Friday PM May 16th, 2008
by: Ed Mayberry, May 16, 2008 6:05:00 pm
The weekly AAA Texas gas price survey released finds regular self-serve is averaging $3.68 per gallon in the survey's 11 cities. That's 15 cents higher than last week's record high. Houston's average is up 13 cents from last week to $3.65 per gallon. Nationally, the average price rose 13 cents to a new record of $3.78 per gallon. Auto club spokeswoman Rose Rougeau predicts high fuel prices and tough economic times generally will keep some Americans at home come Memorial Day. She says the number of people expected to be traveling in the Memorial Day holiday later this month is expected to drop by about a percentage point from last year. The most expensive gasoline in Texas is found in Amarillo, where the average spiked 13 cents from last week to $3.71 per gallon. The cheapest gas is in El Paso, where prices soared 13 cents to $3.63 per gallon.
The Texas unemployment rate dropped to 3.9 percent in April. It's the lowest unemployment rate the state's labor force has seen for April since a 3.8 percent reading in late 2000. The March jobless rate in Texas was 4.2 percent. The Texas Workforce Commission says the ranks of the unemployed decreased by an estimated 40,200 in April--to 448,700. The nationwide jobless rate for April was 4.8 percent. Texas employers added 15,400 jobs in April. The biggest gain was in the financial services sector. Houston's jobless rate is at 3.8 percent, compared to the revised March figure of 4.1 percent. Midland had the lowest April unemployment rate in the state at 2.4 percent. The highest jobless rate in the state was in the McAllen-Edinburg-Mission area, at 5.7 percent. The statewide numbers were adjusted for seasonal trends in hiring and firing.
Construction of new homes posted the biggest increase in more than two years in April, a rare bit of good news in what has been the worst downturn in housing in more than two decades. The Commerce Department reports that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. A big jump in apartment construction offset further weakness in single-family homes. The gain represents a recovery after a steep slump in March building that had pushed activity to the slowest pace in 17 years. However, the surprising rebound in April was expected to be temporary, given the headwinds builders are confronting at the present--from slumping sales to soaring home foreclosures.
Saudi Arabia's leaders say they see no reason to increase oil production until customers demand it, despite a personal request from President Bush. But a White House official says the Saudis did brief the president again on their plan to increase their production capacity over time. Bush is in the oil-rich country today to appeal to King Abdullah for greater production to help halt rising gas prices in the United States. But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand. Meanwhile, crude oil futures prices ended higher on the New York Mercantile Exchange. The near-month contract for the benchmark grade rose $2.17 to a new record--closing at $126.29 a barrel.
The Energy Department says it has canceled oil shipments into the Strategic Petroleum Reserve beginning in July when the current purchase contract expires. The move came days after Congress passed legislation requiring the president to suspend the shipment into the reserve in hopes of lowering gasoline prices. The Energy Department said it will not sign contracts for new shipments of 76,000 barrels of oil a day for the six-month period beginning July 1st. President Bush had opposed halting the shipments, arguing that such a relatively small amount of oil would not influence prices. Current shipments will continue. The reserve is 97 percent full, holding 701 million barrels of crude.
Treasury Secretary Henry Paulson says financial markets are "considerably calmer" now than they were two months ago. He predicts the economy will be rebounding by the second half of this year. In remarks prepared for delivery to business executives Friday, Paulson characterizes housing troubles as still the biggest drag on the economy. But he says that risk will soon be lessened by nearly $100 billion in economic stimulus payments to U.S. households. Paulson says the stimulus checks will support the economy as it weathers the housing correction, market turmoil and higher energy and food prices.
Smoothie chain Jamba Juice plans to close ten underperforming stores and cut 53 workers in a reorganization aimed at cutting costs. The company says the job cuts will be in support positions. Jamba Juice will close ten underperforming company-owned stores in 2008 and end seven signed leases for un-built stores. It had 726 stores, 515 of which were company owned, as of last month. It still plans to open up to 40 new company-owned stores this year.
The United Nations says the world economy is "teetering on the brink" of a severe downturn and is expected to grow only 1.8 percent in 2008. The 1.8 percent projections is down from a global growth rate of 3.8 percent in 2007. The U.N. says the downturn is expected to continue, with only a slightly higher growth of 2.1 percent in 2009. The mid-year update of the U.N. World Economic Situation and Prospects 2008 blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter. The projections says U.S. economic problems are expected to "continue to be a major drag for the world economy extending into 2009." But the U.N. said developing countries will suffer as badly.
General Electric says the nation's economic slowdown is prompting it to get out of the appliance business. GE's chairman and CEO Jeff Immelt says while GE Appliances "has a very strong brand," it's primarily a U.S. business and that means its "fortunes are tied to the rise and fall of a single market." In a statement, the company says the decision to sell or spin off GE Appliances is part of an ongoing plan to exit "slower growth and more volatile businesses." Analysts say the move is a recognition that nothing is "untouchable at this point" including GE's lighting business and even NBC Universal. The 101-year-old Appliance Division is headquartered in Louisville, Kentucky. Last year it had revenues of $7 billion. It employs about 13,000 people worldwide.
Baker Hughes in Houston reports the number of rigs actively exploring for oil and natural gas in the U.S. rose by 16 this week--to reach 1,862. One year ago the rig count stood at 1,744. Texas added 13 rigs. Baker Hughes has tracked rig counts since 1944.