August 30, 2013 in Business

U.S. economy grew faster than estimated

From Wire Reports
 

WASHINGTON – The U.S. economy grew at a 2.5 percent annual rate from April through June, much faster than previously estimated. The steep revision was largely because U.S. companies exported more goods and imports declined.

The Commerce Department said second-quarter growth was sharply higher than the initial 1.7 percent rate it reported last month. And the growth this spring was more than double the 1.1 percent rate from January through March.

The improvement in the trade deficit helped offset a weaker government spending.

Economists expect growth will stay at an annual rate of around 2.5 percent in the second half of the year, helped by steady job gains and less drag from federal spending cuts. Still, some say higher interest rates might restrain the economy’s expansion in the second half.

Rates could rise even further, if the Federal Reserve decides to reduce its $85 billion a month in bond purchases at its September meeting. The Fed will consider the stronger second-quarter growth when making a decision next month. The bond purchases have helped keep long-term borrowing rates low.

New jobless claims fall, signaling fewer layoffs

WASHINGTON – The number of Americans seeking unemployment benefits remained near the lowest level in more than five years last week, a sign that companies are cutting few jobs.

First-time applications for benefits fell 6,000 to a seasonally adjusted 331,000, the Labor Department said Thursday. The four week average, a less volatile measure, inched up 750 to 331,250 after falling to its lowest level since November 2007 the previous week.

Applications for unemployment benefits reflect layoffs. At the depths of the recession in March 2009, they numbered 670,000. The average has fallen 10 percent this year.

All told, nearly 4.5 million people received unemployment benefits in the week that ended Aug. 10, the latest period for which figures are available. That’s about 30,000 more than in the previous week.

The figures “signal no let-up from the recent pace in employment growth, which has been strong enough to keep unemployment trending down,” said Jim O’Sullivan, an economist at High Frequency Economics. “If anything, claims are suggesting further acceleration.”

Average 30-year rate drops from 4.58 to 4.51

WASHINGTON – Average U.S. rates for fixed mortgages declined this week but stayed close to their highest levels in two years.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.51 percent. That’s down from 4.58 percent last week, the highest since July 2011.

Rates have risen more than a full percentage point since May.

U.S. sales of newly built homes dropped 13.4 percent in July to a seasonally adjusted annual rate of 394,000, the government said last week. That’s the lowest level in nine months.

Canadian airline to buy 65 of Boeing’s 737 Max

NEW YORK – Canadian airline WestJet plans to buy 65 of the new fuel-efficient 737 Max aircraft from Boeing as it looks to modernize its fleet.

Boeing said Thursday that the pending order is valued at $6.3 billion at current list prices.

WestJet Airlines Ltd.’s current fleet includes 103 Boeing next-generation 737 and four Bombardier Q400 next-generation aircraft.

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