Work to permanently choke off the oil well that had been spewing into the Gulf of Mexico is at a standstill after ships around the site were ordered to evacuate ahead of the approaching Tropical Storm Bonnie. There had been worries that the cap that has mostly contained the oil would have to be reopened and left gushing if a major storm came through. But engineers are confident enough in the strength of the cap that they've decided to leave it sealed while most of the ships on the surface were told to leave the area. Retired Coast Guard Admiral Thad Allen and BP officials concede the storm, which is expected to enter the Gulf by the weekend, could delay by another 12 days the push to plug the broken well for good using mud and cement.
Tropical Storm Bonnie has made landfall in Florida south of Miami with top sustained winds of 40 miles per hour. The storm was headed over south Florida on a track to cross the Gulf of Mexico near the site of the massive BP oil spill by Sunday. The National Hurricane Center in Miami said the eye of Bonnie came ashore midday near Cutler Bay, about 20 miles south of Miami. There were no immediate reports of damage from the storm that so far has just spread some rain across south Florida. Tropical storm warnings were in place for much of Florida's east coast and from the Florida panhandle at Destin to Morgan City, Louisiana. Bonnie is expected to strengthen as it moves over the Gulf late today and Saturday. The storm is moving west-northwest near 18 mph.
After seven weeks without them, some 2.5 million Americans have their unemployment benefits back. President Barack Obama signed a bill hours after Congress approved it, restoring about 300 dollars a week in unemployment insurance to people who have been out of jobs for six months or more. Meanwhile, new claims for unemployment insurance jumped by 37,000 to a seasonally adjusted 464,000. While seasonal factors boosted the new requests, first-time claims remain elevated — indicating a sluggish job market.
The White House says the government is now borrowing 41 cents of every dollar it spends. New estimates predict the unemployment rate will average nine percent next year and the budget deficit will be $1.42 trillion — even bigger than previously expected. That's because tax revenues are still slumping and the economic recovery is going slower than hoped. The deficit for the current fiscal year is forecast to hit a record $1.47 trillion, about the same as the administration predicted in February. President Barack Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they try to spark job growth and await recommendations from Obama's deficit commission.
President Barack Obama says he can relate to the plight of Americans striving in the struggling economy to pay bills while saving for their kids' education and retirement. He says he and First Lady Michelle Obama took a hit like everybody else when the economy nearly collapsed, telling ABC that a college fund for daughters Malia and Sasha has gone "up and down" with the stock market. Obama says the first couple is "not that far removed from what most Americans are going through." He tells the network "it was just a few years ago that we had high credit card balances, we had two kids, thinking about college. We had our own retirement accounts, wondering if we were going to be able to get enough assets in there."
They haven't been enough to help a struggling housing market, but mortgage rates have hit another record. Freddie Mac says he average rate for 30-year fixed loans this week was 4.56 percent, down from 4.57 last week. That's the lowest since Freddie Mac began tracking rates nearly 40 years ago. But despite rates begin lower than at any time since the 1950s, refinancing activity remains moderate, and sales of previously occupied homes dropped in June.
Things like iPads and Kindles remain hot sellers, and a trade group says that bodes well for a good second half. The Consumer Electronics Association is upping its projections for sales to retailers, saying new categories of products such as tablet computers and 3D displays are growing quickly. It projects revenue for electronics manufacturers to grow three percent over last year, up from its previous estimate of growth of 0.3 percent. The new forecast is $9 billion. Other hot categories include SmartPhones, Blu-Ray players and e-readers.
An educator at the University of Pennsylvania wants to create one of the nation's only business incubators dedicated to education entrepreneurs. The hope is to make it easier to navigate the lucrative but sometimes-tricky education market. The U.S. Department of Education is creating a $650 million fund to boost education innovation. Federal statistics show that K-12 schools and degree-granting institutions spend more than $1 trillion on education annually, representing immense entrepreneurial potential. But Doug Lynch, vice dean of Penn's Graduate School of Education, says it can be nearly impossible to introduce a new product. He says that's due to frequent changes in superintendents, policy and curricula, as well as often cumbersome purchasing process in the nation's 15,000 school districts.
Schlumberger says its net income jumped 33 percent in the second quarter as robust activity in other areas offset a halt to deepwater drilling in the Gulf of Mexico. The Houston oil services company reported earnings of $818 million, up from $613 million, in the same period last year. Revenue increased seven percent to $5.94 billion. Analysts expected revenue of $5.92 billion. The oil industry has struggled to deal with a temporary moratorium on deepwater exploration following the April 20th rig explosion that led to one of the largest oil spills in U.S. history. Schlumberger says it doesn't expect to see a return of drilling activity in the Gulf this year.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 14 this week to 1,585. Houston-based Baker Hughes says that 982 rigs were exploring for natural gas and 591 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 943. Texas gained one rig. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.