A state agency has proposed a 3 percent boost in workers compensation rates, although officials say inflation indicates that the increase should be bigger. Under the Department of Labor &Industries proposal Wednesday, average premiums would rise by nearly 2 cents for each hour worked next year. That would raise an additional $57 million. Director Judy Schurke says there are signs a bigger increase might be needed. She notes that wages rose 5 percent last year, while and health care costs are expected to go up by 5.5 percent in 2009. She says the agency held down its recommended increase in workers comp rate increase to try to help businesses in uncertain economic times. A final decision is set for late November.
Home construction hits 17-year low
Construction of new homes and apartments fell to the weakest pace in 17 years in August, far more than expected, but lower mortgage rates and tax credits have given builders some glimmer of hope of a possible rebound. Housing construction dropped a surprising 6.2 percent last month, the Commerce Department reported Wednesday, far larger than the 1.6 percent decline analysts expected. It was the slowest building pace since January 1991, but that should help clear out bloated inventories of unsold homes. Building activity is on track to slide below the 1 million-mark for the whole year for the first time in more than 60 years.
Fuel cost hedge costly for airlines
Airline bets that oil prices would rise looked like a no-brainer this summer. But with oil prices falling, those hedges against rising fuel costs are getting expensive. United Airlines said on Wednesday it is on track to lose $544 million on fuel hedges this quarter. That included $72 million in realized losses and another $472 million in unrealized losses. Those positions forced United to put $400 million into restricted cash for the parties on the other side of its oil price bets. Other airlines have not disclosed their hedging losses or gains.
Interest rate drop boosts home sales
Homeowners rushed to take advantage of last week’s drop in interest rates following the government’s takeover of Fannie Mae and Freddie Mac, but rates are rising again on investor fears over the eroding conditions in financial markets. A mini-refinance boom started last Thursday but ended early Monday, said Pava Leyrer, president of Heritage National Mortgage in Michigan. The average rate on a 30-year, fixed rate mortgage was 6.14 percent on Wednesday, up from 6.02 percent last week, according to HSH Associates.
American pilots fight outsourcing
The union representing American Airlines pilots asked the federal government Wednesday to delay a decision on the carrier’s proposed closer alliance with British Airways to consider the deal’s effect on job outsourcing and competitiveness. Union President Lloyd Hill said American must negotiate with the union first, and that under the union contract an American Airlines pilot must fly the plane on any trip that generates revenue for the carrier.
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