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Over 1.2 million rechargeable lights are under recall for fire hazards
NEW YORK | More than 1.2 million rechargeable lights are under recall in the U.S. and Canada following a report of one consumer death.
According to a Thursday notice from the U.S. Consumer Product Safety Commission, Good Earth Lighting’s now-recalled integrated light bars have batteries that can overheat — and cause the unit to catch on fire. That can pose serious burn and smoke-inhalation risks.
To date, the CPSC notes that there’s been one report of a consumer who died and another who was treated for smoke inhalation when the light caused a fire in their home last year. Good Earth Lighting is aware of nine additional reports of these products overheating, the CPSC added, six of which resulted in fires and property damage.
In a statement, Good Earth Lighting said it decided to conduct a voluntary recall “after investigating the circumstances” of the reported incidents — and removed the lights involved from sale to the public in January, “out of an abundance of caution.”
The lithium-ion battery-powered lights are intended be alternatives to permanent fixtures in places where wiring may be difficult, such as closets, staircases and cupboards. The products impacted by the recall can be identified by their model numbers: RE1122, RE1145, RE1362 and RE1250.
According to the CPSC, some 1.2 million of these lights were sold at hardware and home improvement stores — including Lowe’s, Ace Hardware and Meijer — as well as online at Amazon, GoodEarthLighting.com and more between October 2017 and January 2024 in the U.S. An additional 37,800 were sold in Canada.
Both regulators and Good Earth Lighting urge those in possession of these recalled products to stop using them immediately.
Good Earth Lighting is offering free light replacement bars to impacted consumers. You can learn more about registering — including instructions on how to safely dispose of the recalled lights — by contacting the company or visiting its website.
The Mount Prospect, Illinois-based company added it “will continue to hold ourselves to the highest quality and safety standards so that consumers feel safe and confident in their decision to purchase our highly energy-efficient and eco-friendly lighting products.”
Europe Central Bank jumps ahead of the Fed in lowering rates
FRANKFURT, Germany | The European Central Bank cut its key interest rate Thursday by a quarter-point, moving ahead of the U.S. Federal Reserve as central banks around the world lean toward lowering borrowing costs — a shift with far-reaching consequences for home buyers, savers and investors.
The ECB cut its benchmark rate to 3.75% from a record high of 4% at a meeting of the bank’s 26-member rate-setting council in Frankfurt.
Speaking afterward at a news conference, ECB President Christine Lagarde said inflation had eased enough for the central bank to start lowering rates.
But with annual inflation at 2.6% in May and expected to remain above the ECB 2% target into next year, Lagarde declined to indicate how fast or how deep any future rate cuts might be.
“We will keep policy rates sufficiently restrictive for as long as necessary,” she said. “We are not committing to a particular rate path.”
“Are we today moving into a dialing-back phase? I wouldn’t volunteer that,” she said.
Rate increases combat inflation by making it more expensive to borrow in order to buy goods, lowering demand and taking the pressure off prices. But high rates also hold back growth, which has been in short supply in the eurozone.
With inflation coming down but taking its time to reach levels central bankers like, the question now is, how soon, how fast and how deep future rate cuts from the Fed, the ECB and others will be.
Analysts say the ECB will likely leave rates unchanged when it next meets on July 18, while it awaits further confirmation that inflation is under control.
“Today’s cut doesn’t necessarily mark the start of an easing cycle,” said Carsten Brzeski, global head of macro at ING, the Dutch banking firm.
Though the annual inflation rate for May is well below a peak of 10.6% in October 2022, the decline has slowed in recent months. Inflation even ticked up slightly from 2.4% in April. Inflation in the services sectors, a broad category that includes everything from medical care and haircuts to hotels, restaurants and concert tickets, remains particularly elevated at 4.1%.
The ECB’s move represents a switch from the onset of the inflation surge, when the Fed took the lead in tightening credit by raising rates starting in March 2022, sending mortgage costs higher but also boosting returns for savers with money in certificates of deposit or money market funds. The ECB started four months later.
Major central banks around the world now are leaning toward lowering interest rates. Central banks in smaller economies have already cut rates, including in Canada, Sweden, Switzerland, Hungary and the Czech Republic. The Bank of England’s policymakers are scheduled to meet on June 20, but it’s not clear whether the governing board will cut the rate from 5.25%. Japan, an economic outlier among the world big economies, has started raising rates after years of below-zero rates and low inflation.
Lower rates can mean lower mortgage costs and credit card charges for consumers. Lower rates also can boost stock prices and the value of retirement accounts since they diminish returns on conservative alternatives such as certificates of deposit and can mean stronger economic growth that will boost corporate earnings.
The ECB’s higher rates quashed a nine-year-long rally in eurozone home prices and slammed construction activity. Growth in economic output has hovered just above and below zero for more than a year before a modest upbeat surprise in the first three months of the year, when gross domestic product rose 0.3% from the quarter before.
The inflation surge in Europe was unleashed first and foremost by Russia cutting off most natural gas supplies to the continent, and by logjams in supplies of raw materials and parts as the global economy rebounded from the COVID-19 pandemic. Although the eurozone was hit first and hardest by the Russian cutoff, the resulting energy price spike has now largely subsided after spiking to 10.6% in October 2022.
The Federal Reserve faces a very different economy, one in which inflation was fueled less by the Russian energy shock than by government pandemic recovery spending, and more robust growth fueled inflation. The U.S. consumer price index is at an annual 3.4%, some way from the Fed’s goal, also 2%.
Fed Chair Jerome Powell has said the bank expects to cut rates this year from the current benchmark level of 5.25%-5.5%, but no change is expected at the Fed’s policy meeting next week. With inflation cooling slowly in the U.S., economists and investors now increasingly expect only one or two cuts this year.
Mortgage rates ease, pulling the average rate on a 30-year home loan to just below 7%
LOS ANGELES | The average rate on a 30-year mortgage dipped to just below 7% this week, little relief for prospective homebuyers already facing the challenges of rising housing prices and a relatively limited inventory of homes on the market.
The rate fell to 6.99% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.71%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week, lowering the average rate to 6.29% from 6.36% last week. A year ago, it averaged 6.07%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields eased this week following economic data showing slower growth. Signs that the economy is cooling can drive inflation lower, which could persuade the Federal Reserve to lower its short-term interest rate from its highest level in more than two decades.
The Fed, which is scheduled to hold its next policy meeting next week, has maintained it doesn’t plan to cut interest rates until it has greater confidence that price increases are slowing sustainably to its 2% target. Until then, mortgage rates are unlikely to ease significantly, economists say.
“Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024, early 2025,” said Ralph McLaughlin, senior economist at Realtor.com.
The average rate on a 30-year mortgage remains near a two-decade high, adding hundreds of dollars a month in costs on a home loan, limiting homebuyers’ purchasing options.
Elevated mortgage rates dampened home sales this spring homebuying season. Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising borrowing costs and prices.
As rates have ticked higher, so have the monthly payments home shoppers need to take on when applying for a mortgage.
The national median monthly payment listed on home loan applications was $2,256 in April, a 2.5% increase from the previous month and 6.8% higher than what it was a year earlier, according to data from the Mortgage Bankers Association.
Slightly more Americans apply for jobless benefits
The number of Americans applying for jobless claims rose last week, but layoffs remain at healthy levels despite lingering inflation and high interest rates.
Unemployment benefit applications for the week ending June 1 rose by 8,000 to 229,000, up from 221,000 the week before, the Labor Department reported Thursday.
The four-week average of claims, which offsets some of the week-to-week gyrations, fell to 222,250, a small decline of 750 from the previous week.
Weekly unemployment claims are seen as a stand-in for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since millions of jobs vanished when the COVID-19 pandemic hit the U.S. in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an attempt to extinguish the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession of 2020. The Fed’s intention was to cool off a red-hot labor market and slow wage growth, which can fuel inflation.
Many economists had expected the rapid rate hikes would trigger a recession, but that’s been avoided so far thanks to strong consumer demand and sturdier-than-expected labor market.
In April, U.S. employers added just 175,000 jobs, the fewest in six months and a sign that the labor market may be finally cooling off. The unemployment rate inched back up to 3.9% from 3.8% and has now remained below 4% for 27 straight months, the longest such streak since the 1960s. The Labor Department issues its May jobs report on Friday. Analysts are forecasting that employers added 180,000 jobs last month.
The government also recently reported that job openings fell to 8.1 million in April, the fewest vacancies since 2021.
Moderation in the pace of hiring, combined with a slowdown in wage growth, could give the Fed the data its been seeking to finally cut its benchmark interest rate. A cooler reading on consumer inflation in April could also play into the Fed’s rate decision next week.
Though layoffs remain low, some high-profile companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple and eBay have all recently announced layoffs.
Outside of tech and media, Walmart, Peloton, Stellantis, Nike and Tesla have recently announced job cuts.
In total, 1.79 million Americans were collecting jobless benefits during the week that ended May 25, an increase of 2,000.
—From AP reports
