Thursday AM May 1st, 2008
by: Ed Mayberry, May 1, 2008 12:05:00 am
The bruised economy limped through the first quarter of this year at a six-tenths of a percentage point growth rate as housing and credit problems forced people and businesses alike to hunker down. The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reports, but not the kind of statistic that economists define as a recession. Economists consider a recession to be a retraction of the economy, but the economy is managing to keep growing—however slightly. The White House isn't satisfied with news of a six-tenths-of-a-percent economic growth rate for the first quarter of the year. Press Secretary Dana Perino says the figure is "nothing to crow about." She does, however, say "it is growth nonetheless." Perino also says President Bush "has been very honest about what we are seeing in the economy."
Employers' costs to hire and retain workers grew at a slower pace in the first three months of this year. The Labor Department reports that compensation costs--wages, salaries and benefits--rose 0.7 percent in the January-to-March quarter, the slowest pace in two years. Many economists were expecting a slightly higher, 0.8 percent rise. The report suggests that the weak labor market is making employers a bit less generous with their compensation.
The Bush administration says it is bringing back the one-year Treasury bill that it stopped issuing seven years ago when the budget was in surplus. Now the government needs it to cope with soaring budget deficits. The administration says it will begin selling the one-year bill, also referred to as a 52-week bill, at an initial auction in June. New one-year securities will be auctioned every four weeks. The government is looking for various ways to borrow the billions of dollars in extra cash it will need to cover a budget deficit that is expected to jump to an all-time high this year, surpassing the old mark of $413 billion set in 2004.
An international group of food scientists says countries should not use food crops to produce biofuels during a world food crisis. Three scientists with the Consultative Group on International Agricultural Research say if nations stop turning corn into ethanol this year, it would cut 20 percent from the price of corn next year. Instead of using grains, the international group is calling on the U.S. and other countries to shift biofuels production to nonfood crops such as switchgrass. Ohio State University soil researcher Rattan Lal, a critic of the international group, agrees. Lal says "we need to feed the stomach before we feed the car." President Bush, in a White House press conference, says it is in the nation's best interest that American farmers grow energy instead of relying on foreign oil.
The Port Commission of the Port of Houston Authority has approved $3.6 million in improvements. That includes $1.2 million in radios for Barbours Cut and Port police and up to $2.4 million in concrete replacement at three wharves near the Turning Basin Terminal. The commissioners also approved advertising for proposals for project outlines and for a site selection study for a future container terminal.
House Democrats are pushing for new standards to protect workers from combustible dust explosions and fires. The Democratic-controlled House is expected to pass legislation to require new safety standards for workplaces in danger of having large levels of dust that can become fuel for fires and explosions. That's after 13 people were killed in a February explosion at the Imperial Sugar refinery near Savannah, Georgia. Imperial Sugar is based in Sugar Land. The explosion has been blamed on dust that ignited. The disaster prompted the Occupational Safety and Health Administration to inspect hundreds of plants where combustible dust is a workplace hazard. The White House threatened to veto the bill if it makes it out of Congress.
The widow of a man killed in a blast at a sugar refinery near Savannah, Georgia, is suing Savannah Foods & Industries. The lawsuit filed in Chatham County State Court in Savannah on Monday contends the company owned the Port Wentworth, Georgia, property where the Imperial Sugar refinery operates. The lawsuit was filed on behalf of Lashunda Harvey, widow of Shelathia Harvey, contends Savannah Foods is liable for damages. It also names Stokes Contracting, a cleaning-dust control company, as a defendant. The lawsuit says 31-year-old Shelathia Harvey was operating a machine used in the refining, packing and transporting of sugar when the explosion tore through the plant on February 7th. The lawsuit says he was an employee of Imperial-Savannah. Shelathia Harvey was one of 13 people who died. The explosion is believed to have been sparked by combustible sugar dust. Part of the plant was destroyed in the explosion, but company officials have pledged to rebuild. Sugar Land-based Imperial Sugar isn't named as a defendant in the Harvey lawsuit.
Interior decor retailer Home Interiors & Gifts has filed for bankruptcy protection and says it will restructure under a turnaround expert. The Carrollton-based company, which sells decorating accessories through home parties, says it filed for Chapter 11 bankruptcy protection in Dallas but will remain in business. The company says it expects to continue paying employees and 100,000 sales consultants with court approval. Court filings say Home Interiors' sales peaked at $615 million in 2003 but fell to $300 million last year. The company was founded in 1957 by Mary Crowley, the sister-in-law of late Mary Kay Cosmetics founder Mary Kay Ash. Crowley used the same direct-sales approach her sister-in-law used to build her company. The company said it operated nearly debt free until 1998, when it was sold to the Dallas buyout firm Hicks, Muse, Tate & Furst. That generated $500 million in debt. In 2006, the bondholders canceled most of the debt in exchange for most of the company's equity.
The Associated Press has uncovered significant problems at two of the nation's largest beef processing plants. Both plants--National Beef in Dodge City, Kansas and Cargill's Plant in Fresno, California--provide meat to the national school lunch program. They've been hit with humane handling violations of animals about to be slaughtered. The AP, through a Freedom of Information Act request, found audits of 18 slaughterhouses revealed some cattle were not being stunned properly on the first try, others were subjected to overcrowding, and others had to be electrically prodded to get them to move. Just this week, after AP raised questions about Cargill's violations, government officials notified the company it was reducing the allegation from one of "non-compliance'' to a "letter of concern.'' The Agriculture Department investigation comes after violations at a southern California processing plant were captured on an undercover videotape. That led to the largest beef recall in the nation's history.
Time Warner says it will spin off the rest of its cable TV business. The move has been expected in reaction to investor pressure. The announcement came as the parent of Warner Bros., CNN, AOL and time magazine, reported a 36 percent decline in first-quarter earnings from a year ago. That was when it had a gain from the sale of AOL's Internet access business in Germany. The results were mainly in line with expectations. Time Warner's cable unit became a separately traded public company just over a year ago, but the company held on to an 84 percent stake. Time Warner Cable is the second-largest cable TV operator in the country after Comcast and is the largest operating unit of Time Warner, the world's largest media conglomerate. The company didn't offer specific details on how or when the spinoff would be completed, but CEO Jeff Bewkes said in a statement that Time Warner was working closely with the board of Time Warner Cable and expected a final agreement soon.
Between sour consumer sentiment and rising gasoline prices, one casualty of the faltering economy appears to be the summer vacation. The Conference Board says the number of people planning to take a vacation in the next six months is at its lowest point in 30 years. Consumer spending accounts for more than two-thirds of the nation's economic activity. And an AOL/Zogby survey finds more than half of Americans have less money to spend this year on summer vacations than in 2007. Some 57 percent are looking for ways to save on their travel costs because of higher fuel costs and the decline of the dollar abroad. To save money, about a third plan to stay with family or friends, and about 37 percent plan to drive rather than fly.
Nearly half of Americans are struggling to stay happy and healthy, and just about half are reported to be thriving. That's according to a survey that attempts to measure the nation's general welfare. More than 100,000 people participated in the Gallup-Healthways Well-Being Index. The results are based on personal assessments of how participants said they felt about their lives at the time of the survey and where they think they'll be in five years. Four percent of Americans polled are reported to be suffering. Gallup's chief scientist for well-being says people who are thriving tend to have higher incomes, more education and less illness. Those who are suffering have trouble meeting their basic needs, including food, shelter and medical care.