GDP growing at slower-than-expected pace…New claims for jobless benefits fall; online recruitment stabilizes…BP signs $900 million exploration and production agreement with Libya’s national oil company…
It is the slowest pace in more than four years. The government says the economy just barely managed to grow at an annual pace of just six-tenths of one percent in the first quarter. That’s less than half the initial estimate of gross domestic product issued by the government a month ago. The key reasons for the downward GDP revision involve the trade deficit and reductions in business inventories. Analysts expected a slightly smaller downward revision.
Despite slowing growth in the general domestic product, Connecticut-based ExecuNet’s Recruiters Confidence Index increased for the second consecutive month in May. The index says nearly three in four search professionals believe the executive employment market will remain in the midst of a prolonged period of growth in the next six months. Nearly half of all search firms plan to add additional professional staff during the next three months.
The Labor Department says fewer people are in the unemployment lines. New claims for jobless benefits fell by a seasonally adjusted 4,000 to 310,000. The news comes a day ahead of the monthly employment report. Economists are looking for the May unemployment rate to remain steady at four and a-half percent.
Online job recruiting as measured by the Monster Employment Index inched up three points in May, suggesting online recruitment activity and related demand for workers has stabilized. Online job demand has risen for five straight months and, while the year-over-year growth rate dipped to 13 percent, there’s been a moderate pick-up from the sluggish pace registered in first quarter. Monster says 13 of 20 industries and seven of 23 occupational categories it tracks rose during the month, with online demand for healthcare professionals increasing and the construction and manufacturing-related categories declining.
CDS Market Research says the number of housing units is expected to increase in the Energy Corridor and West Houston area. The study projects an increase of 41 percent in office space square footage and an increase of 53 percent in retail space square footage. The land use, residential and employment projections report predicts an estimated 101,933 jobs will be available in the Energy Corridor by 2025. Other additions to the corridor in the upcoming years include two new churches, two post offices and additional hotel accommodations. Texas Children’s Hospital will develop an additional 300,000 square foot facility on the northwest corner of I-10 and Barker Cypress.
The government says construction spending rose one-tenth of one percent in April, restrained by the slumping housing market. The Commerce Department says spending by private builders on non-residential projects, as well as spending by the government, rose to fresh highs. March’s gain was revised up to six-tenths, originally put at two-tenths.
The nation’s banks are feeling the effects of the sluggish housing market. The Federal Deposit Insurance Corporation says profits at federally insured banks and thrifts fell two and a-half percent in the first quarter–to $36 billion. In addition to the weak home-sales market, the FDIC blames increased defaults on loans, higher interest rates and weak economic growth. While the results for the first three months of the year were down $912 million from the same quarter last year, the profit was still the fourth-highest on record. Several recent reports suggest that the housing market’s decline is not over. Standard & Poor’s reported earlier this week that home prices showed a quarterly decline in the first three months of the year for the first time since 1991.
Long-term mortgage rates are higher this week on news of growth in durable goods orders. Freddie Mac says the average for the 30-year fixed-rate mortgage stands at 6.42 percent–up five basis points from last week. The 15-year loan is averaging 6.12 percent, compared with 6.06 percent a week ago. Freddie Mac Vice President and Chief Economist Frank Nothaft says the report of stronger growth in orders for durable goods suggests economic growth outside the housing market remains robust. That’s due, he says, to “a healthy consumer sector and improving business spending.”
AT&T and four other telecom companies won a federal telecommunications contract that’s worth up to $20 billion over ten years. But getting on the so-called Networx Enterprise contract is the first step. The winners must now compete with each other to win business from agencies looking to improve their voice, data and other telecom services. Competing with San Antonio-based AT&T are Verizon, Sprint Nextel, Qwest Communications and Level Three Communications. It’s the second telecom contract awarded by the General Services Administration in about two months. In late March, Qwest, AT&T and Verizon won the much larger Networx Universal contract. That’s the government’s largest telecom contract ever awarded and is potentially worth up to $48 billion over a decade. Universal requires companies to maintain current agencies’ needs. They also must offer advanced services, such as Internet-based telephone service, network security and video and Web conferencing, domestically and internationally. Enterprise has far fewer requirements than the much larger Universal contract and covers a smaller geographic area.
BP has signed a $900 million exploration and production agreement with Libya’s national oil company. The deal brings BP back to Libya for the first time in over 30 years. The project could lead to the drilling of about 20 wells.
Duke Energy has acquired the wind power development business of Austin-based Tierra Energy, according to the Houston Chronicle. The purchase includes more than 1,000 megawatts of wind assets under development in the west and southwest.
Houston’s Anheuser-Busch distributor has agreed to buy the Budweiser distributor in San Antonio, making it the nation’s largest wholesale distributor for the beer. Silver Eagle Distributors is not disclosing the terms of the deal, but the editor of Beer Marketer’s Insights says it could be a deal worth $250 million.
Houston Executive Airport is breaking ground next week on its new airport in Brookshire, west of Houston. The two-story Henriksen Jet Center will be constructed by Tribble & Stephens Constructors, featuring a 26,000-square-foot hangar, passenger lobby, pilot’s lounge, theatre room, weather briefing room and offices. The facility is expected to be completed by 2008.
A Mississippi plant has won a $623 million contract to build 1,200 armored vehicles for the Marine Corps. The armored vehicles will be mine-resistant and ambush-protected. The contract will result in 350 jobs coming to the Griffin Armament Plant in West Point, Mississippi. The truck chassis will be built at Griffin’s Garland plant and shipped to the military integration facility in West Point for final assembly. In a statement, Republican Congressman Roger Wicker of Mississippi says that the contract specifies delivery of the vehicles to the Marine Corps by February 2008.
ChoicePoint says it’s reached a settlement with 43 states–including Texas–as well as the District of Columbia over alleged failure to adequately secure consumers’ personal information. The settlement arises from a 2005 database breach. The suburban Atlanta-based consumer data provider has agreed to adopt stronger security measures to secure the legitimacy of companies before they are allowed access to people’s personal information. They will include getting written certification and sometimes making on-site visits. ChoicePoint will also conduct periodic audits to ensure that companies are using consumer data for legitimate reasons. ChoicePoint will also pay a total of $500,000 to the states to use for public education campaigns about identity theft. The breach that was disclosed in February 2005 involved thieves posing as small business customers to gain access to ChoicePoint’s database. The Federal Trade Commission says the breach possibly compromised the personal information of 163,000 Americans.
The Greater Houston Convention & Visitors Center on the first floor of City Hall on Bagby is celebrating eight years of providing information to travelers, downtown employees and residents. The center offer information on history, cultural arts, attractions, restaurants, retail and education, through merchandise, brochures, magazines and flyers and through information specialists. It’s the largest visitors center in the U.S., with 7,700 square feet.