Business Briefs for Nov. 19

VIRGINIA

Index will track Va. housing affordability

WASHINGTON -- Housing Virginia, a statewide nonprofit dedicated to affordable housing, and the Virginia Association of Realtors announced yesterday that they will produce a quarterly housing-affordability index for the state beginning in January.

The index will be a broad measure of housing affordability that compares housing and rental costs with household incomes.

"Basically what we're looking at is presenting the percentage of a typical Virginia household's income necessary to afford the typical home in Virginia," said Scott Brunner, chief executive officer of the Virginia Association of Realtors.

The Virginia Center for Housing Research at Virginia Tech will conduct the analysis. State and locality data will be available.

In general, housing is considered affordable if costs are less than 30 percent of income. A household with annual earnings of $60,000, for example, should pay no more than $18,000 a year for housing, or $1,500 a month for rent or mortgage payments.

The index is intended to give consumers a resource for determining how much they can afford for housing.

THE NATION

Home construction plunged last month

The budding economic recovery is getting little help from the home-building industry, which normally creates jobs and boosts growth as a recession ends.

Construction of homes unexpectedly plunged last month to its lowest point since April, the Commerce Department said yesterday. The weak figures show that builders still lack confidence that buyers can soak up the glut of unsold homes already on the market -- a supply magnified by a record number of home foreclosures.

The sluggish recovery is also holding down inflation. While consumer prices edged up faster than expected in October, they remain lower than they were a year ago. And inflation is expected to remain subdued.

The Labor Department said consumer prices rose 0.3 percent in October, a bit more than the 0.2 percent economists had expected.

1 million may run out of jobless aid in Jan.

WASHINGTON -- More than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said yesterday.

States typically provide 26 weeks of unemployment insurance for those who lose their jobs through no fault of their own, with weekly checks averaging about $300. On Nov. 6, Congress extended coverage for the fourth time since the recession began, granting 14 to 20 more weeks to try to keep about 1.3 million people who have been jobless for well over a year from running out of benefits before the end of 2009.

That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states. But that legislation didn't address an underlying problem: The emergency unemployment compensation program, including all 73 additional weeks, expires at the end of this year.

After Jan. 1, if the program isn't renewed, recipients who have used up their 26 weeks of state benefits won't get any extra coverage. The National Employment Law Project estimated yesterday that 450,000 people will fall into that category in January.

An additional 600,000 will run out of extended coverage that month, the NELP estimates. Since the extra federal benefits are provided in stages, recipients won't be able to continue to the next one after Jan. 1, unless the emergency program is reinstated.

Elsewhere

• San Francisco-based Wells Fargo & Co. agreed yesterday to repay customers about $1.4 billion to settle a lawsuit and regulatory investigations alleging the company improperly marketed risky investments as safe. The $330 billion market in auction-rate securities collapsed in February 2008, and investors' accounts were frozen.

• A federal judge in Atlanta yesterday denied a request by AT&T Inc. to force competitor Verizon Wireless to pull its "There's a Map for That" commercials. But the judge scheduled a Dec. 16 hearing to give the AT&T attorneys another chance to make their case. Verizon argues that the commercials are valid and truthful.

• Health insurer Aetna said yesterday that it will cut 625 jobs immediately, or nearly 2 percent of its staff, and will make a similar number of cuts by the end of the 2010 first quarter because of the lagging economy and the potential impact of health-care reform.

• Delta Air Lines and its alliance partners said yesterday that they are making a $1 billion offer to lure loss-making Japan Airlines from its affiliation with American Airlines.

• American Express Co. is buying Revolution Money for about $300 million to keep up with trends in electronic payments, where new security features and online transaction options are shaking up traditional models.

-- Staff and Wire Reports