Jobless claims rise, fall in see-saw pattern
WASHINGTON -- The number of Americans filing applications for unemployment benefits rose last week, maintaining a pattern of gains and losses around decade lows that signals firings remain muted.
Jobless claims climbed by 10,000 to 277,000 in the week ended Sept. 26, a report from the Labor Department showed Thursday. The median forecast of 48 economists surveyed by Bloomberg called for 271,000. The four-week moving average fell to the lowest level in almost two months and the total number of people receiving benefits was the smallest in 15 years.
Employers are retaining staff amid solid domestic demand, one reason why claims have been hovering near historically low levels even as overseas markets languish. Labor Department data on Friday may show payrolls climbed by about 200,000 workers in September after a 173,000 gain, according to the Bloomberg survey.
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Credit, debit cards with chips debut in fraud fight
NEW YORK -- The battle against credit card fraud is inching forward.
As of Thursday, the liability for fraud committed using traditional MasterCard and Visa magnetic-stripe credit and debit cards will shift from banks to stores. The move is part of a drive by the banks and payment companies to get people to use the new, more secure cards embedded with computer chips.
Roughly half of all global credit card fraud occurs in the United States even though the country makes up only about a quarter of all credit card transactions, according to a report by Barclays last month.
Fast and easy loans can be costly for small businesses
NEW YORK -- It sounded like a sweet deal: A loan broker walked into Southern Girl Desserts offering the Los Angeles bakery a $40,000 loan that could be deposited in a bank account quickly. Already rejected for a loan from a bank, co-owner Catarah Hampshire took the offer and hired more workers to whip up peach cobblers and sweet potato cupcakes.
Then the daily phone calls from brokers began. Within two years, Southern Girl Desserts took out six loans and was in a financial mess that made it difficult to buy ingredients and pay employees.
Southern Girl Desserts borrowed from companies that make short-term loans or give cash advances to small businesses that are typically structured to be paid back in under a year. Automatic payments are taken out daily or weekly, either from a bank account or from a company's credit card transactions. Annual percentage rates can be as high as 50 percent or more, far above the APRs of traditional small business loans backed by the Small Business Administration.
A growing chorus of critics say short-term loans are bad for small businesses because APRs aren't revealed, they are expensive and they can lead businesses into a dangerous cycle of borrowing over and over again to keep up with payments.
-- Herald wire reports