Thursday PM October 14th, 2010
by: Ed Mayberry, October 14, 2010 10:10:00 pm
Applications for jobless benefits rose last week for the first time in three weeks, evidence that companies are reluctant to hire in a slow economy. The Labor Department says initial claims for unemployment aid rose by 13,000 to a seasonally adjusted 462,000. It was only the second rise in two months. Despite the ups and down, claims have been stuck near 450,000 all year. Few employers see much reason to create many jobs, and some are still laying off workers. In addition, cash-strapped state and local governments are cutting jobs, adding to the ranks of those out of work. The four-week average of claims, a less volatile measure, rose by 2,250 to 459,000.
Southwest Airlines has a tentative labor deal with its pilots' union that will allow it to use a new Boeing plane. The airline says that directors of the union unanimously approved a tentative deal covering use of the Boeing 737-800. As part of the deal, the union's labor contract with Southwest will be extended one year through August 2012. Southwest isn't disclosing details of the agreement. It goes to a vote of all the company's pilots. Southwest uses only Boeing 737s, but the 737-800 is bigger than the models currently used by the Dallas-based airline.
Experts say thousands of jobs could be created as Galveston rebuilds public housing destroyed by Hurricane Ike. Galveston Mayor Joe Jaworski, during a town hall meeting, discussed plans for nearly 570 duplexes as part of recovery from the September 13th, 2008, storm. The Galveston County Daily News reports that Jack Steele with the Houston-Galveston Area Council says the recovery rebuilding would produce 3,000 jobs during the next few years. The spending debate involves $500 million in community development block grant funds. John Hennenberger with the Texas Low Income Housing Information Service says there are 1,300 people on a public housing waiting list. Hennenberger says “privately affordable housing is gone and it's not coming back; but there is going to be public housing for 569.”
Wholesale prices rose last month due to higher costs for food and energy. But the increase isn't likely to spark fears of widespread inflation. The Labor Department says the producer price index, which measures price changes before they reach the consumer, increased 0.4 percent in September, after an equal rise in August. Food costs rose 1.2 percent and energy prices increased 0.5 percent. Wholesale prices have increased by four percent in the past year. Excluding volatile food and energy costs, core producer prices rose only 0.1 percent in September from the previous month. That rise was driven by higher car and truck prices.
The U.S. trade deficit widened sharply in August, reflecting a surge in imports of consumer products as businesses restocked their shelves in hopes of a pickup in consumer demand. The politically sensitive deficit with China climbed to an all-time high, a development that was certain to increase pressure on the Obama administration to take a tougher line on trade issues including China's tightly controlled currency. The Commerce Department says the deficit in August increased 8.8 percent to $46.3 billion. Exports edged up a slight 0.2 percent but this increase was swamped by a 2.1 percent jump in imports.
New figures show lenders seized more U.S. homes this summer than in any three-month stretch since the housing market began to bust in 2006. Industry group RealtyTrac says more than 288,000 properties were lost to foreclosure in the July-September quarter. That's up from nearly 270,000 in the second quarter, the previous high point in the firm's records dating back to 2005. Banks have seized more than 816,000 homes through the first nine months of the year and had been on pace to seize 1.2 million by the end of 2010. But fewer are expected now that several major lenders have suspended foreclosures and sales of repossessed homes until they can sort out the foreclosure-documents mess. There are allegations that banks evicted people without reading the documents. Officials in 50 states and the District of Columbia this week launched a joint investigation into the matter.
Rates on 30-year mortgages fell to 4.19 percent, the lowest level in decades. They were pushed down by lower Treasury bond yields. Investors are buying up Treasury bonds in anticipation of a move by the Federal Reserve designed to lower mortgage rates and yields on corporate debt. As a result, the average rate for 30-year fixed loans dropped to the lowest level on records dating back to 1971. It's down from 4.27 percent the previous week. The average rate on 15-year fixed loans fell to 3.62 percent, the lowest on records dating back to 1991. Rates have mostly fallen since spring as investors shifted money into the safety of Treasury bonds. That demand lowers their yields, which mortgage rates tend to track.
Walmart says it will double its sale of locally sourced produce in the U.S. by the end of 2015. The move by the world's biggest retailer is part of a new sustainable agriculture strategy that looks to steer more business to small and medium-sized farmers globally while also reducing farming's environmental impact. Walmart plans to buy more of select U.S. crops. It also anticipates providing training to a million farmers and farm workers in emerging markets and selling $1 billion in food sourced from one million small and medium-sized farmers. Walmart says it will start asking suppliers about water, energy, fertilizer and pesticide used per unit of food produced. The retailer also wants to lower food waste at its stores.
A police commissioner says unknown gunmen have kidnapped an Indian national who works as a principal at a school affiliated with ExxonMobil. Akwa Ibom State Police Commissioner Walter Rugbere told the Associated Press that two police officers were killed in a gun battle as kidnappers abducted Lakshmi Tombush. Tombush works as a principal at the Mobil Pegasus School in Eket, where the U.S. oil firm's operations are based. Rugbere said he had no other information about the kidnapping, which occurred Wednesday morning in the oil-rich and restive Niger delta. Kidnappings for ransom have become common in the region, even as militant attacks against oil companies have dropped in recent months.
OPEC oil ministers have left production targets unchanged in a move to reassure energy-dependent nations just starting to emerge from recession. The present overall output target of the 11 OPEC countries under quotas is just under 25 million barrels of crude a day, as agreed at a meeting in March. But OPEC nations overproduce, meaning they put out about 27 million barrels a day. Iraq is not bound by quotas as it rebuilds its economy and infrastructure in the wake of the war. With its production included, total daily output is just over 29 million barrels. OPEC's decision to keep output unchanged was expected. Shortly before the ministers went into closed-doors talks on what to do with output, Saudi Oil Minister Ali Naimi--whose country packs the most clout in OPEC--told reporters that they “are happy with the market the way it is.”
The White House adviser charged with overseeing creation of a new consumer protection agency is visiting Ohio in her first fact-gathering meeting with consumer advocates. Elizabeth Warren has spent much of her first several weeks on the job reaching out to the financial industry, which fought creation of her Consumer Finance Protection Bureau. The agency is a cornerstone of a sweeping financial overhaul signed into law this summer. Ohio has been hit hard by the economic downturn, foreclosures and poverty.
The Department of Labor says it will require companies providing 401(k) accounts to lay out all the fees and other charges in plain language beginning January 1st, 2012. The new regulations, announced by Secretary of Labor Hilda Solis, will affect about 483,000 retirement plans. She said the 72 million workers enrolled in 401(k) plans will now have the detailed information they need to do easy comparisons of the costs of their investment choices in their plan. Companies must begin to lay out the administrative expenses, including accounting and recordkeeping fees, and the charges that apply to the individual choices a worker makes, such as fees charged for loans. The charges for administrative expenses must be laid out in the quarterly reports workers receive and on a website.
Elyse Lanier has been re-appointed to serve as a member of the Port Commission of the Port of Houston Authority. The wife of former Houston Mayor Bob Lanier was initially appointed to the commission in February 2006. She serves on the commission’s Small Business Development Task Force. Commissioners serve two-year terms without pay.
Dell Chairman and CEO Michael Dell has assured a federal judge that the computer maker will carry through the reforms it promised after being accused of fraudulent accounting by the government. Dell spoke at a U.S. District Court hearing by a judge weighing whether to approve the company's $100 million settlement of civil charges with the Securities and Exchange Commission. The SEC had said that Dell improperly used payments from Intel to pump up its profits to meet Wall Street targets over five years. Dell himself agreed to pay a $4 million fine in the settlement. The company agreed to tighten its procedures for disclosing financial information to shareholders. Dell told Judge Richard Leon the company will live up to all the commitments in the settlement.
Microsoft is starting to incorporate what your friends do on Facebook in its Bing search engine. The software maker began rolling out a new feature that can show what someone's Facebook friends “like” on the search results page. On Facebook and sites around the web, people can click a “like” button to show support or share information with Facebook friends. In the coming weeks, if you use Bing to search for a topic in the news, articles that friends have shared on Facebook might appear, along with their names and Facebook profile photos. Restaurants and movies that friends have “liked” could help you decide what to do on your next date. Microsoft also added Facebook profile results to people searches.
A British judge today granted an injunction against Liverpool Football Club owners that could clear the way for the soccer club's sale to the parent company of the Boston Red Sox. High Court Judge Christopher Floyd issued an order against the legal action taken in Dallas by American co-owners Tom Hicks and George Gillett, Jr. Meanwhile, Hicks--who's from Dallas--and Gillett's companies filed a motion in Dallas asking that the Royal Bank of Scotland, New England Sports Ventures and Liverpool's independent board members be held in contempt and jailed. Hicks and Gillett had obtained a temporary restraining order blocking the $476 million sale to New England Sports Ventures. The British judge ordered them to withdraw their action or be held in contempt of court. NESV lawyer David Chivers said the sale would go through once the Texas case is withdrawn. The British judge said the legal action in Texas amounted to "unconscionable conduct on the part of Mr. Hicks and Mr. Hillett.”