Business news in brief

Jobless-aid claims fall to 44-year low

WASHINGTON -- The number of Americans collecting unemployment benefits fell last week to the lowest level since Richard Nixon was president.

The Labor Department said Thursday that claims for unemployment aid dropped by 22,000 to 222,000, fewest since March 1973. The less-volatile four-week average slid by 9,500 to 248,250, lowest since late August.

The overall number of Americans collecting unemployment checks dropped to 1.89 million, lowest since December 1973 and down nearly 9 percent from a year ago.

Unemployment claims are a proxy for layoffs. The low level suggests that employers are confident enough in the economy to hold onto workers.

The unemployment rate last month hit a 16-year low of 4.2 percent. Employers cut 33,000 jobs in September -- the first monthly drop in nearly seven years -- but only because Hurricanes Harvey and Irma rattled the economies of Texas and Florida; hiring is expected to bounce back.

-- The Associated Press

Boeing invests in drone startup company

Boeing is investing in Pittsburgh-based Near Earth Autonomy, a self-guided drone startup, marking its first financial backing for a company specializing in autonomous technology since establishing the HorizonX venture fund in April.

Boeing, the world's largest aerospace company, declined to specify the size of the investment. Near Earth Autonomy authorized the sale of about $10 million in equity, which would value the company at $40 million to $50 million, according to an estimate by private stock market operator Equidate. HorizonX typically makes investments "that span the single millions up to the low teens," a spokesman said.

While automakers have been investing in or acquiring autonomous driving startups, a similar pattern has started to emerge in aerospace. Last week, Boeing announced it is acquiring Aurora Flight Services, a drone pioneer that is helping to develop flying taxis for Uber Technologies Inc. Boeing is also an investor in Zunum Aero, a hybrid-electric airplane company. Competitor Airbus has formed a division called "Urban Air Mobility" that is exploring technology from on-demand helicopter rides to delivery drones.

-- Bloomberg News

1,000 stores in Target remodeling plan

Target is stepping up its plan to remodel stores, a bid to regain its cachet and fend off incursions by Wal-Mart Stores Inc. and Amazon.com.

The retailer now plans to revamp more than 1,000 locations by the end of 2020, part of an overhaul of its operations. The Minneapolis-based company had previously said it was remodeling 600 stores by 2019.

The changes include opening smaller-format stores in New York, Los Angeles, Chicago and Philadelphia, and pairing the locations with e-commerce services. On Thursday, Chief Executive Officer Brian Cornell helped unveil a store in Manhattan's Herald Square, not far from the Macy's flagship.

"Guests are rewarding us with more traffic and we're driving increased comparable-store sales," Cornell said at the event. "It's given us confidence to move forward aggressively."

Target is opening 11 small-format stores this week, as well as a traditional bigger location in Honolulu. The company also is rolling out its Restock program nationwide in 2018. That service lets customers have essentials such as toothpaste delivered the next day.

Small-format stores generate at least twice as much in sales per square foot, though they're costlier to operate -- partly because they have to take deliveries more often. The company also has to pay more for real estate in city centers.

-- Bloomberg News

OPEC again signals extension of cuts

OPEC sent its strongest signal yet on Thursday that oil output cuts will be extended until the end of 2018, saying negotiations are taking their lead from Vladimir Putin's tentative backing for a further nine months of curbs.

If the Organization of the Petroleum Exporting Countries and allies including Russia decide they need to extend their supply deal, it should be done at least until the end of next year, the Russian president said in Moscow on Oct. 4. That statement is the basis for talks ahead of next month's OPEC gathering, led by Russian Energy Minister Alexander Novak and his Saudi counterpart, Khalid Al-Falih, said OPEC Secretary-General Mohammad Barkindo.

The comments signal not only the growing chance of an extension of the cuts but also how far Russia and Saudi Arabia, two countries that haven't been close historically, are working together to lift oil prices. King Salman visited the Kremlin earlier this month -- the first visit by a Saudi monarch to Russia.

Putin "gave a very pointed answer, which we are taking very seriously," Barkindo told reporters at the Oil & Money Conference in London. "Khalid Al-Falih is on tour of some of our member countries to build consensus. Mr. Novak is also in extensive consultations with non-OPEC."

OPEC and its allies are scheduled to meet in Vienna on Nov. 30.

-- Bloomberg News

30-year mortgage rate drops to 3.88%

After gradually rising for more than a month, fixed mortgage rates fell back this week.

According to the latest data released Thursday by Freddie Mac, the Federal Home Loan Mortgage Corp., the 30-year fixed-rate average slipped to 3.88 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.91 percent a week ago and 3.52 percent a year ago.

The 15-year fixed-rate average slid to 3.19 percent with an average 0.5 point. It was 3.21 percent a week ago and 2.79 percent a year ago. The five-year adjustable rate average ticked up to 3.17 percent with an average 0.4 point. It was 3.16 percent a week ago and 2.85 percent a year ago.

"Treasury yields were relatively flat last week," said Joel Kan, an economist with the Mortgage Bankers Association. "While the [Federal Open Market Committee] minutes showed an increased likelihood of one more rate increase in 2017, nudging rates slightly higher, the week's gains were offset by a downturn on Friday due to weaker than expected inflation data."

-- The Washington Post

Business on 10/20/2017

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