The tally of newly laid-off workers seeking jobless benefits rose more than expected, after falling for five straight weeks. The Labor Department says initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000. That was above analysts’ expectations of 460,000. A Labor Department analyst says claims were partly inflated by a surge following the Thanksgiving holiday week, when many state unemployment offices were closed. The number of people continuing to claim benefits fell by 303,000 to 5.16 million, the lowest level since February. The total unemployment benefit rolls have fallen in 11 of the past 12 weeks.
Texas Senators are telling Army Secretary John McHugh that they could hold up the nomination of a new Army acquisition chief unless the Army reconsiders its position on a truck contract. Senators Kay Bailey Hutchison and John Cornyn told Army Secretary McHugh they are extremely disappointed with the department’s recent Family of Tactical Vehicles contract award to a competitor of Sealy-based BAE Systems. Malcom Ross O’Neill has been nominated for assistant secretary for acquisition, logistics and technology. BAE Systems held the contract for 17 years. The company has protested the contract award to the Government Accountability Office, arguing that the challenger’s low bid was accepted without verifying whether a new company could start a new truck line from scratch and do it for less money. A delegation including Mayor Bill White and others last week met with Army officials to discuss the contract award. The decision to give the award to a Wisconsin firm could cost some 3,400 jobs at the Sealy plant.
The federal government has accepted $111.4 million in high bids for 155 offshore energy leases off the coast of Texas. The leases were sold last August in New Orleans by the Minerals Management Service. The agency rejected high bids of just over $4 million on seven tracts as not being of fair market value. The highest accepted bid was $28.1 million by BP Exploration & Production, for a tract located in about 4,900 feet of water.
The federal deficit for the first two months of the new budget year is piling up faster than last year’s record imbalance. Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery. The Treasury Department says the November deficit totaled $120.3 billion, less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit. Even with the improvement, the deficit is 5.7 per cent higher than the first two months of the 2009 budget year when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.
The U.S. trade deficit unexpectedly narrowed in October as exports surged to the highest level in nearly a year. Growing exports, boosted by a weaker dollar, are expected to boost demand for American manufactured goods in coming months and provide important strength to the overall economic recovery. The Commerce Department says the trade deficit fell to $32.9 billion in October, 7.6 per cent below a revised September deficit of $35.7 billion. Economists had expected the deficit to increase to $36.8 billion. The improvement reflected a 2.5 per cent jump in exports, led by strong gains in sales of American farm products, autos, aircraft and industrial machinery. Imports rose a smaller 0.4 per cent, a gain that was held back by a big drop in oil imports.
Americans got wealthier in this fall. The Federal Reserve says net worth rose five per cent from the second quarter to more than $53 trillion. Net worth includes the value of assets such as homes, bank accounts and investments, minus debts like mortgages and credit cards. Even with the gain, Americans’ net worth remains far below the peak of $65 trillion reached before the recession began. That shows the vast loss of wealth over the past two years.
The House has passed a massive year-end spending bill awarding generous funding boosts to domestic programs despite massive budget deficits. The wrap-up measure totals $1.1 trillion, combining six spending bills for ten cabinet departments into a 1,088-page bundle packed with more than 5,000 back-home projects sought by lawmakers. The 221-202 vote sends the House-Senate compromise measure to the Senate, which may vote on it this weekend before sending it to President Barack Obama. The bill combines $447 billion in operating budgets for ten cabinet departments with more than $600 billion for federal benefit programs such as Medicare and Medicaid. The measure is advancing as the government registered a $1.4 trillion deficit for the 2009 budget year.
The Senate has temporarily halted debate on health care reform to turn to a massive year-end spending bill awarding generous funding boosts to foreign aid and domestic programs. The 56-43 vote to begin debating the House-Senate compromise measure likely sets the stage for a final tally this weekend. Republicans have promised a filibuster of the measure, which totals $1.1 trillion and combines six spending bills for ten cabinet departments into a 1,088-page bundle. Anti-abortion Republicans are particularly upset that the measure would end a ban on abortion funding by the Washington, D.C. government. The tally fell short of the 60 votes that would be needed later to break a filibuster, but Democrats are hopeful of picking up a few Republicans in the end.
Senators supporting climate legislation have offered a revised proposal that would add incentives for building nuclear power plants and open the way for possible expanded oil and gas drilling off the nation’s coastlines. The new framework for a Senate climate bill would ease back requirements for early reductions of greenhouse gases. It calls for cuts of 17 per cent by 2020, instead of 20 per cent. That’s similar to reductions Obama will call for at the Copenhagen climate talks. But key to hopes of attracting Republican support are new measures to significantly increase government loan guarantees for building new reactors and a proposal to open offshore waters to oil and gas drilling if states want such development.
Retail gasoline prices held steady across Texas this week at an average $2.50 a gallon. AAA Texas reported the nationwide price at the pump remained at about $2.63. The cheapest gasoline was in Galveston, where motorists paid $2.45 a gallon. El Paso had the most expensive gasoline, at $2.61 a gallon. The association says gasoline prices have been stable since the end of October and the average price has fallen several cents since the beginning of November. Spokeswoman Sarah Schimmer says market analysts have found an adequate supply of gasoline and slight improvements in demand.
Chevron will cut capital and exploratory spending next year by five per cent compared with 2009 levels. The second-largest U.S. oil company, which is headquartered in San Ramon, California, said its spending program would amount to $21.6 billion in 2010 and will be dominated by oil and gas exploration projects. “Much of our 2010 spending continues to be on large, multiyear projects consistent with our upstream growth strategies and on improving operating efficiency and reliability,” chairman and CEO Dave O’Reilly said in a statement. Among Chevron’s major spending projects will be $17.3 billion for exploration and production including the development of the gorgon natural gas project in Western Australia and other drilling operations in the Gulf of Mexico, Western Africa and the Gulf of Thailand.
Treasury Secretary Timothy Geithner is telling a skeptical oversight panel that his decision to extend the government’s unpopular bank bailout program through October sets the stage for eventually shutting it down. Geithner told the panel monitoring the $700 billion Troubled Asset Relief Program that it would have been irresponsible not to extend it. But Elizabeth Warren, a Harvard University law professor who is chairwoman of the special Congressional panel, told Geithner “TARP has been far from an unmitigated success.” She said that consumers and small businesses are still having trouble obtaining loans. And Paul S. Atkins, a former Securities and Exchange Commission member, says extending the program “borders on irresponsibility” and is a drain on taxpayers. Geithner says the government will reduce its stake in banks as quickly as it prudently can.
Just over 31,000 homeowners have received permanent loan modifications under the Obama administration’s mortgage relief plan, a setback for the government’s embattled effort to stem the foreclosure crisis. Lenders say they are having a hard time getting borrowers through the trial period, which can last up to five months. Many homeowners who were given verbal approval for the program have not returned the necessary documents.
Banks borrowed slightly less from the Federal Reserve’s emergency lending program over the past week. The Fed says commercial banks averaged $19.4 billion in daily borrowing over the week that ended Wednesday. That was down $468 million from the previous week. Banks’ use of the program has been declining for the last several months, reflecting greater stability in the financial system. Banks borrow from the Fed’s “discount window” when they are having trouble getting loans in the private market. The identities of the banks aren’t released. They pay just 0.50 per cent interest for the emergency, overnight loans.
Copper miner Asarco has provided $52 million to help pay for environmental cleanup at its closed El Paso smelter. The State Attorney General’s Office says the funds were transferred into a trust fund as part of an agreement it negotiated with the company. The 422-acre site near downtown El Paso and has been dormant since 1999. It produced and refined heavy metals such as lead, copper, cadmium, and zinc for more than 100 years. Attorney General Greg Abbott’s office also secured $29 million from Asarco to pay for low-level radioactive waste cleanup at the company’s superfund site near Houston. Under a court-approved bankruptcy reorganization, Asarco’s El Paso smelter is permanently closed.
Chicken producer Pilgrim’s Pride says it expects a court to approve its reorganization plan. The Pittsburg, Texas-based company filed for Chapter 11 bankruptcy protection last year, as it was hobbled by debt and struggled to pay high feed costs. Spokesman Ray Atkinson said the U.S. bankruptcy court in the Northern District of Texas has indicated it will approve the plan. Atkinson said the company continues to expect to emerge from bankruptcy later this month. Brazilian beef company JBS in September said it would buy a majority stake in Pilgrim’s Pride for $800 million in a transaction that would include paying off pilgrim’s pride’s creditors. The Federal Trade Commission and Department of Justice have cleared the way for the deal.