreed to $86 million in criminal fines. Those five and a sixth firm will surrender more than $68 million in profits, interest and civil penalties.
OPEC is forecasting that world energy demand will rise by 40 percent in the next three decades even as the appetite for oil shrinks because some of the need will be met by other sources. In its annual world outlook, the 12-nation oil producers’ bloc says that crude’s role in fueling the world will fall “over time,” although it will still be over 30 percent by 2040. It suggests renewables and natural gas could become increasing alternatives. The report says that fossil fuels overall will remain dominant, satisfying 80 percent of energy needs. The report from the Organization of the Petroleum Exporting Countries also said world oil demand will grow to a daily 105.5 million barrels in 2030, an increase of 21 million barrels a day over last year.
A San Antonio produce processing company is disputing government allegations of contamination at its now-closed facility. Federal health officials announced they found listeria bacteria at the unit that Texas authorities have linked to four deaths from contaminated celery. The Food and Drug Administration says it found the pathogen in multiple locations in the Sangar Produce & Processing plant, confirming test results announced last month by Texas health authorities. Hours later, Sangar attorney Jason Galvan announced an analysis done October 26th by a laboratory–hired by the company–had negative results for listeria. The state closed the plant October 20th and recalled all produce shipped since January. A hearing is set for November 17th in Austin. An FDA report also included 18 observations from inspectors, including: failure to take necessary precautions to protect against contamination of food and food contact surfaces, failure to store raw materials in a way that protects against contamination and failure to take apart equipment as necessary to ensure thorough cleaning.
American Airlines says it has launched a codeshare deal with AirBerlin, the second-largest airline in Germany. The agreement was announced by Fort Worth-based American. Codeshare agreements allow airlines to sell tickets on each other’s flights. AirBerlin flies to 160 cities in Europe, Russia, the Middle East and North America. It is owned by Air Berlin. Both airlines are in the OneWorld airline alliance.
Rates on 30-year fixed mortgages edged up this week to an average of 4.24 percent, still close to their lowest level in decades. Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans rose from 4.23 percent the previous week. It was the third weekly increase in a row. Rates fell last month to 4.19 percent, the lowest average on records dating back to 1971. The average rate on 15-year fixed loans fell to 3.63 percent this week from 3.66 percent a week earlier. Rates have been at or near historic lows since April. Nervous investors are buying up ultra-safe treasury bonds. The extra demand means treasury bonds can produce lower yields for investors. Mortgage rates tend to track treasury yields.