Fed aids market: Mortgage finance giant Freddie Mac said today that average rates on 30-year fixed-rate mortgages dropped to 4.85% this week, from 4.98% last week. It was the lowest in the history of Freddie Mac’s survey, which dates to 1971 and was down a full percentage point from a year ago. The previous record low of 4.96% was set in the week of Jan. 15. Rates fell after the Fed last week said it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
12% of U.S. work force: About 7,500 General Motors Corp. workers—about 12% of its U.S. hourly work force—have signed up to take buyout and early retirement incentives to leave the company, the automaker said today. GM offered $20,000 cash and a $25,000 voucher to buy a car to all of its hourly U.S. employees in an effort to further trim its blue-collar work force to match reduced sales. The deadline to decide was Tuesday, and many of the workers waited until the last minute to turn in their paperwork. The workers have seven days from the date they turn in the paperwork to rescind their decision, so many will have to decide by March 31.
GDP down more in 4Q: New claims for unemployment benefits last week rose to a seasonally adjusted 652,000 from the previous week’s revised figure of 644,000, the Labor Department said today. The total number of people claiming benefits jumped to 5.56 million, worse than economists’ projections of 5.48 million, a ninth straight record and the highest total on records dating to 1967. The Commerce Department said the economy shrank at a 6.3% annual pace at the end of 2008, the worst showing in a quarter-century, and a bit faster than the 6.2% drop estimated a month ago. The main culprit behind the GDP downgrade was that businesses’ cut inventories more deeply than estimated a month ago. That shaved 0.11 percentage points off fourth-quarter GDP, rather than adding 0.16 percentage points in the previous report.
