Gas prices finally drop a bit, after 16 weeks of increases…Commerce Department says incomes fell one-tenth of one percent, while spending rose five-tenths of one percent…National Association of Realtors’ pending home sales index falls again…
A weekly survey shows Texas retail gasoline prices sagged this week after 16 straight weeks of gains took them to record heights. The AAA Texas Gas Price Survey shows regular-grade gasoline retailed for an average of $3.05 per gallon in 11 Texas cities. That’s three cents less than last week’s average. The national average dropped four cents to $3.19 per gallon. Houston’s average is down 2.2 cents, to $3.01. Auto club spokeswoman Rose Rougeau says refinery production has picked up and gasoline inventories have increased. She says that’s helped ease the upward pressure on prices. The survey found the state’s highest prices in Amarillo, where regular-grade averaged $3.25 per gallon. That’s despite a three-cent decrease. Corpus Christi had the lowest average price of $2.97 after a three-cent decrease.
The Labor Department says the nation’s unemployment rate held steady in May at 4.5 percent. Payrolls expanded by 157,000 jobs, nearly twice as many as the previous month. Job growth was seen in white-collar areas like health care, education, professional and business services, leisure and hospitality as well as government. Not surprisingly, there was continuing weakness in manufacturing, construction and retailing, partly reflecting fallout from the housing slump. Economists call the report encouraging because it indicates many companies are holding up well to the troubles that have plagued housing and the automotive sectors and rising gasoline prices.
The government says a drop in incomes didn’t keep consumers from spending in April. The Commerce Department says incomes fell one-tenth of one percent, while spending rose five-tenths of one percent. The spending figure was stronger than what economists expected, while the incomes number was weaker.
The National Association of Realtors’ pending home sales index fell again in April. The index, based on pending home sales, was down 3.2 percent, and 10.2 percent below the level of April of 2006. NAR senior economist Lawrence Yun says the decline was due–in part–to the fact that some subprime lenders went out of business and disrupted the market. But he adds that mortgage applications have risen recently, suggesting that the impact of problems in the subprime industry may be diminishing.
Higher demand for both passenger vehicles and light trucks sent General Motors’ U.S. sales rising last month. The world’s largest automaker says sales were up 9.6 percent in May, despite a planned reduction in fleet sales. Retail sales–which exclude fleet sales–were up almost 13 percent. Meanwhile, Toyota’s U.S. sales of its cars and light trucks jumped 14 percent in May–to just over 269,000 vehicles. That was more than Ford, whose sales tumbled nearly seven percent–to 259,470 cars and light trucks. Toyota also topped Ford in sales for January and passed its American competitor twice in monthly sales last year. Chrysler saw its sales rise 4.3 percent thanks to a sales surge of 20 percent by its Jeep brand. U.S. sales by Chrysler’s parent company–DaimlerChrysler–were up 3.9 percent.
The law firm of Lerach Coughlin Stola Geller Rudman & Robbins has issued a news release confirming that William Lerach is considering retirement after 35 years of practicing law. It was reported earlier this week that the California attorney who has brought scores of cases on behalf of defrauded shareholders earlier this week was leaving the firm he started three years ago. Lerach collected more than $7.3 billion for victims of Enron’s collapse in 2001. He recently pressed the Securities and Exchange Commission to make it easier for investors to collect money from investment banks and accounting firms that did business for Enron.
The manufacturing sector expanded for a fourth straight month in May, despite soaring gas prices and the economy’s slowing growth. The Institute for Supply Management says its manufacturing index rose to 55 from 54.7 in April, surprising economists who had been calling for a decline. A reading above 50 indicates growth, while a reading below 50 suggests contraction.
El Paso-based Western Refining announced it has completed its acquisition of Scottsdale, Arizona-based Giant Industries, making Western the fourth-largest publicly traded independent refiner and marketer in the nation. The agreement calls for Giant’s common stock to cease to trade on the New York Stock Exchange. The deal went through after a federal judge on Tuesday denied the Federal Trade Commission’s efforts to block the proposed $1.3 billion acquisition, clearing the way for the southwest gasoline companies to join forces. The FTC requested a stay, and the two companies agreed not to complete the deal before the federal agency’s appeal to the 10th U.S. Circuit Court of Appeals in Denver. The 10th Circuit denied the FTC’s request for an injunction pending the appeal. But an FTC spokesman says that the court did grant the FTC’s request for an expedited appeal and that the agency was preparing that now. The 10th Circuit has set a hearing for September 20th.