J.C. Penney cuts quarterly losses in half
Shares of J.C. Penney surged after the ailing department store cut its quarterly losses in half and announced that it would begin selling used clothing to staunch fading sales.
Retailers have been searching for ways to get people back into its stores in the decade since the global economic downturn altered consumer behavior, a period that has run parallel with the ascent of Amazon.com.
Among the worst hit has been J.C. Penney, a company that traces its roots back to 1902 and just received a delisting warning from the New York Stock Exchange because its shares have fallen below $1.On Thursday, the Plano, Texas, company said it would be partnering with thredUP, a resale website where people can buy and sell clothes online. J.C. Penney will open threadUP shop in 30 stores soon.
Industrial production falls in July
WASHINGTON — U.S. industrial production fell 0.2% in July, as factory activity slumped in a worrisome sign for the economy.
The Federal Reserve said that the overall decline was caused primarily by a 0.4% drop last month in manufacturing production. Output decreased for autos, fabricated metals, wood products, textiles and plastics and rubber products.
Over the past 12 months, factory production has fallen 0.5%. Manufacturers’ struggles reflect a global softening in growth.
Jennifer Lee, a senior economist at BMO Capital Markets, said the trade with China war is weighing heavily on manufacturers.
“Uncertainty over which way it is headed, or how painful it will be, is preventing businesses from moving too far forward with spending, investing, hiring plans,” she said.
Production at the nation’s utilities increased 3.1%. Production at mines, a sector that also covers oil and gas drilling, fell 1.8% as Hurricane Barry temporarily halted oil extraction in the Gulf of Mexico.
Long-term mortgage rates remain low
WASHINGTON — U.S. long-term mortgage rates remained near historically low levels this week against a backdrop of volatile financial markets around the globe.
Mortgage buyer Freddie Mac said Thursday the average rate on the benchmark 30-year loan was unchanged at 3.60%, its lowest level since November 2016. A year ago the rate stood at 4.53%.
The average mortgage rate for 15-year, fixed-rate home loans edged up to 3.07% from 3.05% last week.The climate of low home borrowing rates has sparked a flurry of activity by prospective homebuyers as well as owners looking to refinance mortgages. Mortgage applications for home purchases increased 2% in the week ended Aug. 9 from a week earlier, the Mortgage Bankers Association reported. Refinance applications jumped 37% to a three-year high.
U.S. productivity rises in 2nd quarter
WASHINGTON — U.S. productivity increased at a decent pace in the second quarter, a trend that could lead to higher wages if it continues.
The Labor Department said Thursday that productivity — or output per hour worked — rose 2.3% in the April-June quarter, down from 3.5% in the first three months of the year. The first quarter gain was the best in four years.
Greater productivity is a key ingredient in raising living standards. It enables companies to lift worker pay without raising prices on coumers. The recovery, now in its 11th year, has been held back by historically weak productivity growth. It has grown at roughly two-thirds of its historical average since the recession began.
Yet productivity has picked up in recent quarters and expanded 1.8% in the past year. That’s below the 2.1% long-term annual average, but better than the 1.3% average increase since the recession began in 2007.
Productivity increased in the April-June quarter largely because the number of hours employees worked fell 0.4%, the weakest showing since the third quarter of 2009, just after the Great Recession ended.
Hiring has been solid though it has slowed from its rapid pace last year. But the average hours worked per week by all employees has slipped. Yet economic output still grew 1.9%, which means workers were more efficient.
Labor costs also rose at a healthy clip, which could push up inflation in the coming months. Labor costs grew 2.4%, following a large 5.5% increase in the first quarter that was revised substantially higher.
Walmart reports strong 2nd quarter
NEW YORK — Walmart offered a dose of optimism amid growing concerns over weakening economic growth by raising its annual outlook after a strong second quarter.
Sales at stores opened at least a year rose 2.8%, its 20th consecutive quarter in the right direction as the world’s largest retailer continues to expand its grocery delivery services. U.S. online sales increased 37%.Walmart’s chief financial officer Brett Biggs told reporters on a call that the consumers’ financial health remains “solid.”