Encouraging economic reports top our roundup of the day's top business news stories
Wholesale Prices Drop for First Time Since April
After posting a 0.3 percent rise in August, wholesale prices ticked downward 0.1 percent, the first drop since April, the Labor department reported Tuesday. Wholesale food prices dipped 1 percent, offsetting a 0.5 percent rise in energy prices, which reflected higher costs for home heating oil, diesel fuel and natural gas. Gasoline prices, which rose 2.6 percent in August, dipped 0.1 percent in September. Core prices, excluding volatile food and energy, rose 0.1 percent in September. They have risen a modest 1.2 percent over the past 12 months, well within the Federal Reserve’s inflation goal of 2 percent.
Home Prices Rose in August
The S&P/Case Sheller composite index showed U.S. single-family home prices posted their strongest annual gain in more than seven years in August. The index of 20 metropolitan areas rose 0.9 percent on a seasonally adjusted basis, beating economists' expectation of a 0.6 percent gain. Prices rose 0.6 percent in July. On a non-adjusted basis, prices rose 1.3 percent. Prices were up 12.8 percent compared to a year ago, and that too beat economists' expectations of 12.5 percent. It marked the strongest gain since February 2006, when the increase was 13.8 percent. The rise in prices came despite a rise in August in 30-year mortgage rates that slowed mortgage applications and refinancing activity. Home prices have been rising over the past 18 months and economists consider the housing market one of the best performing markets in the U.S. recovery.
Apple’s New iPhone Helps Consumer Spending Index
The U.S. Commerce Department reports retail sales excluding automobiles, gasoline and building materials climbed 0.5 percent last month, and economists credited sales of Apples new iPhone as well as leisure goods for the growth. The so-called core sales figures match most closing with the consumer spending component of gross domestic product. Core sales were boosted last month by a 0.7 percent rise in receipts at appliance and electronics stores. Automobile sales were reportedly down significantly for the month, however.
Sears Making Moves with Lands’ End, Auto Center
Sears Holdings is discussing separating its Lands' End and Sears Auto Center brands from the rest of the company, while also planning to close some of its unprofitable stores as it moves ahead on its turnaround efforts. Sears has been working to cut costs and lower its debt, which is the reason it said it would likely try to spinoff Lands’ End as opposed to selling the brand outright. The retailer also said that it has already started repositioning Sears Auto Center around services other than tires sales. Sears is examining sales at stores where its leases are set to expire soon so as to consolidate sales staff and increase profitability.
Japan Brands Drives Away with Top Reliability Honors
Seven of Consumer Reports’ top 10 picks for most reliable autos are Japanese. Lexus, Toyota and Acura took the top three spots in this year’s survey. Three non-Japanese brands, Audi, Volvo and GMC, pulled in to empty spaces in the top 10. The Yonkers, NY-based magazine surveyed the owners of 1.1 million vehicles to gauge the reliability of 2014 model year cars and trucks. The magazine did not recommend The Honda Accord V6 and Nissan Altima sedans, two of Japan’s biggest sellers. The 2014 Subaru Forester got the top score for predicted reliability, but the magazine noted that the 2014 Forester had only been on sale for a few weeks in the spring when owners were surveyed, so there wasn't much time for errors to crop up. The Subaru Legacy was the top-performing midsize car. Electric cars and hybrids generally performed well, Consumer Reports noted, but the Ford C-Max Energi plug-in hybrid got the worst reliability scores. Ford and its luxury Lincoln brand were near the bottom of the rankings because of customer complaints about their glitch-prone touchscreen dashboard systems and lower-than-expected fuel economy numbers, The Associated Press reports.
Do Burger King’s “Satisfries” Rule?
One month after their debut, “Satisfries” have yet to receive a decree by Burger King to become a permanent fixture on the menu, The Associated Press reports. While sales so far are in line with expectations, it is too soon to make as ruling as the burger monarchy’s third quarter same-store sales in the U.S. and Canada declined 0.3 percent. The company blames the decline on “softness in consumer spending and ongoing competitive headwinds,” AP states. Industry French fry sales have dipped in recent years due to a trend toward healthier eating. “Satisfries” are less calories than traditional French fries because their batter—years in development—absorbs less cooking oil.