Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Mon, Oct 5 1992 Date: Mon, 5 Oct 92 04:46:08 EDT Message-ID: 10-05 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 5, 1992 Source: USA TODAY:Gannett National Information Network ECONOMY CONTINUES TO STUMBLE: By now - a month before the presidential election and more than two years since the recession began - the economy was supposed to be in good shape. Things haven't quite worked out that way. Friday, the Labor Department capped a miserable week of economic news when it said that, despite the jobless rate falling to 7.5% last month from 7.6% in August, the economy lost 57,000 jobs. GDP REPORT EXPECTED TO BE GRIM: One million more people were unemployed last month than in September 1991. On Oct. 27, the Commerce Department is expected to report the Gross Domestic Product grew at a weak 1.7% annual rate last quarter, according to a USA TODAY:CNBC survey of 52 economists. GROWTH ESTIMATES ARE CUT: Economists sharply cut their estimates of third-quarter economic growth in the latest USA TODAY:CNBC survey. The consensus estimate of the 52 economists: the economy grew at a 1.7% annual rate last quarter. In June's survey, the consensus was 2.7%. "We're just not creating any jobs, and what that means is a stalled economy," says economist Donald Ratajczak. MOST SAY RECESSION IS OVER: While economists have cut their estimates of third-quarter economic growth, 83% of the economists surveyed by USA TODAY:CNBC believe the recession has ended. Because of the slow pace of economic growth, 67% of the economists surveyed believe the Federal Reserve should push interest rates down once more to try to boost economic growth. And 73% believe the Fed will do so this quarter. FACTORY ORDERS DIVE: New orders to factories in August posted their largest decline in eight months, according to a government report that analysts said was fresh evidence the manufacturing economy has stalled. Orders for durable and non-durable goods fell 1.9% to $237.6 billion at a seasonally adjusted rate, down from $242.3 billion in July, the Commerce Department said. BANK INSURANCE FUNDS DRY UP: Federally operated funds to insure depositors against failures of banks and thrifts are almost empty, Rep. Henry Gonzalez, D-Texas, said Friday. Bloomberg Business News reported that the Bank Insurance Fund of the Federal Deposit Insurance Corp. "is essentially bankrupt," Gonzalez said. Faltering banks are being allowed to stay open until after the election, he charges. COMMERCIAL LOANS DOWN: Commercial and industrial loans decreased $1.241 billion to $274.299 billion in the week ended Sept. 23, the Federal Reserve System said Friday, according to Bloomberg Business News. The total doesn't include $1.635 billion of bankers' acceptances and commercial paper. EC CRISIS HURTS GLOBAL FUNDS: Stock funds that invest overseas had a tough third quarter. Slowing economies around the globe continued to play havoc with stocks. International funds fell an average 4.6% last quarter. In the second quarter, the declining value of the dollar helped cushion the stocks' decline, because the fund holdings could buy more dollars when translated back into dollars. HOUSE PASSES REGULATORY BILL: The House Saturday passed a compromise bill to regulate government-sponsored enterprises Freddie Mac and Fannie Mae. Both organizations buy residential mortgages from banks, thrifts and other originators, adding to the amount of money that institutions can lend to homebuyers. The House bill sets capital standards and establishes an independent regulator. TREASURY BONDS, BILLS RISE: The Dow Jones industrial average shed 53.76 points to 3200.61 Friday, ending the week down 46.71. The yield on 30-year Treasury bonds rose to 7.33% from 7.32%. The discount rate on three-month T-bills rose to 2.62% from 2.59%. The dollar was mostly lower against other currencies. On the N.Y. Merc.: Platinum fell $1.70 to $366.70 an ounce. Light sweet crude oil rose 9 cents to $21.92 a barrel. GOLD AND SILVER MIXED: On the Commodity Exchange Friday, gold bullion for current delivery rose 60 cents to $348.10. Republic National Bank quoted a price of $348.25, up $0.15. Gold fell in London to $348.15, down from $348.45. Silver rose on the Comex to $3.734, up from $3.714. Silver fell in London to $3.74, down from $3.75. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3200.61 Monday after closing down 53.76 Friday. The New York Stock Exchange composite opens at 225.81, down 2.92. The American Stock Exchange market value opens at 371.24, down 2.92. The NASDAQ OTC composite opens at 571.63, down 6.70. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM