U.S. retail sales rose at a healthy pace in October, though the gains were likely boosted by one-time factors such as hurricane recovery spending and higher gas prices and more in Friday’s markets in brief.
The Commerce Department said Thursday that retail sales rose a seasonally adjusted 0.8 percent last month, following two months of slight declines. Excluding gasoline sales, which were inflated by higher prices, sales climbed a still-solid 0.5 percent.
The figures suggest that consumers are spending at a modest pace, fueled by steady job gains and mild wage increases. Americans lifted their spending over the summer and fall at the fastest six-month pace in four years. Yet business spending on machinery, computers and buildings barely increased in the July-September quarter, leaving consumers shouldering more of the burden of maintaining growth.
MARKETS IN BRIEF
US Average Mortgage Rates Flat to Higher; 30-Year 4.94%
U.S. long-term mortgage rates were steady to slightly up this week, at their highest levels in nearly eight years and dampening home sales.
Mortgage buyer Freddie Mac says the average rate on a 30-year, fixed-rate mortgage was unchanged from last week at 4.94 percent. That’s the highest level for the benchmark rate since February 2011. A year ago the rate stood at 3.95 percent.
The average rate on a 15-year, fixed-rate loan rose to 4.36 percent from 4.33 percent last week.
Anxiety over rising interest rates, reflecting strength in the economy, and expectations of additional rate increases by the Federal Reserve have roiled financial markets in recent weeks and spilled over into the housing market. The higher home borrowing rates have kept many potential buyers on the sidelines.
PG&E Shares Plummet as California Burns
hares in PG&E are trading at their lowest level in more than a decade with some Californians who have lost homes saying that the power company is at fault for the state’s deadliest and most destructive wildfire.
In a lawsuit filed this week, homeowners said a high voltage transmission line failed, sparking the fire. They accuse Pacific Gas & Electric Co. of failing to maintain infrastructure.
Shares in the San Francisco company plunged another 31 percent Wednesday, to $25.99. The have lost about 45 percent of their value since last week.
PG&E told state regulators last week that it experienced a problem on a transmission line just before the blaze erupted in the vicinity.
Investigators have not determined the cause of the blaze.
Fed Announces Wide-Ranging Review of its Practices
The Federal Reserve says it will conduct a wide-ranging review next year of the strategies and tools it uses to achieve its congressionally mandated goals of maximum employment and price stability.
The Fed says the review will also examine ways the Fed communicates with the public.
In a statement, Fed Chairman Jerome Powell says with the economy doing so well at the moment, “now is a good time to take stock of how we formulate, conduct and communicate monetary policy.”
As part of the review, the Fed says it will sponsor a research conference on June 4-5 at the Federal Reserve Bank of Chicago. Other regional banks will host their own events.
The Fed says it will use the findings of the year of review to develop future policy.
EPA Official Arrested on Felony Ethics Charges in Alabama
The Trump administration’s top environmental official for the Southeast has been arrested on Alabama state ethics charges related to a scheme to help a coal company avoid paying for a costly toxic waste cleanup.
Trey Glenn was booked into a county jail in Birmingham on Thursday before being released on a $30,000 bond. Glenn was appointed last year as chief of the Environmental Protection Agency’s regional office in Atlanta, which oversees operations in eight states.
Glenn is charged with multiple ethics violations stemming from his prior work as a coal-industry consultant opposing federal Superfund cleanup efforts. He resigned as director of the Alabama Department of Environmental Management in 2009 following another ethics scandal.
It was not clear if Glenn had an attorney. EPA spokesman John Konkus declined to comment.
JC Penney Withdraws Profit Guidance, Cuts Sales Outlook
Shares of J.C. Penney are plunging after the company withdrew profit guidance and lowered its sales expectations for the year.
The company on Thursday reported a loss of $151 million in its third quarter, or 48 cents per shares. Losses, adjusted for one-time gains and costs, were 52 cents per share, which is a nickel better than analysts had expected, according to a survey by Zacks Investment Research.
Revenue of $2.73 billion fell short of Wall Street expectations of $2.81 billion.
Shares of J.C. Penney Co. tumbled 10 percent before the opening bell, to $1.10.
Schwan’s Co. Sold to South Korean Company For $1.8B
A food distributor with deep roots in Minnesota has been sold to South Korea’s largest food company.
The Schwan’s Co. is well known for home deliveries made by its gold trucks. The companies released a statement Thursday saying CJ CheilJedang will pay $1.8 billion for an 80 percent stake in Schwan’s and gain control of its businesses that serve restaurants, grocery stores and other retailers.
The Schwan family will retain 20 percent ownership in the businesses being sold to CJCJ. The family will keep 100 percent ownership of Schwan’s Home Service Inc., the home-delivery business that Marvin Schwan began in Marshall in 1952.
The companies say Schwan’s will keep its name and its Minnesota offices in Bloomington and in Marshall. Schwan’s CEO Dimitrios Smyrnios will continue to lead the company.
Chinese Automaker Zotye Plans to Sell Vehicles in US in 2020
Chinese automaker Zotye Auto said it plans to start selling vehicles in the United States in 2020.
Zotye said it will work with an American partner, HAAH Automotive Holdings. The companies said Wednesday the first model for the U.S. market will be an SUV but gave no details.
Zotye joins Chinese automakers that have announced ambitions to enter the U.S. market. The privately owned company headquartered in Hangzhou, southwest of Shanghai, also is developing electric vehicles with Ford Motor Co. for the China market.
General Motors Co. and Sweden’s Volvo Cars export Chinese-made vehicles to the United States. China’s BYD Auto sells battery-powered buses to U.S. transit companies.
Other Chinese brands have announced U.S. sales plans but have struggled to meet safety and emissions standards.
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