Thursday PM September 3rd, 2009
by: Ed Mayberry, September 3, 2009 9:09:53 pm
New jobless claims fell slightly last week while the number of people receiving unemployment benefits rose, a sign the job market's recovery will be long and bumpy. The Labor Department says the number of laid-off workers applying for benefits dipped to 570,000 last week, a weaker performance than the drop to 560,000 that economists expected. The number of people receiving jobless benefits totaled 6.23 million for the week ending August 22nd, up 92,000 from the previous week, which had been the lowest level since early April. Economists surveyed by Thomson Reuters had expected that number to fall to 6.13 million.
Unemployment benefits are expected to run out by the end of the year for more than 1.3 million Americans unless Congress or individual states authorize another extension. The national employment law project says more than 402,000 Americans will exhaust their unemployment benefits by the end of this month. That figure will more than triple by the end of December. The government does not track how many jobless Americans have exhausted both their standard and extended benefits, but experts say the figure is nearly 100,000 and rising.
Federal agencies will hire more than 270,000 workers by the end of September 2012, according to the Partnership for Public Service, as reported by the Houston Business Journal. That's a 40 per cent increase in projected federal government hiring during fiscal 2010 to 2012, compared to the previous three years. Most federal hiring is expected in medical and public health; security and protection; compliance and enforcement; legal; and program management.
A new study suggests older Americans will make up virtually all of the growth in the U.S. work force in the coming years. That's because a nearly unprecedented number are expected to hold onto jobs as younger people decide to stay in school. The study by the Pew Research Center highlights a rapidly graying labor market due to longer life spans, an aging baby boomer population and a souring economy that has made it harder to retire. Pew's survey and analysis of government data found the share of Americans ages 55 and older who have or were seeking a job rose to 40 per cent this year. That's the highest level since 1961. In contrast, people 16 to 24 who were active in the labor market decreased to 57 per cent, down from 66 per cent in 2000. Older workers are expected to make up nearly one in four workers by 2016.
A study finds that the recession is taking more than just a financial toll. A report from the John J. Heldrich Center for Workforce Development at Rutgers University says the psychological toll for those who lost jobs in the economic downturn has been nearly as devastating. Researchers conducted a survey that found a majority of recently unemployed Americans feel "traumatized" as they cope with serious financial and psychological issues. Two-thirds of respondents reported being depressed. The report says just 40 per cent received unemployment insurance, and 83 per cent of those who got aid are concerned their benefits will run out before they find a job.
Fraud defendant R. Allen Stanford is back in a Conroe-area prison after early-morning surgery Wednesday for an aneurysm in his leg. Defense attorney Dick DeGuerin says Stanford had the surgery at the Conroe Regional Medical Center at about 7:30 a.m., and then was returned to the privately-run Joe Corley Detention Center. Stanford has been held without bail since July, charged with 21 felony conspiracy and fraud counts for an alleged $7 billion Ponzi scheme sold through affiliates of Houston-based Stanford Financial Group.
Abundant fuel supplies and crude oil prices below $70 per barrel are credited for a four-cent drop in the per gallon retail price of regular gasoline in Texas. The weekly AAA Texas gasoline price survey shows regular, unleaded self-serve gasoline retailing for an average of $2.45 per gallon in Texas. Nationally, the average price fell two cents to $2.60 per gallon. Houston has the least expensive gasoline in the survey with regular averaging $2.39 per gallon, a nickel less than last week. El Paso, as usual, has the most expensive gas at $2.54 per gallon, down four cents from last week.
A trade group's measure of U.S. service sector activity shows last month's decline was the slowest in 11 months. The Institute for Supply Management says its service index, which covers hospitals, retailers, financial services companies and more, came in at 48.4 in August, from 46.4 in July. Economists polled by Thomson Reuters expected a reading of 48; anything below 50 indicates the service sector is shrinking. The ISM says this survey of purchasing executives in 18 industries tracks more than 80 per cent of the country's economic activity. The metric covers indicators such as new orders, employment, business activity and inventories.
The times still aren't good for the nation's retailers, but the latest snapshot isn't as bleak as analysts were expecting. August marked the 12th straight month of declining sales for retailers, but some lower-priced chains actually saw sales rise compared with a year earlier. Discounters performed best as consumers remained focused on bargains. The chief economist for the International Council of Shopping Centers, Michael Niemira, says the situation is "still weak in the broad trend, but it is considerably stronger than it has been in some time." A monthly compilation of 32 retailers' sales by the ICSC and Goldman Sachs showed sales in established stores fell two per cent this August compared with August of last year. That was better than the 3.5 per cent to four per cent drop analysts forecast. The better-than-expected sales results eased some analysts' concerns that the holiday season will be as bad as last year.
Retailers reporting sales declines for August say shoppers continue to hold off on back-to-school purchases and continue to focus on necessities. As merchants report their sales figures, teen apparel stores reported weakness. Wet Seal and Hot Topic both said sales dropped. Labor Day falls a week later this year, so some back-to-school purchases are likely to come later. Warehouse club operator Costco Wholesale says sales at stores open at least a year dipped two per cent, but that was above analyst expectations. Food remains a best seller. August is expected to be the 12th consecutive month of such declines.
Parents who invested in their children's future through the Texas prepaid college tuition plan will not get extra money if they cancel the deal. The deficit-strapped former Texas Tomorrow Fund needs the money. The Dallas Morning News reported that the Texas guaranteed tuition plan has decided to cancel its policy that pays sometimes as much as 200 per cent in returns. The prepaid tuition plan has adopted a policy that will restrict future refunds to the actual amount paid by parents or others who purchased college slots, minus administrative fees. The updated policy takes effect November 1st. Currently, refunds include the initial amount paid and the difference between the original contract price and a current value based on average tuition rates for state colleges and universities.
The government says it has approved $500 million in reimbursements to auto dealers for car sales under the cash for clunkers program. A transportation official says more than 15 per cent of the submissions from dealers have been approved. The car rebate program ended on August 24th and dealers have complained that the government has been slow to reimburse them for the incentives of up to $4,500 per vehicle. The official said that all eligible and completed dealer submissions should be fully paid by September 30th. The car rebates led to 690,114 new sales at a taxpayer cost of $2.88 billion. The government is ramping up staff and 5,000 workers will be reviewing paperwork by the end of next week.
The Labor Department is taking another crack at rolling back a Bush administration regulation that made it easier for farmers to hire temporary foreign farm workers. The agency is proposing a new rule that would boost wages and increase safeguards for thousands of seasonal workers brought in each year to help farmers pick their crops. If the proposed rule is adopted, it would largely reverse a regulation finalized shortly before President George W. Bush left office. The Labor Department tried to suspend the Bush rule earlier this year, but farm groups successfully challenged the decision in federal court. Farm growers say the changes to the H-2A guest worker program will make it more cumbersome and expensive for them to hire foreign workers for tough field jobs that most Americans don't want.
Ohio-based ATM maker Diebold has sold its much-criticized U.S. voting-machine business to a competitor, Election Systems & Software of Omaha, Nebraska. Diebold, based in North Canton, announced the sale of its Allen, Texas-based subsidiary Premier Election Solutions. Diebold will get $5 million plus payments representing 70 per cent of collections of the unit's accounts receivable as of August 31st. Diebold expects to recognize a pretax loss on the deal in the range of $45 million to $55 million. Last year premier generated 2.8 per cent of Diebold's revenue. Diebold faced repeated criticism over the reliability and security of its touch-screen voting machines and began looking for a buyer for Premier more than two years ago.
Vice President Joe Biden says the $787 billion economic stimulus "is in fact working" despite public skepticism and continuing criticism. Biden gave an upbeat assessment of the massive package's results 200 days after it was signed. Speaking at the Brookings Institution, Biden said the stimulus is "changing the trajectory of our economy." Economists say the country is slowly breaking free of the most crippling recession in decades. Yet public angst is also deepening, And the effectiveness of the two-year, multifaceted stimulus pProgram remains a matter of sharp political debate.
Treasury Secretary Timothy Geithner says efforts by the U.S. and other nations to fight the economic crisis have been able to pull the global economy "back from the abyss." He's saying that countries must continue to provide sizable amounts of support until there are clearer signs of recovery to avoid a classic mistake countries have made in past recessions. Speaking at a briefing for reporters, Geithner said he will stress that point in meetings of financial ministers in London that start Friday. Those discussions will allow officials to assess the state of the global economy for growth and decide what steps are needed to prevent a recurrence of last year's crisis.
France, Germany and Britain are calling on the European Union to present a united front at the upcoming G-20 summit to press for stricter international regulation of the financial sector. In a joint letter to the Swedish president, France's Nicolas Sarkozy, Germany's Angela Merkel and Britain's Gordon Brown say such regulations would prove crucial to preventing another financial crisis. They say a "strong common message" from the EU's 27 member countries is a "decisive precondition for the success of the summit." The Group of 20 meeting of the world's largest economies will be held in Pittsburgh, Pennsylvania on September 24th and 25th. Sweden holds the rotating presidency of the EU.
Over the objections of environmentalists and fishermen, the Obama administration gave the nod to fish farming in federal waters of the Gulf of Mexico, a first step in opening the seas to the production of tilapia, red snapper, shrimp and other marine species. The National Ooceanic and Atmospheric Administration declined to oppose offshore aquaculture plans for the Gulf. At the same time, the agency said it would develop a national policy for "sustainable marine aquaculture" in the next few months. Environmentalists and fishermen are concerned that growing fish in large cages or pens in the open waters will lead to pollution and threaten wild marine stocks. Proponents say offshore aquaculture is a safe way to produce high-quality seafood for American consumers.
AT&T says the latest iPhone models will finally get the ability to send picture and video messages to other phones on September 25th. Apple's popular phone has lacked the ability to send messages using MMS, or multimedia messaging service, since the first model launched in 2007. The original model still won't be able to send MMS. Its users will have to keep sending pictures in e-mail. The new feature applies to the 3G model, launched last year, and the 3GS, launched this year. A software update this summer prepared the latest phones for MMS, but AT&T, the sole iPhone carrier in the U.S., held off on enabling the feature to make sure its network could handle the traffic.