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Economy Briefs

- - Thursday, January 12, 2012

UNEMPLOYMENT

Benefit applications jump to 399,000

Applications for weekly unemployment benefits spiked last week, largely because companies let go of thousands of workers after the holiday season.

Weekly applications rose by 24,000 to a seasonally adjusted 399,000, the Labor Department said Thursday. That's the highest level in six weeks.

Economists said such a jump is typical in early January and downplayed the increase. It followed three months of steady declines that brought applications to their lowest level in more than three years. And weekly unemployment claims have been below 400,000 in nine of the past 10 weeks.

Applications typically soar in the first two weeks of the year. That's because many companies lay off temporary workers brought on to help during the holidays. The department tries to adjust for those patterns, but the task is difficult because the data can be volatile.

The four-week average, which attempts to smooth such fluctuations, also rose, to 381,750. It had fallen in the previous week to a 3 1/2-year low.

AIRLINES

Delta shares up on report of interest in AMR

FORT WORTH, Texas | Shares of Delta Air Lines Inc. rose Thursday after a report that the world's second-biggest airline is interested in bidding for American Airlines parent AMR Corp.

The Wall Street Journal reported that Delta and buyout firm TPG were separately looking at AMR, which is in the early stages of reorganizing through the bankruptcy process.

Delta and AMR declined to comment.

Three big mergers since 2008 have helped the airline industry by reducing competition and making it easier to raise prices. In one of those deals, Delta bought Northwest.

American missed out on the merger mania and fell from first to third among the world's biggest airlines by passenger traffic. US Airways Group Inc., which tried to buy Delta out of bankruptcy in 2006, is widely viewed as a possible bidder for AMR. US Airways declined to comment.

Delta shares rose 34 cents, or 4 percent, to $8.95 in afternoon trading. The stock has traded between $6.41 and $12.81 in the past 52 weeks.

MORTGAGES

Rate on 30-year loans drops to record 3.89%

Fixed mortgage rates fell once again to a record low, offering a great opportunity for those who can afford to buy or refinance homes. But few are able to take advantage of the historic rates.

Freddie Mac said Thursday the average rate on the 30-year fixed mortgage fell to 3.89 percent. That's below the previous record of 3.91 percent reached three weeks ago.

Records for mortgage rates date back to the 1950s.

The average on the 15-year fixed mortgage ticked down to 3.16 percent. That's down from a record 3.21 percent three weeks ago.

Mortgage rates are lower because they track the yield on the 10-year Treasury note, which fell below 2 percent. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.

Average fixed mortgage rates hovered around 4 percent at the end of 2011.

NEW YORK

KeyBank agrees to buy 37 upstate HSBC branches

BUFFALO | First Niagara Bank has agreed to sell 37 HSBC branches to KeyBank as part of its purchase of HSBC's entire upstate New York retail network, the banks announced Thursday.

Cleveland-based KeyBank will pay First Niagara a deposit premium of about $110 million, or just less than 5 percent, for the branches in Erie, Niagara, Orleans and Monroe counties.

The purchase includes all 26 of the HSBC branches that First Niagara promised to divest in a November agreement with the Justice Department to satisfy antitrust concerns.