Friday AM May 11th, 2007
by: Ed Mayberry, May 11, 2007 5:05:00 am
The Bush administration divvied up $445 million in grants to protect commuters, shipping ports, and transit systems from attacks. It's a boost of more than ten percent from last year. The Department of Homeland Security devoted most of the money to seaports and mass transit. The Port of Houston Authority received 100 percent of its funding request of $5,304,854. Smaller amounts will help protect passenger rail carrier Amtrak, and bus services like Dallas-based Greyhound and Trailways, as well as trucking and passenger ferry services. Grant awards are closely scrutinized by city and state officials who measure their funding against previous years. The bigger fight is usually over which cities are judged at highest risk of attack, and how much money they each get.
Single-family home sales in April rose compared to the same month last year, reversing the Houston market's first decline in more than three years. The average and median sales prices increased. The Houston Association of Realtors speculates that tighter subprime lending standards could be weakening sales of homes priced at $140,000 or less, while homes in the $400,000-plus range have seen strength in sales. Total property sales for the month were 7,275—a 2.7 percent increase over April 2006. Properties sold during the month reached more than $1.4 billion—an 8.5 percent increase compared to last year's more than $1.3 billion in April sales. The median price for a single-family home reached a monthly record for April of $150,000, and the average single-family home price hit $205,511. HAR President Rob Cook notes that last month's decline did not set a trend, and Houston stands apart from the nation in increasing sales and sales prices.
Mortgage rates on the most popular kind of home loan are down again. Mortgage giant Freddie Mac says 30-year, fixed-rate mortgages averaged 6.15 percent nationwide this week, down slightly from 6.16 percent last week. The low for the year was 6.14 percent in early March. Rates have fallen in three of the past four weeks. This week's decline is attributed to a weaker-than-expected jobs report, which showed just 88,000 jobs were created last month. The persistent decline of the key mortgage rate is further evidence that slower economic growth will help keep inflation in check. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, remained at 5.87 percent this week, the same as last week. Adjustable-rate mortgages are up slightly this week.
The Fed has again decided to leave interest rates just where they are. That's the word from Federal Reserve policy makers after their latest session. It's the seventh time in a row the federal Open Market Committee has decided no change in interest rates is needed. The decision had been widely expected by financial markets. The federal funds rate, the interest that banks charge each other, has been at 5.25 percent since last June when the central bank capped a two-year, credit-tightening campaign with its 17th consecutive quarter-point rate hike. In announcing the decision, the fed said inflation "remains somewhat elevated'' and it will continue to monitor inflation, to see whether it's done enough to restrain it. The Fed's monetary policy seems to be working according to plan. Economic growth has slowed to the slowest pace in four years, taking the pressure off tight labor markets and helping to reduce inflation.
The U.S. economy has maintained its position atop world competitiveness rankings, according to an annual survey. The World Competitiveness Yearbook from the IMB Business School in Switzerland ranks U.S. competitiveness number one, despite a record trade deficit, a high corporate tax rate on profit and low confidence in the government's handling of public finances. Singapore was ranked a close second, with Hong Kong, Luxembourg and Denmark rounding out the top five most competitive national economies. The study lists 55 economies according to 323 criteria that measure how the nations create and maintain conditions favorable to businesses. The project director says the U.S. position was cemented by the dynamism of its financial market, which drives what is the world's strongest domestic economy, topping all others in its amount of investments, stock purchases and commercial service exports.
The nation's largest companies continue to move away from traditional pension plans. A survey has found just 31 of the 100 biggest companies offered traditional pension plans last year. That's down from 35 in 2005 and only about a third of the 89 that offered traditional pensions in 1985, according to the study by the Watson Wyatt Worldwide Human Resources consulting and management firm. It found 42 of the companies surveyed now offer new workers only defined contribution accounts like 401-ks. The remaining 27 companies are using so-called hybrid defined benefit plans, such as cash-balance plans.
The number of Americans filing first-time claims for unemployment benefits fell by 9,000 last week. The Labor Department puts the total at 297,000. It's the fourth straight weekly decline, suggesting a firm job market. The four-week average, used to watch trends, fell more than 11,000 to more than 317,000.
Between rising gasoline prices and troubles in the housing market, many of the nation's retailers are telling of disappointing April sales. As the chains release their monthly sales figures, weak performers include Wal-Mart, J.C. Penney and Macy's parent Federated Department Stores. Analysts expected last month would be weak after an early Easter prompted many consumers to do their holiday shopping in March, hurting some of the April business. Even so, sales were softer than expected. Wal-Mart, the world's largest retailer, says sales at stores open at least a year fell 3.5 percent. Analysts were looking for a decline of 1.1 percent.
The Treasury Department says federal revenue collections hit an all-time high in April, contributing to a further improvement in the budget deficit for the year. Tax collections swell in April every year as individuals file their tax returns by the deadline. Still, the monthly budget report shows the government collected $383.6 billion last month, the largest monthly tax collection on record. According to the report, the federal deficit through the first seven months of this budget year totals $80.8 billion. That's a lot less than the more than $184 billion imbalance run up during the first seven months of the previous budget year. So far this year, tax revenues total $1.505 trillion, an increase of 11.2 percent over the same period last year.
Rising oil imports helped produce a more than ten percent jump in the nation's trade deficit in March. The Commerce Department reports the gap surged to nearly $64 billion--larger than expected. U.S. exports were on the rise, but not enough to fully counter the increase in imports coming into the country. The politically sensitive deficit with China narrowed as U.S. exports to that country hit a record high. So far this year, the trade deficit is running at an annual rate of more than $722 billion, slightly below last year's record.
Whole Foods Markets reports its first-quarter profit fell about 11 percent. The Austin-based natural and organic foods giant continued to show slower growth in sales. Whole Foods earned $46 million in the quarter that ended April 8th. That's down from year-ago net income of $51.8 million. Whole Foods has struggled to keep up its pace of growth—as supermarkets expanded their offerings of organic and natural foods, often at lower prices. Whole Foods in February announced plans to buy smaller rival Wild Oats Markets for $565 million. But staffers at the Federal Trade Commission have voiced concerns regarding perceived anticompetitive effects from the deal.
A student interested in computers never imagined--in 1984 when he was at the University of Texas--that his work would end up in a museum. Now one of Michael Dell's original computers is going to the Smithsonian Institution's National Museum of American History in Washington. The 42-year-old chairman of Round Rock-based Dell donated a collection of materials to the Smithsonian. The items include Dell's employee badge, one of the company's newest computers and a PC Limited computer from 1985. Parts of the Dell collection will be temporarily displayed at the "Treasures of American history'' exhibit housed at the National Air and Space Museum. Dell dropped out of UT Austin 23 years ago when his business took off.