The International Council of Shopping Centers is trimming its November sales growth forecast as shoppers are falling behind in their holiday buying compared with a year ago. Michael P. Niemira, chief economist for ICSC, predicts that November sales at stores open at least a year--a key industry barometer--will be up three to four per cent, compared with the steep 7.7 per cent drop a year ago. But the increase will be below the original forecast for growth in a range of five to eight per cent. Sales at stores open at least a year are considered a key indicator of a retailer's health. Major retailers are slated to report final monthly results Thursday.
A research firm says decisive price cuts are helping sales of LCD flat panel TVs rise after Thanksgiving. Isuppli estimates that sales are up six per cent over last year. It says promotional prices have been 22 per cent lower than before Black Friday, the traditional start of the holiday shopping season. The average promotional price for a 32-inch set was $369, down from $490 before Thanksgiving. Prices for larger sets have been down more modestly, on the order of seven per cent. According to Isuppli, manufacturers instead have been packing better features into the models on sale, such as faster refresh rates for a steadier picture.
The Transportation Department says it has fined Houston-based El Paso Corporation and subsidiary Colorado Interstate Gas $2.3 million for a 2006 Wyoming pipeline blast that killed a worker. The department said the fine is the largest it has levied against a pipeline company. In November 2006, a bulldozer working on construction of the Rockies Express pipeline project struck and ruptured a buried 36-inch natural gas pipeline owned by an El Paso subsidiary, sending a giant fireball into the air and scorching 600 acres. The operator--Bobby Ray Owens, Jr.,--was killed. An investigation found the pipeline hadn't been located and marked according to federal safety regulations. Company spokesman Richard Wheatley says federal officials failed to take into account errors on the part of construction company laying the pipeline or the complexity of the incident. He says El Paso has since developed better procedures for identifying and marking existing pipelines and sharing that information.
The number of homebuyers who signed contracts to buy previously occupied homes rises for the nine straight month. The National Association of Realtors said its seasonally adjusted index of sales agreements rose 3.7 per cent from September to October to 114.1. It was the highest reading since March 2006 and almost 32 per cent above a year ago, the largest annual increase ever for the index. Economists surveyed by Thomson Reuters expected the index would fall to 109.5. Every region saw year-over-year increases in pending sales. And compared with September, every region but the west saw an increase. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales.
A private trade group says manufacturing activity grew for the fourth straight month in November, but at a slower pace than in the previous month, signaling a bumpy rebound. The Institute for Supply Management, a trade group of purchasing executives, says its manufacturing index read 53.6 in November after 55.7 in October. A reading above 50 indicates growth. Analysts polled by Thomson Reuters had expected a reading of 55. But new orders, a signal of future production, jumped to 60.3 from 58.5 in October. The index, which also includes production, employment, inventories and prices, first showed growth in August after 18 months of contraction. Measures of manufacturing in the UK, the Eurozone and China also grew in November.
Construction spending posted a tiny increase in October, the first advance in six months, as a surge in home building offset continued weakness in nonresidential construction. The small gain is a hopeful sign that the key construction sector might be stabilizing, which could provide support for the fledgling economic recovery. The Commerce Department says construction spending edged up 0.04 per cent in October, or $401 million, pushing the seasonally adjusted annual rate to $910.8 billion. The October performance was better than the 0.5 per cent decline that economists had expected, but it followed five straight drops including a 1.6 per cent fall in September that was the largest since January.
A federal subsidy to the Cobra plan ends today. Cobra is the program that allows workers to keep their company's health insurance plan after they leave their job. The economic stimulus bill President Barack Obama signed in February cut the cost of Cobra by 65 per cent for workers laid off after September 1st of last year. The aim was to keep the ranks of the uninsured from exploding as unemployment moved toward double digits. But the discount lasted only nine months. Now, many still out of work are looking at a significant jump in costs. A report released by the advocacy group Families USA finds that unemployed families who lose the cobra subsidy will see their premiums increase from $389 per month to $1,111 per month, on average.
General Motors says its November sales fell two per cent from poor sales numbers in the same month last year. The Detroit automaker says it sold 150,676 light vehicles last month. GM says it saw growing sales of new models including the Chevrolet Equinox and GMC Terrain midsize crossover vehicles and the Buick Lacrosse luxury car. Rival Chrysler posted a 25 per cent drop. Ford says U.S. sales held steady in November as buyers snapped up fuel-efficient cars and crossovers. Ford says its sales were essentially flat compared to last November at 122,846. But sales of crossovers climbed 26 per cent and sales of cars rose 14 per cent. Trucks and SUVs saw big declines. Toyota reported steady to higher sales and Hyundai posted a large increase, signs that the U.S. auto market is stabilizing. Mercedes-Benz USA sold almost 17,000 vehicles last month—up 19 per cent compared to one year ago. So far this year, sales are down more than 17 per cent. Sales of the new 9th Generation e-class have more than doubled from a year ago. Automakers are hoping for signs of an economic recovery in November's sales. Last November U.S. auto sales fell to a 26-year low.
GM says it will hold off on making a decision over the fate of its Swedish car brand Saab after new potential buyers have emerged. It will evaluate bids for the storied car maker by the end of December. If it does not find a "suitable arrangement," GM says it will scrap the brand. GM did not identify the possible bidders. About 4,500 jobs at Saab are at stake.
A group of senators wants the United States to oppose any new international loans to Antigua until the island nation compensates victims of the fraud allegedly run by R. Allen Stanford. The flamboyant Texas billionaire financier's bank was located in the Caribbean nation. Senator Richard Shelby of Alabama is the senior Republican on the Banking Committee, and he and seven other senators introduced a resolution. The so-called Sense-of-the-Senate resolution would have Treasury Secretary Timothy Geithner direct U.S. representatives to the World Bank and International Monetary Fund to oppose new loans to Antigua "until that government cooperates with the United States" and compensates the Stanford investors. The resolution would be nonbinding and it's unclear when the Senate might vote on it. Treasury spokeswoman Meg Reilly declined to comment. Spokesmen at the embassy of Antigua and Barbuda in Washington had no immediate comment. Stanford is in jail awaiting trial on U.S. federal charges that he ran a $7 billion ponzi scheme by promising huge returns on certificates of deposit from now-closed Stanford International Bank in Antigua.
Mexico's central bank says the money migrants sent home fell nearly 36 per cent in October compared to the same month last year. It's the largest drop since records began to be kept in 1996. The Bank of Mexico says Mexicans abroad sent home $1.69 billion in October 2009, nearly $1 billion less than October 2008. Statistics published on the bank's Web site indicate migrants sent $18.1 billion in the first ten months of 2009, a 16 per cent drop from the same period last year. Remittances sent by migrants have been Mexico's second largest source of foreign income, falling only behind oil exports. Bank officials have said remittances are declining because of the U.S. economic downturn, particularly in the construction market.
The U.S. Department of Agriculture is warning states about potential problems with outsourcing food stamp operations. The USDA letter, without naming states, says such private projects encountered severe problems in meeting critical performance standards and eligible applicants suffered. Texas in 2005 hired a group led by Accenture to run call centers for enrollment in food stamps and Medicaid. The project encountered training and technology problems. The agreement was scrapped in 2007. The Austin American-Statesman reported that the letter comes as Texas is negotiating a new contract with a private company already doing some aspects of enrollment. Texas is negotiating a deal with Maximus, which in June tentatively won a contract to continue running call centers in Austin, San Antonio, Midland and Athens. Maximus is a former Accenture subcontractor.
The Environmental Protection Agency wants more tests to determine if car engines can handle higher concentrations of ethanol in gasoline before deciding whether to increase the blend requirement from ten to 15 per cent. The EPA said that two tests indicate engine performance should not be harmed by the higher ethanol blend. But it said it wants more tests to make that certain. In a letter to a pro-ethanol group, the EPA said it won't make a decision until next year after all the testing is completed. Growth Energy, which petitioned to increased the ten per cent blend standard, called the EPA letter "a strong signal"' that it will increase the requirement. But a group representing oil refiners applauded the call for more studies.
Continental Airlines is requiring passengers to use credit or debit cards for in-flight purchases of alcoholic beverages and headphones starting today, with some exceptions. Passengers can still pay in cash on regional Continental Express and other contractor-operated flights. The airline still accepts cash for duty-free items on international flights.
Bloomberg says it has completed its purchase of McGraw-Hill's Businessweek magazine. The financial news service had agreed to buy the business magazine in October. Terms of the sale were not disclosed. Businessweek, citing unnamed people privy to the negotiations, had indicated the acquisition price was $2 million to $5 million in cash.
The federal government is wading into deliberations over the future of journalism. With the media business in distress, the Federal Trade Commission is holding a two-day workshop to examine the challenges facing the industry and to explore ways the government might help it survive. While media executives hope to find new business models, government officials say they want to discuss ways to preserve a free press as a pillar of democracy. Among the panelists at the FTC event are News Corp. Chairman Rupert Murdoch and Huffington Post founder Arianna Huffington.