Thursday PM March 4th, 2010
by: Ed Mayberry, March 4, 2010 9:03:24 pm
An economist says it might be another couple of weeks before there's a clear picture of jobless claims. The Labor Department says new claims for jobless benefits fell last week to 469,000, better than Wall Street estimates. It's considered a sign that layoffs may be easing as the economy slowly recovers. Last week's drop only partly reverses a sharp rise in claims in the previous two weeks. Those increases are blamed on the weather. Several states processed a backlog of claims that had built up from previous weeks when government offices closed due to a series of winter storms. Initial claims are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.
The Texas Workforce Commission says the state's unemployment rate held steady at 8.2 percent in January, matching the revised figure from December. The commission says the Texas labor force reached its highest total at 12.1 million workers. The agency said recent bad weather on the East Coast has delayed the release of job figures in each industry. The jobless rate in Texas remained well below the national figure of 9.7 percent.
Almost 270 positions will be eliminated at the Houston Independent School District in a cost-cutting restructuring that could save at least $8.2 million. The restructuring eliminates HISD's five regional offices. Ten administrators, 31 aides, 45 curriculum specialists and 18 regional clerical workers are being cut.
The House has passed a bill awarding tax breaks to companies that hire unemployed workers. It's the first of several job-creation bills promised by Democrats, but many lawmakers questioned whether it'll actually spur much hiring. The bill is far smaller than the jobs measure that passed the house in December. It would exempt businesses hiring the unemployed from having to pay the 6.2 percent social security payroll tax. It also extends federal highway programs through the end of the year. Critics of the measure said few businesses would base hiring decisions on the new tax cut. The Senate passed an almost identical bill last week but must act on the measure again because of slight changes in the legislation before it can be sent to President Barack Obama to sign it into law.
Productivity in the final three months of last year surged at a faster pace than previously thought as labor costs fell more rapidly. The Labor Department reports that productivity jumped at an annual rate of 6.9 percent in the fourth quarter, even better than an initial estimate of a 6.2 percent growth rate. Unit labor costs fell at a rate of 5.9 percent, a bigger drop than the 4.4 percent decline initially estimated. The combination of rising productivity and falling labor costs bolsters company profits and helps keep inflation at bay. But it also puts American households under stress, leaving them with less income to increase consumer spending, the key ingredient to economic growth.
Upbeat retail sales figures are helping to ease fears among some economists that weak consumer spending might hamper the economic recovery. The International Council of Shopping Centers says February's gain of 3.7 percent was the strongest showing since November 2007, a month before the recession started. It's the third consecutive month with an increase. Retailers from Nordstrom to Target reported numbers that beat Wall Street estimates. The number of pending home sales fell sharply in January. The National Association of Realtors says its index fell 7.6 percent from December to a January reading of 90.4. It's the lowest reading since last April. Economists expected an increase to 97.6.
There's another sign that manufacturing is helping to support the economic recovery. A surge in demand for commercial aircraft is credited for an encouraging report on orders to U.S. factories. The Commerce Department says orders to U.S. factories posted the biggest increase in four months in January. The 1.7 percent gain was slightly below what economists predicted. It was the ninth gain in the past ten months. The Labor Department says productivity rose by 6.9 percent in the fourth quarter, higher than analysts' expected. Higher productivity raises living standards in the long run, but it also enables companies to get by with fewer workers.
Capital One Bank's 4th quarterly "Market Pulse" economic outlook for Texas businesses and consumers indicate that 46 percent of Texas consumers have seen their personal savings shrink since earlier in 2009. Forty-seven percent of large businesses surveyed say economic conditions for the businesses are improving. More large businesses are reporting plans to hire new employees in the near future. About 80 percent of Texas businesses report they have access to the credit or financing they need. But many consumers are expressing concern about the job market and their own personal financial situation.
The number of buyers who agreed to purchase previously occupied homes fell sharply in January, a sign that demand for housing is sinking this winter, especially after stormy weather hit much of the country. The National Association of Realtors says its seasonally adjusted index of sales agreements fell 7.6 percent from December to a January reading of 90.4. It was the lowest reading since last April. Economists surveyed by Thomson Reuters had expected the index would rise to 97.6. The index is considered a barometer for future sales because typically there is a one- to two- month lag between a signed sales contract and a completed deal. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.
Texas gasoline prices rose this week for a second week in a row. The weekly AAA Texas survey released shows regular unleaded gasoline averaging $2.57 per gallon across the state, four cents higher than last week. Nationally, the average price rose 3 cents to $2.71 per gallon. The auto club statement cites a slightly stronger economy and a soft dollar for strengthening crude oil prices around $80 a barrel, which is only now becoming felt at Texas gas pumps. The cheapest gasoline in Texas is found in Houston and San Antonio, where it's averaging $2.52 per gallon. That's up three cents in Houston from last week and a penny in San Antonio. The most expensive gas remains in El Paso, where the average price rose six cents to $2.68 per gallon.
A militant group says it attacked an oil facility in the Niger delta run by the Italian firm Agip. A statement sent to reporters from the joint revolutionary council claims militants attacked the Agip facility early Wednesday morning. The militants said the facility linked several tank farms to an oil field operated by the firm. Officials with Rome-based Agip could not be immediately reached for comment. Militants in the Niger delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006. They demand that the federal government send more oil-industry funds to Nigeria's southern region, which remains poor despite five decades of oil production.
Members of Congress may soon be back in the business of raising soft money, the unlimited corporate and union donations that a 2002 law bans them from collecting for their campaigns. The National Democratic Redistricting Trust is asking the Federal Election Commission to let lawmakers raise soft money for the legal fights likely to develop as Congressional district boundaries are redrawn after this year's census. How a district is drawn--and which voters are included in it--can have a big impact on whether a Democrat or Republican gets elected to represent it. The Democratic group says lawmakers should be allowed to raise unlimited donations because they wouldn't be used for elections. Members of Congress were banned from raising soft money for elections due to corruption concerns.
The U.S. Department of Labor has launched an online suite of resources for ETA grant applicants. A sample solicitation gives advice on how to respond to particular sections: hints on areas of solicitations that can be particularly challenging; suggestions for avoiding common pitfalls; and links to helpful Web sites and additional outside resources. The grant application tools are now available online.
The Treasury Department says it has received a record $1.54 billion from the sale of warrants it received from Bank of America as part of the support it provided during the financial crisis. The Treasury says it sold 272.17 million warrants in an auction held because Bank of America and the government could not agree upon an acceptable price. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. The $1.54 billion total is the largest amount raised from a single institution from the sale of warrants as part of the government's $700 billion financial rescue effort.
Contract talks between American Airlines and its flight attendants have broken off. Leaders of the Association of Professional Flight Attendants last night declared negotiations are at a stalemate. Fort Worth-based American says the carrier is looking forward to more bargaining. The union says it will ask federal officials to start a 30-day cooling-off period, after which flight attendants could strike. The National Mediation Board could order both sides to resume negotiations. The union, which represents about 18,000 flight attendants, wants raises to offset pay and benefit cuts that workers accepted in 2003, when American was close to bankruptcy. The company, which lost $3.6 billion in the last two years, says it spends more per employee on flight attendants than other big carriers and must cut labor costs.
With a simple click, U.S. travelers buying airline tickets via some travel agencies and Internet sites can now donate $2 or more to fight aids in developing countries. The United Nations and former President Bill Clinton launched the donation effort called MassiveGood to supply low-cost drugs to the developing world to fight aids, tuberculosis and malaria. It's optional for everyone involved. Major ticket distributors Amadeus, Travelport and Sabre Holdings and corporate buyers such as American Express Business Travel and Carlson Wagonlit Travel will offer the donation option for airline ticket buyers. The money goes to the Geneva-based Millennium Foundation and the UN-funded Unitaid, which have been seeking innovative ways to finance UN health goals.