Consumer prices edged up slightly faster than expected in October, driven higher by another increase in energy prices and the biggest jump in new car prices in 28 years. Still, prices are lower than they were a year ago and inflation is expected to remain subdued as the economy struggles to emerge from a deep recession. The Labor Department said that consumer prices rose 0.3 per cent in October, a bit more than the 0.2 per cent economists had expected. Core inflation, which excludes energy and food, rose 0.2 per cent, compared to analysts’ expectation for a 0.1 per cent rise in core prices.
Construction of new homes plunged last month as builders waited to see whether lawmakers would extend a tax credit for homebuyers. The Commerce Department says construction of new homes and apartments fell 10.6 percent in October to a seasonally adjusted annual rate of 529,000, from an upwardly revised 592,000 in September. Economists polled by Thomson Reuters expected a pace of 600,000. But builders could ramp up in the coming months, since Congress earlier this month gave first-time buyers until April 30th to qualify for the credit of up to $8,000. Applications for building permits, a gauge of future activity, fell four per cent to an annual rate of 552,000 units, below the 580,000 that economists had expected.
Mortgage insurer Genworth Financial says it saved more than 1,300 Texas homes from foreclosure in the past year–a total of $165 million worth of mortgages saved statewide. Alan Goldberg is vice president of Genworth.
“People pursuing the dream of homeownership couldn’t anticipate a national economic recession, or the individual financial hardships they could face. What’s important now, however, is how the entire mortgage lending industry is responding, increasing efforts to help the homebuyers remain homeowners. It’s great that we could help so many delinquent Texas households resolve their mortgage problems.”
Nine out of ten Texas homeowners helped by Genworth in the past 12 months were able to keep their homes. Eighty-seven per cent of the workouts are considered a “cure,” meaning the borrower was able to save the home and become current on the mortgage. The remaining 13 per cent were able to avoid foreclosure through loan modifications, repayment or other methods.
The Energy Department says crude inventories and gasoline inventories fell last week, missing analysts’ expectations. Crude inventories fell by 900,000 barrels, now 6.5 per cent above year-ago levels. Gasoline inventories fell 1.7 million barrels, still 5.3 per cent above year-ago levels. Demand for gasoline over the past month was slightly below year-ago levels.
A leading auto organization is projecting a 1.4 per cent increase in Thanksgiving travel this year, although fewer people will travel by air due to budget concerns, reduced airline capacity and added charges. AAA said it expects 38.4 million Americans will travel 50 miles or more away from home over this year’s holiday weekend compared to 37.8 million last year. The number of automobile travelers is expected to be 33.2 million compared to 32.5 million last year–an increase of 2.1 per cent. Air travel, however, is projected to decline 6.7 per cent, or 2.3 million travelers this year compared to 2.5 million in 2008. AAA said the share of Thanksgiving travelers journeying by air has been declining for a decade.
The Greater Houston Partnership says the recent U.S. Army decision that took away the contract for building military vehicles from BAE Systems could cost the Houston region $1.8 billion annually if not reversed. Some 3,000 jobs are at stake at the Family of Medium Tactical Vehicles manufacturing plant in Sealy. The Partnership estimates that, in fact, the count would be closer to 3,400 direct jobs and 6,766 indirect jobs. The Sealy facility has built the armored vehicles for 17 years. The Army’s decision is currently under investigation by the Government Accountability Office. Their recommendations will be unveiled by December 14th.
Superconductivity physicist Paul Chu is returning to the University of Houston after working overseas for most of the decade. Chu since 2001 served as president of the Hong Kong University of Science and Technology. Chu, when his appointment was announced in November 2000, said he planned to lead the Hong Kong institution for a few years, then return to UH. Chu brings with him a $2.8 million grant from the U.S. Air Force Office of Scientific Research to further his search for new superconducting materials. Chu in 1987 discovered a compound that allows electricity to flow without resistance at a temperature higher than the boiling point of nitrogen–high-temperature superconductivity. Texas voters this month approved establishing a $500 million fund to help universities expand their research programs.
A new study conducted by ExecuNet indicates that companies should prioritize executive retention before key business leaders depart. More than half of those executives surveyed are actively looking for a new job now, and 40 per cent plan to ramp up their job search once the economy improves. The 2009 Executive Retention Report finds that many companies have taken their eye off retention during the recent recession.
Social network sites have the potential to revolutionize job searches, but they can also prove harmful for those who rely too heavily on them or misuse them, according to Challenger, Gray & Christmas. The job search training and counseling firm says it’s important to remember that email, the Internet, social networking, smart phones and other technologies simply enhance the job search—they don’t replace face-to-face connections that are critical to a successful search. It’s estimated by Forrester Research that 51 per cent of online adults in the U.S. utilize social networking sites such as Facebook or LinkedIn.
President Barack Obama says he’s worried that spending too much money to help revive the economy could undermine a fragile U.S. recovery and throw the economy into a double-dip recession. That’s when the economy begins to recover briefly from a recession only to be dragged back under. Obama told Fox News in an interview that his administration is weighing tax breaks that could encourage businesses to begin hiring again. But he added that it’s important to recognize that if the nation keeps adding to deficit spending through tax cuts or more stimulus spending, at some point people could lose confidence in the U.S. economy and that could “lead to a double-dip recession.”
President Obama says creating jobs isn’t the goal of a coming White House forum on jobs and economic growth. The president told NBC News that the purpose of the December 3rd summit is to figure out how to encourage hiring by businesses still reluctant to do so. The U.S. unemployment rate hit 10.2 per cent last month, the highest in decades. Before departing on his trip through Asia, Obama said the high jobless rate is one of the biggest challenges for an economy that has begun to show signs of recovery. Obama told NBC that the forum will give him and other administration officials a chance to talk to CEOs, small business owners and other experts to find out what’s going on.
A government financial report says government waste in fiscal 2009 is up $26 billion over the previous year. But officials attribute the jump to some changes in how to define improper spending as well as an increase in overall spending due to the recession. The report says more than $98 billion in taxpayer dollars spent by government agencies was wasted in fiscal 2009, much of it on questionable claims for tax credits and Medicare benefits. In all, the report says about five per cent of spending in federal programs was improper, though the overall error rate was similar in 2008. President Barack Obama is expected to sign an executive order within the next week aimed at cracking down on government waste and fraud.
The Senate’s top Democrat is poised to outline a new health care bill designed to meet President Barack Obama’s goal of expanding coverage without adding to the deficit. Majority Leader Harry Reid of Nevada met at the Capitol with Vice President Joe Biden to go over the game plan on health care. Crucial to the White House and Reid is winning over reluctant moderate Democrats. Reid wants to bring his roughly $900 billion, ten-year health care remake to the floor in the next few days. The Democratic leader has spent weeks melding bills from the Senate Health Committee and the finance panel.
An Associated Press poll finds more people support creation of a new government-run health insurance plan to compete with the private insurance market. But the level of support depends on how the question is asked. Half the participants in the poll were told the government plan would be less expensive. Fifty-two per cent in that group said they supported it–and 35 per cent were opposed. The other half were also told that the government would run the plan and make decisions about what was covered. That question elicited only 44 per cent support–and 38 per cent opposition. The government insurance plan has been the most controversial element of President Barack Obama’s health care overhaul.
Small businesses across the country are dropping or scaling back employee health care plans because of the rising cost of insurance. The health insurance crunch has hit small businesses particularly hard because they lack the leverage of their bigger counterparts to negotiate with insurers. So when insurance rates rise, they often respond by asking employees to make higher co-payments, raising deductibles, switching to less generous benefits or simply dropping their coverage. In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have said they are looking into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs.
A Senate panel has condemned the confusing and aggressive sales tactics of three online companies. The Commerce Committee accuses Affinion, Vertrue and Webloyalty of scamming millions of customers by tricking them into signing up for subscription services they don’t want. According to the committee, the three companies have entered into agreements with other more familiar Internet shopping sites. The panel says just before completing the sales confirmation process, customer get offers of cash back or other rewards that appear to be connected to the shopper’s original transaction. Clicking “continue,” or “yes,” commits shoppers, often unwittingly, to a new financial contract with a membership club operated by the three companies. Millions of Americans are expected to make online purchases on Cyber Monday, which follows the post-Thanksgiving shopping kickoff.
Power-hungry TVs will be banned from store shelves in California after state regulators adopted a first-in-the nation mandate to lower electricity demand. On a unanimous vote, the California Energy Commission required all new televisions up to 58 inches to be more energy efficient beginning in 2011. The requirement will be tougher in 2013, and only a quarter of all TVs on the market currently meet that standard. The California Energy Commission estimates that TVs account for about ten per cent of a home’s electricity use. The concern is that the energy draw will rise by as much as eight per cent a year as consumers buy larger televisions, add more to their homes and watch them more often. Commissioners say energy efficiency standards are the cheapest and easiest way to conserve electricity.
The latest safety tests have Ford, Subaru and Volkswagen leading the pack of 2010 model cars. The Insurance Institute for Highway Safety says 19 passenger cars and 8 SUVs are the top safety picks. The list includes the Buick LaCrosse, the Audi A3 and the Jeep Patriot. The number of awards this year has been pared from last year’s total because of tougher roof safety requirements. That additional test kept a lot of cars off the list, including all Toyota, Mazda and Mitsubishi models. Ford and its Volvo unit received the most awards with six, followed by five awards apiece for Subaru and Volkswagen and its Audi unit. Chrysler received four awards followed by two each for Honda and General Motors.
Federal consumer officials are looking into toy warnings from a California health group just ahead of the holiday shopping season. Seven of the 250 children’s toys tested by the Center for Environmental Health contained lead levels above federal limits. Among the suspect toys are a Barbie Bike Flair accessory kit and a Disney Tinkerbell water lily necklace. Mattel says it’s not involved, and that it licensed its trademarked Barbie name to Bell Sports for use on the bike accessory kit. Bell officials say the kit dates back two years and they weren’t aware it was still being stocked. Disney says the Tinkerbell necklace passed federal and state tests. Other suspect toys include a Dora the Explorer activity tote, two pairs of children’s shoes, a boys belt and a child’s poncho.
J.C. Penney will stop publishing its twice-yearly “big book” catalogs, now that customers increasingly shop online. Instead, J.C. Penney says it will publish specialty catalogs and focus its efforts online, on the Web site jcp.com and on social networks. In part, the company says it is responding to consumer habits to view catalogs more as “look books.” The Plano company will continue to publish its Christmas catalog and others, such as the “little red book” for women’s apparel and “matters of style” for men. Eliminating the hefty twice-a-year catalogs will cut the company’s paper use by 25 per cent to 30 per cent in 2010.