Wednesday PM April 7th, 2010
by: Ed Mayberry, April 7, 2010 10:04:00 pm
Unemployment rates fell or remained unchanged in two-thirds of the 372 largest U.S. metro areas in February. The news adds to evidence that the job market is improving. The Labor Department's report offers a brighter picture compared with the previous two months, when the jobless rate rose in most areas. Unemployment fell in 189 metro areas in February. That compares with only three in January, though the report that month was distorted by an annual data revision. The rate fell in only 41 metro areas in December. Still, joblessness remains widespread. Twenty-nine areas posted jobless rates of 15 percent or higher, though that's down from 35 in January. The metro employment numbers aren't seasonally adjusted and can be volatile.
A key data service is reporting that retail sales rose in many sectors in March, helped by an earlier Easter and modest consumer spending rebound. The latest numbers from Mastercard Advisor's SpendingPulse show sales of furniture, luxury items, clothing and consumer electronics rose. The figures track transactions in all forms including cash. More hints about consumer spending are due Thursday when about 30 major retailers report on sales at stores open at least a year. A fourth straight month of solid increases is expected.
A new industry survey shows late payments for most types of consumer loans decreased in the final quarter of last year. Loans that were 30 days or more past due fell in proportion to overall loans in eight of 11 categories tracked by the American Bankers Association's quarterly Consumer Credit Delinquency Bulletin. But housing-related loans showed mixed results--a sign that the housing market still lags the spreading economic recovery.
Texans have a new incentive to buy energy-efficient appliances. The state has begun accepting rebate reservations for the Texas Trade Up Appliance Rebate program, to purchase select Energy Star appliances. Texas is using $20 million in federal stimulus funds. The program is restricted to replacement of existing appliances. The State Comptroller's Office says eligible purchases, starting April 16th, include refrigerators, freezers, room air conditioners, clothes washers, dishwashers, central air conditioners, air-source heat pumps and hot water heaters. Residents must buy appliances in-store from a Texas retailer. online purchases do not qualify. Purchases of central air conditioners, air-source heat pumps and hot water heaters can also be made from a Texas contractor. Texans can request to be on the rebate waiting list once reservations have closed.
Texas Comptroller Susan Combs says the state received $1.46 billion in sales tax revenue in March—down 7.8 percent compared to March 2009. Two months ago, there had been an eight-month stretch of double-digit declines, so that's two months of moderation in sales tax collections decline. Combs will send April sales tax allocations of $265.7 million to Texas cities on Friday—down 3.6 percent compared to last year. Combs says sales tax revenue is lower than last year in major sectors such as oil and gas, construction, manufacturing, and retail industries. She says to expect more declines in the coming months before a return to sales tax revenue growth later in 2010.
Texas has awarded the first grant from a fund created to provide emergency assistance to veterans across the state. The $1 million grant, announced by Governor Rick Perry during a visit to Houston, has been given to the Texas Veterans of Foreign Wars. The group will use the grant to provide veterans and their families emergency assistance with household, vehicle, childcare, medical and personal expenses. Awards can be for up to $1,000. The fund, supervised by the Texas Veterans Commission, was created by the legislature in 2007. Veterans can apply for the grant through on application on the Texas Veterans of Foreign Wars' Web site.
An agreement announced will allow a Texas oil company to expand drilling off the coast of California's scenic Santa Barbara County. The Environmental Defense Center says the revision involving several conservation groups addresses concerns that sidetracked the original 2008 plan, mainly by making the agreement public and by giving the state the right to enforce it. The plan would allow Houston-based Plains Exploration & Production to drill new shafts from an existing offshore platform into an undersea formation in state waters. PXP would shut down existing oil production from three offshore platforms in nine years and a fourth platform in 14 years. It also requires removal of two onshore facilities and hundreds of acres of onshore wells.
Traffic on the nation's airlines has been picking up, but carriers are still offering fare sales and other inducements to keep the fragile recovery in travel moving ahead. The latest example is Southwest Airlines. It says it will give members of its frequent-flier program free travel by taking four roundtrip flights. That's twice as fast as fliers would normally earn a trip. Southwest said customers who buy a higher-priced "business select'' ticket will earn a trip even faster. The offer covers travel through May 26th, meaning it expires before the beginning of the peak summer travel season.
YES Prep Public Schools have closed on a $22.1 million bond offering using a federal bond program authorized under the stimulus bill. The arrangement reduces interest costs for the charter school by tens of millions of dollars compared to traditional bonds. The financing will enable YES Prep to grow to 10,000 students in Houston within the decade. Under the terms of the offering structured by Capital One, YES Prep will pay less than one percent interest, which translates into interest savings of $28 million over the term of the bonds. It allows more than 99 percent of future dollars raised from supporters to go directly to education, rather than debt service.
Russia's jailed former oil tycoon Mikhail Khodorkovsky says none of the companies he is accused of stealing oil from ever reported the alleged theft. He spoke as part of his courtroom defense against new charges filed against him. Khodorkovsky, once Russia's richest man, is currently serving eight years in prison for tax evasion--charges widely seen as punishment for challenging then-President Vladimir Putin. Khodorkovsky testified in a Moscow court for a second-straight day against fresh embezzlement charges that could keep him in prison for another 22 years. Prosecutors say Khodorkovsky stole $25 billion worth of oil from three subsidiaries of his former company, Yukos, and laundered most of the proceeds. He denies that.
Former Federal Reserve Chairman Alan Greenspan is telling a panel investigating the roots of the financial crisis that his policy of keeping interest rates low did not encourage risky lending. Greenspan also is defending the Fed's failure to police most risky mortgage lending in remarks before the Financial Crisis Inquiry Commission. Greenspan opens three days of hearings by the commission, which was created by Congress. Critics say the Fed failed to regulate the consumer finance industry and its low interest-rate policy encouraged risky lending. Those loans became the toxic assets that sparked the crisis. The ten bipartisan commissioners later will grill former and current executives of Citigroup about that bank's role in financing and reselling mortgage investments.
A Federal Reserve official says the Fed should start boosting interest rates "soon," warning that delay could eventually unleash inflation. He does not specify when it should act. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, in a speech in New Mexico raises concerns about leaving rates at record lows for too long. He suggests the Fed soon start moving its key rate--now near zero--toward one percent. When rate increases are delayed, "the outcome too often is greater inflation, significant credit and market imbalances, and an eventual financial crisis," he says. Hoenig, a member of the Fed's interest-rate setting committee, opposed the committee's pledge at its past two meetings to hold rates at record lows for an "extended period."
Federal regulators have proposed new, stricter rules for asset-backed securities, the bundles of loans that helped spark the market's collapse in 2008 and nearly brought down the financial system. The Securities and Exchange Commission voted 5-0 to propose that the Wall Street firms that package and sell asset-backed securities be required to hold at least five percent of the loans--mortgages, credit cards, auto loans--on their own books. With some "skin in the game," the thinking goes, the firms would be more careful to ensure that borrowers are properly screened.
Houston is the top destination for people relocating with U-Hauls, according to the company, as reported by the Houston Press. Houston was in second place last year. More than a million transactions involving moves of 50 miles or more were examined. San Antonio placed fourth on the list and Austin is sixth.
Former boxer George Foreman was the featured speaker at today's 5th annual Veterans Entrepreneurship Seminar at the University of Houston. The event at UH's University Center also featured representatives of the UH Small Business Development Center and others, offering insight and advice to aspiring entrepreneurs.