First-time claims for jobless benefits fell more than expected last week, evidence that companies are laying off fewer workers as the economy improves. The Labor Department says initial claims for unemployment insurance fell to a seasonally adjusted 550,000 from an upwardly revised 576,000 in the previous week. Analysts expected claims to drop to 560,000, according to Thomson Reuters. The number of people continuing to receive benefits fell by 159,000 to nearly 6.1 million, the lowest level since early April. Still, the figures remain significantly above levels associated with a healthy economy and indicate that jobs remain scarce.
White House economists say the Obama administration's recovery efforts have saved or created more than a million jobs. President Barack Obama has promised that his $787 billion stimulus plan will create or save 3.5 million jobs by the end of next year. In its first report to Congress, the Council on Economic Advisers says the number is more than one million, and the stimulus has been the driving force. An official who has seen the report summarized it on condition of anonymity because it had not been released. The U.S. economy has actually lost about 2.5 million jobs since the stimulus was signed in February. But the White House says that number would be far worse without the plan's tax cuts and huge increases in state aid, Medicaid and unemployment.
ExecuNet says companies are tightening the purse strings. According to a survey of 476 search firm consultants and corporate human resource professionals, many key compensation components are being withheld from new offers. Guaranteed bonuses, severance pay and stock options have become less prevalent in executive compensation packages. A separate survey reveals that average executive compensation decreased 1.7 per cent last year. But ExecuNet says employed executives can expect a 17 per cent increase in total compensation if they make a job change in the year ahead—down from 18 per cent in 2008.
The average retail price of gasoline across Texas dropped 16 cents to $2.39 a gallon this week. AAA Texas reported that prices this summer reached a peak in June when a gallon of unleaded gasoline cost $2.55 while the national average was $2.69. Fort Worth and Houston had the cheapest gas in the weekly survey, at $2.34 a gallon. That's down a nickel from last week. El Paso had the most expensive price per gallon, at $2.50. AAA Texas spokesman Dan Ronan says motorists in Texas consistently pay less than the national average. Average cost for a 14-gallon fill-up in Texas costs $33.46, compared to $36.12 nationally. The association says nationwide gas prices fell 2 cents to $2.58 a gallon.
The Texas Alliance of Energy Producers released a study estimating that the Texas economy will be damaged if Congress passes proposed changes to the tax code. Congress is discussing the proposed repeal of eight tax provisions and implementation of a new federal excise tax on oil and gas production from federal waters in the Gulf of Mexico. The alliance says if the tax proposals were adopted, the total negative impact to the state would be by about $20 billion over four years. The group says about 70,000 oil patch workers would lose their jobs as drilling declines to record lows in a matter of months. Oil and natural gas production revenues would drop, affecting royalties to the Permanent School Fund and the Permanent University Fund. Crude oil imports would increase.
The Houston Food Bank says a new report reveals that millions in unclaimed federal benefits are available for hungry Texans. The report by the Food Research and Action Center examines SNAP--formerly called food stamps--and hunger in 24 markets, looking at local participation rates, the number of unserved people and the consequences for individuals and local economies. Harris County had among the top five-worst participation rates, reaching only 46 per cent of eligible individuals in May 2007. That means more than $203 million in unclaimed benefits in 2007. The American Recovery and Reinvestment Act included a 13.6 per cent increase in SNAP benefits, or $80 more per household of four.
A new report shows the number of U.S. households threatened with foreclosure has been holding steady. The numbers from August are another sign that lenders' efforts to help distressed borrowers may be having an impact. Analysts note, however, that one month doesn't make a trend. RealtyTrac reports that more than 358,000 foreclosure-related filings were recorded in August. That means one in 357 U.S. homes received a foreclosure filing. That's up 18 per cent from a year ago. The number includes default notices, scheduled auctions and bank repossessions. Data also shows mortgage companies are ramping up their efforts to help troubled borrowers modify loan payments to make them more affordable. RealtyTrac reports that bank repossessions dropped 13 per cent from July. Foreclosures in Texas are down seven per cent. Nevada had the nation's highest foreclosure rate for the 32nd-straight month. Next were Florida, California, Arizona and Michigan.
The U.S. trade deficit shot up in July to the highest level in six months as a surge in shipments of foreign oil and autos pushed imports up by a record amount. The Commerce Department says that the trade deficit rose 16.3 per cent to $32 billion in July, much larger than the $27.4 billion imbalance that economists had expected. It was the largest imbalance since January and the percentage increase was the biggest in more than a decade. Imports rose by 4.7 per cent, the largest monthly advance on records that go back to 1992, while exports were up by a smaller 2.2 per cent. Both gains provided evidence that the most severe recession since world war ii was beginning to lose its grip on the global economy.
A Labor Department report counts some 60 countries where child labor or forced labor is used to make hundreds of goods. The report, which was mandated by Congress, doesn't name companies that use child labor or U.S. businesses that buy the goods. Labor Secretary Hilda Solis says the government isn't trying to penalize those companies, but to raise awareness about the issue and encourage American companies to voluntarily make sure raw goods aren't derived with exploited labor. Some of the most common products listed include raw materials like cotton, sugar cane, coffee, rice, cocoa and bricks. They come from nearly every region of the world, from West African cocoa farms to Latin American sugar cane to Indian silk. Iowa Senator Tom Harkin says "knowing which products are produced by child slaves" may change consumer behavior. He says "these reports shed light on who and where we need to focus our efforts to stop the worst forms of child labor."
Governor Rick Perry has issued an executive order for a comprehensive cost review of Texas' higher education system to ensure universities are spending student and taxpayer dollars as efficiently and effectively as possible. Perry issued the order directing the Texas Higher Education Coordinating Board to work with Texas' institutions of higher education. The order includes a review of state funding based on student course completion, restructuring the state's financial aid programs, consolidation or elimination of low-producing academic programs, and other items. A review of higher education cost-saving measures implemented in other states and countries is also expected. The report will be presented to Perry, the legislature and public institutions of higher education by November 1st, 2010.
Treasury Secretary Timothy Geithner says confidence and stability are replacing the fear and panic that gripped financial markets a year ago. Geithner said the nation still has a ways to go before "true recovery takes hold." But his upbeat tone reflects a growing push by the Obama administration to present government rescue efforts as a success. Geithner said the administration is starting to unwind a number of emergency support programs implemented in the wake of the financial crisis and expects to receive a further $50 billion in repayments from banks over the next 18 months. Geithner spoke before the Congressional oversight panel that monitors the Treasury's $700 billion financial bailout.
The Census Bureau reports that the number of people lacking health insurance rose to 46.3 million in 2008. That's up from 45.7 million in 2007, due to a continuing erosion of employer-provided insurance. Still, the level remained just below the peak of 47 million who were uninsured in 2006, because of the growth of government insurance programs such as Medicaid for the poor. Texas is once again number one in the nation for percentage of uninsured residents. The nation's poverty rate increased to 13.2 per cent, up from the 12.5 per cent in 2007. That meant there were 39.8 million people living in poverty. It was the highest rate since 1997. The statistics cover the first full year of the current recession. The median--or midpoint--household income declined slightly to $50,303.
Transportation Secretary Ray LaHood says the government has approved $1.2 billion in reimbursements to car dealers for sales under the cash for clunkers program. LaHood says the government is on track to pay eligible dealers by a September 30th deadline. More than 40 per cent of the applications from dealers have been paid. The rebates led to more than 690,000 new car sales at a taxpayer cost of nearly $2.9 billion. Auto dealers have said the Obama administration has been slow to pay them for the car incentives, which ended August 24th.
Ford Executive Chairman Bill Ford, Jr., and Governor Jennifer Granholm have formally announced plans to redevelop a closed auto plant near Detroit as the nation's largest renewable energy park. Ford and Granholm spoke at the Wixom site with officials from Xtreme Power of Kyle, Texas, and Clairvoyant Energy of Santa Barbara, California. The companies plan to buy the 320-acre Wixom assembly plant if state tax incentives and federal loans are approved. Ford says he "can't imagine a better way to reuse the facility." The state senate approved the tax breaks and okayed additional business tax credits because Michigan is out of incentives it can give this year. The Ford plant closed in 2007. The park could employ 2,800 workers building storage batteries and solar panels.
Experts say a court decision today in Indiana could make employers think twice before hiring workers who have health conditions that might prove costly down the road. An appeals court ruled that a pizza shop has to pay for weight-loss surgery for a 340-pound employee. The surgery will ensure the success of another operation for a back injury that he suffered at work. The ruling raises concerns among businesses bracing for similar claims. The pizza shop had agreed to pay for the back surgery, but said it wasn't obligated to pay for the weight loss operation because the man was already obese before he was hurt. The court found that the surgery was covered because the man's weight and the accident had combined to create a single injury. There was a similar ruling recently in Oregon, where the state's supreme court ruled that the state workers' compensation insurance has to pay for gastric bypass surgery to ensure that a man's knee replacement surgery is effective. The head of a consulting firm that helps businesses manage workers compensation says the Indiana case "draws a line in the sand"--because it's based on principles used in several states.
Patriot Bank has agreed to acquire The Woodlands-based Texas Community Bank, according to the Houston Business Journal. Houston-based Patriot Bank has ten area branches and would gain six from Texas Community Bank.
Banks trimmed their borrowing from the Federal Reserve's emergency lending facility and cut back on other programs intended to ease the financial crisis as credit markets thawed a bit. The Fed says banks averaged $30.4 billion in daily borrowing over the week ended Wednesday. That was down from $32.7 billion in the week ending September 3rd. The identities of the financial institutions are not released. They pay just 0.50 per cent in interest for the emergency loans, overnight loans.
Texas Southern University will save about $225,000 per year as the result of initiating an aggressive sustainability program this year. Through the new program, a single server will allow Texas Southern to monitor the current power configuration on all of its 3,800 computers, and to adjust the settings based on the specific needs of the campus. The university will be able to turn off monitors, place systems in stand-by or turn off computers during evenings and weekends, resulting in savings between $35 to $45 per computer. The green computing system is being provided by BigFix Power Management Software.
The National Science Foundation has awarded a $499,995 grant to researchers at the University of Houston-Downtown and Texas A&M University to explore why more women are not entering science, technology, engineering and mathematics degree programs and careers. The grant will fund studies at both universities over the next three years. A 2004 NSF study found that despite an increase in women entering those fields, the number of women actually practicing in the fields was still relatively small—21 to 35 per cent.
Google will let other online companies sell its digital copies of out-of-print books if a class-action settlement with U.S. authors and publishers wins court approval. The company announced that concession after mounting opposition to Google's ten-month-old settlement. Among other things, opponents of the deal argue it would give Google a digital monopoly on millions of books that are no longer being published. Google now says it will give Amazon.com and other rivals to its digital library of out-of-print books. The other merchants would then be allowed to keep most of the revenue from the sales. Google announced the change shortly after the head of the U.S. Copyright Office advised a Congressional committee that parts of the settlement violate federal law.