A drop in jobless claims, a KIA recall and the Fed's deliberations over its stimulus program top our roundup of the day's top morning business news stories.
Jobless Claims Numbers Drop
There were far fewer new claims for unemployment benefits than expected last week, and economists say that may be a sign of an improvement in labor market conditions. The Labor Department reports that initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 323,000. However, claims for the previous week were revised, with 5,000 more applications received than previously reported. In its weekly poll of economists, Reuters said 335,000 first-time applications were expected, 12,000 more than actually processed. The four-week moving average for claims fell 6,750 to 338,500. The Labor Department said there were no special factors in the week’s business evens that affected the statistics. The Labor Department said there were 39,000 less claims from the October to November survey periods, again showing the possibility of an improvement in job growth.
Ally Bank Repays Nearly $6 Billion in Federal Bailout Aid
Ally Financial Inc. has repaid the U.S. government $5.9 billion in federal bailout aid it received during the financial crisis, the Treasury Department announced Wednesday. With this payment, the government has received $12.3 billion from Ally, more than 70 percent of the total aid provided by the government, the Treasury said in a news release reported by The Associated Press. Ally, the former lending arm of General Motors, received a $17.2 billion bailout following the economic collapse. Last week, the Federal Reserve approved the company's 2013 capital plan, clearing the way for repayment to Treasury.
Kia Recalls 80,000 Minivans from 20 states
A concern over suspension problems caused by salt in the roads has prompted Kia Motors to recall nearly 80,000 minivans for inspection and possible replacement of parts. The recall is for Sedona minivans from the 2006 through 2012 model years. They were sold or registered in 20 states and Washington D.C. where highway crews deposit salt to melt snow and clear roads through the winter. The National Highway Traffic Safety Administration reports salt exposure can cause rust in the lower control arms near the wheels, causing them to be susceptible to breaking. Next month, Kia dealers will inspect the vehicles, and rustproof or replace parts for free. The recall is for vans owned in Massachusetts, Maryland, Michigan, New Hampshire, New York, Pennsylvania, Vermont, Wisconsin, Connecticut, Delaware, Iowa, Illinois, Indiana, Maine, Minnesota, Missouri, New Jersey, Ohio, Rhode Island, West Virginia, and the District of Columbia.
Tapering Ahead? Fed Minutes Consider Winding Down of Stimulus Program
Minutes from the last Federal Reserve meeting in October indicate officials may start tapering their stimulus program for reasons other than an improved job market, which would mark a departure from the Fed’s stated policy. Since September, the central bank has been buying $85 billion in bonds each month to help bolster the in the job market. Most Fed officials still believe the bond-buying program has more help to offer the economy, The Associated Press reports. They also believe the job market will continue improving and "warrant trimming the pace of purchases in coming months," the minutes recorded. The current bond-buying program does not have an end date. Among other scenarios to stimulate the economy discussed at the meeting include keeping short-term interest rates low after unemployment falls to 6.5 percent, the current stated goal.
Retailers Announce Agreement on Bangladesh Safety Inspection Standards
North American and European retailers announced Wednesday that they had agreed on fire and safety inspection standards for up to 2,000 factories in Bangladesh that supply such retailers as Gap, Wal-Mart, and H&M, Reuters reports. Bangladesh garment factory working conditions have been under close scrutiny since two factory fires in the past year have killed more than 1,000 garment workers. Bangladesh is the world’s second- second-largest apparel exporter after China due in part to minimal wages and trade deals with Western countries. The agreement calls for the streamlining of standards for inspector qualifications and monitoring requirements. European retailers have agreed to finance fire and safety reforms for buildings that do not meet requirements, while the North American group - Alliance for Bangladesh Worker Safety - pledged $100 million in loans to factory owners to finance safety upgrades. Individual retailers can voluntarily pull out of factories that do not meet safety requirements, Reuters said.
The McRib Returns to Regional Status
The fabled cult fave sandwich, the McRib, will not be offered nationally by McDonald's the year, The Associated Press reports. Local franchise groups will decide whether to offer the boneless pork sandwich, which comes with pickles, onions and barbecue sauce. The sandwich has been a staple of the McDonald’s national menu for the past three years as a way to boost sales in the second half of the year. The McRib’s former status as a regional offering upped its pop culture cachet. Tyler Litchenberger, a McDonald's spokeswoman, said the Oak Brook, Ill.-based company had "other national priorities" this year, such as its new Mighty Wings. Chicago, New York, and Dallas are among the major markets serving up the McRib. The company’s “limited-time” offers are seen as a strategy to keep customers engaged with the restaurant.