Business briefs
By NewsPress Now
Nearly 138,000 beds are being recalled
NEW YORK | Nearly 138,000 platform beds sold at major retailers including Amazon and Walmart are being recalled across the U.S. and Canada because they can collapse, posing fall and injury risks.
Utah-based importer CVB Inc. is recalling the Lucid-branded platform beds with upholstered square tufted headboards. According to Thursday notices from the U.S. Consumer Product Safety Commission and Health Canada, the beds can sag, break or collapse during use.
To date, there have been 245 incidents of this occurring in the U.S., resulting in 18 related injuries such as contusions and bruises, the CPSC said. An additional 11 reports of “bed failures” have been reported in Canada, with no further injuries.
According to Lucid, the recall covers a discontinued version of its platform beds, which the company says were manufactured between 2019 and 2021.
While manufacturing ended several years ago, the now-recalled beds continued to be sold at major retailers through April 2024, the CPSC said. In addition to Amazon, Walmart and Lucid’s website, consumers may have also purchased the beds at Bed Bath & Beyond, eBay, Home Depot, Macys, Target.com, Wayfair and other retailers.
About 137,000 of the recalled beds were sold in the U.S. and 890 in Canada, the CPSC said.
The beds — which were made in Malaysia and come in twin, full, queen, king and cal-king sizes — can be identified with a white law label found on the back of the headboard. “Made For: CVB INC, 1525 W 2960 S, LOGAN, UT 84321” should be printed on it.
People who have the recalled beds are urged to stop using them immediately and contact Lucid for a free replacement frame.
Consumers will have to write the word “recalled” on the bed’s support rails with a permanent marker and send photos to Lucid. More information about getting a replacement can be found on Lucid’s recall page.
Fire that burned for four days after explosion has finally gone out
DEER PARK, Texas | A fire that burned for four days after a pipeline explosion in the Houston suburbs burned out Thursday after the once-towering blaze had put hundreds of nearby homes under evacuation orders, city officials said.
Investigators say the fire began after the driver of an SUV went through a fence alongside a Walmart parking lot and struck an above-ground valve. On Thursday, human remains were found inside the vehicle and authorities had opened a criminal investigation, according to the City of Deer Park.
Officials in Deer Park, where the explosion happened Monday, described the crash as an accident, and said police and local FBI agents have not found evidence of a coordinated or terrorist attack.
U.S. home sales fell in August despite easing mortgage rates
LOS ANGELES | Sales of previously occupied U.S. homes fell in August to the slowest annual pace in nearly a year even as mortgage rates eased and the supply of properties on the market continued to rise.
Existing home sales fell 2.5% last month, from July, to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors said Thursday.
Sales fell 4.2% compared with August last year. The latest home sales were short of the 3.9 million pace economists were expecting, according to FactSet.
Home prices increased on an annual basis for the 14th consecutive month. The national median sales price rose 3.1% from a year earlier to $416,700. That’s the highest median price for the month of August on records going back to 1999.
“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” said Lawrence Yun, the NAR’s chief economist.
The Federal Reserve cut its main interest rate for the first time in more than four years Wednesday. Fed officials also signaled they expect further cuts this year and in 2025 and 2026. The rate cuts should, over time, lead to lower borrowing costs on mortgages.
Mortgage rates have been mostly easing since July as signs of waning inflation and a cooling job market raised expectations of a Fed cut. The average rate on a 30-year home loan fell this week to 6.09%, the lowest level since early February 2023, according to mortgage buyer Freddie Mac.
Despite more attractive mortgage rates, home sales likely declined last month in part because many prospective homebuyers were holding out for the Fed to cut rates.
“So far, those buyers who waited, may be glad that they did,” said Daniele Hale, chief economist at Realtor.com. “Not only have mortgage rates continued to fall into early September, but we’re also nearing a seasonal sweet spot for homebuyers, when competition usually wanes, home prices ease, and time on market tends to grow.”
Economists are generally projecting that the average rate on a 30-year mortgage will remain above 6% this year.
Existing home sales have been in a deep sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. They sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%.
Elevated mortgage rates, home prices near all-time highs and a chronic shortage of homes on the market have put off many would-be homebuyers.
In addition to the prospect for lower mortgage rates, more homes are hitting the market, giving home shoppers a wider selection to chose from.
All told, there were about 1.35 million unsold homes at the end of August, up 0.7% from July and 22.7% from August last year, NAR said.
That’s the most homes on the market since October 2020, when there were 1.4 million homes for sale, but it’s still down from 1.83 million homes on the market in 2019, Yun noted.
The inventory of available homes translates to a 4.2-month supply at the current sales pace, up from a 3.3-month pace at the end of August last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
“Maybe the favorable backdrop — lower mortgage rates, more inventory — will have an impact in coming months,” Yun said.
Homeownership is still out of reach for many Americans after years of surging home prices. Consider, the median U.S. home sales price has jumped 49% over the past five years, while wages grew by 25% in the same period.
Home shoppers who could afford to buy benefited last month from a modest pickup in properties on the market.
Another factor helping boost inventory: Homes are taking longer to sell, though they’re still being snapped up relatively quickly.
Homes typically stayed on the market for 26 days in August before they were sold, up from 20 days a year earlier.
Fewer homes received multiple offers. Some 20% of the homes that sold last month were bought for more than their original list price, down from 31% in August last year.
First-time homebuyers who don’t have any home equity to put toward their down payment continue to have a tough time getting into the housing market. They accounted for 26% of all homes sold last month, matching the all-time low from November 2021. It was down from 29% in August last year. They’ve accounted for 40% of sales historically.
Homebuyers who can afford to sidestep mortgage rates and pay all cash for a home accounted for 26% of sales last month, down from 27% in July and August 2023. And about 19% of homes sold last month were bought by individual investors or homeowners looking to buy a second home, down from 16% a year earlier, NAR said.
Weekly applications for U.S. jobless benefits fall
The number of Americans applying for unemployment benefits fell to their lowest level in four months last week.
Jobless claims slid by 12,000, to 219,000, for the week of Sept. 14, the Labor Department reported Thursday. That’s fewer than economists’ expectations for 230,000 new filings.
Weekly filings for unemployment benefits, considered largely representative of layoffs, had risen moderately since May before this week’s decline. Though still at historically healthy levels, the recent increase signaled that high interest rates may finally be taking a toll on the labor market.
In response to weakening employment data and receding consumer prices, the Federal Reserve on Wednesday cut its benchmark interest rate by a half of a percentage point as the central bank shifts its focus from taming inflation toward supporting the job market. The Fed’s goal is to achieve a rare “soft landing,” whereby it curbs inflation without causing a recession.
“The focus has now decisively shifted to the labor market, and there’s a sense that the Fed is trying to strike a better balance between jobs and inflation,” said Stephen Innes of SPI Asset Management.
It was the Fed’s first rate cut in four years after a series of rate hikes in 2022 and 2023 pushed the federal funds rate to a two-decade high of 5.3%.
Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion that high interest rates were finally cooling a red-hot U.S. job market.
U.S. employers added a modest 142,000 jobs in August, up from a paltry 89,000 in July, but well below the January-June monthly average of nearly 218,000.
Last month, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job market has been slowing steadily, compelling the Fed to start cutting interest rates.
This week’s Labor Department report showed that the four-week average of claims, which evens out some of weekly volatility, fell by 3,500 to 227,500.
The total number of Americans collecting jobless benefits fell by 14,000 to about 1.83 million for the week of Sept. 7, the fewest since early June.
—From AP reports
