Friday PM June 6th, 2008

The weekly AAA Texas gas price survey shows regular self-serve averages $3.86 per gallon in the 11 Texas cities in the survey. That's up a penny from last week. Nationally, the average rose four cents to a record $3.99 per gallon. Houston's average is up almost two cents to nearly $3.87 a gallon. But auto club spokeswoman Rose Rougeau says the only good news is in the lack of double-digit increases around the state. She says that could indicate the pace of the price run-up is slowing. She points out that falling U.S. demand for gasoline because of high prices has helped bring crude oil prices down from a high of $135 per barrel to around $120. The most expensive gasoline in Texas is in Dallas, where regular self-serve rose two cents this week to an average of $3.87 per gallon. The cheapest gasoline is in Texarkana, where the average rose a penny to $3.81 per gallon.

The Labor Department says the nation's unemployment rate has seen its biggest single-month increase since 1986. The jump was from five percent to five and a-half percent. Says one economist: "It was ugly." While the steep surge in the unemployment rate was more than expected, the number of jobs lost was slightly below forecasts, at 49,000. Even so, job losses reported in both March and April were revised higher than initially reported. Employers have cut jobs for five straight months. There were jobs lost in manufacturing, construction, retailing and professional and business services.

Consumers relied a lot less on their credit cards in April. The Federal Reserve says credit card debt that month rose at the slowest pace in nearly three years. A Fed report said consumer borrowing increased at an annual rate of 4.2 percent in April, down from 6.2 percent in March. Borrowing in the category that includes credit cards rose at an annual rate of just 0.4 percent. That is the weakest performance since a 1.8 percent decline in May 2005.

Republicans have blocked efforts to bring a global warming bill up for a final Senate vote after a bitter debate over its economic costs and whether it would push gasoline prices higher. Democratic leaders fell 12 votes short of getting the 60 votes needed to end a Republican filibuster on the measure. The vote was 48-36. Majority Leader Harry Reid now must decide whether to pull the bill and push the climate change issue to next year with a new Congress and a new president. The bill would cap carbon dioxide coming from power plants and factories with a target of cutting greenhouse gas emissions by 71 percent by mid-century. Opponents say it amounts to a huge tax increase and would lead to higher energy prices.

The Federal Reserve has given approval for Bank of America to purchase distressed subprime mortgage lender Countrywide Financial. The Fed board approved the deal in a 32-page order issued Thursday. Countrywide had said previously that it will hold a special meeting of shareholders on June 25 to approve the proposed sale. In its order, the Fed board said that after the proposed deal Bank of America would remain the largest depository institution in the country, controlling approximately $773.4 billion in deposits, which represent 10.9 percent of total insured bank deposits in the country.

In several parts of India, angry consumers have blocked rail tracks and roads and shut down businesses for a second day. They are protesting a hike in fuel prices by the government. Police detained 20 activists from a powerful hard-line Hindu party, after they disrupted train services in a suburb of Mumbai, India's financial and entertainment capital, according to a railway spokesman. The federal and state governments scrambled to contain the protests. Several states lowered local sales taxes to lessen the impact of the rise in prices of gasoline, diesel and cooking gas. The Indian government hiked gasoline prices by about 13 cents and diesel prices eight cents for a liter (about one-fourth of a gallon) on Wednesday to partially offset soaring international oil prices. Fuel prices vary between states, which also impose their own taxes.

The parent of Skywest Airlines is dropping its pursuit of Expressjet Holdings. Utah-based Skywest announced it's acting in response to Expressjet's deal to continue regional jet service for Continental Airlines. Skywest had its eye on Expressjet, even after a $3.50-per-share takeover offer was rejected in April. Skywest Chief Financial Officer Bradford Rich says the company will pursue other elements of its strategic plan. Expressjet operates regional flights for Continental and Delta Air Lines.

Baker Hughes in Houston says the number of rigs actively exploring for oil and natural gas in the U.S. rose by nine this week--to 1,886. One year ago the rig count stood at 1,760. Texas gained 10 rigs.


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