The government’s point man on the Gulf oil spill response says it could take at least a day for the cement being pumped in the blown well to dry. Retired Admiral Thad Allen says it could take another five to seven days after the cement cures to finish the last part of a nearby relief well. Engineers were able to force oil underground after pumping mud and then cement down the throat of the blown well this week. But Allen says he will not declare the well dead until engineers shove mud and cement down the relief well to plug the underground oil reservoir. The relief well is about 100 feet above its target and about four feet from it horizontally.
Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers. The Labor Department says new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks. Some of the increase in claims stemmed from difficulties the government has in adjusting for seasonal factors. But the jump in claims is a cautionary sign that higher corporate profits and a slowly recovering economy aren’t spurring companies to generate many jobs.
Legislation long sought by Democrats to prevent layoffs of tens of thousands of teachers, police and other public workers has passed the Senate. The bill would help states and local school boards deal with severe budget problems. It would preserve the jobs of perhaps 300,000 public employees across the country by extending programs in last year’s stimulus law. It passed 61-39, after months of blocking tactics by Republicans. Speaker Nancy Pelosi is calling House lawmakers back to Washington next week from their summer vacation to cast the final votes to deliver the bill to President Barack Obama. Unlike the stimulus bill, the $26 billion measure wouldn’t increase the budget deficit since it’s paid for with spending cuts and tax increases on U.S. companies operating overseas.
Governor Rick Perry is calling on Congressional Democrats to strip a Texas-specific provision in a financial aid package to states. The measure, given final approval by the U.S. Senate, requires Perry to promise Washington that Texas will maintain state education spending levels through 2013. The GOP Governor says he can’t do that because the Texas constitution prohibits him from committing future legislative spending. Perry says the measure “effectively kills about $800 million in federal funding for Texas schools.”’ The House is scheduled to take up the measure again next week, but changes are not expected. The squabble between Perry, who is seeking re-election, and House Democrats is the latest example of the governor’s resisting federal presence in state policy.
Deep discounts on summer leftovers and hot weather drove shoppers into malls in July. But they remained choosy, resulting in only modest gains for retailers. The sluggish spending raises worries about the back-to-school season as Americans step up saving amid a stalling economic recovery. Retailers like Abercrombie & Fitch and American Eagle Outfitters are offering generous discounts on new jeans to lure shoppers in the heat wave that hasn’t let up since June. Costco and Victoria’s Secret parent Limited Brands had robust gains. Macy’s posted a strong increase, and the company’s CEO says that the back-to-school business is off to a “great” start. A trade group says retailers together saw a 2.8 percent increase in July, below the pace that was expected.
Higher monthly fees are coming for consumers who take out home loans guaranteed by the Federal Housing Administration, the primary source of mortgages for first-time homebuyers. The Senate unanimously approved legislation giving the FHA the power to hike monthly premiums it charges to consumers. The measure now goes to President Barack Obama, who is expected to sign it. The new law would not affect current mortgage holders. Officials say the agency needs the authority to stabilize its finances, which have deteriorated because of the foreclosure crisis. The fees are projected to bring in an extra $3.6 billion per year, according to the FHA.
Mortgage rates dropped to the lowest level on record for the sixth time in seven weeks, offering the most attractive opportunity in decades for those who qualify to refinance or purchase a home. Government-controlled mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.49 percent, down from 4.54 percent last week. That’s the lowest since Freddie Mac began tracking rates in 1971. The average rate on the 15-year fixed loan dropped to 3.95 percent, down from four percent last week and the lowest on record. Rates have fallen since spring as investors seek the safety of U.S. Treasury bonds. That has lowered the yield Treasurys. Mortgage rates tend to track those yields. The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years. Low rates have sparked some activity in the weak housing market, but not a massive boom in refinancing.
President Barack Obama declared that the U.S. auto industry is not just rebounding from its problems but on its way to being number one in the world again. His rousing pep talk to Ford factory workers came before he was heading into a night of high-dollar fundraising for the Democratic party. The president celebrated that the big three American automakers–GM, Chrysler and Ford–have all been operating at a profit again. He described a remarkable turnaround for the car companies in an industry on the brink of collapse when he took office, because of taxpayer help and industry change. Ford did not need to accept federal bailout funds like the other two companies. But Obama said Ford benefited because the government involvement helped job losses. He spoke from a Ford plant in Chicago that is poised to add 1,200 jobs.
The Postal Service was $3.5 billion in the red for the April through June period. That’s over $1 billion more than the post office lost in the same period a year ago. The agency has been rocked by declining mail volume as people and businesses switch to the internet for both personal messages and paying and sending bills. To stem the losses, postal officials have proposed raising rates, cutting one day of mail delivery per week and eliminating advance payments for postal retiree health benefits. Agency officials are concerned that the post office may not be able to pay all its bills at the end of the fiscal year in September.
The Texas sales tax holiday is August 20th-2nd as shoppers prepare to head for stores the weekend before most public schools resume classes. The Texas Comptroller’s Office says the law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend. The agency says backpacks under $100 and used by elementary and secondary students are also exempt. The 2009 legislature expanded the list of items qualifying for tax exemption during the three-day weekend. Texas families get a sales tax break on most school supplies priced at less than $100 purchased for use by a student in an elementary or secondary school.
The Texas Rangers are stepping closer to getting out of federal bankruptcy protection. Just hours after a marathon auction of the team, a hearing began to go over the team’s bankruptcy plan. If a judge signs off as expected, it will clear the way for Major League Baseball to formally approve a group led by Hall of Fame pitcher and Rangers President Nolan Ryan as the new owner next week. Top creditors who had stalled the sale say they no longer oppose the plan because the auction resulted in a higher price for the Rangers. And the court-appointed restructuring officer is backing the plan after earlier objections. Ryan and sports attorney Chuck Greenberg won a showdown with Dallas Mavericks owner Mark Cuban for the AL West-leading Rangers. Court documents say the winning bid is valued at $590 million. Cuban and Houston businessman Jim Crane’s bid was valued at $581 million, discounted some $17 million because of deductions and a breakup fee of $10 million to $13 million that would have gone to Greenberg-Ryan had they lost.
The battle for control of Liverpool remains mired in confusion, leaving the 18-time English champions still trying to find a buyer to end the team’s financial troubles as the new season begins. British media report that the financial backer for Hong Kong businessman Kenny Huang’s proposed bid is the China Investment Corporation–the country’s sovereign wealth fund. Also, former Syrian club footballer Yahya Kirdi is fronting a consortium of investors from the Middle East and Canada, but some British media have cast doubt on the bid. Kirdi, who said he’s been in talks with co-owners Tom Hicks of Dallas and George Gillett, Jr., since last year, claims that a deal is close to completion. Meanwhile, Hicks is selling baseball’s Texas Rangers, which earlier this year sought bankruptcy protection.