Payless sales increase

Payless ShoeSource Inc., the No. 1 U.S. footwear retailer, on Thursday said December sales at stores open at least a year rose 1.8 percent, helped by a sharp increase in markdowns, sending its stock up.

But the Topeka-based company also cautioned that aggressive promotions may hurt profits.

“The aggressive promotional environment that has persisted for several months is putting intense pressure on financial results for the fourth quarter and the full fiscal year ending Jan. 31,” the company said.

Payless said total sales for the five weeks ended on Jan. 3 climbed 3.3 percent to $301.8 million.

Outlook

Kansas City Fed leader expects 2004 growth

Federal Reserve Bank of Kansas City President Thomas Hoenig said Thursday he expected robust and sustainable growth for the new year, of the sort that will likely improve employment levels.

“I suspect we will look back on 2004 as the year economic activity became more self-sustaining,” Hoenig said in remarks before the Topeka Rotary Club.

The strength that became evident in the U.S. economy during the closing months of 2003 “will continue and the real (gross domestic product) will grow between 4 percent and 4.5 percent” during 2004, amid a broad-based and relatively evenly distributed expansion, Hoenig said.

Energy

Aviation industry blames Bush for rise in oil prices

The airline industry said Thursday the Bush administration was driving up the cost of oil — and increasing airline losses — by purchasing unnecessarily large amounts of petroleum for the nation’s strategic reserve.

“The government is out buying fuel, it appears, without much regard for the impact that it is having on prices,” said James C. May, the chief executive of the Air Transport Assn., the industry’s main lobbying group.

May said oil purchases made by the Energy Department were adding enough demand to the world marketplace to drive up the price by more than $6 per barrel, a major concern for airlines since jet fuel is their second biggest expense after labor.

Real Estate

Mortgage rates climb

Mortgage rates edged up again this week, with the 30-year rate climbing to the highest level in nearly a month.

But even with the modest rise, rates still are low enough to keep the housing market healthy, analysts said.

The average rate on 30-year mortgages rose to 5.87 percent, up from 5.85 percent last week, Freddie Mac, the mortgage giant, said Thursday in its weekly nationwide survey of mortgage rates.

Food

Kraft plans shakeup

Kraft Foods Inc. outlined a corporate overhaul Thursday to try to snap out of a protracted slump in sales and new products, reorganizing its business units and shifting to a more global focus as a way to become more nimble and better positioned for worldwide growth.

The shakeup was announced by chief executive Roger Deromedi, who signaled his intent to take Kraft in a new direction just three weeks after being given control of the company.