Ford plans to go electric with Mexican production
Ford Motor Co. is shifting production of an all-electric vehicle to Mexico, while saying it will create 850 new jobs by continuing production in Flat Rock, Mich., of the Mustang, Lincoln Continental and an autonomous car it wants to sell to delivery fleets beginning in 2021.
Last March, the Dearborn-based automaker announced plans to not build a new plant in Mexico, and adding both the electric vehicle and the hybrid autonomous vehicle in Flat Rock. That plan, which Ford said would create 700 jobs, was formulated after President Donald Trump threatened to withdraw the U.S. from the North American Free Trade Agreement and ridiculed automakers for making any vehicles in Mexico.
The United Auto Workers union said Thursday that the latest decision by Ford to produce the EVs in Mexico will not result in fewer jobs at home because the union already negotiated future job commitments.
“During the 2015 negotiations with Ford, we secured significant product investment for our members at the Flat Rock assembly plant and other manufacturing facilities in the U.S.,” said UAW Vice President Jimmy Settles. “Yesterday’s announcement by Ford to expand production of autonomous vehicles at Flat Rock, and move a low-volume electric SUV to Mexico does not affect our jobs or economic investment commitments.”
Surging stocks boost wealth but not for all
Surging stock prices and steady increases in home values powered American household wealth to $96.9 trillion this fall, the Federal Reserve said Thursday. The gains, however, aren’t widely shared.
U.S. wealth has made a remarkable comeback since the recession, when it plummeted more than $10 trillion to $56.2 trillion. The figures aren’t adjusted for inflation or population growth, nor is it broken out by income levels.
Edward Wolff, an economist at New York University, uses other Fed data to calculate figures for average and median households. The median is the point where half of households are richer, and half poorer, and gives a better sense of how typical families have fared.
In 2016, the latest figures available, median household wealth was still 34 percent below its pre-recession, 2007 level. Average household wealth, meanwhile, fully recovered from the downturn and was 7 percent higher last year. The average figure is pulled up by very wealthy families.
“The middle class is still way below where it was almost 10 years ago,” Wolff said. “What you’re seeing is wealth flowing to the very top even more so than in the Great Recession.”
Mortgage rates rise, but stay below 4 percent
U.S. mortgage rates rose this week as the economy showed signs of strength, which makes it more likely that the Federal Reserve will raise its short-term rate next week.
The rate on the benchmark 30-year fixed-rate mortgage rose to 3.94 percent from 3.9 percent last week, mortgage giant Freddie Mac said. The 15-year, fixed-rate mortgage, popular among homeowners seeking to refinance, also increased, rising to 3.36 percent from 3.3 percent.
The five-year adjustable mortgage rate rose for the third straight week to 3.35 percent from 3.32 percent last week.
Consumer borrowing rises by $20.5 billion
American consumers increased their borrowing by $20.5 billion in October. It was the biggest gain in 11 months and reflected strong increases in the use of credit cards and in auto and student loans.
The October followed a $19.2 billion gain in September and was the best showing since November 2016, the Federal Reserve reported Thursday.
The category that covers auto loans and student loans was up $12.2 billion, slightly slower than the $13.2 billion rise in September. Borrowing in the category that covers credit cards rose by $8.3 billion, up from a $6 billion increase in September and the strongest showing since November.
The solid gains were good signs for strength in consumer spending heading into the holiday shopping season. Consumer spending accounts for 70 percent of economic activity.