WaterFurnace Renewable Energy Inc. saw its first-quarter profits sag during the unusually harsh winter, officials announced Wednesday.
The Fort Wayne manufacturer of geothermal heat pumps reported earnings of $1.53 million, or 12 cents a share, a 35 percent decline from the $2.33 million, or 19 cents a share, reported for the same three months of 2013. Sales for the period ended March 31 declined 8 percent to $26.7 million.
Deep snows and subzero temperatures halted residential loop installations as well as muted the completion of new homes in the first quarter, with recovery expected throughout the remainder of 2014, officials said in a statement.
Geothermal systems can cut monthly heating and cooling costs up to 70 percent, according to WaterFurnace.
US first-quarter productivity falls as labor costs rise
U.S. productivity fell in the first quarter while labor costs rose, reflecting the economic slowdown caused at the start of the year by harsh winter weather.
The Labor Department said Wednesday that productivity declined at an annual rate of 1.7 percent in the January-March period, after growing at a 2.3 percent rate in last year’s fourth quarter.
Special factors, namely the weather, are to blame, said Jennifer Lee, a senior economist at BMO Capital Markets.
The falling productivity coupled with a slight increase in hourly compensation led to labor costs rising 4.2 percent in the first quarter. Labor costs had fallen in the previous two quarters.
Economic growth stalled in the first three months of this year, increasing just 0.1 percent, according to initial estimates by the Commerce Department.
Consumer borrowing up $17.5 billion in March
Consumers increased their borrowing in March by the largest amount in more than a year, using their credit cards and taking out more auto and student loans.
Consumer borrowing increased $17.5 billion in March, up from a gain of $13 billion in February, the Federal Reserve reported Wednesday. It was the biggest monthly increase since a $19.3 billion advance in February 2013.
The category that includes auto and student loans rose $16.4 billion while the category that covers credit card borrowing increased $1.1 billion.
The overall increase in consumer debt pushed total borrowing to a record $3.14 trillion. Gains are an encouraging sign that people are willing to take on debt.
Fed chair expects low rates to stay as economy rebounds
Federal Reserve Chair Janet Yellen said Wednesday that the U.S. economy is improving but noted that the job market remains far from satisfactory and inflation is still below the Fed’s target rate.
Speaking to Congress’ Joint Economic Committee, Yellen said that as a result, she thinks low borrowing rates will continue to be needed for a considerable time.
Yellen’s comments echo earlier signals that the Fed has no intention of acting soon to raise its key target for short-term interest rates even though the job market has strengthened and economic growth is poised to rebound this year. The Fed has kept short-term rates at a record low near zero since December 2008.