WASHINGTON -- Consumers trimmed their borrowing in August by the largest amount since the end of 1990 as confidence in the economy fell and energy prices surged.
The Federal Reserve reported Thursday that consumer credit dropped by a seasonally adjusted annual rate of 1.4 percent in August, or by $2.4 billion, from the previous month. That was the largest dollar decline since December 1990.
The first decline in nine months left total consumer credit outstanding at $2.04 trillion.
Oil reaches $53 a barrel
WASHINGTON -- Oil prices reached $53 a barrel on Thursday, and have advanced more than 20 percent in a month, in large part because output in the Gulf of Mexico was hobbled by a hurricane and has not been restored as quickly as expected.
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The possibility of violence and a labor strike in oil-rich Nigeria has also kept oil traders on edge, and underlying it all is global unease about the fact that the world's available supply cushion is too thin to make up for any large, prolonged loss of output.
Light crude for November delivery climbed 65 cents to settle at a new high of $52.67 per barrel Thursday on the New York Mercantile Exchange, retreating from a high of $53 set earlier in the day. In London, Brent crude for November delivery soared 91 cents to close at $48.90 per barrel.
Oil, job scene dampen holiday forecast
NEW YORK -- The outlook for the holiday shopping season grew more uncertain Thursday as the nation's largest retailers reported they had a fourth straight month of tepid sales in September.
High gasoline prices and grocery bills and ongoing job insecurity prompted many consumers to again limit their spending. The disappointing results came from retailers across the industry, including Wal-Mart Stores Inc., Gap Inc., Federated Department Stores Inc., and J.C. Penney Co. Inc.
Low- and middle-income Americans in particular have been forced to cut spending on clothing and other non-necessities as gas and food prices rise. They're also nervous about jobs -- last week, the Conference Board reported that job worries helped push consumer confidence down in September for the second month in a row.
Applications for unemployment fall
WASHINGTON -- The number of new applications filed last week for unemployment benefits fell sharply, offering a hopeful sign that the recovery in the job market may be gaining some steam.
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The Labor Department reported Thursday that the number of new people signing up for unemployment insurance benefits dropped by a seasonally adjusted 37,000 to 335,000, the lowest level since the beginning of September. In the prior three weeks, claims had gone up.
AT&T; cutting at least 7,500 jobs
NEW YORK -- AT&T; Corp. is cutting at least 7,500 more jobs and slashing the book value of its assets by $11.4 billion, drastic moves prompted by the company's plan to retreat from the traditional consumer telephone business following a lost court battle.
The company announced Thursday that it now plans to shrink its work force by more than a fifth, or about 12,500 jobs, during 2004 -- up from a previous target of about 4,900 jobs.
Most of the jobs cuts are layoffs. About 9,000 of the people affected have already left the company or been notified. AT&T; now expects to finish the year with about 49,000 workers, down from nearly 62,000 at the start of 2004.
Severance costs and other expenses related to the job cuts will reduce third-quarter earnings by $1.1 billion, the company said.
Bank of America to cut another 4,500 jobs
CHARLOTTE, N.C. -- Bank of America Corp. said Thursday it will cut another 4,500 jobs beginning this month as a result of its merger with FleetBoston Financial Corp. and declining business in mortgages.
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The 2.5 percent reduction of the work force, disclosed Thursday, comes on top of 12,500 layoffs that the bank previously said it expected to see from the mega-merger with FleetBoston, which went through earlier this year.
Accounting firms settle lawsuit
BOSTON -- The accounting firm KPMG and a Belgian affiliate agreed Thursday to pay $115 million to settle a shareholder lawsuit claiming the companies failed in their audit of Lernout &; Hauspie Speech Products, which later collapsed.
In the 1990s, Lernout &; Hauspie was recognized as a world leader in the software that recognizes human speech and turns it into computer text.
But the Belgian company, with U.S. operations in Burlington, Mass., collapsed about four years ago and later admitted fraud, including fabricating 70 percent of the sales in its largest unit. A lawsuit pending in federal court claims former company executives used deceptive accounting practices to inflate the company's reported revenues by 64 percent, or $377 million, over a 2 1/2 year period.
