Hurricane Gustav is growing rapidly as it approaches Haiti. Rains on the leading edge of the storm drove many Haitians to shelter but prompted few other outward signs of preparation only hours before landfall. The hurricane roared over Haiti with top sustained winds near 90 miles per hour this afternoon. The storm is on track to slice along the south coast of Cuba during the week before entering the Gulf of Mexico on Sunday. The National Hurricane Center in Miami says the storm could possibly grow by then into a Category 3 hurricane with 115 mile-per-hour wind.
Oil investors are reacting sharply, however. Global oil prices are soaring on fears it could become “extremely dangerous” in the Gulf of Mexico. Fearing the hurricane could threaten the Gulf’s many drilling platforms this weekend, prices jumped by about $5 a barrel. That was after the Miami-based National Hurricane Center projected that Gustav would gather strength over the Gulf’s warm waters. It’s hard to predict just where Gustav will strike, but energy analysts say the market is reacting. Shell and other oil companies are making plans to evacuate beginning as early as Wednesday.
Already pushing oil prices upward is Russia’s recognition of independence for the breakaway provinces of Abkhazia and South Ossetia in Georgia.
Sales of new homes posted an unexpected gain in July as heavily discounted properties enticed cautious house hunters to become home buyers. The Commerce Department says sales of new single-family homes rose by 2.4 per cent last month to a seasonally adjusted annual rate of 515,000 units, the most since April. But sales in June turned out to be much weaker than the government previously estimated. Sales sank to a pace of just 503,000—the worst showing since September 1991. Economists were expecting sales to drop in July.
A government agency says U.S. home prices fell 4.8 per cent in the second quarter compared with a year ago—a new record low. The Office of Federal Housing Enterprise Oversight says the previous record annual drop of three per cent was set in the first quarter of 2008. The index started in 1991. The government index also fell 1.4 per cent from the first quarter to the second quarter. That was a smaller drop than the record quarterly decline of 1.7 per cent set in the first quarter.
Americans’ confidence in the economy has gotten a better-than-expected boost in August amid lower prices at the gas pump. The Conference Board, a private research group, says that its consumer confidence index rose to 56.9, up from a revised 51.9 in July. Analysts had expected a reading of 53. That marked the second month in a row that sentiment improved, after a six-month slide since January. However, the level still remains about half of what it was a year ago. The Conference Board’s present situation index, which measures shoppers’ current assessment of the economy, declined to 63.2 from 65.8 in July. But the expectations index, which measures their outlook over the next six months, increased to 52.8 from 42.7 in July.
Federal regulators say U.S. banking industry profits plunged by 86 percent in the second quarter, as slumps in the housing and credit markets continued. Federal Deposit Insurance Corporation data shows federally-insured banks and savings institutions earned $5 billion in the April-June period, down from $36.8 billion a year earlier. The roughly 8,500 banks and thrifts also set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the second quarter. The FDIC says 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003.
New documents show most Federal Reserve officials at their meeting in August didn’t believe the Fed’s key interest rate was too low given harder-to-get credit conditions straining consumers and businesses alike. Documents released Tuesday provided insight into the Fed’s thinking at the August 5th meeting, when policymakers decided to hold its key rate steady at two per cent for the second straight meeting. But looking ahead, the next direction for rates is probably up, the documents said.
Membership at federally insured credit unions grew one per cent to 88 million members, according to the National Credit Union Administration. Davings outpaced lending in the first six months of 2008, growing at seven per cent. Lending grew 3.7 per cent. First mortgage real estate loans grew by 10.1 per cent. But used car loans grew at a slower pace—3.3 per cent to $92 billion.
The Census Bureau reports that the number of people lacking health insurance dropped by more than one million in 2007, the first annual decline since the Bush administration took office. The nation’s poverty rate held steady at 12.5 percent, not statistically much different from the 12.3 percent in 2006. That meant there were 37.3 million people living in poverty in 2007. The statistics do not take into account the consequences of the economic downturn that began late last year. Census says 45.7 million people —15.3 percent of the population—were uninsured in 2007. That’s down from 47 million in 2006. The median &mdsh; or midpoint — household income rose slightly to $50,200, marking the third consecutive annual increase.
Southwest Airlines says that it’ll eliminate nearly 200 flights early next year as it struggles with high fuel costs and a weakening economy. Southwest will cut 196 flights while adding only six new ones in its schedule that takes effect January 11th. That’s nearly six per cent of the airline’s daily schedule of close to 3,400 flights. Southwest spokesman Chris Mainz says some of the eliminated flights could be restored later in 2009. Late winter is typically a slow travel period. The Dallas-based airlines had resisted the kinds of capacity cuts being made by other carriers. The move raises doubts about the company’s publicly stated goal of growing modestly in 2009 despite the airline industry’s troubles.
An official with the Texas Department of Transportation says in the last 24 months 201 Texas motor coach operators were told their authorization was revoked but an unknown number returned under new names. The director of TXDOT’s motor carrier division, Carol Davis, said two of every five Texas charter bus companies have been ordered off the road in the last two years. The Fort Worth Star-Telegram reports state officials are trying to find out how many revoked companies are operating under a different name. About 300 bus companies have permission to operate legally in Texas. The Federal Motor Carrier Safety Administration has been publicly cracking down on so-called “rogue” motor coach operators in the wake of an August 8th bus crash near Sherman that left 17 passengers dead. The operator in that accident, Iguala Busmex, was an offshoot of another company, Angel Tours, that had been shut down earlier. Authorities recently shut down bus companies in Irving and Houston for being affiliated with revoked companies. Davis says by late September, state officials will begin posting complaints filed against bus companies on TXDOT’s Web site.
Vanco Ghana and Lukoil Overseas Ghana will partner to drill the first exploration test on the Cape Three Points Deepwater block offshore Ghana, according to the Houston Business Journal. Houston-based Vanco holds a 28.3 per cent interest in the block, with Lukoil holding a 56.7 per cent stake. Vanco is also active in Côte d’Ivoire, Equatorial Guinea, Gabon and the Ukrainian Black Sea.
Construction has started on a new office building for IDEV Technologies in Webster. The project on Medical Center Boulevard matches the Phase I building next door completed in April 2007. The new structure, set for completion in august 2009, has been designed to meet Leadership in Energy and Environmental Design (LEED) gold certifications. IDEV is a developer of medical devices used in radiology, gastroenterology, vascular surgery and cardiology.
Ford says it will spend $75 million to retool part of its Michigan truck factory in Wayne so it can make small car bodies. The automaker says the move is part of its plan to convert some truck factories to make smaller vehicles. Michigan truck’s 1,000 workers who now make Ford Expedition and Lincoln Navigator SUVs will be sent to the nearby Wayne assembly plant. Ford plans to add a third shift there to make more Focus cars. The move will begin in November, when Ford starts moving the equipment to build the big SUVs to the Kentucky truck plant in Louisville. That will clear space for Michigan truck’s body shop to be retooled to make Focus bodies. Michigan truck plant will be converted entirely to a car plant in 2010.