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Business News

Last Update on August 28, 2014 17:08 GMT

ECONOMY-GDP

WASHINGTON (AP) -- After a bleak start to the year, the U.S. economy rebounded vigorously in the April-June quarter, growing at a brisk annual rate of 4.2 percent, slightly faster than first estimated.

The upward revision supported expectations that the second half of 2014 will prove far stronger than the first half.

The Commerce Department's second estimate of growth for last quarter compares with its initial estimate of 4 percent. The revision reflected stronger business investment in new equipment and structures than first thought.

The seasonally adjusted 4.2 percent annual growth rate for the gross domestic product came after the economy had shrink at an annual rate of 2.1 percent in the January-March quarter, the biggest drop in activity since the depths of the Great Recession.

UNEMPLOYMENT BENEFITS

WASHINGTON (AP) -- The number of Americans applying for unemployment benefits slipped 1,000 last week to a seasonally adjusted 298,000, a low level that signals employers are cutting few jobs and hiring is likely to remain strong.

The Labor Department says the four-week average, a less volatile measure, dropped to 299,750. That's just 6,000 higher than four weeks ago, when the average fell to the lowest level in more than eight years.

When employers hold onto their workers, it suggests they are more confident in the economy and could step up hiring.

The applications data is the latest sign that the job market is steadily healing. Average job gains since February have been the best in eight years.

PENDING HOME SALES

WASHINGTON (AP) -- More Americans signed contracts to buy homes in July, a sign that buying has improved as mortgage rates have slipped, the number of listings has risen and the rate of price increases has slowed.

The National Association of Realtors says its seasonally adjusted pending home sales index rose 3.3 percent to 105.9 last month. Still, the index remains 2.1 percent below its level a year ago.

The pressures that caused home sales to stall last year have started to ease. The average 30-year fixed mortgage rate has dropped to 4.1 percent, a 52-week low. Prices are no longer rising at double-digit annual rates, thereby helping to improve affordability.

Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.

MORTGAGE RATES

WASHINGTON (AP) -- The average 30-year U.S. mortgage rate remains at a 52-week low this week.

Mortgage company Freddie Mac says the nationwide average for a 30-year mortgage is 4.10 percent, the same as last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, has risen to 3.25 percent from 3.23 percent.

At its 52-week low of 4.10 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end in October.

The low rates appear to have boosted U.S. home sales.

BANK EARNINGS

WASHINGTON (AP) -- U.S. banks' earnings rose 5.2 percent in the April-June quarter from a year earlier, as banks reduced their expenses and lending marked its fastest pace since 2007.

The data issued Wednesday by the Federal Deposit Insurance Corp. showed a robust picture as the banking industry continues to recover from the financial crisis that struck six years ago. The improving economy has brought greater demand for loans and stepped-up lending.

The FDIC reported that U.S. banks earned $40.2 billion in the second quarter of this year, up from $38.2 billion in the same period in 2013.

The number of banks on the FDIC's problem list fell to 354 in the second quarter, the lowest number in more than five years and down from 411 in the January-March period.

EBOLA-AIRLINES

KAMPALA, Uganda (AP) -- The World Health Organization is urging airlines to lift most of their restrictions for flying to Ebola-hit nations because a predictable "air link" is needed to help deal with the crisis.

The WHO's assistant director-general for emergency operations, Dr. Bruce Aylward, says "there is a super risk of the response effort being choked off" if airlines restrict flights to Liberia, Sierra Leone and Guinea.

SUPERMARKET FEUD

TEWKSBURY, Mass. (AP) -- Workers at the New England supermarket chain Market Basket are cheering the return of former CEO Arthur T. Demoulas (deh-MOO'-lahs), following a feud with his cousin that saw him fired.

Demoulas announced Wednesday that an agreement has been reached for him to buy majority stake in the business -- $1.5 billion the 50.5 percent of the company owned by his rival cousin Arthur S. Demoulas and his allies. The deal is expected to take several months.

There was uproar after Arthur T. Demoulas' firing weeks ago, with workers revolting and customers boycotting the business.

In a speech at company headquarters today in Massachusetts, Demoulas told workers, that he's "in awe of what you have all accomplished."

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