The number of people claiming unemployment benefits for the first time barely rose last week, after two weeks of sharp drops, further evidence that layoffs are easing. The Labor Department says initial claims for jobless benefits rose by 1,000 to a seasonally adjusted 434,000 last week. That's lower than the 447,000 that analysts expected. The number of continuing claims dropped 179,000 to 4.8 million. But that figure doesn't include an additional 5.4 million people receiving unemployment under federal emergency programs, as of the week ending December 19th, the latest data available. Economists are closely watching initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.
The nation's retailers are reporting signs of life in December sales figures that show modest holiday gains. Several are raising profit outlooks because they didn't have to resort to drastic price-cutting because of lean inventories. As merchants report results, warehouse club operator Costco Wholesale, the Buckle and Children's Place retail stores are reporting gains. Even Sears Holdings is announcing a small increase because of strength at K-Mart. Sears and Limited Brands are among retailers raising profit outlooks. Stragglers included jewelry chain Zale. The sales figures are based on sales at stores open at least a year and are considered a key indicator of a retailer's health.
Target says better-than-expected customer traffic helped a key sales comparison rise in December. The discount chain says it expects fourth-quarter earnings to "meet or exceed" analyst expectations of $1.11 per share. Target says sales in stores open at least a year rose 1.8 per cent during the five weeks ended January 2nd. It says sales were strong during the crucial holiday month in categories ranging from toys to food. Analysts expected sales in stores open at least a year to fall 0.2 per cent. Sales at stores open at least a year are a key measure of retailer performance because they measure growth at existing stores rather than from newly opened ones. Total sales rose five per cent to $9.74 billion.
Sears Holdings says it's letting third parties--including some competitors--sell things on its Web site. The change adds more than ten million products from 1,500 vendors to those available at the company's Web sites. A spokesman says that will more than double the number of products available on Sears.com. The service puts Sears in the company of Walmart.com and Amazon.com, which already sell millions of items from third parties. Sears will receive a commission on sales made through the service, which it calls the Marketplace at Sears.com. It will also get a fee for listing the items.
Contractors seeking to repair or rebuild Hurricane Ike-damaged homes are getting bid information to earn some of $85 million in federal funds. Two meetings were scheduled for companies interested in working on residences in Galveston County, where Ike came ashore in September 2008. The county will take bids for projects funded by federal community development block grants. Housing program director James Wilson says the projects will be divided into the categories of repair and new construction and repair. Galveston County has more than 600 applications for assistance pending.
BMC software has purchased Austin-based Phurnace—it's third acquisition in six months. Phurnace helps businesses quickly upload Web applications. BMC previously acquired Minnesota-based MQ Software and London-based Tideway Systems.
The top executive at General Motors expects the automaker will be profitable this year. And he says hundreds of the 1,350 GM dealers who lost their franchises last year could see them restored. In a wide-ranging talk with reporters at GM's Detroit headquarters, Whitacre predicted that GM would be profitable this year, although he said that was dependent on the economy and other factors. A full-year profit for GM, which left bankruptcy protection in July, would be the company's first since 2004 when it made $2.7 billion. It has posted more than $88 billion in losses since then. Dealers are getting a chance to regain lost franchises as a result of a Congressionally mandated arbitration process that begins later this month.
GM has made its first mass-produced electric car battery as it gears up to sell the new Chevrolet Volt to the general public later this year. The lithium-ion battery was made at GM's Brownstown battery pack assembly plant that will produce the batteries for the automaker's Volt assembly line in Detroit. Regular production at both facilities is expected to begin in the fourth quarter. GM Chairman and interim CEO Ed Whitacre, Jr., had told reporters that GM will send out some Volt models before November, when they are scheduled to hit showrooms. He said the company might sell a few early, and it could send some to consumers before November. GM has plans to test about 100 with utility companies before the showroom debut.
Ford is adding Twitter messages and Internet radio to its in-car entertainment and communication service, known as Sync. Ford hopes to entice consumers who are adept at using mobile applications on their cell phones. But CEO Alan Mulally told an audience at the International Consumer Electronics Show that because Sync is voice-activated, it's safer for drivers than using their phones in the car. Ford executives said that Sync will begin working with Internet radio services Pandora and Stitcher. It also will connect to OpenBeak, which can read your or your friends' Twitter posts out loud. Executives said Ford is talking with Google about bringing its services to cars as well. Ford Sync was developed by Microsoft in 2007.
Financial regulators are telling banks to have procedures in place to minimize their risks from loans when rock-bottom interest rates start to rise. The advisory comes from the Federal Financial Institutions Examination Council, which includes the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The advisory wasn't meant to signal any upcoming change in interest-rate policy by the Fed. To nurture the budding recovery, the Fed has slashed a key bank lending rate to a record low near zero, where it has been for a year. When the economy is on firm ground, the Fed at some point will start boosting rates.
Banks borrowed slightly more from the Federal Reserve's emergency lending program over the past week but the amount was still well below levels reached during the height of the financial crisis. The Fed said that commercial banks averaged $19.45 billion in daily borrowing for the week that ended Wednesday. That was up from $18.74 billion in average borrowing for the previous week. As financial conditions have improved, banks have scaled back their use of the Fed's emergency discount loan window. At the peak of the crisis, which struck in the fall of 2008, banks' daily borrowing from the discount window reached $110 billion, reflecting banks' serious trouble getting loans through normal private-market channels.
Interest rates are mostly higher in the bond markets as minutes from the Federal Reserve's December meeting show that policymakers disagree over the risks of inflation. Concerns about rising prices, which erode the value of returns on fixed-income investments, dented treasury prices and pushed yields higher. The yield on the ten-year treasury note, which is linked to interest rates on consumer loans, rose to 3.83 per cent from 3.76 per cent late Tuesday. Its price fell 16/32 to 96 8/32. Minutes from the Fed's last meeting illustrated that policymakers disagreed over whether to bolster or scale back a program to help prop up the housing market. Leaving those supports for the economy in place too long could lead to inflation.
American Airlines is digging deeper to save its relationship with Japan Airlines. The Associated Press reports sources are saying that Fort Worth-based American has raised the amount it is willing to invest in the troubled carrier by $300 million. American's total offer has now reached $1.4 billion in a battle with Delta Air Lines. Delta wants to create a close partnership with Japan Airlines that would operate across the pacific and throughout Asia.
The government says the nation's airlines set records for arriving on time in November. The Transportation Department says nearly 89 per cent of November flights arrived on time, beating the record of 88 per cent set in September 2002. Hawaiian Airlines had the best record, followed by United and Southwest. The airlines were helped by lower traffic which made terminals and runways less crowded than they were a year or two ago. The government says airlines also did a better job handling baggage, with fewer bags going missing or damaged.
The City of Houston is hosting informational meetings about its Residential Energy Efficient Program, which provides free energy efficient upgrades for low-income homes. The city hopes to reduce energy consumption in each household by 12 to 18 per cent. Weatherization upgrades include caulking, door weather stripping, sheetrock, air duct sealing, energy efficient light bulbs, smart thermostats, insulation and water heater maintenance. Discussions about the REEP program are set for noon tomorrow and Saturday at 10 a.m. at the Hackberry Community Center on South Dairy Ashford.