The national recession continues to take a toll on Texas, pushing the state's unemployment rate up to 7.5 per cent in June. The jobless rate in May was 7.1 per cent, but the state lost 40,600 nonagricultural jobs in June. The hardest-hit industries were trade, transportation and utilities, which dropped 21,700 jobs last month. Professional and business services saw 11,900 jobs disappear. Jeanie Wyatt with South Texas Money Management notes that Texas still has a lower unemployment rate than other states.
"The consensus of economists is that the recession will be over by the second half of this year. So we are expecting GDP comparisons, quarter-over-quarter, to probably be positive for the balance of the year. Much improved from prior quarters, which would mean we are out of the recession. Even when the economy is starting to improve, unemployment rates usually do continue to go up for awhile. When you've had a slow or even a recessionary economy as we've had, employers continue to feel a need to reduce their costs and their overhead."
Texas Workforce Commission Chairman Tom Pauken also notes that the state's jobless rate remains far below the national unemployment rate, which is 9.5 percent. He says his agency is committed to helping out-of-work Texans find new jobs. The strongest industry for job growth was in education and health services, which reported no job losses in June.
The TWC says the ten-county Houston metro area lost 69,600 jobs in the past 12 months, and the region's unemployment rate stands at eight per cent. The Greater Houston Partnership says Houston's economy today has nearly 2.6 million jobs, versus 1.6 million in the 80's recession.
The U.S. Labor Department says unemployment topped ten per cent in 16 states last month. The rate in Michigan surpassed 15 per cent, the first time any state hit that mark since 1984. Home to the nation's struggling auto makers, Michigan has been clobbered by lost factory jobs. Its jobless rate of 15.2 per cent in June was the highest in the country, but the record-high for the state was 16.9 per cent in November 1982. Still, the government says it's the first time in 25 years that any state has suffered an unemployment rate of at least 15 per cent. In 1984, it was West Virginia.
Construction of new U.S. homes rose in June to the highest level in seven months, a sign builders are starting to regain confidence as they emerge from the housing bust. The Commerce Department says construction of new homes and apartments jumped 3.6 per cent last month to a seasonally adjusted annual rate of 582,000 units, from an upwardly revised rate of 562,000 in May. That was better than the 530,000 unit pace economists expected, and was the second straight increase after April's record low of 479,000 units. In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose 8.7 per cent in June to an annual rate of 563,000 units. Economists polled by Thomson Reuters expected an annual rate of 520,000 units.
President Barack Obama's top economic adviser says the nation has moved back substantially from the brink of an economic catastrophe it faced at the beginning of the year. Lawrence Summers, the director of the National Economic Council,, said economic collapse looked all too real six months ago. In prepared remarks for a speech, he said efforts at an economic rescue have made progress. Summers was scheduled to speak at the Peterson Institute, an economic think tank in Washington. Summer's speech comes as the administration approaches its sixth month in office and as the public and members of Congress are becoming restless with Obama's economic policies. The administration is calling for patience to let its initiatives take hold.
U.S. trade envoy Ron Kirk said the Obama administration would take steps to save American jobs and create new ones by better enforcing the country's trade rights around the world. Speaking to steel workers at a United States Steel plant near Pittsburgh, Kirk said the administration "has their backs in the global trading system." He outlined measures he said will help Americans reap the benefits of existing trade agreements, such as better-paying jobs and economic growth. The measures include efforts to spot and respond to trade barriers, particularly those affecting U.S. farmers and manufacturers, and a commitment to monitor more closely foreign labor practices that might violate trade agreements and put U.S. workers at a disadvantage, Kirk said.
Investors requested $668.9 million worth of loans this month in a government program aimed at spurring lending in the commercial real estate market. The Federal Reserve Bank of New York says investors will use the money to buy securities backed by commercial real estate loans that were made months or years ago. None of the money was for newly issued securities. The Fed hopes the program will boost the availability of commercial real estate loans, help prevent defaults and facilitate the sale of distressed properties. It is part of larger consumer lending program called the Term-Asset Backed Securities Loan Facility, or TALF, which figures prominently in efforts by the Fed and the Obama administration to ease credit, stabilize the financial system and help the economy.
Houston-based Continental Airlines says CEO Larry Kellner is stepping down to go into the private-equity business and will be replaced by company president Jeff Smisek. Kellner has been chairman and CEO for the past five years. Smisek will take over both titles on January 1st.
A Houston company has won leases off Mustang Island and South Padre Island to develop wind farms. The Texas General Land Office announced the agreement with Baryonyx Corporation. The company also plans to establish a wind-powered data center in Dallam County. A data center is where governments and businesses house computer systems offsite in a secure area. Land Commissioner Jerry Patterson said that if the turbines are built, the state's permanent school fund could gain $338 million over 30 years. Baryonyx CEO Douwe Franssens told the Corpus Christi Caller-Times that he had no estimate on how many turbines are planned. He says construction could begin in two or three years. The turbines would be visible from shore.
Tolls are going to rise on north Texas roads after a decision to raise rates by an average of 3.5 cents per mile. The North Texas Toll Way Authority authorized the increase, which means that toll tag users will pay an average of 14.5 cents per mile, up from about 11 cents per mile. An analysis in the Dallas Morning News said a roundtrip commute from the far north suburbs to downtown Dallas for toll tag users will cost about $8.60. That route will cost more than $13 for people paying cash. The toll way authority also authorized rates to increase by six per cent every two years, without a vote of the board.