The U.S. Department of Education has rejected Texas’ application for $830 million in federal money for schools. Federal officials say in a letter to Texas Education Commissioner Robert Scott that they could not award the money to Texas because of “conditional assurances” included in the state’s application. Texas Republicans have balked at a provision in the federal law that requires Texas to make additional assurances to the Feds about how Texas schools will be funded for the next three years. Governor Rick Perry says complying with the provision would violate the state constitution. The letter from the Department of Education asked Scott to resubmit the application without the conditional language.
The number of people signing up for unemployment benefits dropped to the lowest level in two months, an encouraging sign that companies aren’t resorting to deeper layoffs even as the economy has lost momentum. The Labor Department says new claims for unemployment aid plunged last week by a seasonally adjusted 27,000 to 451,000. Economists had predicted a much smaller decline of just 2,000. The number of new claims filed in the previous week turned out to be flat, versus a small drop as first reported. But they fell sharply the week before. Even with latest decline, claims are still much higher than they would be in a healthy economy. When the economy is growing strongly, claims drop to below 400,000.
The trade deficit narrowed significantly in July as exports climbed to the highest level in nearly two years, reflecting big gains in sales of U.S.-made airplanes and other manufactured goods while imports declined. The Commerce Department says the July deficit fell 14 percent to $42.8 billion, much lower than economists’ had forecast. The lower trade deficit should give a boost to overall economic growth. Exports rose 1.8 percent to $153.3 billion, the best showing since August 2008, as sales of jetliners, industrial machinery, computers and telecommunications equipment all posted large gains. Imports, which had been surging, dropped 2.1 percent to $196.1 billion.
One private economist says it looks like “we can rule out a double-dip for the economy”–at least, for now. The comment from Chris Rupkey at the Bank of Tokyo-Mitsubishi followed news that the number of people signing up for jobless benefits is at the lowest level in two months–and that the trade deficit narrowed significantly in July. Stocks are extending a September rally based on the encouraging reports. The Labor Department says new claims for unemployment aid plunged last week by a seasonally adjusted 27,000 to 451,000. Economists had predicted a much smaller decline of just 2,000. Even with latest decline, claims are still much higher than they would be in a healthy economy. When the economy is growing strongly, claims drop to below 400,000.
Mortgage rates mostly edged up last week as investors’ fears about the economy eased. Mortgage buyer Freddie Mac says the average rate for a 30-year fixed loan was 4.35 percent, up from 4.32 percent the week before. It was only the second rise in the past 12 weeks. Last week’s was the lowest number since Freddie Mac began tracking rates in 1971. The average rate on a 15-year fixed loan remained at 3.83 percent after falling last week. It’s still the lowest rate on records starting in 1991. Rates have been falling since spring as investors shift money into safe Treasury bonds. That influx of money has lowered Treasury yields, which mortgage rates tend to track. But improved economic news this month has drawn some money back into the stock market.
Summer has been an overall positive period for the Houston apartment sector, according to O’Connor & Associates, with July continuing an upward trend for the sixth month. Class A occupancy increased by a third of a percent to 90.21 percent, putting it just below the ten percent vacancy rate for the first time since February 2009. Average rents also increased. Nearly half of current construction projects are pre-leased.
Sales tax collections in Texas declined 6.6 percent over the last fiscal year, despite five months of modest increases. State Comptroller Susan Combs says August collections of $1.77 billion were a slight jump of 0.8 percent over August 2009. The state fiscal years run from September thru August. Combs says that declines over the first seven months gradually gave way to modest gains over the last five months. Combs says August showed gains in oil, gas and manufacturing but construction and retail collections were down.
Packaging company MeadWestvaco says it is teaming up with two other companies to build a plant in Texas where organic waste streams can be converted into biogas and other products. The Richmond firm says it is working with organic waste management and resource recovery company Vow Resources and Zera Energy for the project. The companies plan to complete building a demonstration plant next to MeadWestvaco’s Texas mill in November. MeadWestvaco will determine the commercial viability of the biogas generation process and, if successful, apply the technology to its waste treatment operation. Officials say the effort will reduce water and natural gas consumption and create organic fertilizer. Financial terms weren’t disclosed.
Alaska Governor Sean Parnell says the state is suing to overturn the federal suspension of offshore drilling in Arctic waters. In May, Interior Secretary Ken Salazar suspended Shell Oil’s request to drill exploratory wells in the Beaufort and Chukchi Seas, and he canceled four Arctic lease sales. Parnell says Salazar illegally failed to consult with state officials, consider the economic effects or issue a written decision explaining the basis for a moratorium. Salazar spokeswoman Kendra Barkoff says the Interior Department is taking a cautious approach to offshore petroleum development. She says the Arctic presents unique environmental challenges and the department needs additional information about spill risks and spill response capabilities.
President Barack Obama’s top health official is vowing “zero tolerance” for insurers that blame premium increases on the new health overhaul law. In a strong letter to the insurance lobby, Health and Human Services Secretary Kathleen Sebelius says she’s putting companies on notice that the administration “will not tolerate unjustified rate hikes” pinned on the health care law. Sebelius warned that bad actors may be excluded from new health insurance markets under the law. They’d lose out on a big pool of customers. An HHS official says the letter is a pre-emptive move, after officials got word that several smaller carriers around the country are blaming the law for rate increases. The administration says the cost of new benefits required by the law is “minimal”
Toys R Us plans to invade the mall this holiday season. It plans to open about 600 temporary “Express” stores in malls and other shopping centers around the country. That’s more than six times last year’s 90 pop-up stores. Toys R Us will also hire 10,000 seasonal workers. The move is the latest in Toys R Us’ attempt to capture more holiday dollars amid tough competition from online retailers and mass merchants such as Walmart and Target. The Toys R Us “Express” stores began opening in June and will continue to open through November. Most will close in January. But some could become permanent outlet stores. The company, based in Wayne, New Jersey, operates 848 Toys R Us and Babies R Us stores.
General Motors says it’s testing software that would let drivers talk to their cars to update status messages on Facebook. They could also listen to Facebook messages. The verbal updates would be made through GM’s Onstar system, part of the automaker’s effort to use the brand to better compete with rival Ford. GM also is testing a feature that would read cellular telephone text messages to drivers and allow them to respond by picking one of four preset replies with a button on the steering wheel, GM said in a statement. GM won’t say when the features might make their way into its vehicles, if at all.