Record imports in October drove the U.S. trade deficit to the highest level in a decade. The Commerce Department said Thursday that the gap between what the United States sells and what it buys from foreign countries hit $55.5 billion in October, the fifth consecutive increase and highest since October 2008. The politically sensitive deficit in the trade of goods with China rose 7.1 percent to a record $43.1 billion. The goods gap with the European Union widened 65.5 percent to a record $17.6 billion. President Donald Trump campaigned on a pledge to slash America’s longstanding trade deficit with the rest of the world. Despite his import taxes on steel, aluminum and Chinese goods, the deficit so far this year is running 11.4 percent above January-October 2017.
Mortgage rates drop with stock prices
U.S. long-term mortgage rates fell this week amid a steep decline in stock prices. Continued slides in the stock market and tumbling oil prices have been pushing mortgage rates lower, although home borrowing rates remain much higher than a year ago. Mortgage giant Freddie Mac said Thursday the average rate on the benchmark 30-year, fixed-rate mortgage dipped to 4.75 perent from 4.81 percent last week. The key rate stood at 3.94 percent a year ago. The fall in mortgage rates “is a welcome relief to prospective homebuyers who have recently experienced rising rates and rising home prices,” Freddie Mac chief economist Sam Khater said.
Sears stockholder bids $4.6B for chain
Eddie Lampert and his ESL Holdings hedge fund are offering to buy the rest of Sears for up to $4.6 billion in cash and stock in a move to stave off liquidation. The Sears chairman and ESL founder own just under half of the Hoffman Estates, Ill., company, according to FactSet. Sears filed for Chapter 11 bankruptcy protection in October, weighed down by years of declining sales and massive debt. It then said it would shutter 142 unprofitable stores in the hopes that it could stay in business. ESL Holdings said in a regulatory filing Thursday that its nonbinding offer for the roughly 500 remaining Sears stores will keep about 50,000 employees working. The offer is subject to due diligence and ESL’s ability to get financing, among other things.
Drugmaker plans cheaper generic EpiPen
A generic drugmaker plans to start selling a slightly cheaper version of the EpiPen in the U.S. early next year. The penlike injectors are used to treat life-threatening allergic reactions. Brand-name EpiPen, which dominates the market, has been in short supply since spring because of production problems. Drugmaker Sandoz said Thursday the price of two generic injectors will be $250 without insurance. Two other generics on the market in the U.S. cost $300 a pair. Brand-name EpiPens sold by Mylan cost at least twice as much. The price people pay varies, though, depending on insurance and discounts. Mylan was blasted in the past for price hikes that pushed the price over $600. It responded by selling its own generic.
Fed chief worried about rural poverty
Federal Reserve Chairman Jerome Powell said Thursday that the U.S. economy overall is strong but many rural areas are falling farther behind. In remarks Thursday to a rural housing conference, Powell said unemployment in the poorest rural counties is more than double the national average last year. This while those employed or looking for jobs in their prime working years in rural areas has increasingly lagged during the current expansion. To address this problem, the Fed is supporting a number of initiatives, Powell said. “While the economy is strong overall, we recognize that some communities have yet to feel the full benefits of the ongoing expansion,” Powell said. “We are conducting research, collaborating with communities and assessing financial regulations so that our nation’s current prosperity will benefit small towns and cities alike.”