clarinews@clarinet.com (NENA BAKER, UPI Business Writer) (02/10/90)
NEW YORK (UPI) -- The United States wrapped up its quarterly
refunding marathon this week with surprisingly strong global
participation that produced higher yields on 30-year bonds, 10-year and
3-year notes.
During the three-day quarterly refunding, the United States sold:
--$10 billion in 3-year notes Tuesday yielding 8.43 percent, the
highest since 9.12 percent May 9 and better than November's 7.77
percent. The 3-year notes, which mature Feb. 3, 1993, and have an
interest rate of 8.375 percent, sold at an average price of $99.857.
--$10 billion of 10-year notes Wednesday with the yield jumping to
8.59 percent, the highest since 9.18 percent May 10. The 10-year notes,
with an interest rate of 8.5 percent, sold at an average price of $99.40
and mature Feb. 15, 2000. The November 10-year notes yielded 7.94
percent.
--$10 billion of 30-year bonds Thursday with the yield increasing to
8.5 percent -- the highest since 9.11 percent on May 11. The 30-year
bonds, which mature Feb. 15, 2020, and have an interest rate of 8.5
percent, sold at an average price of $100. At the November auction,
30-year bonds yielded 7.87 percent.
Wholesale prices surged by 1.8 percent in January in the biggest
rise since the 1974 energy crisis, fueled by a huge increase in oil and
gas prices, the government said Friday.
Vegetable prices also took a beating, but analysts, who placed the
blame on the brutal winter weather, predicted only moderate inflation
for the year.
The unusually large 13.6 percent increase in energy prices was the
steepest since the government started tracking wholesale gas and oil
prices in 1974, and the overall increase in the producer price index was
the largest since 2 percent in November of that year, the Labor
Department said.
The January surge appeared to a be one-time shot.
``We had the cold weather hit and nobody in the northeast was
prepared for it,'' said professor Donald Ratajczak, director of the
economic forecasting center at Georgia State University.
Meanwhile, worker productivity slowed in the last three months of
1989, winding up a year with the smallest gain in the hourly output of
goods and services since 1982, the government said Monday.
Some analysts said the report may set the stage for steeper
inflation ahead.
In its report on productivity and costs, the Labor Department said
worker output decreased by 0.2 percent in the quarter and the number of
hours worked fell by 0.4 percent -- the first decline since the second
quarter of 1986 -- while hourly pay jumped by nearly 7 percent. It also
warned conumer prices are on the rise.
``There was a big jump in labor costs,'' warned Irwin Kellner,
chief economist for Manufacturers Hanover Trust in New York. ``Unless
business wishes to take a hit to the bottom line they'll be trying to
recoup this by raising prices.''
However, prices for new one-family houses fell slightly in the last
quarter of 1989 and rose 2.7 percent during the year compared with
prices for similar houses sold in 1988, the Commerce Department reported
Monday.
Last year, only the West registered a significant increase in
prices for new one-family houses comparable to those sold in 1988, the
department's Census Bureau said.
Analysts noted that during 1989 nationwide house sales as well as
new construction remained at a low ebb due to higher mortgage interest
rates.
According to the Census Bureau, the average price of houses sold in
1989 rose 8 percent to $149,300 from 1988, indicating that houses were
larger and had more amenities than those sold in the previous year.
_T_h_i_s_ _W_e_e_k_ _ _ _ _ _L_a_s_t_ _W_e_e_k_ _ _ _ _ _ _Y_e_a_r_ _A_g_o
_(_I_n_ _M_i_l_l_i_o_n_s_,_ _S_i_x_ _Z_e_r_o_s_ _O_m_i_t_t_e_d_)
Gov't Sec Bought
Outright $214,337 $217,228 $223,424
Held Under RP 0 0 0
Loans Dep Ins $880 x-$850 $970
M-1 $796,900 x-$794,200
Bank Clrngs $4,295,993 $4,529,177 $3,699,378
_(_F_o_l_l_o_w_i_n_g_ _f_i_g_u_r_e_s_ _i_n_ _F_u_l_l_)
Auto, Truck
Production 179,950 x-177,534 246,438
Rail Ldngs 337,389 345,864 322,583
Coal Output _2_0_,_7_1_2_,_0_0_0_ _ _ _ _ 20,712,000 19,701,000
Elect Pdn 54,451,000,000 54,672,000,000 53,749,000,000
Dun & Brad
Bus Failures unavailable
Std & Poor's
Bus Index a-174.4 174.2 176.4
Steel Pdn 1,798,000 1,800,000 2,001,000
Loans to depository institutions include seasonal borrowings of
$37,000,000 in the latest week. Extended credit 28.
a-Latest figure available
x-Revised