Monday PM October 26th, 2009
by: Ed Mayberry, October 26, 2009 10:10:40 pm
A survey may ease some concerns about unemployment and its effect on consumer spending. Forecasters say more employers appear willing to hire in the coming months. The latest quarterly survey from the National Association for Business Economics indicates that unemployment should moderate. It also signals an improved hiring outlook over the next six months, which may help alleviate worries that the nation's unemployment rate will continue to jump and constrict consumer spending, the main driver of the U.S. economy. NABE members said the percentage of firms adding jobs doubled to 12 per cent in October from an all-time low of 6 per cent in July. Job losses appear to be slowly abating with the percentage of firms cutting payrolls falling to 31 per cent from 36 per cent, the survey said. Twenty-four per cent of those surveyed said they expect employment to rise over the next six months, compared with 18 per cent in July. While 56 per cent expect no change in employment, only four per cent of respondents expect more layoffs, down sharply from 11 per cent in July, according to the survey.
A Intuit Payroll survey finds that 44 per cent of small businesses plan to hire in the next year. The poll of more than 1,000 small business owners shows that 60 per cent expect their business to grow over the next 12 months. Health insurance costs continue being an issue, with 25 per cent saying they offer retirement plans and 42 per cent offering health insurance to their employees, although 86 per cent consider healthcare the most important benefit to attract and retain good employees. Some 60 per cent report that a decrease in sales as the biggest impact of the economy on their business. Slower customer payments are cited by half those surveyed. Seventy-nine per cent report having hired a family member or friend, with just 22 per cent saying it was a bad decision.
Direct Energy is closing a call center in Richardson, laying off 85 staffers by the end of the year, according to a company filing with the Texas Workforce Commission. Positions affected include customer service representatives, operations managers and other administrative support jobs. Work is being transferred to other facilities.
Extending jobless benefits to those who are still out of work will be one focus of Senate Democrats this week. The bill would extend expiring benefits for 14 weeks in all states and an extra six weeks in states where unemployment is above 8½ per cent. Republicans have blocked unanimous consent and Democrats now say they're open to GOP amendments.
Top Senate Democrats are proposing an extension of a popular tax credit for first-time homebuyers. The $8,000 tax credit expires at the end of November, but Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus's plan would extend it through the end of March. It would then be phased out in the following months, with its value dropping by $2,000 each quarter through the end of 2010. There's also a more generous, bipartisan plan being floated on Capitol Hill that would extend the $8,000 credit through June 30th, 2010. It would also boost the income cap for eligibility and open the credit to all buyers, rather than first-timers. Supporters say the tax credit has helped revive the housing market and warn if it ends, home sales could drop. The plan could face a vote this week.
The decline in U.S. newspaper circulation is accelerating as the industry continues to struggle with reader defections to the Internet and tumbling ad revenue. New figures from the Audit Bureau of Circulations show that average daily circulation dropped 10.6 per cent in the April-September period from the same six-month span in 2008. That's greater than the 7.1 per cent decline in the October-March period. Sunday circulation fell 7½ per cent. As expected, the Wall Street Journal has surpassed USA Today as the top-selling newspaper in the United States. Newspaper sales have been declining since the early 1990s, but the drop has accelerated in recent years. Circulation revenue has largely held up, though, because of price increases.
The newest list of the Top 100 Global Strategic Infrastructure Projects has been released by CG/LA Infrastructure. Total estimated value of the projects is pegged at nearly $550 billion. North America makes up about $89.2 billion in projects. High-speed rail is the infrastructure project with the most funding at $138.2 billion, worldwide. Ports and logistics and energy generation have been important over the past five years. This year's projects focus on jobs, mobility, people and innovation, with an increase in water and wastewater projects, the emergence of a new infrastructure/renewable generation sector, and high-speed rail and urban mass transit projects.
Southwest Airlines agrees to settle a shareholder lawsuit that grew out of safety violations at the carrier and will pay the investors' lawyers $3.5 million. Southwest disclosed the proposed settlement in a regulatory filing. A hearing on the deal is scheduled for December 7th in state district court in Dallas. The carrier, based in Dallas, agreed to adopt several reforms related to its safety and maintenance programs, including compliance with federal regulations. It also agreed to pay $3.5 million for the plaintiff's legal fees and expenses, if the court approves. In exchange, the plaintiffs agreed to drop claims against Southwest and several directors and executives, including CEO Gary Kelly and former CEO Herb Kelleher.
A legislator has asked Texas Attorney General Greg Abbott to review a refund change in the state's original prepaid tuition plan. Participants are facing a deadline to get back their initial investment in addition to earnings if they quit the plan. Those who drop the plan after November 30th will no longer get earnings, though they will get back the money they put in, minus expense fees. Those who don't pull out will still get the full benefit of the tuition and fees they purchased. The Austin American-Statesman reports that Representative Jim McReynolds, a Lufkin Democrat, asked Abbott on October 14th to weigh the legality of the refund change. More than 40 legislators, mostly Democrats, have questioned the refund-policy change.
Senate Banking Committee Chairman Chris Dodd, who is fighting for his political survival, has proposed an immediate freeze on interest rates on the estimated 700 million credit cards in circulation. The proposal is unlikely to go anywhere in the Senate, where business-minded Democrats would join Republicans in casting the measure as draconian and unnecessary. Banks say that capping interest rates would cut their profits and force them to lend less money, which would reduce spending and worsen the economy. Dodd is running for re-election, and some voters and other have questioned his close ties to big banks.
The head of the United Nations World Food Program blames climate change, escalating fuel costs and falling incomes for the addition of 200 million people to the ranks of the hungry. The U.N. agency says most of the developing world is paying more for food despite drops in commodity market prices during the global economic slowdown. Executive Director Josette Sheeran says the number of "urgently hungry" has now reached its highest ever--1.02 billion. She says one of every six people on the planet "will wake up not sure that they can even fill a cup of food." She says while prices have tumbled on global commodities markets due to the financial crisis, the prices of most food staples in the developing world have soared. Sheeran has signed a $130 million, four-year aid agreement with the Australian government.
A subsidiary of the Chickasaw nation of Oklahoma has again submitted the apparent high bid to buy the assets of Lone Star Park racetrack near Dallas. Chickasaw subsidiary global gaming LSP submitted a bid of $47.8 million for the pari-mutuel horse racing track in Grand Prairie, Texas. Global gaming had thought it would be awarded the track earlier this month after bidding $27 million. But a bankruptcy judge in Delaware ordered a new auction after ruling that an affiliate of Penn National Gaming was wrongfully excluded from the bidding process. Global gaming has filed an appeal of the ruling to reopen the bidding but company officials indicated the appeal may be dropped if the sales agreement is approved. The bankruptcy judge still must agree to the sale. A decision could come sometime this week.
The Internet is set to undergo one of the biggest changes in its 40-year history with the expected approval of domain names that can be written in languages other than English. The Internet Corporation for Assigned Names and Numbers, or ICANN--the non-profit group that oversees domain names--is holding a meeting this week in Seoul, South Korea. Domain names are the monikers behind every Web site, e-mail address and Twitter post, such as ".com" and other suffixes. Allowing entire Internet addresses in scripts that are not based on Latin letters could potentially open up the Web to more people around the world. Addresses could be in characters as diverse as Arabic, Korean, Japanese, Greek, Hindi and Cyrillic. An ICANN official says he expects the board to grant approval on Friday, the conference's final day.