The unemployment rate has surpassed ten per cent for the first time since 1983–and is likely to go higher. It’s now at 10.2 per cent. Nearly 16 million people can’t find jobs even though the worst recession since the Great Depression has apparently ended. The Labor Department says the economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September. But the loss of jobs exceeded economists’ estimates. It’s the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years. Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 per cent, the highest on records dating from 1994. The national jobless rate rose from 9.8 per cent in September. Houston’s rate inched up to 8.5 per cent in September—up from 8.4 per cent.
President Barack Obama says new figures showing national unemployment has hit the double-digit mark are regretful and says he’s working hard to restore the struggling economy. Standing in the White House Rose Garden, Obama called the new jobs report another illustration of why much more work is needed to spur business creation and consumer spending. And he said “I will not rest until all Americans who want work can find work.”
Congressman Kevin Brady is the lead House Republican on the Joint Economic Committee.
“America continues to shed jobs, in comparison to our counterparts in Europe, in Canada, Australia, Japan, South Korea and of course China, whose recoveries are much stronger and much quicker than America’s. At this point, according to the White House, our unemployment rate due to the stimulus should be 7.8 per cent. Today it is 10.2 per cent, and rising.”
Some 51 per cent of workers perceive their jobs as stagnant. In a recent Development Dimensions International survey, a significant number reveal that they’re waiting for the job market to improve to move on. That could mean an eventual high turnover and loss of quality workers, according to Jim Davis with DDI.
“They’re not getting challenging assignments, they’re not getting opportunities to learn new skills, workloads are pretty heavy. And certainly employers should start to give people more challenging assignments, giving them opportunities to advance and opportunities and opportunities to learn new skills would be important.” Ed: “It’s kind of a good idea all the time, right? I mean, not just during slow economic times. You want to challenge your employees if you want to retain the best.” “It’s a good idea all the time. I think we’ve had to focus so much on things like ensuring that we have adequate revenues, making sure that we’re managing the costs appropriately. And so as leaders, we get much more task-focused than we are personal-focused, and we need to keep our eye on our people.”
White House economic adviser Christina Romer says the 10.2 per cent unemployment rate for October is a stark reminder of how much more needs to be done to get people back to work. Romer, who heads the President’s Council of Economic Advisers, says the latest unemployment figure doesn’t come as a surprise, but it’s still disappointing. She says there were some positive signs, such as an increase in temporary services employment, that indicate budding confidence in the job market. The October rate was the highest since 1983. The economy shed a net total of 190,000 jobs in October.
President Obama has signed into law a $24 billion economic stimulus bill providing tax incentives to prospective homebuyers. The measure also extends unemployment benefits to the longtime jobless who have been left behind as the U.S. economy veers toward recovery. The bill-signing at the White House comes a day after the House voted 403-12 for the measure. The Senate approved it unanimously on Wednesday. The White House says the law, which also includes tax cuts for struggling businesses, builds on provisions in the $787 billion stimulus package enacted last February that aim at spurring job creation. Lawmakers stressed that the fourth unemployment benefit extension in the past 18 months was necessary because initial signs of economic recovery have not been reflected in the job market.
Mortgage interest rates have moving lower, good news for anyone looking to buy a home or refinance an existing mortgage. Freddie Mac says the average for 30-year fixed rate mortgages stands at 4.98 per cent this week. That’s down slightly from last week’s average of 5.03 percent. The average for 15-year fixed-rate mortgages is put at 4.40 per cent. That is down from 4.46 per cent last week.
Consumers borrowed less for a record eighth straight month in September amid rising unemployment and tight credit conditions. Economists worry the declines in borrowing will drag on the fledgling recovery. The Federal Reserve says borrowing fell at an annual rate of $14.8 billion in September. That’s the biggest decline since July and is larger than the $10 billion drop economists expected. Americans are borrowing less as they try to repair cracked nest eggs and replenish rainy day funds in a dismal jobs market. Many are finding it hard to get credit as banks, hit by the worst financial crisis in decades, have tightened lending standards. The eight consecutive declines in consumer credit is the longest stretch on records dating to 1943.
Businesses cut inventories at the wholesale level for a record 13th consecutive month in September, but sales rose for a sixth straight time. The hope is steadily rising sales will encourage businesses to begin restocking shelves, a move that would boost production and bolster an economic recovery. But worries persist that consumer spending, which accounts for 70 per cent of economic activity, could falter as various government stimulus programs begin to wane and unemployment keeps surging. The Commerce Department says businesses reduced inventories at the wholesale level 0.9 per cent in September, slightly less than the expected one per cent drop. Sales by wholesalers rose 0.7 per cent, slightly better than the 0.6 per cent gain economists expected.
Texas collected $1.52 billion in sales tax revenue in October—down 12.8 per cent compared to the same month a year ago. Comptroller Susan Combs has distributed $500.7 million in November sales tax rebates to cities, counties, transit systems and special purpose taxing districts. Local sales tax allocations are down 8.7 per cent compared to November 2008.
Halliburton has signed a five-year, turnkey drilling contract for work in the world’s largest oilfield, at South Ghawar in Saudi Arabia, according to the Houston Business Journal. The Houston-based firm will provide drilling rigs and services for a project that includes three to four rigs and involving 153 to 185 wells. The contract includes an option for an additional five-year period.
An oversight board has voted to keep a generous refund formula for those who want to cancel their Texas prepaid college tuition plans. The Texas prepaid higher education tuition decided to cancel new rules that would have cut the value of refunds. A final board vote is needed in December after a public comment period to reinstate the previous refund policy that reflects the value of tuition, not just the amount paid in. The former Texas Tomorrow Fund, renamed the Texas Guaranteed Tuition Plan, had money trouble and was suspended for new participants after legislators in 2003 deregulated college tuition. Texas families that left the plan, after learning of the refund policy change in May, would have until December 31st to return, getting a year to get caught up on tuition installment payments and interest.
Wal-Mart is trimming the online preorder prices of some upcoming DVDs following last month’s price cut on books. The move led rivals Amazon.com and Target to reduce the prices of some of their online preorder DVDs, which pushed Wal-Mart stores to take a few more cents off its offerings. The world’s biggest retailer said that it would lower the online prices of new DVDs such as Harry Potter and the Half Blood Prince and Star Trek to $10. But when Amazon reduced some of its DVD prices to $9.99, Wal-Mart shot back by lowering its DVDs to $9.98 as of Friday morning.
The National Federation of Independent Business/Texas presented the NFIB Guardian of Small Business award to State Senator Dan Patrick of Houston this morning. It’s in recognition of his support for the small business community during the 81st legislative session. He’s credited with waging a campaign to increase the margin tax exemption to $1 million, leading to a $172 million tax break for small businesses. Patrick says keeping that franchise tax cut will be critical next session.
Volunteer attorneys are providing free legal advice on consumer issues tomorrow between 9 a.m. until noon at Ripley House Community Center on Navigation. Sponsored by the Houston Bar Association and other groups, lawyers will answer questions about mortgages, foreclosure, bankruptcy, credit problems and other consumer issues. Those who meet low-income eligibility guidelines can be assigned a pro bono attorney.
The number of rigs actively exploring for oil and natural gas in the U.S. this week rose by nine this week to 1,078. Houston-based Baker Hughes said that 734 rigs were exploring for natural gas and 332 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 1,992. Texas lost four 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.