More than a third of Houston-area employers expect to add staff in first quarter…Federal Reserve meets in Washington today, considers trimming key rate…Groundbreaking set for this afternoon for Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital…
Around 38 percent of Houston area employers surveyed expect to hire more employees in the first quarter of 2008, according to the latest Manpower Employment Outlook Survey. Three percent are expecting payroll reductions, and 57 percent will maintain current staffing levels. For the last three months of this year, 29 percent of firms surveyed had planned to add employees. Employers expect more hiring activity in the new year as compared to one year ago, when 33 percent of companies surveyed planned to raise staff levels and seven percent expected payroll reductions. Nationwide, 22 percent expect to add to their payrolls in the first quarter, and 12 percent expect to reduce staff levels. Sixty percent expect no change in the hiring pace.
Analysts are expecting the Federal Reserve to trim its key rate by one-quarter at today’s meeting in Washington. Some are even talking about a possible half-point cut. The Fed has trimmed rates twice in 2007. In October, officials suggested that might be enough for the year. But the economy has gone through some changes since that last Fed meeting. Credit has become harder to get, Wall Street has convulsed again and the housing slump has intensified. The situation poses the biggest challenge yet to Chairman Ben Bernanke, who took over in February 2006. Some analysts have questioned whether he waited too long to cut the Fed’s key rate and whether he’s acted aggressively enough to address the nation’s economic woes.
The highlight of this week’s economic activity may well be the Federal Reserve meeting today. Analysts have been looking for an interest rate cut, but how much of a reduction remains a question. Also this week, reports are due on inflation, with the Producer Price Index to be released on Thursday. The Consumer Price Index comes out the following day. Both are expected to show an uptick in the headline numbers, with moderate gains for core inflation. Thursday also brings the government report on November retail sales.
Groundbreaking is set for this afternoon for the Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital in Baylor Plaza at Freeman and Bertner. The Duncans donated $50 million to the institute. The facility will be the first in the country to use a multidisciplinary research approach to understand the unique issues of a child’s brain structure, development patterns and related diseases such as autism, epilepsy, Rett syndrome, cerebral palsy and learning disorders. More than 170 researchers from different disciplines will collaborate on treatments for those afflicted with neurological diseases. The research institute is set for completion in 2010, and will be physically connected to the Baylor College of Medicine and M.D. Anderson Cancer Center.
Microsoft is filing 51 civil lawsuits and referring 23 cases to local law enforcement in 22 countries against resellers who allegedly sold counterfeit Microsoft software on Internet auction Web sites. The company says consumers put themselves at risk for computer viruses, malware and spyware when they purchase counterfeit software from online auction sites. Microsoft has a new online education guide to help consumers spot and avoid counterfeit software offered on auction sites. eBay has also established a Web page with examples of pirated software to avoid and steps to report piracy.
The state of Texas has reached a settlement with an auto credit insurance company that sold credit insurance plans to Texas vehicle owners and unlawfully retained unearned premiums. Attorney General Greg Abbott says Protective Life Insurance will refund unearned premiums worth $1.57 million to more than 7,000 eligible Texas policyholders. The premiums apply to vehicle owners whose loans terminated between 2002 and 2006. Texas law required insurers to refund credit insurance premiums when customers pay off their vehicles ahead of schedule.
A subsidiary of El Paso Corporation has formed a joint venture with Pittsburg-based Equitable Resources to develop a natural gas pipeline project linking Clarington, Ohio, to Pleasant Valley, New York. The 471-miles of 36-diameter interstate natural gas pipeline will link to northeastern markets. El Paso’s Tennessee Gas Pipeline subsidiary will have the project online by November 2011.
Christian Brothers Automotive has opened a new facility in Missouri City on Knights Court—it’s 12th Houston-area location. Christian Brothers Automotive is a full-service automotive service franchise organization, currently operating more than 45 stores in eight states. The first outlet opened in Houston in 1982.
Swiss banking giant UBS says it will write off a further $10 billion on losses in the U.S. subprime lending market. In addition, it will raise capital by selling substantial stakes to Singapore and an unnamed investor in the Middle East. UBS will now record a loss for the fourth quarter and said “it is now possible that UBS will record a net loss attributable to shareholders for the full year 2007.” UBS says the government of Singapore Investment Corporation, or GIC, is investing $9.75 billion, while an undisclosed strategic investor in the Middle East is contributing the remainder. As recently as the middle of November, UBS had predicted a profit for the fourth quarter despite ongoing speculation about its subprime holdings. In October the bank downgraded the value of some assets by $3.4 billion because of losses linked to the U.S. mortgage crisis.
The U.S. and China hold trade talks this week that are expected to tackle a number of thorny issues. Chief among them will likely be the safety of Chinese products and China’s huge trade surplus, which hit $233 billion last year. The issue of intellectual property rights could also be on the agenda. Treasury Secretary Henry Paulson will sit down with Chinese officials Wednesday outside Beijing. Both sides are emphasizing the growing interdependence of the U.S. and Chinese economies. The Chinese say they’re worried about what they see as a protectionist sentiment among U.S. lawmakers. But Commerce Secretary Carlos Gutierrez says the U.S. has learned that “protectionism does not protect.” Agreements are to be signed today on food and feed product safety, and on drugs and medical devices.
Electronic Data Systems says it’s won a $715 million deal to manage the communications infrastructure for drug maker Bristol-Myers Squibb. The seven-year deal calls on Plano-based EDS to manage Bristol-Myers Squibb’s information technology systems, including critical operations data and help desk support. The contract initially covers systems in the Americas and Asia Pacific regions. EDS says it later could include Europe, the Middle East and Africa. EDS also said it’ll provide computer capacity to Bristol-Myers Squibb from its data center in Auburn Hills, Michigan. EDS says partners EMC, Microsoft, Oracle and SAP will also provide products and services to Bristol-Myers Squibb. The drug maker says the deal is intended to improve productivity and let his company focus on its core business.
By the end of this week, the world’s best-known chronicle of capitalism, the Wall Street Journal, will have a new owner. For more than a century, the journal’s parent company, Dow Jones, was controlled by the Bancroft family, descendants of Clarence Barron, one of the earliest owners of the storied financial publishing company. The family was long seen as unified in opposition to selling and at first rebuffed the extremely rich offer from Rupert Murdoch’s News Corporation, which valued the company at more than $5 billion. But Murdoch eventually won over enough family members to clinch the deal to acquire Dow Jones and its flagship paper. The first inklings of how the sale will affect the paper came late last week, when News Corporation appointed a new management team for Dow Jones. Murdoch has also clarified the line of succession at News Corporation, naming son James to a new senior role, which puts him clearly in line to succeed his 76-year-old father. More changes are in store after News Corporation formally seals the deal with a vote by Dow Jones shareholders this Thursday.