Congressional appropriators agreed Tuesday night to give civilian federal employees a 2 percent pay increase -- which includes a locality pay increase President Obama didn't want.
Government workers will get a 1.5 percent nationwide increase in base pay and a 0.5 percent average increase in locality pay. The final agreement goes against the wishes of Obama, who called for a flat 2 percent jump and no locality increase.
Locality pay helps address the gaps between federal pay and private sector wages in high-cost areas of the country. The Federal Salary Council estimates the current private-public gap is about 26 percent, on average. Locality increases mean a federal worker in Cincinnati might get a smaller increase than a worker in Washington, D.C., because of local costs of living. [Why aren’t Social Security recipients and disabled veterans receiving their COLA raises for the next few years as well?]
US homeowners have lost about $5.9 trillion in value since the housing market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com.
Almost half a trillion dollars was wiped out this year through November as housing headed for a third straight annual decline. New foreclosures and higher mortgage rates in 2010 may hinder a rebound, the property data service said yesterday.
“A phenomenal amount of wealth has been erased since the housing bust,’’ Stan Humphries, the chief economist for Seattle-based Zillow, said Tuesday in an interview. “For many households, most of their wealth is tied up in real estate.’’
The net worth of US households at the end of June fell 19 percent from two years earlier to $53.1 trillion, according to Federal Reserve data. Employers have cut more than 7.2 million jobs since the start of the recession in December 2007.
The slowing of property declines because of a government tax credit for first-time buyers and record-low mortgage rates will be tested as more foreclosures reach the market and borrowing costs rise, Humphries said. More than two-thirds of the 154 markets tracked by Zillow have lost value this year.
The value of US housing today is about $24.7 trillion, down 19 percent from the market’s peak, according to Zillow.
Wells Fargo & Co., the bank that gained a portfolio of option adjustable-rate mortgages when it bought Wachovia Corp. last year, cut the principal for delinquent borrowers in some loans by as much as 30 percent.
Wells Fargo has forgiven an average of $46,000 in principal, or 15 percent, for the 43,500 option-ARM loans it has modified this year through September, said Franklin Codel, chief financial officer at the bank’s home-lending unit. The San Francisco-based lender has cut as much as 30 percent off the loan principal in a few “rare exceptions,” with the ceiling typically capped at 20 percent, Codel said.
“Right away we decided we wanted to go after the highest- risk borrowers,” Codel said in an interview yesterday from Des Moines, Iowa, where Wells Fargo Home Mortgage is based. “Principal forgiveness is one of the arrows in the quiver.”
In the second-quarter, 15.2 percent of option-ARMs were seriously delinquent, almost triple the 5.3 percent rate for all home loans, according to joint figures from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. As U.S. home prices declined, the Federal Deposit Insurance Corp. and the Center for Responsible Lending have called for banks to reduce the principal for borrowers who owe more than their property is worth.
Wells Fargo has modified about $15.7 billion of option-ARMs in the first three quarters, Codel said. It wrote down $2 billion in loan balances, leaving $13.7 billion in modified mortgages that no longer qualify as option-ARMs, according to a third-quarter presentation.
The U.S. Freight Transportation Index fell in October to its lowest level for October since 1996, as industry shipments decreased for two months in a row.
Shipments suffered their biggest October year-on-year decline, falling 10.5 percent, since the department began calculating the index 20 years ago.
The Freight TSI measures the month-to-month changes in freight shipments in ton-miles, which are then combined into one index.
The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight.
FROM A SHOPPER: This happened at Wal-Mart (Supercenter Store #1279, 10411 N Freeway 45, Houston, TX 77037) a month ago. I bought a bunch of stuff, over $150 worth, and I glanced at my receipt as the cashier was handing me the bags. I saw a cash-back of $40. I told her I didn't request cash-back, and to delete it. She said I'd have to take the $40, because she couldn't delete it.
I told her to call a supervisor. The supervisor came, and said I'd have to take it. I said NO! Taking the $40 would be a cash advance against my Discover card, and I wasn't going to pay interest on a cash advance!!!!! If they couldn't delete it, then they would have to delete my whole order. So the supervisor had the cashier delete the whole order and re-scan everything. This second time around I looked at the electronic pad before I signed, and an unwanted cash-back of $20 popped up. At that point I told the cashier, and she deleted it. The total came out right.
The cashier agreed that the electronic pad must be defective. However, it was obvious that the cashier already knew that the electronic pad was defective because the first time around, although the $40 cash back showed up on the receipt, she kept quiet and NEVER offered me the money, like she should have! She intended to pocket my $40.
Can you imagine how many people went through before me, and at the end of her shift how much money she pocketed?
Few employers plan to ramp up hiring early next year, two surveys show – evidence that the economic recovery isn't likely to create many jobs anytime soon.
That will mean fierce competition for job openings that do exist. Nearly 6.3 unemployed workers, on average, are vying for each opening, government figures released Tuesday show. When the recession began, only 1.7 jobless workers were competing for each opening.
More of America's largest companies will shrink their staffs than will hire in the next six months, according to a quarterly survey from the Business Roundtable, a group of large-company CEOs released Tuesday.
Nineteen percent of the CEOs expect to expand their work forces, while 31 percent predict a decrease in the next six months, the survey found. That's slightly better than the 13 percent who expected to increase hiring three months earlier. At that time, 40 percent forecast cuts.
More chief executives foresee higher sales and capital spending compared with three months ago. But "it still will take some time for these gains to translate into more jobs," said Ivan Seidenberg, CEO of Verizon Communications and chairman of the Roundtable.
Separately, a survey of 28,000 employers by staffing company Manpower Inc. found that hiring may improve in the first quarter of 2010 compared with the current quarter – but any gains will likely be slight.
Manpower said its hiring index rose to 6. It was the first positive reading since the first quarter of 2009. Still, that's far below the 18 the index reached in the fourth quarter of 2007, when the recession began.
Economists say employment at large firms is likely to remain flat through much of 2010. Many companies already have hit their hiring targets for what's expected to be a weak and bumpy recovery.
The number of U.S. workers filing new claims for jobless benefits rose more than economists expected last week, the Labor Department said in its weekly report Thursday.
Total claims lasting more than one week, meanwhile, fell.
Initial claims for jobless benefits rose by 17,000 to 474,000 in the week ended Dec. 5. The previous week's level was unrevised at 457,000.
Economists surveyed by Dow Jones Newswires expected an increase of 8,000 initial claims.
An economist at the Labor Department said Thursday that an increase in claims is generally expected during this time of year because it reflects data from the week after Thanksgiving and because construction lay-offs tend to occur in that week.
"Generally...that week sees the biggest percentage increase in initial claims over the year, and this year was no exception," he said.
Although initial claims rose last week, the four-week moving average, which aims to smooth volatility in the data, still continued to drop. The Labor Department said the four-week moving average fell by 7,750 to 473,750 from the previous week's revised average of 481,500. That is the lowest figure since September 27, 2008.
Michelle Meyer, an economist at Barclays Capital, said in an interview Wednesday that despite the predicted increase in claims, she also expected the four-week moving average to continue to decline in a positive sign for the labor market.
"You are still seeing an improving trend," she said. "You are still experiencing an overall downturn in jobless claims."
In the Labor Department's Thursday report, the number of continuing claims--those drawn by workers for more than one week in the week ended Nov. 28 --fell by 303,000 to 5,157,000 from the preceding week's revised level of 5,460,000.
The unemployment rate for workers with unemployment insurance for the week ended Nov. 28 decreased to 3.9%, a 0.2 percentage point decline from the prior week's unrevised rate of 4.1%.
The largest increase in initial claims for the week ended Nov. 28 was in Wisconsin due to layoffs in the construction, service and manufacturing sectors. The largest decrease in initial claims occurred in California.
T he U.S. trade deficit narrowed unexpectedly in October, falling to $32.94 billion, as the rise in exports from September of goods such as cars was slightly higher than the increase in imports.
The figure, representing the U.S. deficit in international trade of goods and services, is 7.6% lower than the downwardly revised $35.65 billion trade gap the U.S. ran in September, the Commerce Department reported Thursday.
Economists surveyed by Dow Jones Newswires had expected the October trade deficit would widen to $37.0 billion. The September trade gap was originally estimated to be $36.5 billion.
The real, or inflation-adjusted deficit, used by economists to measure the impact of trade on gross domestic product, fell to $38.0 billion in October from a downwardly revised $41.49 billion in September.
U.S. GDP, a broad range of economic activity, rose in the third quarter by an annualized 2.8%, the first increase in more than a year. However, the economy's expansion was limited by a wider trade deficit, with net exports subtracting 0.8 of a percentage point to GDP in the July-September period.
Thursday's report showed U.S. exports in October rose 2.6% to $136.84 billion, the highest level in nearly a year, from $133.38 billion the previous month.
Imports rose by just 0.4% to $169.78 billion from $169.03 billion in September, but that was still the highest level in U.S. imports since Dec. 2008.
The U.S. paid $17.44 billion for crude oil imports in October, down from $19.51 billion the month before. After rising for seven months in a row, the average price per barrel was the lowest since January 2000, falling to $67.39 from $68.17 in September. Crude import volumes fell to 258.83 million barrels from 286.22 million barrels.
The total U.S. bill for all types of energy-related imports fell to $22.45 billion in October from $24.87 billion in September.
Imports of foreign-made consumer goods rose $1.0 billion in October, with imports of auto and related parts rising by $0.4 billion from September. Purchases of capital goods increased by $1.1 billion.
U.S. exports of consumer goods, including artwork and jewelry, rose by $1.0 billion in October compared to the prior month. The value of U.S. exports of industrial supplies, such as steelmaking material and gold, increased by $0.4 billion. Auto and related products exports also rose by $0.4 billion from September.
Meanwhile, capital goods exports rose by $1.2 billion in October from the previous month.
The U.S. trade gap with China was the highest since Nov. 2008, rising to $22.7 billion in October from the previous month's $22.1 billion. The trade deficit with Japan rose to $4.4 billion from $4.1 billion in September.
However, the U.S. trade deficit with some other major trading partners narrowed slightly. The deficit with the European Union fell to $4.9 billion from $5.5 billion a month earlier, while the trade shortfall with Mexico was unchanged at $4.6 billion.
Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.
This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.
“We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”
Foreclosure filings exceeded 300,000 for the ninth straight month in November, RealtyTrac said today. A weak labor market and tight credit are “formidable headwinds” for the economy, Federal Reserve Chairman Ben S. Bernanke said in a Dec. 7 speech in Washington. The 7.2 million jobs lost since the recession began in December 2007 are the most of any postwar economic slump, Labor Department data show. Unemployment, at 10 percent last month, won’t peak until the first quarter, Quigley said.
Loan-modification programs and an expanded government tax credit for first-time homebuyers are helping slow the monthly pace of filings and “keeping a lid” on further foreclosures, James Saccacio, RealtyTrac’s chief executive officer, said in the statement.