Factory orders rose in June for the fourth time in five months, an unexpected gain and the latest sign that the ailing manufacturing sector is recovering. The Commerce Department says factory orders rose 0.4 per cent, after a 1.1 per cent increase in May. Economists expected a one per cent drop, according to a survey by Thomson Reuters. A 2.7 per cent rise in orders for nondurable goods, such as chemicals and textiles, was the most since June 2008 and drove the overall increase. Orders for petroleum and coal products jumped 13.2 per cent, as the price of oil rose. Orders for durable goods, big-ticket items such as aircraft and appliances, fell 2.2 per cent.
A trade group's measure of the health of the U.S. services sector contracted more sharply than expected in July. The Institute for Supply Management's services index clocked in at 46.4, down from 47 in June. It's the 10th straight month of decline as any reading below 50 indicates the sector is shrinking. Analysts had expected a reading of 48 in July, according to poll by Thomson Reuters. The ISM says the service industries included in its survey, including retailers, financial services, transportation and health care, make up more than 80 per cent of the country's economic activity. Any turnaround in the sector requires improved consumer spending.
Planned job cuts announced by U.S. employers jumped 31 per cent in July, after falling to a 15-month low in June. The latest downsizing report from outplacement consultants Challenger, Gray & Christmas says over 97,000 job cuts were announced—the first increase in monthly cuts since January. So far this year, almost a million jobs have been cut, with the auto industry leading the nation at 122,212 layoffs.
Retail gasoline prices jumped 2.4 cents overnight to a new national average of $2.585 for a gallon of regular unleaded. That's according to AAA, Wright Express and Oil Price Information Service. That's more than seven cents above last week's price, but still a little cheaper than last month. Prices at the pump continue to rise because refiners are cutting back on production. Refiners are now are operating at just over 84 per cent of their capacity, which is about nine per cent below what is typical at this time of year.
Rains have not been enough to fill stock tanks or creeks. Robert Burns is with the Texas Agrilife Extension Service.
"In Texas, the wet got wetter, the dry got drier the first week of August. In central and parts of east Texas, two to three inches of rain was common, with isolated instances of from eight to ten inches, according to the National Weather Service and reports. It's the south and parts of southeast Texas that deserve our sympathy, though, as farmland and ranchland there remain parches, receiving only scattered showers, at best. And though parts of the southwest did receive from a half to one inch of rain, July was the hottest month on record, with 23 days of temperatures of 100 degrees or above."
Even farmers who have been irrigating have been having trouble keeping up, with all the days of 104-plus degree temperatures.
A government program to offer amnesty to militants in Nigeria's southern oil region has begun. The program, first announced in June, formally got under way Wednesday. Timiebi Koripamo, spokesman for the Government Amnesty Committee, says the plan provides unconditional pardon to those who turn in their arms, register and take part in reintegration programs. Already the leader of Nigeria's main militant group, Henry Okah, has been released as part of the program. However, the spokesman for the group said they would not take part. The militants say they are fighting to force the federal government to devote more oil-industry funds to the southern region, which remains deeply poor despite its natural bounty.
The post office says it lost $2.4 billion from April through June. That brings the year's losses so far to $4.7 billion. And the U.S. Postal Service expects to be $7 billion in the red when the fiscal year ends September 30th. The stark figures come from a decline in mail volume as people rely more on e-mail, plus a dip in advertising mail because of the recession. In an effort to reduce costs, the agency has proposed closing several hundred local post offices, has asked Congress for permission to reduce mail delivery to five days a week, and has reduced hours at many offices.
Four Houston post offices are on a list of potential cuts, including Addicks Barker on Barker Springs Road, Genoa on Almeda Genoa Road, Nassau Bay on Upper Bay Boulevard and Westchase Finance on South Gessner.
Vice President Joe Biden has told a Detroit audience that the U.S. needs to build on the city's "rich past" for the state's auto-dependent economy to recover. Biden is in Michigan to announce that the federal stimulus will provide $2.4 billion in taxpayer grants to develop next-generation electric vehicles and batteries--and tens of thousands of jobs. Michigan is the largest recipient of those grants, garnering more than $1 billion. Biden spoke at Nextenergy, a nonprofit that works with businesses on research involving alternative and renewable energy. The Obama administration says 11 Michigan manufacturers and research facilities will receive grants. Forty-eight projects in 25 states will create or retain tens of thousands of jobs.
Transportation Secretary Ray LaHood proclaimedcash-for-clunkers a roaring success just as the Senate seems poised to push the popular program back into high gear with another $2 billion in cash. LaHood said that in just a brief time, "the government has proved we can get money out the door and sell almost 160,000 cars." LaHood is a Republican and former Congressman from Illinois. In an interview on CBSs's The Early Show, he called the car-purchase program "a huge boost for the economy." Senate Majority Leader Harry Reid had said earlier that he believed there were sufficient votes to get the additional $2 billion approved by the Senate before it goes on summer recess.
General Motors' board chairman says company management was told this week to bring some of its new vehicles to market faster. Edward Whitacre, Jr., would not identify the vehicles but told reporters on a conference call that the board emphasized fuel efficiency as well as other areas. Whitacre says the company can become profitable sooner than many people think it can. He says he's confident that GM can change its culture so it can respond to market changes faster, even though it has not hired a lot of new people from outside. He also says GM's balance sheet is strong and he is confident it can protect and grow its U.S. market share. GM's new board met for the first time in Detroit on Monday and Tuesday.
Toyota's president says the world's biggest automaker soon will produce a sports car that will be affordable and fun to drive. Akio Toyoda announced plans for the new model in a speech on his ideas for returning the company to profitability after a period of losses and slow sales. Toyoda told an automotive conference in Traverse City the new sports car would be launched within the next few years. He said it's part of a strategy for turning things around by building cars that customers want. Toyoda said the auto industry is at a once-in-a-century crossroads and must reinvent itself by producing vehicles that use less oil and rely more on alternative fuels.
The Treasury Department says it will raise a record $75 billion in a series of treasury auctions next week to help deal with the government's soaring debt. The $75 billion surpasses the $71 billion record set in the prior three-month period. It is part of total borrowing needs for the July-September quarter that the government estimates will hit $406 billion. The projected borrowing, while significant, is below the record $530 billion it borrowed in the same period in 2008. The upcoming quarterly refunding will include auctions of $37 billion in three-year notes, $23 billion in ten-year notes and $15 billion in 30-year bonds.
Google says it plans to acquire On2 Technologies, a provider of digital video compression technology, in an all-stock deal valued at $106.5 million. Google, based in Mountain View, California, says On2 Technologies shareholders will receive 60 cents worth of Google Class A common shares for each outstanding share of On2 they hold. That represents a 57 per cent premium to the Clifton Park, New York, company's closing price Tuesday. Sundar Pichai, Google's vice president for product management said in a statement, "today video is an essential part of the Web experience, and we believe high-quality video compression technology should be a part of the Web platform." Google owns the popular video sharing site YouTube.