The nation's unemployment rate jumped to 8.5 percent in March, the highest since late 1983, as a wide range of employers eliminated a net total of 663,000 jobs. Staffing specialist Steve Drexel says Texas fared better for longer, but is now feeling the effects of the downturn.
"It came to us later so we're more in a little bit more [of a] panic just because it's more in our doorsteps. You know, the companies that are based in Texas that just sell in Texas, they'll be alright. But so many of the businesses sell throughout the country or throughout the world, so you just can't escape the downturn."
Secretary of Labor Hilda Solis counts the total of job losses at 5.1 million since the recession began last year. President Barack Obama, speaking about the U.S. jobless picture from Baden-Baden, Germany, where he met with German Chancellor Angela Merkel ahead of a NATO conference, said that without concerted and united global action, there will be "collective failure." Congressman Kevin Brady of Texas told the Joint Economic Committee that the Labor Department's report is fresh evidence of the toll the recession has inflicted on America's workers and companies.
"Job figures reported today add to the growing body of evidence indicating that the administration's economic forecast is much too optimistic. The unemployment rate is already significantly above the administration's forecast for all of 2009. The reason the Democrat's Congressional budget resolution got so far off track is that it's based on the president's budget. This is why a variety of accounting gimmicks are needed to hide the true costs of the administration's dangerous spending spree in the Democrats House budget resolution which passed last night."
The non-binding budget blueprints passed by the House and Senate represent a big win for the White House, while also exposing some of President Barack Obama's vulnerabilities. Congressional Democrats broadly supported the administration agenda of higher spending for domestic programs such as education and a health care overhaul. But 20 House Democrats, mostly representing Republican-leaning areas, abandoned Obama on the final vote, reflecting unhappiness over deficits. Obama lost a symbolic but politically resonant Senate vote on lowering the estate tax. Senate votes also dealt a severe blow to his plan to help pay for his health care initiative by reducing the tax benefits wealthier people take on itemized deductions such as mortgage interest.
Hundreds of people marched on Wall Street in New York City to protest the billions of dollars in bailout money to big business. Four people were arrested on disorderly conduct charges after they tried to walk in the middle of Broadway in downtown Manhattan. Marchers planned to walk past AIG headquarters and several banks on their way to the iconic bull statue on Wall Street. The protesters plan to repeat the march on Saturday.
A private trade group's measure of the strength of the services sector shrank for the sixth straight month in March and at a faster pace than expected. A services index from the Institute for Supply Management, a Tempe, Arizona-based trade group of purchasing executives, fell to 40.8 last month from 41.6 in February. Economists surveyed by Thomson Reuters expected the index to edge up to 42. Any reading below 50 indicates contraction. The report is based on a survey of the institute's members in 18 industries. It covers such indicators as new orders, employment, inventories, prices and backlogs. About three-quarters of Americans work in service-providing industries such as hotels, retail, education and health care.
Lenders are boosting their attempts to avoid home foreclosures, but fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than ten per cent. The report, which provides the most detailed and broad analysis to date of efforts to stem the foreclosure crisis, was published by the Federal Office of the Comptroller of the Currency and the Office of Thrift Supervision. Among loan modifications made in the October-December quarter, about 37 per cent resulted in a drop in payments of more than ten per cent, compared with about one-fourth in the first nine months of the year. Still, nearly one in four loan modifications in the fourth quarter actually resulted in increased monthly payments.
Rates on 30-year mortgages have fallen for the second consecutive week and remain at the lowest level on record. Mortgage finance giant Freddie Mac said that average rates on 30-year fixed-rate mortgages dropped to 4.78 per cent this week, from 4.85 per cent last week. The Federal Reserve launched a new effort to assist the staggering U.S. housing market. Rates are down by more than a full percentage point from a year ago and have sparked a surge in refinancing activity. Lenders, however, have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.
Ben Bernanke says the Federal Reserve was "extremely uncomfortable" about last year's bailouts of big financial companies, but the Fed chief believes the central bank's strategy to ease the financial crisis is working. Bernanke referred to the Fed's unprecedented decisions last year to step in and financially back JPMorgan Chase's takeover of then-troubled investment house Bear Stearns, and throw its first of four financial lifelines to insurance giant American International Group. In remarks to a Fed conference in North Carolina, he says the Fed was forced to take action because the collapse of those companies would have dealt a serious blow to the financial system and the broader economy. The situation underscores the need for ways to allow the government to safely wind down such huge firms.
Negotiators for AT&T and union officials representing 112,500 employees are discussing new labor agreements. Both sides expect the bargaining to go into the late hours Saturday, when five regional labor contracts expire at midnight. Candice Johnson, a spokeswoman for the Communications Workers of America, declined to say whether union officials are moving any closer to calling a strike. Union workers voted to give their leaders that option last month. AT&T spokesman Walt Sharp notes that negotiations typically continue until contracts expire and sometimes go beyond. The Dallas-based phone company would like union employees to cover more of their health care costs, among other concessions.
A survey by TriNet Group indicates small businesses are still planning to hire—just not as frequently and with fewer spots to fill. The group's HR Trends Survey found that 55 per cent intend to hire during the year—down from 80 per cent late last year.
Governor Rick Perry is urging the nation's leading pharmaceutical research and manufacturing companies to invest in the state's growing biomedical technology industry. Speaking at the Pharmaceutical Research and Manufacturers of America annual conference in San Antonio, Perry touted the state's strong business climate and investments through the Emerging Technology Fund.
Hearst Corporation is asking its newspapers to cut costs 20 per cent this year. Plunging advertising sales are blamed, and the newspaper unit president tells analysts that the industry is largely overstaffed. Hearst owns the Houston Chronicle, which has shed more than 300 employees since late 2007.
The Texas Supreme Court upheld its decision that a "premises owner" cannot be sued by injured employees of a contractor. A contract employee who attempted to sue the owner of a work site where he was injured now must go back to the drawing board. Turbine mechanic John Summers was injured in a 2001 accident while repairing a leak on a hydrogen generator at an Entergy Gulf States plant in Bridge City. Entergy covered the injury with a workers compensation policy that previously only protected the company from being sued by direct employees. Legislators say they never meant the compensation law to apply to contractors. Attorneys for Summers argued the ruling allows other Texas companies to avoid lawsuits by workers. It was a rare rehearing before the Texas Supreme Court.
An actor has been cast as Jeff Skilling for a new play set for the Chichester Festival Theatre on England's south coast this summer. Samuel West will play the former chief executive of Enron, jailed for fraud and conspiracy, beginning in July. The play, written by Lucy Prebble and directed by Rupert Goold, then moves to London's Royal Court Theatre in September. Further casting is underway.
Sam Houston Race Track is hoping to hire more than 300 employees for the upcoming 2009 American Quarter Horse meet and the Showground's Summer Concert Series. The spring job fair is being held Saturday in the main grandstands for positions in event operations, sales, admissions, parking and security.
The COO of Lonestar Capital, Steve Vella, opened the Toronto Stock Exchange this morning. The Houston firm focuses on the consolidation and growth of renewable energy companies, primarily in solar energy. Lonestar began in California with the acquisition of Acro Electric in February, and trades under the stock symbol "LON."
Blockbuster says it has amended a revolving and term loan agreement, which gives it some breathing room on its finances amid a deepening recession and increased competition. The Dallas-based video rental company, which faces competition from Netflix and others, says lenders have also agreed to waive any default that comes from a "going concern" classification for fiscal 2008. The struggling company had lined up tentative financing deals prior to the amendment, but earlier this month cautioned that its auditor was likely to raise doubts about its ability to stay in business. The amended facility, agreed upon with JPMorgan and other lenders, gives Blockbuster a $250 million revolving loan refinancing that matures on September 30th, 2010.
Baker Hughes reports the number of rigs actively exploring for oil and natural gas in the U.S. rose by four—to reach 1,043. The Houston-based company says it's the first time this year the weekly count has increased. One year ago the rig count stood at 1,830. The U.S. count is down nearly 50 per cent since the end of as weak energy demand has hampered oilfield activity. Texas added three rigs.