Business Briefs – November 10, 2016

The Economy That Trump Inherits: Durable But Sluggish

WASHINGTON (AP) – Donald Trump inherits a much sturdier economy than the one Barack Obama carried into his second term four years ago. Back then, the scars of the Great Recession were still fresh. Joblessness was near 8 percent. Pay was flat. Europe faced a grave debt crisis that threatened to spread across the Atlantic.

Now? The job market, with steady hiring and just 4.9 percent unemployment, has proved durable. Pay is finally accelerating. Auto sales are near a record pace. Housing is stronger. Europe’s financial plight has stabilized.

Yet the economy’s long-standing shift toward workers with college degrees left people without them stuck with dimmer job opportunities and stagnant wages — a trend for which Trump blamed trade deals that he said led manufacturers to move overseas. The Americans who elected Trump are longing not just for change but for a reversal of the Obama era — one that will ignite growth, slash taxes, restore lost factory jobs and curb most federal regulations.

Problem is, the economy’s most vexing problems — from an aging workforce to listless productivity to weak corporate spending — defy quick fixes. Trump has pledged an economic renaissance yet has avoided the broad policy prescriptions widely seen as necessary for managing a government.

Investors Flee Emerging Markets After Trump Victory

NEW YORK (AP) – Investing in Mexico, China and other emerging markets has never been for the fainthearted. Big swings have been a hallmark, caused by everything from the 1994 “tequila crisis” where Mexico devalued the peso to Russia’s default on its debt in 1998.

Here’s the latest addition to the list: Donald Trump’s victory on Tuesday, which some analysts are calling an “orange swan” event for emerging markets. Trump’s election was unexpected, and investors were unprepared for it — the kind of event that economists liken to seeing a black swan for the first time — and it has caused stock markets to tumble from Mexico City to Seoul. As investors try to piece together what a Trump presidency will mean for stocks, a growing consensus is that emerging markets will be some of the biggest losers, at least in the short term.

Funds devoted to emerging market-stocks tumbled after the election, even while stocks in the United States were surging.

Applications for U.S. Unemployment Aid Fall From 3-Month High

WASHINGTON (AP) – Fewer Americans sought unemployment aid last week, the latest sign that companies are holding onto their workers.

The Labor Department said Thursday that weekly applications for jobless benefits fell 11,000 to a seasonally adjusted 254,000. That’s down from a three-month high in the previous week. The four-week average, a less volatile measure, ticked up 1,750 to 259,750. Just over 2 million people are receiving unemployment aid, up 18,000 from the previous week.

Applications, which are a proxy for layoffs, have remained below 300,000 for 88 straight weeks, the longest streak since 1970.

Average U.S. 30-Year Mortgage Rate Rises to 3.57 Percent

WASHINGTON (AP) – Long-term U.S. mortgage rates rose this week for a second straight week.

Mortgage giant Freddie Mac said Thursday the average for a 30-year fixed-rate mortgage increased to 3.57 percent from 3.54 percent last week. Rates remain near historically low levels, however. The benchmark 30-year rate is down from 3.98 percent a year ago. Its all-time low was 3.31 percent in November 2012.

The rates reflect the mortgage market in the week prior to Republican nominee Donald Trump’s election as president. On Wednesday, the day the result became known, bond prices fell sharply. That sent yields higher.

Macy’s Says Clothing Sales Strong, Gives Better Outlook

NEW YORK (AP) – Macy’s raised its sales outlook for the year after it said business improved in the third quarter, and cited stronger clothing sales that spanned the men’s, women’s and children’s sections.

The department store chain also said it struck a deal with a real-estate investor that involves redeveloping some properties. That sent its shares up more than 5 percent Thursday. Still, the company’s third-quarter earnings missed Wall Street expectations and a key revenue measure fell for a seventh straight quarter.

Macy’s had been a stellar performer after the recession but has seen sales growth slow in the past year and a half as it and other traditional department store chains face competition from online and off-price rivals. Kohl’s shares also rose Thursday as the company reported better-than-expected profit as it controlled its inventory — but sales fell.