Two Americans and a British-Cypriot economist have won the Nobel economics prize for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies. Federal Reserve Board nominee Peter Diamond is honored along with Dale Mortensen and Christopher Pissarides were awarded the $1.5 million prize for their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets. Diamond is a former mentor to Federal Reserve Chairman Ben Bernanke. He analyzed the foundations of so-called search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market. Their work, dating back to the 1970s and ’80s, sheds light on why the classical view of markets, in which prices are set so that buyers and sellers always find each other and all resources are fully utilized, doesn’t always apply to the real world.
The Houston Livestock Show and Rodeo released its economic impact study from 2010 show data, prepared by University of Houston economics professor emeritus Barton Smith. He says annual gross regional product was increased by over $320 million, and annual aggregate gross sales in the area increased by over $475 million. The annual fiscal tax revenues to local government are increased by over $27 million. The 2011 rodeo runs March 1st through the 20th.
A top White House adviser is questioning the need for a blanket stoppage of all home foreclosures. Pressure is growing for the Obama administration to do something in the face of mounting evidence that banks have at times used inaccurate documents to evict homeowners. A top House Democrat, Florida’s Debbie Wasserman Schultz, voiced her support for a moratorium on Fox News Sunday, but the number two House Republican, Eric Cantor of Virginia, told Fox a national moratorium would remove the protections that lenders need. On CBS’ Face the Nation, Obama Senior Adviser David Axelrod says flawed paperwork poses a serious problem, but he notes that there are valid foreclosures that ought to be allowed to go forward. Axelrod says the Obama administration is pressing lenders to step up their reviews of foreclosures to determine which ones have flawed documentation. Last week the Bank of America became the first bank to halt foreclosures in all 50 states.
The jobs crisis has brought an unwelcome discovery for many unemployed Americans: job openings in their old fields exist. Yet they no longer qualify for them. During the recession, companies became more productive by doing more with fewer workers. Some asked staffers to take on a broader array of duties–duties that used to be spread among multiple jobs. Now, someone who hopes to get those jobs must meet the new requirements. The broader responsibilities mean it’s harder to fill many of the jobs that are open these days. It helps explain why many companies complain they can’t find qualified people for certain jobs, even with 4.6 unemployed Americans, on average, competing for each opening. By contrast, only 1.8 people, on average, were vying for each job opening before the recession.
President Barack Obama is pushing a $50 billion plan to upgrade the nation’s transportation networks and create jobs, bringing governors and mayors to the White House to help him make the case. Obama says that clogged roads and crumbling infrastructure are costing American lives, eroding productivity and hindering economic growth. He spoke from the Rose Garden after meeting with state and local officials and cabinet officials, who stood behind him for his comments. The timing of his announcement comes as the public sector slashed 159,000 jobs in September, including the largest cuts by local governments in 28 years. Obama is eager to show constant attention to the hurting economy, especially ahead of the November 2nd Congressional elections.
A new survey finds the average price of regular gasoline in the United States has jumped 8.23 cents in the past two weeks. The Lundberg Survey of fuel prices says the price of a gallon of regular is $2.77. Analyst Trilby Lundberg says the average price for a gallon of mid-grade was $2.91, and premium was at $3.02. Houston’s average retail prices are up 6.5 cents over the past week, now averaging $2.60 per gallon. Tucson, Arizona, has the lowest average price among cities surveyed at $2.51 a gallon for regular. San Francisco was highest among surveyed cities at $3.08.
ConocoPhillips plans to expand the processing capacity at a Texas natural gas liquids plant it owns with Devon Energy and Targa Resources Partners at a cost of $75 million. The Gulf Coast Fractionators Partnership will increase its processing capacity by 42 percent to 145,000 barrels per day at the plant in Mont Belvieu. The company said the expansion will be operational during the second quarter of 2012 and is subject to regulatory approvals.
China’s state-owned offshore oil and gas company has bought a one-third interest in 600,000 acres Chesapeake Energy leases in a south Texas oil and gas field. CNOOC and Oklahoma City-based Chesapeake announced the deal worth up to $2.16 billion in the Eagle Ford shale project between Laredo and San Antonio. A joint statement says CNOOC will pay Chesapeake $1.08 billion in cash at closing and share 75 percent of Chesapeake’s drilling and completion costs up to another $1.08 billion. Chesapeake expects to produce 400,000 to 500,000 barrels of oil equivalent per day at the project’s peak. The deal is the second in as many days for CNOOC. It announced that it has bought 2.6 million tons of liquefied natural gas from French utility GDF Suez.
The National Marine Fisheries Service will study whether the Gulf of Mexico oil spill has hurt the Bluefin tuna population to the point that the fish should be placed on the endangered species list. The agency says the Center for Biological Diversity’s San Francisco office provided substantial scientific information to back up its request to protect Bluefin tuna under the Endangered Species Act. The agency says it will make its recommendation by May 2011–a year after the petition was filed. Bluefin are believed to spawn only in the Mediterranean Sea and the Gulf of Mexico. Oil from the busted BP well polluted the Gulf after the Deepwater Horizon rig exploded and sank in April.
Seniors are preparing to cut back on everything from food to charitable donations to whiskey as news spreads that their social security checks will be frozen for a second straight year next year. Though the decision wasn’t made by politicians, it could have an impact on election day if seniors blame Democrats for it. Older people are the most loyal of voters, and their support is especially important during mid-term elections, when turnout is lower. Everett Rawlings, a 73-year-old from Boca Raton, Florida, says the decision affects him and everybody else who’s retired, but he understands the rationale behind it. Retired 69-year-old state worker Paul McNeil of Warwick, Rhode Island, is more blunt, saying he thinks the decision not to increase benefits is “disgusting.”
Students dropping out of college after just one year are costing taxpayers billions of dollars, a new report says. States appropriated almost $6.2 billion to four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two, the report released Monday says. The federal government also spent $1.5 billion and states spent $1.4 billion on grants for students who didn’t start their sophomore years, according to statistics compiled by the nonprofit American Institutes for Research. The figures are meant to advance the argument that college completion rates need improvement, but could give ammunition to critics who say too many students are attending four-year schools at great cost to taxpayers.
Heathrow Airport has reported its busiest September ever–underscoring hopes of a resurgence in the aviation industry. Airports operator BAA says that 6.22 million people flew from the airport–Europe’s busiest–last month. That’s an increase of 7.6 percent compared to September 2009. BAA says that much of the rise was driven by a bounce back in business travel as the global recovery picks up pace, with airlines also restarting routes and flights that were axed at the height of the recession. The most popular routes were to New York, Dubai and Dublin. BAA says traffic across all six of its British airports–Heathrow, Stansted, Southampton, Glasgow, Edinburgh and Aberdeen–rose 3.3 percent year-on-year to 9.99 million.
Microsoft will launch three new smart phones with AT&T ahead of the holiday shopping season. The new phones will run on Microsoft’s new mobile software in a test of whether Microsoft can catch up with rivals in the fast-growing smart phone market. T-Mobile also plans a phone running Windows Phone 7 software for the holiday season. The new handsets will go up against both the iPhone and the expanding number of phones running on Google’s Android operating system. The phones AT&T plans to launch will be manufactured by HTC LG Electronics and Samsung. The first will go on sale November 8th, with two more coming a few weeks later.
Apple plans to make a version of its popular iPhone 4 available through Verizon Wireless by early next year, according to published reports. The New York Times, citing an anonymous source briefed by Apple, reported the development late Friday. The Wall Street Journal also reported the move.
Growers along the West Coast are rushing to pick grapes after a cool summer led to a late harvest. Jon Emmerich of Silverado Vineyards in California’s Napa Valley says the harvest is running about three weeks behind because workers were waiting to let the grapes ripen. Growers in Oregon and Washington say they’re running two to three weeks behind too. But if they can beat the coming frost, vintners say the grapes have the potential to make great wine. With less sun and heat, grapes develop less sugar, which means they’ll produce wines with slightly less alcohol but full and balanced flavors. Winemakers say this year’s American vintages will be more akin to those produced in the world’s top wine countries, such as France and Italy.
The coming week brings readings on the economy covering inflation and retail sales among others. The Federal Reserve tomorrow releases minutes from its policy-setting last month. Later in the week, both the producer price index and the consumer price index are scheduled. Also due, the government’s snapshot of September retail sales.