President Bush calls for tax relief to stimulate economy…U.S. Chemical Safety Board sends investigative team to BP refinery in Texas City…AAA Texas Gas Price Survey shows average price of regular self-serve fell about four cents this week…
President Bush is calling for about $145 billion in tax relief to stimulate a sagging economy. Bush says in order to be effective, a stimulus package would have to represent about one percent of the Gross Domestic Product. Bush and Congress are scrambling to act, amid mounting fears of a recession. There are concerns that a severe housing slump and a painful credit crisis could cause people to stop spending, and cause businesses to stop hiring. Bush says the package must include tax incentives for business investment and “direct and rapid” tax relief for individuals. He says, “letting Americans keep more of their money should increase consumer spending.” He also says Congress should work quickly to send him legislation to “keep our economy growing and creating jobs.”
President Bush says if Congress passes an economic stimulus package, the country will be “just fine.” He spoke at a manufacturing plant in Frederick, Maryland–hours after he outlined what he’d like to see in a stimulus package. Bush said the package should represent about one percent of the gross domestic product, or about 150 billion dollars. As he visited the plant in Maryland, Bush said, “we need to get this deal done and get it out.” He said he thinks there can be an agreement on a growth package “very quickly.” He said earlier that there’s a “risk of a downturn.” Treasury Secretary Henry Paulson says the largest part of the stimulus package would be targeted to individual taxpayers. One Republican official says Bush is hoping to target about $100 billion toward individuals, and about $50 billion toward businesses. Congressional leaders have been working on a broader package that would also include a temporary increase in food stamps. And, there’d be an extension of unemployment benefits, which also could increase.
The U.S. Chemical Safety Board has deployed an investigative team to the BP refinery in Texas City. An employee was killed in a process-related accident in an ultracracker unit on Monday. CSB Supervisory Investigator Don Holmstrom, who led the board’s two-year investigation of the 2005 fatal explosion at the refinery, will head the team. The board doesn’t issue citations or fines, but makes safety recommendations to plants, industry organizations, labor groups and regulatory agencies.
Retail gasoline prices sagged somewhat this week across Texas. The weekly AAA Texas Gas Price Survey shows the average price of regular self-serve fell four cents this week to $2.94. That’s still 83 cents more than at this time last year. Nationally, regular self-serve averaged $3.04 per gallon, down almost six cents from last week. Houston’s average is down just over three cents, averaging $2.91 per gallon. Auto club spokeswoman Rose Rougeau says gas prices now appear unlikely to test the May 23rd record high of $3.09 per gallon–at least in the next few weeks. She says winter weather usually combines with the lack of holidays to depress gasoline consumption to its lowest levels of the year. El Paso has the cheapest gas of the 11 Texas cities on the auto club survey list with $2.85 per gallon, down a penny from last week. Texarkana has the most expensive gas at $3.01 per gallon, despite a four-cent drop from last week.
The Texas Workforce Commission reports that the seasonally adjusted state unemployment rate rose to 4.5 percent in December. That’s its highest level in ten months and a sign of slowing in the regional economy. Houston’s rate—not seasonally adjusted—is up to 4.2 from 4.0 the previous month. The monthly jobless report shows the number of job hunters swamped a modest increase in hiring in Texas, pushing unemployment up from 4.2 percent in November. Still, the December jobless rate remained low by historical standards. Unemployment in Texas dipped to 4.1 percent at times last year. That’s a 31-year low. The national unemployment rate in December was five percent. That’s a two-year high. The Workforce Commission said seasonally adjusted non-farm employment in Texas grew by 18,600 jobs in December. That was an improvement from weak November numbers. Midland, helped by the boom in oil and gas exploration and production, continued to have the lowest unemployment in the state at 2.7 percent, unchanged in several months. The highest unemployment was in the McAllen-Edinburg-Mission area, where it jumped to 6.6 percent from a November rate of 5.9 percent. Initial claims for unemployment benefits in Texas fell 4.3 percent.
A forward-looking gauge of the economy is pointing down. The Conference Board’s Index of Leading Indicators fell two-tenths of a percent in December. It is the third straight monthly decline, signaling further weakening for the economy in the coming months. Conference Board economist Ken Goldstein says the data suggests “that growth could remain slow–and possibly be even a little slower–in the first half of 2008.” Some economists believe that the credit crunch and troubled housing market have already pulled the U.S. economy into recession.
American Airlines doubled its fuel surcharge to $40 per round trip. The move by the nation’s largest carrier came just days after a slightly larger increase led by United Airlines failed. A spokesman for Fort Worth-based American confirmed that the airline raised its previous fuel surcharge from $10 one-way and $20 roundtrip. Farecompare.com reports the increase applies to business and leisure fares on most American routes, but not where it competes with low-fare leader Southwest Airlines, based in Dallas. United last week raised its surcharge to $50 per round trip. That move was matched by American and others, but it crumbled this week as some airlines pulled back.
Wireless phone provider Sprint Nextel plans to cut 4,000 jobs and close 125 retail locations, in response to an expected slowdown in subscriber growth, profit and revenue. The job cuts and store closings aim to cut up to $800 million a year in labor costs. The Virginia-based company says it will also close 4,000 of its 20,000 third-party distribution points, such as stalls inside of other consumer electronics retailers. The retail store closures represent eight percent of its 1,400 company-owned shops. There are about 35 sprint retail stores in the Houston area and some 64 third-party distribution points, although the effect of the cuts or closings here have not been announced.
The New York Stock Exchange has an agreement to buy the American Stock Exchange, ending a once-intense rivalry that began in colonial times when brokers traded in outdoor markets. Both exchanges have battled for corporate listings and bragging rights since the early 1900s, with their trading floors just a short walk away from each other in lower Manhattan. Newspapers around the country all listed the stock swings on the nation’s two dominant markets, until investors began paying more attention in the 1990s to technology issues on the upstart Nasdaq stock market. Their evolution took a very different path–with the big board forming NYSE Euronext to become the world’s first trans-Atlantic exchange. The AMEX, unable to compete like it once did, began to focus on trading options and other financial products. The AMEX, which once hosted the likes of big-name stocks such as the New York Times Company, now trades generally smaller companies that are often too illiquid to meet the standards of bigger rivals. NYSE Euronext said it would pay AMEX’s seatholders–generally members that trade at the exchange–$260 million in stock. In addition, they would receive more stock after the sale of AMEX’s building on 86 Trinity Place–a landmarked art deco building it moved into in 1921 and that sits only blocks away from the World Trade Center site. The deal will give NYSE Euronext a second U.S. license for an option exchange. It would make the NYSE the number three U.S. options marketplace.
Baker Hughes in Houston says the number of rigs actively exploring for oil and natural gas in the U.S. fell by 12 this week–to reach 1,732. One year ago the rig count stood at 1,745. Texas is down five rigs. Baker Hughes has tracked rig counts since 1944.