Thursday AM June 26th, 2008
Sales of new homes tumbled for the sixth time in seven months while median prices kept dropping, underscoring the depth of the nation's housing woes. The Commerce Department reports that new homes were sold at a seasonally adjusted annual rate of 512,000 units in May, down 2.5 percent from the April level. The median price of a new home sold last month fell to $231,000, down 5.7 percent from a year ago. The report on new home activity in May followed reports Tuesday that showed record home price drops in April, showing that the nation's housing slump is not only deepening but widening to include previously untouched parts of the country.
A new report says orders to factories for big-ticket manufactured goods were basically flat in May as strength in demand for aircraft and computers was offset by widespread weakness elsewhere. The Commerce Department reports that durable goods showed no change last month after declines of one percent in April and 0.2 percent in March. Economists had expected a flat reading for May as the manufacturing sector continues to be buffeted by the weak overall economy. The hope is that continued strength in demand for exports will compensate for plunging demand for autos and building supplies, two sectors that have been especially hard-hit by the current economic slowdown.
Lawyers for BP and plaintiffs have settled more than 100 cases in the last three weeks related to the Texas City explosion. Just over 50 claims for damages remain, including 14 in the current trial in Galveston, which is in its fifth week. There were 4,000 claims against BP for the 2005 explosion and fire that killed 15 and injured hundreds.
Figures released in Austin show the first collection of the state's new business tax has so far generated $4.2 billion. Comptroller Susan Comb's office released an estimate that's short of the projection the state has been banking on. The tax was estimated to bring in $5.9 billion per year to help offset school property taxes. So far, about 133,000 payments have been received. About 46,000 businesses that requested a deadline extension have yet to pay. Those taxes were due to the state--for the first time—on June 16th. Some small businesses say the tax is hitting them hard and they've formed a coalition to lobby the 2009 legislature. Texas budget writers have been watching tax revenues. The business tax makes up about 15 percent of the state's total tax revenue--second only to the sales tax.
A government report says global energy demand will grow by 50 percent over the next two decades despite high oil prices. And the world's heavy reliance on environmentally troublesome fossil fuels--especially coal and oil--will continue. The report is the Energy Department's long-term energy outlook. It assumes no action will be taken to limit global warming. With such energy growth, the report says, the annual amount of heat-trapping carbon dioxide going into the atmosphere will be 51 percent greater in 2030 than it was three years ago. The report predicts that global energy use will increase sharply even though oil will be over $100 a barrel in 2030, possibly as high as $186 a barrel.
A study released by Bankrate shows that 19 percent of Americans feels they'll never be able to retire, according to the Houston Business Journal. The poll finds that 28 percent think they can retire comfortably, while 33 percent think they'll just be able to get by when retired. But 70 percent say they have set low expectations about their retirement prospects.
Continental Airlines has agreed to offer voluntary leaves of absence to pilots who agree to leave the Houston-based airline's work force. Officials with its pilots' union hope the agreement will reduce the need for layoffs. They say pilots who take voluntary leave for a minimum of 18 months would keep their benefits. They say the incentives are aimed at pilots who are eligible for retirement. Continental announced recently that it will cut 3,000 jobs, ground 67 jets and reduce flights to counter high fuel costs. Continental has offered unionized workers with at least ten years experience a year's worth of health insurance and travel perks until 2023 if they leave on their own. The pilots, affiliated with the Air Line Pilots Association, had sought a separate deal.
A federal study finds the southwest has the lowest health insurance coverage in the country. The report from the U.S. Centers for Disease Control and Prevention finds that 30 percent of non-elderly adults and 18 percent of children uninsured are uninsured in Arizona, New Mexico, Texas and Oklahoma. Lead researcher Robin Cohen won't theorize why the region has higher rates of uninsured people than other parts of the country. But Emory University expert Ken Thorpe says it likely comes from a combination of factors, including state policy decisions and the fact that many jobs in the southwest are service, construction or other jobs without good health benefits. The study found New England has the largest proportion of its population covered with a rate of uninsured people less than half that of the southwest. The study marks the first time the CC has compared different regions of the country by health insurance status.
Plans by American Airlines to cut back flights later this year will fall hardest on passengers in Dallas/Fort Worth, Chicago, St. Louis and New York. The Fort Worth-based carrier plans to cut a total of 62 mainline and regional flights in Chicago, and 42 at DFW. The moves come amid rising fuel prices. Flights in and out of St. Louis, once a major hub for American, will drop by 43, while New York's Laguardia Airport will lose 42 American flights. The cutbacks in St. Louis and New York primarily affect shorter regional flights. In addition, American will quit flying to: Oakland, California; London Stansted; Barranquilla, Colombia; Albany, New York; Providence, Rhode Island; Harrisburg, Pennsylvania; Samana, Dominican Republic and San Luis Obispo, California.
Cell phone company T-Mobile USA is set to launch a nationwide service that lets customers place unlimited domestic calls with their landline phones over a broadband connection. The service, called T-Mobile At Home, will cost $10 per month with roll out set for July 2nd. Customers will need a wireless plan that costs at least $40 per month. They'll have to buy a T-Mobile Internet router for $50. The router plugs into the home broadband connection, and the customer's corded or cordless phones plug into the router. The service is aimed at consumers reluctant to abandon their landline completely in favor of wireless. The monthly prices don't include taxes or certain fees, which vary from state to state.
The Screen Actors Guild is accusing the major Hollywood studios of offering a contract deal worth less than an agreement tentatively approved by the leaders of a smaller actors union. SAG Executive Director Doug Allen told the Associated Press the offer is worth millions of dollars less over the life of the proposed three-year contract. SAG declined to immediately provide details on the differences in the offers.
J.C. Penney says it will slow the pace of new store openings because of the weak economy. The department store chain also says it's reducing capital spending for next year. J.C. Penney Chief Executive Myron E. Ullman III said the company expects the coming year to be "very challenging for the American consumer." The Plano-based company now plans 20 new or relocated stores in 2009, down from the 36 stores it expects to open or move this year. The company had once planned to open 50 new stores per year through 2011. Penney still plans to open its first store in Manhattan late next year. It believes the store will be its sales leader. The company also said it would renovate 10 to 15 stores next year, down from the 20 it expects to renovate this year and well below an original plan to update 65 stores per year through 2011.
Say goodbye to your cubicle and hello to a three-day weekend. The future workplace is likely to be more flexible in design and scheduling. That's according to predictions from job placement consultancy Challenger, Gray and Christmas. Technology improvements and rising energy costs are likely to change the way we work. The predictions include a four-day work week, as both employers and employees try to cut commuting costs. Laptops and other high-tech equipment will also open telecommuting opportunities and free workers from the office cubicle.