A fresh snapshot of the nation's services sector is showing a modest pullback, although it is not as weak as forecast. The Institute for Supply Management index is reported at 49.6, marking the third straight month of contraction. It is up three-tenths of a percent from February. Any number below 50 indicates contraction. While new orders rose slightly in March, employment activity dropped again. The report also indicates that prices were rising at a faster rate. That indicates that even as activity has slowed, pricing pressure has accelerated.
The number of new people signing up for unemployment benefits last week shot up to the highest level in more than two years. It's fresh evidence of the damage to the national economy clobbered by housing, credit and financial crises. The Labor Department said Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29th. The increase leaves claims at their highest point since September 17th, 2005.
Federal Reserve Chairman Ben Bernanke says the central bank moved to assist troubled investment bank Bear Stearns to protect the U.S. economy against severe consequences. Bernanke is the top witness at a Congressional hearing Thursday to examine whether the Fed was justified in providing $30 billion to facilitate the sale of Bear Stearns to JPMorgan Chase. Bernanke says that given the exceptional pressures on the U.S. economy, the fallout if Bear Stearns had been allowed to fail could have been severe and far-reaching.
Nearly a third of domestic flights failed to arrive on time in February--but that can be seen as an improvement. A U.S. Transportation Department report says more than 31 percent of commercial flights in the U.S. arrived late, were canceled or diverted in February. That's a better record than the 33 percent in February of last year, which was the sixth worst month for flight delays on record. But the numbers still point to continued poor performances for the airline industry, which has been plagued by safety concerns and pinched by fuel costs. This February's results were worse than in January, when almost 28 percent of flights were delayed. One reason is that airlines are replacing big planes with smaller ones to fly with fewer empty seats. Analysts say that crowds the skies and gates. Weather hasn't helped. In February, nearly 47 percent of late flights were delayed by weather, up from more than 38 percent in the year-ago period.
Building new transmission lines so wind-power turbines can connect to the Texas power grid could cost ratepayers as much as about $6.4 billion. That estimate comes from the Electric Reliability Council of Texas. ERCOT, which operates the grid, filed a study this week with the Public Utility Commission. ERCOT explained five scenarios of wind growth and the transmission equipment to handle it. Texas already leads the nation in wind power, with almost 5,000 megawatts of existing generation. More transmission capacity would be needed to move the power from rural west Texas to more populous areas of the state. The PUC is expected to choose a scenario within months and then sign off on a transmission construction plan within about one year.
Apple says a new consumer study shows its iTunes online music store vaulted past Wal-Mart in February to become the top overall music retailer in the U.S. Apple said Thursday that consumer surveys conducted by market research firm the NPD Group show iTunes' music sales surpassed those of the discount retailer in January and February. iTunes has sold more than four billion tracks since its launch in 2003, thanks in part to the popularity of its iPod portable music players. The NPD surveys count every 12 digital downloads as one CD. Theyexclude mobile music sales. A call to NPD was not immediately returned.