Treasury Bill Rates Hit Highest Level Since 2008
Interest rates on short-term Treasury bills rose in Monday’s auction, their climb keeping them at their highest levels in more than a decade.
The Treasury Department auctioned $51 billion in three-month bills at a discount rate of 2.010 percent, up from 2.000 percent last week. Another $45 billion in six-month bills was auctioned at a discount rate of 2.180 percent, up from 2.160 percent last week.
The three-month rate was the highest since those bills averaged 2.050 percent on June 16, 2008, before the financial crisis that struck in the fall of that year. The six-month rate was the highest since those bills averaged 2.255 percent on June 23, 2008.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,950.20 while a six-month bill sold for $9,900.88. That would equal an annualized rate of 2.048 percent for the three-month bills and 2.235 percent for the six-month bills.
Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, stood at 2.43 percent on Friday, unchanged from the beginning of last week on July 30.
US Consumer Borrowing Rose $10.2B in June
Americans increased their borrowing in June at the slowest annual pace in three months as the level of credit card debt fell slightly.
The Federal Reserve said Tuesday that consumer debt rose a seasonally adjusted $10.2 billion in June from the prior month to a total of $3.91 trillion. Consumer borrowing increased at an annual rate of 3.1 percent in June, the slowest annual gain since March.
The category that includes credit cards slipped by $185 million in June after having surged by nearly $9.6 billion in May.
Consumer borrowing trends are closely monitored for clues they can provide about the willingness of consumers to borrow more to support their spending. Consumer spending accounts for 70 percent of U.S. economic activity.
During the April-July quarter, U.S. economic growth accelerated to an annual pace of 4.1 percent. The gain nearly doubled the annual growth rate of 2.2 percent during the first three months of 2018.
The Fed’s monthly borrowing report does not include mortgages or any other debt secured by real estate, such as home equity lines of credit.
GE Laying Off 200 Workers at Turbine Plant
General Electric says it’s laying off 200 hourly workers at its upstate New York plant that produces steam turbines for the company’s power unit.
Boston-based GE announced Tuesday that the layoffs include unionized manufacturing and assembly employees at its facilities in Schenectady (skeh-NEHK’-ta-dee), where Thomas Edison co-founded the company in 1892. Another 25 unfilled jobs will be eliminated.
GE Power unit spokesman Christopher Shigas says the layoffs come after a 45 percent drop in volume at the plant.
The Times Union of Albany reports GE employs about 4,000 workers at GE Power and other units in Schenectady. The company employs another 1,500 at GE’s main research lab in the neighboring town of Niskayuna (nihs-kee-YOO’-nuh).
GE laid off 130 hourly workers at the Schenectady plant and Niskayuna facility in January. The cuts come as the company continues to reshape itself.
Dean Foods Reports 2Q Loss of $40.1M a Year After Posting Profit
Dean Foods Co. (DF) on Tuesday reported a second-quarter loss of $40.1 million, after reporting a profit in the same period a year earlier.
On a per-share basis, the Dallas-based company said it had a loss of 44 cents. Earnings, adjusted for one-time gains and costs, were 16 cents per share.
The results surpassed Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 14 cents per share.
The milk company posted revenue of $1.95 billion in the period, also surpassing Street forecasts. Five analysts surveyed by Zacks expected $1.94 billion.
Dean Foods expects full-year earnings in the range of 32 cents to 52 cents per share.
Dean Foods shares have declined 18 percent since the beginning of the year. The stock has dropped 36 percent in the last 12 months.
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