Friday PM March 5th, 2010
by: Ed Mayberry, March 5, 2010 10:03:00 pm
The unemployment rate held at 9.7 percent in February as employers shed fewer jobs than expected, evidence that the job market may be slowly healing. The Labor Department says employers cut 36,000 jobs, below analysts' expectations of 50,000. Analysts expected the jobless rate to rise to 9.8 percent. The department says the severe snowstorms that hammered the East Coast last month may have affected job losses, but other data in the report signaled the storms didn't have as much impact as feared. Economists estimated before the report that the storms could inflate job losses by 100,000 or more. The department revised its estimate of job losses for January from 20,000 to 26,000, but said job cuts were fewer in December than originally estimated--109,000 rather than 150,000. Hiring for the 2010 census accounted for 15,000 jobs, the department said. The government anticipates hiring one million temporary census workers this year.
President Barack Obama says the new jobs report "is actually better than expected." Even so, the president said the number of unemployed Americans is "more than we should tolerate" and pushed Congress to pass a jobs bill for immediate relief. Obama was touring a Washington-area energy company and said too many families are still struggling. He urged lawmakers to expand unemployment benefits and temporary health insurance through the end of the year.
Houston-area employers expect to hire at an active pace in the second quarter, according to the Manpower Employment Outlook Survey. Twenty percent of companies interviewed plan to hire more employees between April and June, with only seven percent expecting to reduce their payrolls. That compares to 17 percent planning to hire nationally. But another 72 percent expect to maintain their current staffing levels. That yields a net employment outlook of 13 percent.
Consumer borrowing broke a record stretch of declines with a small increase in January as a boost in auto loans offset continued weakness in credit card borrowing. The small gain, the first in nearly a year, could be a signal that Americans are regaining confidence in the economy. The Federal Reserve reports that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for borrowing to decline by $4.5 billion. It was the first gain after a record 11 straight declines and it was the largest increase since July 2008.
The House has passed legislation giving companies that hire the jobless a temporary payroll tax break. The measure passed 217-201 on a mostly party-line vote. The bill also extends federal highway programs through the end of the year. Some Democrats complaint that the approximately $35 billion jobs bill is too small. Others say the tax cut for new hires won't generate many new jobs. However, the pressure is on to address jobs and deliver a badly needed win for President Barack Obama and a Democratic party struggling in opinion polls and facing major losses in the upcoming midterm elections. Further jobs measures are promised. The Senate responded last week with the far smaller measure that the House is reluctantly accepting. That means the Senate would have to act again before Obama could sign the bill into law.
Texas gasoline prices rose this week for a second week in a row. The weekly AAA Texas survey shows regular unleaded gasoline averaging $2.57 per gallon across the state, four cents higher than last week. Nationally, the average price rose three 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.
While the snow from last month's severe storms has melted in most places, it just now becoming apparent on the airlines' financial ledgers. US Airways and Continental Airlines say the storms cost them a combined $55 million in lost revenue. Southwest Airlines says that winter storms along the East Coast last month cost it $15 million in lost passenger revenue. Other airlines, including the U.S.'s two biggest, Delta and American, say they don't have figures yet on the storms' impact or won't disclose them. Flightstats.com says 7,400 flights were canceled during the storms at the seven largest airports affected by the weather, including Washington to New York. Analyst Helane Becker estimates that the lost revenue will total between $80 million and $100 million for the industry. Airline industry consultant Robert Mann says some of the revenue will be recovered as leisure travelers reschedule trips and some canceled business meetings are held later.
Continental Airlines has been rated the most admired U.S. airline on Fortune magazine's annual airline industry list of World's Most Admired Companies. This is the ninth consecutive year that Continental has been the highest-ranking U.S. airline on the list. The rankings are determined in a survey of corporate and airline executives, boards of directors and industry analysts.
A new Congressional report says the United States' long-term fiscal woes are even worse than predicted by President Barack Obama's grim budget submission last month. The nonpartisan Congressional budget office predicts that Obama's budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That's $1.2 trillion more than predicted by the administration. The agency says its future-year predictions of tax revenues are more pessimistic than the administration's. For the ongoing budget year, CBO predicts a record $1.5 trillion deficit. That's actually a little better than predicted by the White House. The deficit picture has turned alarmingly worse since the recession that started at the end of 2007.
Aiming to stay a step ahead of counterfeiters, the government is planning a new design for the $100 bill that will be unveiled next month. The Treasury Department said the wraps will come off the facelift for Ben Franklin at an April 21st ceremony in the ornate Cash Room at the department, the site of Ulysses Grant's first inaugural ball in 1869. Treasury Secretary Timothy Geithner and Federal reserve Chairman Ben Bernanke will do the honors. The government says its decisions on redesigning currency are guided by assessments of counterfeiting threats, from digital technology or old-fashioned printing presses. The C-note--the highest value of all U.S. bills--circulates widely around the globe.
A new study says despite the fact that banks and credit unions took in more than $38 billion in overdraft and non-sufficient funds fees last year, a new federal rule will help reduce that amount in the future. Consulting firm Bretton Woods, based in St. Simons Island, Georgia, says the rule also will reduce short-term consumer credit in the form of overdraft protection by $6.3 billion. The study found that the average fee reached an all-time high of $29.58 in 2009 but had been rising consistently. Under the new rule, called Regulation E, banks must notify customers when an ATM or debit card transaction will result in an overdraft fee. Customers who don't have overdraft protection--automatic loans in the event of overdrafts--would not be able to complete those transactions. The rule takes effect July 1st.
Volunteer attorneys will provide advice on consumer issues at a free legal clinic tomorrow morning through noon at the Spring Branch Family Development Center on Pitner. They're answering questions on consumer topics such as mortgages, foreclosure, bankruptcy and credit problems. Those who meet low-income eligibility guidelines can be assigned a pro bono attorney through the Houston Bar Association's Houston Volunteer Lawyers Program.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 23 this week to 1,396. Houston-based Baker Hughes said that 926 rigs were exploring for natural gas and 456 for oil. Fourteen were listed as miscellaneous. A year ago this week, the rig count stood at 1,170. Texas gained 23 rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.