Friday PM August 21st, 2010
by: Ed Mayberry, August 20, 2010 9:08:00 pm
The July unemployment rate in urban areas of Texas held steady at 8.2 percent. The Texas Workforce Commission reports the seasonally adjusted unemployment rate for last month matched the June rate. TWC says Texas continues to trend below the national jobless rate, which was 9.5 percent during July. Commission Chairman Tom Pauken says private sector employers in Texas continued adding jobs in July, in a trend since the first of the year. He says significant government job losses offset much of the gains in the private sector in July.
Unemployment fell in only 18 states last month, a much smaller number than in recent months and a sign that jobs remain scarce nationwide. The Labor Department says the jobless rate rose in 14 states and stayed the same in 18. That's a slowdown from the past three months when unemployment fell in more than 30 states. Nationwide, the unemployment rate remained stuck at 9.5 percent in July. Still, 37 states saw job gains in July, an improvement from June and about the same as May. There were some bright spots in the northeast. New York and Massachusetts reported strong job gains. Massachusetts added 19,200 private-sector jobs, the largest monthly gain in more than 20 years.
A new report says that a record number of workers made hardship withdrawals from their retirement accounts in the second quarter of this year. The report issued by Fidelity Investments says the number of workers borrowing from their accounts reached a ten-year high. Beth McHugh, Fidelity's Vice President of Marketing Insight, says the trends reflect the financial stress many workers find themselves in as the economy struggles to find sure footing. McHugh says with unemployment and many companies cutting back on overtime and overall hours, take-home pay for many workers has been cut. To be eligible for a 401(k) hardship withdrawal, individuals must demonstrate an immediate and heavy financial need. Most 401 (k) plans allow the money to be used for emergencies such as certain medical expenses; costs relating to the purchase of a primary home; tuition and education expenses and payments to prevent eviction or foreclosure on a primary home.
A survey of rural bankers in ten midwest and plains states shows a further dip in the economy after signs of a rebound earlier this year. The overall index for the Rural Mainstreet Economic Report dropped to 46.0 in August, from 49.3 in July and 52.6 in June. The index ranges between zero and 100. A score below 50 suggests the economy will contract in the next few months; above 50 indicates the economy will grow. The index had been above 50 from April to June after a 26-month streak below that mark. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed for the report. The monthly confidence index, which tracks bankers' economic outlook six months out, dropped for a third straight month. Bankers were asked in August whether they expected the economy to sink back into recession in 2011. About 43 percent of bankers said they thought a further recession was likely or very likely, while 26 percent said that was unlikely or very unlikely.
A confidential document obtained by the Associated Press says the company that owned the oil rig that exploded in the Gulf of Mexico is accusing BP of withholding critical evidence needed to investigate the cause of the worst offshore oil spill in U.S. history. BP calls the claims a publicity stunt. The new complaint by Transocean follows similar complaints by U.S. lawmakers about difficulties obtaining necessary information from BP in their investigations. In a sternly worded letter to BP's attorneys, Transocean said the oil giant has in its sole possession information key to identifying the cause “of the tragic loss of eleven lives and the pollution in the Gulf of Mexico.” The letter says BP's refusal to turn over the documents has hampered Transocean's investigation and hindered what it has been able to tell families of the dead and state and federal investigators. BP and Transocean appear likely to face off in court over how much each should pay out for the tragedy. Transocean owned the Deepwater Horizon, the rig that exploded and sank, killing 11 workers and unleashing millions of gallons of oil. BP was the operator and majority owner of the well.
Details released about how claims will be paid from BP's $20 billion fund show that how close geographically a person or business is to the Gulf oil spill will play a key role. The claims process is shifting from BP to the Gulf coast claims facility effective Monday. It will be run by Washington attorney Kenneth Feinberg. The new rules govern emergency claims that can be made between Monday and November 23rd. Claimants will not give up their right to sue BP and other spill-related companies in return for that money. But final settlements coming later will include a waiver of the right to sue. The documents say claimants must show how the spill caused damage or economic loss, including their geographic proximity.
Details about how claims will be paid from BP's $20 billion fund show that how close geographically a person or business is to the Gulf oil spill will play a key role. The claims process is shifting from BP to the Gulf coast claims facility effective Monday. It will be run by Washington attorney Kenneth Feinberg. The new rules govern emergency claims that can be made between Monday and November 23rd. Claimants will not give up their right to sue BP and other spill-related companies in return for that money. But final settlements coming later will include a waiver of the right to sue. The documents say claimants must show how the spill caused damage or economic loss, including their geographic proximity.
Nearly half of homeowners seeking help from the Obama administration's flagship effort to help those at risk of foreclosure have fallen out of the program. A new report from the Treasury Department says approximately 630,000 people who had tried to get their mortgages modified through the program have been cut loose through July. That's about 48 percent of the 1.3 million homeowners who had enrolled since March 2009. That's up from more than 40 percent through June. The report suggests foreclosures could rise in the second half of the year and weaken the ailing housing market.
More federal aid to shore up battered state budgets might be tough to swallow for ambitious Republican governors forced to choose between taking the money or making a stand. The aid package requires governors to sign off before their states can receive a share of the $16 billion in federal medical assistance money. The situation is most taxing on GOP governors considering 2012 presidential campaigns. That includes Indiana's Mitch Daniels, Minnesota's Tim Pawlenty and Mississippi's Haley Barbour. They have railed against Washington spending and have to choose between muddying their message or depriving their states of tens of millions of dollars. Pawlenty and Daniels haven't decided what they'll do. A spokesman for Barbour says he's planning to apply for the money.
Mexico may rotate punitive tariffs on U.S. goods from one set of products to another until the United States resolves a dispute over access for Mexican trucks. While the number of total products may not change, individual goods could be added or removed from the list of 99 items subject to tariffs announced this week. Economy Secretary Bruno Ferrari said Mexico “would not hesitate” to take such steps. Current tariffs range from five to 15 percent on products like cheese, fruits, juices, wine, toilet paper and some pork products. The tariffs are a response to the cancellation of a pilot program allowing some Mexican trucks to transport goods into the U.S. under the North American Free Trade Agreement.
Three weeks of gasoline price increases ended this week with a drop in retail gasoline prices across Texas and the nation. The weekly AAA Texas gasoline price survey shows the retail price of a gallon of unleaded regular fell this week by four cents to $2.59 in Texas and by five cents to $2.73 nationwide. The cheapest gasoline is found in San Antonio and Houston at $2.54 per gallon, down four cents this week in San Antonio and a nickel in Houston. The most expensive gasoline is still in El Paso, where it averaged $2.75 per gallon despite a three-cent decrease this week. The auto club statement cites a decrease in crude oil prices to $75 per barrel, their lowest point in a month, and less favorable news about the economic recovery that showed an expanded trade deficit and a slump in housing demand.
Hyperion Resources says it still plans to have a $10 billion oil refinery operating in southeast South Dakota by 2015. The statement came in response to South Dakota governor candidates Dennis Daugaard and Scott Heidepriem both saying this week that they're unsure whether the plant will be built, in part because financing the project might be difficult. Hyperion spokesman Eric Williams says the Dallas-based company isn't commenting on specifics of the financing. But he says in the past six weeks there has been “a real uptick” in inquiries from potential investors. The Hyperion refinery and power plant on 3,800 acres of farmland near Elk Point would process 400,000 barrels of Canadian tar sands crude oil a day. It would be the first new U.S. oil refinery built since 1976.
Some sugar beet growers are uneasy as they wait for federal officials to decide the next step for a crop that provides half the nation's sugar supply. A federal judge in California issued a ruling earlier this month that prevents future planting of sugar beets with genetically modified seeds until the U.S. Department of Agriculture studies the effect the crop could have on other food. Industry officials say farmers need to be patient and let the process play out. Duane Grant, the chairman of Idaho's Snake River Sugar Company, fears there aren't enough conventional seeds to plant next year. But North Dakota sugar beet farmer Robert Green is optimistic a solution will be found.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 11 this week to 1,651. Houston-based drilling systems provider Baker Hughes says that 985 rigs were exploring for natural gas and 655 for oil. Eleven were listed as miscellaneous. A year ago this week, the rig count stood at 985. Texas lost four rigs. The rig tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.