Business news in brief

An Airbus 400M lands during this week’s international airshow in Farnborough, England, where aircraft manufacturers expressed concern over the effect of trade tariffs on their industry.
An Airbus 400M lands during this week’s international airshow in Farnborough, England, where aircraft manufacturers expressed concern over the effect of trade tariffs on their industry.

Fed districts note truck driver shortage

American businesses want to keep trucking along, but they're running into a persistent roadblock: a driver shortage amid high demand for freight services.

The Federal Reserve's July Beige Book, a collection of anecdotes from across the Fed's regional bank districts released this week, showed 25 mentions of "truck" or "trucking," up from just 10 a year earlier. For months, businesses have been expressing anxiety on earnings calls about rising shipping costs and capacity constraints in the trucking industry as a hot economy stokes demand.

"Six Districts specifically mentioned trucking capacity as an issue and attributed it to a shortage of commercial drivers," according to the Fed report, released Wednesday in Washington.

In some districts, like the Richmond Fed's, the shortage means demand is going "partially unmet." In the Boston region, it's driving up freight costs, while businesses in the Cleveland area are turning to railroads as a transportation method. And in the St. Louis region that includes Arkansas, it's pushing up wages: "One trucking company offered the largest one-time pay increase in its history," the report said.

-- Bloomberg News

Boeing tops Airbus in air-show deals

Boeing edged out Airbus to claim a sales victory at the Farnborough air show in England on Thursday as its European rival failed to land an anticipated 100-jet order amid a flurry of late deals at the year's biggest aviation expo.

The U.S. company ended the show Thursday after booking new business worth $79 billion from orders and outline commitments involving 528 jetliners, according to its closing statement at the trade fair southwest of London.

Airbus said it racked up $62 billion of sales from 431 planes, meaning the hoped-for order for A321neo narrow-body planes from AirAsia Group would have given it victory by a margin of just three jets. Instead the Malaysian operator signed for 34 A330neo wide-bodies while indicating that the single-aisle deal needed more work.

Thursday saw an unusually high level of activity for a fourth day of the air show, with Airbus and Boeing trading blows to rack up more than $32 billion of orders at list prices. The expo culminated with the AirAsia announcement, which at once buoyed the backlog for the A330neo, which has struggled competing with Boeing's popular 787 Dreamliner, while revealing that the narrow-body component had fallen at the final hurdle.

-- Bloomberg News

Long-term mortgage rates little changed

Mortgage rates were stagnant again this week.

According to the latest data released Thursday by Freddie Mac, the Federal Home Loan Mortgage Corp., the 30-year fixed-rate average slipped to 4.52 percent with an average 0.4 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.53 percent a week ago and 3.96 percent a year ago.

The 15-year fixed-rate average slid to 4 percent with an average 0.4 point. It was 4.02 percent a week ago and 3.23 percent a year ago. The five-year adjustable rate average ticked up to 3.87 percent with an average 0.3 point. It was 3.86 percent a week ago and 3.21 percent a year ago.

"Manufacturing output and consumer spending showed improvements, but construction activity was a disappointment," Sam Khater, Freddie Mac's chief economist, said in a statement. "This meant there was no driving force to move mortgage rates in any meaningful way, which has been the theme in the last two months. That's good news for price-sensitive home shoppers, given that this stability in borrowing costs allows them a little extra time to find the right home."

The 30-year fixed rate has hovered between 4.55 percent and 4.66 percent for much of the summer.

-- The Washington Post

Amazon Prime Day sales put at $4.2B

Shoppers spent $4.2 billion during Amazon.com's Prime Day sale, up 33 percent from a year ago, according to estimates Thursday from Wedbush Securities analyst Michael Pachter.

The online retailer doesn't disclose revenue from the 36-hour event that began Monday. Pachter based his estimate on information the company did release, including that it shipped more than 100 million products and that small and mid-sized businesses sold over $1 billion worth of goods in the first 24 hours. Amazon's Web store features its own merchandise as well as products from more than 2 million independent merchants who pay Amazon commissions and fees for storage, delivery and selling on the platform.

Pachter's estimate tops a pre-event prediction of $3.4 billion from Coresight Research, and reinforces early projections that Amazon overcame technical glitches that thwarted some shoppers at the start of the sale. Many consumers were disappointed when they couldn't add products to their carts or their attempts to search for goods prompted an error page featuring dog photos.

-- Bloomberg News

Jobless claims at lowest level since '69

Unemployment lines across the U.S. last week were the shortest since December 1969, according to a Labor Department report Thursday that showed an unexpected drop in filings for joblessness benefits.

Claims decreased by 8,000 to 207,000 and continuing claims rose by 8,000 to 1.75 million in the week ending July 7. Continuing claims data is reported with with one-week lag.

The latest tally for joblessness-benefit applications coincides with the same week the Labor Department conducts surveys for the monthly jobs report. The drop last week is an encouraging sign that the July employment data will remain robust.

The number of Americans filing for unemployment insurance has been running well below 300,000, a level consistent with a healthy labor market. The claims figures are in sync with other reports showing employers are competing for a limited pool of qualified workers.

-- Bloomberg News

Business on 07/20/2018

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