Economy improving, but not enough for jobs
The economy is showing signs of modest improvement — not enough to reduce high unemployment but enough to ease fears that another recession might be near.
Fewer people applied for unemployment benefits last week, though some of that was because of technical factors. And the economy grew slightly more in the April-June quarter than previously estimated. Growth is also expected to tick up in coming months.
Investors initially drew some hope from the latest data, as well as from news that Germany’s government approved a plan to bolster Europe’s response to its debt crisis. The Dow Jones industrial average surged more than 200 points in morning trading before erasing all its gains by mid-afternoon.
Some of the news Thursday wasn’t encouraging. Chief executives of the nation’s largest companies are more pessimistic than they were just three months ago, according to a survey by a trade group, the Business Roundtable.
Only about one-third of the CEOs said they plan to hire or boost spending in the next six months. That’s down from about half who said so in June.
And fewer Americans signed contracts to buy homes in August, the second straight month of declines.
Rate on 30-year loans falls to record 4.01%
Fixed mortgage rates have fallen to historic new lows for a fourth straight week and are likely to fall further.
The average on a 30-year fixed mortgage fell to 4.01 percent from 4.09 percent this week, Freddie Mac said Thursday. That’s the lowest rate since the mortgage buyer began keeping records in 1971. The last time long-term rates were lower was in 1951, when most long-term home loans lasted just 20 or 25 years.
The average on a 15-year fixed mortgage, a popular refinancing option, ticked down to 3.28 percent. Economists say that’s the lowest rate ever for the loan.
Mortgage rates tend to track the yield on the 10-year Treasury note. The 10-year yield has risen this week to around 2 percent. A week ago, it touched 1.74 percent — the lowest level since the Federal Reserve Bank of St. Louis started keeping daily records in 1962. As recently as July, the 10-year yield exceeded 3 percent.