The government says new claims for unemployment benefits jumped to their highest level in more than 26 years. The Labor Department says the number of laid-off workers seeking jobless benefits rose last week to a seasonally adjusted 626,000, from the previous week’s upwardly revised figure of 591,000. The latest total is far more than analysts’ expectations of 583,000. The number of people that remained on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967, though the work force is now much larger.
The Lawrence Marshall car dealership in Hempstead has closed because of the economy. The dealership, which employed about 240, posted a notice on its Web site. Lawrence Marshall sold Chrysler, Dodge, Jeep, Chevrolet, Cadillac, Ford, Hyundai and pre-owned vehicles on a 40-acre complex about 50 miles northwest of Houston. CEO Ray Childress, former defense lineman with the Houston Oilers, was the public face of the dealership, campaigning on a slogan of “clobbering big city prices.” Landmark and Bill Heard Chevrolet closed in September as part of a nationwide 13-dealership closing.
Prices at the gasoline pump rose an average eight cents this week in Texas. AAA Texas reported the average retail cost per gallon statewide reached $1.80. The nationwide cost rose six cents, to hit $1.90 a gallon. Houston’s average is at $1.77 per gallon. The association survey found San Antonio had the state’s least expensive gasoline at $1.76 a gallon. El Paso had the highest price for gasoline, at $1.94. AAA Texas says the retail cost of gasoline remains about $1 less than in early February 2008. Association spokesman Dan Ronan says oil inventories continue to rise. He says crude supplies are running at a surplus of more than 50 million barrels.
The same cheap crude that crushed year-end profits for oil and gas producers is driving the industry’s biggest annual deal-making event. This week’s North American Prospect Expo in Houston comes as crude prices hover at five-year lows around $40 a barrel. But the Associated Press reports there are deals to be had in a recession. Thomas Wilson is an investment banker from New Orleans who’s representing the Delek Group, which is an Israeli energy firm. Wilson says “there’s a sense of blood in the water.” This year’s expo is expected to attract more than last year’s record 15,700 participants. The expo takes up a chunk of Houston’s George R. Brown Convention Center. Companies can spend thousands of dollars for exhibit space. The roster includes ExxonMobil and Shell, but most participants are smaller independent producers.
The nation’s retailers are reporting dismal January sales as shoppers dig deep into survival mode and curtail their spending as they grapple with rising layoffs and shrinking retirement accounts. As merchants reported their sales figures, the malaise crossed the spectrum of retailing, from department chains to teen chains. Wet Seal, Stage Stores and Children’s Place Retail Stores are among the pack that reported deeper-than-expected sales declines. The figures are based on same-store sales, or sales at stores opened at least a year. Wal-Mart, the world’s largest retailer, is a notable exception. It reports sales that beat Wall Street’s forecast, as shoppers continue to focus on necessities like groceries. Macy’s turned in better-than-expected sales figures. January is the least important month of a retailer’s sales calendar, but the figures confirm the deterioration of consumer spending. The retail industry has posted sales declines since October. Many analysts believe the weakness will last at least through the first half of the year.
Productivity was increasing at the end of last year at three times the expected pace while labor costs slowed significantly, underscoring that a deepening recession has taken away the threat of inflation. The Labor Department said that productivity rose at an annual rate of 3.2 per cent in the final three months of last year, far above the 1.1 per cent rise that economists had expected. The increase was double the 1.5 per cent rise in productivity in the third quarter. Meanwhile, the government says unit labor costs edged up at a 1.8 per cent annual rate in fourth quarter, far lower than the 2.9 per cent rise that had been forecast. Labor costs had risen at a 2.6 per cent rate in the third quarter.
The government says orders to U.S. factories fell for a record fifth straight month in December, closing out the worst year for American manufacturers since 2002. Analysts say the deepening U.S. recession will mean further weakness in coming months. The Commerce Department said that orders dropped by 3.9 per cent in December, an even bigger decline than the three per cent that economists had been expecting. The weakness was widespread with a range of industries from autos to heavy machinery and computers all reporting big declines in demand. For all of 2008, factory orders are up by 0.4 per cent, the weakest showing since orders actually fell by 1.8 per cent in 2002.
Babcock & Wilcox Nuclear Operations Group has received awards in excess of $1 billion for the manufacture of nuclear components. The contracts could be worth $2.66 billion in revenue over ten years. As a result of this increased workload, The McDermott International subsidiary expects to hire an estimated 250 new salaried and hourly employees at its various locations. The company, which employs 20,000 worldwide, provides nuclear fuel and manufactures reactors for U.S. Navy submarines and aircraft carriers. It also performs plutonium and uranium decontamination and decommissioning.
A government watchdog group says the federal government overpaid for stocks and other assets from financial institutions under its $700 billion rescue program. The chairwoman of the Congressional Oversight Panel for the Bailout Funds told the Senate Banking Committee that Treasury in 2008 paid $254 billion and received assets worth about $176 billion. The figures were reached by extrapolating the results of a study of ten government transactions. The treasury by January 23rd had spent about $294 billion on more than 300 companies under the troubled asset relief program. In one bright spot, the inspector general in charge of reviewing the funds said the federal government has received more than $271 million in dividends from preferred shares obtained through the program.
The Federal Reserve says commercial banks boosted their borrowing over the past week from its emergency lending program, while investment firms drew less. The Fed says commercial banks averaged $67.4 billion in daily borrowing over the week ending Wednesday. That was up from nearly $65 billion in average daily borrowing logged over the week that ended January 28th. Investment firms drew $30.3 billion over the past week from the Fed program. That was down from an average of nearly $32 billion the previous week. This category includes any loans that were made to the U.S.- and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Bank of America’s Merrill Lynch.
A private security official says unidentified gunmen have attacked an oil-industry vessel off the coast of Nigeria and killed its captain. The official said the captain of the security boat died of gunshot wounds sustained in the attack early Thursday in Nigeria’s deep water offshore oil fields. The official spoke on condition of anonymity due to company prohibitions on dealings with the media and had no further details. Attacks on the oil industry have become common in three years of rising violence across the oil-rich southern Niger delta. Nigeria is Africa’s biggest oil producer.
Texas could lose $466 million in tax revenue in 2010 and up to $5.4 billion by 2060 because of reduced business activity caused by insufficient water supplies, Comptroller Susan Combs warned in a report. By 2060 there could be more than 46 million people living in Texas and a 27 per cent increase in demand for water, Combs said. Besides population growth, Texas’ vulnerability to drought makes long-term water planning imperative and difficult, she said. Each of the one- or two-year droughts in Texas during the past decade has cost agricultural producers and businesses between $1 billion and $4 billion annually. Combs’ report, titled “Liquid Assets: the State of Texas’ Water Resources,” recommends state officials consider a dedicated funding source for water development.
President Barack Obama is ordering the government to establish higher energy efficiency standards for everyday products such as dishwashers, lamps and microwave ovens. Administration aides say Obama signed a presidential memorandum directing the Energy Department to get moving on energy standards for appliances. That includes a first batch he will order to be finalized by August. The fact that Obama is getting directly involved in speeding up household appliance standards underscores how much he wants to show quick, clear progress on energy. It’s part of a broader campaign promise to deal with economic and energy concerns all at once. Laws on the books already require new efficiency standards for household and commercial appliances. But they have been backlogged in a tangle of missed deadlines, bureaucratic disputes and litigation.
House and Senate lawmakers have reached an agreement to expand a four-decade-old program helping American workers who lose their jobs because of trade with other countries. The renewal and expansion of the Trade Adjustment Assistance Program is expected to be added as an amendment to the economic stimulus package now working its way through the Senate. The agreement was reached by senior Republicans and Democrats on the House Ways and Means Committee and the Senate Finance Committee, the two panels in charge of trade policy. The measure would provide more money for the retraining and health care of workers displaced by trade and would extend eligibility to include workers in service industries and the public sector.
State leaders have authorized the payment of millions of dollars in bills that had been stacking up from companies that helped with emergency services after September’s Hurricane Ike. Jack Colley, the state’s Emergency Management director, told lawmakers this week that the state has $134 million in unpaid bills. Governor Rick Perry’s office blamed the Federal Emergency Management Agency for the delay. But in a letter Wednesday to agencies involved, Perry directed $145 million be transferred to the Texas Division of Emergency Management to pay the bills from the September 13th hurricane. “This approval is contingent on the conditions that the money be used only to reimburse Hurricane Ike-related expenses and that reimbursements be made in a manner consistent with maximum federal reimbursement,” they wrote.
A survey of state highway safety agencies suggests a silver lining to high gas prices and a faltering economy — fewer traffic fatalities. The Governors Highway Safety Association says vehicles deaths dropped in 40 states and the District of Columbia out of 44 states they surveyed. The average decline was 10.7 per cent. The survey is an early indication that traffic deaths could hit their lowest levels in four decades. The head of the organization says deaths declined because people drove less in the face of skyrocketing gas prices in the first half of 2008 followed by the economic downturn. Barbara Harsha says seat belt use reaching a record high of 83 per cent and an increased enforcement of traffic laws also contributed to the drop. The safety association cautions the surveys are estimates and the final figures could vary.
Belo says its loss for the fourth quarter widened on falling sales and impairment charges. But the Dallas-based television company says results managed to beat Wall Street forecasts. Belo lost $358.8 million compared with $333.4 million in the year-ago quarter. Belo’s revenue fell nine per cent to $198.9 million from $218 million but still topped the average forecast of $198.1 million.