The unemployment rate dropped unexpectedly in January to 9.7 percent from ten percent while employers shed 20,000 jobs. The Labor Department says the rate dropped because a survey of households found the number of employed Americans rose by 541,000. The job losses are calculated from a separate survey of employers. The report also included an annual revision to the estimates of total payrolls, which showed there were 930,000 fewer jobs last March than previously estimated. The department also revised down its estimates for April through October of last year, adding another 433,000 job losses. November was revised up, however, to show a gain of 64,000 jobs. All told, the department says the Great Recession has eliminated 8.4 million jobs. That’s the most of any recession since World War II as a proportion of total payrolls.
President Barack Obama says an unexpected drop in the unemployment rate is “cause for hope but not celebration.” Speaking at a small business in a Washington suburb, Obama took care not to trumpet the gains outlined in the new government report too loudly. He said the data shows modest progress toward “climbing out of the huge hole that we found ourselves in.” But he said that “far too many of our neighbors and friends and family are still unemployed,” requiring much additional work to bring the economy back. Obama also cautioned against reading too much into the single report. He said that “these numbers will continue to fluctuate for months to come.”
Americans borrowed less for an 11th consecutive month in December, paying off credit cards while increasing borrowing for cars and other products. The mixed picture raises hopes that Americans may soon return to spending, a necessary condition for economic recovery. But the record 11-month decrease in overall borrowing shows consumers are still holding back amid lingering economic uncertainty and 9.7 percent unemployment. The Federal Reserve said that total borrowing dropped by $1.8 billion–far less than the revised $10.6 billion for November. It also was well below the $9 billion analysts had expected. Borrowing on credit cards fell by $8.5 billion, while other types of loans increased by $6.8 billion.
Toyota’s president apologized for the automaker’s global recalls and promised to beef up quality control by setting up a special committee he would head himself. Toyota Motor President Akio Toyoda said the automaker was still deciding what to do to fix braking problems with the popular Prius gas-electric hybrid. Toyoda, grandson of Toyota’s founder, was speaking at a hastily called news conference in Nagoya, Japan, which was shown at Toyota’s Tokyo office by satellite feed. The automaker has acknowledged the new Prius that went on sale in May last year has braking problems. Toyoda did not announce a recall, but Toyota said this week it was considering one.
Damage to Toyota’s image is growing by the day with the automaker now considering a U.S. and Japanese recall of Prius hybrids–the vehicle that’s a symbol of its technological prowess and green car ambitions. The beleaguered automaker faces probes of brake problems with the latest model Prius in the U.S. and Japan, but remains tightlipped about adding the gas-electric hybrid to the millions of cars it has recalled. Toyota is also investigating possible brake problems with its luxury Lexus hybrid. Nihon Keizai, Japan’s top business newspaper, said that Toyota would soon notify Japan’s transport ministry and the U.S. Department of Transportation of a recall of 270,000 Prius hybrids. Toyota says it’s considering a recall, but no decision had been made.
Former White House Press Secretary Dana Perino teamed with Bracewell & Guiliani for a round-robin event this afternoon in which female professionals shared experiences with young professional women. It was a rapid-fire series of brief meetings, like in speed dating.
“It’s exactly like speed dating, except I’ve never been on a speed date myself! But the way that it works is that we have many mentors from across the spectrum of business and politics and government. The young women are broken into groups of three and they go from room to room, and they have ten minutes each with the mentors, so that they can get three pieces of pro-active advice that the mentors bring. And then they have the rest of that time to ask questions of that particular mentor. The ten minutes actually, because it is so focused, you can get a lot of questions asked and answered.”
Former First Lady Barbara Bush blew the whistle to kick off Minute Mentoring, which also included Mayor Annise Parker, former Congresswoman Susan Molinari and representatives from Chevron Energy Technology, Continental Airlines, CBS News and other Houston-area mentors.
Retailers got more business than they expected last month. One of the positive trends was an increase in sales at mall-based clothing stores. The monthly numbers are providing a bit of hope that the consumer is not only more confident, but ready to spend more money. Both typical consumers and those who buy luxury brands were picking up the pace. A trade group says its January sales gauge was up three percent compared to a year earlier, much better than expected. That’s leading Macy’s and Bon-Ton stores to raise their earnings estimates because they weren’t forced to discount as heavily as they feared.
The chill in the air near the Arctic Circle is matched by the latest cooling of global markets as the world’s seven major industrial countries sit down for talks in Canada. The setting is a snow-swept town 200 miles south of the Arctic Circle and the main topic of the finance ministers and central bank presidents is expected to be how long to keep up global economic stimulus efforts. The latest market turmoil is serving as a sobering reminder that the aftershocks of the Great Recession are far from over. Representatives from the United States, Japan, Germany, France, Britain, Italy and Canada arrived today. Treasury Secretary Timothy Geithner is expected to urge other G-7 nations to keep providing stimulus through the rest of this year. He says the risk of ending stimulus too soon is a plunge back into recession.
Big bankers are trying to make peace in Washington. The banking executives fanned out across Capitol Hill, hoping for two things. First, to shape the overhaul of financial regulations they know is coming; and second, to repair their image with Congress and the American public. Both are tall orders. The head of U.S. Bancorp says bluntly: “the number one goal we have is to be relevant to this fix.” Bankers have been meeting with everyone from President Barack Obama on down, hoping to shape the bill being crafted by Senator Chris Dodd of the Senate Banking Committee. But Dodd has been frustrated by the banking industry and is hinting that he’ll move ahead soon–with or without Republican support.
Regulators are urging banks to make loans to creditworthy small businesses, a move that would support the economic recovery. Small businesses have had an especially hard time getting loans. That has crimped their ability to expand operations and hire. Small businesses usually help drive job creation during recoveries, but credit clogs have hurt hiring. In a joint statement, regulators including the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency–say that banks that engage in “prudent small business lending after performing a comprehensive review of a borrower’s financial condition will not be subject to supervisory criticism for small-business loans made on that basis.”
An administration official says President Barack Obama will press Congress to temporarily expand two lending programs for the owners of small businesses. Speaking on the condition of anonymity because the president hasn’t yet announced the proposal, a White House official said the plan would temporarily increase the cap on Small Business Administration express loans from the current maximum of $350,000 to $1 million. The proposal would also expand the SBA’s program to support refinancing for owner-occupied commercial real estate loans.
If you were looking for a 30-year fixed-rate mortgage lately, chances are that rates have risen a bit. Freddie Mac says the average for 30-year fixed stands at 5.01 percent this week. That’s up slightly from 4.98 percent last week. last year at this time, the average rate for a 30-year fixed mortgage was 5.25 percent. Rates fell to a record low of 4.71 percent in early December. They’ve been held around five percent by a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31st. Rates on five-year, adjustable-rate mortgages averaged 4.27 percent, up from 4.25 percent a week earlier. Rates on one-year, adjustable-rate mortgages dropped to 4.22 percent from 4.29 percent. The rates do not include add-on fees known as points.
China has announced anti-dumping duties of up to 105.4 percent on imports of U.S. chicken products, adding to trade strains with Washington. The case comes amid mutual accusations of protectionism by Beijing and Washington which both say will hurt efforts to end the global economic downturn. The Commerce Ministry says a preliminary investigation concluded U.S. exports were being sold at improperly low prices that harmed Chinese competitors. It says importers must post a bond until a final decision is reached. Beijing launched the investigation in September after Washington raised duties on imports of Chinese-made tires despite vigorous opposition from China. The two governments also are embroiled in disputes over access to each other’s markets for steel pipes, movies and books and other goods.
A sheen remains from a tanker collision at Port Arthur that dumped 462,000 gallons of oil and left more than a dozen animals dead or coated. The Coast Guard says cleanup continued nearly three weeks after a collision between an 800-foot tanker and a towboat pushing two barges at the Sabine-Neches waterway. Lieutenant J.G. Kyle Carter told the Associated Press that five dead birds have been found. Carter says three birds are recovering, four were in rehabilitation and released, while another died in rehab. Carter says one dog that got into the oil also was cleaned. No injuries were initially reported in the January 23rd collision that closed the waterway for days. Houston attorney Charles Livingston says he represents three workers who say they were injured while on a docked vessel allegedly struck by the tanker.
Urban farmers are challenging city halls across the country to rewrite zoning laws that govern residential gardens. They want to feed fellow urbanites locally grown vegetables and fresh eggs, put city green spaces to good use and develop sustainable business models. But problems can develop, such as when an urban farmer’s neighbor prefers a tidy lawn. Seattle has loosened its rules for backyard goats, New York City’s health department is taking steps to legalize beekeeping and Detroit is looking into regulating compost and greenhouses. Urban farmers in Los Angeles are lobbying for the Food and Flowers Freedom Act to allow cultivation and sale of flowers, fruits, nuts or vegetables in residential neighborhoods.
Two free Academy Day workshops are being held by Congressman Gene Green to provide high school students with information on U.S service academies. A workshop is planned for tomorrow morning at the Houston Community College Northline Community Room on Fulton. A second workshop is set for Monday night at the MacArthur Senior High School cafeteria on Aldine Mail. Representatives from the Naval Academy at Annapolis, Air Force Academy at Colorado Springs, U.S. Military Academy at West Point and Merchant Marine Academy at Kings Point, New York, will be on hand. Parents can learn about accessing grants, scholarships, government-sponsored loans and other financial aid.
Information for taxpayers using Earned Income Tax Credits will be available at a Taxpayer Assistance Center hosted by the IRS on Saturday. The centers are on Smith downtown, I45 North Houston and in southwest Houston on South Gessner. Those locations will also be open on February 29th.
The number of rigs actively exploring for oil and natural gas in the U.S. rose by 18 this week to 1,335. Houston-based Baker Hughes said that 878 rigs were exploring for natural gas and 445 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 1,399. Texas gained three 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.