Path: bloom-picayune.mit.edu!snorkelwacker.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 Wed, Oct 28 1992 Date: Wed, 28 Oct 92 04:40:26 EST Message-ID: 10-28 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 28, 1992 Source: USA TODAY:Gannett National Information Network ECONOMIC GROWTH TAKES A LEAP: Economic growth jumped to a 2.7% annual rate last quarter, the Commerce Department said Tuesday, almost equal to first quarter's 2.9%. President Bush trumpeted the report, the last major economic report before the election. Economists were stunned by the jump in gross domestic product. The consensus forecast was for 1.6% growth. The deparment said the figure should not be revised downward much. CONSUMER, DEFENSE SPENDING UP: Big jumps in consumer and defense spending boosted gross domestic product growth to a 2.7% annual rate last quarter, the Commerce Department said Tuesday. The gain pushed real GDP above a $4.9 trillion annual rate for the first time since second-quarter 1990. Consumer spending increased 3.4% in the third quarter from the second quarter. Defense spending jumped 6.9%. CITICORP PLANS MILDER CUTS: Chairman John Reed says Citicorp will make more cost and staff cuts next year, but not as drastic as the past two years. Since 1990, the USA's largest bank company has cut annual operating costs by $1.4 billion and cut staff by 18,000 to 82,000. Reed Tuesday confirmed analysts' reports that Citicorp plans to sell $800 million of its assets the next few quarters to build capital. CONSUMER CONFIDENCE FALLS: Confidence in the economy fell this month for the fourth straight month, with increasing concern about the availability of jobs, a business research group reported Tuesday. The Conference Board said its widely watched index of consumer confidence fell this month to 53, down 4.3 points from September. The index is based on a 1985 level of 100. WAGE INCREASE A SMALL ONE: Wages, salaries and benefits rose 3.5% in the year ended Sept. 30, the smallest increase in five years, the Labor Department said Tuesday. The report was a fresh sign of the curbing effect of the weak economy on inflation. The government's Employment Cost Index, considered one of the best gauges of wage inflation pressures, was down from the 4.3% increase in the 12 months ended September 1991. BANK ACQUISITION IS SIGNED: Washington Mutual Savings Bank Tuesday signed a definitive agreement to acquire Pacific First Bank for $663 million cash. Washington Mutual will buy all outstanding stock of Pacific's parent from RT Holdings Inc. Washington Mutual said the acquisition is part of the bank's plan to become a national consumer bank. The $663 million is 95.4% of Pacific's book value. USA AGREES TO MORE TALKS: The European Community and the United States agreed Tuesday to another round of talks in their farm trade dispute, raising hopes of a breakthrough before the U.S. presidential elections. "We are continuing negotiations to try and find a solution that is acceptable to both of us," Ray MacSharry, the community's trade negotiator, said in Luxembourg. STERN CAN PROCESS TRADES: The Chicago Board of Trade says Lee B. Stern & Co. has voluntarily withdrawn as a clearing member of the exchange but remains a member. A clearing firm processes customer trades. Other member firms must channel business through clearing members. The board says it has removed the suspensions of the three major owners of Stern, but the firm is banned from handling customer accounts. BLACKS TURNED AWAY FROM LOANS: Blacks continue to be turned down for mortgage loans more than twice as often as whites, the government said Tuesday. Last year, lenders nationwide rejected 37.6% of conventional mortgage applications from blacks vs. a 17.3% rejection rate for whites. The figures, came from 9,358 banks, thrifts, credit unions and mortgage lenders. GOLD FALLS, SILVER MIXED: Gold fell Tuesday. At New York's Commodity Exchange, gold dropped $3.70 a troy ounce to $337.40. Republic National Bank in New York quoted gold at $337.25, down $3.25 from Monday. Gold fell in London to $338.15, down from $341.25 Monday. Silver fell to $3.739 an ounce on New York's Comex from $3.744 late Monday. Silver bullion rose in London to $3.76 a troy ounce, up from $3.75 Monday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3235.73 Wednesday after closing down 8.38 Tuesday. The New York Stock Exchange composite opens at 230.01, up 0.23. The American Stock Exchange market value opens at 376.65, down 0.49. The NASDAQ OTC composite opens at 596.95, down 1.97. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly down on Wednesday. It opens at 0.6319 British pounds, down from 0.6343; 5.2015 French francs, down from 5.2290; 1.5325 German marks, down from 1.5420; and 122.33 Japanese yen, up from 122.20. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) 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. 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