U.S. defense leader to lead World Bank

The World Bank approved Paul Wolfowitz as its new president Thursday, affirming the administration’s choice of a Bush loyalist to take the helm of the 184-nation development bank.

Wolfowitz, the deputy defense secretary who helped plan the Iraq war, will begin his five-year term June 1.

“Nothing is more gratifying than being able to help people in need and developing opportunities for all the people of the world to achieve their full potential,” Wolfowitz said after winning unanimous approval from the World Bank’s 24-member board.

Rates

30-year mortgages reach 8-month high

Rates on 30-year mortgages climbed this week to their highest point in eight months, hovering just above the 6 percent mark.

In its weekly nationwide survey, mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.04 percent, up from 6.01 percent last week.

This week’s rate was the highest since 30-year mortgages averaged 6.21 percent last July. The latest increase, the seventh consecutive weekly rise, was attributed to new worries about inflation.

“Financial markets currently are very inflation sensitive, putting upward pressure on mortgage rates,” said Frank Nothaft, Freddie Mac’s chief economist.

While 30-year mortgages have jumped by nearly one-half percentage point since hitting a low for this year of 5.57 percent in early February, Nothaft predicted future increases will be at a moderate pace.

Economy

Incomes, spending show solid gains

Americans’ incomes, bolstered by strong gains in hiring, rose by 0.3 percent in February while consumer spending climbed at an even faster pace of 0.5 percent, the government reported Thursday.

The Commerce Department said the gain in spending followed a much smaller 0.1 percent increase in January and reflected the fact that auto sales rebounded last month after having fallen in January.

The 0.3 percent rise in incomes was attributed to a surge of 262,000 new jobs in February, the biggest increase in four months. Further solid gains in both incomes and consumer spending are expected in the months ahead as the consumer continues to be a driving force in the economy.

Analysts said the February gains in incomes and spending showed that the economy was being propelled this year by continued strength in employment growth and consumer spending.