High prices, low spending slow economy

High gasoline prices, government budget cuts and weaker-than-expected consumer spending caused the economy to grow only weakly in the first three months of the year. The Commerce Department estimated Thursday that the economy grew at an annual rate of 1.8 percent in the January-March quarter. That was the same as its first estimate a month ago. Consumer spending grew at just half the rate of the previous quarter. And a surge in imports widened the U.S. trade deficit. Most economists think the economy is growing only slightly better in the current April-June quarter. Consumers remain squeezed by gas prices, scant pay increases and a depressed housing market.

Mortgage rates hit year’s low point

Fixed mortgage rates hit the lowest point of the year for the third straight week. Freddie Mac says the average rate on the 30-year loan fell to 4.60 percent from 4.61 percent. That’s the lowest point since mid-December. The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.78 percent from 3.80 percent. That marked the lowest level since November. While low rates make purchasing a home more attractive, sales are slumping. Sales rose in April from the previous month, but are down almost a quarter from last year. And the number of people buying previously occupied homes is well below what economists consider healthy. Rates track the yield on the 10-year Treasury note, which was lower this week.

Philip Morris buys nicotine inhaler

Cigarette maker Philip Morris International Inc. has purchased the rights to a technology that lets users inhale nicotine without smoking. The world’s largest nongovernmental cigarette seller told The Associated Press on Thursday it has bought the patent for a non-tobacco, aerosol nicotine-delivery system developed by Jed Rose, director of the Center for Nicotine and Smoking Cessation Research at Duke University in Durham, N.C. Terms were not disclosed.

Tiffany earnings climb 25 percent

In another sign that the luxury sector remains strong, Tiffany & Co. said Thursday its first-quarter profit rose 25 percent on higher revenue across all regions worldwide. The results handily beat expectations and the jewelry maker also raised its forecast for the year above current Wall Street estimates. Shares rose $6, or 8.6 percent, to close Thursday at $76.04. The New York company, known for its iconic turquoise-colored box, said net income rose to $81.1 million, or 63 cents per share, for the three months ended April 30, up from $64.4 million, or 50 cents per share, a year earlier. Net income includes 4 cents per share of expenses related to Tiffany relocating its headquarters in New York. Analysts expected 57 cents per share, according to FactSet. High-end, gold and engagement jewelry sold particularly well, said investor relations vice president Mark Aaron.

From Herald news services