Friday PM March 28th, 2008
by: Ed Mayberry, March 28, 2008 5:03:00 pm
Consumer sentiment dipped in March to its weakest reading since 1992. The University of Michigan's consumer sentiment survey for March saw the overall index decrease to 69.5, from 70.8 in February—in line with analysts' expectations. The final March current conditions index rose, while the expectations index declined.
Consumers, jolted by a credit crisis, job cuts and soaring energy costs, turned in the weakest spending performance in 17 months in February. It was fresh evidence that the risks of a recession are increasing. The Commerce Department said that consumer spending edged up by just one-tenth of one percent last month, the poorest showing since September 2006. And if the effects of inflation are removed, spending was flat in February, the third consecutive month of sluggish activity. The performance of the consumer is closely watched since consumer spending accounts for two-thirds of total economic activity. Economists said the sustained weakness in this area is one of the most worrisome signs that the economy could be tipping into a recession.
The price of gasoline in Texas held steady at $3.17 per gallon this week. AAA Texas reported that San Antonio has the lowest average in the state survey, at $3.12 per gallon. Galveston still has the highest average prices in the state at $3.20 per gallon, up one penny from a week ago. Nationally, the average price for gasoline held steady at about $3.27. AAA Texas spokeswoman Rose Rougeau says the average prices in the state are 70 cents above what Texans paid for gas this time last year.
The Federal Reserve, embarking on a new program, has auctioned $75 billion worth of treasury securities to big investment houses in the latest effort to ease a painful credit crisis. Demand was high. Big investment houses requested a total of $86.1 billion of the treasury securities, the Fed says. Bidders paid an interest rate of 0.330 percent to borrow the securities. The next auction will be held April 3rd.
Things are mostly back to normal for American Airlines and Delta Air Lines after both carriers had to cancel hundreds of flights in recent days while wiring bundles on some planes were inspected. A Delta spokeswoman says the airline completed its inspections last night and has no cancellations planned for Friday. American says it has canceled four flights and that six planes are still being worked on, as the airline finishes inspecting wire bundles in its planes. The nation's largest airline inspected 300 of its MD-80 aircraft this week, and more than half needed to be modified. American canceled 141 flights by mid-afternoon Thursday, and canceled 318 flights Wednesday. The inspections came almost three weeks after the FAA ordered a check of maintenance records at all U.S. airlines following criticism of the agency's handling of missed fuselage inspections at Southwest Airlines.
Delta Air Lines is taking another shot at raising its fares. Farecompare.com, an airfare price tracking Web site, says the carrier has raised its fuel surcharge by $10 round-trip. Delta tried a similar hike last week, but that effort failed after most other airlines failed to follow suit. Because of stiff competition, widespread airfare increases launched by one airline typically gain hold only when they are matched by competitors. Fuel represents one of the airline industry's biggest expenses, and carriers have been aggressively trying to push ticket prices higher as the cost of fuel has risen.
Enron shareholders eligible for some of a $7.2 billion class-action lawsuit settlement can benefit from the second of two forums, set for tomorrow night the downtown Four Seasons Hotel on Lamar. Former shareholders can get help filling out required proof-of-claim forms, which are due April 30th. The workshop is being led by the Claims Administrator and attorneys and investor relations specialists representing the class. Those included must have acquired Enron-related securities between September 9th, 1997 and December 2nd, 2001, when Enron declared bankruptcy.
The Greater Houston Builders Association is hosting an event on Saturday at the George R. Brown Convention Center offering assistance on the home buying process. Potential homebuyers can connect with homebuilders, lenders and service providers. Credit questions and information about loans will be available. Representatives of Houston's Homebuyers Assistance Program will be on hand.
The Internal Revenue Service is opening 320 offices on Saturday to help retirees, veterans and low-income people get checks from the Economic Stimulus Act passed by Congress in January. People must file a tax return to receive the payment. The IRS offices this weekend are offering assistance in preparing Form 1040A solely to receive the stimulus payment.