Consumers cutting back credit so much it may stymie recovery
WASHINGTON — Americans borrowed less for a 10th consecutive month in November, with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.
The dramatic declines raised new worries about whether consumers will cut back further on spending, making it harder for the economy to mount a sustained rebound.
The Federal Reserve said yesterday that total borrowing dropped by $17.5 billion in November, a much bigger decline than the $5 billion decrease economists had expected.
WHOLESALE INVENTORY RISE MAY NOT SUSTAIN REBOUND
WASHINGTON — Inventories held by wholesalers posted an unexpectedly strong gain in November while sales shot up by the largest amount in 10 months.
While these gains gave the economy a strong boost as 2009 was ending, economists expressed concerns over the durability of the rebound given that unemployment remains stubbornly high.
The Commerce Department said yesterday that wholesale inventories rose 1.5 percent in November, a much stronger showing than the 0.2 percent drop that economists had expected. Sales jumped 3.3 percent, far better than the 0.9 percent rise that had been forecast.
UPS CUTBACKS REPRESENT LESS THAN 1% OF WORK FORCE
ATLANTA — Shipping giant UPS Inc. will cut 1,800 management and administrative jobs, less than 1 percent of its global work force, as it repositions itself for a gradual economic recovery with improved technology and fewer employees.
About 1,100 employees will be offered a voluntary separation package as part of the work force reduction, which is meant to streamline the company's U.S. small package segment. Other cuts will come through attrition and layoffs.
The U.S. small package segment represents roughly 60 percent of UPS' annual revenue. It handles shipments of up to 150 pounds by ground and air.
BEST BUY REPORTS SHARP RISE IN COMPUTER, PHONE SALES
NEW YORK — Best Buy Co., the largest U.S. electronics retailer, saw a key sales figure rise sharply in December — compared with a plunge a year earlier — as consumers bought computers, TVs and phones for the holidays, the company said yesterday.
But Best Buy didn't raise its earnings forecast, and its shares fell $1.63, or 3.9 percent, to close at $39.91 yesterday.
Even though the December sales figures were strong, analysts said Best Buy's stock isn't likely to rise much during the first half of 2010 because investors are worried about increasing competition and a scarcity of must-have electronics in development.
SAAB FINDS 2 MORE SUITORS, BUT SURVIVAL SEEMS UNLIKELY
STOCKHOLM — The board of General Motors' Swedish unit Saab on yesterday took the first formal step to wind down the ailing carmaker by appointing a representative to lead the process, even as GM evaluates last-minute offers, union officials said.
Two suitors emerged late Thursday, with one including British billionaire and Formula 1 tycoon Bernard Ecclestone.
ORANGE JUICE FUTURES SOAR AS CHILL THREATENS FLA. CROP
NEW YORK — Orange juice futures contracts surged to a new two-year high yesterday following fresh concerns that cold weather in Florida could wipe out parts of the citrus crop over the weekend.
March contracts for frozen orange juice concentrate rose 10 cents, or 7.1 percent, to settle at $1.5115 a pound, marking the second time in three days the price reached two-year highs.