Thursday PM December 23rd, 2010
by: Ed Mayberry, December 23, 2010 4:12:00 pm
Slightly fewer people applied for unemployment benefits last week, the second drop in three weeks. That's a sign the job market is slowly healing. The Labor Department says the number of people seeking benefits edged down by 3,000 to a seasonally adjusted 420,000 in the week that ended December 18th. Weekly unemployment applications at around 425,000 signal modest job growth. But economists say applications would need to dip consistently to 375,000 or below to indicate a significant decline in unemployment. Weekly applications peaked during the recession at 651,000 in March 2009. The four-week average, a less volatile measure, rose slightly to 426,000. The average had fallen for six straight weeks to the lowest level in more than two years.
Congress has passed a six-week extension of programs to aid workers who were laid off due to cheap imports and jobs that moved abroad. Supporters of the bill said they would work on a longer extension next year. The House originally approved a more comprehensive bill with an 18-month extension, but the Senate shortened the period. The House then approved the Senate version and sent the bill to the president.
Mayor Annise Parker says about 850 city employees have taken voluntary furlough days as the city faces a nearly $30 million budget shortfall. Parker says the city has saved about $250,000 so far. She says additional voluntary furloughs could push that figure to $500,000 as more employees take days off between Christmas and New Year's Day. Parker has not ruled out mandatory furlough days for employees of the state's largest city. The mayor also says she hopes to make progress on reforming the city's pension obligations. The Houston City Council on December 15th voted to hike fees on almost 150 municipal services to help close the budget gap.
The Bureau of Economic Analysis says average compensation for Harris County workers was $69,008 in 2009—up just $32 from the previous year, according to the Houston Chronicle. Compensations for Texas workers overall average $55,579 last year—a 0.6 percent increase over 2008.
Americans spent at a moderate pace last month, giving the economy a boost ahead of the holidays. The government says consumers increased their spending 0.4 percent in November. The gain came after shoppers ratcheted up spending by 0.7 percent in October, the most since August 2009. Even with the latest increases, consumers are still reluctant to go on the type of buying binges needed to dramatically lower the 9.8 percent unemployment rate. Consumers' incomes grew 0.3 percent last month, helped by gains from fatter stock portfolios. Wages and salaries, however, barely budged. Incomes increased 0.4 percent in October, reflecting strong wage gains.
Orders for long-lasting manufactured goods outside of the volatile transportation category rose by the largest amount in eight months in November. Factories saw demand increase for computers, appliances and heavy machinery. The Commerce Department says total orders for durable goods dropped 1.3 percent, a decline that reflected sagging demand for aircraft and autos. But excluding transportation, orders rose 2.4 percent, the best showing since last March. The widespread gain outside of transportation was an encouraging sign that factories will be ramping up production and hiring more workers in coming months.
More people purchased new homes in November, but not enough to signal better times are ahead for the battered housing industry. The Commerce Department says sales of new homes rose 5.5 percent last month to a seasonally adjusted annual rate of 290,000 units. That gain came after sales had fallen to the second-lowest level in 47 years in October. Economists believe it could take three years to get back to a more normal rate of 600,000 sales per year given a continued glut of unsold homes and falling prices.
Just in time for holiday road trips comes a survey that shows the national average for a gallon of regular gasoline is $3.01. The pump price rose about a cent and a half a gallon overnight. That's 14 cents more than a month ago and 43 cents higher than a year ago. It's the first time that the average retail price has been above $3 a gallon at Christmas. Another study says consumers will likely pay about $1.35 more a gallon during the 12 days of Christmas (from December 25th to January 6th) than during the same period last holiday season. The rising price of crude oil has been pushing up the price of gasoline for the past month.
The weekly AAA Texas gasoline price survey shows the average price of a gallon of regular unleaded is selling for $2.85 across the state, three cents higher than it was last week. The national average rose three cents to $3.01 this week. The cheapest gasoline in Texas was once again found in El Paso and San Antonio at $2.80 a gallon. The state's most expensive gasoline is $2.89 a gallon in Texarkana, where it soared eight cents from last week.
State Comptroller Susan Combs is recommending greater transparency for the Texas Enterprise Fund and Emerging Technology Fund. The high-profile programs are administered by Governor Rick Perry. Perry spokeswoman Katherine Cesinger defends the programs, saying both are meeting their legislative goals in job creation. Combs released a 116-page analysis of nine state programs that use tax breaks or grants to create or retain jobs and to attract businesses to Texas. Legislators next month convene with a projected $20 billion budget shortfall looming. Combs wrote that she believes the Texas economy will continue to grow, with or without incentives. But she says effective incentive programs “can help signal the state's aggressive desire to attract business and in encouraging growth of targeted industries.”
The Environmental Protection Agency is taking the unprecedented step of directly issuing air permits to industries in Texas because of the state's refusal to comply with new greenhouse gas regulations going into effect January 2nd. The EPA announced it will issue Clean Air Act permits for greenhouse gas emissions in Texas beginning in January. The agency said in a statement that it prefers states remain the permitting authorities but “officials in Texas have made clear . They have no intention of implementing this portion of the federal air permitting program.” A spokesman for the Texas Commission on Environmental Quality did not immediately return a message. The nation's largest oil refineries are in Texas, which also is home to more coal-fired power plants than any other state.
President Barack Obama says the economy will be his “singular focus” over the next two years. He says the nation is past the “crisis point” in the economy, and that he'll now be working to bring down the jobless rate and equip the nation to compete with the rest of the world. Obama told reporters at a news conference that the government needs to be a “good partner” with the private sector, in getting rid of regulations that stand in the way of innovation. But he says the government also needs to make sure consumers, workers and the environment are protected.
President Obama says Republicans and Democrats will have a robust debate about how to cut spending when a new Congress convenes next month with the GOP in control of the House. Obama says he was disappointed that the current Congress did not agree on long-term budget goals and strategies to rein in spending. He said the recent passage of a number of other bills proves that the two parties can work together, but he knows it will not be easy. Obama told reporters the nation is not doomed to endless gridlock. But he continues to differ with Republicans on extending tax cuts to millionaires.
Stephen Baldwin is suing Kevin Costner over their investments in a device that BP used to try to clean up the massive Gulf oil spill. A federal lawsuit filed in New Orleans by Baldwin and a friend claims Costner and a business partner duped them out of their shares of an $18 million deal for BP to buy oil-separating centrifuges from a company they formed after the April 20th spill. BP ordered 32 of the centrifuges, which separate oil from water, and deployed a few of the devices on a barge in June. Costner's publicist, Arnold Robinson, declined to comment on the suit's allegations. The lawsuit seeks unspecified damages.
A federal appeals court has upheld a conviction against Texas-based Southern Union Gas for illegally storing mercury at a rundown building in Rhode Island. The 1st U.S. Circuit Court of Appeals in Boston also affirmed an $18 million penalty imposed against the company last year for the illegal storage. The company had been keeping the mercury, removed from old gas regulators, at the building in Pawtucket without the required permit. The mercury was exposed to the public in 2004 when vandals broke into the building and dumped the substance at a nearby apartment complex. Scores of people were either displaced or reported health problems from the mercury exposure.
The Internal Revenue Service says some taxpayers will have to wait until mid- to late- February to file their returns due to changes in tax law approved by Congress in its lame-duck session. The changes apply to tax breaks on college tuition, state and local property taxes and out-of-pocket expenses for teachers. The IRS says the delays would be minimal for people who itemize deductions, because they normally must wait for financial documents before filing their returns.
The Treasury Department says six banks have repaid government bailouts worth a combined $2.66 billion. The banks are returning taxpayer money that they received in the aftermath of the 2008 financial crisis. Banks repaying their bailouts are Huntington Bancshares, First Horizon National, Wintrust Financial, Susquehanna Bancshares, Heritage Financial, and the Bank of Kentucky Financial. The banks also paid the government a total of $13.7 million in dividends that they owed in exchange for the loans.
Honda is recalling about 10,800 Accord sedans and Pilot sport utility vehicles to prevent possible front suspension failure. The company says the recall covers late model year 2010-2011 Accord sedans and 2011 Pilot SUVs in the U.S. Honda says problems with the machinery used to tighten spindle nuts on the front axles on both vehicles could cause the front suspension to fail. It expects to notify owners this week, with repairs being done at dealerships. Honda says a flaw in the software for the equipment used in the assembly process was discovered at its plant in Alabama.
General Motors is recalling almost 100,000 vehicles to fix two problems that could cause the rear axle to lock and the passenger-side airbag not to work. GM says in postings with the National Highway Traffic Safety Administration that the airbag recall affects almost 96,000 2005 to 2007 model year versions of the Cadillac CTS. The axle recall affects almost 1,300 2011 model year versions of the Cadillac Escalade, Chevrolet Avalanche 1500 and Silverado 1500, as well as the GMC Sierra 1500. The axle recall is expected to begin in January. GM did not say when the airbag recall would begin.
GasBuddy is announcing an iPhone app to help find the cheapest local gas prices in real time. The application uses GPS and cllelar triangulation to provide listings for gasoline stations. Users can also search by zip code or city. The GasBuddy app is available for free on iPhone, Android and Windows handsets.
Rates on fixed mortgages dipped after rising for five weeks in a row. Freddie Mac says the average rate on a 30-year fixed mortgage slipped to 4.81 percent from 4.83 percent in the previous week. Last month, the rate reached a 40-year low of 4.17 percent, but has since been edging higher. The average rate on the 15-year loan also fell to 4.15 percent from 4.17 percent. It hit 3.57 percent in November, the lowest level on records starting in 1991. Rates had been rising since early November as investors took money out of Treasurys. Traders expect the recent tax-cut plan will boost economic growth and potentially increase inflation. Yields tend to rise on fears of higher inflation. Mortgage rates track the yields on the ten-year Treasury note.
Make that two million books sold for former President George W. Bush. The Crown Publishing Group says that Bush's Decision Points passed the two million mark less than two months after its official release. Published in early November, Bush's memoir about his key presidential decisions and other choices has topped the best-seller list on amazon.com for weeks. More than 2.6 million hardcovers are in print after an initial run of 1.5 million. The two million books sold include nearly 200,000 e-editions.