Thursday PM January 27th, 2010
by: Ed Mayberry, January 28, 2010 10:01:09 pm
The number of new claims for unemployment benefits fell less than expected last week, fresh evidence the job market remains a weak spot in the economic recovery. The Labor Department says first-time jobless claims dropped by 8,000 to a seasonally adjusted 470,000. Analysts had expected a steeper drop to 450,000. The four week average, which smoothes out volatility, rose for the second straight week to 456,250. The average had fallen for 19 straight weeks before starting to rise. That decline that had given some analysts hope the economy would soon generate net job gains. Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.
Orders to U.S. factories for big-ticket manufactured goods posted a modest increase in December, but the gain was not enough to prevent orders from plunging by a record amount for the entire year. The Commerce Department said that orders for durable goods edged up a slight 0.3 percent last month, a much weaker showing than the two percent advance economists had been expecting. For all of 2009, durable goods orders plunged by 20.2 percent, the largest drop on records that go back to 1992. The decline highlighted the battering that U.S. manufacturers have suffered during the recession. Economists are hoping that improving outlooks in the U.S. and globally will make 2010 a better year for U.S. manufacturers.
The U.S. Chamber of Commerce says President Barack Obama's State of the Union address unfairly criticized banks and big business. Chamber President Thomas J. Donohue says Obama was right to focus on job creation in his Wednesday address, and tie it to helping smaller companies export more. But Donohue told the Associated Press at the World Economic Forum that Obama's criticism of banks, the energy industry and health care providers was "ill-founded and a mistake." He says employers would struggle to create jobs amid "unbelievable uncertainty" over the future costs of government, citing possible regulations linked to climate, health care, union legislation and higher taxes.
The Democratic-controlled Senate has muscled through a plan to allow the government to go a whopping $1.9 trillion deeper in debt. The party-line 60-40 vote was successful only because Republican Senator-elect Scott Brown has yet to be seated. Sixty votes were required to approve the increase. The measure would lift the debt ceiling to $14.3 trillion. That's about $45,000 for every American. Democrats had to scramble to approve the plan, which means they won't have to vote on another increase until after the midterm elections this fall. To win the votes of moderate Democrats, President Barack Obama promised to appoint a special task force to come up with a plan to reduce the deficit. The House must still vote on the measure before it's sent to Obama for his signature.
The Senate has approved tough new budget rules to make it harder to run up the deficit with new tax cuts or federal benefit programs. The Democratic-backed plan would make it more difficult to permanently extend some tax cuts that expire at the end of this year and renew health care subsidies for laid-off workers. The idea passed by a 60-40 party-line vote. It attempts to curb the spiraling budget deficit by requiring spending increases or tax cuts to be ``paid for'' with cuts to other programs or tax increases. If the rules are broken, there would be automatic cuts to programs like Medicare, farm subsidies and veterans' pensions. The rules must still be passed by the House as part of legislation to allow the government to increase its limit on issuing new debt.
Just days after President Barack Obama endorsed a partial freeze on domestic spending, his Democratic allies in the Senate have rejected a plan attempting to do pretty much the same thing. Old-school Democrats were the driving force in killing the bipartisan legislation, sponsored by Alabama Republican Jeff Sessions and Missouri Democrat Claire McCaskill. Their plan was slightly modified version of Obama's that would have permitted domestic agencies an increase of just about one percent, with slightly higher boosts for the Pentagon. A 56-strong majority of Senators supported the plan but it failed because 60 votes were required. The vote came the morning after Obama threatened to veto spending bills that would exceed a domestic spending freeze.
The company that makes the gas pedal systems implicated in Toyota's big recall of some popular brands says it is working with the automaker on a fix. CTS officials say they have ramped up production at three factories to produce new pedals. They pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when driver presses on the gas or in rare cases, get stuck. CTS says the new pedals will be meant to fix cars already owned by Toyota customers and for new cars Toyota is manufacturing. Earlier this week, Toyota halted sales of eight models due to problems with the gas pedal system. That followed a recall last week of 2.3 million trucks and cars, including Camrys and Corollas.
More than half of the operators of power plants and other "critical infrastructure" say in a new study that their computer networks have been infiltrated by sophisticated adversaries. In many cases, foreign governments are suspected. The alarming findings come in a survey that offers a rare public look at the damage computer criminals can do to power grids, water and sewage systems and oil and gas companies. The report, based on interviews with 600 executives and technology managers in 14 countries, was prepared by McAfee, which makes security software, and the Center for Strategic and International Studies in Washington. The respondents aren't named and specifics aren't given about what happened in the attacks.
An insurance industry group says 2008's Hurricane Ike was the costliest weather catastrophe in Texas history when it comes to coverage. The Insurance Council of Texas said the storm's insured losses totaled nearly $12 billion. Ike made landfall in the Galveston area on September 13th, 2008, with a devastating 16-foot storm surge and winds at 110 mph. The council says Ike total windstorm claims in Texas totaled $9.8 billion. The National Flood Insurance Program said Texans filed nearly 44,000 flood claims from Ike costing almost $2.2 billion. State leaders also have said Ike was the costliest natural disaster in Texas history, with overall damage topping $29 billion and more than three dozen lives lost.
Prices at the gasoline pump are down for the second straight week in Texas. AAA Texas reports the average retail gasoline cost slipped four cents, to settle at $2.56 a gallon. Gas prices nationally also declined, down a nickel, at $2.69 a gallon. Fort Worth had the least expensive gasoline in Texas, at $2.52. El Paso had the most expensive gasoline, at $2.62 a gallon. AAA Texas says demand continues to be "very soft" for gasoline in the United States.
Rates on 30-year mortgages have remained almost flat this week as the Federal Reserve said it would keep rates near record lows to help the economy recover. Freddie Mac said the average rate on a 30-year fixed mortgage was 4.98 percent this week, down slightly from 4.99 percent last week. Last year at this time, the average rate for a 30-year fixed mortgage was 5.10 percent. Rates are still above the record low of 4.71 percent set in early December. They've been held around five percent by a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable.
A federal appeals court has sided with Texas in a dispute over buying wine. The Dallas Morning News reported that the 5th U.S. Circuit Court of Appeals ruling allows Texas to continue regulating alcohol sales under its current system. The California-based Specialty Wine Retailers Association had challenged the Texas law. Spokesman Tom Wark says the recent ruling limits the ability of Texas consumers to access the wines they want, but which they cannot find in what he calls "the state's wholesaler-controlled marketplace." Wholesalers attorney Dee Kelly, representing Glazers Wholesale Drug Company and Republic Beverage Company, says the appeals court ruling is good for Texas and consumers. Consumers can buy wine directly from wineries, but retailers must obtain a permit from the Texas Alcoholic Beverage Commission.
A listing of nearly 44,000 people with unclaimed money or other property will be published February 7th in newspapers across North Texas. Comptroller Susan Combs says the traditional statewide list of unclaimed property owners, usually published in October, has been replaced with six regional lists. Combs says the five regional unclaimed property lists published so far have produced 20 percent more claims than last year's statewide list. She says the state so far has returned $21.2 million to owners. The list will have names of people with at least $250 in unclaimed property reported to the state within the last year. Examples of unclaimed property include cashier checks, utility deposits and other refunds, mineral interest or royalty payments, dormant bank accounts and the contents of abandoned safe deposit boxes.