Housing construction slowed in August, but still remained close to a 17-year high, a sign that a recent upward swing in mortgage rates has done little damage to the resilient housing market. Builders broke ground on 1.82 million housing units at a seasonally adjusted annual rate in August, a 3.8 percent drop from the previous month, the Commerce Department reported Wednesday. Housing construction boomed in July, clocking in at a rate of 1.89 million units, the strongest monthly activity since April 1986. The boom followed significant drops in interest rates, which have since risen.
In a massive restructuring designed to retreat from stiff discount-brand competition, R.J. Reynolds Tobacco Co. on Wednesday announced the elimination of 2,600 jobs – about 40 percent of the company’s workforce. Workers whose jobs are being eliminated will be notified over the next week, said Seth Moskowitz, spokesman for the nation’s second-largest cigarette maker. RJR said it will focus future spending on premium brands Camel and Salem, and will only invest enough in the cheaper Winston and Doral brands to try to optimize profits.
United Airlines on Wednesday said it will launch a low-cost carrier from its Denver hub in February, flying to destinations in the Southwest and Southeast before expanding nationwide. The bankrupt airline’s goal is to better compete with discount carriers such as Frontier, JetBlue and Southwest, which have grown quickly amid the economic downturn. The new airline, which has not yet been named, will initially fly to Reno, Nev.; Las Vegas; Phoenix; New Orleans; and Tampa, Fla. – cities primarily associated with leisure travel. Tickets will go on sale in November.
In a defeat for Visa and MasterCard, a federal appeals court on Wednesday upheld a lower court ruling designed to give their competitors more access to consumers. The 2001 ruling by a federal court in Manhattan required Visa and MasterCard to drop rules that prohibit their member banks from also issuing American Express or Discover cards. A three-judge panel of the 2nd U.S. Circuit Court of Appeals upheld the decision, finding that Visa and MasterCard’s “exclusionary rules” harmed competition. The rules “have absolutely prevented Amex and Discover from selling their products at all,” the court found. About 20,000 banks issue cards through Visa and MasterCard. The exclusion rules put them in direct competition with American Express and Discover, which issue cards directly to individuals.
From Herald news services
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