Houston-based strong>Luby's is closing 25 underperforming stores. The company will have 95 remaining restaurants, as well as 15 culinary contract service centers. Luby's said final information on which stores are closing will be released within two weeks. The company is monitoring five to ten other locations that could also close, depending on performance. Luby's reported a net loss of $23 million in the most recent quarter. About $25 million to $30 million is expected to be made from sale of closing stores, which will be reinvested back into the company for upgrades and building.
The Texas unemployment rate jumped to 8.2 per cent in September, and the state lost another 44,700 jobs. The Texas Workforce Commission said the jobless rate increased from August, when the state hit eight per cent unemployment for the first time in 22 years. The last stretch of eight per cent-plus unemployment lasted 22 months, starting in February 1986. Houston's unemployment rate inched up to 8.5 per cent, from last month's 8.4 per cent. Commission Chairman Tom Pauken says most Texas industries saw job losses in September. The Texas rate is still running well under the national unemployment figure of 9.8 per cent, a 26-year high. Unemployment rates are adjusted for seasonal trends in hiring and firing, which most economists believe gives a better picture of the job market.
The federal budget deficit surged to an all-time high of $1.42 trillion as the recession caused tax revenues to plunge while the government was spending massive amounts to stabilize the financial system and jump-start the economy. The imbalance for the budget year ended September 30th, more than tripled last year's record. The Obama administration projects deficits will total $9.1 trillion over the next decade unless corrective action is taken. As a portion of the economy, the budget deficit stood at ten per cent, the highest since World War II. President Barack Obama has pledged to reduce the deficit once the Great Recession ends and the unemployment rate starts falling. But economists worry the government lacks the will to make the hard political choices to cut spending and raise taxes to get control of the imbalances.
Output at the nation's factories, mines and utilities rises for the third straight month in September on higher production of autos and other goods, positive signs for the ailing manufacturing sector. The Federal Reserve says industrial production rose 0.7 per cent last month. Wall Street economists expected a 0.2 per cent rise. August output also was revised higher, to 1.2 per cent from 0.8 per cent. The nation's factories boosted production 0.9 per cent last month. Production of steel and other metals rose 3.4 per cent. The production of autos and auto parts rose 8.1 per cent, after a 6.1 per cent rise in August.
Nearly $5 million in federal funds will help pay for repairs to a Hurricane Ike-damaged dike in Texas City. Mayor Matt Doyle says the city commission is expected to discuss a contract with an engineering firm. Texas City and Galveston County face figuring out how to pay for the overall repair job, estimated at $11.3 million, pending 13 months after Ike slammed the Galveston area. Federal Emergency Management Agency spokesman Brad Craine said FEMA awarded $4.5 million to repair an associated road and embankment. Some funds will pay for repairs to five boat ramps, including the Sansom-Yarbrough ramp. A Texas Parks and Wildlife Department survey found that ramp, handling seven per cent of all the boats launched in Galveston Bay, was the busiest on the state's coast before Ike.
A 109-turbine wind farm in San Patricio County has begun generating energy into the Texas power grid. The $200 million Papalote Creek Wind Farm, a complex near Taft owned by E.On Climate & Renewables, officially went into service Thursday. Most of the power produced during the next 15 years will be sold to CPS Energy, which provides electricity to the city of San Antonio. John Bonnin, manager of Wholesale Power Marketing for CPS, marked the start of the power production by saying: "that's 10 kilowatts, 15 kilowatts.'' Taft is a town of about 3,400, located 15 miles north of Corpus Christi.
Teamsters President Jim Hoffa joined Continental Airlines workers in Newark, New Jersey, for a rally announcing that fleet service workers had filed for an election to join the Teamsters Union. Newark is Continental's second-largest hub, employing 2,600 of the Houston-based air carrier's 8,000 fleet service workers across the country. Some 3,700 aviation technicians at Continental are already represented by the Teamsters.
Chicago Bridge & Ironhas been awarded a $70 million contract by the NIS Petroleum Industry of Serbia to upgrade its Pancevo oil refinery. The Woodlands-based energy infrastructure company will engineer and construct a hydrocracker/hydrotreater unit. CB&I is doing similar work in Croatia.
Halliburton is reporting that conditions are improving in North America, the hardest hit area for the oil industry, though third-quarter profits fall well short of the same period last year. Companies like Halliburton help oil and gas producers with drilling and other services. Those producers were hit hard this year by plunging oil prices, and they've squeezed the service companies to cut costs, which drained profits for Halliburton during the first half of the year. Halliburton reported a profit of $262 million last quarter, about 61 per cent smaller than the same period last year. But the company said its revenue in North America has improved this year, increasing two per cent from the second quarter.
Bank of America says it lost more than $2 billion in the third quarter as its loan losses continued to rise. The nation's second-largest bank, which lost $2.24 billion after accounting for preferred dividends, said its losses for failed loans came to almost $10 billion during the July-September period, up almost $1 billion from the second quarter. The bank also added $11.7 billion to its reserves to cover bad loans. The company, hurt like other banks by consumers' inability to pay their bills, said credit problems would continue for the near future. Its earnings follow the pattern set this week by Citigroup and JPMorgan Chase, which also reported more loan losses during the third quarter.
Treasury Secretary Timothy Geithner says the economy is in the midst of a recovery that could be imperiled if the government's support systems are removed too quickly. During a conference sponsored by the magazine The Economist, Geithner said the classic pattern in past financial crises was for governments to withdraw their support too early. He says the Obama administration plans to be very careful and avoid that mistake. Geithner says there are signs of improvement in the economy, but that the recovery will be slow.
Two agencies charged with oversight of the financial markets propose changes aimed at eliminating differences in regulating similar financial investments. The recommendations to Congress are on "harmonizing" regulations by the Securities and Exchange Commission, the government's primary markets watchdog, and the Commodity Futures Trading Commission. They're part of the plan to overhaul the nation's financial rules called for in the Obama administration's blueprint. Officials say the explosive growth of the unregulated market for derivatives has made the need to address gaps and overlaps in the agencies' regulators especially necessary. The complex financial instruments are blamed for worsening last year's financial crisis. The House Financial Services Committee voted to impose regulation for the first time on derivatives, which helped bring down Wall Street's ,strong>Lehman Brothers and nearly toppled insurance conglomerate American International Group.
Government data show the south and southwest have benefited most from the first federal contracts awarded as part of President Barack Obama's stimulus program. Military construction and environmental cleanup contributed to a boost of about 30,000 jobs. Those jobs are linked to less than $16 billion in federal contracts, just a sliver of the $787 billion stimulus program. The new job numbers offer the first hard data on effects of the stimulus program and are in line with expectations for such an early accounting. The White House says the numbers show the administration is on track to hit the president's goal of creating or saving 3.5 million jobs by the end of next year. On paper, Colorado posted the largest increase of any state, more than 4,700 jobs. California, Florida, Tennessee and Texas also showed strong gains, while New England fared poorly.
Foreign demand for long-term U.S. financial assets rose in August even though China trimmed its holdings of treasury securities. Foreigners purchased $28.6 billion more in assets than they sold in August. That followed a net increase of $15.3 billion in July, and $90.2 billion in June. The Treasury Department is auctioning record amounts of debt to cover a deficit estimated to have hit $1.41 trillion for the budget year that ended in September. Some economists worry that if overseas buyers don't keep buying U.S. debt, interest rates could rise. China trimmed its holdings by $3.4 billion to $797.1 billion in August, but still remained the largest foreign holder of treasury securities. Japan, the second largest foreign holder, boosted its treasury securities to $731 billion, from $724.5 billion in July.
The Federal Reserve says banks cut back on loans from its emergency borrowing facility and trimmed use of other credit programs set up to ease the financial crisis. Commercial banks averaged $27.4 billion in daily borrowing over the week that ended Wednesday. That was down from $27.9 billion in the week ended October 7th. The identities of the financial institutions are not released. They pay just 0.50 per cent in interest for the emergency, overnight loans.
The winners of the 2009 World Oil magazine awards were announced at a dinner in Houston last night. John Murray of FloaTEC won the Innovative Thinkers award. Cameron was recognized in the Best Completion Technology award for a system providing a local area network between the surface and subsea equipment. Other award winners include Marathon Oil, Halliburton, Schlumberger, Baker Hughes and Superior Well Services.
State Fair of Texas organizers are hoping a big final weekend will ease the pain of rain for the 24-day event. Spokeswoman Nancy Wiley estimates that business is off an average of 20 per cent to 25 per cent for most vendors at the nation's largest fair. She says it's hard to know how much the economy had to do with the drop-off because of persistent showers since the fair opened September 25th. A weekend forecast of perfect fair weather has organizers and vendors alike banking on a rally. The Texas-Oklahoma game is always a big fair draw but usually falls on a middle weekend. This year, those 90,000-plus fans will descend on the final weekend, which is always a big hit by itself.