The unemployment rate jumped to 9.7 per cent in August, the highest since June 1983, as employers eliminated a net total of 216,000 jobs. The level of job cuts is less than July’s upwardly revised total of 276,000 and is the lowest in a year. Analysts expected the unemployment rate to rise to 9.5 per cent from July’s 9.4 per cent, and job reductions to total 225,000. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the so-called underemployment rate reached 16.8 per cent, the highest on records dating from 1994.
The White House press secretary says progress is being made in slowing the long string of job losses that the recession has caused. But the spokesman, Robert Gibbs, is still predicting that the nation’s unemployment rate will “exceed ten per cent.” And he says President Barack Obama is still not satisfied. Gibbs spoke after the government announced that the country’s unemployment rate had jumped to 9.7 per cent.
The number of Americans receiving food stamps continued to rise in June, with more than 35 million Americans receiving assistance. The numbers, released by the U.S. Department of Agriculture, are 22 per cent higher than June 2008. The number of Americans receiving food stamps in June rose by more than 700,000 people compared with May. The USDA administers the food stamp program, which helps to cover grocery costs for poor Americans. The average recipient in June received more than $133 in assistance. The average household received more than $293. June was the eighth straight month the number of people on food stamps rose.
The official poverty rate for Americans 65 years and older has stood for years at ten per cent. That’s the lowest rate among age groups. But the true rate could be nearly twice that high, according to a revised formula created by the National Academy of Sciences. The NAS formula would put the poverty rate for older Americans at 18.6 per cent, or 6.8 million people, compared with 9.7 per cent, or 3.6 million people, under the existing measure. The original government formula, created in 1955, doesn’t take account of rising costs of medical care and other factors. The NAS approach is gaining favor among public officials, including some in the Obama administration. If the academy’s formula is adopted, a more refined picture of American poverty could emerge that would capture everyday costs of necessities besides just food. The result could upend long-standing notions of those in greatest need and lead eventually to shifts in how billions of federal dollars for the poor are distributed for health, housing, nutrition and child-care benefits.
The British theater production of Enron is headed to London’s West End this winter and to Broadway in 2010, according to Playbill. Lucy Prebble’s play opened to rave reviews at Chichester’s Minerva Theatre in July. It transfers to London’s Royal Court Theatre beginning September 17th. But the play has sold out its run at the Royal Court. It also will have an autumn UK tour, beginning with performances at Bristol Ol Vic.
Rates for 30-year fixed home loans have dropped this week, getting close to the record lows seen in the spring. Freddie Mac says the average rate for a 30-year fixed was 5.08 per cent, down from 5.14 per cent a week ago. While above the record low of 4.78 per cent hit in the spring, rates are at levels that may be attractive for people looking to buy a home or refinance. To revive the economy, the Federal Reserve is spending more than $1.2 trillion on mortgage-backed securities, which has driven down rates on home loans. That money is set to run out by winter, though some analysts expect the central bank to gradually scale back its purchases, allowing the program to last longer.
A judge in Detroit has ruled in favor of American Airlines in a lawsuit by five men of Iraqi descent. The men alleged that their nationality caused a captain to cancel a flight to Chicago. U.S. District Judge Paul Borman said the airline’s decision to return to the gate in San Diego wasn’t “arbitrary and capricious”–a key legal standard in the case. The Detroit-area men were flying to Chicago in August 2007 after training U.S. marines in California about Iraqi culture. A woman who was uncomfortable got off the flight. Flight attendants said one of the men had a blanket over his head and glared at a crew member. A lawyer for the men, Lawrence Garcia, says he disagrees with the ruling. American Airlines is headquartered in Fort Worth.
Federal regulators are investigating American Airlines over structural repairs to its aging fleet of MD-80 series aircraft. A Federal Aviation Administration official, Lynn Lunsford, said that the investigation centered on 16 planes. The Wall Street Journal has reported FAA officials suspect American rushed to retire one of the planes to keep it from inspectors. A spokesman for American, Tim Wagner, declines to comment on that but says mothballing the aircraft wouldn’t let it escape scrutiny. He says the FAA has complete access to retired airplanes, and it exercises that access frequently. Wagner says American is responding to the FAA’s investigation. He declines to comment further.
The U.S. Appeals Court for the Federal Circuit says Microsoft can keep selling its Word desktop software as it appeals an unfavorable patent ruling. In May, a Texas district court said some versions of Microsoft’s Word processing software infringe on a Canadian technology company’s patent. The dispute is over the way Word 2003 and Word 2007 let users customize document encoding. The Texas judge had ordered Microsoft to pay Toronto-based i4i $290 million and stop selling infringing versions of Word by the middle of October. Microsoft has appealed the ruling and is set to present arguments on September 23rd.
The government agency that monitors energy markets is releasing a revamped weekly report that it said will provide a clearer picture of who is trading oil and other commodities. Speculation in energy markets has come under increased scrutiny after prices surged last summer to around $150 per barrel. Oil prices plunged this year to below $35 per barrel only to double within a matter of months. The new report, over time, is intended to give investors a clearer picture of who is doing what in commodities markets and perhaps a better idea of the motives behind the trades. The Commodity Futures Trading Commission releases a weekly roundup that details which way traders have bet oil prices will go over the past week. The report historically had classified the people making those bets as commercial traders, such as airlines or oil producers, who use markets to hedge against energy volatility, and noncommercial traders.
The Federal Reserve says banks boosted borrowing from its emergency lending facility over the past week, but cut back on other programs intended to ease the financial crisis. The results offer a mixed picture of credit conditions. The Fed says banks averaged $32.7 billion in daily borrowing over the week that ended Wednesday. That was up from nearly $30 billion in the week ending August 26th. The identities of the financial institutions are not released. They pay just 0.50 per cent in interest for the emergency, overnight loans. Banks, however, drew fewer longer-term loans from one of program the Fed established to ease the financial crisis. Companies also trimmed their use of another program aimed at increasing the availability of short-term financing crucial for paying salaries and supplies.
Natural gas prices are tumbling. And that should bode well for people using gas to heat their homes this winter. Natural gas has hit a new seven-year low. That’s as the nation cuts energy use, and more supply is going into storage. Earlier this week, Spokane, Washington-based utility Avista said it wants to reduce natural gas prices for its Oregon customers to the lowest levels in five years. And in the Midwest, Alliant Energy and Wisconsin Public Service both predicted heating bills would drop around 20 per cent. Natural gas, a key energy source for power plants, has plummeted to less than a third the price it fetched last summer, and its contract on the NYMEX lost nearly 23 per cent in the past six trading days.
The number of rigs actively exploring for oil and natural gas in the U.S. rose by ten this week to 1009. Houston-based Baker Hughes reported that 701 of the rigs were exploring for natural gas and 295 for oil. Thirteen were Listed as miscellaneous. A year ago this week, the rig count stood at 2,013. Texas added 12 rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.