Monday PM April 7th, 2008
by: Ed Mayberry, April 7, 2008 5:04:00 pm
Gasoline prices have risen further into record territory. They have been lifted by surging oil futures and a growing belief that gasoline supplies will fall as the summer driving season approaches. A survey says the national average price of gasoline rose five cents over the last two weeks. According to the Lundberg Survey, the average price of self-serve regular gasoline Friday was $3.32 a gallon, mid-grade was $3.44 and premium was $3.55. Of the cities surveyed, the cheapest price was in Newark, New Jersey, where a gallon of regular cost $3.03, on average. The highest was in San Francisco at $3.72. Lundberg surveys 7,000 stations nationwide. The national average price of a gallon of gas jumped 3.6 cents over the weekend to a record $3.339. The AAA and the Oil Price Information Service report the current level is 58 cents higher than a year ago.
Economists are expecting more U.S. job losses in the coming months on top of the 80,000 that were cut last month. Mark Zandi of Moody's Economy.com says businesses are "getting nervous and pulling back.'' Analysts expect the jobless rate to peak around six percent early next year. They say as many as two million people could lose their jobs in a recession that may have already begun. Construction workers, real-estate agents and auto workers could be among those hardest hit. School and medical jobs should be safer. Hiring is also expected to hold up in areas where people spend no matter how the economy is doing: places like grocery stores, gas stations and repair shops. But because people may put off things like vacations, various segments of the tourism industry, including hotels and restaurants, could suffer.
Fresh off a trip overseas, President Bush turned his attention back to the nation's slumping economy. The president summoned a group of business executives to the White House to help him highlight the investment tax breaks in the stimulus plan he and Congress agreed on. That plan also includes the tax rebate checks that go into the mail next month. Bush maintains the stimulus package is all that's needed to right the U.S. economy. But while he was in Europe there was more dire news: the worst monthly job loss in five years, and Fed chief Ben Bernanke saying for the first time that a recession is possible.
There's no shortage of opposition to President Bush's proposal for the Colombian Free Trade Agreement. The pact is heavily opposed by Democrats, who claim Colombia has not done enough to halt violence, protect labor activists and demobilize paramilitary organizations. Organized labor is against it, with one union saying it's an outrage for Bush to send Congress a trade agreement, "with a country that has one of the most ruthless records of repression of the trade union movement.'' Business groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce, back Bush's move and say they'll work to get the deal through Congress. Bush sent the agreement to Congress under a fast-track process that requires votes within 90 legislative days.
Investors appear to have been cheered by news that the nation's largest thrift is poised for a big cash infusion. The Wall Street Journal says Washington Mutual would get $5 billion cash from investors such as TPG, formerly Texas Pacific Group. In reaction, Washington Mutual shares have been rising.
Airtran and jetBlue have taken the top spots in a national survey of airline quality. They were followed by Dallas-based Southwest, Northwest and Frontier Airlines. Houston-based Continental Airlines comes in at the sixth spot. At the bottom of the list was Atlantic Southeast Airlines. The annual airline quality rating survey released Monday found that overall the industry did a poor job last year. There were more lost bags, more bumped passengers, more consumer complaints about higher fares and fewer on-time flights than in the previous year. The rate of consumer complaints was up 60 percent. US Airways had the most complaints last year. Southwest had the fewest. The rate more than doubled at US Airways and Comair, and rose for 15 of the 16 airlines included in the study. The exception was Mesa Airlines. On-time arrivals dropped for the fifth straight year, with more than one-quarter of all flights late, according to the survey. The rates of passengers bumped from overbooked flights and lost, stolen or damaged bags also jumped in 2007. A co-author of the study says "the trend is bad and it doesn't look like it gets any better."
Continental Airlines is adding a new policy that charges a $25 service fee for second checked bags. The policy applies to economy tickets for domestic and North American destinations beginning May 5th.
A state district judge has dismissed a campaign finance lawsuit against a statewide business group and a high-powered Austin lobbyist who helped Republicans in the 2002 election. Five Democrats who lost that year sued the Texas Association of Business over mailings to voters in key races. The mailings cost $1.7 million, and they were secretly financed by 30 corporate donors, mostly insurance companies. Texas law bans the use of corporate money in campaigns. But the business group said the ads were legal because they talked about candidates' positions, but didn't advocate voting for or against anyone. State District Judge Joe Hart dismissed the case this week.
After a busy week last week, the flow of economic data slows to a crawl in the coming days. Tuesday, the National Association of Realtors reports on February pending home sales, amid all indications that the housing market crunch is still very much a problem. The minutes from the most recent Federal Reserve meeting will also be released Tuesday. Thursday, figures on the February trade imbalance will be released by the Commerce Department. Friday brings the University of Michigan Consumer Sentiment Survey, expected to show little change.