BUSINESS BRIEFS
Housing, credit expected to slow economy in 2008
Associated Press
WASHINGTON — The housing collapse and credit crisis will slow economic growth and nudge up unemployment next year, the Federal Reserve said yesterday in a first-of-its-kind forecast that some economists believe will lead to interest rate cuts early in 2008.
Don't count on a cut in rates at the Fed's December meeting, however, analysts say.
The Fed called its rate reduction in late October a "close call" and hinted that its two cuts this year may be sufficient to energize the economy, according to minutes of the Oct. 31 closed-door meeting made public yesterday.
HOME BUILDING HITS 16-YEAR LOW
WASHINGTON — Construction of single-family homes in October skidded to the lowest level in 16 years, although the slide was cushioned somewhat by a rebound in apartment building.
The Commerce Department reported yesterday that total housing construction rose by 3 percent in October to a seasonally adjusted annual rate of 1.229 million units.
But all the strength occurred in a hefty rebound in apartment construction, which is extremely volatile.
RETAILERS BLAME WOES ON WEATHER
MINNEAPOLIS — An unseasonably warm fall hurt sales of clothing and home items at retailer Target Corp., and was partly to blame for a 4 percent drop in third-quarter profits.
Limited Brands also blamed an unusually warm fall for weaker-than-expected third-quarter profits. The operator of Victoria's Secret and Bath & Body Works stores earned $12.1 million for the quarter, down from $23.5 million a year ago.
The tepid third quarters at Target and Limited contrasted with strong results at upscale Saks Inc. and discounter Ross Stores Inc. And last week, Wal-Mart Stores Inc. posted an 8 percent rise in third-quarter profits and raised its profit forecast for the year.
CRUDE OIL PRICES FLIRTING WITH $100
NEW YORK — Oil prices resumed their march toward $100 yesterday, rising to records over $98 a barrel as futures drew strength from a declining dollar, news of refinery problems and speculation that the Federal Reserve will again cut interest rates.
Gasoline prices, meanwhile, extended their decline at the pump.
Oil futures, which offer a hedge against a weak dollar, picked up momentum as the dollar fell to a new low against the euro, and added to their gains after the Fed forecast slowing growth and tame inflation next year.
D.R. HORTON SEES 4TH-QUARTER LOSS
DALLAS — Home-builder D.R. Horton Inc. said it swung to a loss in the fourth quarter as the company again wrote down the value of unsold homes and land options, and the housing market showed few signs of improvement.
Tighter lending standards and more cautious consumers contributed to further decline in housing during the late summer, with the numbers of unsold homes remaining high.
Company Chairman Donald R. Horton said the housing market would "remain challenging" and that next year is likely to be worse. Horton said his company was cutting prices.
H&R BLOCK CHAIRMAN QUITS
KANSAS CITY, Mo. — Mark Ernst has resigned as chairman, president and chief executive of H&R Block Inc., the tax preparation and accounting services company that is reeling from its foray into the collapsing subprime mortgage business.
The company said Ernst's replacement as chairman is Richard Breeden, the former head of the Securities and Exchange Commission, who led a dissident shareholder group that won three seats on the H&R Block board.
