Income Growth

Maryland's projected budget gap has shrunk by more than $600 million since June because of higher-than-expected tax revenues, legislative budget analysts said yesterday. Analysts told lawmakers and the state Spending Affordability Committee that the gap between revenues and expenses in the budget Gov. Robert L. Ehrlich Jr. is preparing to release in January is now $388 million, down from a projected $1 billion a few months ago. Ehrlich must submit a balanced budget, so some spending cuts are expected.

U.S. mortgage applications decreased last week as refinancing declined for a fourth time and fewer people bought homes, a private group's survey found. The Mortgage Bankers Association's applications index dropped 1 percent to 689 from 696.2 the previous week. The gauge of applications to refinance existing mortgages fell 2 percent to 1852.4 from 1890.6. Refinancing was a source of strength for consumer purchases in 2002 and 2003. The decline suggests any acceleration in spending in coming months is that much more dependent on job and income growth.

PNC Financial Services Group Inc., Pennsylvania's biggest bank, said third-quarter profit rose 23 percent as its acquisition of Baltimore's Mercantile Bankshares Corp. helped generate higher fee revenue. Excluding a gain last year from an investment in fund manager BlackRock Inc., earnings climbed to $469 million, or $1.37 a share, from $380 million, or $1.28, for the third quarter last year, the Pittsburgh company said yesterday. Exceeds estimates Per-share profit was 2 cents higher than the average estimate of 17 analysts surveyed by Bloomberg.

If you believe a mutual fund could help you to achieve your long-term financial goals and if at last you have the money to begin investing in one, are you putting it off because of talk that stock prices are due for a correction from their near-record levels?Alternatively, if you are a few years from retirement and are invested in equity funds that live up to your expectations, does such talk make you want to reduce your exposure to the stock market now -- while continuing to aim for a decent return and inflation protection?

Howard County and Central Maryland will be "awash" in new jobs in about two years, but that won't help balance the county budget next fiscal year, economist Anirban Basu told Howard County's Spending Affordability Committee on Thursday. The committee, composed of county officials, accountants, bankers, business people and academics, meets annually to recommend spending and borrowing levels for the county executive, who must propose a budget in mid-April. County budget director Raymond S. Wacks said this year presents an unusual problem for the citizens advisory group.

With the record U.S. economic boom well into its 10th year, evidence continues to show that growth is broad-based, improving the lives of millions of Americans who didn't participate in past periods of prosperity. Indeed, a new study shows that the 1990s and the first part of 2000 have been a particularly prosperous stretch - both nationally and here in Maryland - for the four most prominent minority groups: African-Americans, Asian-Americans, Hispanic-Americans and Native Americans. This newest study, an annual undertaking by the University of Georgia's Terry College of Business, projects that between 1990 and 2001, the aggregate buying power of these four groups nationwide will have doubled (risen about 103 percent)

Lockheed Martin Corp. reported yesterday that its profit tripled in the second quarter, despite fewer sales of fighter planes, rockets and other of its signature products. The Bethesda-based defense giant also said it expects income growth to continue, predicting an earnings increase of 30 percent to 35 percent for the year. "They've done what they said they would do - reduce debt, divest divisions - and it has worked," said Paul H. Nisbet, an aerospace analyst for JSA Research Inc. Lockheed Martin earned $144 million, or 33 cents a share, in the second quarter, compared with $42 million, or 11 cents a share, posted for the second quarter of 2000.

While the nation is struggling with a sagging economy, Carroll County is holding up "remarkably well," according to an economist who delivered an outlook on 2003 to business, government and community leaders yesterday in Westminster. Residential growth, which many in the county wish to stem, could insulate the area from the brunt of the downturn, said Anirban Basu, director of applied economics for Towson University's economic research arm, RESI Research & Consulting. Basu told an audience of about 200 that housing construction is strong throughout the state, particularly in Carroll.

A measure of U.S. mortgage applications rose last week as a drop in borrowing costs helped lure homebuyers. Refinancing declined for the sixth week in the past seven. The Mortgage Bankers Association said its gauge of loan demand increased 0.1 percent to 601.2. The purchase index rose 1.1 percent last week to 454.5 and remains close to the record 501.6 reached in January. The creation of 1.2 million jobs so far this year, income growth and 30-year fixed-mortgage rates about 1.2 percentage points from a record low have underpinned home sales.