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Business Briefs

Reported by Star-Bulletin staff & wire

Thursday, October 26, 2000

Safeway strike lingers on

Associated Press
Striking truck drivers picket a Safeway supermarket
yesterday in Oakland, where a media conference was
held to discuss safety hazards of their jobs at the
Summit Logistics distribution center in Tracy, Calif.
The strike against Summit, which began Oct. 18,
entered its second week yesterday with no settlement
in sight and some continuing violence. On Tuesday,
a replacement driver allegedly waved a gun at another
truck driver on Interstate 580 and was later arrested.
The warehouse distributes supplies to 246 Safeways,
including 19 in Hawaii, as well as in Northern
California and Nevada.

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Mortgage rates drop to 7.68%

WASHINGTON -- Mortgage rates fell sharply this week, with rates for 30-year and 15-year mortgages hitting their lowest levels in nearly a year.

The average interest rate on 30-year fixed-rate mortgages declined to 7.68 percent this week, down from 7.83 percent reached last week, according to a survey released today by Freddie Mac, the mortgage company. A year ago, the rate on 30-year mortgages stood at 7.96 percent.

This week's 30-year rate was the lowest since Nov. 12, 1999, when the rate averaged 7.67 percent, and is a far cry from mid-May, when 30-year rates hit a five-year high of 8.64 percent.

Fifteen-year mortgages fell to an average 7.36 percent this week from 7.50 percent last week. This week's 15-year rate was the lowest since Nov. 19, 1999, when it averaged 7.31 percent. A year ago, 15-year mortgages averaged 7.57 percent. One-year, adjustable-rate mortgages averaged an initial rate of 7.22 percent, down from 7.25 percent last week. For the same period last year, one-year ARMS averaged 6.35 percent.

U.S. labor costs remain in check

WASHINGTON -- Labor expenses for U.S. businesses posted their smallest gain in a year in the third quarter, easing the pressure on company costs and consumer prices, government figures showed today.

The 0.9 percent increase in the employment cost index in the three months that ended Sept. 30 followed a 1 percent gain in the second three months of the year, the Labor Department said. The third-quarter rise in the index -- the broadest measure of what companies pay for salaries, wages and benefits -- was the smallest since a 0.8 percent gain in the third quarter of 1999, Bloomberg News reported.

The size of the increase should reinforce the view of Federal Reserve Chairman Alan Greenspan and other central bankers that unemployment at a 30-year low of 3.9 percent has not aggravated inflation. That's especially true since advances in technology and management have made it possible for companies to increase worker output.

In other news . . .

Nextel Communications today reported a smaller-than-anticipated loss in the third quarter, but the wireless telephone company, as expected, added fewer mobile telephone subscribers than analysts initially had predicted. Nextel, based in Reston, Va., said its net loss narrowed to $236 million, or 31 cents a share, from $361 million, or 55 cents a share, a year earlier. Analysts had forecast a loss of 37 cents a share.