Friday AM June 27th, 2008
unemployment benefits held steady last week but were still at a high level, pointing to a cooler jobs market. The Labor Department, in a new report Thursday, says new applications for unemployment insurance stayed at 384,000 for the week ending June 21st, marking no change from the previous week. The figure was higher than the 375,000 claims level economists were forecasting. The four-week moving average of claims, which smoothes out week-to-week fluctuations, rose by 2,250 last week to 378,250.
Both Toyota and Nissan say global output rose in May, as strong demand in Asia and emerging markets offset the softening U.S. market. Toyota says overall global production rose 3.6 percent from the previous year to 806-thousand vehicles. The automaker says exports from Japan advanced slightly. Meanwhile, Nissan says global production in May rose 5.1 percent to 27,000 vehicles. However, Nissan's overseas output retreated more than eight percent to 175,000 units, dragged down by the U.S. and Mexico. Honda's numbers for May are lower, as global output fell 3.7 percent to 316,000 vehicles. Toyota is also retreating from its previous prediction of becoming the largest automaker in the world, as it tries to take the title away from General Motors./P>
If you've bought a new car this year, chances are you just aren't as enamored with it as you were the last time you got one. At least, that's what the latest survey by J.D. Power and Associates indicates. It says for the first time in five years, drivers of new cars were less satisfied with their vehicles. And it all goes back to high gas prices. J.D. Power's director of Product Research and Analysis notes that by and large, fuel economy among vehicles hasn't improved at a time when gas prices are up 27 percent. The survey measures owner satisfaction with the design, layout and performance of new vehicles. The good news is U.S. automakers continue to show improvement. In fact, of the eight most-improved nameplates, all were U.S. brands.
The U.S. economy turned in a better performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas. But it's still viewed as sub-par. The Commerce Department says the one percent growth rate marks a slight improvement from the government's previous estimate of nine-tenths of a percent for the January-to-March quarter. But the tiny improvement points to a fragile economy, shaken by housing, credit and financial problems. Analysts say more normal growth would be along the lines of 2.5 to three percent. Still, the figure shows the economy posting an improvement over the feeble six-tenths-percent growth rate in the final three months of 2007.
American Airlines expects to cut about eight percent of its management and support jobs as it deals with record high jet fuel prices. Details are in an e-mail to American employees that was obtained by the Associated Press. It's from Faye Wright, the managing director of flight services for Fort Worth-based American. The e-mail says the cuts will apply to "all levels of management" and probably be based on how critical the person's job is. American Human Resources Vice President Jeffrey Brundage, in a letter this week to employees, said reductions would vary by department but in the eight percent range. He said the job cuts would be completed in September. Executives announced last month that American would cut capacity in the October-to-December quarter by up to 12 percent. The nation's largest carrier has about 82,000 employees. Houston-based Continental Airlines recently offered voluntary-departure packages to employees with at least ten years of service.
American Airlines is cutting flights from Syracuse to Dallas and Chicago. Syracuse Aviation Commissioner Tony Mancuso says American Eagle, the airline's regional carrier, will eliminate its one daily direct flight from Syracuse to Dallas and one of four daily flights to Chicago this fall. The cuts are part of extensive service reductions by American to pare costs in the face of soaring fuel costs. The Fort Worth-based airline is cutting its overall domestic capacity by about 11 percent. The airline announced it will close its operations in Albany and eliminate 42 flights at New York's Laguardia Airport.
Southwest Airlines outlined plans to shed 31 flights but add 40 others--including a big push into Denver. Dallas-based Southwest is also beefing up service in Fort Lauderdale, Florida. The addition of nine flights overall comes as many of Southwest's competitors scale back flight offerings due to record fuel prices. A number of markets will gain new nonstop Southwest service. For example, the carrier will now offer three daily roundtrip flights between Denver and Orange County, California, and two daily between Denver and Tulsa, Oklahoma. Denver is the home of Frontier Airlines and a major hub for United Airlines--both of which have announced capacity cutbacks in recent weeks. Frontier filed for bankruptcy protection in April. United recently announced plans to shutter its low-cost arm Ted, which was based in Denver.
Continental Airlines announced it will give more options to customers making last-minute flight changes on restricted tickets--but for a fee. The airline said customers changing flights within 24 hours of their scheduled departure would be able to pick another flight within 12 hours of making their change request. Before, changes were limited to a three-hour window. Customers will pay $50 for the change, or $25 if they are elite members of Continental's frequent-flier program. The fee will apply on flights operated by Continental, including Continental Express, Continental Connection and Continental Micronesia. The fee won't be charged to customers traveling on unrestricted tickets or fares without penalties for making changes.
Record high gasoline prices in the range of $4 per gallon are not keeping travelers at home across Texas. A survey released by AAA Texas shows those members who were polled say they will take at least the same amount of vacation trips this summer, compared to 2007. The association reports almost 90 percent will make at least one out-of-town getaway this summer. The review found 53 percent of the surveyed AAA Texas members plan to travel about the same amount this summer. About 15 percent plan to take more trips than one year ago, while 31 percent expect to take fewer trips. The e-mail survey was done May 13th-June 2nd. More than 350 members were polled about a "trip," defined as traveling a distance at least 50 miles away from home and involving an overnight stay.
Long-term mortgage rates are higher this week--but not by much. Freddie Mac says the 30-year fixed-rate mortgage is averaging 6.45 percent compared with last week's rare of 6.42 percent. A year ago, it averaged 6.67 percent. The average for the 15-year loan stands at 6.04 percent—up two basis points from last week. At this time last year, the 15-year fixed rate mortgage averaged 6.34 percent. Freddie Mac Vice President and Chief Economist Frank Nothaft says a lot of the stability was due to uncertainty about what the fed would do at yesterday's meeting.
Wall Street companies trimmed their borrowing from the Federal Reserve's emergency lending program over the past week, while commercial banks were ramping it up. A report from the central bank says the investment firms averaged $6.1 billion in daily borrowing for the week ending Wednesday, compared with $8.6 billion the previous week. Banks, on the other hand, increased their borrowing, averaging $14.7 billion a day. It was $13.4 billion last week.
A study by Fidelity Investments finds that the average 65-year-old couple needs $85,000 to cover insurance costs for long-term care like nursing home stays. At issue is the need to prepare for the possibility of needed assistance. The burden often falls on adult children of seniors, who can damage their own finances while caring for an ailing parent. The Boston-based financial services firm surveyed insurers offering long-term care policies. The estimate is for the amount of money needed to cover annual premiums for long-term care coverage throughout retirement.
The Internet's key oversight agency is considering the first sweeping changes in the network's addressing system since its creation 25 years ago. The Internet Corporation for Assigned Names and Numbers is meeting in Paris, considering proposals for streamlining new domain name suffixes. The new guidelines could lead to hundreds, perhaps thousands, of Internet addresses to join ".com." They could include ".lat" for Latin America and a Bulgarian moniker in the Cyrillic script. New names won't start appearing for at least several months, and ICANN won't be deciding on specific ones quite yet. Demand for change has been rising around the world as Internet usage expands to people who cannot speak English or easily type English characters.
New filings for