Gas prices and a shaky economy will keep more Texans home over the Fourth of July holiday. AAA Texas says nearly 2.8 million people in the state are expected to take holiday trips this week. The number is almost two percent less compared to 2007. Some 445,000 travelers are expected to fly to their getaway, marking a four percent decline from last year. About two million will drive to their destination this holiday, a drop of almost two percent. AAA Texas General Manager Mark Bell says record-high gas prices and worries over the economy are curbing holiday travel. Nationwide, AAA anticipates Fourth of July travel will decline 1.3 percent compared to last year. Some 40.45 million Americans are expected to take trips for the holiday.
The head of the International Energy Agency says the world is in an “oil shock.” A forecast made at an oil congress in Madrid, Spain, says the amount of oil hitting the market will be less than originally estimated. The report also says while demand for oil from industrialized nations will fall, supplies will stay tight since developing nations will be consuming more. Half of that consumption will come just from China and India. The energy agency predicts that over the next five years oil producers will still meet world demand, but only by two million barrels a day. If correct, that would leave a thin cushion between what’s available and what’s needed.
A measure of U.S. manufacturing activity has grown for the first time in five months in June, thanks to strong exports. The reading of 50.2 from the Institute for Supply Management was up from 49.6 in May. It beat economists’ prediction of a reading of 48.7, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth. For the previous four months, the index had hovered near its lowest level in five years.
Texas manufacturing activity weakened last month, according to the Federal Reserve Bank of Dallas. Respondents note that uncertainty in the national economy and rising energy costs are to blame. But about a third of manufacturers responding to the survey expect increases in production and volume of new orders in the next six months.
Starbucks plans to close 600 stores in the U.S. in the next year and cut back the number of new stores it had planned to open. The coffee purveyor says 70 percent of the stores set for closure had opened since the start of the 2006 fiscal year. The total includes 100 previously announced closings. Starbucks says it will try to place workers from closed stores in remaining Starbucks.
The Federal Reserve has auctioned another $75 billion in loans to help banks overcome credit problems. As it released the results of its most recent auction the 15th since the program began in December–the central bank said it will provide a fresh batch of the loans this month. In mid-December, the Fed said it was creating an auction program that would give banks a new way to get short-term loans from the central bank. Banks have been reluctant to lend to each other because of the global credit crunch, which has crimped lending to individuals and businesses. The smooth flow of credit is critical to the health of the economy. It allows people to finance big-ticket purchases, such as homes and cars, and helps businesses expand operations and hire workers.
AT&T said it’ll sell the new version of the iPhone without a service contract for $400 more than the price with a two-year plan. That’s a break from the rules Apple set forth when it debuted its popular touch-screen gadget last year. Two new iPhones models go on sale with two-year AT&T contracts July 11th for $199 and $299, depending on the amount of memory they contain. San Antonio-based AT&T says the no-contract versions will cost $599 and $699 and will go on sale sometime in the unspecified future. Buyers would then go month-to-month on AT&T’s service. AT&T says the no-contract phones would be “`locked” to work only on AT&T’s network, as the contract-laden phones will be. The new iPhones will have faster data access and more accurate navigation capabilities. The cheaper model will have eight gigabytes for internal memory, while the more expensive model will have 16 gigabytes of memory.