US long-term mortgage rates little changed; 30-year at 2.93%

WASHINGTON (AP) — U.S. average rates on long-term mortgages changed little this week, remaining at historically low levels that has sparked demand for homes.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan ticked up to 2.93% from 2.91% last week. By contrast, the rate averaged 3.49% a year ago.

The average rate on the 15-year fixed-rate mortgage declined, however, to 2.42% from 2.46% last week.

Housing demand continues as one of few bright spots in the pandemic-hobbled economy. Sales of new homes soared in July, rising nearly 14% as the market continued to gain traction following the spring downturn caused by pandemic-forced lockdowns.

In the wider economy, the government reported Thursday that the number of laid-off Americans applying for unemployment benefits fell to a still-elevated 881,000 last week — evidence that the pandemic keeps forcing many businesses to slash jobs.

Associated Press

Coronavirus turns Chile’s middle classes into new poor

During more than three decades of boom in Chile, the middle classes reaped the rewards, but just three months of the coronavirus pandemic has already reduced many to poverty.

When a protest movement took to the streets against inequality in October, it was largely led by the middle classes.


The protests dragged on for months, affecting many small businesses — and just as those were starting to recover, the coronavirus struck in mid-March.

With high levels of debt, facilitated by easy access to credit, and a lack of state support, a significant number of the middle class have been left in a vulnerable situation by the virus crisis.

“The richest 10% is the only sector relatively bulletproof in Chile,” said Dante Contreras, assistant manager at the Center for Social Conflict and Cohesion Studies (COES).

Contreras is also a professor at the University of Chile, which has calculated that poverty has risen from nine to 15%.


There’s an emergency family fund that was created to help people cope with the health crisis, but it only covers households bringing in less than 400,000 pesos ($490) a month.

That accounts for only 34% of Chilean households, meaning the entire middle class — which makes up almost half of Chile’s 18 million people — gets nothing.

“What you see in Chile is a high degree of fluctuation in household income. Families that leave poverty and families that return to poverty. And that is a snapshot of the high level of fragility that makes it difficult for them to take long term decisions,” said Contrerasa.

‘Live or pay rent’

Pablo Martinez is a prime example. In just over one year, the 44-year-old has gone from a successful and solvent engineer living in an upper-middle class neighborhood to barely having enough to live.


Since being made redundant in March 2019, he has been unable to find work.

During the first few months he used up his savings and unemployment insurance.


He started working as a driver for Uber, but work slowed when the protests broke out in October and dried up completely when the virus lockdown began.

“If before we were critical, now we’re practically paralyzed,” Martinez told AFP.

Whereas before he “lived relatively comfortably,” now he cannot afford to pay the rent.

“There’s living or paying the rent, I can’t do both.”

He and his wife have opened a shop selling personalized gifts, while he also gives guitar and piano lessons over the internet.

But it’s not enough, and he doesn’t qualify for state help.

Surveyor Rodrigo Acevedo, 44, is in the same situation.

After his job was suspended, he had to lean on the employment protection law that was created during the pandemic so that employees could access their unemployment insurance.


The first monthly payment was worth 70 percent of their salary, but that diminished progressively.

His $1,200 monthly salary meant he didn’t qualify for state aid, and he had to take his daughter out of a private college and enroll her in a public school.

“We had no other option,” he told AFP.

In Chile, there is a wide disparity in the level of public and private education and health care.

‘A drastic change’

Since 1990, Chile has dramatically reduced poverty from 40 to 9%, but the middle classes improved their lifestyles through credit.

Now, 70% of those families live with unsustainable levels of debt.

A study by the University of Chile found that the self-employed had been the worst affected by the pandemic, seeing their salaries fall by 60 percent.

“The fall in the wellbeing levels of the middle classes is going to be significant,” said Contreras. “Even if they don’t fall into poverty, it will be a drastic change: changing from the private to public health system, the children’s schools or liquidating assets.”

Life has already changed for Pedro Castro, 54, a successful exhibition businessman whose business fell victim to the pandemic.


To make ends meet, he’s rented out his comfortable home in the trendy Nunoa neighborhood of the capital and moved his family to a cabin on the outskirts of Santiago.

“You have to go out onto the streets again,” Castro, who now sells purified water, told AFP. “To live off cards, off savings, to sell some machines to make money and payments.”

Agence France-Presse

Handling Debt When You’re Out Of Work

Nothing is more stressful than losing your job and watching the bills pile up. It isn’t long before your bank account balance plummets, the collection companies start to call, and you feel like you’re drowning in debt.

Don’t panic. You can keep your head above water and your bank accounts out of the negative. Here’s how.











1. Make job-hunting your full-time job.

reduce-debtGenerating an income is your number one priority and the best solution for your financial woes. It may be difficult to find a job in your area of expertise, and it may be even harder to replace a sizeable income in this economy, but that does not mean you can simply wave a white flag and surrender.

    Take what you can get. Desperate times call for desperate measures. Stop holding out for that management position or dream career. A job flipping burgers, cleaning floors, or raking lawns is better than no job at all. And the money will keep the electricity on and the repo man at bay.

    Go part time. A part-time job is also better than no job. Many people juggle two or more part-time jobs to meet their financial obligations.

    Looking for work is a full-time job. Until you are working a full-time job, you do not have “spare” time. You need to keep handing out resumes, applying to job sites, and combing job boards until you are back on your feet again.

2. Examine your debts

Which debts are a priority? If you have any “secured” debt, meaning that the creditor has the right to repossess an asset for non-payment, you will want to keep those up-to-date. The last thing you need is to have your home go into foreclosure or your car repossessed.

You will also need to ensure that the things you need to survive such as electricity, heat, and food are covered.

Also, consider paying off the items with high interest rates like credit cards. These outstanding balances can turn into massive debts if left unpaid.

3. Contact your creditors

Contact your creditors before your accounts slip into arrears. You may be able to negotiate lower payments, lower interest rates, or deferred payments–any of which will help you stay current on your financial obligations and prevent further stress. If you wait until you have become delinquent, they may be less receptive to your request for help.

4. Apply for Unemployment Benefits

Contact your unemployment office the minute you find yourself out of work. The sooner you get your paper work completed and the wheels in motion, the sooner you will receive your benefits. These funds will definitely help keep food on the table while you conduct your job search.

5. Tighten your belts.

Begin by separating your necessities from the expenses that you can survive without. For instance, you need heat, but you don’t need satellite TV.
Next, devise a budge based on these necessities and stick to it. Eliminate extra expenses until you are back on your feet again and, then, introduce them gradually. You may find that you don’t need some of them after all.
And don’t put extras on credit cards. A mounting credit card debt can be disastrous–growing rapidly due to high interest rates. Snipping your credit cards in half would be the best move.
Unemployment is stressful. Unemployment coupled with debt can feel like an insurmountable burden. So don’t let your debt drag you down to the depths of despair. By sticking to a plan, being proactive, and never losing hope, you can return to financial viability–and restore your satellite TV.

Read more at http://financialhighway.com/handling-debt-youre-work/#tXAYaguMR1VlRDjJ.99

Begin by separating your necessities from the expenses that you can survive without. For instance, you need heat, but you don’t need satellite TV.
Next, devise a budge based on these necessities and stick to it. Eliminate extra expenses until you are back on your feet again and, then, introduce them gradually. You may find that you don’t need some of them after all.
And don’t put extras on credit cards. A mounting credit card debt can be disastrous–growing rapidly due to high interest rates. Snipping your credit cards in half would be the best move.
Unemployment is stressful. Unemployment coupled with debt can feel like an insurmountable burden. So don’t let your debt drag you down to the depths of despair. By sticking to a plan, being proactive, and never losing hope, you can return to financial viability–and restore your satellite TV.

Read more at http://financialhighway.com/handling-debt-youre-work/#tXAYaguMR1VlRDjJ.99

Begin by separating your necessities from the expenses that you can survive without. For instance, you need heat, but you don’t need satellite TV.

Next, devise a budget based on these necessities and stick to it. Eliminate extra expenses until you are back on your feet again and, then, introduce them gradually. You may find that you don’t need some of them after all.

And don’t put extras on credit cards. A mounting credit card debt can be disastrous–growing rapidly due to high interest rates. Snipping your credit cards in half would be the best move.

Unemployment is stressful. Unemployment coupled with debt can feel like an insurmountable burden. So don’t let your debt drag you down to the depths of despair. By sticking to a plan, being proactive, and never losing hope, you can return to financial viability–and restore your satellite TV.

source:  financialhighway.com

Walmart lays off 2,300 in cost-cutting move—report

NEW YORK — Walmart will lay off about 2,300 workers at its Sam’s Club warehouse unit, The Wall Street Journal said Friday, the latest in a string of job losses at US retailers.

Half of the cuts will affect middle-management workers, the newspaper said, calling it “the club chain’s biggest round of job cuts in four years.”

Walmart did not immediately confirm the numbers, which amount to about two percent of Sam’s Club workers.

“Over the years, we’ve migrated to a top-heavy structure in our management,” said Sam’s Club chief executive Rosalind Brewer, in an interview. “What this does is align the number of assistant managers to the sales of the club and to where our growth areas are.”

A range of major American retail groups, including JCPenney, Macy’s and Target, have announced job cuts in recent weeks.

source: business.inquirer.net

May jobs report: Hiring slows, unemployment rises

NEW YORK (CNNMoney) -- Businesses hired far fewer workers than expected in May, throwing into doubt the strength of the economic recovery.

Only 69,000 jobs were added last month, the weakest growth in a year. The unemployment rate rose to 8.2%, as people rejoined the labor force.

Economists surveyed by CNNMoney had expected to see employers add 150,000 jobs and the unemployment rate to remain at 8.1%.

Revisions from previous months also showed the economy gained 49,000 fewer jobs in March and April than originally thought.

Private companies sharply cut back on hiring last month, adding only a meager 82,000 jobs. Employment increased in health care, transportation and wholesale trade, but declined in construction. Employment was little changed in most other major industries.

The public sector continued to shed jobs, losing 13,000 in May.

The figure stunned most economists, who laid the blame for the slow growth at the feet of Europe and Washington D.C. The steady drumbeat of headlines concerning Europe's financial woes, as well as the looming fiscal cliff in the U.S., is weighing on consumer confidence. Adding to the problems is the slowdown in the Chinese economy.

"It was really shockingly low," said Bill Dunkelberg, chief economist for the National Federation of Independent Business, who said small businesses have pulled back from hiring as customers dried up.

The rising unemployment rate contained a glimmer of good news. It increased because 642,000 people re-entered the labor force, often a sign of economic optimism.

Economy: Are you better off?

But the overall job market still has a long way to go to climb out of the deep hole left by the financial crisis. Of the 8.8 million jobs lost, only about 3.8 million have been added back.

Roughly 12.7 million Americans remain unemployed, and 42.8% of them have been so for six months or more. The number of long-term unemployed rose to 5.4 million, up from 5.1 million.

source: CNN

Wall Street inches toward three-year highs

NEW YORK - US stock markets climbed steadily, if unspectacularly, this week, nearing three year highs despite worry over rising oil prices and Europe's slow boil debt crisis.

"Stocks were in a bear market from October 2007 until March 2009," said Beth Ann Bovino of Standard & Poor's "they have now recovered much of those losses."

The holiday-shortened week saw the Dow Jones Industrial Average hover above the symbolic threshold of 13,000 points, helping add to confidence about the growing economy and falling unemployment.

At the end of the week the Dow was up 0.3 percent to reach 12,982.95 points. The Nasdaq rose 0.4 percent and the S&P 500 rose 0.3 percent.

"A stronger job market is helping the US weather headwinds from both home and abroad," said economists at Nomura, a Japanese bank.

One of those headwinds is higher oil prices, which have been rising on tensions in Iran.

While prices have been on the up for some time, there was renewed focus this week as US politicians talked extensively about what can be done to stem the rise in this election year.

"Oil prices are on the rise again and concerns are growing about their impact on the recovery," said IHS Global Insight economists Paul Edelstein.

"The situation is reminiscent of early-2011, when Brent oil prices reached $126 a barrel, creating a growth pocket in the middle of the year."

"If oil prices stay persistently high or continue to rise, growth forecasts will likely be revised downward. But it would take a much bigger spike in prices to sink the US economy back into recession."

Higher oil prices spelled a boon for the oil majors.

ExxonMobil shares were up two percent for the week and Chevron was up 2.3 percent

Airlines got the raw end of that trade.

US Airways plunged 21 percent, United Continental 13 percent and Delta 12 percent for the week.

In other sectors Wal-Mart saw steep declines, down 5.9 percent following disappointing quarterly earnings.

Wal-Mart missed earnings forecasts for its fourth quarter in part due to heavy price-cutting in the industry during the busy Christmas season.

Hewlett-Packard suffered a nearly 10 percent drop after reporting a 44 percent profit fall in its fiscal first quarter.

After four days that saw little in the way of market-moving data, next week promises to be data-rich including reports on consumer confidence, GDP, manufacturing, and the Federal Reserve's Beige Book. — Agence France Presse

source: gmanetwork.com

Unions protest Spanish labor reforms

Madrid (CNN) -- Spain's largest unions carried out mass protests across the country Sunday in response to labor-market changes announced by the government.

Protesters packed the streets of Madrid, marching against measures they said will make it cheaper and easier to fire workers.

Sunday's demonstrations were the first major union protests against Spain's new conservative government, which took office two months ago.

Spain's unemployment rate is nearly 23%, and its youth unemployment rate is nearly 50%. About 5.2 million people in the country are jobless.

Last week Spain's parliament approved the labor reforms, which the nation's Cabinet approved earlier this month.

Government officials have argued that the new labor reforms will reduce unemployment and give workers more rights, such as an annual 20-hour paid leave for training.

But protesters said the reforms -- which also reduce the amount of severance employers must pay -- will further cripple the country.

Business administration student Raquel Tapia Solascasas carried a large pair of cardboard scissors, protesting cutbacks in education.

Pedro Munoz, a welder, said he was marching Sunday because he was worried about his grandchildren's future.

source: CNN