Starbucks, union agree to mediation

Starbucks and its union have agreed to bring in an outside mediator for contract negotiations in an effort to revive stalled talks and reach a landmark deal.

The company and Workers United “have made progress over the last nine months of bargaining, and we are committed to continuing to work together — with a mediator’s assistance — to navigate complex issues and reach fair contracts,” Starbucks and the union said in a joint statement emailed to Bloomberg News.

The union is “optimistic that Starbucks will move off of their fixed position on wage and benefits improvements in this next phase of negotiations,” barista and bargaining delegate Michelle Eisen said in a separate statement from Workers United.

The union and the company have been negotiating a template for first-time collective bargaining agreements covering more than 500 U.S. cafes that have unionized since late 2021. After years of conflict, the two sides announced in February they had agreed to work together to resolve hostilities.

Starbucks and the union reported substantial progress in subsequent negotiating sessions, but talks broke down at the end of 2024 over the issue of pay.

Average mortgage rate eases again

The average rate on a 30-year mortgage in the U.S. eased for the second week in a row, but remains just below 7%, little relief for prospective home shoppers looking ahead to the spring homebuying season.

The rate fell to 6.95% from 6.96% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.63%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate dropped to 6.12% from 6.16% last week. A year ago, it averaged 5.94%, Freddie Mac said.

The average rate on a 30-year mortgage briefly fell to a 2-year low just above 6% in September, but has been mostly rising since then, echoing a sharp rise in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.

The yield, which was at 3.62% in mid-September, reached 4.79% two weeks ago amid fears inflation may remain stubbornly higher than the Fed’s 2% target.

Fewer apply for jobless benefits

The number of Americans filing for jobless benefits fell last week in a sign that the labor market remains strong.

Applications for jobless benefits fell by 16,000 to 207,000 for the week ending January 25, the Labor Department said Thursday. Analysts were expecting 225,000 new applications.

Weekly applications for jobless benefits are considered a proxy for layoffs. The four-week average, which evens out some of the weekly volatility, ticked down by 1,000 to 212,500. Though some signs of labor market weakness surfaced in 2024, jobs are still plentiful and layoffs historically low.

Earlier this month, the Labor Department reported that job growth in December surged and unemployment fell. Employers added 256,000 jobs last month and the unemployment rate ticked down to 4.1%.

The final jobs report of 2024 underscores that the economy and hiring were able to grow at a solid pace even with interest rates much higher than they were before the pandemic.

Compiled from Bloomberg and Associated Press reports.