Royal Dutch Shell says it will cut 5,000 jobs by the end of the year—ten per cent of its workforce--including hundreds of positions in Houston, according to the Houston Chronicle. It's not clear how many of the 13,000 employees in the Houston area will be affected. Shell has been transferring additional office jobs from Houston to India and the Philippines for cost reductions. Shell is based in The Hague, with U.S. headquarters in Houston.
The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment. In a more upbeat assessment, the Fed says the economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs. The Fed says it expects to wind down some emergency lending programs when they are set to expire next year.
Consumer prices moved higher last month, mostly reflecting more expensive energy costs. But most other prices were tame, suggesting the sluggish economic recovery will keep inflation in check in the months ahead. The Labor Department says consumer prices rose 0.4 per cent in November, matching analysts' expectations. Stripping out energy and food, all other prices were flat last month, indicating inflation isn't taking off. That was better than expected. According to the Greater Houston Partnership, the cost of food at home fell 5.1 per cent in Houston over the past year. Energy prices in Houston rose 4.1 per cent over the year.
Construction of new homes, helped by better weather, rebounded in November following a setback in the previous month. The gain is a hopeful sign that the housing recovery is continuing, a development viewed as critical to lifting the overall economy out of recession. The Commerce Department says construction of new homes and apartments rose 8.9 per cent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country although the increase was slightly lower than economists had expected. Applications for new building permits were also up, rising six per cent to an annual rate of 584,000 units, a stronger showing than economists predicted.
The deficit in the broadest measure of foreign trade posted a sharp increase in the July-September quarter, a sign that the U.S. economy was beginning to rebound as demand for foreign goods increased. The Commerce Department said the current account deficit rose to $108 billion in the third quarter, an increase of 10.3 per cent from the second quarter. The deficit matched economists' forecasts. The increase reflected a sharp widening of the deficit in goods as American demand for imports outpaced the rise in U.S. exports. The widening deficit was seen as evidence that the U.S. economy was beginning to rebound from the worst recession since the 1930s.
The House has approved legislation giving the federal government the ability to borrow $290 billion to finance its operations for just six additional weeks. The vote sends the must-pass bill to the Senate, which is expected to approve it as its last act before adjourning for the year. The alternative would be a market-rattling, first-ever default on U.S. obligations. The measure is needed as a result of the out-of-control budget deficit, which registered $1.4 trillion for the budget year that ended in September. The current debt ceiling is $12.1 trillion. Democrats had hoped to pass a far larger increase of almost $2 trillion to avoid another vote before next year's midterm elections.
Federal regulators have moved to require companies to reveal more information about how they pay their top executives amid a public outcry over compensation. The Securities and Exchange Commission voted 4-to-1 to expand the disclosure requirements for public companies. Company policies that encouraged excessive risk-taking and rewarded executives for delivering short-term profits were blamed for fueling the financial crisis.
The value of loans held by the banks that received the largest amounts of government bailout support fell for the ninth consecutive month in October. The Treasury Department reported the numbers a day after President Barack Obama criticized the nation's top bankers for not doing enough to boost lending. The monthly report, which monitors the top 22 recipients of support from the government's $700 billion rescue fund, shows that their average loan balances dropped in October by $36.8 billion, or 0.9 per cent. That followed a decline of 1.1 per cent, or $45.9 billion, in September. Obama urged the nation's big banks to make "extraordinary" efforts to increase lending to help consumers and businesses who have been staggered by the worst recession since the 1930s.
An auditor's report has found that state employee turnover dropped in fiscal year 2009. Turnover for full- and part-time employees decreased to 14.4 per cent, down from 17.3 per cent in 2008. That's the lowest rate in the past five years. The state auditor's office report released said several factors are involved: employee salaries increased, state agencies implemented retention programs and the overall Texas unemployment rate increased. The highest turnover rate among large state agencies came at the Texas Youth Commission, where turnover was 31.3 per cent. It's attributed largely to the number of departing correctional officers. But that rate was down slightly from a year earlier. When "involuntary separations" and retirements are excluded, the overall state employee turnover rate was 8.1 per cent in fiscal 2009.
A leading exploration firm on the largely untapped Marcellus shale natural gas formation says it has almost quadrupled its gas flow from a year ago. Range Resources said it's producing a million cubic feet of natural gas each day from its wells in southwestern Pennsylvania. That's enough natural gas for about a half-million homes every day. The Fort Worth-based firm says it expects to double that flow next year. Company spokesman Matt Pitzarella says range has paid out more than $20 million in landowner royalties on its Marcellus shale wells. Geologists say the Appalachian gas field could become the nation's most prolific. By some estimates, it holds enough natural gas to supply the United States for up to two decades.
The union that represents mechanics at American Airlines launched a publicity campaign today aimed at steering travelers away from airplanes maintained overseas. American Airlines does its own maintenance at facilities in the U.S. but the union said it's frustrated that other carriers aren't playing by the same rules. Several of the biggest airlines, including Delta Air Lines and Southwest, send planes to overseas repair shops. A report by the Transportation Department's inspector general last year found that U.S. oversight of repair facilities is lagging, and that the FAA has failed to closely track how much maintenance is outsourced and where it is performed.
Federal Reserve Chairman Ben Bernanke has been named Time magazine's "person of the Year" for 2009. Last year's winner was then-president-elect Barack Obama. The 2007 winner was Russian Prime Minister Vladimir Putin. Other previous winners have included Bono, President George W. Bush, and Amazon.com CEO and founder Jeff Bezos.