Oil companies have been watching the progress of Hurricane Dean, shutting-in production from some deepwater oil and natural gas fields in the Gulf of Mexico. Transocean has evacuated non-essential personnel from its production platforms and drilling rigs, with more evacuations planned throughout the weekend. Sugar Land-based Noble evacuated workers for Tropical Storm Erin and is keeping them onshore until Hurricane Dean. Shell has also been evacuating workers.
Retail gasoline prices continue to plummet across the state this week. The weekly AAA Texas Gas Price Survey shows regular grade gasoline averages $2.68 per gallon at self-serve pumps across the state. That's a nickel less than last week. Nationally, regular self-serve prices fell by an average of a nickel a gallon to $2.76. Houston's average is down a nickel to $2.62 per gallon. The cheapest gas in Texas is in Corpus Christi, where regular self-serve prices fell by an average of a nickel a gallon to $2.54. The state's most expensive gas remains in Amarillo, where it fell a nickel a gallon to $2.83. Auto club spokesman Paul Flaningan says Texas retail gas prices have fallen in nine of the past 11 weeks and are now at their lowest level of the summer. But they're still averaging 60 cents more per gallon than they did in February.
The Federal Reserve is taking dramatic action to restore calm in global financial markets amid the turmoil triggered by a widening credit crisis. The Fed is declaring that the increased economic uncertainty poses risks for U.S. business growth and it is approving a half-percentage-point cut in its discount rate on loans to banks. The discount rate is being lowered to 5.75 percent, from 6.25 percent. The Fed did not change its target for the more important federal funds rate, which has remained at 5.25 percent for more than a year. However, it has been infusing billions of dollars into the banking system over the past week to keep that rate from rising above the target level. And many economists believe if the financial market crisis worsens, the Fed will also move to cut the federal funds rate.
Is this the "perfect storm'' for the U.S. economy? Stocks are tanking, the nation's housing market is shrinking and credit, the lifeblood of the economy, is drying up. Many economists think if consumers get jumpy enough, a recession could easily follow. Since consumer spending accounts for two-thirds of the gross domestic product, any persistent slowdown in sales of big-ticket items puts the economy on a slippery slope. And housing starts are also down to their lowest level in a decade. Republicans seeking to hold on to the White House want no part of a recession heading into next year's election.
Texas employers added 29,400 jobs in July. But the Texas Workforce Commission says that the jobs increase wasn't enough to offset an increase in job seekers. As a result, the state unemployment rate rose to 4.4 percent. The June jobless rate had been 4.1 percent, the lowest since at least 1976. A year ago, the unemployment rate was 4.9 percent. Texas remained below the national jobless average of 4.6 percent. The Houston area is at 4.6 percent. The July gain in nonagricultural employment was the third-largest of the year. Government agencies accounted for more than one-third of the new jobs. The lowest jobless rate in the state was in Midland, at 3.2 percent, while the highest was 7.2 percent in the Rio Grande Valley cities of McAllen, Edinburg and Mission. There were more than 60,000 initial claims for unemployment benefits in the July--up from more than 58,000 the month before.
The Houston Independent School District will be hiring qualified bus drivers, custodians, school crossing guards and other non-instructional employees during a job fair set for Saturday. HISD is hiring about 80 bus drivers, 60 custodians, 20 mechanic helpers, 20 transportation attendants and workers for dozens of other crafts positions. The job fair is set for Saturday from 9 a.m. To 2 p.m. at the Hattie Mae White Educational Support Center on West 18th.
This year's tax-free weekend for back-to-school items is underway, and extends through midnight Sunday. For the first time, school backpacks won't be taxed, but school supplies are still not on the list. For Texans, about $8 in taxes will be saved on every $100 spent. The state comptroller estimates shoppers will save about $52 million in sales taxes this year. The comptroller's Web site has an extended list of items that are tax-free.
Southwest Airlines is on pace to unseat American Airlines this year as the world's biggest airline, measured by passenger traffic. According to a just-released government tally, the domestic-only discount carrier eclipsed American's combined domestic and international traffic during the first five months of 2007. Southwest carried 40.3 million passengers on domestic routes between January and May, an increase of 4.2 percent from last year. American carried 40 million passengers during the January-May period, down 1.8 percent from last year's levels. American's international traffic for that five month period was 8.7 million, up 0.3 percent in the first five months; its domestic traffic of 31.3 million was down 2.4 percent.
Federal regulators have appealed a court ruling that allowed Whole Foods Marketto purchase its rival organic grocer Wild Oats. The Federal Trade Commission has also asked a federal court to delay the closing of the deal pending the outcome of the appeal. The FTC is seeking to block the $565 million acquisition, arguing that it would stifle competition and lead to higher prices in the premium organic food market. The companies say the deal won't hurt consumers because they also compete with conventional supermarkets such as Safeway and Kroger, which are selling increasing amounts of organic products. U.S. District Judge Paul Friedman rejected the FTC's arguments in a ruling late Thursday. The legal basis for the ruling remains under seal because it includes trade secrets. Austin-based Whole Foods says it agreed with the FTC's request not to close the transaction before August 20th. Whole Foods says it and Boulder, Colorado-based Wild Oats may complete the sale after that date if no stay's been granted.
Analysts are praising J.C. Penney's second-quarter results, a day after the department-store operator said profits rose two percent to beat expectations. The results buck the assumption that moderately priced retailers are most at risk in the current retail environment, with middle-income consumers pressured by a sagging housing market, credit concerns and higher energy costs. J.C. Penney says lower taxes, positive back-to-school sales and higher real-estate income lifted its bottom line. Goldman Sachs analyst Adrianne Shapira says results were helped by better expense control. Morgan Stanley analyst Michelle Clark calls J.C. Penney a "top pick'' in the retail softlines sector.
The number of rigs actively exploring for oil and natural gas in the United States fell by three this week to 1,795. Of the rigs running nationwide, 1,480 were exploring for natural gas and 309 for oil, according to Houston-based Baker Hughes. Six were listed as miscellaneous. A year ago, the rig count stood at 1,762. Texas lost seven rigs.