WASHINGTON >> U.S. workers’ paychecks grew at a moderate rate over the summer, showing little sign of accelerating from the sluggish growth that has persisted since the recession ended.
The employment cost index, which tracks wages, salaries and benefits, rose 0.6 percent in the July-September quarter from the April-June quarter, the Labor Department said Friday. That is stronger than the second quarter’s 0.2 percent gain.
Yet in the past 12 months, pay and benefits have risen 2 percent. That’s below the 3.5 to 4 percent typical of a robust economy.
The modest annual gain is a sign that companies are still able to find the workers they need without offering much higher pay. That suggests the job market is not yet back to full health.
Federal Reserve officials consider wages and salaries a key indicator of the economy’s health. A sustained pickup in wages would be a sign that the unemployment rate might not fall much further.
In the past year, employers have added 2.2 million new jobs.
Valeant cutting ties with Philidor
NEW YORK >> Valeant Pharmaceuticals, a company that has come under intense scrutiny for its drug prices, has cut ties with Philidor following accusations that it was a "phantom pharmacy" used solely to artificially boost sales.
Valeant said Friday that the mail-order pharmacy has informed the company that it will shut down as soon as possible.
The imminent end of Philidor comes just hours after the nation’s two largest pharmacy benefit providers, CVS Health and Express Scripts, said they had ended all interactions with the company, citing its business practices. UnitedHealth Group conducted an audit of Philidor in late 2014 and began cutting ties with the company "in the interests of our customers."
No decision on hike yet, Fed member says
WASHINGTON >> A voting member of the Federal Reserve cautioned Friday that the Fed has yet to decide when to raise interest rates even though it issued a statement this week that said a rate hike was possible in December.
John Williams, president of the Fed’s San Francisco regional bank, said he wants to study more economic data in coming weeks before deciding whether the economy is strong enough for the Fed to raise its key short-term rate from a record low. Williams said the Fed chose to say that it could decide at its next meeting to avoid surprising investors.
Stock market ends October with big gains
NEW YORK >> The stock market drifted lower Friday but finished October with its biggest monthly gain in four years.
U.S. government economic data released Friday and earlier this week suggests the economy is still sluggish, stuck in a pattern of gradual but uneven growth it has followed since the Great Recession. But the outlook for future growth improved, and fears waned that a slowing Chinese economy would send the U.S. economy into a tailspin.
Strong corporate earnings in some sectors, like health care and telecommunications, also helped propel the market all the way back to positive for the year after a swoon in August and a rocky September.
Chevron plans to slash up to 7,000 jobs
DALLAS >> Chevron is cutting up to 7,000 jobs, or 11 percent of its workforce, the latest indication of the toll that low oil prices are taking on the industry.
The two biggest U.S. oil companies reported huge profits for the third quarter. Chevron Corp. said Friday that it earned $2 billion, and Exxon Mobil Corp. earned more than $4.2 billion. But those profits are down sharply from a year ago. Chevron’s profit was 64 percent lower than last year’s third quarter; Exxon’s profit fell 47 percent, its worst third quarter since 2003.
Investors could bear costs of bank failures
WASHINGTON >> Federal regulators are proposing that the eight biggest U.S. banks build new cushions against losses that would shift the burden to investors.
The Federal Reserve’s proposal put forward Friday means the mega-banks would have to bulk up their capacity to absorb financial shocks by issuing equity or long-term debt equal to prescribed portions of total bank assets.
The idea is that the cost of a huge bank’s failure would fall on investors in the bank’s equity or debt, not on taxpayers.
Hewlett-Packard splitting into 2 companies
SAN FRANCISCO >> One of the nation’s most storied tech companies will split in two this weekend.
Hewlett-Packard was an early pioneer of what became the model for Silicon Valley startups: Founded in 1939 by two Stanford graduates in a garage, HP was long celebrated for its engineering know-how and laid-back corporate culture. It made hefty profits as it grew into a multinational giant.
But after struggling to keep pace with recent trends like the rise of smartphones and cloud computing, HP’s board decided to create two smaller companies.
ON THE MOVE
Hawaiian Airlines has appointed Thomas K. Aiu director of corporate security. He has more than 30 years of federal law enforcement expertise. Aiu previously served as an adjunct professor of graduate studies in criminal justice administration at Chaminade University as well as a federal investigator for the Office of Personnel Management and a senior special agent with the U.S. Department of Justice Drug Enforcement Administration.
Montage Kapalua Bay has announced that Catherine Hutchison is the new director of sales and marketing. Prior to joining the resort, she served as director of travel industry sales at Montage Deer Valley in Park City, Utah. Hutchison also was a member of the resort’s opening sales team in 2010, which she established, and sustained partnerships with various consortia such as Fine Hotels and Resorts, tour operators and online travel agencies.
