More Americans signed up for unemployment benefits last week, but the broader trend in layoffs points to a slowly healing jobs market. The Labor Department says new claims for unemployment aid rose last week by a seasonally adjusted 26,000 to 436,000. The previous week's claims were revised up slightly to show applications had tumbled by 31,000 to 410,000. The figures are often volatile during the weeks around the Veteran's Day and Thanksgiving holidays. Even so, the longer-term trend has shown a downward drift. The four-week moving average of claims, which smoothes volatility, fell to 431,000 last week, a two-year low.
Preliminary sales reports and data show shoppers spent more in November, responding to “Black Friday” deals and promotions that began early in the month. Mastercard’s SpendingPulse, which tracks spending across all transactions including cash, reported spending on family and children's clothing rose more than ten percent in November. Teen clothing was particularly strong, up 12 percent. Spending on luxury goods rose 1.6 percent. Electronics fell one percent as flat-screen TV prices fell. Overall online sales rose 12 percent during the month. Many types of stores reported robust gains that beat Wall Street expectations. Those include Costco and the owner of Victoria's Secret. Target says more shoppers came to its stores in November and spent more, helping a key revenue figure rise 5.5 percent during the month, better than expected. That underscores that many people were not only buying gifts for others but throwing in items for themselves. The results are based on revenue at stores opened at least a year and are considered a key indicator of a retailer's health.
The number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a low in June. The National Association of Realtors says its index of sales agreements for previously occupied homes jumped 10.4 percent in October. Contract signings were up in every region of the country except the west. Economists had forecast contract signings to decline, given the numerous problems facing the housing industry.
The worst summer for home sales in decades also put a chill on foreclosure sales, even though average discounts on the distressed properties got bigger compared with other types of homes. RealtyTrac says foreclosure sales plunged 25 percent in the July-September quarter versus the April-June period. They tumbled 31 percent from the third quarter of last year. The foreclosure listing firm says sales of non-foreclosed properties fell 29 percent from the previous quarter and nearly 31 percent from the third quarter of last year. The decline in sales of bank-owned properties and other homes in some stage of foreclosure is in line with an overall housing market slowdown. That slowdown began after federal homebuyer tax credits expired in April.
Rates on fixed mortgages edged up again this week after hitting their lowest level in decades last month. Freddie Mac says the average rate for 30-year fixed loans rose to 4.46 percent from 4.40 percent last week. Three weeks ago, the rate hit 4.17 percent, the lowest level on records dating back to 1971. The 15-year loan also rose, to 3.81 percent from 3.77 percent. it hit its lowest point since the survey began in 1991 a month ago, when rates fell to 3.57 percent. Mortgage rates are rising because a string of positive economic data drew investors away from the safety of Treasury bonds. That pushed the yield on Treasurys up and mortgage rates tend to track those yields.
The co-chair of a presidential panel investigating the worst offshore oil spill in U.S. history says the disaster cannot be blamed solely on BP. William K. Reilly, the former head of the EPA under President George H.W. Bush, points to three companies: well operator BP, rig owner Transocean, and cement contractor Halliburton. He says all three made questionable decisions that contributed to the blowout. Reilly says the perception that the well blowout was the result of one company's choices does not stand. He says the panel has conclusively established that there are larger problems with offshore drilling safety. Reilly's remarks came at the start of two days of deliberations, the last public forum for the panel before it issues its report in January.
BP's oil well in the Gulf of Mexico is dead, but the political fallout is very much alive. The Obama administration says it won't open up new areas of the eastern Gulf and Atlantic seaboard to drilling, reversing a decision to hunt for oil and gas that the president himself announced three weeks before the largest offshore oil spill in U.S. history. Interior Secretary Ken Salazar says the BP spill taught officials a number of lessons, most importantly to proceed with caution. The oil and gas industry and many Republicans say the Obama administration is stifling domestic oil production and contradicting the will of recession-weary voters eager for new jobs.
A Texas administrative panel has again recommended state regulators deny an air permit to a proposed coal-fired power plant in Corpus Christi. The administrative law judges say it’s unclear the developers of the Las Brisas power plant can “ensure that emissions from the proposed facility would not contribute to air pollution” and violate the federal Clean Air Act. Earlier this year, the judges accused the developers of conducting air pollution modeling in a “reckless manner.” The recommendation will go to the Texas Commission on Environmental Quality, which issues permits. The commission is not bound by the recommendations. Environmentalists fear the plant will spew high levels of “particulate matter,” air pollution that contributes to asthma and other respiratory diseases.
Virgin America has expanded to the heartland with its first flight to Texas, setting up a showdown with American Airlines. The three-year-old airline will fly to Dallas-Fort Worth from Los Angeles and San Francisco, starting with four flights a day. British billionaire Richard Branson is minority owner of Virgin America. He was on the first flight Wednesday. Branson predicts his airline can grab eight percent of the U.S. air travel market within five years--or about what US Airways and Continental each control now. That's a bold forecast for a young airline that, according to its own CEO, barely survived the 2008 surge in fuel prices.
Aegon, the Dutch insurer, says it will cut 400-500 jobs in the U.S. over the coming two years, or around five percent of its U.S. work force, to wind down businesses it no longer considers part of its core operations. The heaviest cuts will come at a branch in Dallas. Aegon plans to take a $80 million in restructuring charges and an additional write-off of goodwill and intangible assets of $210 million. The businesses being stopped are executive benefit plans and bank or company-owned life insurance. Last month Aegon, which survived the 2008 financial crisis with support from the Dutch state, reported third quarter net profit of €657 million ($907 million). Around two-thirds of its operations are in the U.S., where it owns Transamerica.
All the major automakers but Toyota reported strong U.S. sales increases in November as the auto industry's recovery continued to gain traction. Ford, General Motors, Chrysler, Nissan, Hyundai and Honda all reported double-digit increases. Only Toyota, hurt by a string of safety recalls, had a sales drop. Overall, according to AutoData, U.S. sales last month rose 17 percent from November 2009, a month marked by consumer paralysis due to high unemployment. The November performance helped an industry that is trying to recover from last year's historic lows as credit froze up and two major automakers slid through bankruptcy court. Sales started the year with promise, peaked in May as consumer confidence rose, fell off during the summer and now have started to rebound. Incentives such as sweet lease deals and rebates also helped push up sales last month. By one account, automakers raised incentive spending about six percent over October to an average of $2,712 per vehicle.