Business in brief May 8
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5/7/2008 - 5/8/08
Consumer borrowing rises
WASHINGTON — Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, in what was seen as a sign of rising economic stress.
The Federal Reserve reported Wednesday that consumers increased their borrowing at an annual rate of 7.2 percent, compared with a 3.1 percent rate of increase in February.
The gain was much larger than economists had been expecting and reflected strong borrowing on credit cards and also in the category that includes auto loans. The increase in consumer debt totaled $15.3 billion at an annual rate in March, much bigger than the $6 billion increase that economists had been expecting.
Pending home sales drop to new low
NEW YORK — Pending home sales dropped to a new low in March, an industry group said Wednesday, signaling the housing slump has yet to bottom out even as the spring sell season gets under way.
The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell to 83.0 from a downwardly revised February reading of 83.8, the index's previous low. The index stood at 103.9 in March 2007.
Wall Street economists polled by Thomson/IFR had predicted the index would slip to a reading of 83.8.
Cell phone networks merge
KANSAS CITY, Mo. — Clearwire and Sprint Nextel said Wednesday that they will combine their wireless broadband units to create a $14.55 billion communications company.
The new company, which will retain Clearwire's name, will continue developing a mobile network based on WiMax technology, which promises faster speeds than the latest cellular networks for movies, games and other data services.
A group of outside investors, including Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks, will kick in $3.2 billion for the new company.
Toyota raises prices on some models
TOKYO — Toyota Motor Corp., the world's second-biggest automaker by annual vehicle sales, is raising its prices on some U.S. models later this month amid increased worries about its profit growth in the American market.
The price increases, which will start in the middle of May, include a hike of $200 on the 2008 Yaris sedan, boosting the cost of the base model to $12,425, with higher prices for models with extra features.
The 2009 Camry will go up $200, to $18,920 for a model without any extras, the automaker's U.S. unit said in a statement released Friday.
The base hybrid Camry, introduced as a 2007 model in late 2006, will cost $300 more, at $25,650, Toyota said.
Worker productivity up in first quarter
WASHINGTON — Worker productivity rose by a better-than-expected amount in the first three months of the year while labor cost pressures eased.
The Labor Department reported Wednesday that productivity, the amount of output per hour of work, increased at an annual rate of 2.2 percent in the first quarter. That was slightly higher than the 1.5 percent increase that had been expected.
In a sign that inflation could be easing, labor cost pressures slowed a bit. Unit labor costs rose at an annual rate of 2.2 percent, down from a 2.8 percent rise in the final three months of last year.